AR 00-1(4): Albright v. Commissioner of the Social Security Administration , 174 F.3d 473 (4th Cir. 1999) (Interpreting Lively v. Secretary of Health and Human Services )—Effect of Prior Disability Findings on Adjudication of a Subsequent Disability Claim—Titles II and XVI of the Social Security Act.

AR 00-1(4)

EFFECTIVE/PUBLICATION DATE: 1/12/2000

Acquiescence Ruling 00-1(4)

Issue:

Whether, in making a disability determination or decision on a subsequent

disability claim with respect to an unadjudicated period, the Social

Security Administration (SSA) [1] must consider a finding of a claimant's residual functional capacity or

other finding required under the applicable sequential evaluation process

for determining disability, made in a final decision by an Administrative

Law Judge (ALJ) or the Appeals Council on the prior disability claim.

Statute/Regulation/Ruling Citation:

Sections 205(a) and (h) and 702(a)(5) of the Social Security Act (42

U.S.C. 405(a) and (h) and 902(a)(5)), 20 CFR 404.900(a), 404.957(c)(1),

416.1400(a), 416.1457(c)(1), Acquiescence Ruling (AR) 94-2(4) (rescinded).

Circuit:

Fourth (Maryland, North Carolina, South Carolina, Virginia, West

Virginia)

Albright v. Commissioner of the Social Security

Administration , 174 F.3d 473 (4th Cir. 1999) (Interpreting Lively v. Secretary of Health and Human Services , 820 F.2d

1391 (4th Cir. 1987)).

Applicability of Ruling:

This Ruling applies to determinations or decisions at all levels of the

administrative review process (i.e., initial, reconsideration, ALJ hearing

and Appeals Council).

Lively [2]

Description of Case:

In a decision dated October 19, 1981, an ALJ found that the plaintiff, Mr.

Lively, was not disabled under Rule 202.10 of the medical-vocational

guidelines, 20 CFR Part 404, Subpart P, Appendix 2, and denied his

application for disability insurance benefits. In applying Rule 202.10,

the ALJ found that Mr. Lively had the residual functional capacity for

light work. The decision that Mr. Lively was not entitled to disability

insurance benefits became the final decision of SSA and was affirmed by

the district court.

e medical-vocational

guidelines, 20 CFR Part 404, Subpart P, Appendix 2, and denied his

application for disability insurance benefits. In applying Rule 202.10,

the ALJ found that Mr. Lively had the residual functional capacity for

light work. The decision that Mr. Lively was not entitled to disability

insurance benefits became the final decision of SSA and was affirmed by

the district court.

The plaintiff filed a second application for disability insurance benefits

on December 14, 1983. After holding a hearing, an ALJ concluded that the

plaintiff was not entitled to disability insurance benefits. The ALJ

determined that Mr. Lively retained the functional capacity for the

performance of work activity at any exertional level on and prior to

December 31, 1981, the date his insured status expired. The ALJ did not

discuss in his decision the 1981 finding by another ALJ that the plaintiff

had the residual functional capacity to do only light work. This decision

became the final decision of SSA and was appealed to the district court.

The case was referred to a United States Magistrate who found that the

evidence before the ALJ on the plaintiff's 1983 application was sufficient

to sustain SSA's decision that the plaintiff was not disabled as of

December 31, 1981. The district court adopted the Magistrate's Report and

Recommendation. Mr. Lively then appealed to the United States Court of

Appeals for the Fourth Circuit.

Holding:

The Fourth Circuit reversed and remanded the decision of the district

court. The court stated that:

Congress has clearly provided by statute that res judicata prevents

reappraisal of both [SSA]'s findings and ... decision in Social Security

cases that have become final, 42 U.S.C. § 405(h), and the courts have

readily applied res judicata to prevent ... [SSA] from reaching an

inconsistent result in a second proceeding based on evidence that has

already been weighed in a claimant's favor in an earlier proceeding.

provided by statute that res judicata prevents

reappraisal of both [SSA]'s findings and ... decision in Social Security

cases that have become final, 42 U.S.C. § 405(h), and the courts have

readily applied res judicata to prevent ... [SSA] from reaching an

inconsistent result in a second proceeding based on evidence that has

already been weighed in a claimant's favor in an earlier proceeding.

