SSR 74-29: SECTION 206 (42 U.S.C. 406) -- REPRESENTATION OF CLAIMANT -- DISQUALIFICATION OF NONATTORNEY -- DUE PROCESS REQUIRES NOTICE AND OPPORTUNITY FOR HEARING
20 CFR 404.971-404.972 and 404.979-404.990
SSR 74-29
- Although a conviction which resulted in imprisonment and disbarment by a State Supreme Court are inconsistent with a finding that an individual meets the good character and "in good repute" qualifications necessary for the appointment and recognition of a nonattorney as a representative of claimants under section 404.971 and 404.972 of Regulations No. 4, where such individual, prior to the conviction and disbarment, had represented claimants before the Social Security Administration, held, notice and an opportunity for a hearing must be provided in accordance with sections 404.979-404.990 of Regulations No. 4 before such individual may be excluded, suspended or disqualified from acting as a representative of claimants in future proceedings before the Social Security Administration.
A question has been raised as to whether an individual who has been convicted of mail fraud and disbarred by a State Supreme Court may be excluded from representing claimants under section 404.972(b) of Social Security Administration Regulations No. 4 without first affording such individual the notice and hearing rights provided by sections 404.979 through 404.990 of Regulations No. 4.
Section 404.971 of the Regulations provides that a party in an action before the Administration may appoint as his or her representative "only an individual who is qualified under section 404.972 to act as a representative". Section 404.972 sets forth qualifications necessary where (a) the designated representative is an attorney in good standing, and (b) the designated representative is a person other than an attorney. Specifically, 404.972(b) states that any person may be appointed as a representative if such person
- "(1) is of good character, in good repute, and has the necessary qualifications to enable him to render valuable assistance to an individual in connection with his claim,
- "(2) has not been disqualified or suspended from acting as a representative in proceedings before the SSA, and
- "(3) is not, pursuant to any provision of law, otherwise prohibited from acting as a representative."
The statutory authority for section 404.972 of the Regulations which requires only persons other than attorneys in good standing to meet the qualifications of (1) above, is found in section 206(a) of the Social Security Act. Section 206(a) states, inter alia, that "an attorney in good standing who is admitted to practice before the highest court of the State, Territory, District, or insular possession of his residence or before the Supreme Court of the United States or the inferior Federal courts, shall be entitled to represent claimants before the Secretary." Section 206(a) of the Act further provides that the Secretary may prescribe rules and regulations governing the recognition of agents or other persons representing claimants before the Secretary and may require such persons, before being recognized as representatives of claimants, to show that they are of good character and in good repute, possessed of the necessary qualifications to enable them to render such claimants valuable service, and otherwise competent to advise and assist such claimants in the presentation of the cases. These provisions of the Social Security Act enable the Administration to refuse to recognize a nonattorney as the representative of a claimant when the nonattorney does not satisfy the above-cited statutory qualifications and the parallel requirements of section 404.972(b)(1) of the Regulations.
An individual, prior to conviction for mail fraud was active in social security cases before the Administration as an attorney. this individual served an 18-month prison sentence, was disbarred by a State Supreme Court and ha snow been released from prison and is actively representing social security claimants as a nonattorney.
Although a recent conviction for mail fraud and disbarment by a State Supreme Court are inconsistent with a finding that the individual meets the qualifications of section 404.972(b)(1) necessary for appointment and recognition of a nonattorney as a representative of claimants under section 404.971, where an individual, prior to the conviction and the disbarment, has represented claimants before the Administration, notice and an opportunity for a hearing must be given before that individual may be excluded by the Administration from representing claimants. This conclusion is based on the provision of section 206(a) which states:
- "The Secretary may, after due notice and opportunity for hearing suspend or prohibit from further practice before him any such person, agent, or attorney who refuses to comply with the Secretary's rules and regulations or who violates any provision of this section for which a penalty is prescribed."
This provision does not derogate the authority of the Administration to require that persons other than attorneys, before being recognized as representatives of claimants, show that they are of good character and in good repute. It does, however, give to those persons who have represented claimants before the Administration, a statutory expectation that before they are suspended or prohibited from further practice, notice and an opportunity for hearing will be given. Conviction and disbarment rather than removing this statutory expectation, should trigger the notice and opportunity for hearing procedures. Clearly this is the result where an attorney has been convicted of a violation of section 206(a) of the Act. See section 404.979 of Regulations No. 4. If, upon conviction for a violation under section 206(a), an attorney must receive from the Social Security Administration notice and opportunity for a hearing before being disqualified or suspended from acting as a representative in proceedings before the Administration, a conviction for some other offense should arguably prompt the same notice and opportunity for hearing procedures.
