Petition — Heckler v. Broz

Supreme Court brief1983

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1982

RICHARD S. SCHWEIKER, SECRETARY OF HEALTH AND

HUMAN SERVICES, PETITIONER

’ v.

: JOHN BROZ, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

Rex E. LEE

Solicitor General

J. PAUL McoGRATH

Assistant Attorney General

KENNETH S. GELLER

Deputy Solicitor General

JOHN H. GARVEY

Assistant to the Solicitor General

ROBERT 8S. GREENSPAN

ANNE BUXTON SoBOL

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 6328-2217

QUESTION PRESENTED

Whether the Secretary of Health and Human Services

may rely upon medical-vocationa! guidelines, rather than

individualized proof, to determine the effect of age on

claims for disability benefits under the Social Security Act.

PARTIES TO THE PROCEEDINGS

John Broz, Richard D. Holmes, Corinne Little, Thomas

O. Jones, and Fred Soesbe were appellees in the court of

appeals and are respondents in this Court.

(1)

TABLE OF CONTENTS

Page

PTE ct ureccenganesedusenactetessacncess l

Dt <cacetddansvdeudengeneoenadenscesenes l

Statute and regulations involved .................. 2

DE ciatisesagunnesnisesaéenseetescacueese 2

Reasons for granting the petition ................. 6

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Pt Mcicviensegviedadeneneéuuteeseeunecees 23a

PEE UF cccinuaheanctddetdenenss caubedeseauues 10la

SE Eada veuutanecedeceescanducenaneneceses llla

PEE UB i dbreccccdasiueaenudsakeugneseneseeane 165a

TABLE OF AUTHORITIES

Cases:

Batterton v. Francis, 432 U.S. 416........... 8

Decker v. Harris, G47 F.2d 291 .............. 7

FCC v. National Citizens Committee for

Broadcasting, 436 U.S. 775..............44. 10

Fogg v. Schweiker, No. 81-1232 (Ast Cir. Oct.

is SD & dcedcnenbcessadcenesunectbioucee 8,9

Kirk v. Schweiker, petition for cert. pending,

No. 81-6754 (filed May 20, 198 .)............ 6

NLRB vy. Seven-Up Bottling Co., 344 U.S.

Dl Scacueeebssbacatuseosennnensdudisduses 10

Schweiker v. Campbell, cert. granted, No.

81-1983, (June 21, 1982) ........... 2,6, 7,8, 11

Schweiker v. Gray Panthers, 458 U.S. 34..... 8

Statutes and regulations:

Administrative Procedure Act, 5 U.S.C.

ak eee ee ieee aie ed we me dnics 4,5

Social Security Act, 42 U.S.C. (& Supp. IV)

301 et seq.:

Title II, 42 U.S.C. (& Supp. IV) 401 ef seg.: 2,3

Ce GD desc ncncccdccascesnes 2, 5, 6,8

42 U.S.C. (Supp. IV) 405(b) ............. 4,5

(111)

(IV)

Statutes and regulations— Continued: Page

42 U.S.C. (& Supp. IV) 423(d)........... 2, 3,6

Ge re GED ccccccccccecccccce Oe 8

42 U.S.C. (Supp. IV) 423(d)(5) .......... 2, 5,8

Title XVI, 42 U.S.C. (& Supp. IV) 1381 ef

BOG.S cw ccrcccccccccccccesecccces sececces 2.3

42 U.S.C. (& Supp. IV) 1382¢(a)(3)....... 3

SE 0 ans nec dea cae cbe 2

a MED dvcdueeesececsnecs es 2

20 C.F.R. Part 404, Subpart P:

CTT ee etouns 2

Section 404.1560 to 404.1569 ............... 2

EEE RT eG Bp fete ea ae 3

en en newas 4,9

I el ukndibes 11

SE aE Uiccceubegdwustne- da ceee 2,4, 7,8, 9, 10, 11

I i ee ba 11

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a i 4

RRR ae a ce nar nr eR 3

I i iin cei a a ae ll 3

I a a Oe 4

20 C.F.R. Part 416, Subpart I:............... 2

ce 2

Section 416.960 to 416.969 ................. 2

SESE A a rere ver 2

42 Fed. Reg. (1978):

ne I a a a ld a ge )

Ds 1. ccsvedeckscelekeetusenes 3

Sp idibsncshadeusvdseestecescéeceecss 3

Ditch epcceddecdueeueeeMisbeveeece as )

In the Supreme Court of the Anited States

OCTOBER TERM, 1982

No.

RICHARD S. SCHWEIKER, SECRETARY OF HEALTH AND

HUMAN SERVICES, PETITIONER

JOHN BROZ, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

The Solicitor General, on behalf of the Secretary of

Health and Human Services, petitions for a writ of certio-

rari to review the judgment of the United States Court of

Appeals for the Eleventh Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra,

la-22a) is reported at 677 F.2d 1351. The judgments of the

district court (App. B, infra, 23a, 39a, 58a, 68a, 84a) are

unreported. The decisions of the Social Security Adminis-

tration Appeals Council (App. C, infra, 10la-110a) and the

Administrative Law Judges (App. D, infra, 11la-164a) are

unreported.

JURISDICTION

The judgment of the court of appeals (App. E, infra,

165a-166a) was entered on June 7, 1982. A petition for re-

hearing was denied on August 16, 1982 (App. E, infra,

167a). The jurisdiction of this Court is invoked under 28

U.S.C. 1254()).

STATUTE AND REGULATIONS INVOLVED

The pertinent provisions of Title II of the Social Security

Act (42 U.S.C. 405(a) and 42 U.S.C. (& Supp. IV) 423(d))

and the applicable regulations (20 C.F.R. 404.1545; 20

C.F.R. 404.1560 to 404.1569; and 20 C.F.R. Part 404,

Subpart P, App. 2) are reproduced in Appendix F (81-1983

Pet. App. 34a-75a) to the petition for a writ of certiorari in

Schweiker v. Campbell, cert. granted, No. 81-1983 (June

21, 1982).!

STATEMENT

1. This case concerns the validity of the age classifica-

tions made in the Social Security Administration’s medical-

vocational guidelines for determining entitlement to disabil-

ity benefits. 20 C.F.R. Part 404, Subpart P, App. 2. A

closely related question concerning the validity of the

guidelines is now before this Court in Schweiker v.

Campbell, cert. granted, No. 81-1983 (June 21, 1982). The

government’s petition in Campbel! describes the operation

of the guidelines and the disability provisions of Title II of

' Copies of the Secretary's petition and brief in Camphel/ have been

sent to counsel for respondents.

Although respondents Holmes (App. D, infra, 120a), Little (App. D,

infra, 135a), and Soesbe (App. D, infra, 157a) filed claims for Supple-

mental Security Income (“SSI”) under Title XVI of the Act, 42 U.S.C.

(& Supp. IV) 1381 ef seq., as well as claims for disability benefits un-

der Title II (the Federal Old-Age, Survivors, and Disability Insurance

Program), 42 U.S.C. (& Supp. IV) 401 ef seq., the court of appeals did

not discuss the regulations applicable under Title XVI. For that rea-

son, we speak throughout this brief only of Title II and do not repro-

duce the corresponding provisions of Title XVI and its applicable regu-

lations. We note, however, that any decision regarding Title I] would

apply perforce to Tithe XVI. The statutory provisions are parallel

(compare 42 U.S.C. 1383(d)(1), (e)(1), with 42 U.S.C. 405(a) and 42

U.S.C. (Supp. IV) 423(d)(5)), the regulations are virtually identical

(compare 20 C.F.R. 416.945, 416.960 to 416.969 with 20 C.F.R.

404.1545, 404.1560 to 4(4.1569), and the guidelines in 20 C.F.R. Part

404, Subpart P, App. 2—which are at issue in this case—are incorpo-

rated by reference in 20 C.F.R. Part 416, Subpart I. See 20 C.F.R.

416.969.

the Social Security Act in some detail (81-1983 Pet. 2-7).

We limit our discussion here to a description of the age

classifications invalidated by the court of appeals.

Title II of the Social Security Act provides disability ben-

efits to individuals who, because of a physical or mental im-

pairment, are unable to do their previous work or to “en-

gage in any * * * kind of substantial gainful work which

exists in the national economy * * *.” 42 U.S.C.

423(d)(2)(A).? In determining whether a claimant is dis-

abled, the Act requires the Secretary of Health and Human

Services to consider—in addition to a claimant's physical

and mental impairments—his age, education, and work ex-

perience. /bid. The medical-vocational guidelines were pro-

mulgated to govern the interplay of those factors in disabil-

ity determinations. The effect that age should have on such

cases was decided in a rulemaking proceeding on the basis

of data dealing with the relationship of age and employ-

ment, and on the expertise the Social Security Administra-

tion had acquired from its operation of the disability pro-

grams. 43 Fed. Reg. 55858-55355 (1978).

The inquiry that preceded promulgation of the regula-

tions revealed that employment problems begin to develop

at age 45 and intensify at age 55 (43 Fed. Reg. 55354

(1978)). Because the adverse effect of increasing age occurs

gradually, the guidelines establish classifications in five-

year intervals reflecting the increasing significance of age

at 45, 50, 55, and 60. See 20 C.F.R. 404.1568. They pro-

vide, for example, that all claimants over 55 who are se-

verely impaired, and have limited education and no work

experience, are disabled regardless of their residual func-

tional capacity. 20 C.F.R. Part 404, Subpart P, App. 2, Ta-

bles 1, 2, and 3, Rules 201.01, 202.01, 203.01. They also

® The Act's definition of disability is the same for both Title II and

Title XVI. Compare Section 223(d) of Title I1, 42 U.S.C. (& Supp. IV)

42%(d), with Section 1614(a)(3) of Title XVI, 42 U.S.C. (& Supp. IV)

1382¢(a)(3).

provide that all impaired claimants over 50 who are illiter-

ate and unskilled are disabled, unless they have at least the

residual functional capacity to do medium work. See Rules

201.09, 202.09, 202.18. The regulations specifically provide,

however, that the age categories will not be applied “me-

chanically in a borderline situation.” 20 C.F .R. 404. 1563(a).

2. Respondents’ claims for disability benenfits were

denied by the Social Security Administration initially and

upon reconsideration. After hearings in each case, adminis-

trative law judges (“ALJs”) concluded that respondents

were not disabled. They found that while respondents were

unable to do their past jobs, they were able to perform at

one of the levels of restricted work encompassed by the

guidelines and tables in Appendix 2. The ALJs made find-

ings as to respondents’ age, education, and work experi-

ence. On the basis of these findings, the ALJs applied rules

in the tables in Appendix 2 which directed conclusions that

respondents were not disabled (App. D, infra, 117a-118a,

132a, 142a, lida, 163a-164a). The Appeals Council denied

review (App. C, infra, 101la-110a).

Respondents then sought judicial review in the United

States District Court for the Southern District of Alabama.

In each case, the court adopted the recommendation of a

magistrate holding the guidelines invalid and remanding

the claim to the agency (App. B, infra, 23a, 39a, Sa, 68a,

84a). According to the magistrate’s recommendations, the

administrative notice underlying the guidelines conflicts

with 42 U.S.C. (Supp. IV) 405(b), which provides that eligi-

bility determinations shall be based on evidence “adduced

at the hearing,” and with the Administrative Procedure

Act, 5 U.S.C. 556(e), which provides that an agency basing

its decision on adjudicative notice of facts not appearing in

the record must permit parties an opportunity to respond

to such facts (App. B, infra, 34a-36a, 49a-5la, 64a-66a,

80a-82a, 98a-99a).

3. Respondents’ cases were consolidated on appeal (App.

A, infra, 2a). Although the court of appeals relied on dif-

ferent grounds than the district court, it too invalidated in

part the guidelines in Appendix 2.* The court of appeals

found that the portions of the regulations dealing with re-

sidual functional capacity, education, and work experience

are valid, because they leave open for adjudication in each

case the precise effect that an individual's physical and

mental limitations and job skills have on his ability to do a

job (App. A, infra, la-12a). The court held, however, that

the regulations are invalid insofar as they make the claim-

ant’s entitlement to disability benefits turn on his chrono-

logical age. The court noted that underlying the regulations

is the “premise that, at a certain point, age significantly re-

stricts a worker's ability to adapt and adjust to a new job

and a new working environment” (id. at 12a). But it would

not always be true, the court said, that that ability would

be more restricted for a person 50 years old than for one 49

years old. Because the impact of age may vary from one

case to another, the court concluded, it is a matter of adju-

dicative fact, and not within the rulemaking power given

to the Secretary by 42 U.S.C. 405(a) and 42 U.S.C. (Supp.

IV) 423(d)(5). App. A, infra, Ia-l4a. Accordingly, the

court remanded respondents’ claims to the agency for indi-

vidual consideration of the effect that each claimant's age

had on his or her ability to adapt to new jobs (id. at lia,

22a).

* The court of appeals did not find that the guidelines furnished evi-

dence in violation of 42 U.S.C. (Supp. IV) 405(b); rather, the court

concluded that they established rules governing the ultimate conclu-

sion in disability cases. It noted, moreover, that Section 556(e) of the

Administrative Procedure Act—relied upon by the district court—

applies to adjudication but not to rulemaking (App. A, infra, l5a-19a).

* Although it held that “the Secretary has exceeded the authority

conferred by the statute because the regulations determine an adjudi-

cative fact” (App. A, infra, Ia), the court concluded that it could

“uphold the regulations as written” if “individual consideration | were

given to| the age-adjustment factor” (id. at 15a). The court went on to

suggest that the Secretary might consider age as a “nonexertional im-

pairment that significantly limits basic work skills, |in which case} the

grids are inapplicable” (ibid.). But since the very point of the guide-

lines is to make disability determinations more rational and consistent

by use of “the grids,” it is difficult to see how chis proposal amounts to

“uphold{ing| the regulations as written.” It is true that an individual

claimant afflicted prematurely with impairments usually associated

REASONS FOR GRANTING THE PETITION

The issue in this case, though distinct in some respects,

is substantially similar to that presented in Schweiker v.

Campbell, supra. In each case the court of appeals held the

medical-vocational guidelines invalid for failure to permit

individualized proof of an issue the guidelines were de-

signed to remove from adjudication. Each decision rests on

the erroneous premise that the Secretary, in promulgating

the guidelines, exceeded the rulemaking authority con-

ferred on him by Congress with regard to the disability

program.®

1. The statutory definition of “disability” requires that a

‘claimant must have a physical or mental impairment so

severe

that he is not only unable to do his previous work but

cannot, considering his age, education, and work expe-

rience, engage in any other kind of substantial gainful

work which evists in the national economy * * *.

with age (e.g., arthritis, or premature senility) could prove that he had

nonexertional limitations, and thereby obtain a determination of disa-

bility to which his age would not otherwise entitle him. See pages

9-10, infra. But the court's suggestion appears to place upon the See-

retary the obligation of proving in each case that the mental and physi-

ological effects of senescence on the claimant do not entitle him to ben-

efits. As the court noted, “|a| claimant must first show an impairment

serious enough to prevent work in his * * * previous job. Here the

burden of proof is on the claimant. * * * If this burden is met the bur-

den shifts to the Secretary to prove that the claimant ‘cannot, consid-

ering his age, * * * engage in any other kind of substantial gainful

work’” (App. A, infra, 4a) (emphasis in original). Presumably, if age

means physiological age, it is the effect of that condition on the claim-

ant’s work possibilities which the Secretary must prove.

®° The issue of this case is also related to an issue presented in Kirk

v. Schweiker, petition for cert. pending, No. 81-6754 (filed May 20,

1982). Petitioner in that case contends not that the Secretary lacks

statutory authority under 42 U.S.C. 405(a) and 42 U.S.C. (& Supp. IV)

423(d) to promulgate the age guidelines, but that the age categories

embodied in the guidelines are not supported by valid data correlating

age with the ability to perform specific jobs (81-6754 Pet. 2-3 (Question

IH), 19). The government has suggested that the Court dispose of the

petition in Kirk as appropriate in light of its decision in Campbel!.

42 U.S.C. 423(d)(2)(A). In Schweiker v. Campbell, supra,

the Second Circuit held that the Secretary, in determining

whether there is “work which exists in the national econ-

omy” that a disability claimant can perform, is not entitled

simply to rely on the tables in Appendix 2. Rather, the

court held, the Secretary must “‘identify specific alterna-

tive occupations available in the national economy that

would be suitable for the claimant’” and give for each “‘a

job description clarifying the nature of the job, [and]

demonstrating that the job does not require’ exertion or

skills not possessed by the claimant” (81-1983 Pet. App. 9a,

quoting Decker v. Harris, 647 F.2d 291, 298 (2d Cir.

1981)). The Secretary’s brief in Campbel/ argues that the

very purpose of the regulations is to determine conclusively

the types and numbers of occupations available, and their

suitability for claimants whose medical and vocational char-

acteristics are described in the tables (81-1983 Pet. Br. 9).

The court of appeals in this case held that the Secretary,

in giving the “consider|ation]” to “age” that the statute re-

quires, is not entitled simply to rely on the chronological di-

visions drawn by the tables in Appendix 2. Rather, the

court held, age is “an adjudicative factor and therefore

must be given individual consideration through adjudication

rather than legislative resolution through rulemaking”

(App. A, infra, 14a). Though the decision below focused on

a different component of the statutory term “disability”

than did the Second Circuit in Campbhel/,® the decisions

share the common conclusion that the Social Security Act

somehow precludes the Secretary from declaring in regula-

tions the effect that nonmedical factors should have on the

evaluation of disability. There is no indication in either the

language of the statute or its legislative history that the

scope of rulemaking authority is more restricted in one case

than in the other. Indeed, both Campbell and this case deal

with disability requirements found in the same sentence of

the statute (42 U.S.C. 423(d)(2)(A)), and implemented by

* Indeed, the court of appeals expressly stated its disagreement

with the Second Circuit's conclusion that the Secretary must identify

“particular jobs that a claimant is capable of performing” (App. A,

infra, VGa n.12.).

the same guidelines (20 C.F.R. Part 404, Subpart P, App.

