Drummond v. Commissioner of Social Sec.
| Decision Date | 30 September 1997 |
| Docket Number | No. 95-6552,95-6552 |
| Citation | 126 F.3d 837 |
| Parties | , Unempl.Ins.Rep. (CCH) P 15792B Grace DRUMMOND, Plaintiff-Appellant, v. COMMISSIONER OF SOCIAL SECURITY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John McClorey (argued and briefed), Somerset, KY, for Appellant.
Susan Kelm Story (argued and briefed), Social Security Administration, Office of General Counsel, Atlanta, GA, Mary Ann Sloan, Holly A. Grimes (briefed), Social Security Administration, Office of General Counsel, Atlanta, GA, John S. Osborn, III (briefed), Office of the U.S. Attorney, Lexington, KY, for Appellee.
Before: MERRITT, JONES, and COLE, Circuit Judges.
OPINION
Plaintiff Grace Drummond appeals the district court's grant of summary judgment to Defendant Commissioner of Social Security ("Commissioner") following judicial review of the denial of her claim for Disability Insurance Benefits ("DIB"). We hold that the district court erred in granting summary judgment to the Commissioner. We, therefore, reverse and remand this case to the district court for further proceedings consistent with this opinion.
Grace Drummond was born on January 16, 1939. She has a seventh grade education. From 1971 to 1985 Drummond worked as a yarn spinning operator. She last worked on November 17, 1985. Drummond's claim for disability stems from back and leg pain caused by degenerative disc disease with osteoarthritis and exogenous obesity as an aggravating factor.
On July 6, 1987, Drummond applied for DIB benefits. Drummond cited a disability onset date of November 17, 1985, the last day that she worked. Drummond's claim was denied initially and on reconsideration. After the initial denial Drummond requested a hearing. The ALJ found that Drummond was unable to perform her past work but retained a residual functional capacity ("RFC") for "sedentary" work. At the time of the ALJ's decision Drummond was 49 years old which under the applicable regulations is classified as a "younger" individual. 20 C.F.R. § 404.1563(b).
On October 14, 1988, Drummond filed a second application for DIB. There is no indication of any decision on this claim. On June 21, 1989, Drummond filed a third application for DIB. This claim was denied initially on July 19, 1989, and again on reconsideration on October 11, 1989. Drummond then requested a second hearing.
The ALJ divided Drummond's claim into two time periods--July 6, 1987 to July 28, 1988, and July 28, 1988 to August 2, 1990. The ALJ immediately dismissed the earlier time period as duplicative of the first ALJ decision. On August 2, 1990, the second ALJ issued a decision denying benefits for the latter time period. Based on the report of Drummond's treating physician and the Commissioner's expert, the ALJ found that Drummond suffered from combined musculoskeletal and multiple body system impairments but retained an RFC suitable for "medium" level work and could perform her past relevant work as a textile machine operator. As a result the ALJ found that Drummond was not disabled and denied her claim for benefits.
At the time of the second determination, Drummond was between 50 and 54 years which is considered by the Social Security Regulations as a "person approaching advanced age." 20 C.F.R. § 404.1563(c). If Drummond had been determined to have a RFC limited to sedentary work, as was decided in the first determination, she would have been entitled to disability benefits under the Commissioner's regulations because of the combination of her age classification and RFC.
Drummond filed suit in the United States District Court for the Eastern District of Kentucky seeking judicial review of the Commissioner's decision. Following cross-motions for summary judgment, the district court granted summary judgment to the Commissioner finding that substantial evidence supported the Commissioner's denial of benefits. Drummond then appealed to this court.
