Reply Brief — Bowen v. Yuckert

aol

* Supreme Court, U.S,

f° FILED

JAN 6 Om

#OSEPH F. SPANIOL, sR

———al

In the Supreme Court of the United States

OCTOBER TERM, 1986

OTis R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, PETITIONER

Vv.

JANET J. YUCKERT

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

REPLY BRIEF FOR THE PETITIONER

CHARLES FRIED

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Cases: Page

Pluvband v. Heckler, 730 F.2d 886 (2d Cir. 1984).. 15

Brady v. Heckler, 724 F.2d 914 (11th Cir. 1984) .. 19

; Brown Vv. Bowen, 794 F.2d 703 (D.C. Cir. 1986)... 15

1 Chevron U.S.A. Inc. Vv. NRDC, Inc., 467 U.S. 837

og (1984) ........ SN TE Ae See ne a ee 14

Dixon v. Heckler, 589 F. Supp. 1494 (S.D.N.Y.

1984), aff’d, 785 F.2d 1102 (2d Cir. 1986), peti-

tion for cert. pending, No. 86-2 .........................-.. 13-14

Goodermote v. Secretary of HHS, 690 F.2d 5 (Ast

Nahata lia il ha iaiaeeerantiiideniina 15

3 Heckler vy. Campbell, 461 U.S. 458 (19838) -......... 4,11, 12,

4 14-15

Kerner Vv. Fleming, 283 F.2d 916 (2d Cir. 1960)... 16

Mathews Vv. Eldridge, 424 U.S. 319 (1976) ............. 16

3 McDonald vy. Secretary of HHS, 795 F.2d 1118

I atc craitaltlisine 17

Rivera Vv. Schweiker, 717 F.2d 719 (2d Cir. 1983) .. 15

Statutes and regulations:

Social Security Act, 42 U.S.C. (& Supp. II) 301

et seq.:

f Tit. II, 42 U.S.C. (& Supp. II) 401 et seq.:

LET eT 4,15

42 U.S.C. (Supp. II) 421 (kk) ......................... 14

42 U.S.C. 423 (d) (1) (A)................... 2,9, 10, 11,13

42 U.S.C. 423(d) (2) (A) .... ....2, 4, 8, 9, 12, 13, 14

42 U.S.C. 423 (d) (2) (B) .....220000002.... ceaiieiaals 13

42 U.S.C. (Supp. II) 423 (d) (2) (C)...... ..5, 6, 7, 18

Tit. XVI, 42 U.S.C. (& Supp. I1) 1381 et seq......... 1

Social Security Ameridments of 1967, Pub. L. No.

90-248, § 158(b), 81 Stat. 868 00 4

yi Social Security Disability Benefits Reform Act of

1984, Pub. L. No. 98-460, 98 Stat. 1794 et seq..... 2,4

a ST a eee 14

J 20 C.F.R.:

; I cedewbind 3, 6,18

. an ee ae 1l

AS ee ee 3

II

Statutes and regulations—Continued : Page

SSA State Letter No. 174 (1952)......................... aati 11

Social Security Rulings:

GS ne 17

No. 82-56 (1982) ........................... sptnciieieadamaaa 17

No. 85-28 (1985) -...... sidiebalhae nisapisetiieaiasasiinamamaanl 8, 14,17

Miscellaneous:

Appeals Council Review of Sequential Evalua-

tion Under Expanded Vocational Regulations

CD ccecescovcncesssinnitttestiisamiaiasiaitiaiiatialtitaalitesliaiaaliai 19

102 Cong. Rec. 13052-13054 (1956) -........................ 8

130 Cong. Rec. S11458 (daily ed. Sept. 19, 1984)... 7,8

Disability Freeze State Manual (Mar. 16, 1955)... 9, 10

Disability Insurance Legislation: Hearings Be-

fore the Subcomm. on Social Security of the

House Comm. on Ways and Means, 96th Cong.,

Sy, rr 20

Disability Insurance Program: Hearings Before

the Subcomm. on Social Security of the House

Comm. on Ways and Means, 94th Cong., 2d

I, GOT ccacecincstccsncsenccsicncinsiniteaonemamaiaans 20

3. S 5 fy a 8

43 Fed. Reg. (1978) :

Serre See TR 18

A, TEED nnsnscecsstsinsedsennsassnsinnsiciniaantentinniaaaaaiaal 18

Is TEED cccensiccivnintainiabinctnbiascnnialidieasdtiniasamdeaaaaa 16

Pee. am, GSO Cee cncittccnctmenee 18, 19

H.R. Conf. Rep. 98-1039, 98th Cong., 2d Sess.

} | EE LAs ea 7,8,18

H.R. Rep. 1698, 83d Cong., 2d Sess. (1954) —........... 10

H.R. Rep. 544, 90th Cong., Ist Sess. (1967) ........ 12,13

H.R. Rep. 98-618, 98th Cong., 2d Sess. (1984) _...... 7,16

House Comm. on Ways and Means, 99th Cong.,

2d Sess., Background Material and Data on

Programs Within the Jurisdiction of the Com-

mittee on Ways and Means (Comm. Print

TID <cousnosesssnntessnsnsiosenssnenniganiaummmesaaeia as 15-16

S. Rep. 1987, 88d Cong., 2d Sess. (1954) -..000000000.... 10, 11

S. Rep. 2133, 84th Cong., 2d Sess. (1956)

III

Miscellaneous—Continued : Page

S. Rep. 744, 90th Cong., Ist Sess. (1967) .............. 8,13

S. Rep. 98-466, 98th Cong., 2d Sess. (1984)-..... 6, 17,18

SSA, Not Severe Impairment Workgroup, “Ri.

nal Report and Recommendations” (Aug. 23,

SESS SST ee OE 19

Subcomm. on the Administration of the Social

Security Laws of the House Comm. on Ways

and Means, 86th Cong., Ist Sess., Disability In-

surance Fact Book: A Summary of the Legisla-

tive and Administrative Development of the

Disability Provisions in Title II of the Social

Security Act (Comm. Print 1959) -..........-.......... 9

Senate Comm. on Finance, 95th Cong., 2d Sess.,

Staff Data and Materials on Supplemental In-

come (SSI) Disability Prozosals (Comm. Print

i GS LETT RT EE 20

Senate Comm. on Finance, 97th Cong., 2d Sess.,

Staff Data and Materials Related to the Social

Security Disability Insurance Program (Comm.

