Bordes v. Commissioner of Social Security ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
5-18-2007
Bordes v. Comm Social Security
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-2197
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 06-2197
____________
PAULINE BORDES
Appellant
v.
COMMISSIONER OF SOCIAL SECURITY
____________
On Appeal from the United States District Court
for the District of New Jersey
D.C. Civil Action No. 04-cv-05586
(Honorable Dennis M. Cavanaugh)
____________
Submitted Pursuant to Third Circuit LAR 34.1(a)
April 26, 2007
Before: SCIRICA, Chief Judge, FUENTES, and ALARCÓN,* Circuit Judges.
(Filed: May 18, 2007)
____________
OPINION OF THE COURT
____________
*
The Honorable Arthur L. Alarcón, Senior Judge of the United States Court of
Appeals for the Ninth Circuit, sitting by designation.
ALARCÓN, Circuit Judge.
Pauline Bordes appeals from the District Court’s order remanding the
Commissioner of Social Security’s final decision denying Ms. Bordes’s application for a
period of disability and disability benefits under §§ 216(i) and 223 of the Social Security
Act, 42 U.S.C. §§ 416(i) and 423. Ms. Bordes argues that the procedures leading to the
denial decision were fundamentally unfair, that the denial decision was not supported by
substantial evidence, and that the District Court abused its discretion by remanding her
case for further proceedings instead of reversing and directing an award of benefits. We
affirm the District Court’s judgment because the procedures leading to the
Commissioner’s denial decision were not fundamentally unfair. We also conclude that
the Commissioner failed to consider certain evidence in the record adequately, and that
the record is not sufficiently developed to warrant reversal and an award of benefits.
I
Ms. Bordes, a former factory worker, applied for disability benefits on March 12,
1997. R. at 122. Her application stated that she suffered from back pain, headaches,
dizziness, coughing, shortness of breath, chest pain, blurred vision, anxiety, and
depression. Id. Ms. Bordes also filled out a Social Security Administration (“SSA”)
form appointing as her personal representative attorney Joel M. Solow of the law firm
2
Freeman & Bass.1 R. at 19. The Commissioner denied her application on August 7,
1997. R. at 51-55.
On August 20, 1997, Freeman & Bass sent the SSA an unsigned, computer-typed
letter on Freeman & Bass letterhead, requesting reconsideration. R. at 58.2 Freeman &
Bass also sent an SSA “Request for Reconsideration” form on September 16, 1997,
bearing Ms. Bordes’s signature and an unintelligible signature next to the heading
“Signature or Name of Claimant’s Representative.” R. at 56. The request for
reconsideration was denied on February 20, 1998. R. at 59-61.
On February 25, 1998, Freeman & Bass sent an unsigned, computer-typed letter on
Freeman & Bass letterhead requesting a hearing before an administrative law judge
(“ALJ”).3 R. at 64. Freeman & Bass also sent an SSA “Request for Hearing” form on
March 21, 1998, filled out by hand. R. at 62. In a space on the form marked
“representative’s signature,” the form bears the handwritten words “Freeman & Bass by:”
1
The SSA’s Hearings, Appeals and Litigation Law Manual (“HALLEX”) provides
that “[a] person claiming a right or benefit under titles II, XVI, and XVIII of the Social
Security Act (the Act), as amended, may appoint an attorney or other qualified individual
to represent him or her in dealings with the Social Security Administration (SSA).”
HALLEX § I-1-1-1, available at http://www.ssa.gov/OP_Home/hallex/I-01/I-1-1-1.html.
2
The letter’s closing read, “Very truly yours, FREEMAN & BASS,” followed with
the typed words “BY: MICHAEL BASS.” R. at 58.
3
This second letter also closed with, “Very truly yours, FREEMAN & BASS,”
followed with the typed words “BY: MICHAEL BASS.” R. at 64.
3
followed by an unintelligible signature. R. at 62. The request for a hearing was granted
on April 6, 1998, and the hearing was held on March 16, 1999. R. at 65-67.
On August 23, 1999, the ALJ issued a partially favorable decision finding that Ms.
Bordes had been disabled since April 26, 1996, but not prior thereto.4 R. at 79-84. On
September 1, 1999, Freeman & Bass sent an unsigned, computer-typed letter to the
Appeals Council on Ms. Bordes’s behalf, stating in relevant part:
We hereby serve upon you through this letter a formal
demand that the matter be appealed to the Appeals Council of
the Social Security Administration. It is our contention that
the denial by the Administrative Law Judge was improper,
contrary to law, and a violation of our client’s rights. Kindly
review this matter at the Appeals Council and advise our
office of the disposition.
Respectfully yours,
FREEMAN & BASS
R. at 87. Under “FREEMAN & BASS,” appeared the word “By:” without any name or
signature. Id.
On February 14, 2003, the Appeals Council issued an order vacating the ALJ’s
August 23, 1999 decision and remanding it for further proceedings. R. at 88-91. In its
order, the Appeals Council stated that the ALJ’s decision “does not provide a proper
4
This date is apparently based on the date of a medical examination of Ms. Bordes
submitted by Dr. I. Ahmad, an orthopedic specialist, who diagnosed her with a spinal
sprain and myositis. R. at 82.