2); and in each case the Secretary's authority to make rules

derives from the same statutory provisions (42 U.S.C.

40K a); 42 U.S.C. (Supp. IV) 423(d)(5)). Under these cir-

cumstances, a reversal in Campbell would cast serious

doubt on the correctness of the decision in this case.

2. The decision below is clearly erroneous. Congress spe-

cifically stated in the Act that the Secretary should “consid-

er| | [a claimant's] age” in making disability determinations.

42 U.S.C. 423(d)(2)(A). Yet the court of appeals stated that

the Secretary could not “determine that a person 49 years

of age is able to adjust to a new unskilled sedentary occupa-

tion but that a person 50 years old is not|,| * * * [because]

a person's ability to adapt or adjust is clearly a fact relating

to the individual claimant” (App. A, infra, 1a). It is diffi-

cult to believe that when Congress used the word “age” in

the statute it had in mind anything other than chronological

age. However, the court of appeals’ decision in effect re-

quires the Secretary to base disability determinations not

on chronological age, but on the unique effects that the pas-

sage of time has had on the individual claimant—i.e., on his

“physiological” age.

It was plainly unwarranted for the court to invalidate the

regulations insofar as they preclude an investigation into

that question, given the “legislative effect” to which the

regulations are entitled. Schweiker v. Gray Panthers, 458

U.S. 34, 44 (1981); Batterton v. Francis, 432 U.S. 416,

425-426 (1977). As the First Circuit held in Fogg v.

Schweiker, No, 81-1232 (Oct. 13, 1981), slip op. 9 n.5:?

Had Congress purposely intended to refer to physio-

logical age, it * * * would have signalled this depar-

ture from the expected by clearer language. Instead

Congress simply noted that age was a relevant factor

and accorded the Secretary broad powers to issue reg-

ulations which would take age into account as a part of

disability. 42 U.S.C. § 423(d)(2). We cannot find that

the Secretary exceeded his powers by contravening

Congressional intent.

7 We are lodging a copy of the First Circuit's opinion in Fogg with

the Clerk of the Court and sending a copy to counsel for respondents.

It is true that in drafting the guidelines dealing with age,

the Secretary recognized that there were physical and men-

tal consequences of senescence, and that those conse-

quences made age significant, because they were likely to

affect claimants’ ability to adapt to new jobs. 43 Fed. Reg.

55359 (1978). The available data did not, however, “relate

varying specific chronological ages to specific physiologi-

cally-based vocational limitations for performing jobs”

(jhid.). As a result, the regulations rely on data dealing

with, for example, the rate by age of participation in the la-

bor force, the unemployment rate by age, the duration of

unemployment by age, and the proportion of hires to appli-

cants by age (id. at 55358-55854). The court of appeals con-

cluded that the lack of scientific data on the relation be-

tween the physiological consequences of aging and job

performance was itself an argument for case-by-case deter-

mination of the effect those facts had on disability (App. A,

infra, 14a). But what it shows even more clearly is the wis-

dom of Congress in directing the Secretary to consider

chronological age in making disability determinations. Any

attempt to account in individual cases for the innumerable

consequences of senescence and their bearing on a claim-

ant’s ability to undertake new work would inevitably pro-

duce the very unfairness and inconsistencies in disability

cases that the guidelines were designed to eliminate. See

81-1983 Pet. Br. 28-37; Fogg v. Schweiker, supra, slip op.

10.

It may be that the lines drawn in the guidelines will not

produce a perfect separation of claimants according to their

physiological and mental traits produced by the aging pro-

cess. But such a separation is neither possible nor neces-

sary. The regulations specifically state that they are not to

be applied “mechanically in a borderline situation.” 20

C.F.R. 404.1568(a). Moreover, the remulations provide a

method for taking account of impairments that usually ac-

company age, even when they afflict a younger person. For

example, arthritis or premature senility would be consid-

ered apart from the tables in Appendix 2. if they should

strike a 40-year old, he may be entitled to a determination

of disability made without exclusive reliance on the tables.

See, e.g., 20 C.F.R. Part 404, Subpart P, App. 2, Section

200.00(e).

When a regulation established by an agency is “judg-

mental or predictive,” as is the case with the age classifica-

tions in the medical-vocational guidelines, “complete factual

support in the record for the |agency’s| judgment or predic-

tion is not possible or required * * *.” FCC v. National

Citizens Committee for Broadcasting, 436 U.S. 775,

813-814 (1978). Fashioning a rule on the basis of expertise,

in light of available if imperfect facts, is the traditional

function of an administrative agency. “‘Cumulative experi-

ence’ begets understanding and insight by which judgments

not objectively demonstrable are validated * * *. The con-

stant process of trial and error, on a wider and fuller scale

than a single adversary litigation permits, differentiates

perhaps more than anything else the administrative from

the judicial process.” NLRB v. Seven-Up Bottling Co., 344

U.S. 344, 349 (1958).

3. The court of appeals’ strained reading of the statutory

requirement that the Secretary consider age in making dis-

ability determinations resuited from its inverted approach

to the grant of rulemaking authority in the Act. Rather

than ask what Congress had instructed the Secretary to ac-

complish through regulations, the court began by asking in

wzeneral terms what kind of issues were proper subjects for

rulemaking (App. A, infra, 8a-lla). The court stated that

“because both the broad hearing provision and the broad

rulemaking provision in the statute must be given their in-

tended play, they should operate in areas where they are

best suited” (id. at 10a). Since age “looks to the individual

characteristics of the claimant,” the court concluded that it

was “clearly adjudicative” (id. at lla) and hence a factor

whose effects were properly determined in individualized

hearings.

As the court recognized, however, the distinction be-

tween legislative and adjudicative facts is only “a principle

to guide in the construction of thie] statutory scheme”

(App. A, infra, 8a). It should not be allowed to control the

clear directions that Congress itself gave for the implemen-

tation of the Act. As the government's brief in Campbell

emphasizes, Congress granted the Secretary broad and ex-

plicit authority to implement the disability provisions of the

Act and expressed its hope that the resulting regulations

would provide specific criteria to govern the effect that

statutory factors such as age have on the evaluation of disa-

bility (81-1983 Pet. Br. 13-28).

The medical-vocational regulations do make the claim-

ant’s chronological age an adjudicative fact. In most cases it

will be undisputed; but where it is a matter of uncertainty,

age must be determined individualiy at an administrative

hearing. 20 C.F.R. 404.1568(e); 20 C.F.R. Part 404, Sub-

part P, App. 2, Section 200.00(a). On the other hand, the

weight given to a claimant's age in determining disability is

a proper issue for rulemaking. The guidelines eliminate the

unfairness of treating claimants of the same age differently

on the basis of unmeasurable facts about senescence. They

do so on the basis of factual judgments about the types of

jobs open to individuals of given age (with different educa-

tion, skills, and impairments), and policy judgments about

the levels of restrictions that satisfy the definition of “disa-

bility” painted with a broad brush in the Act.

CONCLUSION

The petition for a writ of certiorari should be held pend-

ing the decision in Schweiker v. Campbell, supra, and

should then be disposed of as appropriate in light of that

decision.

Respectfully submitted.

Rex E. LEE

Solicitor General

J PAUL McGRATH

Assistant Attorney General

KENNETH S. GELLER

Deputy Solicitor General

JOHN H. GARVEY

Assistant to the Solicitor General

ROBERT S. GREENSPAN

ANNE BUXTON SOBOL

Attorneys

NOVEMBER 1982

Appendix A

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 81-7140

JOHN BROZ, PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, Secretary of Health & Human

Services, a Department of the United States Government,

DEFENDANT-APPELLANT.

No. 81-7143

RICHARD D. HOLMES, PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, The Secretary of Health and

Human Services, DEFENDANT-APPELLANT.

No. 81-7336

CORRINE LITTLE, PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, Secretary of the Department of

Health and Human Services, DEFENDANT-APPELLANT.

No. 81-7370

THOMAS QO. JONES, PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, Secretary, Department of Health

and Human Services, DEFENDANT-APPELLANT.

No. 81-7466

FRED SOESBE, PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, Secretary of Health and Human

Services, DEFENDANT-APPELLANT.

APPEALS FROM THE UNITED STATES DISTRICT

COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

| Decided June 4, 1982}

Before GODBOLD, Chief Judge, HENDERSON and

MERRITT*, Circuit Judges.

GODBOLD, Chief Judge:

In these five consolidated appeals we decide the validity

of the Department of Health and Human Services’ Medical-

Vocational Guidelines, popularly known as the “grid regula-

tions,” which are employed in determinations of Social Se-

* Honorable Gilbert S. Merritt, U.S. Circuit Judge for the U.S.

Court of Appeals for the Sixth Circuit, sitting by designation.

curity disability benefits.' These regulations appear at 20

C.F.R. part 404, subpart P, Appendix 2 (1981), and were

promulgated in 1978 under the Federal Old-Age, Survi-

vors, and Disability Insurance Benefits portion of the Social

Security Act, 42 U.S.C. § 401 ef seq.? In each of these

cases disability benefits were denied on the basis of these

grid regulations after a hearing conducted by an Adminis-

trative Law Judge. Each case was appealed to the Seuth-

ern District of Alabama where a United States magistrate

recommended that the grid regulations be held invalid and

that the decision of the ALJ be reversed and remanded for

reconsideration apart from the regulations. The district

court adopted the magistrate’s proposed findings and rec-

ommendations as its own findings of fact and conclusions of

law. The Secretary of Health and Human Services appeals.

After a description of the grid regulations, we address

first the question common to all of these cases, namely, the

validity of the regulations, and then turn to alleged errone-

ous findings and procedures in the individual cases. We

conclude that the regulations as they have been applied are

invalid because they conclusively determine the effect of

age on disability, but that they are capable of valid applica-

tion by providing an individual determination of the age

factor.

' We are the fourth circuit to consider a broad challenge to the facial

validity of the grid regulations. Three prior circuits have upheld the

regulations under varying attacks. Sawtise v. Schweiker, [F 243 Cir.

1982); Cummins v. Schweiker, 670 F.2d 81 (7th Cir. 198): Kirk v.

Secretary, 667 F.2d 524 (6th Cir. 1981). See notes 5 & 9 infra.

The Second Circuit and the former Fifth Circuit have considered the

validity of the regulations under a more limited attack. Camphell v.

Secretary, 665 F.2d 48 (2d Cir. 1981) (remanding case for identification

of specific jobs available to claimants); Salinas v. Schweiker, 662 F.2d

345 (5th Cir. 1981) (holding that existence of jobs in the economy is a

proper subject for administrative notice). See notes.12 & 13, infra.

? 43 Fed. Reg. 55349 et seq. (1978), effective Feb. 26, 1979. The reg-

ulations were recently revised to simplify their language. 45 Fed. Reg.

55584 (1980). As no changes material to thir discussion were made, ci-

tations are to the current version.

I. The Act and the regulations

The Act provides benefits to qualified individuals who

are disabled. 42 U.S.C. § 423(a)(1). “Disability” is defined

as the “inability to engage in any substantial gainful activi-

ty by reason of any [permanent] medically determinable

physical or mental impairment.” /d. at § 423(d)(1)(A).

Some impairments are per se disabling. 20 C.F.R.

§ 404.1525 (1981). For those not per se disabling a two-

stage analysis is used to determine whether an impairment

is disabling. A claimant must first show an impairment seri-

ous enough to prevent work in his or her previous job.

Here the burden of proof is on the claimant. Ferguson v.

Schweiker, 641 F.2d 243, 246 (Sth Cir. 1981). If this burden

is met the burden shifts to the Secretary to prove that the

claimant “cannot, considering his age, education, and work

experience, engage in any other kind of substantial gainful

work which exists in the national economy.” 42 U.S.C. §

423(d)(2)(A) (emphasis added).*

The Medical-V ocational Guidelines come into play at this

second stage. Part of these regulations provide a general

framework to guide the ALJ in his analysis of the medical

and vocational facts that bear on his determination of

whether a claimant is capable of performing other substan-

tial gainful employment. 20 C.F.R. § 404.1545 -.1573

(1981). The part of the regulations at issue here, Appendix

2 to 20 C.F.R. part 404, subpart P, is no mere guideline,

however, but is a detailed grid system directing a conclu-

sion in certain cases on the issue of ability to perform other

substantial work, based on the claimant's age, education,

and work experience characteristics. These grid regulations

are structured in this fashion: The ALJ first ascertains a

3“*Work which exists in the national economy’ means work which

exists in significant numbers either in the region where such individual

lives or in several regions of the country.” 42 U.S.C. § 423(d)(2)(A). It

does not matter “whether such work exists in the immediate area in

which [the applicant] lives, or whether a specific job vacancy exists for

him, or whether he would be hired if he applied for work.” /d. Thus,

the ‘only issue is what jobs exist in the national economy that the appli-

cant could perform, not whether he could actually obtain those jobs

considering the labor market or employer hiring practices.

claimant’s “residual functional capacity,” which involves

findings as to the claimant’s ability to lift weight, sit, stand,

push, and pull. 20 C.F.R. § 404.1567 (1981). For claimants

found capable of sedentary, light, or medium work, the reg-

ulations provide three tables, one corresponding to each

level of residual functional capacity. These tables account

for the vocational factors of age, education, and work expe-

rience, which are mentioned in the statute. 42 U.S.C.

§ 423(d)(2)(A). The ALJ determines a claimant’s age, edu-

cation, and work experience and reads from the appropri-

ate table and line the conclusion of whether the claimant is

disabled.

When the grid regulations apply, they leave no discretion

to the ALJ, for they direct the ultimate conclusion of

whether a claimant is capable of other substantial gainful

work in the national economy. Where the grids do not ap-

ply, however, the ALJ determines for himself, under the

general guidelines accompanying the grids, whether the

claimant is capable of other substantial work. 20 C.F.R.

part 404, subpart P. App. 2 § 200.00(a), (d). The grid regu-

lations do not apply unless each factor in the matrix is met

by a characteristic of the claimant. /d. There are two nota-

ble exclusions from the grids. At a given residual functional

capacity, if a claimant is capable of some work at that level

but not a full range of work, then that level of the grids is

not applicable. 7d. at §§ 201.00(h), (i), 202.00(b); see 43

Fed. Reg. 9284, 9300. Accord Santise v. Schweiker,

F.2d , slip op. p. 22, (8d Cir. 1982); Kirk v. Secre-

tary, 667 F.2d 524, 529 (6th Cir. 1981). Second, in deter-

mining residual functional capacity only exertional limita-

tions are considered, i.e., ability to lift, stand, push, pull,

handle, ete. If a claimant has nonexertional impairments

that significantly limit the ability to do basic work activi-

ties‘—for example, sensory impairments such as skin or re-

spiratory sensitivity and mental or emotional impair-

ments—then the grid regulations do not apply. /d. at §

200.00(e).

4 This paraphrases the definition of “impairment” in 20 C.F.R. &

404.1520(c).

Il. Validity of the requlations

A. Introduction

The effect of the Medical-Vocational Guidelines can be

described in different ways. First, in directing a conclusion

as to a claimant's ability to perform other substantial work,

the essential effect of the Guidelines is to remove this ulti-

mate issue from adjudication. Once a claimant's residual

functional capacity, age, education, and work experience

are known, the determination of whether the claimant is ca-

pable of substantial work in the national economy is made

by the Secretary's regulations and not by the ALJ. Second,

under the regulations, vocational expert testimony to sup-

port a conclusion of not disabled is unnecessary, and voca-

tional expert testimony contradicting the conclusion is ir-

relevant. Thus, the regulations might be viewed as

supplying the evidence necessary to discharge the agency's

burden of proving by substantial evidence that a claimant

no longer able to perform his previous work is capable of

other substantial gainful activity. Third, the regulations

might also be viewed as taking administrative notice of cer-

tain facts; that is, the regulations are based on the agency's

observation that a substantial number of unskilled seden-

tary, light, and medium occupations exist in the national

economy, and the agency's observation of the physical

requirements for these jobs. See Appendix 2, supra, at

$§ 201.00(a), 202.00(a), 203.00(a).

Correspondingly, in this case three lines of attack are

made on the regulations: (1) They deprive a claimant of the

right to an individual determination of disability by an ALJ

at a hearing; (2) they improperly relieve the Secretary of

the burden of demonstrating by substantial evidence that a

claimant is capable of other substantial work; and (3) they

fail to allow a claimant an opportunity to rebut the facts

that are administratively noticed through the regulations.

B. The right to a hearing versus the authority to rulemake

(1) The statutory language

The Act confers the right to a hearing and to have an ini-

tial disability determination affirmed, reversed, or modified

on the basis of evidence adduced at the hearing. 42 U.S.C.

§ 405K b). The regulations have the effect of removing from

ALJs, who conduct such hearings, the ultimate decision of

the claimant's ability to perform other substantial gainful

work and relegating to determination at the hearing only

the subsidiary facts of residual functional capacity, age, ed-

ucation, and work experience. The regulations direct, for

instance, that a 45-year old claimant capable of sedentary

work with no transferable work skills and only limited edu-

cation is not disabled. 20 C.F.R. part 404, subpart P, Ap-

pendix 2 § 201.18. This determination is conclusive and is

made on the basis of facts noticed in the rulemaking where

the regulations were promulgated. Claimants argue that

the conclusiveness of this determination, made on the basis

of facts not adduced at the hearing, violates 42 U.S.C.

§ 405(b).