EEE DESEO ; 20

Social Security Disability Insurance Program:

Hearing Before the Senate Comm. on Finance,

| 0 | 20

Subcomm. on Administration of the Social Secu-

rity Laws of the House Comm. on Ways and

Means, 86th Cong., 2d Sess., Administration of

the Social Security Disability Insurance Pro-

gram: Preliminary Report (Comm. Print

EE EE SEE 10

Subcomm. on Social Security of the House Comm.

on Ways and Means, 96th Cong., Ist Sess.,

Actuarial Condition of Disability Insurance

(Comm. Print 1979) .............. Ro 20

Subcomm. on Social Security of the House Comm.

on Ways and Means, 97th Cong., Ist Sess.,

Status of the Disability Insurance Program

a 20

Iu the Supreme Court of the United States

OCTOBER TERM, 1986

No. 85-1409

OTIS R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, PETITIONER

Vv.

JANET J. YUCKERT

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

REPLY BRIEF FOR THE PETITIONER

This case presents a single and straightforward ques-

tion of law: whether the “severity” regulation promul-

gated by the Secretary of Health and Human Services in

the administration of the disability program under Title

II and Title XVI of the Social Security Act is invalid on

its face. The court of appeals so held. That holding,

however, is clearly wrong. As we demonstrate in our

opening brief, the severity regulation is firmly supported

by the text of a number of provisions of the Social Se-

curity Act (Gov’t Br. 19-28) and by the legislative

history of the 1954, 1967 and 1984 Amendments to the

Act (Gov’t Br. 30-33, 38-41, 43-49. As we further dem-

onstrate, the principle on which the severity regulation is

premised—that benefits may be denied solely on the basis

of medical evidence that the claimant’s impairment is

relatively minor—has been an important feature of the

disability program since its inception in 1954 and has

been applied to millions of claims since that time (Gov’t

Br. 34-38, 41-43, 49-50).

Respondent for the most part simply ignores the com-

pelling legislative and administrative support for the

severity regulation, and the amici supporting respondent

do not even attempt to rebut our submission in this re-

(1)

2

gard. Respondent’s challenge to the regulation instead

rests almost entirely on 42 U.S.C. 423(d) (2) (A), which

in her view requires consideration of the claimant’s age,

education, and work experience in every case. That in-

terpretation is refuted by the language of Section 423 (d)

(2) (A), which merely prescribes several necessary (but

not sufficient) conditions of eligibility; it does not pro-

hibit a threshold screening mechanism under which the

claimant may be denied benefits if he cannot even demon-

strate that he has a medically severe impairment. The

legislative history confirms that interpretation and mani-

fests no intention to invalidate the then-existing version

of the severity regulation, which had been promulgated

in 1960 to implement the basic definition of the term

“disability” in 42 U.S.C. 423(d) (1) (A).

Contrary to respondent’s (and amici’s) contention, the

current version of the severity. regulation merely carries

forward and clarifies the substantive standard of medical

severity under the 1960 regulation, and it therefore is

likewise fully consistent with both 42 U.S.C. 423(d)

(1) (A) and (2)(A). In any event, and again contrary

to respondent’s contention, the text and legislative history

of the Social Security Disability Benefits Reform Act of

1984 make unambiguously clear that Congress has rati-

fied the current version of the severity regulation. For

this reason, respondent’s and amici’s extended discussion

of alleged differences between the current and prior ver-

sions of the regulation, the relative numbers of claims

denied under each, and the wisdom of labeling the current

regulation a “de minimis” standard is quite beside the

point.

A. We note at the outset that nothing in respondent’s

submission detracts from the manifest reasonableness of

the severity regulation as a matter of common sense and

administrative efficiency. It provides that an application

for disability benefits will be denied—without specific

consideration of the claimant’s ability to perform his pre-

vious work or other jobs, in light of the so-called “voca-

tional” factors of age, education and work experience—if

the claimant fails to establish on the basis of medical evi-

3

dence alone that his impairment is “severe.” However,

the regulation evaluates the severity of an impairment

not as an abstract medical matter, but in concrete, work-

related terms. Thus, an impairment will be found non-

severe only if it does not “significantly limit[] [the

claimant’s] physical or mental ability to do basic work

activities’ (20 C.F.R. 404.1520(c))—i.e., “the abilities

and aptitudes necessary to do most jobs,” such as walk-

ing, standing, lifting, seeing, hearing, and understanding

or carrying out instructions (id. § 404.1521(b)). More-

over, although the vocational factors are not considered

at step two, Social Security Ruling (SSR) 85-28 ex-

plains: “An impairment or combination of impairments

is found ‘not severe’ and a finding of ‘not disabled’ is

made at this step when medical evidence establishes only

a slight abnormality or a combination of slight abnormal-

ities which would have no more than a minimal effect on

an individual’s ability to work even if the individual’s

age, education, or work experience were specifically con-

sidered (i.e., the person’s impairment(s) has no more

than a minimal effect on his or her physical or mental

ability (ies) to perform basic work activities)” (Pet.