4
evaluation under the sequential evaluation process for finding [Ms. Bordes] not disabled
prior to April 26, 1996, nor does it provide the regulatory basis for finding [her] disabled
beginning April 26, 1996.” R. at 89. A second hearing before the ALJ was scheduled for
August 19, 2004. R. at 93.
Mr. Solow appeared at the hearing held on August 19, 2004. He informed the ALJ
that his office had mistakenly sent the request for review of the ALJ’s August 23, 1999
decision to the Appeals Council. R. at 46. He admitted at the August 19, 2004 hearing
that it was the first time he had raised the issue of his office’s mistaken request for appeal.
R. at 46-47. He declined to add any evidence to the record. R. at 47.
On August 27, 2004, the ALJ issued a decision finding that Ms. Bordes had never
been disabled and was not entitled to benefits. R. at 14-18. The ALJ reasoned that Ms.
Bordes did not have a severe impairment, as required to support a finding of disability,
because “the medical evidence present on or before December 31, 1998 [the last date she
was insured for disability insurance purposes] fails to establish the presence of any
impairment that resulted in any significant restrictions or limitations of [her] ability to
perform basic work-related activities.” R. at 17.
On September 23, 2004, Freeman & Bass sent a computer-typed letter to the
Appeals Council requesting review of the ALJ’s August 27, 2004 decision. R. at 250-51.
The letter did not argue that Freeman & Bass had mistakenly requested Appeals Council
5
review of the ALJ’s August 23, 1999 decision. Instead, it argued that the ALJ’s August
27, 2004 decision failed to evaluate the credibility of Ms. Bordes’s statements, and placed
too heavy of a burden on Ms. Bordes to demonstrate a severe impairment. Id. The letter
was signed:
Respectfully yours,
FREEMAN & BASS, P.A.
BY: JOEL M. SOLOW.
Mr. Solow’s signature appeared above his typed name. R. at 251. The Appeals Council
denied the request for review on November 5, 2004, and the ALJ’s August 27, 2004
decision became the final decision of the Commissioner. R. at 5-7.
Ms. Bordes appealed from the August 27, 2004 decision to the District Court. On
March 9, 2006, the District Court issued an opinion reversing the ALJ’s decision and
remanding it for further findings. Appx. at 1. The District Court reasoned that, although
substantial evidence supported the ALJ’s determination that Ms. Bordes did not have a
severe back, shoulder, or leg impairment, the ALJ had failed to address evidence in the
record supporting Ms. Bordes’s complaints of stiffness in her hands, blurred vision,
shortness of breath, anxiety, and depression. Appx. at 14-15. The District Court further
determined that the ALJ had improperly failed to evaluate the credibility of Ms. Bordes’s
subjective complaints. Appx. at 15. It instructed the ALJ “[o]n remand . . . [to] address
6
Plaintiff’s subjective complaints in addition to the medical evidence regarding her various
impairments.” Appx. at 16. Ms. Bordes filed a timely notice of appeal.
The District Court had subject-matter jurisdiction pursuant to 42 U.S.C. § 405(g).5
This Court has appellate jurisdiction pursuant to 28 U.S.C. § 1291.
II
A
Ms. Bordes contends that the Appeals Council followed fundamentally unfair
procedures, and thus violated her due process rights, by initiating review of the ALJ’s
August 23, 1999 decision based on an unsigned request for appeal, taking more than sixty
days to initiate its review, and not notifying her in advance of its intent to undertake the
review. She contends that the Appeals Council’s conduct violated various provisions of
two SSA internal procedure manuals, the Program Operations Manual System (“POMS”)6
5
42 U.S.C. § 405(g) provides:
Any individual, after any final decision of the Commissioner
of Social Security made after a hearing to which he was a
party, irrespective of the amount in controversy, may obtain
[judicial] review of such decision by a civil action . . . . Such
action shall be brought in the district court of the United
States for the judicial district in which the plaintiff resides
....
6
“The POMS is a primary source of information used by Social Security
employees to process claims for Social Security benefits.” SSA’s Program Operations
Manual System, https://s044a90.ssa.gov/apps10/poms.nsf/aboutpoms. See also
7
and Hearings, Appeals and Litigation Law Manual (“HALLEX”),7 as well as the Code of
Federal Regulations. The Commissioner responds that those provisions are inapplicable
to this case, and that it was Ms. Bordes’s practice to communicate with the Commissioner
via unsigned, computer-generated documents. This Court exercises plenary review over
the legal issue of whether the SSA’s conduct violated fundamental fairness. Allen v.
Barnhart, 417 F.3d 396, 398 (3d Cir. 2005).
“[D]ue process requires that any hearing afforded [a Social Security disability]
claimant be full and fair.” Ventura v. Shalala, 55 F.3d 900, 902 (3d Cir. 1995). This
standard is violated where a claimant is deprived of the opportunity to present evidence to
an ALJ in support of his or her claim, or where the ALJ exhibits bias or animus against
the claimant. Ventura, 55 F.3d at 902-03 (claimant was denied a fair hearing where the
ALJ acted abusive and intimidating, and interfered with the claimant’s presentation of
Washington State Dept. of Soc. and Health Servs. v. Guardianship Estate of Keffeler, 537
U.S. 371, 385 (2003). Although POMS is intended for SSA employees, a publicly
available version is posted on the World Wide Web.
