Schofield v. Saul

• Decision Date: 21 February 2020
• Docket Number: No. 18-11390,18-11390
• Citation: 950 F.3d 315
• Parties: Tammy Raye SCHOFIELD, Plaintiff-Appellant, v. Andrew M. SAUL, Commissioner of Social Security, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

950 F.3d 315

Tammy Raye SCHOFIELD, Plaintiff-Appellant,

v.Andrew M. SAUL, Commissioner of Social Security, Defendant-Appellee.

No. 18-11390

United States Court of Appeals, Fifth Circuit.

FILED February 21, 2020

Michael Thomas Kelly, Maria Laura Siguad Hernandez, Morgan & Weisbrod, L.L.P., Dallas, TX, for Plaintiff - Appellant.

Thomas Edward Chandler, Assistant Regional Counsel, Simone Pereira Cain, Special Assistant U.S. Attorney, Social Security Administration, Office of the General Counsel Region VI, Dallas, TX, for Defendant - Appellee.

Before ELROD, GRAVES, and OLDHAM, Circuit Judges.^*

ANDREW S. OLDHAM, Circuit Judge:

The Social Security Administration ("SSA") denied Tammy Raye Schofield’s application for disability benefits. The SSA based its decision on a highly reticulated, multi-part web of administrative regulations, a multi-page chart called "The Matrix," and subregulatory-guidance documents called the "POMS" and the "HALLEX." Within this administrative-state labyrinth lies many a trap for the unwary. But in this case, the SSA ensnared itself. We reverse.

I.

A.

An applicant for disability benefits faces a long and winding road to get them. The relevant subpart of the Code of Federal Regulations spans over one hundred sections, two dense appendices, and several hundred pages of text. See 20 C.F.R. pt. 404, subpt. P, §§ 404.1501 –1599 & app. 1–2. But here’s a highly condensed roadmap.

The person seeking disability benefits first applies in writing to the SSA. If the SSA denies the application, the person has 60 days to seek reconsideration. See 42 U.S.C. § 405(b)(1). If the SSA denies reconsideration, the applicant can request a hearing before an administrative law judge ("ALJ").

The ALJ then performs a "five-step sequential evaluation process" to determine whether the applicant is disabled. 20 C.F.R. § 404.1520(a)(4) ; see Newton v. Apfel , 209 F.3d 448, 453 (5th Cir. 2000). The steps are as follows:

1. At step one, the ALJ considers the applicant’s "work activity, if any." 20 C.F.R. § 404.1520(a)(4)(i). A person performing "substantial gainful activity" is not disabled. Id. § 404.1520(b).

2. At step two, the ALJ considers "the medical severity of [the applicant’s] impairment(s)."

Id. § 404.1520(a)(4)(ii). A person who does not have a "severe impairment" is not disabled. Id. § 404.1520(c).

3. At step three, the ALJ considers whether the person’s impairment "meets or equals" an impairment listed in Appendix 1 of the regulations. Id. § 404.1520(a)(4)(iii). A person who "meets or equals" the enumerated impairments is disabled. Id. § 404.1520(d).

4. At step four, the ALJ considers whether the person is capable of performing the work she has done in the past. Id. § 404.1520(a)(4)(iv). If she is so capable, she is not disabled. Id. § 404.1520(f).

5. At step five, the ALJ considers the applicant’s "residual functional capacity and ... age, education, and work experience to see if [the applicant] can make an adjustment to other work." Id. § 404.1520(a)(4)(v). If the person can adjust to other work, she’s not disabled; if she cannot adjust, she is disabled. Id. § 404.1520(g).

This case concerns Step Five. At Step Five, ALJs use the Medical-Vocational Guidelines, which contain a number of rules in a grid-like matrix. See 20 C.F.R. pt. 404, subpt. P, app. 2 § 200.00(a). To figure out which rule applies, the ALJ enters into the matrix the applicant’s residual functional capacity, age category, education level, and previous work experience. The matrix, in turn, identifies the applicable rule, and that rule directs a disability finding. Changing any one of these inputs can change what the matrix requires. For instance, if you change the age category and leave the other inputs unchanged, that will sometimes direct a different answer regarding whether the applicant is disabled.

But there is a way out of the matrix. The SSA will sometimes choose not to use a person’s actual age in what it calls a "borderline situation." 20 C.F.R. § 404.1563(b). A borderline situation occurs when an applicant is "within a few days to a few months" of an older age category. Ibid. You might reasonably wonder how many months or days are "a few." The regulation does not say.^† But in cases where Section 404.1563(b) applies, the ALJ will not "mechanically" use the applicant’s actual age and will instead "consider whether to use the older age category after evaluating the overall impact of all the factors ...." Ibid.