App. 4la (emphasis added) ).

Such a modest threshold requirement of medical sever-

ity should be entirely unobjectionable in a program in

which eligibility is fundamentally premised on medical

disability, not an adverse vocational profile. And indeed

respondent and amici concede that some threshold medical

standard is permissible if its application is limited to

screening out claimants who have what they term “de

minimis” impairments. It thus is not clear to what extent

respondent and amici now actually challenge the facial

validity of the severity regulation.

It does seem clear, however, that respondent and amici

fail to appreciate that there are two distinct but over-

lapping functions served by the severity regulation:

(i) it assures that disability benefits are paid only to

those individuals for whom a significant medical impair-

ment is actually a primary cause of their inability to

work; and (ii) it screens out at an early stage those

4

claimants who, it may reasonably be presumed, would

not be found disabled even if the Secretary were to

undertake a full-blown vocational assessment. Respond-

ent and amici address only the second purpose, arguing

that the regulation is invalid to the extent it is applied to

screen out any individual claimant who might be found

to be disabled if his ability to perform his previous work

and his age, education and work experience were spe-

cifically considered. See Resp. Br. 22-24. However, if

pushed too far, this position would effectively require an

individualized assessment of the claimant’s vocational

factors in every case, thereby sacrificing uniformity and

ease of administration and causing vocational considera-

tions to overshadow the central importance of a medical

impairment.

The balancing of these competing considerations in

the implementation of the statutory definifion of “dis-

ability” has been entrusted by Congress to the “ ‘excep-

tionally broad authority’” of the Secretary under 42

U.S.C. 405(a), and the Secretary’s regulations must be

sustained unless they exceed the Secretary’s statutory au-

thority or are arbitrary and capricious. See Heckler v.

Campbell, 461 U.S. 458, 466 (1983). Respondent does

not contend that the severity regulation is arbitrary and

capricious, but she does contend that the regulation ex-

ceeds the Secretary’s statutory authority.

B. Respondent’s argument that the severity regulation

is inconsistent with the Social Security Act rests almost

entirely on 42 U.S.C. 423 (d) (2) (A), which was enacted

as part of the 1967 Amendments (§ 158(b), 81 Stat.

868). See Resp. Br. 19-22, 28, 39. This reliance is mis-

placed for three reasons.

1. The first flaw in respondent’s reliance on an asserted

inconsistency between the severity regulation and Section

423(d)(2)(A) is that any such inconsistency has been

rendered irrelevant by Congress’s supervening ratifica-

tion of the severity regulation when it passed the Social

Security Disability Benefits Reform Act of 1984, Pub. L.

No. 98-460, 98 Stat. 1794 et seq.

5

a. The 1984 Amendments enacted the new 42 U.S.C.

(Supp. II) 423(d) (2) (C), which codifies the concept of

a “severe” impairment (emphasis added) ) :

In determining whether an individual’s physical

or mental impairment or impairments are of a suffi-

cient medical severity that such impairment or im-

pairments could be the basis of eligibility under this

section, the Secretary shall consider the combined

effect of all of the individual’s impairments without

regard to whether any such impairment, if con-

sidered separately, would be of such severity. If the

Secretary does find a medically severe combination

of impairments, the combined effect of the impair-

ments shall be considered throughout the disability

determination process.

Respondent attempts to brush aside this statutory pro-

vision with the assertion (Br. 41) that it “made no

change in the 1954 definition of disability other than

to require the Secretary to consider the combined effect

of all of an individual’s impairments on his ability to

work.” We of course agree with respondent that the 1984

Amendments made no change in the underlying definition

of “disability,” but that is irrelevant. The critical point

for present purposes is that the first sentence of the new

Section 423(d) (2) (C) expressly provides that the Secre-

tary may continue to make the threshold assessment of

“medical severity” at step two of the “disability deter-

mination process.” Furthermore, the second sentence of

Section 423(d)(2)(C) expressly conternplates that the

subsequent steps of that process—including steps four

and five, at which the Secretary considers the claimant’s

ability to perform his past work and his age, education

and work experience—will be reached only if the Secre-

tary first “does find” a “medically severe” impairment.

Thus, congressional authorization for the sequential eval-

uation process, including tae severity regulation, it now

set forth in the Social Security Act itself.

Despite this explicit statutory text, respondent contends

(Br. 40, 42-43) that Congress in 1984 at most intended

to ratify not the threshold medical standard embodied in

6

the Secretary’s published regulations, but some other

standard, under which the Secretary could determine only

whether the claimant’s impairment is “slight” or “de

minimis” in the abstract and would be required in every

case to make at least an implicit evaluation of the claim-

ant’s age, education, and work experience. This conten-

tion is refuted by the language of Section 423(d) (2) (C),

which states the test to be whether an impairment is

medically “severe’—the precise term used in the regula-

tion respondent challenges.

b. Any remaining doubt about whether Congress in-

tended to ratify the severity regulation is dispelled by the

legislative history of the 1984 Amendments. The Senate

Report states that under “[p]resent law,” “[m]edical

considerations alone can justify a finding of ineligibility

where the impairment[] is not severe,” and that “[a]n

impairment is nonsevere if it does not significantly limit

the individual’s physical or mental capacity to perform

basic work-related functions.” S. Rep. 98-466, 98th

Cong., 2d Sess. 22 (1984). The “present law” to which

the first passage just quoted refers of course is the sever-

ity regulation. The second passage in turn is essentially

a quotation of that regulation, the next sentence of which

expressly informs the claimant that the Secretary “will

not consider [his] age, education, and work experience”

at that step (20 C.F.R. 404.1520(c) (emphasis added) ).