On the other hand, the Secretary relies on the broad

rulemaking powers under the Act to justify the regulations:

The Secretary shall have full power and authority to

make rules and regulations and to establish proce-

dures, not inconsistent with the provisions of this

subchapter, which are necessary or appropriate to car-

ry out such provisions.

42 U.S.C. § 405(a). There are also more specific provisions

directed toward the issue of disability:

§ 405(a):

The Secretary ... shall adopt reasonable and proper

rules and regulations to regulate and provide for the

nature and extent of the proofs and evidence and the

method of taking and furnishing the same in order to

establish the right to benefits hereunder.

§ 423(d)(5):

An individual shall not be considered to be under a dis-

ability unless he furnishes such medical and other evi-

dence of the existence thereof as the Secretary may

require.

The problem we face, then, in the words of Professor

Kenneth Culp Davis, is how “to fit together two statutory

provisions, the one conferring the right to ‘full hearing,’

and the other conferring power to make substantive rules.”

K. Davis, 2 Administrative Law Treatise § 12.16, at 467

(1979). The Secretary clearly has a degree of authority to

promulgate substantive rules governing the determination

of disability, yet any such rule necessarily removes some is-

sues from adjudication that otherwise might have been sub-

ject to proof by a claimant at the hearing guaranteed by the

Act.

(2) The principle of construction

The principle to guide the agency © 4 the courts in

harmonizing a claimant's statutory mght to a hearing and

the Secretary's substantive rulemaking powers is found in

the well established distinction between legislative and ad-

judicative facts. Where only legislative facts are involved it

is proper to rulemake; adjudicative facts, however, must be

determined at a hearing. We emphasize that this distinction

is employed here as a principle to guide in the construction

of this statutory scheme and is not necessarily a matter of

constitutional due process.

The legislative/adjudicative fact distinction, first articu-

lated by Professor Davis in An Approach to Problems of

Evidence in the Administrative Process, 55 Harv. L. Rev.

364, 404-07 (1942), has become a cornerstone of modern

administrative law theory and has been widely accepted in

the federal appellate courts. See Association of National

Advertisers Inc. v. FCC, 627 F.2d 1151, 1162-68 & n.20

(D.C. Cir. 1979), cert. denied, 447 U.S. 921 (1980) (col-

lecting cases from six dreuits, including Drummond v.

Fulton County Dept. of Family & Children’s Services, 568

F.2d 1200, 1210 (Sth Cir. 1977) (en bane), cert. denied, 437

U.S. 910 (1978)). Accord, K. Davis Treatise, supra, at

§ 15:2. Speaking broadly, adjudicative facts are those about

the immediate parties, and legislative facts are all others.

Id. at § 15:3, p. 143. “‘Legislative facts ... apply univer-

sally, while adjudicative facts are those developed in a par-

ticular case.” U.S. v. Bowers, 660 F.2d 527, 581 (5th Cir.

1981) (quoting U.S. v. Gould, 536 F.2d 216, 220 (8th Cir.

1976)).

The legislative/adjudicative fact distinction is well suited

to dovetailing the right to a hearing and the power to

rulemake because the distinction preserves the essential

function of each process and assigns to each process the

matters best dealt with by each: “Trials are at their best

when specific adjudicative facts are in dispute. Trials are

seldom desirable either on legislative facts or on broad fae-

tual issues.’” Drummond, supra, 568 F.2d at 1210 (quoting

K. Davis, Administrative Law of the Seventies § 7.00-11 at

276 (1976)). Instead, “determination {of legislative facts] is

particularly appropriate to the administrative [rule

making] process.” Usery v. Tamiami Trail Tours, Ine.,

581 F.2d 224 (5th Cir. 1976). Trial procedure is best suited

for adjudicative facts because the best source of informa-

tion about specific facts concerning the individual parties is

the parties thenselves. Facts that concern scientific truths,

sociological data, and industrywide practices, on the other

hand, are not peculiarly within the knowledge of the parties

and are not of the type that generally would be aided by

viewing the demeanor of witnesses, by cross-examination,

and other aspects of adversarial factual development. See

generally, K. Davis Treatise, supra, at §§ 12:4, 15:3.

Construction of the Act in this fashion accords with schol-

arly opinion: “A statute [that] requires ja hearing on the

record] can and should be interpreted ... not to require

trial procedure on issues of broad legislative fact, because

the purpose behind such a statute is always to require trial

procedure on issues of adjudicative fact ...” /d. at § 14:13,

p. 11. The Supreme Court has also recognized that a broad

hearing requirement must give way in appropriate circum-

stances to rulemaking authority: “We do not read the hear-

ing requirement ... as withdrawing from the |Secretary]

the rulemaking authority necessary for the orderly conduct

of business.” See U.S. v. Storer Broadcasting Co., 351 U.S.

192, 202 (1956) (upholding FCC regulations that determine

maximum number of broadcast licenses one individual can

own in the public interest, despite right to a hearing when

an application is denied).

Interpretation of the Act in terms of legislative and adju-

dicative facts is suggested in the Seventh Circuit's recent

opinion upholding the validity of the grid regulations. That

court observed that

lif the statutory term “disability” described a histori-

cal {i.e., adjudicative] fact best or only ascertainable

on a case-by-case basis, binding criteria might be a

problem; but it does not... . A judgment {of disabili-

ty], to be well informed, requires a broad knowledge of

the labor market.

Cummins v. Schweiker, 670 F.2d 81, 83 (7th Cir. 1982).

Other circuits that have reviewed the validity of the regula-

tions have also emphasized the need for an individual deter-

mination of adjudicative facts. Santise v. Schweiker,

F.2d , slip op. at 21 (3d Cir. 1982) (“the statute

{demands that] the denial of disability benefits be the prod-

uct of individualized fact finding, i.e., ... taking into aec-

count each applicant's peculiar characteristics”). See Kirk

v. Secretary, 667 F.2d 524, 5380 (6th Cir. 1981).° Finally, the

prior caselaw deciding the validity of other disability regu-

lations is consistent with this distinction. Regulations that

attempt to determine conclusively that a particular impair-

ment is not disabling have consistently been invalidated,

Marion v. Gardner, 359 F.2d 175 (8th Cir. 1966) (regula-

tion precluding personality disorders unless accompanied

by severe psychosis); Nickles v. Richardson, 326 F. Supp.

777 (D.S.C. 1971) (regulation excluding diabetes unless it

resulted in amputation); Wooley v. Gardner, 283 F. Supp.

576 (E.D. Pa. 1968) (regulation excluding hypertension un-

less accompanied by certain physiological effects), whereas

regulations that define other aspects of the disability deter-

mination that are not focused on the individual characteris-

tics of the applicant but instead address broader questions

of economic and sociological fact have been upheld, King v.

Finch, 312 F. Supp. 909, 914 (N.D. Ohio 1970) (regulation

defining what level of compensation is “‘substantial"’);

Levine v. Ribicoff, 201 F. Supp. 692 (S.D.N.Y. 1962) (regu-

lation defining what are “wages paid”).

5 We cite these cases for their support of the legislative/adjudicative

fact distinction. As seen below, we do not agree with the conclusion

reached by the Seventh Circuit that the disability determination is en-

tirely a matter of legislative fact, or with the conclusion of the Third

and Sixth Circuits that the regulations leave for individual determina-

tion all of a claimant's individual characteristics. age note 9 infra.

lla

To summarize our holding, because both the broad hear-

ing provision and the broad rulemaking provision in the

statute must be given their intended play, they should op-

erate in areas where they are best suited. This is accom-

plished by restricting rulemaking to legislative facts and

requiring determination of adjudicative facts in a hearing.

The distinction bet ween the two sets of facts is not a bright

line one, see K. Davis Treatise, supra, at $§ 12:3, 15:3,

and so the Secretary should be given discretion in constru-

ing the Act in borderline situations.® Therefore, the regula-

tions are valid if they refrain from determining what are

fairly classified as adjudicative facts.

(3) Application of the legislative/adjudicative

fact distinction

We now review the regulations to determine if they con-

fine themselves to nonadjudicative facts. As discussed

above, the regulations come into play at thai stage of the

disability determination where the issue is whether the

claimant can perform substantial gainful employment other

than his former job. There are two elements in this deter-

mination. First, it is necessary to decide what capabilities

and qualifications the claimant has, namely, residual funce-

tional capacity, age, experience, and education. Second, it

is necessary to determine whether there are a substantial

number of jobs in the national economy that a person with

these characteristics can perform. Generally speaking, the

first element is a matter of adjudicative fact; the second is

not. The first looks to the individual characteristics of the

claimant. This is clearly adjudicative. The second element

looks to conditions of the national job market. It is con-

cerned with broad sociological data that is not related to

the individual parties. It therefore concerns nonadjudica-

tive matters.

* Cf. Sullivan v. Weinberger, 493 F.2d 855, 859 (5th Cir. 1974):

“Congress delegated to the Secretary the responsibility for prescribing

regulations concerning the determination of what showing is sufficient

to prove that the claimant's alleged impairment is a disability under

the Act. . . . This is an area where administrative expertise shoul be

accorded great weight.”

12a

For the most part the regulations are consistent with this

outline. They leave for case-by-case determination the criti-

cal factor, which is the physical capability of the claimant.

If the claimant is found to have the exertional capacity to

perform sedentary work, for instance, and has no

nonexertional impairments, then the grids are « onsulted for

the disability determination. In the majority of cases the

claimant is found not disabled regardless of his education

and experience because the grids determine that there are

a substantial number of unskilled jobs in the national

economy. Where it is necessary to evaluate a claimant's

ability to perform skilled work, and education and experi-

ence thus become critical to the disability determination,

these two factors are open to individual adjudication in

terms of the claimant’s specific skills. A claimant's educa-

tion is evaluated in terms of the degree to which it has

conferred job skills. 20 C.F.R. § 404.1564 (1981); see note 8

infra. Work experience is likewise evaluated in terms of

the specific skills learned and the extent to which these

skills are transferable to other jobs. /d. at § 404.1565.

Thus, for the three factors of residual functional capacity,

education, and work experience, the regulations “are prem-

ised on the necessity to adjudicate each case individually to

determine what work a specific individual is able to do.”

The regulations remove from adjudication only “the kinds

and numbers of jobs that exist in the national economy and

their skill and exertional requirements.” 43 Fed. Reg.

55349, 55352 (1978). In large part, then, the regulations

proper!y allocate legislative and adjudicative facts between

rulemaking and the hearing.

The final factor is age. Age is relevant under the grid

regulations in this manner: The grids operate with the

premise that, at a certain point, age significantly restricts a

worker’s ability to adapt and adjust to a new job and a new

working environment. /d. at § 404.1563(a).7 For instance,

7” ‘Age’ refers to how old you are ... and the extent to which your

age affects your ability to adapt to a new work situation and to do work

in competition with others.”

We do not hold that this is the only interpretation that may be given

to the age factor. The agency interprets it this way and no one chal-

13a

the sedentary grid determines that a 50-year old claimant

with no skills and limited education is disabled, while a

49-year old claimant with the same characteristics is not

disabled. Compare 20 C.F.R. part 404, subpart P, Appen-

dix 2 § 201.09 with id. at § 201.18. See, e.g., Cummins v.

Schweiker, 670 F.2d 81, 83 (7th Cir. 1982).

This adaptability or adjustment factor is not open to indi-

vidual determination under the grids. Instead the grids

conclusivcly determine that a person 49 years of age is able

to adjust to a new unskilled sedentary occupation but that a

person 50 years old is not.* In this respect the Secretary

has exceeded the authority conferred by the statute be-

cause the regulations determine an adjudicative fact.® As

the Secretary treats this factor, a person's ability to adapt

or adjust is clearly a fact relating to the individual claimant

and not one relating to the national labor market:

Where age is critical to a decision, recognition is taken

of increasing physiological deterioration of the senses,

joints, eye-hand coordination, reflexes, thinking proc-

lenges it, so we proceed under this interpretation. We must confess

some confusion concerning this adaptability factor, though. The agency

considers that the inability to adapt to a new work environment can be

offset or mitigated by job skills or education. But one would think that

a person unable to adjust to an unskilled job could also not adjust to a

skilled job.

®* Contrast the treatment given the age categories with that given

the education categories:

Adjudicative weight is ascribed to formal education only to the

extent that such education contributes to the individual's ability

to meet the vocational requirements of jobs; e.g., reasoning abili-

ty, communications skills or language competence, arithmetical

ability ... Thus the judgment must be an individualized one and

pertain to the facts presented about the claimant being evalu-

ated. Grade level is only determinative in the absence of evidence

to the contrary.

43 Fed. Reg. 9284, 9299 (1978).

* This is the juncture where we depart from the opinions of other

circuits. The Third Circuit has held that the regulations require “com-

plete consideration of all of an applicant's relevant characteristics.”

Santise, F.2d at . Slip op. p.21. The Seventh Circuit evident-

ly views the disability determination to consist entirely of legislative

facts. See note 5 supra and accompanying text. The Sixth Circuit has

held that the “grid requires that a claimant's particular characteristics

be evaluated before a disability determination is reached.” Kirk, 667

F.2d at 5380.

l4a

esses, etc., which diminish a severely impaired per-

son's aptitude for new learning and adaptation to new

jobs.

43 Fed. Reg. 55849, 55859 (1978).'°

The Secretary proffers this justification for the mechani-

cal treatment given the age-adaptability factor in the grid

regulations:

|Tjhere are no conclusive data which relate varying

specific chronological ages to specific physiologically-

based vocational limitations for performing jobs; this

was a pioneering effort by SSA due to the unique na-

ture of its disability program.

Id. at 55859."' The lack of precision in the adaptability fac-

tor does not, however, justify a legislative approach to its

resolution. Instead, the very fact that there are no scientif-

ic data sources on which to make the conclusions that the

regulations draw underscores that the best source of infor-

mation for determining the effect of age on adaptability is

the individual claimant.

To recapitulate, the Secretary has interpreted the Act to

require a consideration of the effect of age on the ability to

adapt to a new job. This is decidedly an adjudicative factor

and therefore must be given individual consideration

through adjudication rather than legislative resolution

' Indeed, where the grid regulations are not applicable and disabili-

ty is determined on the basis of the general guidelines in 20 C.F.R. §

404.1525 et seq., the Secretary has recognized the need for a more

case-by-case determination than is made in the grids: “|Wle will not

apply these age categories mechanically in a borderline situation.” Ac-

cord 43 Fed. Reg. 55349, 55354 (1978) (“the point when age could be

expected to be an adverse consideration in determining an individual's

vocational adaptability to [pew] work ... is an expectancy only and not

an arbitrary limit”).

"! See also, Goldhammer, The Effect of the New Vocational Requla-

tions on Social Security and Supplemental Security Llucome Disability

Claims, 32 Admin. L. Rev. 501, 508 (1980):

Now, this question of adaptability of older workers to new jobs

was raised from time to time at hearings taking place before the

new vocational regulations took effect. The typical response of

vocational expert witnesses was that while older workers are

generally less adaptable to change than younger workers, it is

virtually impossible to apply that generalization to specific

situations.

15a

through rulemaking. Because the ALJ applied the grid reg-

ulations in these cases to determine conclusively these

claimants’ abilities to adapt to new work, the cases must be

remanded for an individual consideration of this factor. See

42 U.S.C. § 405 (g) (providing for remand to the agency

upon showing of good cause); Ferguson v. Schweiker, 641

F.2d 243, 246 n.3, 250 n.8 (5th Cir. 1981) (same).

We do not decide at this stage how individual considera-

tion of the age-adjustment factor must be accomplished.

We observe, however, that two mechanisms exist under

the regulations as written that would meet the require-

ments of the Act. As discussed above, the grid regulations

do not apply if a claimant is unable to perform a full range

of work at a given residual functional capacity. For in-

stance, although manual dexterity is not a listed criterion

for determining that a claimant is capable of sedentary

work, if an applicant’s dexterity is restricted to the extent

that he cannot perform a full range of sedentary work, then

the sedentary grid does not apply and the case is decided

under general guidelines. 20 C.F.R. part 404, subpart P,

Appendix 2 § 200.01(h). An applicant’s inability to adapt to

new work environments might also limit his ability to per-

form a full range of work. Second, if an applicant has a

nonexertional impairment that significantly limits basic

work skills, then the grids are inapplicable. The Secretary

intends the category of nonexertional impairments to be

flexible: “This particular area does not lend itself to a great

degree of specificity.”’ 43 Fed. Reg., supra, at 55359.

Therefore, we perceive no reason why the age factor could

not be evaluated as a nonexertional impairment as well. If

the effect of age on the ability to adapt is considered

through either of these two routes—full range of work or

nonexertional impairment—then the individual determina-

tion that is required of this adjudicative factor is supplied

despite the apparent flaw in the regulations. We emphasize

these two mechanisms because they presently exist in the

regulations and therefore enable us to uphold the regula-

tions as written if applied in this fashion. We do not intend

to hold that this is the only manner in which the age-

l6a

adjustment factor may be dealt with by the agency. (f.,

e.g., note 8 supra.

C. Substantial evidence and administrative notice

Having determined that the regulations if properly ap-

plied are within the Secretary’s rulemaking powers con-

ferred by the Act and do not contravene claimants’ rights

to a hearing, we turn to the contentions that the regula-

tions cannot serve as substantial evidence to discharge the

Secretary's burden of proving a claimant is capable of other

substantial gainful activity, and that the regulations im-

properly take administrative notice of facts without an op-

portunity to rebut.

(1) Substantial evidence

In Salinas v. Schweiker, 662 F.2d 345, 347-49 (Sth Cir.

1981), the former Fifth Circuit held that the administrative

notice taken in the grid regulations of the existence of sub-

stantial work in the national economy for which a person

with a claimant’s characteristics is qualified is substantial

evidence and may be used in lieu of vocational expert testi-

mony. We are bound by this holding. Bonner v. City of

Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en bane).'?

