Karrine Milhem v. Kilolo Kijakazi ( 2022 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 22-1488
KARRINE MILHEM,
Plaintiff-Appellant,
v.
KILOLO KIJAKAZI, Acting Commissioner of Social Security,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Indiana, Fort Wayne Division.
No. 1:20-cv-488-SLC — Susan L. Collins, Magistrate Judge.
____________________
ARGUED SEPTEMBER 28, 2022 — DECIDED NOVEMBER 4, 2022
____________________
Before EASTERBROOK, HAMILTON, and BRENNAN, Circuit
Judges.
BRENNAN, Circuit Judge. To determine whether a claimant
is eligible for Social Security disability benefits, an Adminis-
trative Law Judge applies the familiar five-step sequential
evaluation to assess whether that claimant can engage in sub-
stantial gainful activity. See 20 C.F.R. §§ 404.1520(a)(1);
416.920(a)(1). In step five, the ALJ considers whether the
claimant is unable to adjust to “work (jobs) that … exist[s] in
2 No. 22-1488
significant numbers in the national economy.” 20 C.F.R.
§§ 404.1560(c), 416.960(c). This case presents the question:
what number of jobs is “significant” for step five?
I. Background
Karrine Milhem applied for Social Security disability
insurance benefits and supplemental security income. She al-
leged that, as of November 19, 2018, several conditions
limited her ability to work, including heart problems, back
problems, alcohol withdrawal, anxiety, depression, and hal-
lucinations. When Milihem applied she was thirty-eight years
old, had completed three years of college, and had previously
worked as a canvasser, receptionist, portrait photographer,
and graphic designer. Her claims were denied initially and
upon reconsideration.
Milhem then sought review by an Administrative Law
Judge. At a Social Security hearing an ALJ uses a five-step
evaluation to assess whether a claimant may engage in sub-
stantial gainful activity, inquiring whether:
1. the claimant is presently employed;
2. the claimant has a severe impairment or combination
of impairments;
3. the claimant’s impairment meets or equals any impair-
ment listed in the regulations as being so severe as to
preclude substantial gainful activity;
4. the claimant’s residual functional capacity leaves him
unable to perform his past relevant work; and
5. the claimant is unable to perform any other work ex-
isting in significant numbers in the national economy.
No. 22-1488 3
Prill v. Kijakazi, 23 F.4th 738, 746–47 (7th Cir. 2022) (quoting
Butler v. Kijakazi, 4 F.4th 498, 501 (7th Cir. 2021)). The claimant
has the burden to prove steps one through four of the analy-
sis, and the burden shifts to the Commissioner at step five. Id.
at 747.
At a hearing held in May 2020, the ALJ heard testimony
from Milhem and a vocational expert. After Milhem testified,
the ALJ asked the vocational expert to classify Milhem’s prior
work. Based on the Dictionary of Occupational Titles (DOT), the
vocational expert testified that Milhem’s prior work as a can-
vasser was classified as light work and was light as actually
performed, and her work as a receptionist was classified as
sedentary work and was medium as actually performed. Mi-
lham had also previously been self-employed as a portrait
photographer and as a graphic designer. The vocational ex-
pert classified the portrait photography work as light work
and the graphic design work as sedentary work, together con-
sidered heavy as performed.
The ALJ then asked whether a “hypothetical individual of
the claimant’s age, education, and with the [same] past jobs”
was able to perform Milhem’s past work, with the following
limitations: the individual can “perform work at the light ex-
ertional level … that can be learned in 30 days or less with
simple, routine, tasks, simple work related decisions, [and]
routine workplace changes” and “is able to remain on task in
two hour increments with occasional interaction with
coworkers, supervisors, and the general public.” This ques-
tion reflected the ALJ’s conclusion that the evidence sup-
ported limiting Milhem’s work to that which can be learned
in thirty days or less, that Milhem could stand or walk for at
least two hours in an eight-hour workday, and that Milhem
4 No. 22-1488
“could make judgments commensurate with functions of sim-
ple, repetitive tasks,” “respond appropriately to brief super-
vision and interactions with coworkers and work situations,”
and “deal with routine changes in a work setting.” The voca-
tional expert responded that such a hypothetical individual
could not perform Milhem’s past work, but that there was
other work she could perform. This included work as a router,
price marker, and cafeteria attendant, of which there were ap-
proximately 53,000, 307,000, and 63,000 jobs in the national
economy, respectively.
The ALJ further inquired into how changing the exertion
level to sedentary would impact the number of jobs available.
