Keys, Napoleon L. v. Barnhart, Jo Anne ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-4219
NAPOLEON L. KEYS,
Plaintiff-Appellant,
v.
JO ANNE B. BARNHART,
Commissioner of Social Security,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 01 C 7334—Arlander Keys, Magistrate Judge.
____________
ARGUED JUNE 11, 2003—DECIDED OCTOBER 29, 2003
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Before POSNER, COFFEY, and RIPPLE, Circuit Judges.
POSNER, Circuit Judge. Social security disability benefits
are designed for disabled workers, but low-income parents
(or, as in this case, a guardian) may obtain them on behalf
of their disabled children as well. 42 U.S.C. § 1382c(a)(3)(C);
see Sullivan v. Zebley, 493 U.S. 521 (1990); Encarnacion ex rel.
George v. Barnhart, 331 F.3d 78, 80-85 (2d Cir. 2003); Kittles ex
rel. Lawton v. Barnhart, 245 F. Supp. 2d 479, 487-90 (E.D.N.Y.
2003). This extension of the normal program for disabled
2 No. 02-4219
adults can be defended as a realistic recognition that having
a disabled child will often limit the amount of productive
work that the parents can do and that the limitation is a
particular hardship to families that have limited financial
means. But this defense of disability benefits for the dis-
abled children of the poor is at best conjectural. Richard P.
Weishaupt & Robert E. Rains, “Sullivan v. Zebley: New
Disability Standards for Indigent Children to Obtain
Government Benefits,” 35 St. Louis U. L.J. 539, 545-46 (1991),
noting the “virtual silence” concerning Congress’s motiva-
tion for extending disability benefits to children, points
out that this silence, “coupled with the lack of a social wel-
fare tradition regarding income maintenance for disabled
children, made development of an appropriate standard a
difficult task.” (On the agency’s struggles to come up with
such a standard, see Sullivan v. Zebley, supra, 493 U.S. at 539-
41.) About all that is clear is that since disabled children
generally do not have a work history, the structure of the
disability program for them is necessarily different from
that for adults, Encarnacion ex rel. George v. Barnhart, supra,
331 F.3d at 82-83, except in cases in which the child has a
“listed impairment,” that is, an impairment that would
entitle the adult to disability benefits without any further
inquiry into his ability to perform his past work or some
other work; the child is treated the same in such a case. 20
C.F.R. § 416.924(d). But if he is not so seriously disabled as
is implied by being found to have a listed impairment, then
it must be determined whether he is nevertheless severely
limited in functioning in specified areas of life activity such
as concentration and communication.
After the administrative law judge to whom the applica-
tion for disability benefits on behalf of Napoleon Keys, then
14 years old, had been referred held that he was not dis-
abled within the meaning of the applicable regulations,
which were merely interim regulations, the Social Security
No. 02-4219 3
Administration adopted final regulations in implementation
of changes in the definition of childhood disability made by
the Personal Responsibility and Work Opportunity Recon-
ciliation Act of 1996, Public Law 104-193, §§ 211-212. These
are different from the interim regulations and the initial
question presented by the appeal is whether Keys’s case
is governed by the old (interim) or the new (final) regula-
tions. No appellate case has attempted to resolve the issue.
The statement accompanying the issuance of the new
regulations says that the regulations applicable to a particu-
lar case are those that were “in effect at the time of the final
decision.” 65 Fed. Reg. 54751 (Sept. 11, 2000). When the new
regulations took effect at the beginning of 2001, Keys’s
appeal from the administrative law judge’s adverse decision
was pending before the Appeals Council of the Social
Security Administration. The Council has discretion wheth-
er to hear an appeal from an administrative law judge’s
decision. Perkins v. Chater, 107 F.3d 1290, 1294 (7th Cir.
1997); Eads v. Secretary of HHS, 983 F.2d 815, 816 (7th Cir.
1993); see also Mills v. Apfel, 244 F.3d 1, 5 (1st Cir. 2001). It is
like the discretion conferred by the certiorari jurisdiction of
the Supreme Court, but unlike the Court the Appeals
Council gives reasons when it denies review. In Keys’s case,
the Council “concluded that there is no basis . . . for grant-
ing your request for review. Accordingly, your request is
denied and the Administrative Law Judge’s decision stands
as the final decision of the Commissioner of Social Security
in your case. In reaching this conclusion, the Appeals
Council has . . . considered the final regulations . . . imple-
menting the childhood disability provisions. . . . The new
regulations do not provide a basis to change the Adminis-
trative Law Judge’s decision.”