We also find claimants’ argument unconvincing under an

alternative analysis. The flaw in the contention that the

regulations cannot discharge the agency's evidentiary bur-

den at the hearing is that the regulations are not a source

of evidence for the ALJ’s determination of disability but

quite differently create a rule of agency law directing the

'2 The Second Circuit differs with this result, holding that the regu-

lations fail to provide notice of particular jobs that a claimant is capa-

ble of performing. Campbell v. Secretary, 665 F.2d 48, 53-54 (2d Cir.

1981). This requirement of identification of specific jobs does not hold

in this circuit, however, where the claimant has first been found capa-

ble of a full range of work in a given residual functional capacity.

Ferquson v. Schweiker, 6A1 F.2d 243, 247-48 (Sth Cir. 1981). More-

over, as discussed immediately following in text, we do not agree with

the implicit premise of the Second Circuit that the Secretary's regula-

tions must comply with the caselaw prescribing the Secretary's eviden-

tiary burden at an adjudication.

17a

ALJ's ultimate conclusion. The proper characterization of

the regulations undermines claimants’ contention in two

ways. First, the regulations remove from adjudication the

ultimate issue of ability to perform new work. Therefore,

they do not purport to be, and need not be, a source of evi-

dence on this matter, because the matter is not subject to

adjudication. The only issue then is whether it is within the

Secretary's power to remove this issue from adjudication,

and that question has been answered above in the affirma-

tive. Second, where the Secretary exercises rulemaking au-

thority, the standard of review is no longer one of substan-

tial evidence but instead whether the regulations are valid

and properly applied.

The findings of the Secretary as to any fact, if sup-

ported by substantial evidence, shall be conclusive,

and where a claim has been denied ... because of fail-

ure of the claimant ... to submit proof in conformity

with any regulation ..., the court shall review only the

question of conformity with such regulations and the

validity of such regulations.

42 U.S.C. § 405(g).

For those subsidiary factual issues that do remain for

adjudication—residual functional capacity, age, education,

and work experience—the regulations do not alter the bur-

den of proof or the evidentiary standard. Watkins v.

Schweiker, 667 F.2d 954, 955 (11th Cir. 1982).

(2) Administrative notice

The Administrative Procedure Act requires that when

“an agency's decision rests on official notice of a material

fact ..., a party is entitled, on timely request, to an oppor-

tunity to show the contrary.” 5 U.S.C. § 556(e). Claimants

reason that the reguletions contravene this provision be-

cause they take administrative notice of the existence of a

substantial number of unskilled jobs in the national econ-

omy and the requirements for those jobs, without affording

an opportunity to rebut.'* If this characterization of the

13 This issue is not controlled by Salinas v. Schweiker, 662 F.2d 345

(5th Cir. 1981). There the court held that it was proper to take admin-

istrative notice of the existence in the economy of jobs that a person

18a

regulations is followed, claimants have an easy case indeed,

for the notice taken in the regulations is in fact conclusive.

This is surely too facile, however. Section 556(e) applies

only to adjudications, not to rulemakings.'* Administrative

notice of the existence of unskilled jobs and their require-

ments was not taken in any of these claimants’ cases but

was taken at the rulemaking where these regulations were

promulgated.

Claimants’ argument is strengthened by contending that

when the regulations, which are based on administrative

notice, are applied in an adjudicatory context to direct the

ALJ's ultimate determination, then the “agency's decision

rests on official notice.” We find this not convincing. It is

merely a convenient manner of expressing the effect of the

regulations to say that they direct the A!.J’s determina-

tion.'® It is more precise and accurate, however, to observe

that when the regulations are applied the ALJ does not de-

termine disability. The ultimate issue is removed from ad-

judication. Only the subsidiary facts upon which the regula-

tion operates are decided or determined through the

adjudicatory process. Therefore, the determinations actual-

ly made at the hearing are not based on administrative no-

tice, and § 556(e) is thus not applicable.

To illustrate the fallacy of claimants’ argument, we ob-

serve that it could be made against any regulation that is

applied in an adjudicatory context, for every rulemaking is

based on notice of legislative facts that inform the rule that

with the claimant's qualifications can perform and that vocational ex-

pert testimony is not necessary once the claimant's individual vocation-

al characteristics have been considered. This issue of the use of admin-

istrative notice instead of vocational testimony differs from the

administrative notice issue we face in that in Sa/ivas the issue was a

substantive one of whether jobs in the economy is a proper subject for

administrative notice whereas here the primary issue is a procedural

one of, assuming it is proper to take judicial notice, was proper notifi-

cation and opportunity to rebut afforded.

4 Appellees do not contend that the rulemaking in which the regula-

tions were adopted was deficient in failing to provide an opportunity to

respond.

15 See, e.g., Salinas v. Schweiker, 662 F.2d 345, 347-49 (5th Cir.

1981).

19a

is promulgated. For instance, the Act expressly empowers

the Secretary to define by rule “when... earnings ... dem-

onstrate an individual’s ability to engage in substantial

gainful activity,” 42 U.S.C. § 423 (d)(4), and accordingly

regulations provide that earnings over $300 per month

ordinarily show substantial gainful activity, 20 C.F.R.

§ 404.147 b)(2)(vi). Such regulations are based in part on

administrative notice of the prevalent wage rates. Under

the profferred interpretation of § 556(e), if an ALJ invoked

this rule to deny benefits the regulation would be invalid

despite the Secretary's clear power under the Act. To state

this proposition is enough to demonstrate that this is not

the fashion in which § 556(e) is meant to apply. Instead, if

the Secretary is empowered by the Act to remove an issue

from litigation by determining it conclusively in rule-

making, § 556(e) is inapplicable because the administrative

notice taken is not taken during adjudication.

Ill. The individual cases

We have held that all of these cases must be remanded to

the agency for an individual consideration of the age-adjust-

ment factor because the regulations as heretofore applied

conclusively determine this adjudicative matter. We decide

now whether there were other defects in the particular

cases, aside from the validity of the regulations, that re-

quire reconsideration on remand. There are two matters to

address. First, some claimants contend that application of

the regulations to them was not predicated upon proper

findings by the ALJ. Second, claimants contend that dec’-

sion of their cases under the regulations was procedurally

unfair because there was no notice of the ALJ’s intention to

rely on the grids, and therefore there was no proper oppor-

tunity to offer rebuttal evidence showing that the claimant

cannot perform a full range of work.

A. Predicate findings

Claimant Holmes, age 32 at the time of the agency hear-

ing, suffered a back injury in 1976 that precluded him from

continuing his former work at a paper mill. After his second

20a

application for disability benefits Holmes was adjudged dis-

abled for a time but was determined in 1977 to have re-

gained the ability to perform substantial gainful employ-

ment. Tais determination was made on the basis of a

physician's report that, after treatment, there was no rea-

son Holmes could not resume some substantial work. No

appeal was taken from this determination. Subsequently,

Holmes was twice hospitalized and was seen by several

other doctors because of back problems. He continues to

suffer pain, he complains of vision problems and numbness,

he undergoes four hours of traction per day, and he takes

three drugs that potentially affect his mental acuteness.

In the hearing held in this third application for benefits,

the ALJ found, based on the 1977 doctor's report saying

that Holmes could return to work and the adjudication the

same year that he was not disabled, that Holmes was capa-

ble of sedentary work. His age, experience (unskilled), and

education (illiterate)'® resulted in a not disabled determina-

tion under the grids. 20 C.F.R. part 404, subpart P, App. 2

§ 201.23.

The district court reversed and remanded, holding that

the need for four hours of traction and the mental effects of

the medication were nonexertional impairments, and there-

fore Holmes’ case falls outside of the grid. We cannot agree

fully. Although it is clear from the record that these mat-

ters potentially impose limitations on Holmes’ ability to

perform sedentary work, we cannot say with certainty that

they rise to the level of nonexertional impairments or pre-

vent a full range of sedentory work. No findings were made

on these matters by the . LJ, so Holmes’ case must be re-

manded. See Harrell v. Harris, 610 F. 2d 355 (Sth Cir.

1980) (finding inadequate consideration by ALJ of need for

therapy and the effects of medication). Because there is no

evidence or findings on how these potential limitations in

® Mr. Holmes was not actually adjudged illiterate but only pre-

sumed so by the ALJ because he claimed only a limited ability to read

an!’ write and it was not necessary under the grids to determine

whether he was literate.

2la

fact limit Holmes’ work skills, however, we do not hold that

the ALJ must decide the case outside the grid system; in-

stead, the question of whether the grids apply must be re-

considered. See Ferguson v. Schweiker, 641 F.2d 243, 250

n.8 (5th Cir. 1981) (case should be remanded for agency

consideration where record does not support “a dispositive

ruling”).

Holmes also complains that inadequate attention was giv-

en by the ALJ to his allegations of pain and to his post-1977

hospitalizations and physicians’ reports. Although we need

not decide whether these defects alone would warrant re-

consideration of the case, we agree that the ALJ's treat-

ment of these matters was abbreviated, and, inasmuch as

this case must be substantially reconsidered on other

grounds, on remand the ALJ should make a fresh determi-

nation of the extent of Holmes’ current impairments and

whether he meets the exertional requirements for seden-

tary work.

Claimant Jones, a former telephone installer and line re-

pairman with a tenth grade education, age 52 at the time of

his hearing, was found capable of light work and thus not

disabled under § 202.11 of the grid regulations. Jones com-

plains of back problems that cause pain and of a sinus condi-

tion and arthritis. He challenges the finding by the ALJ

that he is capable of light work.

Jones’ personal physician reported that Jones is totally

disabled. Recent examinations by two other physicians,

however, report that despite Jones’ difficulties he is capa-

ble of light work as defined in the regulations. The ALJ

was allowed to resolve this conflict in the medical evidence.

Jones also contends that the ALJ did not consider his alle

gations of pain. Examination of the record discloses that

pain was considered but discounted in the light of physi-

cians’ examinations. In particular, the fact that Jones’ “re-

sponses on physical examination were very much anticipa-

tory and somewhat exaggerated,” in the words of the ALJ,

supports the ALJ’s decision to discount Jones’ allegations of

pain.

22a

Claimants Soesbe, Broz, and Little have not challenged

in their briefs to this court or to the district court any of

the agency's findings on matters predicate to application of

the grid regulations. '?

B. Procedure

Claimants contend that, if the regulations are valid, they

should be given notice that their cases will be determined

under the regulations so that they may develop the facts

necessary to rebut application. We perceive no need for

special notice of these regulations. The regulations, as pub-

lished in the Code of Federal Regulations, fully explain the

requirements for their application and that a disability case

will be decided under them where appropriate. They re-

quire no more notice than other regulations governing the

disability determination.

We emphasize though that there is a “basic obligation” on

the ALJ in these nonadversarial proceedings to develop a

full and fair record, which obligation rises to a “ ‘special

duty ... to scrupulously and conscientiously explore for all

the relevant facts’” where an unrepresented claimant has

not waived counsel. This duty of inquiry on the ALJ would

include, in a case decided under the grids, a duty to inquire

into possible nonexertional impairments and into exertional

limitations that prevent a full range of work. Claimants

Holmes’ and Jones’ contentions concerning the ALJ's con-

sideration of their cases have been addressed, and no other

claimant contends that the ALJ's consideration was not full

and fair.

The judgments of the district court are AFFIRMED in

part and VACATED in part, and these cases are RE-

MANDED with instructions to remand to the agency for

further proceedings not inconsistent with this opinion.

'7 Claimants Soesbe and Broz did allege at oral argument that it was

not proper to apply the regulations in their cases. This is too late in the

long history of these cases to raise these contentions. See Nathan

Rodgers Construction Co. v. City of Saraland, F.2d 5th

Cir. 1982) (on petition for rehearing).

23a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 80-0156-H

JOHN BROZ, PLAINTIFF

PATRICIA ROBERTS HARRIS,

SECRETARY OF DEPARTMENT OF HEALTH AND HUMAN

SERVICES, DEFENDANT.

ORDER AND JUDGMENT

After due and proper consideration,’ and upon the rec-

ommendation of the Magistrate, which is adopted as the

opinion of this Court, it is ORDERED, ADJUDGED and

DECREED that the Administrative decision be and is

hereby VACATED, and that this cause be REMANDED to

the Secretary of Health and Human Resources for addition-

al proceedings not inconsistent with the opinion of this

Court, no costs to be taxed.

DONE this 11th day of December, 1980.

/s/W. B. HAND

United States District Judge

U.S. District Court

FILED AND ENTERED THIS THE

llth Day of Dec., 1980,

Minute Entry

No. 52,107

1 To the cases cited by the Magistrate, the Court adds Fruge v.

Harris, No. 803476 (5th Cir.. Dec. 4, 1980).

24a

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 80-0156-H

JOHN BROZ, PLAINTIFF

PATRICIA ROBERTS HARRIS, SECRETARY OF DEPARTMENT

OF HEALTH AND HUMAN SERVICES, DEFENDANT.

RECOMMENDATION OF MAGISTRATE

Plaintiff filed a suit in this Court as provided by 42

U.S.C. § 405g) for review of an adverse decision of the

Administrative Law Judge |“ALJ”| on a Social Security

Disability claim. The Court referred this matter to the

Magistrate for preliminary review of the administrative

record! and recommendation.

Congress provided that in such a case the Court shall

have power under 42 U.S.C. § 405g) to enter judgment

upon the pleadings and transcript, or to remand the case.

The Magistrate recommends that this cause be remanded to

allow the Secretary to offer rebuttal evidence in accordance

with applicable law.

I. Procedural History. On August 22, 1977, plaintiff filed

a claim with the Social Security Administration seeking an

entitlement to a “period of disability” under 42 U.S.C.

§ 416(i), and Social Security Disability Insurance benefits

as provided by 42 U.S.C. § 423. The plaintiff claimed disa-

bility because of a bad leg, a “drop foot,” a ruptured disc,

and damage to his spinal cord. The Social Security Admin-

istration determined that the plaintiff was disabled as of

July, 1977, because of his back condition. In a later contin-

uing disability investigation the Secretary determined that

the plaintiff's disability ceased in March, 1979, because of

medical improvement. The cessation determination was af-

firmed on reconsideration.

1 28 U.S.C. § 636(b\(3); Mathews v. Weber, 423 U.S. 261 (1976).

25a

The ALJ held a twenty-two minute hearing on October

16, 1979, at which the plaintiff was not represented by an

attorney. The ALJ affirmed the cessation decision, finding

is substance that:

1. Claimant ceased to meet the criteria for disability ben-

efits in March, 1979, and claimant compiled with all juris-

dictional conditions in his appeal from the cessation

determination;

2. Claimant was born on January 4, 1947, and was de

fined as a “younger individual”;

3. Claimant had a high school education;

4. Claimant had prior substantial gainful activity as a

commercial painter;

5. Medical evidence revealed that claimant underwent a

bilateral cervical laminectomy with good postoperative re-

covery and as of March, 1979, had no definite weakness or

atrophy in the upper extremities and had good return of

function. Claimant had suffered an injury to his right pero-

neal nerve but had not suffered such significant loss of func-

tion as to be precluded from engaging in all substantial

gainful activity;

6. Social Security medical-vocational guidelines regula-

tions required that claimant as of March, 1979, considering

his maximum sustained work capacity, age, education, and

work experience, be found “not disabled”;

7. Claimant was not under a disability as of March, 1979,

and continuing thereafter.

The Appeals Council refused the request to review the

decision of the ALJ and plaintiff thereupon sought review

in this Court of the decision of the ALJ, the final adminis-

trative decision.

II. Evidence of Record.

A. Employment Background. Plaintiff is a 33 year-old

male with a twelth-grade education. He lives with his wife

and two children in a house he owns. He received his last

Social Security check in May, 1979, and at the time of the

hearing, he had no income. His wife has a part-time job.

26a

The plaintiff last worked as a painting contractor prior to

his surgery in 1977. He has also worked as a painter's help-

er and a painter beginning in 1965.?

B. Alleged Medical Problems. Plaintiff claims that his

condition has not improved, but has instead gotten worse.

Plaintiff says that his neck hurts, his arms are numb, and

his nerves are “about shot.’ Plaintiff claims he is in con-

stant pain which begins in his shoulders and goes into his

arms and legs.*

C. Medical Testimony. The medical records reveal that

the plaintiff suffered an injury to the peroneal nerve (outer

side of the leg) of his right /eg in 1958, which resulted in a

foot drop.®

Plaintiff also suffered a neck injury in 1973, when diving

into a swimming pool and hitting the top of his head on the

bottom of the pool. Eight months after the accident, plain-

tiff developed weakness in his right hand for which he was

hospitalized and treated with cervical traction by Dr. M. H.

Taylor, a general surgeon in Foley, Alabama.

The next medical records refer to July 27, 1977, when the

plaintiff was admitted to the Baptist Hospital in Pensacola,

Florida by Dr. F. D. Kimbell, a neurosurgeon, with a diag-

nosis of cervical dise injury. Plaintiff was complaining of

neck pain and right shoulder and arm pain which had been

severe for several weeks and was gradually becoming more

disabling.

Dr. Kimbell performed a myelogram on the plaintiff on

July 28, 1977, which showed a defect at cervical 5 and 6

dises and the next day the doctor performed a bilateral cer-

vical laminectomy (excision of the posterior arch of a ver-

tebra) of cervical 4, 5, and 6 dises. Plaintiff was discharged

on August 5, 1977, at which time he was ambulatory with

no further arm discomfort and a minimal amount of neck

2 Record at 28-30, 55, 65.

97d. at 115.

*Jd. at 110.

