Reply Brief — Forney v. Apfel

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& Sugreme «Court, U -

FILED

No. 97-5737

In The CLERK

Supreme Court of the United States

October Term, 1997

¢

SANDRA K. FORNEY,

Petitioner,

KENNETH S. APFEL,

Commissioner of Social Security,

Respondent.

¢

On Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

.

REPLY BRIEF FOR PETITIONER

6

RavpH W'LBoRN

(Counsel of Record for Petitioner)

RavpH WILBORN AND

Erra L. Wicsorn, P.C.

1580 Valley Drive, Suite 170

Eugene, Oregon 97401

(541) 485-4265

Etta L. WiLBporN

Tim WILBORN

RavrpH WILBORN AND

Etta L. Wivsorn, P.C.

1580 Valley Drive, Suite 170

Eugene, Oregon 97401

(541) 485-4265

Eric SCHNAUFER

2501 N. Lincoln Ave. #285

Chicago, Illinois 60614

(773) 935-4016

Counsel for Petitioner

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

Il.

IV.

VI.

TABLE OF CONTENTS

Page

The Positions Of Petitioner, The Commissioner

Of Social Security, And Amicus .............

Under Its Own Rationale, The District Court

Should Have Entered Judgment Reversing The

Commissioner’s Final Decision, Without A

Remand For A Rehearing, To Award Benefits

Petitioner Did Not Get “Everything She Asked

PU Sa GaSb CRNSE NER UeCROEE Sos aderetusvecesss

The Availability Of Judicial Review Following

An Unfavorable Decision After New Adminis-

trative Proceedings Upon Remand Will Not

Provide Petitioner With An Adequate Forum

To Challenge The District Court’s Judgment

EN Site 90 bes Wen ebedestee cedgececs cess

Recognizing That Plaintiffs Such As Petitioner

May Appeal Would Likely Decrease Appellate

PN 5 6 sScesesecectenecstesesevessecess

a ee

10

12

TABLE OF AUTHORITIES

Page

Cases

Allen v. Bowen, 881 F.2d 37 (3d Cir. 1989) .......... 4,6

Bowen v. Yuckert, 482 U.S. 137 (1997)..............4.. 4

California v. Rooney, 483 U.S. 307 (1987) .............. 8

Consolidated Edison Co. v. NLRB, 305 U.S. 197

ti BM 12

Detrick v. Chater, 115 F.3d 573 (8th Cir. 1997)......... -)

Director, OWCP v. Greenwich Collieries, 512 U.S. 267

(0 | PPM Sree 4

Drummond v. Commissioner of Social Security, 126

RS S57 (6th Cle. S000)... o000cc00000neeeeneeeeeeee 2

Electrical Fittings Corp. v. Thomas & Betts Co., 307

US. 260 (IGG)... occcescscveuueeheuaneeeneene 8

Faucher v. Secretary of HHS, 17 F.3d 171 (6th Cir.

BODE)... occ cenvccesenessenp sus seein nnn 8, 9

Gibson-Jones v. Apfel, __ F. Supp. __. No. 95-

C-874, 1998 WL 57080 (N.D. Ill. Jan. 23, 1998) .... 19

Johnson v. Heckler, 741 F.2d 948 (7th Cir. 1984)........ 6

Johnson v. New York, N.H. & H.R. Co., 344 U.S. 48

(2962) . . oo ce cesccenswoutthe ue onan enn 17

Key v. Sullivan, 925 F.2d 1056 (7th Cir. 1991) ......... 2

Lester v. Chater, 81 F.3d 821 (9th Cir. 1995).......... 16

Lewis v. Callahan, 125 F.3d 1436 (11th Cir. 1997) ...... 5

Light v. Social Security Admin., 119 F.3d 789 (9th

Cig. 2997) ...cccccveneckpoesus eeu )

Parr v. United States, 351 U.S. 513 (1956) ......... 16, 17

TABLE OF AUTHORITIES — Continued

Page

Partmar Corp. v. Paramount Pictures Theatres Corp.,

CC 12

Richardson v. Perales, 402 U.S. 389 (1971) ............. 6

Shalala v. Schaefer, 509 U.S. 292 (1993)............... 16

Smith v. Shalala, 46 F.3d 45 (8th Cir. 1995)............ 4

Smolen v. Chater, 80 F.3d 1273 (9th Cir. 1996)......... 5

Stone v. Heckler, 761 F.2d 530 (9th Cir. 1985).......... 6

Sullivan v. Finkelstein, 496 U.S. 617 (1990)..... 2, 16, 17, 18

Terry v. Sullivan, 903 F.2d 1273 (9th Cir. 1990)........ 4

Titus v. Callahan, 133 F.3d 561 (8th Cir. 1997)......... 4

United States v. Jose, 117 S. Ct. 463 (1996) ..... 2, 15, 16

STATUTES

EID 6, 13, 16

ccicncbmdacdevcescesccccccscece passim

eee cba eGbcdscccncceoscctcccccccce 6

REGULATIONS

ee ED, ee ee 3

20 C.F.R. § 404.1520(f) (1997)... 2... 2... e ees 3, 4

Orner AUTHORITY

Social Security Ruling 96-8p, 61 Fed. Reg. 34,474

Cis E Cpa seeSGcbbdecsecccovccevccosce cee 5

1

Il. The Positions Of Petitioner, The Commissioner Of

Social Security, And Amicus.