The government argues that the “final decision” was that
of the administrative law judge, and hence the old regula-
4 No. 02-4219
tions apply since the new ones had not taken effect until
after his decision. We understand everything but “hence.”
The Appeals Council considered the new regulations—it
had to, since obviously the administrative law judge’s
decision had not become final while the case was still before
the Appeals Council. When the Council decided not to
review the case, the administrative law judge’s decision
became final, but it became final then, not earlier, just as a
decision becomes final when the Supreme Court denies
certiorari. Clay v. United States, 537 U.S. 522 (2003). It would
be very odd if the Social Security Administration wanted
the Appeals Council to consider the applicability of the new
regulations but the court of appeals to consider only the
applicability of the old ones. We have held, it is true, taking
one side of a circuit split, see Mills v. Apfel, supra, 244 F.3d at4 and n. 2, that the court may not consider evidence first
presented to the Appeals Council in deciding whether the
administrative law judge made an error of fact, because he
cannot err by failing to have considered evidence never
tendered to him. Eads v. Secretary of HHS, supra, 983 F.2d at
817. But we made clear in that case, id., as did the First
Circuit in Mills, 244 F.3d at 5, that we can review an errone-
ous refusal by the Council to take account of new evidence
submitted to it, because that is a legal error. And similarly
we can review an erroneous application of regulations by
the Council. See Perkins v. Chater, supra, 107 F.3d at 1294.
The government argues that, if so, the Social Security
Administration “would be reluctant to amend and approve
on its own regulations if, every time it did so, it would be
required to re-adjudicate cases that were properly decided
under valid regulations.” But it was the agency itself that
decided that the applicable regulations would be those in
effect when the final decision was rendered; it could if it
wanted have limited the applicability of the new regula-
tions to applications for benefits filed, or cases decided by
No. 02-4219 5
administrative law judges, after the new regulations took
effect. Giving administrative regulations prospective ef-
fect only is more common than otherwise, but the agency
declined to limit the effect of its new regulations in this way.
The government’s interpretation of the scope of our
review is not saved by Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984), because
it is found only in a brief, and briefs, it seems, get limited
deference. United States v. Mead Corp., 533 U.S. 218, 228
n. 19 (2001); Matz v. Household Int’l Tax Reduction Investment
Plan, 265 F.3d 572, 574-75 (7th Cir. 2001); Doe v. Mutual of
Omaha Ins. Co., 179 F.3d 557, 563 (7th Cir. 1999); Rosales-
Garcia v. Holland, 322 F.3d 386, 403 n. 22 (6th Cir. 2003); see
also Christensen v. Harris County, 529 U.S. 576, 586-88 (2000);
cf. Houston Police Officers’ Union v. City of Houston, 330 F.3d
298, 304-05 (5th Cir. 2003). Our hedge (“it seems”) is be-
cause Auer v. Robbins, 519 U.S. 452, 462 (1997), gave full
Chevron deference to an agency’s amicus curiae brief; yet
in the Christensen case the Supreme Court stated flatly that
“interpretations such as those in opinion letters—like
interpretations contained in policy statements, agency
manuals, and enforcement guidelines, all of which lack of
the force of law—do not warrant Chevron-style deference.”
529 U.S. at 587. Briefs certainly don’t have “the force of
law.” Yet Christensen did not purport to overrule Auer, but
instead described it as a case in which the regulation that
the agency was interpreting (in the amicus brief, though the
Court in Christensen doesn’t mention this) was ambigu-
ous—but Chevron only requires deference to agency inter-
pretations of regulations that are ambiguous; an agency
cannot by regulation contradict a statute, but only supple-
ment it.
Probably there is little left of Auer. The theory of Chevron
is that Congress delegates to agencies the power to make
6 No. 02-4219
law to fill gaps in statutes. See, e.g., United States v. Mead
Corp., supra, 533 U.S. at 226-27; American Federation of
Government Employees v. Rumsfeld, 262 F.3d 649, 656 (7th Cir.
2001); Paragon Health Network, Inc. v. Thompson, 251 F.3d
1141, 1146-47 (7th Cir. 2001). It is odd to think of agencies as
making law by means of statements made in briefs, since
agency briefs, at least below the Supreme Court level,
normally are not reviewed by the members of the agency
itself; and it is odd to think of Congress delegating lawmak-
ing power to unreviewed staff decisions. See David J.