5 Jd. at 71-78.

27a

discomfort. Dr. Kimbell’s discharge diagnosis was

herniated cervical 5 dise with spinal cord compression

which was treated and improved.®

Dr. H. C. George, orthopedic surgeon in Fairhope, Ala-

bama, examined the plaintiff on November 5, 1977. In a let-

ter to the Disability Determination Unit, Dr. George re-

counted the plaintiffs medical history, concluding that

some three months after the operation he was not doing

well. Plaintiff had pain concentrated in his neck, and low

back pain which was probably secondary to the neck pain.

He told Dr. George that any physical exertion caused an in-

tense increase in the pain. The doctor’s prognosis was that

he could expect some slow continual improvement but less

than complete recovery.’

On November 18, 1977, Dr. Kimbell saw the plaintiff,

who had complaints of a shocking sensation in both arms

and down his spine into his legs. Dr. Kimbell told the plain-

tiff that as the muscles in the surgical incision of his neck

grew stronger, the shocking sensations shou'' gradually

improve. The doctor suggested that the plainti.. .ould have

another myelogram but the plaintiff said he was unable to

afford the hospitalization.®

In January, 1978, plaintiff received notice of a favorable

decision entitling him to disability benefits. Then, in Febru-

ary, 1979, he received notice that his disability status was

scheduled for review.

The medical evidence introduced at the time of the re-

view included the resulis of an examination of the plaintiff

done at the request of the Social Security Administration

by Dr. William Bridges, a neurosurgeon in Mobile. On

March 20, 1979, Dr. Bridges wrote to the Disability Deter-

mination Unit that the plaintiff was continuing to have neck

pain, right arm pain, and right arm numbness and weak-

ness. It was the doctor’s opinion that the plaintiff would

benefit from a foot drop brace on his right foot and if his

neck and arm pain increased he should have a myelogram.

Dr. Bridges felt that the plaintiff had 8% permanent partial

6 Id. at 79-82.

7 Jd. at 92-3.

Jd. at .

28a

disability because of his right foot drop, and a 3-4% perma-

nent partial disability because of his neck injury. Dr.

Bridges felt that the plaintiff was employable.®

Included in the new medical evidence was an insurance

form filled out by Dr. Taylor on August 3, 1979, in which he

indicated that the plaintiff would never be able to work be-

cause of persistent pain and weakness from a cervical

dise.'°

The last of the medical evidence consists of notes from

Dr. Taylor. There are several notes on prescription pad pa-

per written in October, 1979, stating that the plaintiff is to-

tally disabled.'' There is also a letter written on November

15, 1979, in which Dr. Taylor states the plaintiff has cervi-

cal radiculitis (inflammation of the root of a spinal nerve)

which causes persistent pain and that his functional limita-

tion has caused pain which is precipitated by any strain.”

D. Plaintiff's Testimony. Plaintiff testified that his daily

activities consist of trying to fish a little and trying to help

his wife out around the house. He can do a little but then

starts hurting so bad that he has to lie down. He is able to

drive sometimes but has to wear a cervical collar when

driving or riding in a car. He has a cane to use when his leg

is weak and he is on medication for pain.'®

Plaintiff objected to the medical report by Dr. Bridges

because during the examination the doctor appeared to him

to be in a hurry. According to the plaintiff, the doctor

“poked around a little bit,” ran a needle up and down his

right arm, twisted his neck, and had him walk across the

floor and balance on one foot at a time.'*

E. Witnesses’ Testimony.

1. James Troy King, a painting contractor and a friend of

the plaintiff's for approximately 14 years, testified that he

visits with the plaintiff two or three times a week and that

on each visit since his operation, plaintiff has been in pain.

*Jd. at 127-8.

"Jd. at 133-4.

127d. at 137.

137d. at 30, 32-33.

4 Jd. at 34.

29a

Mr. King stated that he amd the plaintiff have tried to go

fishing and that the plaintiff is in such pain that he cannot

even go fishing for 30 minutes.'®

2. Mrs. Mary C. Broz, the plaintiffs wife, testified that

in her opinion, her husband is totally disabled. She testified

that he tries to do things around the house but he cannot;

that he is short tempered; that he cannot do things with the

children that a father is supposed to do; and that he is los-

ing weight because of bad nerves. In her opinion, her hus-

band is not able to work.'®

III. Applicable Law in General. The Social Security Act:

sets forth a two-part test for determining “disability”

under the Act: First, there must be a “medically de-

terminable physical or mental impairment which can

be expected to result in death or which has lasted or

can be expected to last for a continuous period of not

less than twelve months....” 42 U.S.C.

§ 1382¢(a)(3)(A). Second, this impairment must be so

severe that the claimant is “not only unable to do his

previous work but cannot, considering his age, educa-

tion, and work experience, engage in any other kind of

substantial gainful work which exists in the national

economy, regardless of whether such work exists in

the immediate area in which he lives, or whether a

specific job vacancy exists for him, or whether he

would be hired if he applied for work.” /d.

§ 1382¢(a)(3)(B). "7

If plaintiff shows that he or she cannot now perform his

former job, the burden shifts to the Secretary to show both

that the claimant is able to perform other work, and that

such other work is in effect available in the economy."* The

availability of work is normally proven either by the

15 Jd. at 35-37.

16 Jd. at 38-39.

17 Chaney v. Califano, 588 F.2d 958, 959 (5th Cir. 1979).

1 McGill v. Harris, 615 F.2d 365 (Sth Cir. 1980); Johnson v.

Harris, 612 F.2d 983 (5th Cir. 1980); White v. Harris, 605 F.2d 867,

869 (5th Cir. 1979); Knott v. Califano, 559 F.zd 279, 280 (5th Cir.

1977).

30a

testimony of a vocational expert'® or by administrative no-

tice”® if properly taken.*!

IV. Standard of Review. Congress has clearly provided

that in a Social Security case the administrative findings

“as to any fact, if supported by substantial evidence, shall

be conclusive. ...”*? This Court’s function is strictly limit-

ed; we may only determine whether the administrative

findings are supported by “substantial evidence” consider-

ing the record as a whole.**

The term “substantial evidence” in this circumstance

means:

more than a mere scintilla. It means such relevant evi-

dence as a reasonable mind might accept as adequate

to support a conclusion.*4

The testimony is undoubtedly quite strict. Though it may

be “so stringent that it has been described as bordering on

the unrealistic,”*> it is nevertheless true that “the claim-

ant’s burden of proof is not insuperable.”*®

V. Medical-Vocational Guidelines |“The Grid”|. The

resolution of this case is inextricably interwoven with the

applicability and validity of the new “Medical-Vocational

Guidelines”?? or, more commonly, “the grid” and its attend-

ant explanatory regulations. While plaintiff did not in his

complaint specifically challenge the use of the grid, he did

allege that the findings of the ALJ were not supported by

substantial evidence. Since the conclusion of the ALJ is ap-

parently based solely upon the grid, the decision of the ALJ

1% E.g., Chaney v. Califano, 588 F.2d 958, 960 (Sth Cir. 1979).

20 Brown v. Finch, 429 F.2d 80, 82 (5th Cir. 1970); Breaur v.

Finch, 421 F.2d 687, 689 (5th Cir. 1970).

2! White v. Harris, 605 F.2d 867, 870 (Sth Cir. 1979).

22 42 U.S.C. § 405(g).

23 Chaney v. Califano, 558 F.2d 958, 959 (Sth Cir. 1979); Mims v.

Califano, 581 F.2d 1211, 1213 (5th Cir. 1978); Rivas v. Weinberger,

576 F.2d 255, (Sth Cir. 1973).

24 Richardson v. Perales, 402 U.S. 389, 401 (1971), quoting Consoli-

dated Edison Co. v. N.L.R.B., 350") .S. 197, 229 (1988).

25 Johnson v. Harris, 612 F.2d 993 (Sth Cir. 1980), quoting

Williams v. Finch, 440 F.2d 613, 615 (5th Cir. 1971).

26 Simmons v. Harris, 602 F.2d 1233, 1236 (5th Cir. 1979), quoting

Mims v. Califano, 581 F.2d 1211, 1213 (5th Cir. 1978).

27 20 C.F.R. § 404.1513 Subpart P. App. 2, § 200.00 et. seq.

3la

is supported by substantial evidence only if the grid estab-

lishes a system of adjudication not at variance with the

statutes, Constitution, or decisional laws of the United

States.

A. The Medical-Vocational Guidelines |“The Grid” |. In

the middle 1970's the Social Security Administration be-

gan** an internal study of the possibility of adoption of reg-

ulations providing increased use of administrative presump-

tions and administrative notice, having a view toward both

administrative efficiency and nationwide uniformity in So-

cial Security Disability determinations. The new regula-

tions became effective on February 26, 1979.2° Because

parts are displayable as a simple chart or table, the Medi-

cal-V ocational Guidelines are commonly called “the grid” a

usage which, though technically limited to the tables them-

selves, commonly includes the attendant explanatory

matter.

1. The Grid in Perspective: Pre-Grid Analysis. There is

a sequential analysis by which the agency determination

reaches the level at which the grid is used, the entire proc-

ess moving toward a determination of whether or not an ap-

plicant is “disabled”’ within the meaning of 42 U.S.C.

§ 1382¢(3). Several preliminary steps are involved.

The several steps are, in sum, these:

First, the agency determines whether the person is actu-

ally working.*° If so, the agency conclusively presumes that

the applicant is not disabled and the claim must be

denied;*' but if not, the agency moves to the second step.

Second, the agency must determine whether the claimed

impairment is “severe.’’? If not, the claim is denied on

28 The work was apparently at the prodding of certain congressional

committees and the General Accounting Office. Since no statute was

passed, however, the work should be treated as a pure executive

branch effort.

2 The hearing in this case occurred six months later.

8 20 C.F.R. § 404.1503(b).

3! By comparison, judge-made law in other areas recognizes that a

person, though injured, is often “required to work in order to survive.”

Vaughn v. Atkinson, 369 U.S. 527, 5383 (1962) (maintenance and cure

under the general maritime law).

32 20 C.F.R. § 404.153(c¢).

32a

medical evidence alone; but if so, the agency moves to the

third step.

Third, the agency determines whether the applicant’s im-

pairment equals or exceeds in severity a list of impair-

ments.** If so, the applicant is entitled to benefits, but if

not, the agency goes to the fourth step.

Fourth, the agency determines whether the applicant is

able to perform his or her past work. If so, the agency finds

that the applicant is not disabled under the law,** but if

not, the agency moves to the fifth step. At this point the

burden shifts to the Secretary.*®

Fifth, and last, the agency must determine whether the

applicant is able—despite his or her inability to perform his

or her prior work—to perform other substantial gainful ac-

tivity considering his or ner age, education, and work expe-

rience.** It must be co! inually recalled that by this point

the burden has already shifted to the Secretary to rebut

plaintiff's prima facie case. The grid system is designed to

constitute the Secretary’s rebuttal to the claimant’s prima

facie case, and the entire rebuttal is in the form of adminis-

tratively-noticed facts systematized in the grid. We pro-

ceed next to a summary analysis of the use of the grid.

2. Use of the Grid. The agency must first determine

which of the three available grids or tables*’ to use, each

dealing with a different level of exertional impairtment,**

since obviously a person’s employability for many jobs may

well depend upon the extent to which he can stand, move,

or lift. Thus, the agency determines the person's residual

functional capacity to perform certain levels of work. This

determination is naturally an ersatz combination of medical

and vocational factors.

33 20 C.F.R. § 404.1503(d).

34 20 C.F.R. § 404.1503(e).

35 See note 18 above.

96 42 U.S.C. § 1382e(a)(3)(B).

37 Table 1 is for applicants able to do only sedentary work, 2 for

light, and 3 for medium. The terms sedentary, light, and medium are

defined in 2v C.F.R. § 404.1510.

38 An “exertional impairment” limits the strength which an applicant

can exert on the job. A non-exertional impairment might be, for exam-

ple, the required use of a renal dialysis machine.

33a

Finally, once the correct grid is selected, it is used. The

grid contains in tabular form a series of rules which consti-

tute the Secretary’s interpretation of the statutory phrase

“age, education, work experience,”*® which are the deter-

minant of ability to engage in substantial gainful activity

other than the prior job which the impaired claimant can no

longer perform. In essence the grid is a black box into

which three variables are fed: age, education, and work ex-

perience. When the agency determines the three variables

in any particular case the black box is cranked—i.e., the fi-

nal column on the grid [styled “decision” | is read—and the

result spouts forth: either “disabled”, or “not disabled.”

It is important to note that while there are of course situ-

ations is which the particular applicant’s criteria simply do

not fit the grid system for one reason or another and the

grid is not used,*® where the grid does apply the agen-

cy—and, in particular, the ALJ—is absolutely required to

read and follow the decision in the grid column labeled

“decision.”

Factored into the grid system is a rule-based administra-

tive notice of the existence of a number of available un-

skilled jobs in the applicable economy. When the grid is

used, therefore, the existence of such jobs in the economy

“is established.’*' The rule does not provide for the consid-

eration of contrary testimony on the point, and does not

provide for the possibility that an applicant might offer evi-

dence which, in fair litigation not limited by the conclusive

rule, might be deemed to have overcome the administra-

tively-noticed facts.

VI. Holding of the ALJ.

A. Prima Facie Case. The ALJ did not make an express

finding upon the crucial qucstion of whether plaintiff was

99 42 U.S.C. § 1382¢(a)(3)(B).

#° 20 C.F.R. § 404.1513 Subpart P, App. 2, § 200.00(a) (“Where any

one of the findings of fact does not coincide with the corresponding cri-

terion of a rule, the rule does not apply in that particular case... .").

The regulation suggests as an example a person who falls in the middle

by being able to do more than light but less than medium work, in

which event the grid is used simply for whatever use it may be. /d. at

§ 200.00(d).

“7d. at § 200.00(b).

34a

able to perform his prior occupation as a house painter. A

fair reading of the opinion, however, indicates that the ALJ

was proceeding on the unstated but apparently universally

understood foundation that plaintiff was foreclosed by his

condition from performing his prior work as a house paint-

er. The contrary conclusion would not, in any event, have

been supported by substantial evidence.

Plaintiff having made out a prima facie case, therefore,

the burden shifted to the Secretary to prove that plaintiff

could perform other substantial gainful activity.44 We must

next determine whether the Secretary carried that burden.

B. Secretary's Rebuttal. The Secretary's “rebuttal” case

could be viewed in two possible ways. In neither case is it

sufficient—on the present record—to rebut the prima

facie case.

1. If Grid Alone. A fair reading of the ALJ's opinion in-

dicates that in his judgment the finding of “not disabled”

was flatly compelled by the grid system. To the extent that

the ALJ deemed the grid system to constitute the Secre-

tary’s rebuttal, the decision of the ALJ is not supported by

substantial evidence (as required by the statute) because

the grid system itself and its use in this case violated the

Administrative Procedure Act* in two particulars.

a. Administrative Notice Deemed Conclusive. The grid

has taken conclusive administrative notice of the existence

of sedentary, light, and medium jobs “throughout” the na-

tional economy; under the grid “the existence of such jobs

is established.”** When the regulation states that the fact

“is established,” it obviously means conclusively estab-

lished. Certainly it does not say otherwise. Such conclusive

administrative notice expressly violates 5 U.S.C. § 556(e),

providing that:

When an agency decision rests on official notice of a

material fact not appearing in the evidence in the rec-

ord, a party is entitled, on timely request, to an oppor-

tunity to show the contrary.

42 See note 18 above.

* 5 U.S.C. § 661 et seq.

* 20 C.F.R. § 404.1513 Subpart P, App. 2 § 200.00(b).

35a

Accordingly, the regulation being contrary to an act of Con-

gress in that respect, the case should be remanded to allow

plaintiff—should he so desire—to offer evidence pursuant

to 5 U.S.C. § 556(e) that work of which he is capable does

not in these times of high unemployment exist “through-

out” the national economy.*®

b. Administrative Notice by Rule. Administrative or ju-

dicial notice in its traditional sense is ordinarily expressly

taken at the hearing and, in fact, the Administrative Proce-

dure Act—and arguably the Due Process Clause also—re-

quires administrative notice to be expressly taken at the

hearing. As the Court of Appeals for this Circuit recently

wrote:

The Administrative procedure Act provides in § 556(¢)

Isic: § 556(e)|:

When an agency decision rests on official notice of

material fact not appearing in the evidence in the

record, a party is entitled, on timely request, to an

opportunity to show the contrary.

The provision is unquestionably applicable to disability

cases that are heard before ALJ’s, because the stat-

ute, 42 U.S.C. § 405(b), requires disability decisions

to be made “on the basis of evidence adduced at the

hearing.”

Unfairness may result when facts are noticed without

precisely indicating the facts and their source. A quick

remark by an ALJ that he takes official notice of avail-

ability of jobs in the national economy that would be

suitable for the claimant could be unfair for lack of suf-

ficient specificity.*®

The administrative notice of jobs taken here was pro-

cedurally invalid because there was not even a “quick re-

mark” at the hearing, there was nothing said at the hearing

*5 The “throughout” term is in the grid regulation, 20 C.F.R.

§ 404.1513 Subpart P, App. 2 § 200.00(b). It is not clear whether that

term is intended to supplant 20 C.F.R. § 404.150%a), but since under

the grid the existence of jobs “throughout” the economy was noticed,

that is what plaintiff is entitled to rebut.

46 White v. Harris, 605 F.2d 567, 870 (5th Cir. 1979), quoting K.

DAVIS, ADMINISTRATIVE LAW § 15.11 (supp. 1978).

36a

at all about administrative notice which was, then,

procedurally improper by reason of 5 U.S.C. § 556(e) and

“evidence adduced at the hearing” requirement of 42

U.S.C. § 405(b).

The possibility that plaintiff can submit a rebuttal affida-

vit on appeal in the Appeals Council does not change the

result. The statute states that the decision must be based

on evidence “adduced at the hearing’*?7—it does not say on

appeal—and it is inconceivable that in passing 5 U.S.C.