The issue presented is whether a plaintiff seeking

Social Security Disability benefits may appeal a district

court judgment entered pursuant to sentence four of 42

U.S.C. § 405(g), reversing, with a remand for a rehearing,

a final decision of the Commissioner of Social Security, in

order to obtain a reversal of the Commissioner's final

decision, without a remand for a rehearing (or a more

favorable remand order). Petitioner and the Commis-

sioner agree that Petitioner may appeal such a sentence-

four judgment and that Petitioner is aggrieved by that

judgment, but they disagree about matters related to the

latter conclusion. (See Br. for Pet’r at 17-28; Br. for the

Resp’t at 31; see also id. at 16-23.) Amicus argues that

Petitioner is not aggrieved by the judgment, and that the

judgment is not appealable. (Br. of Amicus Curiae (“Br. of

A.C.”) at 12-19.)

Petitioner and Amicus disagree whether Petitioner is

aggrieved by the legal effect the district court's disposi-

tion of Petitioner‘s Complaint will have on any new

administrative proceedings upon remand. While Amicus

does not dispute that the law of the case applies during

any new administrative proceedings, or that the Commis-

sioner is bound by any district court remand order,

Amicus contends that the effect of the law of the case, or

any district court remand order, does not make Petitioner

an aggrieved party. (Br. of A.C. at 22-25.) With respect to

issue preclusion, Petitioner and Amicus disagree about

which of the district court's rulings are “necessary to the

judgment.” Amicus contends that issue preclusion

applies only to a single issue, while Petitioner contends

the district court’s judgment precludes more issues.

2

The Commissioner appears to take the extraordinary

position that (1) issue preclusion’ does not apply generally

to sentence-four judgments reversing with a remand for a

rehearing, (Br. for Resp’t at 30-34); (2) the law of the case?

does not apply to administrative proceedings following a

sentence-four judgment but may be invoked only in subse-

quent civil litigation, (id. at 33 & n.19); and (3) on remand,

the Commissioner is “free to,” but not required to, follow

the district court’s remand order, regardless of whether the

court remand order includes rulings favorable or unfavor-

able to the non-government party, (id. at 24, 34).

The Court should conclude that the district court's

final decision is appealable under the normal rules of civil

litigation with special reference to the procedural posture

of Petitioner’s case and the plain language of sentence four

of 42 U.S.C. § 405(g). United States v. Jose, 117 S. Ct. 463

(1996); Sullivan v. Finkelstein, 496 U.S. 617 (1990).

Il. Under Its Own Rationale, The District Court

Should Have Entered Judgment Reversing The

Commissioner’s Final Decision, Without A Remand

For A Rehearing, To Award Benefits.

Sentence four of 42 U.S.C. § 405(g) provides that a court

“shall have power to enter, upon the pleadings and

' The Commissioner's attack on issue preclusion based on

court judgments is an extension of his attack on issue preclusion

based on final agency actions. See, e.g., Drummond v.

Commissioner of Social Security, 126 F.3d 837 (6th Cir. 1997).

2 In civil litigation after a new final decision of the

Commissioner, the Commissioner has resisted the reach of the

law of the case. See, e.g., Key v. Sullivan, 925 F.2d 1056 (7th Cir.

1991). (See also Br. of A.C. at 22 n.18 (noting tension in

Commissioner's litigation position).)

3

transcript of the record, a judgment affirming, modifying, or

reversing the decision of the Commissioner of Social Secu-

rity, with or without remanding the cause for a rehearing.” 42

U.S.C. § 405(g) (emphasis added). Petitioner appealed a dis-

trict court sentence-four judgment reversing a final decision,

with a remand for a rehearing, on the basis that the district

court was required to enter a sentence-four judgment without

a remand for a rehearing.

Given the district court’s own rationale, absent an

articulated legitimate justification, the district court

should have entered a sentence-four judgment without a

remand for a rehearing. A Social Security disability claim-

ant may be found “disabled” either at step three or at

step five of the sequential analysis of disability. 20 C.F.R.