Barron & Elena Kagan, “Chevron’s Nondelegation Doc-
trine,” 2001 Sup. Ct. Rev. 201, 204; Robert A. Anthony,
“Which Agency Interpretations Should Bind Citizens and
the Courts?” 7 Yale J. Reg. 1, 60-61 (1990). In any event, we
doubt that Chevron has any role to play in this case because
the government’s brief did not offer an interpretation of the
agency’s regulations. The new regulations are clear in
requiring the Appeals Council to apply them and not the
old ones. The dispute is over whether the finality of the
administrative law judge’s decision should be, as it were,
backdated if the Appeals Council decides not to review his
decision. There is no regulation on this question.
We conclude that the new regulations govern our review.
They designate six “domains” of functioning: acquiring and
using information; attending to and completing tasks;
interacting with and relating to other people; moving about
and manipulating objects; caring for oneself; and health and
physical well-being. 20 C.F.R. § 416.926a(b)(1). A claimant
is to be found disabled if he has an “extreme” limitation in
at least one of the domains, or “marked” limitations in at
least two. 20 C.F.R. § 416.926a(d). “Marked” and “extreme”
limitations in a given domain can be established by stan-
dardized test scores that are two or three standard devia-
tions, respectively, below the mean—that is, either in the
lowest 2.5 percent of the distribution or the lowest 1
No. 02-4219 7
percent—provided, however, that the scores are rep-
resentative of day-to-day functioning. 20 C.F.R.
§§ 416.926a(e)(2)(iii), 416.926a(e)(3)(iii). Test scores are not
conclusive, therefore, and the bulk of 20 C.F.R. § 416.926a is
devoted to “general descriptions of each domain” against
which a claimant’s functioning may be compared; and so
when the dust settles, the agency retains substantial discre-
tion, which we cannot say was abused here.
Although Napoleon Keys had a turbulent childhood (his
parents, with whom he no longer lives, were drug addicts),
has a low-average IQ, has done quite poorly in some of his
classes, has a limited social life, and has definite problems
with concentration, he functions poorly rather than being as
it were off the chart. In the six domains of functioning, he is
extremely deficient in none and markedly deficient only in
one (“attending to and completing tasks,” formerly “con-
centration, persistence, and pace”). In fact, he is able to
function more or less adequately in school, so that if he
were deemed disabled so would millions of other children
be. The denial of benefits was therefore reasonable and
must stand.
We are mindful that some cases, most recently Booker-
Sheldon v. Barnhart, 2003 WL 21316516, at *5 (N.D. Ill. June
10, 2003), doubt the propriety of reviewing an administra-
tive law judge’s decision when it was based on the inappli-
cable old regulations. No doubt in many cases this would be
improper. But the differences between the old and the new
regulations are not great, see Encarnacion ex rel. George v.
Barnhart, supra, 331 F.3d 78, 84 n. 4 (2d Cir. 2003)—the report
accompanying the final regulations confirms that the pur-
pose of the revision was “largely to clarify” the earlier
categories and to “rename, and to some extent reorganize,
the prior areas of functioning,” 65 Fed. Reg. 54756 (Sept. 11,
2000)—and when it is plain, as it is in this case, that the
8 No. 02-4219
administrative law judge’s factual determinations would
compel a denial of benefits under the new regulations as
well as under the old, the doctrine of harmless error, which
is fully applicable to judicial review of administrative
decisions, Sahara Coal Co. v. Office of Workers Compensation
Programs, 946 F.2d 554, 558 (7th Cir. 1991); Save Our Heritage,
Inc. v. FAA, 269 F.3d 49, 61-62 (1st Cir. 2001), would spare us
from having to order a remand in any event.
More important, although technically judicial review is
of the administrative law judge’s decision when the
Appeals Council denies review, realistically it is of the
Appeals Council’s denial when it gives a reason for its
action that relates to the soundness of the denial of the
application for benefits. Had the Council just said we’re
denying review because we’re too busy, then the only
decision for the courts to review would be that of the
administrative law judge. But that was not the character of
the Council’s reason for denying review; its reason was that
the new regulations would make no difference to the
outcome. That was a reasonable substantive judgment to
which we would defer even if we did not independently
believe that the changes brought about by the new regula-
tions do not help Keys.
AFFIRMED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-29-03