7
“Through HALLEX, the Associate Commissioner of Hearings and Appeals
conveys guiding principles, procedural guidance and information to the Office of
Hearings and Appeals (“OHA”) staff. HALLEX includes policy statements resulting
from an Appeals Council en banc meeting under the authority of the Appeals Council
Chair. It also defines procedures for carrying out policy and provides guidance for
processing and adjudicating claims at the Hearing, Appeals Council, and Civil Action
levels.” HALLEX § I-1-0-1, Purpose, http://www.socialsecurity.gov/OP_Home/hallex/I-
01/I-1-0-1.html. HALLEX provisions are available at
http://www.ssa.gov/OP_Home/hallex/.
8
evidence supporting his claim); Hess v. Sec. of Health, Educ. and Welfare, 497 F.2d 837,
841 (3d Cir. 1974) (pro se claimant was deprived of a full and fair hearing where the ALJ
failed to secure readily obtainable evidence to resolve doubts about his right to disability
benefits). As Ms. Bordes relies only on the fundamental fairness standard set forth in
Ventura, we need not address whether the Appeals Council’s actions violated due process
under any other theory.
1
Ms. Bordes contends that “[t]he computer generated document [sent by Freeman &
Bass on September 1, 1999, requesting review of the ALJ’s August 23, 1999 decision] is
unsigned, and, as such cannot be considered as an actual request for review.” Appellant
Br. 13. “Fundamental fairness,” she argues, “would dictate that a document must be
signed in order to justify legal action thereon.” Id. In support of this contention, she
relies on POMS section GN 00204.010(B)(2),8 which provides in relevant part:
Written Statement Must Be Signed
A written statement of intent to file must be signed or initialed (this
includes typed signatures and initials) by the claimant or otherwise
proper applicant, or a SSA employee to establish the protective filing
date.
8
Ms. Bordes’s actually cites POMS “section GN 00204.1010.” Appellant Br. 13.
That section does not appear in the POMS, and apparently does not exist. Ms. Bordes’s
brief refers to a printout of a POMS section set forth in her appendix, which is POMS
section GN 00204.010. Apparently, her reference to “GN 00204.1010" is a typographical
error.
9
Section GN 00204.010(B)(2) is unavailing to Ms. Bordes, because it applies to written
statements of intent to file for benefits, rather than to requests for Appeals Council
review.
Other POMS provisions not cited by Ms. Bordes, however, do appear to require
signatures on requests for Appeals Council review. POMS section GN 03104.200,
entitled “Preparation of Form HA-520-U5 (Request for Review of Hearing
Decision/Order),” instructs SSA employees to “[r]emember that a request for review or
appeal can be anything in writing over the claimant’s signature or that of his/her
appointed representative.” POMS § GN 03104.200(B)(5),
https://s044a90.ssa.gov/apps10/poms.nsf/lnx/0203104200!opendocument (emphasis
added). POMS section GN 0201.010(B)(d), states in relevant part that “[g]enerally . . .
SSA requires claimant and/or third party signatures in the following situations . . . .
Requests for appeal of an Agency decision; . . .”
https://s044a90.ssa.gov/apps10/poms.nsf/lnx/0200201010!opendocument.
To similar effect is the HALLEX. Although the HALLEX contains no express
signature requirement, it does require that a request for Appeals Council Review be filed
by “a claimant or representative.” HALLEX § I-3-3-1. HALLEX § I-1-1-10 provides
that “[a] claimant may not appoint as his or [sic] representative a . . . law firm, but instead
must specify a person or persons within the organization as the representative.”
10
HALLEX § I-1-1-10, Note 2, http://www.ssa.gov/OP_Home/hallex/I-01/I-1-1-10.html.
Ms. Bordes’s appointed representative in this case was Joel M. Solow. R. at 19.
Neither Ms. Bordes nor Mr. Solow signed the September 1, 1999 letter requesting
Appeals Council review, nor do their names appear on the letter. R. at 87. Although
Freeman & Bass, which is listed on the letter, is also listed on Ms. Bordes’s form
designating a representative, HALLEX states that a law firm may not serve as a
claimant’s personal representative. HALLEX § I-1-1-10 Note 2. The letter thus did not
comply with the signature requirement of POMS sections GN 03104.200(B)(5) or GN
0201.010(B), or the HALLEX’s requirement that a request for review be submitted by a
claimant or representative individual.
These POMS and HALLEX provisions do not aid Ms. Bordes, however, because
they lack the force of law and create no judicially-enforceable rights. See Schweiker v.
Hansen, 450 U.S. 785, 789 (1981) (Social Security Administration Claims Manual “has
no legal force, and . . . does not bind the SSA”); Binder & Binder PC v. Barnhart, - - -
F.3d - - - , 2007 WL 901808, at *10 (2d Cir. March 27, 2007) (Even if SSA Program
Circular were part of the POMS, “it still would not constitute properly enacted policy or
have the force of law.”); Lowry v. Barnhart, 329 F.3d 1019, 1023 (9th Cir. 2003) (stating
that “neither [POMS nor HALLEX] imposes judicially enforceable duties”); Tejada v.
