AR 94-2(4): Rescinded

AR 94-2(4)

(Rescinded 1/12/2000 by AR 00-1(4) )

EFFECTIVE DATE:07/07/94

ISSUE

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

disability claim with respect to an unadjudicated period, an adjudicator

must adopt a finding regarding 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 or the Appeals Council on a prior disability

claim arising under the same title of the Social Security

Act. [1]

STATUTE/REGULATION/RULING CITATION

Sections 205(a) and (h) and 1102 of the Social Security Act (42 U.S.C.

405(a) and (h) and 1302), 20 CFR 404.955, 404.957(c)(1), 404.981,

416.1455, 416.1457(c)(1), 416.1481.

CIRCUIT

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

Virginia)

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,

Administrative Law Judge hearing and Appeals Council).

DESCRIPTION OF CASE

In a decision dated October 19, 1981, an Administrative Law Judge 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 Administrative Law Judge 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 the Secretary and was affirmed by the district court.

s, 20 CFR Part 404, Subpart P, Appendix 2, and

denied his application for disability insurance benefits. In applying Rule

202.10, the Administrative Law Judge 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 the Secretary 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 Administrative

Law Judge concluded that the plaintiff was not entitled to disability

insurance benefits. The Administrative Law Judge 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 Administrative Law Judge did not

discuss in his decision the 1981 finding by another Administrative Law

Judge that the plaintiff had the residual functional capacity to do only

light work. This decision became the final decision of the Secretary and

was appealed to the district court. The case was referred to a United

States Magistrate who found that the evidence before the Administrative

Law Judge on the plaintiff's 1983 application was sufficient to sustain

the Secretary'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

tates Magistrate who found that the evidence before the Administrative

Law Judge on the plaintiff's 1983 application was sufficient to sustain

the Secretary'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 stated that: Congress has clearly provided by statute

that res judicata prevents reappraisal of both the Secretary's

findings and his 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 the Secretary 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 Administrative Law Judge, 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 the

Secretary 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.

STATEMENT AS TO HOW LIVELY DIFFERS FROM SSA POLICY

that the

Secretary 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.

STATEMENT AS TO HOW LIVELY DIFFERS FROM SSA POLICY

Under SSA policy, if a determination or decision on a disability claim

has become final, the Agency may apply administrative res judicata with

respect to a subsequent disability claim under the same title of the Act

if the same parties, facts and issues are involved in both the prior and

subsequent claims. However, if the subsequent claim involves deciding

whether the claimant is disabled during a period that was not adjudicated

in the final determination or decision on the prior claim, SSA considers

the issue of disability with respect to the unadjudicated period to be a

new issue that prevents the application of administrative res judicata.

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.

The United States Court of Appeals for the Fourth Circuit concluded that

where a final decision of the Secretary after a hearing on a prior

disability claim contained a finding about a claimant's residual

functional capacity, the Secretary may not make a different finding in

adjudicating a subsequent disability claim with an unadjudicated period

arising under the same title of the Act as the prior claim unless there is

new and material evidence relating to the claimant's residual functional

capacity.

EXPLANATION OF HOW SSA WILL APPLY THE DECISION WITHIN THE CIRCUIT

about a claimant's residual

functional capacity, the Secretary may not make a different finding in

adjudicating a subsequent disability claim with an unadjudicated period

arising under the same title of the Act as the prior claim unless there is

new and material evidence relating to the claimant's residual functional

capacity.

EXPLANATION OF HOW SSA WILL APPLY THE 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, Administrative Law

Judge hearing or Appeals Council level. It applies only to a finding

regarding 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, or a

finding required under the evaluation process for determining disability

provided under 20 CFR 404.1578, as appropriate, which was made in a final

decision by an Administrative Law Judge or the Appeals Council on a prior

disability claim. When adjudicating a subsequent disability claim with an

unadjudicated period arising under the same title of the Act as the prior

claim, adjudicators must adopt such a finding from the final decision by

an Administrative Law Judge or the Appeals Council on the prior claim in

determining whether the claimant is disabled with respect to the

unadjudicated period unless there is new and material evidence relating to

such a finding. [1] Although Lively was a title II case, similar principles also apply to title

XVI. Therefore, this Ruling extends to both title II and title XVI

disability claims.