The Senate Report then specifies that the new statutory

directive to consider the combined effect of multiple im-

pairments (i) “is to be applied in accordance with the

existing sequential evaluation process,” and (ii) “re-

quires the Secretary to determine first, on a strictly

medical basis and without regard to vocational factors,

whether the individual’s impairments, considered in com-

bination, are medically severe” (S. Rep. 98-466, supra,

at 22).

Respondent does not dispute that the Senate Report

reflects unqualified approval of the severity regulation,

but she contends (Br. 43) that the Conference Committee

“rejected” the Senate’s approach. Respondent is simply

wrong. The House Report likewise eschewed any inten-

7

tion to mandate a change in the sequential evaluation proc-

ess, beyond requiring consideration of the combined effect

of multiple impairments. H.R. Rep. 98-618, 98th Cong.,

2d Sess. 6-8 (1984). Because the House and Senate were

in basic agreement, there was no occasion for the Con-

ference Committee to “reject” the Senate’s approach.'

Moreover, the Conference Report also expressly approves

the severity regulation. It states: (i) that “interests

of reasonable administrative flexibility and efficiency”

permit a finding of no disability if an impairment is

“slight enough to warrant a presumption, even without a

full evaluation of vocational factors, that the individual’s

ability to perform [substantial gainful activity] is not

seriously affected”; (ii) that the-“current ‘sequential

evaluation process’ allows such a determination”; (iii)

that a non-severe impairment for these purposes is “ ‘one

which does not significantly limit basic work-related func-

tions’”’; and (iv) that there was no intention to “impair

the use of that process” (H.R. Conf. Rep. 98-1039, 98th

Cong., 2d Sess. 29-30 (1984)). The Conference Report

thus reinforces the conclusion that Section 423(d) (2)

(C) ratified the severity regulation.

This conclusion is further reinforced by the remarks

of Senator Long during the floor debate on the Conference

Report (see Gov’t Br. 47-49 & n.28). Senator Long ob-

served that “[s]ome courts”—like the court below (see

Pet. App. 5a, 9a)—“‘have ruled that the Secretary can-

not deny claims solely on the basis that the individual has

no severe medical condition but must always make an

evaluation of vocational capacities” (130 Cong. Rec.

$11458 (daily ed. Sept. 19, 1984)). But Senator Long

made clear that Congress rejected this notion, stressing

1 The Conference Report states that, as relevant here, the Senate

bill was the “[s]ame” as the House bill and that the Senate provi-

sion merely “clarifie[d] that the requirement applies to the deter-

mination of whether the individual has a combination of impair-

ments which are medically severe, without regard to age, education,

or work experience.” H.R. Conf. Rep. 98-1039, 98th Cong., 2d Sess.

29 (1984) (first emphasis added).

8

that the bill was “carefully drawn to reaffirm the author-

ity of the Secretary to limit benefits to only those indi-

viduals with conditions which can be shown to be severe

enough from a strictly medical standpoint—that is, with-

out vocational evaluation” (ibid.).

Respondent attempts (Br. 43 n.25) to avoid the force of

Senator Long’s remarks by labeling them “partisan” and

“post-conference.” However, Senator Long was one of

the principal sponsors of the disability program when it

was enacted in 1956 (S. Rep. 2133, 84th Cong., 2d Sess.

140 (1956) (minority views); 102 Cong. Ree. 13052-

13054 (1956)); was the Chairman of the Finance Com-

mittee at the time of the 1967 Amendments, upon which

respondent relies (S. Rep. 744, 90th Cong., Ist Sess. 1

(1967) ); and was the ranking minority member of the

Conference Committee on the 1984 Amendments (H.R.

Conf. Rep. 98-1039, supra, at 46). He therefore spoke

with unique authority on the disability program and the

1984 Amendments, and his explanation of the Conference

Report is significant precisely because it was “post-

conference,” especially since no Member of the House or

Senate expressed a contrary view.*-

2. Even if Congress’s ratification of the severity regu-

lation in 1984 were put to one side, respondent’s reliance

on an alleged inconsistency with 42 U.S.C. 423(d) (2) (A)

would be without merit. The original version of the se-

verity regulation was formally promulgated in 1960,°

* Respondent also contends (Br. 43 n.25) that Senator Long’s

remarks are not a “reliable” indicator of congressional intent

because they reiterated the views in the Senate Report, which,

respondent contends, were “rejected” in conference. However, to

the extent there were differences between the two bills, Senator

Long explained that the Conference bill “follow[ed] the Senate

approach,” not the House formulation, because the latter “might

have been misinterpreted so as to raise a question about the ability

of the Department to deny benefits at the initial stage of evaluation

on the basis that there is no severe medical impairment” (130 Cong.

Rec. $11458 (daily ed. Sept. 19, 1984) (emphasis added) ).

$25 Fed. Reg. 8100 (1960) ; Gov’t Br. 36. As we explain in our

opening brief (at 34), the interpretation embodied in the 1960

9

well before Section 423(d) (2) (A) was enacted in 1967,

and its validity therefore does not depend on that section.

Rather, the 1960 regulation implemented—and, as re-

spondent concedes (Br. 2, 32-33), was fully consistent

with—the basic definition of the term “disability” in Sec-

tion 423(d) (1) (A).