§ 404.1520(d) (1997) (step three); 20 C.F.R. § 404.1520(f)

(1997) (step five). The Commissioner found Petitioner

“not disabled” at step five. (J.A. at 27-28.) When it

reviewed the Commissioner’s decision finding Petitioner

not disabled, the district court accepted that the Commis-

sioner had the “burden of showing that [Petitioner] can

engage in substantial gainful work in the economy/|.]”

(J.A. at 128.) Moreover, the district court held that the

Commissioner “did not sustain her burden of proof in

step five of the five-step evaluative process in determin-

ing whether [Petitioner] is entitled to benefits.” (J.A. at

128.) The court reached this conclusion accepting as true

the Commissioner’s factual findings regarding Peti-

tioner’s residual functional capacity and vocational char-

acteristics. (J.A. at 125-28.) Given the foregoing, Petitioner

established her claim. Because the district court articu-

lated no reason to give the Commissioner another oppor-

tunity to show that Petitioner could perform a significant

number of jobs, the district court should have entered

4

judgment reversing the Commissioner's final decision

without a remand for a rehearing. See, e.g., Allen v. Bowen,

881 F.2d 37 (3d Cir. 1989) (“The Secretary, in effect, asks

this court for a second chance to prove his case because

the testimony given by the first vocational expert did not

satisfy the Podedworny teaching. We see no reason, how-

ever, why the Secretary should be afforded such an addi-

tional opportunity.”).

As matters of law, public policy, and fairness, absent

the court's articulated and legitimate justification, there

should be no further administrative proceedings concern-

ing the merits of a claim when a claimant fer Social

Security disability insurance benefits proves to a court

that she has satisfied any burden of proof, including any

burden of production or persuasion, she may have had

and when the government did not satisfy any burden of

proof, including any burden of production or persuasion,

it may have had. Through 42 U.S.C. § 405(g), Congress

has accorded claimants for Social Security disability

insurance benefits this very protection — the right to court

judgments reversing, without remands for rehearing,

unfavorable agency decisions.*

’ A “burden of proof” may be a burden of production and/

or a burden of persuasion. Director, OWCP v. Greenwich

Collieries, 512 U.S. 267, 272-74 (1994). The issue of the precise

nature of the allocation of the burden of proof at step five of the

sequential analysis, 20 C.F.R. § 404.1520(f) (1997), is not before

this Court. Nonetheless we note that in Bowen v. Yuckert, 482

U.S. 137 (1997), this Court observed that the Commissioner

“bears the burden of proof at step five,” and that this “allocation

of burdens of proof” was within the Commissioner's regulatory

authority, id. at 146 n.5.

5

Petitioner appealed the district court's judgment for

other reasons as well At step five, a claimant is “dis-

abled” if she cannot work on a full-time basis. See Social

Security Ruling 96-8p, 61 Fed. Reg. 34,474, 34,476 (1996)

(Titles II and XVI: Assessing Residual Functional Capac-

ity in Initial Claims). Due to this full-time work require-

ment, the district court should have found Petitioner

disabled for two reasons. If the district court had

accepted Petitioner's arguments regarding the weight

due a treating physician's opinion and/or the evaluation

of her credibility, the district court would have found that

Petitioner could not work full time and that she was

therefore disabled. (Pl.-Appellant’s Br. at 18-23, 28.)4

The Amicus grounds its arguments in the erroneous

assertion that Petitioner did not appeal the district court's

judgment and that Petitioner’s Ninth Circuit appeal was

directed solely against the Commissioner's decision. (See

e.g. Br. of A.C. at 3, 5, 21, 23-25.) Amicus overlooks that

Petitioner's Notice of Appeal expressly appealed from

the district court judgment. Amicus also fails to appreci-

ate that Petitioner's appeal arose under appellate law

governing Social Security appeals. When, pursuant to 42

* Contrary to appellate authority, Amicus asserts that the

issues Petitioner raised (in addition to the failure of the

vocational expert's testimony to carry the Commissioner's

burden of proof) “are scarcely the type of challenges that, even

when credited, lend themselves to outright reversal by a court

lacking the authority to reweigh the evidence.” (Br. of A.C. at 19

n.15.) See, e.g., Lewis v. Callahan, 125 F.3d 1436 (11th Cir. 1997)

(awarding benefits based on review of Commissioner's

evaluation of treating source opinions); Smolen v. Chater, 80 F.3d

1273 (9th Cir. 1996) (awarding benefits based on review of

Commissioner's evaluation of claimant's testimony and treating

source opinions).

6

U.S.C. § 405(g), a plaintiff initiates a civil action for

judicial review of a final decision of the Commissioner

finding that she was not under a “disability,” 42 U.S.C.

