Albalos v. Sullivan

Leonard Albalos (plaintiff) was awarded Social Security disability benefits in the early 1970s. Albalos was a Filipino immigrant who spoke a Philippine dialect, had only six grades of formal education, and had worked 57 years in the United States, performing various unskilled jobs before his award. As a benefit recipient, Albalos was required to file annual earnings reports if he earned money in excess of an exempt amount. In 1978, the Secretary of Health and Human Services sent notice to Albalos of his failure to file an earnings report in 1976, which resulted in an overpayment of benefits. Albalos did not respond to the 1978 notice, and the secretary deducted the overpayment from Albalos’s monthly benefit payments, as authorized. In 1984, the secretary sent Albalos notice for his failure to file reports in 1978 and 1980, at which time the secretary informed Albalos that his benefits would again be deducted for the overpayments and assessed a $295 penalty for the failures. Albalos requested reconsideration of the deduction overpayment and penalty, and an administration representative doubled the penalty after taking notice of the 1976 failure. After a hearing, an administrative-law judge (ALJ) refused to waive the deduction overpayment and penalty after concluding that Albalos was not without fault for failing to file the 1978 and 1980 earnings reports. The ALJ did not make any findings regarding Albalos’s circumstances nor his credibility. However, the ALJ’s decision became Secretary Luis Sullivan’s (defendant) final decision. Albalos sought judicial review of the decision, and a United States district court granted summary judgment in favor of the secretary. Albalos appealed.