Section 423(d) (1) (A) states that the term “disability”

shall mean the “inability to engage in any substantial

gainful activity by reason of any medically determinable

physical or mental impairment * * *.” The statutory re-

quirement that the claimant’s alleged inability to work

be “by reason of” a “medically determinable” impair-

ment strongly supports a threshold test of medical sever-

ity, because it ensures, on a uniform basis, that the

claimant’s impairment is sufficiently major to justify its

regulation previously had been reflected in the Disability Freeze

State Manual, issued in 1955. Respondent cites (Br. 35 n. 20) provi-

sions of that Manua/ that addressed the circumstances in which age,

education, and work experience would be considered. However, those

provisions do not undermine the Manual’s explicit instructions that

“Tijn the great majority of cases” the state agency would be able to

evaluate the applicant’s impairment solely on the basis of its “level

of severity,” and that the non-medical factors of age, education and

experience should be considered only if a realistic assessment could

not be made on the basis of “medical factors.” Section 304.B (Gov't

Br. 34). The same point is made in a 1958 booklet entitled “Dis-

ability and Social Security”:

[T]here are some obvious cases where the medical facts may be

controlling. For example, where the only impairment is a mod-

erate neurosis, moderate impairment of sight or hearing, or

any other moderate abnormality, it would be obvious on the

basis of medical considerations alone that the facts would not

justify favorabie determinations.

Quoted in Subcomm. on the Administration of the Social Security

Laws of the House Comm. on Ways and Means, 86th Cong., Ist Sess.,

Disability Insurance Fact Book: A Summary of the Legislative and

Administrative Development of the Disability Provisions in Title Il

of the Social Security Act 21-22 (Comm. Print 1959). These in-

structional materials refute respondent’s contention (Br. 2, 32-33)

that under the 1957 regulations (22 Fed. Reg. 4362 (Gov’t Br. 38

n.22)), an inquiry into the claimant’s education, training, and work

experience was required in every case.

10

consideration as the primary or substantial cause of his

inability to work. See Gov’t Br. 33. The central role of

medical considerations is what distinguishes a disability

program from other forms of unemployment assistance.‘

This interpretation is supported by the House and Sen-

ate Reports on the 1954 Amendments, which stress that

disability evaluation has two aspects: the claimant must

have “a medically determinable impairment of serious

proportions,” and there must be an inability to work “by

reason of such impairment.” H.R. Rep. 1698, 83d Cong.,

2d Sess. 23 (1954); S. Rep. 1987, 83d Cong., 2d Sess. 21

(1954). Respondent does not dispute, or even discuss,

these dispositive aspects of the text and legislative his-

tory of the basic definition of “disability” in 42 U.S.C.

423(d) (1) (A).5

* This was the contemporaneous construction of the definition of

disability in the Disability Freeze State Manual of 1955. Sections

310-319 of the Manual elaborated upon the statutory terms. Section

314, entitled “By Reason of an Impairment,” stated: “The impair-

ment must be sufficiently severe to be the cause of inability to

work.” A similar explanation of the “by reason of” language was

offered by Deputy Director Robert Ball during the extensive House

oversight hearings in 1959. See Gov’t Br. 36-37 n.21. In its report

issued after those hearings, the Subcommittee likewise stated that

“the individual’s impairment must be the primary cause of the lack

of capacity” (Subcomm. on Administration of the Social Security

Laws of the House Comm. on Ways and Means, 86th Cong., 2d Sess..,

Administration of the Social Security Disability Insurance Pro-

gram: Preliminary Report 19 (Comm. Print 1960) ). The report ex-

plained that a “chronic condition” in an older worker that might

affect his ability to find a job, but is not a “major handicap,” does

not qualify him for benefits; and it emphasized the distinction be-

tween a disability program, under which the failure to work must

be attributable to a “major medical impairment,” and an unemploy-

ment benefits program (id. at 19-20).

5 Respondent does take issue (Br. 33) with our reliance (Gov’t

Br. 30-31) on statements in the House and Senate Reports that

the claimant must be “totally” disabled (H.R. Rep. 1698, supra,

at 23; S. Rep. 1987), supra, at 20), contending that there is no

suggestion that those references were intended to “preclude” con-

sideration of vocational factors. Respondent misunderstands our

submission. We argued only that the emphasis on “total” disabil-

ity suggested the prerequisite of a major impairment, not that

11

Nor is there any merit to respondent’s contention

(Br. 7, 19-20, 24 n.12, 25-26) that the severity regulation

permits only an “abstract medical assessment” and is

inconsistent with the Act’s definition of disability “in

terms of the effect a physical or mental impairment has

on a person’s ability to function in the workplace” (id.

at 19-20, quoting Heckler v. Campbell, 461 U.S. 458, 459-

460 (1983)). The prior version of the regulation stated

the test to be whether the impairment was “slight,” a

standard that was criticized by the Comptroller General

and state agencies as vague. See Gov’t Br. 42 n.24. By

contrast, under the current version, the severity of the

impairment is evaluated in terms of its effect on the

claimant’s capacity to perform basic activities that are

necessary for most jobs, and therefore is directly tied te

Section 423(d) (1) (A) precludes consideration of vocational factors

in all circumstances. Respondent’s reliance (Br. 33-34) on SSA

State Letter No. 174, issued in 1952, is misplaced for the same

reason. Moreover, that Letter stated that the impairment must be

of “major importance” (§ 3820 para. 1) and that “[i]n many cases,

no decision as to total disability can be made without such social

data as will describe the individual’s education and work history”

(ibid. para. 2), thereby implying that in some cases such informa-

tion was not necessary.

Respondent also argues (Br. 34-35) that we quote out of con-

text the portion of the 1954 Senate Report that refers to the

development of standards for evaluating disability (see Gov’t Br.