§ 423(d), a district court determines both whether sub-

stantial evidence supports the Commissioner’s final deci-

sion, including its essential subsidiary factual findings,

and whether the Commissioner applied the proper legal

standards when making his decision, 42 U.S.C. § 405(g)

(sentence five).

Moreover, if a district court enters judgment under

sentence four of section 405(g) affirming the Commis-

sioner’s decision, and the plaintiff appeals the district

court’s final decision, 28 U.S.C. § 1291, an appellate court

applies the same substantial-evidence standard of review

the district court applied. Richardson v. Perales, 402 U.S.

389, 401, 91 S. Ct. 1420 (1971); Johnson v. Heckler, 741 F.2d

948, 953 (7th Cir. 1984) (“Our standard of review is the

same as that of the district court pursuant to. . . 42 U.S.C.

§ 405(g).”). The standard of appellate review is thus de

novo. Although an appellate court may reference a district

court’s rationale, see, e.g., Allen, 881 F.2d at 41, ultimately

at issue is the Commissioner's final decision, not the dis-

trict court’s rationale for affirmance of that decision, see,

e.g., Stone v. Heckler, 761 F.2d 530, 532 (9th Cir. 1985).

Given the foregoing, in the Ninth Circuit, Petitioner

argued that the Commissioner's decision was not supported

by substantial evidence and that it was based on the

application of incorrect legal standards. When arguing

that Petitioner did not attack the district court’s judgment

in the Ninth Circuit, Amicus thus overlooks both the

applicable standard of appellate review and that, in the

Ninth Circuit, Petitioner expressly appealed from the dis-

trict court’s judgment:

7

This is an appeal, in a Social Security dis-

ability case, from the Judgment of Robert E.

Jones, U.S. District Judge, District of Oregon,

vacating the agency’s final decision that Forney

was not disabled, but remanding to the agency

for further proceedings. Forney appeals, and

requests a finding of disability and payment of

benefits, instead of remand for additional pro-

ceedings.

(Pl.-Appellant’s Br. at 2.) Because the appellate standard

of review is de novo, on appeal of the district court's

sentence-four judgment, Petitioner, of course, focused on

errors in the Commissioner’s final decision. The unwary

appellant challenges the district court’s rationale, neglect-

ing the ultimate issue - whether the Commissioner’s final

decision should be reversed and, if so, in what manner.

Amicus asserts that Petitioner “seeks reversal of the

agency decision, for reasons different than those stated in

the district court opinion.” (Br. of A.C. at 3 (emphasis

original).) Amicus makes a similar assertion in his state-

ment of the Question Presented:

Whether a social security claimant who suc-

ceeds in winning a district court judgment pur-

suant to 42 U.S.C. § 405(g), setting aside an

agency decision to deny benefits and remanding

to give the claimant an opportunity to secure all

the benefits she seeks, is entitled to bring an

appeal seeking reversal of the agency’s decision

for additional reasons not relied upon by the district

court in entering judgment in the claimant's favor.

(Br. of A.C. at i (emphasis added).) Amicus thus over-

looks that Petitioner appealed the district court’s judg-

ment because, given its own reasoning and findings, the

district court should have entered judgment reversing the

Commissioner’s final decision, without a remand for a

rehearing. At the appellate court, Petitioner argued that,

8

given its own rationale, the district court should have

entered judgment reversing the Commissioner's decision,

without a remand for a rehearing. Petitioner is thus

aggrieved by the district court’s final judgment.

Amicus also erroneously argues that “a remand is

plainly necessary so that additional evidence may be

taken on whether employment opportunities exist for

someone with [Petitioner's] ability.” (Br. of A.C. at 19 n.15

(emphasis original).) With this proposition, Amicus

ignores the significance of its citation to Faucher v. Secre-

tary of HHS, 17 F.3d 171 (6th Cir. 1994).

Petitioner has endured two administrative hearings

and, according to the district court, the record already

includes the Commissioner’s proffer of step-five voca-

tional evidence for someone with Petitioner’s residual

functional capacity and vocational characteristics. (J.A. at

47, 125-28.) This is consistent with the record. In response

to a question from an administrative law judge (ALJ), a

vocational expert identified two occupations which Peti-

tioner purportedly could perform. In response to a ques-

tion whether there were any other jobs the vocational

expert could rely on, the vocational expert answered

“No.” (Transcript at 88; Pl.-Appellant’s Reply Br. at 14.)

The district court held that the ALJ’s finding Peti-

tioner could perform the jobs identified by the vocational

expert — assuming the validity of the AL]’s own findings

regarding Petitioner's residual functional capacity —- was not

5 In light of Petitioner’s challenge of the district court's

judgment on its own terms, Amicus’ heavy reliance on California

v. Rooney, 483 U.S. 307 (1987), and its attempt to distinguish

Electrical Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241 (1939),

are inapposite. (Br. of Amicus Curiae at 20-22 (Rooney); id. at

24-25 (Electrical Fittings).)