Apfel, 167 F.3d 770, 775 (2d Cir. 1999) (“[T]he POMS guidelines ‘ha[ve] no legal force,
11
and [they] do[] not bind the [Commissioner].”) (alterations in original); (citing Schweiker,
450 U.S. at 789). Edelman v. Comm’r of Soc. Sec., 83 F.3d 68, 71 n.2 (3d Cir. 1996)
(POMS “regulations do not have the force of law.”). See also SSA’s Program Operations
Manual System, Disclaimer, https://s044a90.ssa.gov/apps10/poms.nsf/aboutpoms (last
visited April 12, 2007) (stating, “[t]he POMS states only internal SSA guidance. It is not
intended to, does not, and may not be relied upon to create any rights enforceable at law
by any party in a civil or criminal action.”).
The Fifth Circuit has taken a more stringent approach. In Newton v. Apfel, 209
F.3d 448, (5th Cir. 2000), the Fifth Circuit addressed an asserted violation of HALLEX
and stated that, “[w]hile HALLEX does not carry the authority of law, this court has held
that ‘where the rights of individuals are affected, an agency must follow its own
procedures, even where the internal procedures are more rigorous than otherwise would
be required.’” Id. at 459 (quoting Hall v. Schweiker, 660 F.2d 116, 119 (5th Cir. 1981)).
“If prejudice results from a violation,” the Fifth Circuit stated, “the result cannot stand.”
Id. The Fifth Circuit held in Newton that it could not grant the claimant relief based on
the Appeals Council’s violation of HALLEX, because the violation did not prejudice the
claimant. Id. at 459-60. Cf. Schweiker, 450 U.S. at 789 (SSA field representative’s
failure to follow a procedure set forth in an internal agency manual did not estop the SSA
from enforcing its written application requirement, where the representative’s “conduct
12
did not cause respondent to take action, or fail to take action, that respondent could not
correct at any time.”) (internal citations omitted).
Ms. Bordes’s fundamental fairness claim would fail even under the Fifth Circuit’s
approach, because she has not shown she was prejudiced by the Appeals Council’s review
of her claim based on the unsigned request for review. Even if Ms. Bordes had sent no
notice of appeal at all, the Appeals Council still could have initiated review of her claim
“on its own motion.” HALLEX § I-3-3-1. Moreover, Ms. Bordes and Mr. Solow failed
to avail themselves of opportunities to withdraw or disclaim the request for review.
POMS section GN 3104.100(B)(5) provides that “[t]he [Appeals Council] may dismiss a
request for review at the request of the claimant or his or her representative.” Neither Ms.
Bordes nor Mr. Solow ever attempted to obtain dismissal of the September 1, 1999
request during the three and one-half years before the Appeals Council issued its reversal.
At no time before the August 19, 2004 post-remand hearing did Mr. Solow raise his
contention that his office mistakenly sent the request. Mr. Solow did not even mention
the alleged mistake in a July 19, 2004 letter he sent to the ALJ regarding the post-remand
hearing, or in his September 23, 2004 letter requesting Appeals Council review of the
ALJ’s August 27, 2004 decision. On these facts, no prejudice has been shown.
2
Ms. Bordes further contends that it was fundamentally unfair for the Appeals
13
Council to initiate review of the ALJ’s August 23, 1999 decision more than sixty days
after the decision was rendered. She argues that 20 C.F.R. § 404.969(a) sets a sixty-day
time limit for Appeals Council review, and that the Appeals Council in this case waited
three and one-half years to render its decision. The Commissioner argues that §
404.969(a) is inapplicable to this case because it applies only where the Appeals Council
initiates review on its own motion.
The Commissioner is correct. Section 404.969(a) expressly applies where the
Appeals Council “decide[s] on its own motion to review the action that was taken in [the
claimant’s] case.” 20 C.F.R. § 404.969(a). Here, the Appeals Council initiated review
not on its own motion but based on Freeman & Bass’ September 1, 1999 letter. R. at 89.
As “[n]o mandatory deadlines apply to claimant-initiated requests [for appeal],” Williams
v. Sullivan, 970 F.2d 1178, 1183 (3d Cir. 1992), the Appeals Council did not violate any
review deadline.
Ms. Bordes also argues that the Appeals Council’s three-and-a-half-year delay
constituted laches. Even assuming a fundamental fairness violation could be made out on
that theory, however, Ms. Bordes has failed to demonstrate the required elements of
laches: inexcusable delay and prejudice to herself. Burke v. Gateway Clipper, Inc., 441
F.2d 946, 949 (3d Cir. 1971) (citing Loverich v. Warner Co., 118 F.2d 690 (3d Cir. 1941),
cert denied, 313 U.S. 577). “These elements are conjunctive, and since laches is a
14
defense, the burden of establishing both is on the defendant. If a statutory limitations
period that would bar legal relief has expired, then the defendant in an action for equitable
relief enjoys the benefit of a presumption of inexcusable delay and prejudice. In that
case, the burden shifts to the plaintiff to justify its delay and negate prejudice.” EEOC v.
