A federal judge in New York has dealt a blow to the Social Security Administration, ruling that the agency must apply circuit court rulings in disability cases to similar cases in the same circuit, regardless of whether it agrees with the ruling.

U.S. District Court Judge Leonard Sand said the agency's so-called "nonacquiescence" policy is unconstitutional because, in effect, it asserts the right of a federal agency to refuse to comply fully with circuit court rulings.

Sand issued a preliminary injunction barring the SSA from pursuing the longstanding policy in either its original form or in a revised form that the agency announced in June. Although the agency has argued that the new rules abolished the policy of nonacquiescence, Sand disagreed.

The injunction, however, will apply only to Social Security and Supplemental Security Income disability cases in New York State.

Under the original policy, whenever a circuit court ruled against the SSA, the agency applied the order to the individuals involved in the case, but not to similar cases within that circuit.

Instead, it continued to apply its own rules, arguing that it needed to maintain the uniformity of its regulations nationwide until the Supreme Court resolved the issue. The only way another individual could get the circuit court's ruling applied in his case was to take it to court himself, a costly and time-consuming process.

The policy was bitterly criticized by many observers, including the House Ways and Means subcommittee on Social Security. Critics were particularly upset because in some cases, the agency did not seek a Supreme Court ruling on the disputed issue, but simply let the matter hang while it continued to apply its own rules.

In response, Health and Human Services Secretary Margaret M. Heckler announced on June 3 that the policy would be changed.

Under the new procedure, local hearing officers would continue to apply SSA rules even after a circuit court had rejected those rules in another case. But if the individual was denied benefits and appealed to an HHS administrative law judge, the judge would follow the circuit court ruling, except in a few casesThe court ruled that the agency's "nonacquiescence" policy is unconstitutional. that the SSA decided to pursue through the courts.

The new policy, however, was criticized by the National Senior Citizens Law Center and others. The critics said that only about half of those who are turned down at the local level actually appeal to administrative law judges because they can't afford it, they don't understand the law or they are discouraged. Thus, the critics contended, the half who don't appeal would continue to be denied the benefit of the circuit court ruling.

Sand, in his Aug. 19 ruling in the case Stieberger v. Heckler, said the new regulations did not go far enough in reversing the policy.

HHS officials said they had no immediate comment.