_

9

supported by substantial evidence. At that point, the

district court should have reversed the ALJ’s decision

and directed that Petitioner be found disabled because,

assuming the residual functional capacity as ultimately

found by the ALJ, the vocational expert could not identify

any other jobs Petitioner could perform. Thus, with the

two inappropriate jobs eliminated (by the district court’s

holding) and no other jobs identifiable, it is established

that Petitioner cannot perform any jobs, and she is, there-

fore, disabled. Under these circumstances, “all essential

factual issues have been resolved and the record ade-

quately establishes a plaintiff's entitlement to benefits.”

Faucher, 17 F.3d at 176.

Under such circumstances, where the Commissioner

fails to satisfy his burden at step five, a court has author-

ity to hold — and in some cases is required to hold — that

the Commissioner’s final decision should be reversed

without a remand for a rehearing, i.e., the court should

hold that the claimant is under a disability. See, e.g., Terry

v. Sullivan, 903 F.2d 1273, 1278-80 (9th Cir. 1990) (holding

the Commissioner did not satisfy his step-five burden

and further fact-finding was unwarranted); Detrick v. Cha-

ter, 115 F.3d 573, 575 (8th Cir. 1997) (similar); Smith v.

Shalala, 46 F.3d 45, 47 (8th Cir. 1995) (similar).

Petitioner acknowledges that the Commissioner’s

failure to satisfy his burden of proof at step five, however

construed, does not always warrant reversal of the Com-

missioner’s final decision, without a remand for a rehear-

ing. The Commissioner’s failure sometimes warrants

reversal with a remand for a rehearing,-see, e.g., Light v.

Social Security Admin., 119 F.3d 789, 793-94 (9th Cir. 1997);

Titus v. Callahan, 133 F.3d 561, 564-65 (8th Cir. 1997).

However, this Court should not find that the district

10

court’s judgment below was not appealable, based on the

Amicus’ erroneous assertion that Petitioner would not be

able to prevail on the merits before the Ninth Circuit (i.e.,

to procure a Ninth Circuit decision holding that reversal

of the Commissioner’s final decision without a remand

for a rehearing was warranted).

III. Petitioner Did Not Get “Everything She Asked

For.”

The Amicus erroneously states that “as a matter of

pleading, [Petitioner] got everything she asked for when

the District Court set aside the agency decision and

remanded.” (Br. of A.C. 14 (emphasis added).) Petitioner

sought first and foremost reversal of the Commissioner's

final decision without a remand for a rehearing, i.e.,

reversal and a remand for a (ministerial) finding that she

was under a disability (and thus entitled to benefits).

(J.A. at 37, 92-93.) Only as a lesser relief did Petitioner

seek a judgment reversing with a remand “for proper

evaluation of the evidence or a hearing de novo.” (J.A. at

37.) Petitioner received only part® of the latter relief.”

6 Petitioner received a remand, but not for proper

evaluation of the evidence and not for a de novo rehearing.

Instead, the district court expressly ordered the agency to apply

improper standards to the evaluation of the evidence during

remand proceedings and to narrowly restrict those proceedings:

“IT IS ORDERED that this case be REMANDED to the Secretary

for further proceedings in accordance with this opinion.” (J.A. at

128 (emphasis added).)

7 Amicus claims that after the district court entered

judgment Petitioner only “belatedly and self-servingly” argued

that she sought as her primary relief reversal of the

Commissioner’s final decision without a remand for a rehearing

11

A sentence-four judgment reversing a final decision

of the Commissioner, with a remand for a rehearing, is

necessarily a denial of the request for a judgment revers-

ing without a remand for a rehearing. When the district

court remanded this matter for a rehearing, it implicitly

denied Petitioner’s request for a judgment reversing the

Commissioner’s final decision without a remand for a

rehearing. Thus, Amicus is simply wrong to assert that

Petitioner “got everything she asked for,” (Br. of A.C. at

14), particularly when Amicus accepts that, all else being

equal, Petitioner has only a sixty percent chance of being

found disabled after her claim is reheard by the agency,

(id. at 13).

Amicus further argues that because Petitioner

“emphatically does not challenge the judgment in her

favor,” Petitioner “runs afoul of the rule that courts

review judgments, not statements in opinions.” (Br. of

A.C. at 8 (emphasis original).) Petitioner discussed above

how this is not true. Properly understood, Petitioner’s

challenge to the rulings underlying the district court’s

denial of this requested relief is a challenge to the judg-

ment. Hence, contrary to Amicus’ arguments, issues Peti-

tioner raised in the Ninth Circuit (besides the significance

as opposed to reversal with a remand for a rehearing. (Br. of

A.C. at 15 n.12.) This claim is unreasonable given that in her

Complaint Petitioner plainly stated that she first sought a

reversal of the Commissioner’s final decision without a remand

for-a rehearing and only if that relief were not granted a reversal

with a remand for a “de novo” rehearing. (J.A. at 37.) Further, in

the district court, Petitioner concluded her brief with a request

for relief that mentioned only reversal without a remand for a

rehearing, i.e., for a finding of disability. (J.A. at 92-93 (“and

Plaintiff should be found disabled”).)