Great Atlantic & Pacific Tea Co., 735 F.2d 69, 80 (3d Cir. 1984), cert. dismissed, 469
U.S. 925 (1984) (citations omitted). As no statute of limitations applied to the Appeals
Council’s action in this case, Williams, 970 F.2d at 1183, the burden of proving laches
rested with Ms. Bordes. She has not met that burden.
3
Ms. Bordes also asserts that the Appeals Council acted unfairly by failing to notify
her that it intended to review the ALJ’s August 23, 1999 decision. In support of this
argument, she relies on 20 C.F.R. § 404.969(d), which provides: “Appeals Council’s
action. If the Appeals Council decides to review a decision or dismissal on its own
motion, it will mail a notice of review to all the parties as provided in § 404.973.” She
also cites HALLEX I-3-6-51(A), which provides in relevant part that “[w]hen the
Appeals Council reviews an ALJ’s action on its own motion, procedural due process
requires that the Council give the claimant and representative, if any, notice of the review
. . . .” Appellant Br. 14. As the Government correctly argues, these provisions are
inapposite because they apply only where the Appeals Council initiates review on its own
15
motion.9
In sum, the District Court did not err by concluding that it was not a violation of
fundamental fairness for the Appeals Council to review Ms. Bordes’s case, based on the
September 1, 1999 letter requesting review of the ALJ’s August 23, 1999 decision,
without notifying her in advance.
B
Ms. Bordes further argues that “the Appeals Council was without substantial
evidence in reversing the favorable decision issued by the ALJ on August 23, 1999.”
Appellant Br. 17. She contends that the Appeals Council ignored residual functional
capacity evaluations by her treating physician, Dr. H. Maker, and a consultative
physician, Dr. L. Vassalo. Those evaluations, Ms. Bordes contends, “clearly demonstrate
that she has impairments which significantly limit her ability to do basic work activities”
9
Even if the prior notice provisions did apply in this case, Ms. Bordes has not
shown she was prejudiced by the Appeals Council’s failure to notify her. She argues that
“[a]bsent the issuance of a prior notice [from the Appeals Council] before taking its
action on February 14, 2003, [she] was not in a position to advance her contentions that a
signed request for review was never issued and that the action proposed was not based on
substantial evidence.” Appellant Br. 15. However, the Appeals Council still could have
reviewed the ALJ’s August 23, 1999 decision on its own motion, even if Ms. Bordes had
argued to it that the request for review was unsigned. Moreover, Ms. Bordes declined on
remand to add any evidence to the record to support her claim of disability. R. at 47. She
does not argue that she would have added any evidence to the record had the Appeals
Council given her advance notice of its intent to review the ALJ’s August 23, 1999
decision.
16
such as sit, stand, and walk. Appellant Br. 18-19. The Commissioner concedes that “the
ALJ inadequately considered [Ms.] Bordes’s subjective complaints,” Appellee Br. 30,
but argues that the ALJ’s decision was otherwise supported by substantial evidence.
In reviewing a district court decision evaluating a final decision of the
Commissioner, “[w]e exercise plenary review over the order of the district court, but
review the decision of the Commissioner to determine whether it is supported by
substantial evidence.” Newell v. Comm’r of Soc. Sec., 347 F.3d 541, 545 (3d Cir. 2003)
(internal citation omitted); 42 U.S.C. § 405(g).10 “Substantial evidence is ‘such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.’”
Rutherford v. Barnhart, 399 F.3d 546, 552 (3d Cir. 2005) (quoting Reefer v. Barnhart,
326 F.3d 376, 379 (3d Cir. 2003)). “It is ‘more than a mere scintilla but may be
somewhat less than a preponderance of the evidence.’” Id. (quoting Ginsberg v.
Richardson, 436 F.2d 1146, 1148 (3d Cir. 1971)). The Commissioner’s decision will
only be supported by substantial evidence if “the [Commissioner] has analyzed all
evidence and has sufficiently explained the weight he has given to obviously probative
exhibits.” Cotter v. Harris, 642 F.2d 700, 705 (3d Cir. 1981) (quoting Dobrowolsky v.
Califano, 606 F.2d 403 (3d Cir. 1979)). “The ALJ must consider all the evidence and
10
42 U.S.C. § 405(g) provides, “The findings of the Commissioner of Social
Security as to any fact, if supported by substantial evidence, shall be conclusive . . . .”
17
give some reason for discounting the evidence she rejects.” Plummer v. Apfel, 186 F.3d
422, 429 (3d Cir. 1999).
1
Although Ms. Bordes frames her argument by reference to the Appeals Council’s
February 14, 2003 decision reversing the ALJ’s August 23, 1999 decision, we must
instead focus our review on the ALJ’s August 27, 2004 decision, which became final
when the Appeals Council denied review on November 5, 2004. See 42 U.S.C. § 405(g)
(permitting judicial review of “any final decision of the Commissioner”); 20 C.F.R. §
404.981 (“The Appeals Council’s decision, or the decision of the administrative law
judge if the request for [Appeals Council] review is denied, is binding unless you or
another party file an action in Federal district court . . . .’”); Poulos v. Comm’r of Soc.