The court noted that the plaintiff became 55 years of age two weeks after

the ALJ, in connection with the first application for benefits, found that

Mr. Lively was limited to light work. The court further noted that a

person with the plaintiff's education and vocational background who is 55

years of age or older and limited to light work would be considered

disabled under Rule 202.02 of the medical-vocational guidelines, 20 CFR

Part 404, Subpart P, Appendix 2. The court found it inconceivable that Mr.

Lively's condition had improved so much in two weeks as to enable him to

perform medium work. Accordingly the court held:

Principles of finality and fundamental fairness ... indicate that ...

[SSA] must shoulder the burden of demonstrating that the claimant's

condition had improved sufficiently to indicate that the claimant was

capable of performing medium work. ... [E]vidence, not considered in the

earlier proceeding, would be needed as an independent basis to sustain a

finding contrary to the final earlier finding.

Albright

Description of Case:

l fairness ... indicate that ...

[SSA] must shoulder the burden of demonstrating that the claimant's

condition had improved sufficiently to indicate that the claimant was

capable of performing medium work. ... [E]vidence, not considered in the

earlier proceeding, would be needed as an independent basis to sustain a

finding contrary to the final earlier finding.

Albright

Description of Case:

In November and December 1992, Mr. Albright filed subsequent applications

for disability insurance benefits and Supplemental Security Income. These

claims were denied initially and again upon reconsideration. On October

26, 1994, an ALJ found that Mr. Albright's prior claims had been denied at

the second step of the sequential evaluation process and that there was an

absence of new and material evidence regarding the severity of his

impairment. Accordingly, the ALJ applied AR

94-2(4) which was published on July 7, 1994, and found that Mr.

Albright was not disabled. [4]

After the Appeals Council denied the claimant's request for review, he

sought judicial review. The district court referred the case to a

magistrate judge who found that SSA had interpreted the holding in Lively too broadly in promulgating AR 94-2(4) . The district court adopted

the magistrate judge's findings and conclusions, and remanded Mr.

Albright's claims for de novo consideration by SSA. After the district

court's denial of SSA's motion to alter or amend the judgment, SSA

appealed to the United States Court of Appeals for the Fourth Circuit.

Holding:

t SSA had interpreted the holding in Lively too broadly in promulgating AR 94-2(4) . The district court adopted

the magistrate judge's findings and conclusions, and remanded Mr.

Albright's claims for de novo consideration by SSA. After the district

court's denial of SSA's motion to alter or amend the judgment, SSA

appealed to the United States Court of Appeals for the Fourth Circuit.

Holding:

The Fourth Circuit affirmed the district court's decision and held that AR 94-2(4) was not an accurate statement

of the holding in Lively . The court further stated that Lively was a "rare case" involving "a finding that initially

disqualified the claimant from an award of benefits [which later]

convincingly demonstrated his entitlement thereto as of two weeks hence."

The court then stated that "[u]nlike the [Acquiescence] Ruling at issue in

... [Albright's] case, however, the prior adjudication in Lively — though highly probative — was not

conclusive." The court further held that:

We therefore disagree with the Commissioner that Lively abrogated the

established law of preclusion.... At its essence, Lively really has very

little to do with preclusion. Although we discussed the doctrine of res

judicata generally, and more particularly its incorporation into the

Social Security Act through 42 U.S.C. § 405(h) , Lively

is not directly predicated on the statute, but on "[ p ]rinciples of

finality and fundamental fairness drawn from § 405(h)."