This question reflected the ALJ’s review of the evidence that
Milhem “could at least perform sedentary work.” The voca-
tional expert testified that such an individual could perform
the work of an addresser, table worker, or document pre-
parer, of which there were approximately 19,000, 23,000, and
47,000 jobs in the national economy, respectively.
Based on Milhem’s specific circumstances, the ALJ as-
sessed the availability of those positions. She asked what the
requirements for those occupations were with respect to “be-
ing on task in the workplace,” reflecting evidence that
Milhem was able to remain on task for two-hour increments.
The vocational expert explained that an individual could be
off task for approximately ten percent of the workday,
exclusive of breaks, and that termination would result if an
individual was continuously off task more often. The ALJ also
inquired into the normally scheduled breaks during the
workday for these positions, whether the positions would ac-
commodate more or longer breaks, and what the tolerance for
absences was in these positions. The vocational expert
No. 22-1488 5
responded that there are usually three scheduled breaks per
day, the permissibility of additional or longer breaks de-
pended on their frequency and duration, and workers should
generally not accumulate more than twelve absences in one
year. The vocational expert explained that her answers to the
ALJ’s questions were based on her experience and an article
on absenteeism, and that they were consistent with the DOT.
The vocational expert testified that there were 89,000 jobs
in the national economy that Milhem could perform, adding
together the number of jobs available as an addresser (19,000),
table worker (23,000), and document preparer (47,000). Based
on this testimony, and “considering [Milhem’s] age, educa-
tion, work experience, and residual functional capacity,” the
ALJ found at step five that there were a significant number of
jobs that Milhem could perform. The ALJ thus concluded that
Milhem was not under a qualifying disability as of November
19, 2018.
The Social Security Appeals Council denied Milhem’s re-
quest for review, rendering the ALJ’s decision final. She then
appealed to the district court, 1 arguing that the ALJ’s findings
on step five were not supported by substantial evidence. 2
Milhem contended that the Commissioner failed to meet the
step-five burden because the ALJ did not determine how
many jobs Milhem could perform as a percentage of total jobs
1The parties consented to the jurisdiction of a magistrate judge pur-
suant to 28 U.S.C. § 636(c).
2 Milhem also challenged the ALJ’s step-three finding that she did not
meet listings 12.03, 12.04, and 12.06 of the Social Security Administration’s
Listing of Impairments. The district court rejected this argument, holding
that the ALJ’s determination was supported by substantial evidence.
Milhem does not appeal this holding, so we do not address it further.
6 No. 22-1488
in the national economy. Per Milhem, the ALJ did not ask the
vocational expert how many jobs existed in the national econ-
omy in total, so “the percentage calculation necessary to
gauge significance was not made.” Milhem also argued that
because 89,000 jobs accounted for just 0.0567% of the total jobs
in the national economy, the ALJ failed to identify a signifi-
cant number of jobs Milhem could perform.
The district court affirmed the ALJ’s determination. It ex-
plained that although “this circuit lacks clear guidance on
what constitutes a ‘significant number’ of jobs in the national
economy,” 89,000 jobs met that threshold. The district court
referred to Weatherbee v. Astrue, 649 F.3d 565, 572 (7th Cir.
2011), in which this court determined that 140,000 representa-
tive jobs in the national economy was “well above the thresh-
old for significance.” Ultimately, the district court grounded
its conclusion in an unpublished decision, Knapp v. Saul, 2021
WL 536121, at *4–5 (N.D. Ind. Jan. 27, 2021), report and recom-
mendation adopted, 2021 WL 536483 (N.D. Ind. Feb. 12, 2021),
where it had found that 67,500 jobs in the national economy
was a significant number.
II. Discussion
Milhem offers three arguments for why the step-five de-
termination was flawed:
1. There must be a regulation defining how many jobs are
“significant” for a step-five determination to be made;
2. Even if the term “significant” can be defined by adju-
dication, neither the ALJ nor the Commissioner presented
a standard by which significance is to be assessed; and
3. 89,000 jobs in the national economy is not a significant
number of jobs. On this point, she relies primarily on an
No. 22-1488 7
unpublished decision, Sally S. v. Berryhill, 2019 WL
3335033, at *11 (N.D. Ind. July 23, 2019), in which the dis-
trict court held that the Commissioner had not presented
substantial evidence that 120,350 jobs nationwide, 0.08%
of jobs, was a “significant” number.
Initially, we consider the Commissioner’s position that
Milhem has waived the first and third of these arguments.