Sec., 474 F.3d 88, 91 (3d Cir. 2007) (“Because the Appeals Council denied review of the
ALJ’s decision, we review that decision as the final decision of the Commissioner.”).
The ALJ’s August 27, 2004 decision rests on the same evidentiary record as the Appeals
Council’s February 2003 reversal decision on which Ms. Bordes focuses on in her brief.
Ms. Bordes’s arguments are therefore equally applicable to both, and will be discussed
hereinafter as if they reference the August 27, 2004 decision.
2
“[T]o establish a disability under the Social Security Act, a claimant must
18
demonstrate that there is some ‘medically determinable basis for an impairment that
prevents him from engaging in any “substantial gainful activity” for a statutory twelve-
month period.’” Newell, 347 F.3d at 545 (quoting Stunkard v. Sec. of Health & Human
Servs., 841 F.2d 57, 59 (3d Cir. 1988)). See also 42 U.S.C. § 423(d)(1)(A). “A claimant
is considered unable to engage in any substantial gainful activity ‘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 experience, engage in
any other kind of substantial gainful work which exists in the national economy.’”
Newell, 347 F.3d at 545 (quoting 42 U.S.C. § 423(d)(2)(A)).
SSA regulations set forth a sequential five-step evaluation process for determining
whether a claimant is disabled. Id.; 20 C.F.R. § 404.1520(a)(4). First, the ALJ “must
determine whether the claimant currently is engaging in substantial gainful activity.” If
the claimant is, he will be found not disabled. Newell, 347 F.3d at 545. If not, at step two
the ALJ determines “whether the claimant has a medically severe impairment or
combination of impairments.” Id. If not, the disability claim will be denied. Id. If so, at
step three the ALJ must “compare [] the medical evidence of the claimant’s impairment to
a list of impairments presumed severe enough to preclude any gainful work.” Id. If the
claimant’s impairment meets or equals a listed impairment, the disability claim will be
granted without any further analysis. Id. at 545-46; 20 C.F.R. § 404.1520(a)(4)(iii). If
19
the claimant’s impairment does not meet or equal a listed impairment, at step four the
ALJ assesses the claimant’s residual functional capacity, or ability to return to his past
relevant work. Newell, 347 F.3d at 546. The claimant bears the burden to show inability
to return to past work. Id. If the claimant fails to meet this burden, the claim will be
denied. Id. If the claimant shows he is unable to return to his past work, the burden of
production shifts to the Commissioner, and “the Commissioner must show that there are
other jobs existing in significant numbers in the national economy which the claimant can
perform,” given “his or her medical impairments, age, education, past work experience,
and residual functional capacity.” Id.
The ALJ’s August 27, 2004 decision denied Ms. Bordes’s claim at step two, and
found that she did not have a medically severe impairment or combination of
impairments. Under the Commissioner’s regulations, “an impairment is not severe if it
does not significantly limit [the claimant’s] physical ability to do basic work activities.”
Id. (quoting Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996)). See also 20 C.F.R. §
404.1520(c). “Basic work activities are ‘abilities and aptitudes necessary to do most jobs,
including, for example, walking, standing, sitting, lifting, pushing, pulling, reaching,
carrying, or handling.’” Newell, 347 F.3d at 546 (quoting Smolen, 80 F.3d at 1273). See
also 20 C.F.R. § 404.1521(b).
“The step-two inquiry is a de minimis screening device to dispose of groundless
20
claims.” Newell, 347 F.3d at 546. Thus, “[a]n impairment or combination of
impairments can be found ‘not severe’ only if the evidence establishes a slight
abnormality or a combination of slight abnormalities which have ‘no more than a minimal
effect on an individual’s ability to work.’” Id. “If the evidence presented by the claimant
presents more than a ‘slight abnormality,’ the step-two requirement of ‘severe’ is met, and
the sequential evaluation process should continue.” Id. at 546-47. (citing Smolen, 80 F.3d
at 1290). Reasonable doubts at the step two stage must be resolved in favor of the
claimant. Id. at 547.
3
Ms. Bordes contends that the ALJ’s August 27, 2004 decision was unsupported by
substantial evidence, and that the ALJ improperly disregarded evaluations by her treating
physician, Dr. H. Maker, and Dr. L. Vassallo, who examined her on behalf of the SSA.
Appellant Br. 19. The Commissioner argues that the ALJ properly disregarded the Maker
and Vassallo evaluations because they were contradicted by objective medical evidence
in the record, and that other evidence in the record supported a finding of no severe
impairment. The Commissioner is incorrect.
The Maker evaluation is dated May 27, 1999. It concluded, apparently based on a
March 10, 1999 MRI report, that Ms. Bordes had a herniated disc at C5-A1, and
lumbosacral radiculopathy. R. at 217-18. The March 10, 1999 MRI report states, under
21
the heading, “Impressions:” “[w]ater loss phenomenon at L5-S1 with a minimum convex
posterior margin to the disc on both sagittal and axial images either representing a
prominent disc bulge or a small smooth subligamentous HNP. Considering the minimum
findings a prominent disc bulge is favored.” R. at 213. Also under “Impressions,” the
MRI report lists “Schmorl’s node and degenerative change at L3-4 with associated disc
bulge at the level of L3-4 most prominent on sagittal images with minimal findings on
axial images.” R. at 212.