12

of the Commissioner’s failure to satisfy his step-five bur-

den of proof), are subject to issue preclusion in subse-

quent administrative and judicial proceedings insofar as

the district court’s rulings on those issues were necessary

to the district court’s denial of Petitioner’s request for a

judgment reversing without a remand for a rehearing.

Thus aggrieved, Petitioner has standing to appeal the

district court’s final decision for reasons other than the

district court's failure to appreciate the significance of the

Commissioner’s failure to satisfy his burden of proof.

Partmar Corp. v. Paramount Pictures Theatres Corp., 347 U.S.

89, 99-101 (1954).

IV. The Availability Of Judicial Review Following An

Unfavorable Decision After New Administrative

Proceedings Upon Remand Will Not Provide Peti-

tioner With An Adequate Forum To Challenge The

District Court’s Judgment And Order.

In support of his position that the district court's

judgment is not appealable, Amicus argues that Peti-

tioner may obtain judicial review of any of the district

court’s rulings if she is not found disabled after the

remand proceedings. (Br. of A.C. at 14, 23, 26-29.) Amicus

does not acknowledge the significance of the standard of

judicial review of a new final decision of the Commis-

sioner. If Petitioner receives an unfavorable final decision

after her claim is reheard by the agency, and if Petitioner

files a new complaint, the district court will determine

whether substantial evidence supports the Commissioner’s

new final decision. 42 U.S.C. § 405(g) (sentence five).

Because substantial evidence is less than a preponderance

of the evidence, Consolidated Edison Co. v. NLRB, 305 U.S.

13

197, 229 (1938), a district court may (in some circum-

stances) properly enter a sentence-four judgment affirming

the Commissioner's new final decision even if on remand

Petitioner established to the Commissioner by a prepon-

derance of the evidence that she was disabled. Given the

substantial-evidence standard of review, this Court

should find that Petitioner's right to file a new complaint

following receipt of an unfavorable decision after her

claim is reheard does not provide Petitioner with an

adequate forum to challenge the district court’s prior

rulings.

The importance of the substantial-evidence standard

of review is stark when one assumes, as the Court should

to resolve the issue of appealability of the district court's

final decision pursuant to 28 U.S.C. § 1291, that Petitioner

correctly maintains that the district court should have

entered a sentence-four judgment reversing the Commis-

sioner’s final decision, without a remand for a rehearing.

Amicus would permit Petitioner to be denied benefits

even though the record showed three times that she was

disabled at step five, as follows: First, the Commissioner

should have found Petitioner disabled at the hearing

level. Second, the district court should have found Peti-

tioner disabled and accordingly entered a sentence-four

judgment reversing, without a remand for a rehearing,

the Commissioner’s final decision. Third, after the

hypothesized proceedings upon remand, the Commis-

sioner should have found Petitioner disabled, but a court

would not reverse the Commissioner’s new decision

because although it was not based on a preponderance of

the evidence, it was supported by substantial evidence.

This Court should not endorse Amicus’ position leading

to this anomalous, inequitable result, particularly since

14

the express language of section 405(g) empowers a court

to enter a judgment reversing the Commissioner's deci-

sion without a remand for a rehearing.

Furthermore, a Social Security plaintiff will not be

able to obtain review of many of the unfavorable rulings

in a district court’s decision related to a sentence-four

judgment reversing with a remand for a rehearing a final

decision of the Commissioner. In most cases in which

there is a rehearing following a district court reversal,

additional evidence will be submitted by the claimant, by

the Commissioner, or both. Judicial review of a Commis-

sioner’s unfavorable final decision following the rehear-

ing will thus commonly involve review of significantly

different factual findings on a significantly different fac-

tual record. For some matters, an expanded record will

permit the Commissioner a second, third, or even fourth

opportunity to satisfy his burden of proof at step five -

subject only to deferential substantial evidence review -

even though the pre-remand evidentiary record war-

ranted a finding of disability.

Moreover, during remand proceedings the Commis-

sioner may generally create new medical evidence - e.g.,

opinion evidence from a non-examining medical source

or a report from an examining medical source - that may

be substantial evidence permitting judicial affirmance of

the Commissioner's incorrect final decision following

remand proceedings.