On appeal, Drummond argued that the first ALJ's determination that she was limited to sedentary work must be followed by the second ALJ based on the principles of res judicata. Drummond v. Secretary of Health & Human Servs., No. 92-5649, 1993 WL 130187, at * 1 (6th Cir. Apr. 1993). Drummond argued that absent evidence of an improvement in her condition since the first hearing, the second ALJ was bound by the RFC determination of "sedentary" work. This court declined to address this issue in the first instance but determined that the issue of res judicata should first be presented to the Social Security Administration and the district court. Id. The court reversed the judgment of the district court and remanded the case to the district court with instructions to remand to the Commissioner for further proceedings. Id. 1993 WL 130187 at * 2. The court instructed the Commissioner as follows:
On remand, the agency should determine whether res judicata is applicable against the Secretary and, if so, whether the evidence supports a finding that plaintiff's condition has improved since the time of her first application. If res judicata is held applicable against the Secretary and there is not substantial evidence to support a finding that plaintiff's condition has improved, plaintiff should be awarded benefits.
The case was subsequently remanded to the Appeals Council of the Social Security Administration. Oral argument was held before the Appeals Council on September 27, 1993. In answering this court's directed question, the Appeals Council determined that res judicata did not apply to the Commissioner because the Commissioner was not a "party" to the action under 42 U.S.C. § 405(h). 1 The Appeals Council found that 42 U.S.C. § 405(h) could not be applied against the Commissioner and that the Commissioner could not be barred from reconsidering an issue. The Appeals Council also found that the Commissioner is not a party to the benefits determination and therefore cannot be bound under the principles of res judicata. Therefore, the Appeals Council denied Drummond's claim for DIB. The decision of the Appeals Council is the final decision of the Social Security Administration in this matter.
Drummond then filed suit a second time in the District Court for the Eastern District of Kentucky seeking judicial review of the Administration's decision. Following the Commissioner's motion for summary judgment the district court affirmed the decision of the Administration finding that "administrative res judicata does not apply to the Commissioner when a transitory condition such as health is involved...." This appeal follows.
At oral argument, Drummond argued that res judicata applied, relying on the Fourth Circuit's decision in Lively v. Secretary of Health & Human Servs., 820 F.2d 1391 (4th Cir.1987). The Commissioner argued that it was not precluded from making new findings on subsequent applications under 42 U.S.C. § 405(h). During oral argument the panel requested supplemental briefing on the issue of res judicata directing the parties' attention to Section 83 of the Restatement (Second) of the Law of Judgments and Section 13.3 of Administrative Law Treatise by Kenneth Culp Davis and Richard J. Pierce, Jr. (3d ed.1994).
We address two issues on appeal: the preclusive effect of the initial ALJ determination on the subsequent assessment made by the Commissioner, and whether sufficient evidence exists to support the Commissioner's decision that Drummond was not disabled.
This court's review of the decision of the Social Security Administration is limited by 42 U.S.C. § 405(g) which circumscribes a reviewing court to a determination of whether substantial evidence supports the Commissioner's decision. "Where the record as a whole contains substantial evidence to support the Secretary's determination, the Secretary's decision must be affirmed." Stanley v. Secretary of Health & Human Servs., 39 F.3d 115, 117 (6th Cir.1994) (citing Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971)). "Substantial evidence" is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson, 402 U.S. at 401, 91 S.Ct. at 1427 (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)).
We first turn to the issue of res judicata. Res judicata is a common-law concept which prescribes that "a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308 (1980) (citing Cromwell v. County of Sac, 94 U.S. (4 Otto) 351, 352, 24 L.Ed. 195 (1876)). Res judicata and the related concept of collateral estoppel (which refers to issue preclusion) are intended to "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." Id. (citing Montana v. United States, 440 U.S. 147, 153-54, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210 (1979)). Res judicata bars the relitigation of the same claim or cause of action while collateral estoppel bars the relitigation of the same issue.
Courts have traditionally applied the concept of res judicata to decisions by administrative agencies when a final judgment has been reached. "When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose." United States v. Utah Const. & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966).
The Commissioner argues that res judicata does not apply against the Social Security Administration because it was not a party to ...
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