§ 556(e) Congress meant that the rebuttal evidence should

be first offered on appeal.

Similarly, the right of the claimant to rebut the underly-

ing findings of actual fact** (e.g., age) is not the same as

the opportunity to rebut the administratively-noticed fact,

namely, the existence of appropriate jobs in the appropri-

ate economy. That administratively-noticed fact is irre-

buttable under the grid.

2. If Medical Testimony. While the findings of fact indi-

cate that the ALJ relied purely upon the grid to rebut the

prima facie case, it is possible that—without saying

it—the ALJ was relying upon the underlying medical evi-

dence itself in his holding that plaintiff could perform other

substantial gainful activity. If so, the most likely basis for

such a conclusion would be the opinion of Dr. Bridges in

March of 1979 that:

This gentleman seems to have some residual from cer-

vical dise disease as well as an injury to his right pero-

neal nerve. I do believe he is employable, I see no rea-

son why he could not perform lifting up to 50 lbs. with

occasional lifting to 50 to 75 lbs. Extremely heavy ac-

tivity that involves his neck and shoulders he would

probably not be able to perform, however routine ac-

tivities should be performed. I believe he will be able

to climb stairs, perform reaching movements.*®

The difficulty is that there was no evidence in the record

bridging the gap between this medical finding and the vo-

cational finding that plaintiff was able to perform other

47 42 U.S.C. § 405(b).

+* 20 C.F.R. § 404.1513, Subpart P, Appendix 2, § 200.00(a).

**° Record at 128.

37a

available substantial gainful activity. As previously dis-

cussed the grid cannot bridge the gap and, aside from the

grid, the ALJ took no administrative notice of vocational

factors, even assuming arguendo that such an approach

would be sufficient under the law. And last, of course, no

vocational expert testified to translate the medical findings

into vocational capacity.*”° The absence of any such evi-

denee in the record compels the conclusion that the finding

of the ALJ is not supported by substantial evidence.

VII. Propriety of Remand. The Social Security Disabili-

ty Amendments of 19805! amend 42 U.S.C. § 405(g) to pro-

vide that:

The Court ... may at any time order additional evi-

dence to be taken before the Secretary, but only upon

a showing that there is new evidence which is material

and that there is good cause for the failure to incorpo-

rate such evidence into the record in a prior proceed-

ing. 52

A fair reading of the statute indicates that it pertains

only to remands to allow the plaintiff to offer additional

testimony.

If the statute does apply to remands to allow the Secre-

tary to offer additional testimony, however, it does not for-

bid remand here because:

A. “there is new evidence which is material,” namely,

there should be vocational testimony, and;

B. “there is good cause for the failure to incorporate

such evidence into the record in a prior proceeding,” name-

ly, reliance by the ALJ upon an existing regulation.

Surely the new provision does not simply compel entry of

judgment against the Secretary in this circumstance, which

is the alternative to remand.

5° See McGill v. Harris, 615 F.2d 365 (Sth Cir. 1980); Johnson v.

Harris, 612 F .2d 998 (5th Cir. 1980) (vocational expert used). See also

Wilson v. Califano, __._ F.2d ____ (4th Cir. March 17, 1980) (voca-

tional expert required).

5! Pub.L. No. 96-265; 49 U.S.L.W. 7 (July 15, 1980).

52 Jd. at § 307.

38a

CONCLUSION

When the ALJ found—or ought to have found—that

plaintiff was unable to perform his former job, the burden

shifted to the Secretary to prove her defense, namely, that

plaintiff was able to do other work in the other economy.

The Secretary failed to carry her burden on rebuttal

because:

1. There was no oral testimony explaining what work

plaintiff could do, given the medical findings;

2. No vocational evidence outside the grid was adminis-

tratively noticed, even assuming that such a procedure

would be valid;

3. The grid cannot serve as the requisite rebuttal testi-

mony because:

A. the regulation precluding plaintiffs adducing con-

trary rebuttal employment evidence at the hearing violates

5 U.S.C. § 556(e) in that it was improperly conclusive

administrative notice, and;

B. the administrative notice taken violated 42 U.S.C.

§ 405(b)’s “adduced at the hearing” requirement and 5

U.S.C. § 556(e) because the ALJ did not even mention at

the hearing that he was administratively noticing anything.

Accordingly, this case must be remanded to give the Sec-

retary an opportunity to offer valid evidence contrary to

plaintiff's prima facie case or, if none, to award benefits to

plaintiff.

DONE this 20th day of August, 1980.

/s/ Davip A. BAGWELL

United States Magistrate

39a

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 79-0730-H

RICHARD D. HOLMES, PLAINTIFF

PATRICIA ROBERTS HARRIS, Secretary of Health and

Human Services, DEFENDANT.

ORDER AND JUDGMENT

After due and proper consideration,’ and upon the rec-

ommendation of the Magistrate, which is adopted as the

opinion of this Court, it is ORDERED, ADJUDGED and

DECREED that the Administrative decision be and is

hereby VACATED, and that this cause be REMANDED to

the Secretary of Health and Human Resources for addition-

al proceedings not inconsistent with the opinion of this

Court, no costs to be taxed.

DONE this 11th day of December, 1980.

/s/ W. B. HAND

UNITED STATES District JUDGE

'To the cases cited by the Magistrate the Court adds Fruge v.

Harris, No. 80-3476 (5th Cir. Dee. 4, 1980).

40a

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 79-0730-H

RICHARD D. HOLMES, PLAINTIFF

PATRICIA ROBERTS HARRIS, Secretary of Health and

Human Services, DEFENDANT.

RECOMMENDATION OF MAGISTRATE

Plaintiff filed suit in this Court as provided by 42 U.S.C.

§ 405(g) for review of an adverse decision of an Administra-

tive Law Judge |“ALJ”| on a Social Security Disability

Claim. The Court referred this matter to the Magistrate for

preliminary review of the administrative record! and rec-

ommendation. The matter is submitted upon the basis of

the pleadings, record, and highly instructive briefs and oral

argument of the parties and an amicus curiae.?

Congress provided that in such a case the Court shall

have power to enter judgment upon the pleadings and tran-

script, or to remand the case.* The Magistrate recommends

that this cause be remanded for the taking of additional evi-

dence, since the Secretary's only rebuttal to plaintiff's

prima facie case was in the form of matter administratively

noticed in a manner violating the Administrative Procedure

Act,* the Social Security Act,® the applicable decisional law

in this Circuit,® and the terms of the administrative notice

regulation itself? and, therefore the decision of the ALJ

128 U.S.C. § 636(b)(3); Mathews v. Weber, 423 U.S. 261 (1976).

* Legal Services Corporation of Alabama, an organization whose at-

torneys have substantial day-to-day experience with the conduct of all

phases of Social Security disability work.

$42U.S.C. § 405g).

*5 U.S.C. § 556(e).

542 U.S.C. § 405(b).

® White v. Harris, 605 F.2d 867 (5th Cir. 1979).

720 C.F.R. § 404.1513 Subpart P Appendix 2 (hereafter “the grid” |

at § 200.00(e)(2).

4la

was not supported by substantial evidence as required by

42 U.S.C. § 405K g).

I. Procedural History.

A. Prior Claims. Plaintiff has filed three separate appli-

cations for Social Security benefits. The first application

was filed in May of 1977, claiming disability from a 1976

back injury. The application was denied and no further ac-

tion was taken.

In September of 1977, plaintiff filed his second applica-

tion, claiming disability for the same back injury. The appli-

cation was denied, and the denial was taken to an Adminis-

trative Law Judge, who found the plaintiff entitled to an

award of disability from October, 1976 through October,

1977. The plaintiff filed an untimely appeal from the ALJ's

decision; no further action was taken.

The third (and present) application was filed in December

of 1978, claiming disability for back surgery, headaches and

a stiff neck, dating back to October, 1976. The Social Secu-

rity Administration denied the claim, the ALJ denied the

claim, and the Appeals Council declined to review the deci-

sion of the ALJ.

The ALJ found in substance that:

i. The clainiant met the threshold requirements;

2. Claimant would be defined as a “younger individual”;

3. Claimant completed the twelfth grade but could nei-

ther read nor write, and was therefore illiterate;

4. Claimant had worked as a “co-layer” |sic: collator* in

the plywood industry and as a laborer in the construction

industry;

5. Medical evide’ ce revealed that claimant had a prior

period of disability :«.om August of 1976 to October of 1977,

because of a back injury and a laminectomy. Claimant's

physician indicated that as of November 1, 1977, claimant

could return to substantial gainful activity;

6. Considering the claimant’s maximum sustained work

capacity, age, education, and work experience, he was not

disabled after November 1, 1977.

*A “collator” in a plywood mill takes the thin sheets of wood and

puts them together until the plywood reaches the appropriate

thickness.

42a

II. Evidence of Record.

A. Employment Background. Plaintiff is a thirty-seven

year old man who, though he somehow completed high

school, is quite illiterate. His last in a series of laborer’s

jobs was in 1976, when he worked in a plywood mill. He,

his wife, and four children live on $144 per month from the

Aid for Dependent Children program, and Supplemental

Security income.

B. Alleged Medical Problems. Plaintiff claims that he is

disabled because of a back injury sustained in October,

1976. He complains of headaches, a stiff neck and numbness

on his right side.

C. Medical Testimony. The ALJ found that plaintiff was

not disabled after November 1, 1977. In order to under-

stand the background of the case, however, it is appropri-

ate to review the medical treatment prior to that time.

1. Prior to November 1, 1977. Plaintiff has had back

trouble since late 1972, from an injury. Pain increased

thereafter, and a Pensacola doctor in April of 1974 diag-

nosed lumbosacral strain and probable intervertabral disc

disease in the lumbosacral area, recommending a back

brace, traction, and muscle-relaxing drugs.® By early 1975

the same doctor opined that plaintiff could not perform con-

tinued heavy lifting or back-straining activity.”

In August, 1976 plaintiff hurt his back again and, follow-

ing a diagnosis of herniated disc and lumbosacral strain,

was hospitalized for conservative treatment." For the next

several months plaintiff's back was treated in a variety of

methods by a variety of doctors, both in and out of the hos-

pital. !?

2. After November 1, 1977. In March, 1978, a

Montgomery neurosurgeon treated plaintiff for his neck,

shoulder, arm and back pain, sleeping problems in certain

positions, stumbling, and decreased libido.** A myelogram

showed a vertebral defect and inflammation of the root of

® Record at 142.

1” Td. at 140.

Jd. at 106.

12 Jd. at 113-14, 116, 117-18, 127, 131, 133-34.

13 Id. at 233.

43a

the spinal nerve," resulting in a diagnosed medical disabili-

ty of 15% and work disability of 30%.'* By the summer of

1978 one doctor opined that plaintiff could not return to his

regular job and would have to do sedentary work,'® and by

the end of 1978 plaintiff's diagnosis was for permanent disa-

bility without recovery.'? In early 1979 an orthopedic sur-

geon opined that plaintiff could only carry 25 pounds fre-

quently and 50 occasionally, and could only sit or stand for

six hours out of a work day, and could not climb, bend, or

stoop. In August, 1979, the last analysis, plaintiff remained

permanently disabled. '*

D. Plaintiffs Testimony. Plaintiff testified that he feels

bad all day long and that when he tries to get up and do

things he feels considerable pain,'® and can walk only a

short distance.2° He has headaches and a very stiff neck?!

and numbness on his right side in his shoulder, arm and

leg.22 He has problems with constipation and with his kid-

neys.?°> He does not remember things as well as he did be-

fore he got hurt,* he could not operate machinery when he

is taking his medications,*° he wears a back support,*® and

is in traction for four hours a day.?? The plaintiff is on a va-

riety of medications for pain, nervousness, and

constipation.**

III. Applicable Law in General. The Social Security Act:

sets forth a two-part test for determining “disability”

under the Act: First, there must be a “medically de

terminable physical or mental impairment which can

44 Jd. at 220, 227.

15 Jd. at 230.

16 Jd. at 235.

17 Jd. at 238.

18 Jd. at 256.

19 Td. at 39.

20 Jd. at 38.

21 Jd. at 36.

22 Jd. at 40.

23 Jd. at 46.

24 Id. at 46.

25 Jd. at 46.

26 Jd. at 37.

27 Id. at 49.

28 Jd. at 255.

44a

be expected to result in death or which has lasted or

can be expected to last for a continuous period of not

less than twelve months....” 42 U.S.C.

§ 1382¢(a)(3)(A). Second, this impairment must be so

severe that the claimant is “not only unable to do his

previous work but cannot, considering his age, educa-

tion, and work experience, engage in any other kind of

substantial gainful work which exists in the national

economy, regardless of whether such work exists in

the immediate area in which he lives, or whether a

specific job vacancy exists for him, or whether he

would be hired if he applied for work.” /d.

§ 1382¢(a)(3)(B).?9

If plaintiff shows that he cannot now perform his former

job, the burden shifts to the Secretary to show both that

the claimant is able to perform othc« work, and that such

other work is in fact available in the economy.*® The availa-

bility of work is normally proven either by the testimony of

a vocational expert*®' or by administrative notice*? if prop-

erly taken.**

IV. Standard of Review. Congress has clearly provided

that in a Social Security case the administrative findings

“as to any fact, if supported by substantial evidence, shall

be conclusive. . . ."*4 This Court’s function is strictly limit-

ed; we may only determine whether the administrative

findings are supported by “substantial evidence” consider-

ing the record as a whole.*®

The term “substantial evidence” in this circumstance

means:

29 Chaney v. Califano 588 F . 2d. 958, 959 (5th Cir. 1979).

30 McGill v. Harris, 615 F.2d 365 (5th Cir. 1980); Johnson v.

Harris, 612 F.2d 998 (5th Cir. 1980); White v. Harris, 605 F.2d 867,

869 (5th Cir. 1979); Knott v. Califano, 559 F.2d 279, 280 (5th Cir.

1977).

31 £.g., Chaney v. Califano, 588 F.2d 958, 960 (5th Cir. 1979).

32 Brown v. Finch, 429 F.2d 80, 82 (5th Cir. 1970); Breaux v. Finch

421 F.2d 687, 689 (5th Cir. 1970).

33 White v. Harris, 605 F .2d 867, 870 (Sth Cir. 1979).

% 42 U.S.C. § 405 (g).

35 Chaney v. Califano, 588 F.2d 958, 959 (5th Cir. 1979); Mims v.

Califano, 581 F. 2d 1211, 1213 (5th Cir. 1978); Rivas v. Weinberger,

576 F.2d 255, (Sth Cir. 1973).

45a

more than a mere scintilla. It means such relevant evi-

dence as a reasonable mind might accept as adequate

to support a conclusion.*®

The test is undoubtedly quite strict. Though it may be “so

stringent that it has been described as bordering on the

unrealistic,”*’ it is nevertheless true that “the claimant's

burden of proof is not unsuperable.”**

V. Medical-Vocational Guidelines |“The Grid” |. The res-

olution of this case is inextricably interwoven with the ap-

plicability and validity of the new “Medical-Vocational

Guidelines”®® or, more commonly, “the grid” and its attend-

ant explanatory regulations. While plaintiff did not in his

complaint specifically challenge the use of the grid, he did

allege that the findings of the ALJ were not supported by

substantial evidence. Since the conclusion of the ALJ is

based upon the grid, the decision of the ALJ is supported

by substantial evidence only if the grid is to be applied, if it

was properly applied, and if the grid establishes a system

of adjudication not at variance with the statutes, Constitu-

tion, or decisional laws of the United States.

A. The Medical-Vocational Guidelines |“The Grid”|. In

the middle 1970’s the Social Security Administration be-

gan*® an internal study of the possibility of adoption of reg-

ulations providing increased use of administrative presump-

tions and administrative notice, having a view toward both

administrative efficiency and nationwide uniformity in So-

cial Security Disability determinations. The new regula-

tions became effective on February 26, 1979.4! Because

parts are displayable as a simple chart or table, the

36 Richardson v. Perales, 402 U.S. 389, 401 (1971), quoting Consoli-

dated Edison Co. v. N.L.R.B., 305 U.S. 197, 229 (1938).

37 Johnson v. Harris, 612 F.2d 993, (5th Cir. 1980), quoting

Williams v. Finch, 440 F.2d 613, 615 (5th Cir. 1971).

%8 Simmons v. Harris, 602 F.2d 1233, 1236 (Sth Cir. 1979), quoting

Mims v. Califano, 581 F.2d 1211, 1213 (5th Cir. 1978).

39 20 C.F.R. § 404.1513 Subpart P. App.2, § 200.00 et seq.

40 The work was apparently at the prodding of certain congressional

committees and the General Accounting Office. Since no statute was

passed, however, the work should be treated as a pure executive

branch effort.

*! The hearing in this case occurred six months later.

46a

Medical-Vocational Guidelines are commonly called “the

grid” a usage which, though technically limited to the ta-

bles themselves, commonly includes the attendant explana-

tory matter.

1. The Grid in Perspective: Pre-Grid Analysis. There is

a sequential analysis by which the agency determination

reaches the level at which the grid is used, the entire proc-

ess moving toward a devermination of whether or not an ap-

plicant is “disabled” within the meaning of 42 U.S.C.

§ 1382 ¢(3). Several preliminary steps are involved.

The several steps are, in sum, these:

First, the agency determines whether the person is actu-

ally working.*? If so, the agency conclusively presumes that

the applicant is not disabled and the claim must be

denied;** but if not, the agency moves to the second step.

Second, the agency must determine whether the claimed

impairment is “severe.’** If not, the claim is denied on

medical evidence alone; but if so, the agency moves to the

third step.

Third, the agency determines whether the applicant's im-

pairment equals or exceeds in severity a list of impair-

ments.*® If so, the applicant is entitled to benefits, but if

not, the agency goes to the fourth step.