But that’s not the only way out of the matrix. If the ALJ determines that one of the matrix’s rules do not apply, the ALJ can perform Step Five using the totality of the circumstances. See 20 C.F.R. pt. 404, subpt. P, app. 2 § 200.00(a) ("In any instance where a rule does not apply, full consideration must be given to all of the relevant facts ...."). In addition, ALJs sometimes rely on a vocational expert’s testimony about "job requirements and working conditions" because an expert "is familiar with the specific requirements of a particular occupation, including ... the attributes and skills needed." Vaughan v. Shalala , 58 F.3d 129, 132 (5th Cir. 1995) (per curiam) (quotation omitted). In these circumstances, the matrix serves only as a "frame of reference." 20 C.F.R. pt. 404, subpt. P, app. 2 § 200.00(d).

In sum, the Step Five inquiry requires that an ALJ consider the factors provided in the Medical-Vocational Guidelines and the matrix. Sometimes the ALJ will use a person’s actual age, sometimes not. And sometimes the ALJ will apply a specific rule from the matrix but, then again, sometimes not.

B.

Schofield began her trek through the SSA maze when she filed an application for a period of disability and disability benefits. In order to be eligible for both, Schofield needed to show she was disabled "on or before the date [she] was last insured." Ivy v. Sullivan , 898 F.2d 1045, 1048 (5th Cir. 1990). She alleged in her application that her disability began on August 18, 2013—a few months before the date she was last insured on December 31, 2013. On the day she was last insured, Schofield was 54 years, 8 months, and 1 day old.

The SSA initially denied Schofield’s claim for benefits because she was "not disabled under [the SSA’s] rules." Schofield then requested the SSA reconsider that denial. The SSA did so and again determined Schofield wasn’t disabled. Schofield then requested a hearing before an ALJ.

The ALJ reviewed Schofield’s case and also determined she wasn’t disabled. Schofield says the ALJ erred at Step Five. At Step Five, the question is whether Schofield could adjust to other work. See 20 C.F.R. § 404.1520(a)(4)(v). If the answer is yes, she is not disabled. But if the answer is no, she is disabled. For Schofield, Step Five is all or nothing.

To determine whether Schofield could adjust to other jobs, the ALJ considered Schofield’s age, education, residual functional capacity, and work experience. As to age, the ALJ found that Schofield was an "individual closely approaching advanced age." The ALJ did not consider, however, whether Schofield’s age placed her in a "borderline situation" because she was "within a few days to a few months" of the "advanced age" category (which starts at 55). See 20 C.F.R. § 404.1563(b). But the ALJ did hear testimony from a vocational expert. The vocational expert testified that an individual with Schofield’s characteristics would be able to perform several types of jobs, such as a greeter or hostess, a machine tender, and a gate guard. Then the ALJ found Schofield was "not disabled."

Schofield asked the Appeals Council to review the ALJ’s decision. She argued the ALJ erred by placing her in a lower age category—an individual closely approaching advanced age—when she was within the borderline (four months) of reaching an older category—person of advanced age. She contended that she would’ve been disabled under the matrix if the ALJ placed her in the older category. The Appeals Council declined review. That denial constituted the agency’s final decision. Higginbotham v. Barnhart , 405 F.3d 332, 337 (5th Cir. 2005).

After exhausting the exhaustive administrative process, Schofield appealed the SSA’s decision to the district court under 42 U.S.C. § 405(g). The district court affirmed. She timely appealed. We review to ensure the SSA’s decision is supported by "substantial evidence" and to ensure the SSA applied the proper legal standards. Higginbotham , 405 F.3d at 335.

II.

On appeal, Schofield challenges the ALJ’s performance of Step Five. She says the ALJ did not apply the SSA’s rules regarding borderline-age situations and did not provide any explanation for putting her in a lower age category. Therefore, Schofield says, the SSA’s decision is not supported by substantial evidence. We agree.

A.

"Substantial evidence" is a term of art used to "describe[ ] how ‘an administrative record is to be judged by a reviewing court.’ " T-Mobile S., LLC v. City of Roswell , 574 U.S. 293, 135 S. Ct. 808, 815, 190 L.Ed.2d 679 (2015) (quoting United States v. Carlo Bianchi & Co. , 373 U.S. 709, 715, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963) ). As the Supreme Court recognizes, "the orderly functioning of the process of [substantial-evidence] review requires that the grounds upon which the administrative agency acted be clearly disclosed." Ibid. (quoting SEC v. Chenery Corp. , 318 U.S. 80, 94, 63 S.Ct. 454, 87 L.Ed. 626 (1943) ). We cannot exercise this review unless the record advises us "of the considerations underlying the [agency] action ...." Chenery , 318 U.S. at 94, 63 S.Ct. 454. And this record must be "[c]omplete." Beaumont, S. L. & W. Ry. Co. v. United States , 282 U.S. 74, 86, 51 S.Ct. 1, 75 L.Ed. 221 (1930) ; accord T-Mobile , 135 S. Ct. at 815. Just as a lower court must "fully ... state" all of its reasons, so too must an agency set forth theirs. Beaumont , 282 U.S. at 86, 51 S.Ct. 1.

Substantial evidence requires at least, in a word, evidence . See Biestek v. Berryhill , ––– U.S. ––––, 139 S. Ct. 1148, 1154, 203...