31-32), because the Report goes on to say that the standards “will

reflect the requirement that the individual be disabled not only for

his usual work but also for any type of substantial gainful activity”

(S. Rep. 1987, supra, at 21) However, nothing in this passage

undermines the requirement that the claimant have a severe im-

pairment (the Senate Report itself describes impairments of “seri-

ous proportions”) or suggests that such a requirement cannot be

included among the contemplated “standards.”

Finally, the testimony during the 1959 oversight hearings that

respondent quotes (Resp. Br. 36-37) simply explains that a claim-

ant may be found disabled even if his impairment is not so severe

as to meet the listing of presumptively disabling impairments (com-

pare 20 C.F.R. 404.1520(d)) and that an impairment may have a

more serious impact on some persons than on others. These state-

ments have no bearing on the issue presented in this case.

12

the central question of whether the claimant’s inability

to work is actually due to an impairment.°

8. Finally, even focusing narrowly on Section 423(d)

(2) (A), as respondent urges, the severity regulation is

well within the Secretary’s statutory authority. That

section provides that “an individual * * * shall be de-

termined to be under a disability only if his physical or

mental impairment or impairments are of such severity

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

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

perience, engage in any other kind of substantial gainful

work which exists in the national economy” (emphasis

added). Especially in light of the phrase “only if,” this

language merely states necessary (but not sufficient) con-

ditions of eligibility. Nothing suggests that it prescribes

the only relevant conditions. In particular, Section 423

(d) (2) (A) does not call into question the validity of the

1960 regulation that permitted the denial of benefits on

medical grounds alone, without regard to the claimant’s

age, education, and work experience. Rather, as respond-

ent concedes (Br. 39), Section 423(d)(2)(A) was en-

acted for the distinct purpose of further restricting eligi-

bility by overturning judicial holdings that a claimant

was disabled if he was unable to do his past work and

there were no other jobs in the immediate vicinity for

which he might be hired. H.R. Rep. 544, 90th Cong., Ist

Sess. 28-30 (1967). This purpose is demonstrated by the

provision in Section 423(d)(2)(A) that the claimant

must be unable to do any substantial gainful work that

exists in the national economy, “regardless of whether

such work exists in the immediate area in which he lives,

6 There also is no merit to respondent’s contention (Br. 21,

25-26) that the severity regulation , events the individualized as-

sessment of disability contemplated by Heckler v. Campbell, 461

U.S. at 467. The determination whether an impairment significantly

limits the claimant’s ability to perform basic work-related functions

assures the requisite assessment of “each claimant’s individual

abilities” (ibid.).

13

or whether a specific job vacancy exists for him, or

whether he would be hired if he applied for work.” ?

Moreover, as we explain in our opening brief (at 40-

41), the House and Senate Reports on the 1967 Amend-

ments describe three distinct eligibility requirements in

terms that directly parallel steps two, four and five of

the sequential evaluation process adopted in 1978. The

first of those requirements is that the individual must

have “a severe medically determinable physical or mental

impairment or impairments” (S. Rep. 744, supra, at 48-

49 (emphasis added) ; H.R. Rep. 544, supra, at 30). This

passage clearly contemplates that the Secretary may deny

benefits on the basis of medical evidence alone, whether

the applicable test is phrased in terms of whether the im-

pairment is not “severe” (as under the current regula-

tions that use the Reports’ term) or “slight” (as under

the version of the regulations in effect in 1967).

Respondent relegates her discussion of this legislative

history to a footnote, contending that it is “ ‘somewhat

ambiguous’” and that it “‘can be read’” simply as an

explanation of the overall circumstances in which a find-

ing of non-disability may be made, rather than as a

“ “fixed sequence’ ”’ of screening steps. Resp. Br. 38 n.22,

quoting Dixon v. Heciler, 589 F. Supp. 1494, 1505 (S.D.

N.Y. 1984), aff'd, 785 ¥'.2d 1102 (2d Cir. 1986), petition

7 Respondent contends (Br. 3, 20 n.10, 39) that because the

disability determination for surviving spouses under 42 U.S.C.

423 (d) (2) (B) is based solely on the level of impairment severity,

without consideration of age, education, and experience, the omis-

sion of any comparable limitation in the contemporaneously enacted

Section 423(d) (2) (A) forecloses that approach for other claimants.

This contention is without merit. The regulation permitting the

denial of benefits to other claimants based on medical factors alone

was in existence prior to 1967, and it implemented Section

423(d) (1) (A), not the 1967 Amendments. Moreover, the fact that

Congress precluded consideration of age, education, and work expe-

rience for surviving spouses scarcely establishes that Congress

intended to require such consideration in all other cases. At most,

the inference would be only that Congress intended to permit such

consideration in appropriate circumstances, as the sequential evalu-

ation process allows.

14

for cert. pending, No. 86-2. But even if the statutory

language and legislative history were ambiguous (which

they are not), the Secretary’s construction of the 1967

Amendments as permitting both the former and current

versions of the severity regulation plainly is reasonable,

and therefore must be sustained. Chevron U.S.A. Ine. V.