Fourth, the agency determines whether the applicant is

able to perform his or her past work.*® If so, the agency

finds that the applicant is not disabled under the law, but if

not, the agency moves to the fifth step. At this point the

burden shifts to the Secretary.*7

Fifth, and last, the agency must determine whether the

applicant is able—despite his or her inability to perform his

or her prior work—to perform other substantial gainful ac-

tivity considering his or her age, education, and work

#2 20 C.F.R. § 404. 1503(b).

*3 By comparison, judge-made law in other areas recognizes that a

person, though injured, is often “required to work in order to survive.”

Vaughn v. Atkinson, 369 U.S. 527, 533 (1962) (maintenance and cure

under the general maritime law).

44 20 C.F.R. § 404. 153(¢).

#5 20 C.F.R. § 404. 1503(d).

#6 20 C.F.R. § 404. 1503(e).

47 See note 30 above.

47a

experience.*® It must be continually recalled that by this

point the burden has already shifted to the Secretary to re-

but plaintiffs prima facie case. The grid system is de-

signed to constitute the Secretary’s rebuttal to the claim-

ant’s prima facie case, and the entire rebuttal is in the

form of administratively-noticed facts systematized in the

grid. We proceed next to a summary analysis of the use of

the grid.

2. Use of the Grid. The agency must first determine

which of the three available grids or tables*® to use, each

dealing with a different level of exertional impairment,*”

since obviously a person’s employability for many jobs may

well depend upon the extent to which he can stand, move,

or lift. Thus, the agency determines the person's residual

functional capacity to perform certain levels of work. This

determination is naturally an ersatz combination of medical

and vocational factors.

Finally, once the correct grid is selected, it is used. The

grid contains in tabular form a series of rules which consti-

tute the Secretary’s interpretation of the statutory phrase

“age, education, work experience”,®! which are the deter-

minates of ability to engage in substantial gainful activity

other than the prior job which the impaired claimant can no

longer perform. In essence the grid is a black box into

which three variables are fed: age, education, and work ex-

perience. When the agency determines the three variables

in any particular case the black box is cranked—i.e., the fi-

nal column on the grid (styled “decision”| is read—and the

result spouts forth: either “disabled”, or “not disabled.”

It is important to note that while there are of course situ-

ations in which the particular applicant’s criteria simply do

not fit the grid system for one reason or another and the

#® 42 U.S.C. § 1382¢e(a)(3)(B).

** Table 1 is for applicants able to do only sedentary work, 2 for

light, and 3 for medium. The terms sedentary, light, and medium are

defined in 20 C.F.R. § 404.1510.

5° An “exertional impairment” limits the strength which an applicant

can exert on the job. A non-exertional impairment might be, for exam-

ple, the required use of a renal dialysis machine.

5142 U.S.C. § 1382c(a)(3)(B).

48a

grid is not used,®? where the grid does apply the

agency—and, in particular, the ALJ—is absolutely re-

quired to read and follow the decision in the grid column

labelled “decision.”

Factored into the grid system is a rule-based administra-

tive notice of the existence of a number of available un-

skilled jobs in the applicable economy. When the grid is

used, therefore, the existence of such jobs in the economy

“is established.”® ‘The rule does not provide for the consid-

eration of contrary testimony on the point, and does not

provide for the possibility that an applicant might offer evi-

dence which, in fair litigation not limited by the conclusive

rule, might be deemed to have overcome the

administratively-noticed facts.

3. Propriety of the Application of the Grid System to this

Case. The grid system is designed for the analysis of purely

exertional limitations. Here. plaintiff testified that he had

not only exertional limitations (7.e., he was not strong), but

also had at least one and possibly two non-exertional limita-

tions; namely, he had to undergo traction four hours a day™

and he took medicine which affected his ability to operate

machinery® and at least arguably affected his mental abili-

ty.5* The grid regulation provides that:

Where an individual has both strength limitations and

nonexertional limitations, the rules in this subpart are

considered in determining first whether a finding of

disabled may be possible based on the strength limita-

tions alone and, if not, the rule(s) reflecting the indi-

vidual’s maximum residual strength capabilities, age,

education, and work experience provide a framework

for consideration of how much the individual's work

52 20C.F.R. § 404.1513 Subpart P, App.2, § 200.00(a) (“Where any

one of the findings of fact does not coincide with the corresponding cri-

terion of a rule, the rule does not apply in that particular case ...”).

The regulation suggests as an example a person who falls in the middle

by being able to do more than light but less than medium work, in

which event the grid is used simply for whatever use it may be. Jd. at

§ 200.00(d).

53 Jd. at § 200.00(b).

* Record at 49.

55 Jd. at 46.

56 Jd.

49a

capability is further diminished in terms of any types

of jobs that would be contraindicated by the

nonexertional limitations.57

Thus, the case should not be squarely governed by the grid,

though the ALJ applied the grid pure and simple. Four

hours of traction and dulling medication obviously have at

least some effect upon a person’s employability,™ and the

ALJ either did not consider its effect or, if he did, did not

explain why it had no effect. Accordingly, upon this

ground, the case is required to be remanded for determina-

tion after due consideration of the non-exertional limita-

tions and other factors outside the grid system.

4. Repugnancy of Grid System to the Administrative

Procedure Act. Alternatively, even if the ALJ were correct

under the regulation in applying the grid, the grid system

itself is void for repugnancy to the Administrative Proce-

dure Act®® in two particulars, both relating to the use of

administrative notice.

a. Administrative Notice Deemed Conclusive. The grid

has taken conclusive administrative notice of the existence

of sedentary, light, and medium jobs “throughout” the na-

tional economy; under the grid “the existence of such jobs

is established.”®° When the regulation states that the fact

“is established,” it obviously means conclusively estab-

lished. Certainly it does not say otherwise. Such conclusive

administrative notice expressly violates 5 U.S.C. § 556(e),

providing that:

When an agency decision rests on official notice of a

material fact not appearing in the evidence in the rec-

ord, a party is entitled, on timely request, to an oppor-

tunity to show the contrary.

Accordingly, the regulation being contrary to an act of Con-

gress in that respect, the case should be remanded to allow

plaintiff—should he so desire—to offer evidence pursuant

to 5 U.S.C. § 556(e) that work of which he is capable does

not in these times of high unemployment exist “through-

57 20 C.F.R. § 404.1513 Subpart P, App. 2 § 200.00 (e)(2).

5 See Harrell v. Harris, 610 F .2d 355 (5th Cir. 1980) (pre-grid case

in which regimen of traction and drugs required finding of disability).

595, U.S.C. $661 ef seq.

6° 20 C.F.R. § 404.1513 Subpart P, App. 2 § 200.00(b).

50a

out” the national economy® for a middle-aged illiterate

with back trouble requiring a daily regimen of hours of

traction and constant dulling drugs.

b. Administrative Notice by Rule. Administrative or ju-

dicial notice in its traditional sense is ordinarily expressly

taken at the hearing and, in fact, the Administrative Proce-

dure Act—and arguably the Due Process Clause

also—requires administrative notice to be expressly taken

at the hearing. As the Court of Appeals for this Circuit re-

cently wrote:

The Administrative Procedure Act provides in § 556

(ce) [sie: § 556(e)|:

When an agency decision rests on official notice of

material fact not appearing in the evidence in the

record, a party is entitled, on timely request, to an

opportunit’ to show the contrary.

The provision is unquestionably applicable to disability

cases that are heard before ALJs, because the statute,

42 U.S.C. § 405(b), requires disability decisions to be

made “on the basis of evidence adduced at the

hearing.”

Unfairness may result when facts are noticed without

precisely indicating the facts and their source. A quick

remark by an ALJ that he takes official notice of avail-

ability of jobs in the national economy that would be

suitable for the claimant could be unfair for lack of suf-

ficient specificity.®

The administrative notice of jobs taken here was

procedurally invalid because there was not even a “quick

remark” at the hearing, there was nothing said at the hear-

ing at all about administrative notice which was, then,

procedurally improper by reason of 5 U.S.C. § 556(e) and

“evidence adduced at the hearing” requirement of 42

U.S.C. § 405(b).

6! The “throughout” term is in the grid regulation, 20 C.F.R.

§ 404.1513 Subpart P, App. 2 § 200.00(b). It is not clear whether that

term was intended to supplant 20 C.F.R. § 404.150%a), but since un-

der the grid the existence of jobs “throughout” the economy was no-

ticed, that is what plaintiff is entitled to rebut.

62 White v. Harris, 605 F.2d 867, 870 (Sth Cir. 1979), quoting K.

DAVIS, ADMINISTRATIVE LAW § 15.11 (Supp. 1978).

5la

The Secretary contends that there is no such violation

because plaintiff can submit a rebuttal affidavit on appeal

in the Appeals Council. The statute, however, states that

the decision must be based on evidence “adduced at the

hearing’’®’—it does not say on appeal—and it is inconceiva-

ble that in passing 5 U.S.C. § 556(e) Congres meant that

the rebuttal evidence should be first offered on appeal.

Similarly, the right of the claimant to rebut the uiaderly-

ing findings of actual fact™ (e¢.g., age) is not the same as

the opportunity to rebut the administratively-noticed fact,

namely, the existence of appropriate jobs in the appropri-

ate economy. That administratively-noticed fact is

irrebuttable under the grid.

It is not necessary to reach the other contentions.®

CONCLUSION

When the ALJ found that plaintiff was unable to perform

his former job, the burden shifted to the Secretary to prove

her defense, namely, that plaintiff was able to do other

work in the economy. The on/y way the Secretary tried to

do so was by the taking of rule-based administrative notice

under the Medical-Vocational Guidelines. That administra-

tive notice was improper because:

1. The grid ought not to have been applied in a Procrus-

tean fashion because plaintiff had non-exertional limitations

which limited his employability, and;

2. The regulation precluding plaintiff's adducing contrary

rebuttal employment evidence at the hearing violates 5

U.S.C. § 556(e) in that it was improperly conclusive

administrative notice, and;

63 42 U.S.C. § 405(b).

4 20 C.F.R. § 404.1513, Subpart P, Appendix 2, § 200.00(a).

*5 For example, plaintiff contended that if he had been slightly older

the grid would have required a finding of disability, and that therefore

the grid effects a constitutionally-improper irrebutable presumption on

the effects of age on different individuals. Having determined the case

on statutory grounds, we need not reach the constitutional issue.

Ash wander v. Tennessee Valley Authority, 297 U.S. 288, 346-48 (1986)

(Brandeis, J., concurring). The grid has, however, survived constitu-

tional challenge elsewhere on this point. Stallings v. Harris, Civ. No.

79-1051 (U.S.DIST.CT.W.D. Tenn. July 10, 1980) (op. at p.8-9).

52a

3. The administrative notice taken violated 42 U.S.C.

§ 405(b)’s “adduced at the hearing” requirement and 5

U.S.C. § 556(e) because the ALJ did not even mention at

the hearing that he was administratively noticing anything.

Because the only evidence offered against plaintiff's

prima facie case was improper for three different reasons,

the decision of the ALJ is not based upon substantial

evidence.

Accordingly, this case must be remanded to give the Sec-

retary an opportunity to offer valid evidence contrary to

plaintiff's prima facie case or, if none, to award benefits to

plaintiff.

DONE this 15th day of August, 1980.

/s/

Davibp A. BAGWELL

United States Magistrate

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 80-0500-H

CORINNE LITTLE, PLAINTIFF

PATRICIA ROBERTS HARRIS

Secretary of Department of Health and Human Services,

DEFENDANT.

ORDER AND JUDGMENT

After due and proper consideration, and upon the recom-

mendation of the Magistrate, which is adopted as the opin-

ion of this Court, it is ORDERED, ADJUDGED and DE-

CREED that the Administrative decision be and is hereby

VACATED, and that this cause be REMANDED to the

Secretary of Health and Human Resources for additional

proceedings not inconsistent with the opinion of this Court,

no costs to be taxed.

DONE this 10th day of Feb., 1981.

———EEE

W. B. HAND

United States District Judge

U.S. District CoURT

Sou. Dist. ALA.

FILED AND EXAMINED THIS THE

10th Day of Feb.

1981 Minute Entry

No. 52,293

William J. O’Connor, Clerk

By G. Walter

Deputy Clerk

hda

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No, 80-0500-H

CORINNE LITTLE, PLAINTIF «’

PATRICIA ROBERTS HARRIS,

Secretary of Department of Health and Human Services,

DEFENDANT.

RECOMMENDATION OF MAGISTRATE

Plaintiff filed suit in this Court as provided by 42 U.S.C.

§ 405(g) for review of an adverse decision of the Adminis-

trative Law Judge |“ALJ”] on a Social Security claim. The

Court referred the case to the Magistrate for preliminary

review of the administrative record! and recommendation.

Congress provided that in such a case the Court shall

have power to enter judgment upon the pleadings and tran-

script, or to remand the case. 42 U.S.C. § 405(g).

I. Procedural History. On October 17, 1978, plaintiff

filed a claim with the Social Security Administration seek-

ing an entitlement to a “period of disability” under 42

U.S.C. §416(i), and Social Security Disability Insurance

benefits as provided by 42 U.S.C. § 423. The application

was denied and no further action was taken. The plaintiff

filed a second claim for disability benefits and an application

for Supplemental Security Income as provided by 42

U.S.C. §§ 1381-1383(¢c) on June 30, 1979. The applications

were denied initially and on reconsideration by the Agency,

and plaintiff thereupon sought a hearing before an ALJ.

The ALJ held a 31-minute hearing on February 15, 1980,

at which plaintiff was represented by an attorney, and the

nlaintiff and two witnesses testified. The ALJ denied the

claim, finding in substance that:

1. Claimant met the threshold requirements;

128 U.S.C. § 636(b)(3); Mathews v. Weber, 423 U.S. 261 (1976).

55a

2. Claimant had the following impairments: gastrointes-

tinal complaints and carcinoma of the lungs;

3. Claimant’s allegations of stomach discomfort and nerv-

ousness were not credible;

4. Claimant’s impairments did not prevent her from per-

forming work requiring lifting ten or less pounds frequently

and walking and/or standing for two or three hours of the

work day;

5. Claimant was unable to perform her past relevant

work as a barmaid; this work required such movement as

pushing, pulling, climbing, fine manipulation and reaching;

6. Claimant had the residual functional capacity for sed-

entary work as defined by the regulations;

7. Claimant was 44 years old, which was defined as a

younger individual;

8. Claimant had an eighth-grade education (limited);

9. The issue of transferability of work skills was not

material;

10. Regulations directed that claimant, considering her

maximum sustained work capability, age, education, and

work experience, be found “not disabled”;

11. Claimant was not under a “disability” as defined in

the Social Security Act.

The Appeals Council refused the request to review the

decision of the ALJ and plaintiff thereupon sought review

in this Court of the decision of the ALJ, the final adminis-

trative decision.

II. Evidence of Record.

A. Employment Background. Plaintiff is a 45-year-old

unmarried woman with an eighth-grade education. She

worked from 1959 until October, 1978, as a barmaid; she

worked the last five months as an assistant manager, which

the bar owner let her do because she needed to be sitting

down. She has had no income, except help from her sisters

and friends, since October 1978.

B. Alleged Medical Problems. Plaintiff claims that she

has been disabled since October 13, 1978, because of her

stomach and lung.*

2 Record at 30-33, 43-4, 90.

3Jd. at GA.

56a

C. Medical Evidence. The medical records reveal that,

at the request of the Vocational Rehabilitation Center,

plaintiff was examined by Dr. Russell March, a Mobile in-

ternist with a specialty in cardiovascular disease. On Octo-

ber 26, 1979, Dr. March wrote the vocational counselor that

plaintiff was complaining of abdominal pain and was diag-

nosed as having a large hiatus hernia (the protrusion of any

structure through the esophageal hiatus of the diaphragm)

but with no reflux esophagitis (inflammation of the esopha-

gus). He did not feel that surgery was needed and recom-

mended adjusting the plaintiff's medications.*

On May 31, 1979, plaintiff was admitted to the Provi-

dence Hospital by Dr. E. H. Borak, a gastroenterologist,

for evaluation of gastrointestinal complaints and, while she

was in the hospital, it was found that she had a lesion in the

right upper lobe of her right lung. A right upper lung lobec-

tomy (excision of a lobe) was performed by Dr. Phillip

Snodgrass, a general surgeon, and the pathological diagno-

sis was adenocarcinoma (carcinoma derived from glandular

tissue or in which the tumor cells form recognizable glandu-

lar structures). Plaintiff's post-operative course was de-

scribed as fairly benign except for her gastrointestinal com-

plaints which were symptomatic of a hiatus hernia. She was

discharged on June 25, 1979, with a guarded prognosis and

an estimated total and permanent disability.®

Dr. Snodgrass filed a report on October 15, 1979 with the

Agency, indicating that following plaintiff's discharge from

the hospital on June 25, 1979, he had seen her in the office

on July 3, September 5, and September 25, 1979. He stated

that plaintiff had a very restrictive chronic obstructive pul-

monary disease in addition to her carcinoma which was

static at that time. He recommended total and permanent

disability.®

Dr. Raymond Bell, an internist with a specialty in

gastroenterology, wrote to the Disability Determination

Unit that on October 31, 1979, he had examined the plain-

*Jd. at 126.

5Jd. at 130-31.

87d. at 124.

57a

tiff with complaints of hyperventilation, weakness and ab-

dominal pain. Plaintiff's history included cancer of the uter-

us which required a hysterectomy eight years earlier and

cancer of the lung which required a right upper lobectomy.

Plaintiff told the doctor that she had chronic abdominal pain

which was located diffusely throughout the abdomen. She

was on medication to relieve the pain. She also complained

of becoming very excited rather easily, which, she said,

was followed by tingling and strange sensations in her

hands, shortness of breath, and sometimes chest pains.