The record contains evidence that contradicts Dr. Maker’s diagnosis, as well as
evidence that supports it. A May 3, 1999 x-ray report states, contrary to Dr. Maker’s
evaluation, that Ms. Bordes has a “normal lumbosacral spine.” R. at 245. Dr. Maker’s
diagnosis of lumbosacral radiculopathy, however, is supported by outpatient notes from
the Bergen Medical Center, dated March 15, 1999, that identify “LS Radiculopathy.” R.
at 229.
The ALJ’s decision fails to mention either the May 3, 1999 x-ray report or the
March 15, 1999 outpatient note in connection with Dr. Maker’s diagnosis. Instead, the
ALJ rejected Dr. Maker’s diagnosis as “not supported by the record,” as follows:
While [Dr. Maker’s] report appears to be based on the March
1999 MRI, an outpatient note dated March 19, 199911 states
11
The ALJ’s mention of the “outpatient note dated March 19, 1999" appears
actually to refer to the March 15, 1999 note. The note reports both a “min. bulge disc
22
that the MRI did not show a herniated disc, but only “small
bulging disc at L5-S1.” It was also stated that the claimant
did have “some relief” from anti-inflammatory medication.
Furthermore, although the claimant was advised to go for
physical therapy, there was no evidence that she ever went.
R. at 17.
An “ALJ must . . . pay close attention to the medical findings of a treating
physician,” Brewster v. Heckler, 786 F.2d 581, 584 (3d Cir. 1986), and “may reject ‘a
treating physician’s opinion outright only on the basis of contradictory medical
evidence.’” Morales v. Apfel, 225 F.3d 310, 317-18 (3d Cir. 2000) (citing Plummer v.
Apfel, 186 F.3d 422, 429 (3d Cir. 1999); Frankenfield v. Bowen, 861 F.2d 405, 408 (3d
Cir. 1988), and Kent v. Schweiker, 710 F.2d 110, 115 (3d Cir. 1983)). “[The reviewing
court] need[s] from the ALJ not only an expression of the evidence s/he considered which
supports the result, but also some indication of the evidence which was rejected. In the
absence of such an indication, the reviewing court cannot tell if significant probative
evidence was not credited or simply ignored.” Cotter v. Harris, 642 F.2d 700, 705 (3d
Cir. 1981).
By failing to indicate whether he considered or rejected the March 15, 1999
outpatient note indicating “LS Radiculopathy,” or the May 3, 1999 x-ray report, the ALJ
violated his duty to “consider all the evidence and give some reason for discounting the
L5S1" and “LS Radiculopathy.” R. at 229.
23
evidence [he or] she rejects.” Adorno v. Shalala, 40 F.3d 43, 48 (3d Cir. 1994). The ALJ
completely failed to explain his rejection of Dr. Maker’s conclusion that Ms. Bordes
suffered from lumbosacral radiculopathy, to state whether he rejected that conclusion
based on the May 3, 1999 x-ray report, or to address the outpatient note that supported
Dr. Maker’s diagnosis. The ALJ appears, instead, to have rejected Dr. Maker’s
lumbosacral radiculopathy diagnosis based on the ALJ’s own speculation that Ms.
Bordes’s condition could not have been too dire if she experienced “‘some relief’ from
anti-inflammatory medication” and failed to go to physical therapy when advised to do
so. “In choosing to reject the treating physician’s assessment, an ALJ may not make
‘speculative inferences from medical reports’ and may reject a ‘treating physician’s
opinion outright only on the basis of contradictory medical evidence’ and not due to his
or her own credibility judgments, speculation, or lay opinion.” Morales, 225 F.3d at 317
(citing Plummer, 186 F.3d at 429; Frankenfield, 861 F.2d at 408; Kent, 710 F.2d at 115).
The ALJ’s conclusions regarding Ms. Bordes’s response to medication and her failure to
go to physical therapy appear to be his own speculation and lay opinion.
The ALJ also failed to address Dr. Vassallo’s diagnosis. Dr. Vassallo concluded,
in a report dated May 3, 1999, that Ms. Bordes “ha[d] a left side sciatic syndrome, [and]
diminished motion of the lumbar spine due to probable degenerative disc disease without
neurological changes.” R. at 243. He further determined that she was restricted to lifting
24
and carrying up to ten pounds “occasionally,” that she could sit and walk for three hours
total in an eight-hour workday and stand for two hours total in an eight-hour workday,
and that she could sit, stand, or walk for only one hour at a time without interruption. R.
at 246-47. While it is possible that the May 3, 1999 x-ray report of a “normal
lumbosacral spine” contradicts Dr. Vassallo’s conclusions, that result is not obvious from
the record: Dr. Vassallo’s diagnosis of a left side sciatic syndrome and degenerative disc
disease may instead be consistent with a “normal lumbosacral spine.” Without an
explanation from the ALJ, it is impossible to tell.