NRDC, Inc., 467 U.S. 887, 843 (1984). That is espe-

cially so in light of the accommodation between the se-

verity regulation and Section 423(d) (2) (A) in practical

application. SSR 85-28 explains that an impairment will

be found to be noii-severe only when the medical evidence

establishes that it “would have no more than a minimal

effect on [the] individual’s ability to work even if the

individual’s age, education, or work experience were spe-

cifically considered” (Pet. App. 41a). As respondent ap-

pears to concede (Br. 22-23), under this interpretation,

the severity regulation is not insensitive to the vocational

factors of age, education and work experience referred

to in Section 423(d) (2) (A)

C. Respondent, joined by several amici, also contends

that the severity regulation is inconsistent with the allo-

cation of the burden of proof in what respondent main-

tains should be a “two-stage” inquiry (Resp. Br. 20-21),

under which the claimant may establish a prima facie

ease by showing an inability to perform past work and

the burden then shifts to the Secretary to show that the

claimant is able to perform other work that exists in

the national econonmry. See Resp. Br. 20-21, 23, 24-25, 26,

28-29, 39, 47 n.29; States Amicus Br. 6 & n.6, 15-16, 26-

27; Cities Amicus Br. 13-16. There are a number of

flaws in this contention:

1. Nothing in the Social Security Act rigidly confines

disability determination to a “two-step” process. The

Secretary has “ ‘exceptionally broad authority’” (Heckler

8 Because SSR 85-28 is only interpretative and clarifying, it was

not necessary, contrary to respondent’s contention (Br. 29-30), for

its publication to be preceded by notice and an opportunity for

comment under 42 U.S.C. (Supp. II) 421(k). See 5 U.S.C.

553(b) (A).

15

v. Campbell, 461 U.S. at 466) to “regulate and provide

for the nature and extent of the proofs and evidence and

the method of taking and furnishing the same” in dis-

ability cases. 42 U.S.C. 405(a). Pursuant to that au-

thority, the Secretary has established a five-step disability

determination process, which includes separate steps for

the determination of impairment severity and ability to

do past work. Respondent and amici have not shown that

this is an arbitrary and capricious means for implement-

ing the statutory definition of disability.

2. The allocation of the burden of proof under the case

law upon which respondent and amici rely applies to the

vocational aspects of disability determinations, and that

allocation in fact is fully respected at those steps of the

sequential evaluation process where the vocational aspects

are considered. Thus, the claimant bears the burden of

proof through the first four steps of the sequential evalu-

ation process. If the claimant demonstrates at step four

that he is unable to perform his previous work, then the

burden shifts to the Secretary at step five to identify

(often by reference to the medical/vocational guidelines)

other jobs in the national economy that the claimant can

perform. Heckler v. Campbell, 461 U.S. at 460. See, e.¢.,

Brown v. Bowen, 794 F.2d 7038, 706 (D.C. Cir. 1986) ;

Goodermote v. Secretary of HHS, 690 F.2d 5, 7 (1st Cir.

1982); Bluvband v. Heckler, 730 F.2d 886, 891 (2d Cir.

1984); Rivera v. Schweiker, 717 F.2d 719, 722-723 (2d

Cir. 1983.°

® Respondent’s reliance (Br. 28-29) on a 1986 House Commit-

tee Print in support of her contention that the severity step of

the sequential evaluation process is inconsistent with burden-of-

proof rules is seriously misleading. The Committee Print explains

that “(t}he adjudication of claims is accomplished on a sequential

basis” and describes the first four steps of that process, including

the “not severe” determination at step two and the past work de-

termination at step four. The print then states that “[a]t this stage

[i.e., at step five], because of a judicial opinion and subsequent ad-

ministrative and legislative ratification, the burden of proof switches

to the Government” to show that the individual can perform other

work in the national economy. House Comm. on Ways and Means,

99th Cong., 2d Sess., Background Material and Data on Programs

16

3. The severity regulation does not conflict with the

policies underlying the burden-shifting rule upon which

respondent and amici rely. The allocation of the bur-

den on vocational questions reflects the parties’ relative

expertise and access to information: although it is

fair to require the claimant to prove that he is unable

to perform a job he has done in the past and with which

he therefore is familiar, the question whether there are

other jobs in the national economy that a person with

the claimant’s functional limitations could perform con-

cerns matters outside the claimant’s knowledge and is

properly committed to the Secretary, who may obtain the

assistance of experts who are familiar with job require-

ments and markets. See Kerner v. Flemming, 283 F.2d

916, 922 (2d Cir. 1960) (Friendly, J.). However, step

two of the sequential evaulation process, at issue here,

does not address these -vocational factors or require the

claimant to assume the Secretary’s burden of identifying

jobs in the national economy that he could perform.

Rather, the claimant must show that his own medical

condition significantly limits his abilities and aptitudes,

a matter within his knowledge and capacity to prove.

See Mathews v. Eldridge, 424 U.S. 319, 336 (1976).

4. Whatever inference of inconsistency might be drawn

from the judicial decisions upon which respondent and

amici rely, the fact remains that Congress ratified the

“current ‘sequential evaluation process’ ”’ when it enacted

the 1984 Amendments, expressly disavowing any intent

to “impair” the operation of that process. H.R. Conf.

Rep. 98-1039, supra, at 30; H.R. Rep. 98-618, supra,

at 8; 8S. Rep. 98-466, supra, at 28. That congressional ap-

proval necessarily encompassed the feature of the sequen-

Within the Jurisdiction of the Committee on Ways and Means, 112-

113 (Comm. Print 1986) (emphasis added). The statement in the

1978 preamble to the sequential evaluation regulations that “[t]he

burden of proof remains as established by the case law and observed

by SSA” (43 Fed. Reg. 55359)—which respondent and amici cite

(Resp. Br. 4, 28; Cities Amicus Br. 15)—likewise referred to the

shifting of the burden of proof at steps four and five of the sequen-

tial evaluation process.

17

tial evaluation process by which the determination of the

claimant’s ability to perform his own past work-~and the

resultant shifting of the burden to the Secretary to show

the existence of other jobs if he cannot—will occur only

if the claimant first establishes at step two that he has a

severe impairment.”