A. Waiver
Milhem waived her first argument, the Commissioner rea-
sons, because she failed to present it to the district court. “Ar-
guments not raised in the district court are waived.” Reck v.
Wexford Health Sources, Inc., 27 F.4th 473, 485 n.30 (7th Cir.
2022). Milhem did not argue in the district court that the term
“significant” must be defined by regulation before an ALJ can
make a step-five determination, so we agree with the Com-
missioner on this point.
Plessinger v. Berryhill, 900 F.3d 909 (7th Cir. 2018), which
Milhem cites, is not to the contrary. There, we observed that
we had previously treated as preserved “more specific argu-
ments” of the same nature as those raised in the district court,
citing Arnett v. Astrue, 676 F.3d 586, 593–94 (7th Cir. 2012).
Plessinger, 900 F.3d at 916–17. We expressly declined to “reach
a definitive conclusion on the issue of waiver” in Plessinger. Id.
at 917. In Arnett, we explained that because a claimant had
challenged the ALJ’s residual functional capacity determina-
tion overall, the claimant had not waived the argument that
this determination did not specifically address how often the
claimant was able to sit and stand. 676 F.3d at 593.
Milhem challenged the ALJ’s significance finding below.
She therefore preserved more specific arguments about the
8 No. 22-1488
significance determination, but not the broader first argument
she raises here. She not only argues that the significance find-
ing was wrong, but that the process to determine significance
is flawed. Specifically, Milhem contends that no ALJ can de-
termine significance via adjudication until the term “signifi-
cant” is further defined by regulation. This first argument ex-
pands the scope of her challenge to the ALJ’s significance
finding and is therefore waived.
The Commissioner argues Milhem waived her third argu-
ment in two ways. She failed to object to the ALJ’s step-five
analysis at the administrative hearing. In support, the Com-
missioner relies on Brown v. Colvin, 845 F.3d 247 (7th Cir.
2016), Liskowitz v. Astrue, 559 F.3d 736 (7th Cir. 2009), and Bar-
rett v. Barnhart, 355 F.3d 1065 (7th Cir. 2004). These decisions
do not support the Commissioner’s position, however, be-
cause they involve challenges to the vocational expert’s esti-
mates of the number of positions the claimant could perform
given her limitations or the sources of information from
which these estimates derived. See Brown, 845 F.3d at 254; Lis-
kowitz, 559 F.3d at 744; Barrett, 35 F.3d at 1067. Milhem does
not challenge the vocational expert’s testimony about the
number of jobs she can perform or the bases for those esti-
mates. Rather, her third argument challenges the ALJ’s ulti-
mate finding that the number of jobs available is “significant”
for purposes of the step-five analysis. Milhem raised this third
argument before the district court, so it has not been waived.
The Commissioner also submits that Milhem waived her
third argument because if she had challenged the ALJ’s sig-
nificance finding at her hearing, the vocational expert could
have provided additional testimony. But because the signifi-
cance determination was made only after the hearing had
No. 22-1488 9
concluded, Milhem did not waive her third argument that
89,000 jobs is not a “significant” number of jobs for purposes
of the step-five determination.
B. Merits
We turn now to the merits of Milhem’s second and third
arguments. The district court’s decision is reviewed de novo,
and the ALJ’s disability decision will be affirmed if she sup-
ported her conclusion with substantial evidence. Prill, 23 F.4th
at 746. “Substantial evidence is not a high threshold, as it
means only ‘such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.’” Id. (quot-
ing Karr v. Saul, 989 F.3d 508, 511 (7th Cir. 2021)); see also
Biestek v. Berryhill, 139 S. Ct. 1148, 1154 (2019). This court does
not substitute its judgment for that of the ALJ, reweigh the
evidence, or decide questions of credibility. Prill, 23 F.4th at
746.
At step five, the ALJ is granted discretion to determine
what constitutes a “significant” number of jobs on a case-by-
case basis. The Commissioner is “responsible for providing
evidence that demonstrates that other work exists in signifi-
cant numbers in the national economy.” 20 C.F.R.