[ Lively , 820 F.2d at 1392] (emphasis added). The distinction

is subtle, but important.

h preclusion. Although we discussed the doctrine of res

judicata generally, and more particularly its incorporation into the

Social Security Act through 42 U.S.C. § 405(h) , Lively

is not directly predicated on the statute, but on "[ p ]rinciples of

finality and fundamental fairness drawn from § 405(h)."

[ Lively , 820 F.2d at 1392] (emphasis added). The distinction

is subtle, but important.

Rather than signaling a sea change in the law of preclusion, the result in Lively is instead best understood as a practical illustration

of the substantial evidence rule. In other words, we determined that the

finding of a qualified and disinterested tribunal that Lively was capable

of performing only light work as of a certain date was such an important

and probative fact as to render the subsequent finding to the contrary

[relating to a period that began two weeks later] unsupported by

substantial evidence. To have held otherwise would have thwarted the

legitimate expectations of claimants...that final agency adjudications

should carry considerable weight. [Footnotes omitted.]

The court observed that the prior residual functional capacity finding in Lively was "highly probative" of the claimant's residual

functional capacity for the period that began two weeks after the

previously adjudicated period because, absent evidence to the contrary, "a

claimant's condition very likely remains unchanged within a discrete

two-week period." The court indicated that the probative value of a prior

finding relating to a claimant's medical condition will likely diminish

"as the timeframe expands," and that "[t]he logic so evident in Lively . .

.applies with nowhere near the force in Albright's situation" where "the

relevant period exceeds three years."

The court also stated that SSA's "treatment of later-filed applications as

separate claims is eminently logical and sensible, reflecting the reality

that the mere passage of time often has a deleterious effect on a

claimant's physical or mental condition."

c so evident in Lively . .

.applies with nowhere near the force in Albright's situation" where "the

relevant period exceeds three years."

The court also stated that SSA's "treatment of later-filed applications as

separate claims is eminently logical and sensible, reflecting the reality

that the mere passage of time often has a deleterious effect on a

claimant's physical or mental condition."

Statement as to How Albright Differs From SSA's

Interpretation of the Regulations

In a subsequent disability claim, SSA considers the issue of disability

with respect to a period of time that was not adjudicated in the final

determination or decision on the prior claim to be a new issue that

requires an independent evaluation from that made in the prior

adjudication. Thus, when adjudicating a subsequent disability claim

involving an unadjudicated period, SSA considers the facts and issues de

novo in determining disability with respect to the unadjudicated period.

SSA does not consider prior findings made in the final determination or

decision on the prior claim as evidence in determining disability with

respect to the unadjudicated period involved in the subsequent claim.

SSA interprets the decision by the United States Court of Appeals for the

Fourth Circuit in Albright to hold that where a final

decision of SSA after a hearing on a prior disability claim contains a

finding required at a step in the sequential evaluation process for

determining disability, SSA must consider such finding as evidence and

give it appropriate weight in light of all relevant facts and

circumstances when adjudicating a subsequent disability claim involving an

unadjudicated period.

Explanation of How SSA Will Apply The Albright Decision

Within The Circuit

ity claim contains a

finding required at a step in the sequential evaluation process for

determining disability, SSA must consider such finding as evidence and

give it appropriate weight in light of all relevant facts and

circumstances when adjudicating a subsequent disability claim involving an

unadjudicated period.