X-rays taken in consultation by Dr. Charles Shopfner, a

radiologist, indicated that plaintiff had moderate general-

ized pulmonary emphysema.’

Dr. Bell completed a Physical Capacities Evaluation form

indicating that in his opinion, plaintiff could be expected to

lift and/or carry ten pounds or less frequentiy; stand and

walk up to three hours in a normal day; and could not be ex-

pected to sit and work as much as six out of eight hours a

day. He indicated that the plaintiff should be restricted

from pushing and pulling movements, climbing and balanc-

ing, fine manipulation, and reaching. He stated that she

had a weakness in her right hand and that he did not think

that she could mentally function in any stressful situation.®

On December 28, 1979, Dr. David Clarkson, an internist,

hemotologist and oncologist, wrote To Whom It May Con-

cern that the plaintiff was under his care for a variety of so-

matic (pertaining to or characteristic of the soma or body)

complaints; and while under his care, had been unable to

return to work. The doctor stated that the plaintiff was

scheduled for a biopsy of a new mass lesion to rule out

breast carcinoma.®

Dr. Snodgrass wrote to the plaintiff's lawyer on January

30, 1980, stating that a lesion removed from plaintiffs

breast on December 28, 1980, was found to be a benign dis-

ease. He noted that plaintiff still had epigastric distress.

Although a favorable prognosis was expected for plaintiff

and no recurrence had been identified, it was Dr.

11d. at 164, 168.

® Jd. at 171.

*Id. at 175.

58a

Snodgrass’ opinion that any patient who had carcinoma of

the lung should be considered totally and permanently dis-

abled. He also stated that plaintiff should not be considered

disabled because of her breast disease or her epigastric dis-

tress. '°

D. Plaintiffs Testimony. Plaintiff testified that she is

not presently able to drive because of her vision, her

nerves, and because she is not alert. She said that in March

of 1978, she did go to Vocational Rehabilitation and that

they paid some of the doctor’s bills but she never got

started in a job because she went into the hospital. Her

hobby was working in the garden but she is not able to do

that because she feels like she has the flu, she runs a tem-

perature and is in pain. She says her body will not let her

stay up to work; she is not even able to clean house. Plain-

tiff said that her stomach feels like it is inflammed, and that

it is sore and painful; she never has a normal bowel move-

ment. At the time of the hearing, she was taking four dif-

ferent medications for pain, nerves, and her stomach.!!

E. Witnesses.

1. Dennis Simmons testified that he had been a friend of

the plaintiff for years and had seen her frequently since Oc-

tober, 1978. He has helped take care of the plaintiff during

the period when she was not able to care for herself at all.

In his opinion, she is so weak that she is not physically able

to do anything. He stated that it is hard for her to get from

the bed to the kitchen table. He does not think she would

be able to do the work required of a waitress. '?

2. Irene Simmons testified that the plaintiff can move

around but that she cannot stay up for very long because

she is weak. When she tries to do something like grocery

shopping, she exhausts herself very quickly. In her opinion,

the plaintiff is not able to perform her former job as a wait-

ress.'5

117d. at 31-33, 37-40.

12 Jd. at 46-8.

13 Jd. at 49-50.

59a

III. Applicable Law in General. The Social Security Act:

sets forth a two-part test for determining “disability”

under the Act: First, there must be a “medically de

terminable physical or mental impairment which can

be expected to result in death or which has lasted or

can be expected to last for a continuous period of not

less than twelve months ....” 42 U.S.C.

§ 1382¢e(a)(3)(A). Second, this impairment must be so

severe, that the claimant is “not only unable to do his

previous work but cannot, considering his age, educa-

tion, and work experience, engage in any other kind of

substantial gainful work which exists in the national

economy, regarc.-ss of whether a specific job vacancy

exists for him, or whether he would be hired if he ap-

plied for work.” Jd. § 1382¢(a)(3)(B)."4

If plaintiff shows that she cannot now perform her former

job, the burden shifts to the Secretary to show both that

the claimant is able to perform other gainful work, and that

such other work is in fact available in the applicable

economy.'> The availability of work is normally proven ei-

ther by the testimony of a vocational expert’® or perhaps

by administrative notice!’ if properly taken. '*

IV. Standard of Review. Congress has clearly provided

that in a Social Security case the administrative findings

“as to any fact, if supported by substantial evidence, shall

be conclusive....”'® This Court’s function is strictly

4 Chaney v. Califano, 588 F.2d 958, 959 (Sth Cir. 1979).

18 McGill v. Harris, 615 F.2d 365 (Sth Cir. 1980); Johnson v.

Harris, 612 F.2d 993 (5th Cir. 1980); White v. Harris, 605 F.2d 867,

859 (5th Cir. 1979); Knott v. Califano, 559 F.2d 279, 280 (5th Cir.

1977).

16 B.g., Chaney v. Califano, 588 F.2d 958, 960 (5th Cir. 1979).

17 Brown v. Finch, 429 F.2d 80, 82 (Sth Cir. 1970); Breaur v.

Finch, 421 F.2d 687, 689 (5th Cir. 1970).

18 White v. Harris, 605 F.2d 867, 870 (Sth Cir. 1979).

1942 U.S.C. § 405(g).

60a

limited; we may only determine whether the administrative

findings are supported by “substantial evidence” consider-

ing the record as a whole.?°

The term “substantial evidence in this circumstance

means:

more than a mere scintilla. It means such relevant evi-

dence as a reasonable mind might accept as adequate

to support a conclusion.?!

The test is undoubtedly quite strict. Though it may be “so

stringent that it has been described as bordering on the

unrealistic,”2? it is nevertheless true that “the claimant’s

burden of proof is not insuperable.”?*

V. Analysis. Since the ALJ found that plaintiff was no

longer able to perform her former employment the burden

fell to the Secretary to rebut plaintiff's prima facie case.™4

In sum, the burden rested upon the Secretary to introduce

evidence that plaintiff could perform gainful work.

Even assuming arguendo®® that there is medical evi-

dence in the record based upon which a vocational expert

could render an opinion both as to plaintiffs vocational abil-

ity and the availability of appropriate work, no such voca-

tional evidence was adduced.

Thus, when the burden shifted to the Secretary, the only

evidence of the availability of other gainful employment or

of plaintiffs vocational capacity to do it came from the

Medical-V ocational Guidelines, or the grid. As discussed in

the next section, the grid does not suffice in this case to re-

but plaintiffs prima facie case.

2° Chaney v. Califano, 588 F.2d 958, 959 (5th Cir. 1979); Mims v.

Califano, 581 F.2d 1211, 1213 (5th Cir. 1978); Rivas v. Weinberger,

576 F.2d 255, (5th Cir. 1973).

21 Richardson v. Perales, 402 U.S. 389, 401 (1971), quoting Consoli-

dated Edison Co. v. N.L.R.B., 305 U.S. 197, 229 (1938).

22 Johnson v. Harris, 612 F.2d 998 (5th Cir. 1980), quoting Williams

v. Finch, 440 F .2d 612, 615 (5th Cir. 1971).

23 Simmons v. Harris, 602 F.2d 1233, 1236 (5th Cir. 1979), quoting

Mims v. Califano, 581 F.2d 1211, 1213 (5th Cir. 1978).

24 See note 15 above.

25 This assumption is quite likely to be incorrect, though we need not

so find.

6la

VI. Medical-Vocational Guidelines |“The Grid”|. The

resolution of this case is inextricably interwoven with the

applicability and validity of the new “Medical-Vocational

Guidelines”?* or, more commonly, “the grid” and its attend-

ant explanatory regulations. Since the vocational conclusion

of the ALJ is at bottom based solely upon the grid, the de

cision of the ALJ is supported by substantial evidence only

if the grid is to be applied, if it was properly applied, and if

the grid establishes a system of adjudication not at variance

with the statutes, Constitution, or decisional laws of the

United States.

A. The Medical-Vocational Guidelines |“The Grid” |. In

the Middle 1970's the Social Security Administration be-

gan?’ an internal study of the possibility of adoption f reg-

ulations providing increased use of administrative presump-

tions and administrative notice, having a view toward both

administrative efficiency and nationwide uniformity in So-

cial Security Disability determinations. The new regula-

tions become effective on February 26, 1979.78 Because

parts are displayable as a simple chart or table, the Medi-

cal-V ocational Guidelines are commonly called “the grid,” a

usage which, though technically limited to the tables them-

selves, commonly includes the attendant explanatory

matter.

1. The Grid in Perspective: Pre-Grid Analysis. There is

a sequential analysis by which the agency determination

reaches the level at which the grid is used, the entire proc-

ess moving toward a determination of whether or not an ap-

plicant is “‘disabled”’ within the meaning of 42 U.S.C.

§ 1382¢(3). Several preliminary steps are involved.

The several steps are, in sum, these:

26 20 C.F.R. § 404.1513 Subpart P, App. 2, § 200.00 et seq.

27 The work was apparently at the prodding of certain congressional

committees and the General Accounting Office. Since no statute was

passed, however, the work should be treated as a pure executive

branch effort.

28 The hearing in this case occurred one year later, on February 15,

1980.

62a

First, the agency determines whether the person is actu-

ally working.?® If so, the agency conclusively presumes that

the applicant is not disabled and the claim must be

denied;*” but if not, the agency moves to the second step.

Second, the agency must determine whether the claimed

impairment is “severe.”*' If not, the claim is denied on

medical evidence alone; but if so, the agency moves to the

third step.

Third, the agency determines whether the applicant's im-

pairment equals or exceeds in severity a list of impair-

ments.*? If so, the applicant is entitled to benefits, but if

not, the agency goes on to the fourth step.

Fourth, the agency detemines whether the applicant is

able to perform his or her past work.** If so, the agency

finds that the applicant is not disabled under the law, but if

not, the agency moves to the fifth step. At thir point the

burden shifts to the Secretary.™

Fifth, and last, the agency must determine whether the

applicant is able—despite his or her inability to perform his

or her pr:or work—to perform other substantial gainful ac-

tivity considering his or her age, education, and work expe-

rience.*> It must be continually recalled that by this point

the burden has already snifted to the Secretary to rebut

plaintiff's prima facie case. The grid system is designed to

constitute the Secretary's rebuttal to the claimant's prima

facie case, and the entire rebuttal is in form of adminis-

tratively-noticed facts systematized in the grid. We pro-

ceed next to the summary analysis of the use of the grid.

29 20 C.F.R. § 404. 1503(b).

3° By comparison, judge-made law in other areas recognizes that a

person, though injured, is often “required to work in order to survive.”

Vaughn v. Atkinson, 369 U.S. 527 533 (1962) (maintenance and cure

under general maritime law).

31 20 C.F.R. § 404. 1503(c).

32 20 C.F.R. § 404. 1503(d).

33 20 C.F.R. § 404. 1503(3).

% See note 15 above.

$5 42 U.S.C. § 1382e(a)(3)(B).

63a

2. Use of the Grid. The agency must first determine

which of the three available grids or tables*® to use, each

dealing with a different level of exertional impairment ,°7

since obviously a person’s employability for many jobs may

well depend upon the extent to which he can stand, move,

or lift. Thus, the agency determines the person’s residual

functional capacity to perform certain levels of work. This

determination is naturally an ersatz combination of medical

and vocational factors.

Finally, once the correct grid is selected, it is used. The

grid contains in tabular form a series of rules which consti-

tute the Secretary’s interpretation of the statutory phrase

“age, education, work experience,”** which are the deter-

minants of ability to engage in substantial gainful activity

other than the prior job which the impaired claimant can no

longer perform. In essence the grid is a black box into

which three variables are fed: age, education, and work ex-

perience. When the agency determines the three variables

in any particular case the black box is cranked—i.e., the fi-

nal column on the grid [styled “decision” | is read—and the

required result spouts forth: either “disabled,” or “not

disabled.”

It is important to note that while there are «" course situ-

ations in which the particular applicant’s cri.cia simply do

not fit the grid system for one reason or another the grid is

not used,®® where the grid does apply the agency—and, in

%6 Table 1 is for applicants able to do only sedentary work, 2 for

light, and 3 for medium. The terms sedentary, light and medium are

defined in 20 C.F.R. § 404.1510.

3° An “exertional impairment” limits the strength which an applicant

can exert on the job. A non-exertional impairment might be, for exam-

ple, the required use of a renal dialysis machine.

38 42 U.S.C. § 1382e(a)(3)(B).

3° 20 C.F.R. § 404.1513 Subpart P, App. 2 § 200.00(a) (“Where any

one of the findings of fact does not coincide with the corresponding cri-

terion of a rule, the rule does not apply in that particular case ...”).

The regulation suggests as an example a person who falls in the middle

by being able to do more than light but less than medium work, in

which event the grid is used simply for whatever use it may be. /d. at

§ 200.00(d).

6Aa

particular, the ALJ—is absolutely required to read and foi-

low the decision in the grid column labelled “decision.”

Factored into the grid system is a rule-based administra-

tive notice of the existence of a number of available un-

skilled jobs in the applicable economy. When the grid is

used, therefore, the existence of such jobs in the economy

“is established.”*” The rule does not provide for the consid-

eration of contrary testimony on the point, and does not

provide for the possibility that an applicant might offer evi-

dence which, in fair litigation not limited by the conclusive

rule, might be deemed to have overcome the adminis-

tratively-noticed facts.

3. Validity of Grid System. The grid system cannot re-

but the prima facie case, since the grid’s use here is invalid

for two reasons.

a. Administrative Notice Deemed Conclusive. The

grid has taken conclusive administrative notice of the ex-

istence of sedentary, light, and medium jobs “throughout”

the national economy; under the grid “the existence of such

jobs is established.”*' When the regulation states that the

fact “is established,” it obviously means conclusively estab-

lished. Certainly it does say otherwise. Such conclusive

administrative notice expressly violates 5 U.S.C. § 556(e),

providing that:

When an agency decision rests on official notice of a

material fact not appearing in the evidence in the rec-

ord, a party is entitled, on timely request, to an oppor-

tunity to show the contrary.

Accordingly, the regulation being contrary to an act of

Congress in that respect, even if judgment should not be

rendered in favor of plaintiff the case should be remanded

to allow plaintiff—should she so desire—offer evidence

pursuant to 5 U.S.C. § 556(e) that work of which she is ca-

pable does in these times of high unemployment exist

“throughout” the national economy.*?

*° Id. at § 200.00(b).

41 20 C.F.R. § 404.1513 Subpart P, App. 2 § 200.00(b).

42 The “throughout” term is in the grid regulations, 20 C.F.R.

§ 404.1513 Subpart P, App. 2 § 200.00(b). It is not clear whether that

term is intended to supplant 20 C.F.R. § 404.150%a), but since under

65a

b. Administrative Notice by Rule. Administrative or

judicial notice in its traditional sense is ordinarily expressly

taken at the hearing and, in fact, the Administrative Proce-

dure Act—and arguably the Due Process Clause

also—requires administrative notice to be expressly taken

at the hearing. As the Court of Appeals for this Circuit re-

cently wrote:

The Administrative Procedure Act provides in § 556(¢)

Isic: § 556(e)|:

When an agency decision rests on official notice of

material fact not appearing in the evidence in the

record, a party is entitled, on timely request, to an

opportunity to show the contrary.

The provision is unquestionably applicable to disability

cases that are heard before AL,Js, because the statute,

42 U.S.C. § 405(b), requires/disability decisions to be

made “on the basis of evidence adduced at the

hearing.”

Unfairness may result when facts are noticed without

precisely indicating the facts and their source. A quick

remark by an ALJ that he takes official notice of avail-

ability of jobs in the national economy that would be

suitable for the claimant could be unfair for lack of suf-

ficient specificity.**

The administrative notice taken here was procedurally

invalid because there was not even a “quick remark” at the

hearing, there was nothing said at the hearing at al/ about

administrative notice which was, then, procedurally im-

proper by reason of 5 U.S.C. § 556(e) and the “evidence ad-

duced at the hearing” requirement of 42 U.S.C. § 405(b).

The possibility that plaintiff can submit a rebuttal affida-

vit on appeal in the Appeals Council does not change the

result. The statute states that the decision must be based

on evidence “adduced at the hearing’**—it does not say on

appeal—and it is inconceivable that in passing 5 U.S.C.

the grid the existence of jobs “throughout” the economy was noticed,

that is what plaintiff is entitled to rebut.

“3 White v. Harris, 605 F.2d 867, 870 (Sth Cir. 1979), quoting K.

DAVID, ADMINISTRATIVE LAW § 15.11 (Supp. 1978).

#442 U.S.C. § 405(b).

66a

§ 556(e) Congress meant that the rebuttal evidence should

be first offered on appeal.

Similarly, the right of the claimant to rebut the underly-

ing findings of factual fact*® (e.g., age) is not the same as

the opportunity to rebut the administratively-noticed fact,

namely, the existence of appropriate jobs in the appropri-

ate economy. That administratively-noticed fact is

irrebuttable under the grid.

Accordingly, use of the grid does not constitute the req-

uisite rebuttal.

VII. Propriety of Remand. The Social Security Disabili-

ty Amendments of 1980** amend 42 U.S.C. § 405(g) to pro-

vide that:

The Court ... may at any time order additional evi-

dence to be taken before the Secretary, but only upon

a showing that there is new evidence which is material

and that there is good cause for the failure to incorpo-

rate such evidence into the record in a prior proceed-

ing.

A fair reading of the statute indicates that it pertains

only to remands to allow the plaintiff to other additional

testimony; it does not say so, however. If the Court decides

not to simply enter judgment in favor of plaintiff and if the

statute does apply to remands to allow the Secretary to of-

fer additional testimony, the statute does not forbid re-

mand here because:

A. “there is new evidence which is material,” namely,

there should be vocational testimony, and;

B. “there is good cause for the failure to incorporate

such evidence into the record in prior proceedi

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