Petitioner disagrees with the Commissioner and

Amicus that a forty-percent chance of being found “not

disabled” after a plaintiff's claim is reheard, (Br. of A.C.

at 30 n.25; Br. of Resp’t at 27), provides adequate protec-

tion of Petitioner’s interests. This is especially true when,

as in Petitioner’s case, the pre-remand evidentiary record

15

interpreted in light of the applicable legal standard mandates

a finding of disability: Petitioner appealed the district

court’s judgment because the Commissioner should not

be permitted a third bite at the apple.

Viewed differently, Amicus neglects or denigrates the

aspect of the district court’s decision ordering the Com-

missioner to conduct remand proceedings consistent with

its opinion. (J.A. at 128 (“IT IS ORDERED that this case be

REMANDED to the Secretary for further proceedings in

accordance with this opinion.” (italicized emphasis

added).)* Because the Commissioner was ordered to con-

form its remand proceedings to the district court’s Opin-

ion and Order (J.A. at 118-28), Amicus’ attempt to

distinguish Jose, 117 S. Ct. 473, fails. Amicus argues that,

8 In order to diminish the legal significance of the district

court’s remand order, Amicus posits, “As is customary, the

District Court did not specify the precise proceedings that must

take place on remand.” (Br. of Amicus Curiae at 5 n.3.) It is

unclear how Amicus knows what customarily accompanies

sentence-four judgments reversing, with remands for

rehearings, final decisions of the Commissioner. In any case, it is

clear that the Commissioner, during remand proceedings, could

not, at least for the time period previously adjudicated, find

Petitioner “not disabled” at step four of the sequential analysis

of disability. Nor could the Commissioner find Petitioner “not

disabled” at step five, without supporting vocational expert

testimony. Moreover, although pursuant to the district court’s

order, the Commissioner should not revisit the precise issues

Petitioner lost in the district court, if the Commissioner did

revisit those issues in a manner advantageous to Petitioner,

neither the Petitioner nor the Commissioner would have

standing to argue in later judicial proceedings that the

Commissioner did not comply with those rulings as

incorporated in the district court’s remand order.

16

unlike the order at issue in Jose, the district court’s deci-

sion herein “imposes absolutely no <estrictions (injunc-

tive or otherwise) on [Petitioner] [.]” (Br. of A.C. at 26.)

To the contrary, the district court ordered the Commis-

sioner on remand to follow the district court’s analyses

regarding the evaluation of an opinion from Petitioner's

treating source and regarding Petitioner’s own credibility.

If the Commissioner complies with the court’s mandate,

Petitioner will have a much more difficult time establish-

ing disability. Indeed, treating source opinions and claim-

ants’ credibility often are dispositive of a claim for

disability insurance benefits. See, e.g., Lester v. Chater, 81

F.3d 821, 830-34 (9th Cir. 1995).

Nor is Parr v. United States, 351 U.S. 513 (1956), per-

suasive authority that the availability of judicial review

following an unfavorable final decision means that Peti-

tioner is not aggrieved. (Br. of A.C. at 16-19.) This Court

held that Parr could not appeal an order of dismissal of

an indictment because until Parr was retried he was not

aggrieved by the indictment’s dismissal. Parr, 351 U.S. at

518-21. Importantly, Parr is based on the principle that

only final district court dispositions are appealable. Id. at

517-20. Here Finkelstein teaches that the district court's

disposition of Plaintiff's Complaint is final for the pur-

pose of 28 U.S.C. § 1291. Finkelstein, 496 U.S. at 624-25,

629; see also Shalala v. Schaefer, 509 U.S. 292, 299 (1993)

(following Finkelstein). The Parr Court, in contrast,

expressly characterized the indictment’s dismissal as

“interlocutory,” Parr, 351 U.S. at 518. In the instant case,

the district court’s sentence-four judgment was not inter-

locutory. Finkelstein, 496 U.S. at 629.9 Moreover, if an

*° Amicus’ reliance on the general rule that a court remand

to an agency for further proceedings is not appealable as

17

analogy is to be drawn to the criminal context, it is

significant that Parr had not been tried and jeopardy had

not attached. Parr, 351 U.S. at 518. Petitioner, on the other

hand, has been “tried” - she has undergone two adminis-

trative hearings and a district court review. Having estab-

lished that she is “disabled,” she opposes a rehearing on

double jeopardy grounds.

V. Recognizing That Plaintiffs Such As Petitioner May

Appeal Would Likely Decrease Appellate Work-

loads.

Amicus speculates that recognizing the right to

appeal of plaintiffs such as Petitioner could lead to a

“substantial” increase in the number of appellate cases.