Explanation of How SSA Will Apply The Albright Decision

Within The Circuit

This Ruling applies only to disability findings in cases involving

claimants who reside in Maryland, North Carolina, South Carolina, Virginia

or West Virginia at the time of the determination or decision on the

subsequent claim at the initial, reconsideration, ALJ hearing or Appeals

Council level. It applies only to a finding of a claimant's residual

functional capacity or other finding required at a step in the sequential

evaluation process for determining disability provided under 20 CFR

404.1520, 416.920 or 416.924, as appropriate, which was made in a final

decision by an ALJ or the Appeals Council on a prior disability

claim. [5]

When adjudicating a subsequent disability claim arising under the same or

a different title of the Act as the prior claim, an adjudicator

determining whether a claimant is disabled during a previously

unadjudicated period must consider such a prior finding as evidence and

give it appropriate weight in light of all relevant facts and

circumstances. In determining the weight to be given such a prior finding,

an adjudicator will consider such factors as: (1) whether the fact on

which the prior finding was based is subject to change with the passage of

time, such as a fact relating to the severity of a claimant's medical

condition; (2) the likelihood of such a change, considering the length of

time that has elapsed between the period previously adjudicated and the

period being adjudicated in the subsequent claim; and (3) the extent that

evidence not considered in the final decision on the prior claim provides

a basis for making a different finding with respect to the per

o the severity of a claimant's medical

condition; (2) the likelihood of such a change, considering the length of

time that has elapsed between the period previously adjudicated and the

period being adjudicated in the subsequent claim; and (3) the extent that

evidence not considered in the final decision on the prior claim provides

a basis for making a different finding with respect to the period being

adjudicated in the subsequent claim.

Where the prior finding was about a fact which is subject to change with

the passage of time, such as a claimant's residual functional capacity, or

that a claimant does or does not have an impairment(s) which is severe,

the likelihood that such fact has changed generally increases as the

interval of time between the previously adjudicated period and the period

being adjudicated increases. An adjudicator should give greater weight to

such a prior finding when the previously adjudicated period is close in

time to the period being adjudicated in the subsequent claim, e.g., a few

weeks as in Lively . An adjudicator generally should give less

weight to such a prior finding as the proximity of the period previously

adjudicated to the period being adjudicated in the subsequent claim

becomes more remote, e.g., where the relevant time period exceeds three

years as in Albright . In determining the weight to be given

such a prior finding, an adjudicator must consider all relevant facts and

circumstances on a case-by-case basis.

[1] Under the Social Security

Independence and Program Improvements Act of 1994, Pub. L. No. 103-296,

effective March 31, 1995, SSA became an independent Agency in the

Executive Branch of the United States Government and was provided ultimate

responsibility for administering the Social Security and Supplemental

Security Income programs under titles II and XVI of the Social Security

Act. Prior to March 31, 1995, the Secretary of Health and Human Services

had such responsibility.

No. 103-296,

effective March 31, 1995, SSA became an independent Agency in the

Executive Branch of the United States Government and was provided ultimate

responsibility for administering the Social Security and Supplemental

Security Income programs under titles II and XVI of the Social Security

Act. Prior to March 31, 1995, the Secretary of Health and Human Services

had such responsibility.

[2] The decision of the Fourth

Circuit in Albright (the subject of this AR) was based, in

part, upon the panel's interpretation of the Fourth Circuit's prior

decision in Lively . Accordingly, the following discussion of

that earlier case is provided as background material.

[3] 20 CFR 404.1520 and 416.920

provide a sequential evaluation process for evaluating disability. These

regulations provide at step two that if an individual does not have any

impairment or combination of impairments that is "severe," the individual

is not disabled.

[4] In an action that was

uncontested on appeal and later termed "entirely proper" by the Fourth

Circuit in Albright , the ALJ dismissed Mr. Albright's claims

insofar as they related to the period up to and including May 28, 1992,

the date of the prior ALJ's decision on Mr. Albright's earlier claims.

[5] In making a finding of a

claimant's residual functional capacity or other finding required to be

made at a step in the applicable sequential evaluation process for

determining disability provided under the specific sections of the

regulations described above, an ALJ or the Appeals Council may have made

certain subsidiary findings, such as a finding concerning the credibility

of a claimant's testimony or statements. A subsidiary finding does not

constitute a finding that is required at a step in the sequential

evaluation process for determining disability provided under 20 CFR

404.1520, 416.920 or 416.924.