§§ 404.1560(c)(2), 416.960(c)(2); see also Weatherbee, 649 F.3d at
569. Whether a claimant “can make an adjustment to [this]
other work” is determined by the ALJ based on a residual
functional capacity assessment and the claimant’s age, educa-
tion, and work experience. 20 C.F.R. § 404.1520(a)(4)(v),
404.1520(g)(1), 416.920(a)(4)(v), 416.920(g)(1). In this assess-
ment, “ALJs often rely heavily on two sources of occupational
information to determine whether the government has met its
burden: the DOT and Vocational Experts.” Weatherbee, 649
F.3d at 569. The DOT “classifies jobs based on a number of
10 No. 22-1488
factors, such as worker actions, exertional level and skill re-
quirements in order to facilitate the placement of applicants
in positions that match their qualifications.” Id. Vocational ex-
perts, in turn “supplement the information provided in the
DOT by providing an impartial assessment of the types of oc-
cupations in which claimants can work and the availability of
positions in such occupations.” Id. The ALJ must assess
whether this evidence establishes more than “[i]solated jobs
that exist only in very limited numbers in relatively few loca-
tions.” 20 C.F.R. §§ 404.1566(b), 416.966(b).
No standard for “significant.” Milhem’s second argument is
that the ALJ’s step-five decision was erroneous because nei-
ther the Commissioner nor the ALJ presented a standard by
which significance is to be assessed. But the statutory and reg-
ulatory framework contains no such requirement. Title 42
U.S.C. § 405(a) requires the Commissioner of Social Security
to “adopt reasonable and proper rules and regulations to reg-
ulate and provide for the nature and extent of the proofs and
evidence … .” The Commissioner has provided that “[w]ork
exists in the national economy when there is a significant
number of jobs.” 20 C.F.R. §§ 404.1566(b), 416.966(b). “Iso-
lated jobs that exist only in very limited numbers in relatively
few locations outside of the region where [the claimant]
live[s] are not considered ‘work which exists in the national
economy.’” § 404.1566(b); see also § 416.966(b). Therefore,
work that exists “in very limited numbers” cannot be consid-
ered “significant.” It is within the ALJ’s discretion to deter-
mine whether jobs exist only in very limited numbers. See
Biestek, 139 S. Ct. at 1152 (citing 20 C.F.R. §§ 404.1560(c)(1),
416.960(c)(1), 404.1566, 416.966). This determination does not
depend upon the establishment of a standard for significance.
No. 22-1488 11
Milhem’s second argument is also rejected in light of the
Supreme Court’s approach to categorical rules in Social Secu-
rity hearings. The Court has observed that these hearings are
“informal,” that “strict rules of evidence, applicable in the
courtroom” do not apply, and that the “substantial evidence”
standard is assessed on a “case-by-case” basis. Id. at 1154–55,
1157 (quoting Richardson, 402 U.S. at 400). In Biestek, the Court
rejected an argument that would have established a categori-
cal rule that substantial evidence could not be shown when-
ever a vocational expert refuses a request for data underlying
her job estimates. See id. at 1157. The Court similarly observed
in Biestek that it had formerly declined to adopt a categorical
rule addressing the substantiality of medical reports in Social
Security hearings. See id. (citing Richardson, 402 U.S. at 399,
410). Milhem’s argument that the Commissioner failed to
meet its burden because no evidence of a standard for signif-
icance was presented might imply a categorical rule, an un-
necessary step here.
89,000 jobs is not a “significant” number. Milhelm’s third ar-
gument is that the aggregate number of jobs the ALJ deter-
mined that she could perform—89,000 nationwide—is not a
significant number. She notes that figure is only 0.0567% of
the total jobs in the national economy. For support she looks
to an unpublished decision, Sally S., 2019 WL 3335033, at *11,
in which the district court determined that 120,350 jobs, or
0.080% of all jobs in the national economy, was not a “signifi-
cant” number.
Milhem’s reliance on Sally S. is misplaced. There, the
district court held that the Commissioner had not presented
substantial evidence establishing significance because the
Commissioner did not cite any cases discussing national, as
12 No. 22-1488
opposed to regional, numbers of jobs in its briefing before that
court. Id. That decision is not binding on this court and does
not account for this court’s decision in Weatherbee, where we
concluded that 140,000 national jobs was a “significant” num-
ber under step five of the analysis. 649 F.3d at 572.
The district court in Sally S. was properly attentive to the
difference between regional versus national numbers of jobs.