With respect to a State court judgment of disbarment, Federal courts have held that the order of disbarment does not create a legal status of professional unworthiness which must be accepted by Federal courts as an adjudicated fact for purposes of a disbarment proceeding in a Federal court. See In re Tinkoff 101 F.2d 341, 343 (7th Cir. 1939), cert. denied 308 U.S. 552 (1939). Rule 46(b) of the Federal Rules of Appellate Procedure provides that when it is shown to the court that any member of its bar has been suspended or disbarred from practice in any other court of record, the member will be afforded an opportunity to show good cause why he should not be suspended or disbarred, and if requested, a hearing will be held upon his response to the rule to show cause. See also Rule 8 of the Rules of the Supreme Court of the United States, 28 U.S.C. Revised Rules of the Supreme Court of the United States.
Although a State court's order of disbarment is not, as res judicata, binding upon the Supreme Court or a Federal court, the effect of such disbarment, as long as the State court action stands unreversed, has been characterized as destroying the condition of fair private and professional character which an individual must possess to continue as a member of the Federal bar. See Selling v. Radford 243 U.S. 46 (1917). This effect of an order of disbarment, however, does not alter the fact that in any subsequent effort to suspend or revoke the individual's legal license, due process of law must play a fundamental part. The issue in such a proceeding is not whether the practitioner is entitled to due process, but whether, as to matters of substance and procedure, the individual has been afforded such due process. See Annot., 98 L.Ed. 851, 852 (1953). The courts are in complete agreement that, to meet due process requirements, it is necessary that an attorney whose license it is sought to suspend or revoke must be given notice of the pending suspension or revocation and must be given an opportunity to be heard in his own defense. See Annot., 98 L.Ed. 852, 855 (1953) citing cases. See also Schwebel v. Orrick 153 F. Supp. 701, affirmed 251 F.2d 919 (D.C. Cir. 1958), cert. denied, 356 U.S. 927 (1958).
In Schwebel v. Orrick, supra, it was held that whereas the Securities and Exchange Commission had the authority to establish qualifications for attorneys practicing before the Commission[1] and to take disciplinary action against attorneys found guilty of unethical or improper professional conduct[2], proceedings to revoke the right to practice before a government agency must be in accordance with the concept of fair play in that case, as legislatively applied to administrative proceedings by the Administrative Procedure Act. This requires, the court continued, that before suspension or revocation of any license, the licensee shall be given written notice of the charges against him and an opportunity to meet such charges. The court stated that the term "license" as defined in section 2(e) of the APA[3] was broad enough to cover the right to practice before a government agency, which is a "form of permission" granted by an agency. As such, the section of the APA[4] providing that except in cases of willfulness, no suspension or revocation of any license is lawful unless the licensee has been given 1) written notice by the agency of the facts or conduct which may warrant the action, and 2) an opportunity to demonstrate or achieve compliance with all lawful requirements was applicable to proceedings for revocation of an attorney's permission to practice before a government agency. Given this broad definition of "license" and the limited effect of a State court's order of disbarment, these minimum due process requirements would also be mandated where an agency, having once recognized an individual in a representative capacity, seeks to exclude such individual from further practice before it.
Therefore, held, that whenever any individual has represented claimants in a proceeding before the social Security Administration, such individual may not be excluded (suspended or disqualified) from future participation in Administration proceedings as a representative of claimants prior to compliance with the procedures established by sections 404.979-404.990 of the Regulations.
[1] See also Herman v. Dallas 205 F.2d 715 (D.C. 1953) where the court stated that the powers of administrative agencies to control the practice of attorneys before them were not changed by provisions of the APA that persons compelled to appear before an agency may be accompanied and represented by counsel.
[2] See also Kivitz v. Securities and Exchange Commission 475 F.2d 956, 962 (D.C. Cir. 1973).
[3] See 5 U.S.C. 551(8) wherein "license" is defined to include "the whole or a part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption or other form of permission."
[4] See 5 U.S.C. 558(c).