(Br. of A.C. at 33.) Such speculation ignores a central

function of the appellate courts - providing guidance to

district courts regarding proper legal standards.'° If, for

example, Petitioner were to convince the Ninth Circuit

that the district court should have entered a judgment

reversing without a remand for a rehearing, and if the

Ninth Circuit were to publish its decision, district courts

within the circuit might be less likely to fail to enter,

when appropriate, sentence-four judgments reversing

interlocutory, (Br. of A.C. at 10 n.7), is misguided in light of the

plain language of § 405(g). As explained in Finkelstein, a

judgment entered pursuant to sentence four of § 405(g) is final

(i.e., not interlocutory), even though that judgment is

accompanied by an order of remand.

10 Cf. Johnson v. New York, N.H. & H.R. Co., 344 U.S. 48, 55

(1952) (Frankfurter, J., dissenting) (“Not the least important

business of this Court is to guide the lower courts and the Bar in

the effective and economical conduct of litigation.”)

18

without remands for rehearings. Application by the dis-

trict courts of such appellate guidance would substan-

tially reduce the need for appellate litigation, and it

would simultaneously obviate many unnecessary new

administrative proceedings. Of itself, the value of such

guidance is reason to permit Petitioner to appeal.

Amicus’ speculation that there would be a “substan-

tial” increase in the number of appeals to federal appel-

late courts if this Court found that plaintiffs such as

Petitioner could appeal is unfounded. Finkelstein was

published in 1990, and it fairly announced sentence-four

judgments to be appealable. Under the deferential “sub-

stantial evidence” standard of review, however, appellate

courts affirm the vast majority of appeals of final deci-

sions of the Commissioner finding claimants “not dis-

abled.” Moreover, since the publication of Finkelstein,

apart from Petitioner’s, there are only two published

cases, and a handful of unpublished cases, where such

plaintiffs have appealed sentence-four judgments

remanding for a rehearing.'! Given this background, it is

unlikely that this Court’s clarifying Petitioner’s right to

appeal will suddenly inspire similarly situated plaintiffs

to appeal.

To achieve outright reversals, appellants must show

not only that substantial evidence does not support the

Commissioner's final decision but that the existing record

necessarily establishes entitlement to benefits ander

applicable legal standards. This daunting challenge likely

explains why Finkelstein itself did not open the flood-

gates.

1! See Br. for Resp’t. at 22 n.13; Br. for Pet. at 29-30.

19

Amicus also fails to acknowledge that appellate liti-

gation is extremely time consuming for claimants’ attor-

neys. It is not highly remunerative - Social Security

claimants win relatively few appeals. The appellate

courts will not be flooded with appeals from attorneys

sinking (very) roughly one hundred hours into an appeal

subject to a deferential standard of review.'?

In any case, because a plaintiff such as Petitioner has

a statutory right to a judgment reversing without a

remand for a rehearing, 42 U.S.C. § 405(g), even if permit-

ting such appeals were to result in increased appellate

litigation, given the plain language of the statute, it is

likely that Congress intended the balance to favor

appeals to ensure that claimants timely receive the bene-

fits to which they are lawfully entitled.

Amicus and the government also overlook the value

of a central function of appellate court decisions — broad-

casting the correct legal standards to district courts

within the circuit. For future purposes, if the appellate

court were to hold that the district court erroneously

failed to enter judgment reversing, without a remand for

a rehearing, i.e., that the district court should have found

Petitioner disabled, then the appellate court’s decision

would inform that district court specifically, and district

courts within the circuit generally, that they should cor-

rectly assess whether claimants are entitled to outright

awards of benefits, thereby negating any further judicial

or administrative delay over such claims. The text of

12 See, e.g., Gibson-Jones v. Apfel, __ F. Supp. __, No. 95-

C-874, 1998 WL 57080, at *2-3 (N.D. Ill. Jan. 23, 1998) (referring

to 96.5 hours of attorney time expended appealing a district

court's affirmance of the Commissioner’s decision finding a

claimant not disabled).

20

section 405(g), and practical and jurisprudential factors,

thus weigh in favor of holding the district court’s judg-

ment was appealable.

VI. Conclusion

The Court should recognize that the effect of the

plain language of section 405(g) is to permit Petitioner to

appeal and that this result is consistent with Congres-

sional intent. The Court should reverse the Ninth Cir-

cuit’s dismissal of Petitioner’s appeal and order the Ninth

Circuit to consider the merits of the appeal.

Respectfully submitted,

RatepH WILBORN

(Counsel of Record for Petitioner)

Erra L. WILBoRN

Tim WILBORN

RactpH WILBORN AND

Etta L. Wicsorn, P.C.

1580 Valley Drive, Suite 170

Eugene, Oregon 97401

(541) 485-4265

Eric SCHNAUFER

2501 N. Lincoln Ave. #285

Chicago, Illinois 60614

(773) 935-4016