But our case law addressing what constitutes a “significant”
number of jobs has sometimes conflated those figures. For ex-
ample, in Liskowitz v. Astrue, 559 F.3d 736, 743 (7th Cir. 2009),
this court stated that 4,000 regional jobs satisfied the Commis-
sioner’s step-five burden, observing that “it appears to be
well-established that 1,000 jobs is a significant number.” For
this proposition, Liskowitz relied on Lee v. Sullivan, 988 F.2d
789, 794 (7th Cir. 1993), as well as Hall v. Bowen, 837 F.2d 272,
275 (6th Cir. 1988), Barker v. Secretary of Health & Human Ser-
vices, 882 F.2d 1474, 1479 (9th Cir. 1989), Trimiar v. Sullivan,
966 F.2d 1326, 1330–32 (10th Cir. 1992), and Jenkins v. Bowen,
861 F.2d 1083, 1087 (8th Cir. 1988). But these decisions dis-
cussed numbers of jobs in the regional rather than the national
economy. Lee, 988 F.2d at 792, 794; Trimiar, 966 F.2d at 1330,
1330 n.10; Barker, 882 F.2d at 1476, 1478 3; Hall, 837 F.2d at 273;
Jenkins, 861 F.2d at 1087. Similarly, in Weatherbee, this court
3The court in Barker refers at one point to jobs that “existed in the
national and local economy.” 882 F.2d at 1478. This reference appears to
acknowledge that work “which exists in the national economy” is defined
as “work which exists in significant numbers either in the region where
such individual lives or in several regions of the country.” Id. (quoting 42
U.S.C. § 423(d)(2)(A)). Even if the 1,200 gatekeeper jobs discussed in Barker
reflected a national number, that court’s conclusion that 1,266 jobs were
“significant” included only jobs in the local economy. Id. at 1476, 1479.
Liskowitz, in turn, relied on the 1,266 figure. See 559 F.3d at 743.
No. 22-1488 13
referred to the 1,000-job figure when discussing regional and
national numbers of jobs, but ultimately determined that
140,000 national jobs was “significant” under step five. 649
F.3d at 572. Subsequent decisions from this court have impre-
cisely cited Liskowitz and Weatherbee for the proposition that
1,000 jobs in the national economy meets the threshold of
significance. 4 Moving forward, reviewing courts should be at-
tentive to the difference between regional and national job
numbers in this discussion.
In determining whether there is a “significant” number of
jobs in the national economy, the regulatory scheme gives the
ALJ discretion to decide, using substantial evidence, when a
number of jobs qualifies as significant. Substantial evidence
means “evidence a reasonable person would accept as ade-
quate to support the decision.” Kastner v. Astrue, 697 F.3d 642,
646 (7th Cir. 2012).
Milhem does not dispute the substantive correctness of the
vocational expert’s testimony—only whether the ALJ had suf-
ficient evidence from that testimony to find Milhem not disa-
bled. The vocational expert provided the ALJ with plenty of
evidence that Milhem could perform 89,000 jobs. The ALJ
grounded her conclusion that the number of jobs mentioned
was “significant” on her consideration of Milhem’s “age, ed-
ucation, work experience, and residual functional capacity”
and that Milhem was “capable of making a successful adjust-
ment to other work that exists” in the economy. The ALJ’s hy-
potheticals to the vocational expert revealed that she weighed
the testimony presented and determined that Milhem could
4 See, e.g., Mitchell v. Kijakazi, 2021 WL 3086194, at *3 (7th Cir. July 22,
2021); Primm v. Saul, 789 F. App’x 539, 546 (7th Cir. 2019).
14 No. 22-1488
at least perform sedentary work. The ALJ further assessed the
tolerance for absences in these positions, the requirements for
being on task in the workplace, and the frequency of breaks
during the workday, all reflecting the ALJ’s conclusions about
Milhem’s capacity to perform work. On this record, a reason-
able person would accept 89,000 jobs in the national economy
as being a significant number.
Our circuit’s case law does not provide a clear baseline for
how many jobs are needed. Weatherbee, in which we con-
cluded that 140,000 jobs in the national economy was “well
above the threshold for significance,” 649 F.3d at 572, is this
court’s only guidepost. Still, the job figure the ALJ arrived at
here of 89,000 was supported by the substantial evidence
noted above. Milhem does not challenge the vocational ex-
pert’s testimony, which was responsive to the ALJ’s questions
addressing Milhem’s capacity to perform work. This ruling is
also in accord with the numbers of national jobs held to be
significant by other circuits. See Moats v. Comm’r of Soc. Sec., 42
F.4th 558, 563 (6th Cir. 2022) (32,000 national jobs); Gutierrez
v. Comm’r of Soc. Sec., 740 F.3d 519, 529 (9th Cir. 2014) (25,000
national jobs); Johnson v. Chater, 108 F.3d 178, 180 (8th Cir.
1997) (10,000 national jobs); Weiler v. Apfel, 179 F.3d 1107,
1110–11 (8th Cir. 1999) (32,000 national jobs).
For these reasons, we AFFIRM the district court’s decision.