5. The practical application of the severity regulation

in any event gives due regard to factors bearing on the

ability to do past work. As SSR 85-28 explains with re-

spect to the current severity regulation (Pet. App. 43a):

By definition, basic work activities are the abili-

ties and aptitudes necessary to do most jobs. In the

absence of contrary evidence, it is reasonable to con-

clude that an individual whose impairments do not

preclude the performance of basic work activities is,

therefore, able to perform his or her past relevant

work.

SSR 85-28 further states that under current procedures,

if the “evidence shows that the person cannot perform

his or her past relevant work because of the unique fea-

tures of that work,” the claim will not be denied at step

two and the decision-maker will undertake “further eval-

uation of the individual’s ability to do other work con-

sidering age, education and work experience” (ibid.).

Compare McDonald v. Secretary of HHS, 795 F.2d 1118,

1126 (1st Cir. 1986).

D. Respondent and amici also contend that the current

version of the severity regulation is invalid because, in

their view, it imposes a heavier burden on the claimant

than did the pre-1978 version, which they characterize

as stating a “de minimis” test. Resp. Br. 5-8, 18, 23-27,

31 n.18, 33, 38-40, 43; States Amicus Br. 14-20, 26-28.

10 SSR 82-55 and 82-56, which are reproduced in the appendix to

respondent’s brief, made clear that the severity regulation does not

focus on the claimant’s ability to do his past work. Resp. Br.

App. 3a, 9a. The Senate and Conference Reports on the 1984 Amend-

ments quote another portion of those rulings (S. Rep. 98-466, supra,

at 22; H.R. Conf. Rep. 98-1039, supra, at 29), which indicates

that Congress was fully aware of the portions relevant to this case

as well.

18

The complete answer to this contention is that it was the

current version of the regulation, not the prior version

or some hypothetical “de minimis” standard, that Con-

gress ratified in 1984. The new 42 U.S.C. (Supp. II) 423

(d) (2) (C) uses the term “severe” from the current reg-

ulation, and the legislative history demonstrates Con-

gress’s understanding that an impairment is non-severe

for these purposes if it does not “significantly limit[]”

the claimant’s “ability to do basic work activities’ (20

C.F.R. 404.1520(c)). See H.R. Conf. Rep. 98-1039, su-

pra, at 29-30; S. Rep. 98-466, supra, at 22. In light of

Congress’s action in 1984, respondent’s and amici’s dis-

cussion of whether the current version of the severity

regulation differs in substance from the prior version and

whether the requirement of a “significant” limitation on

the claimant’s work-related abilities is a “de minimis”

test has no relevance here.

In any event, the revision of the regulation in 1978

was not intended to work a substantive change. As re-

spondent and amici concede (Resp. Br. 4; States Amicus

Br. 17; Cities Amicus Br. 21-23), the Secretary stated

when the sequential evaluation regulations were first pro-

posed in 1978 that they were “not intended to alter the

levels of severity for a finding of disabled or not disabled

on the basis of medical conditions alone” (43 Fed. Reg.

9297 (1978)), and the Secretary reiterated that position

when the regulations were promulgated in final form (id.

at 55358).

Respondent contends (Br. 6), however, that the Sec-

retary acknowledged in 1980 that he had “effected a

substantive change back in 19/8.” Respondent relies on

passages in the preamble to the 1980 revision stating that

“Tallthough the evaluation approach to impairments that

are not severe has been in the regulations for some time,

we expanded it in 1978,” and that “greater program effi-

ciency would be obtained by limiting the number of cases

in which it would be necessary to follow the vocational

evaluation sequence” (45 Fed. Reg. 55574 (1980)). Con-

trary to respondent’s contention, however, these passages

do not state that the threshold standard of severity was

19

increased. Rather, they refer to an expansion of the

severity approach through a broader application of the

same substantive test by clarifying that test and requir-

ing that all claims be screened against it. Prior to 1978,

the regulations did not prescribe a series of fixed check-

points that effectively required a decision on the question

of impairment severity in every case before vocational

factors were considered. Accordingly, claims that could

have been denied because the impairment was slight often

were instead denied, after a full-blown vocational evalu-

ation, on the ground that the claimant retained the ca-

pacity to do his past work or other work. By requiring

the decision-maker to evaluate the severity of every

claimant’s impairment and by clarifying the operative

standard, the new sequential evaluation regulations were

expected to screen out a greater number of insubstantial

claims at the outset. It was in this way, not by a change

in the substantive standard, that those regulations “lim-

ited] the number of cases in which it would be neces-

sary to follow the vocational evaluation process” (id. at

55574)."* The Appeals Council confirmed in 1980 that the

new reguiations were “not intended to change, but [were]

merely a clarification of” the prior “slight impairment”’

standard. Appeals Council Review of Sequential Evalua-

tion Under Expanded Vocational Regulations (1980),

quoted in Brady v. Heckler, 724 F.2d 914, 919-920 (11th

Cir. 1984).

The statistics cited by respondent and amici (Br. 4;

States Amicus Br. 21) showing that the percentage of

claims denied on non-severe grounds rose from 8.4% in

1975 to 41.6% in 1981 (and then decreased to 23.1% in

1985) likewise do not establish any substantive change

in the threshold level of medical severity under the 1978

regulations. Most of the increase occurred before those

regulations even became effective in February 1979.

Moreover, Congress has been fully aware of these trends

and recognized that they resulted from the clarification of

11 See SSA, Not Severe Impairment Workgroup, “Final Report

and Recommendations,” at 6 (Aug. 23, 1983) (Resp. Br. 7-8; States

Amicus Br. App., Exh. L).