Because the ALJ failed to address evidence corroborating Dr. Maker’s diagnosis of
lumbosacral radiculopathy, explain whether it relied on the May 3, 1999 x-ray report in
rejecting Dr. Maker’s diagnosis, or address Dr. Vassallo’s report, the ALJ’s finding that
Ms. Bordes suffered from no severe back impairment is not supported by substantial
evidence. To the extent the District Court held otherwise, the District Court erred.
As the District Court correctly concluded, the ALJ also failed adequately to
address evidence pertaining to Ms. Bordes’s complaints of stiffness in her hands, blurred
vision, shortness of breath, and anxiety and depression. The ALJ referred vaguely in its
decision to “multiple impairments,” but failed to address either Ms. Bordes’s subjective
complaints or medical evidence in the record that corroborated those complaints. The
undiscussed evidence includes:
25
• a June 20, 1996 report from Dr. Malcolm H. Hermele diagnosing Ms.
Bordes with “chronic bronchitis” and stating, “I would estimate a
permanent pulmonary disability of 25% of total.” R. at 180.
• an October 23, 1996 report by Dr. Herbert L. Glatt diagnosing Ms. Bordes
with “a partial permanent disability of 20% of the right eye and 25% of the
left eye.” R. at 183.
• an April 24, 1996 report by Dr. Samuel L. Pollock, diagnosing Ms. Bordes
with “permanent neuropsychiatric disability [of] 35 % of partial total.” R.
at 186.
Depending on the ALJ’s interpretation, the record in this case may be sufficient to show a
medically severe impairment or combination of impairments. “An ALJ is required to
consider impairments a claimant says he has, or about which the ALJ receives evidence.”
Rutherford, 399 F.3d at 552 (quoting Skarbek v. Barnhart, 390 F.3d 500, 504 (7th Cir.
2004)(per curiam)). By not addressing evidence in the record regarding Ms. Bordes’s
hand, vision, respiratory, and emotional complaints, the ALJ failed its duty to “analyze[]
all evidence and . . . sufficiently explain[] the weight he has given to obviously probative
exhibits.” Gober v. Matthews, 574 F.2d 772, 776 (3d Cir. 1978) (quoting Arnold v. Sec.
of HEW, 567 F.2d 258, 259 (4th Cir. 1977)).
In sum, the ALJ’s decision was unsupported by substantial evidence because the
ALJ failed to discuss evidence supporting and contradicting Dr. Maker’s diagnosis, failed
to mention Dr. Vassallo’s report, and failed to address Ms. Bordes’s subjective
complaints or medical evidence substantiating those complaints.
26
C
Ms. Bordes argues that the District Court abused its discretion by remanding the
case to the Commissioner for further findings, instead of reversing and directing an award
of benefits. She contends that benefits should have been awarded because the Maker and
Vassallo reports “clearly demonstrate that [she] has impairments which significantly limit
her ability to do basic work activities.” Appellant Br. 18-19. The Commissioner argues
that “the evidence in this case does not warrant reversal for the payment of benefits” and
that “remand is appropriate to evaluate and make a finding regarding the credibility of
Bordes’s complaints of pain.” Appellee Br. at 30.
“A district court, after reviewing the decision of the Commissioner may under 42
U.S.C. § 405(g) affirm, modify, or reverse the Commissioner’s decision with or without a
remand to the Commissioner for a rehearing.” Newell, 347 F.3d at 549 (citing
Podedworny v. Harris, 745 F.2d 210, 221 (3d Cir. 1984). “A court of appeals also retains
this discretion and, in reversing or modifying the Commissioner’s decision, may choose
to direct a remand of the case to the Commissioner for a further hearing or simply direct
the district court to order the award of benefits.” Id. However, “a court of appeals should
make the decision to direct the district court to order the award of benefits only when the
administrative record of the case has been developed fully and when substantial evidence
on the record as a whole indicates that the claimant is disabled and entitled to benefits.”
27
Id. See also Poulos, 474 F.3d at 95 (“Because the record is not fully developed, we will
remand this case for further proceedings . . . .”).
The record in this case has not been fully developed. The ALJ denied Ms.
Bordes’s claim at step two of the five-step sequential evaluation process, without
proceeding to the other steps. It also failed to consider pertinent evidence relating to Ms.
Bordes’s back and other asserted impairments, or to address her subjective complaints.
Consequently, the District Court did not abuse its discretion by remanding the case to the
ALJ for further proceedings.
Conclusion
The District Court correctly determined that the Appeals Council did not violate
fundamental fairness by reviewing the ALJ’s August 23, 1999 decision based on an
unsigned, computer-typed letter from the law firm that represented Ms. Bordes, by taking
more than sixty days to initiate its review, or by not giving Ms. Bordes advance notice of
its intent to initiate review. Although the District Court erred in concluding that
substantial evidence supported the ALJ’s determination that Ms. Bordes had no severe
back impairment, the District Court correctly concluded that the ALJ’s August 27, 2004
decision was unsupported by substantial evidence. Because the administrative record is
not fully developed, the District Court properly vacated and remanded the ALJ’s decision
for further proceedings. Because our decision rests on grounds different from those relied
28
on by the District Court, we will vacate the District Court’s decision and remand to the
ALJ for further proceedings consistent with this opinion.
29