Fierro v. Bowen, 85-2730

• Decision Date: 21 August 1986
• Docket Number: No. 85-2730,85-2730
• Parties: , Unempl.Ins.Rep. CCH 16,921 Daniel L. FIERRO, Plaintiff-Appellant, v. Otis R. BOWEN, M.D., Secretary, Department of Health and Human Services, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1351

798 F.2d 1351

14 Soc.Sec.Rep.Ser. 422, Unempl.Ins.Rep. CCH 16,921

Daniel L. FIERRO, Plaintiff-Appellant, v. Otis R. BOWEN, M.D., Secretary, Department of Health and Human Services, Defendant-Appellee.

No. 85-2730.

United States Court of Appeals, Tenth Circuit.

Aug. 21, 1986.

Ray Lewis Fuller of Southern New Mexico Legal Services, Inc., Las Cruces, N.M., for plaintiff-appellant.

Karen J. Behner, Asst. Regional Counsel (Edwin L. Meese, U.S. Atty. Gen., Washington, D.C., William L. Lutz, U.S. Atty., Dist. of New Mexico, Gayla Fuller, Chief Counsel, Region VI, Patrick A. Hudson, Principal Regional Counsel, Social Sec. Disability, Litigation Branch, with her on brief), Dallas, Tex., for defendant-appellee.

Before McKAY, TACHA, and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

Daniel L. Fierro appeals from an order and judgment of the United States District Court for the District of New Mexico which affirmed a final decision of the Secretary of the Department of Health and Human Services. The Secretary's decision had denied Fierro's application for disability insurance benefits and supplemental security income benefits. On appeal, Fierro raises two matters: (1) The Appeals Council had no power or authority to review the two decisions of the Administrative Law Judge, each of which found for Fierro and granted him benefits, and, alternatively (2) the ultimate decision of the Appeals Council, which became the decision of the Secretary, is not supported by the record. We are not persuaded by either argument and therefore affirm.

Fierro made application for disability benefits and supplemental security income benefits based on a neck injury sustained in an automobile accident and a residual disability from an old injury to the left arm. Fierro had been a barber for some 27 years. Fierro's application was administratively denied by both state and federal agencies. Fierro then asked for a de novo hearing before an administrative law judge (ALJ). The latter, after hearing, rendered a decision in favor of Fierro and granted him the benefits sought. Thereafter, the Appeals Council vacated the ALJ's decision, and remanded the case to the ALJ with direction that there be a psychiatric evaluation and psychological testing followed by further hearings on the case. On rehearing, at which time Fierro and his attorney appeared, the ALJ, after taking additional testimony, again found for Fierro and granted him the requested benefits. The Appeals Council thereafter reviewed the ALJ's second decision in the matter and then issued its own decision that Fierro was not disabled within the meaning of the Social Security Act and, accordingly, denied the application. The decision of the Appeals Board became the final decision of the Secretary from which Fierro sought judicial review. ¹

We must first decide whether we are going to initially review the decision of the ALJ and determine whether it is supported by substantial evidence, or, by-pass the ALJ's decision and proceed to a consideration of whether the Secretary's decision is supported by substantial evidence. ² In this regard, Fierro, the appellant, argues that under 20 C.F.R. Sec. 404.970(a) the Appeals Council may only review a decision of an ALJ if it finds that one of the four conditions specified in the regulation exists. ³ In the instant case, says Fierro, the Appeals Council indicated that it was reviewing the ALJ's decision because of a belief that the ALJ's action, findings, or conclusions were not supported by substantial evidence, and, that, such being the case, a review of the ALJ's decision to determine whether it is, in fact, supported by substantial evidence is necessary in order to first determine whether the Appeals Council had any power or authority to review the ALJ's decision. In thus arguing, Fierro relies on Scott v. Heckler, 768 F.2d 172 (7th Cir.1985); Shepherd v. Secretary, 758 F.2d 196 (6th Cir.1985); and Parker v. Heckler, 763 F.2d 1363 (11th Cir.1985). ⁴

The Secretary argues that the Secretary, who, under the statutory scheme, has delegated his authority in this regard to the Appeals Council, makes, in a given case the "final and reviewable decision," and not the ALJ, citing, inter alia, Weinberger v. Salfi, 422 U.S. 749, 766, 95 S.Ct. 2457, 2467, 45 L.Ed.2d 522 (1975). Further, the Secretary argues that the provisions of 20 C.F.R. Sec. 404.970(a) spell out when the Appeals Council will review an ALJ decision, but that such does not cut back on the provisions of 20 C.F.R. Sec. 404.969, which grants broad authority to the Appeals Council, under certain time limitations, to review any action of an ALJ. ⁵ In support of its position, the Secretary relies on such cases as Kellough v. Heckler, 785 F.2d 1147 (4th Cir.1986); Howard v. Heckler, 782 F.2d 1484 (9th Cir.1986); Taylor v. Heckler, 765 F.2d 872, 875 (9th Cir.1985); Lopez-Cardona v. Secretary 747 F.2d 1081 (1st Cir.1984); Baker v. Heckler, 730 F.2d 1147 (8th Cir.1984); and Beavers v. Secretary, 577 F.2d 383, 386 (6th Cir.1978). The Secretary's interpretation of its regulations is reasonable in terms of the words of the regulation and the purposes of the statute and is therefore entitled to great deference. E.I. DuPont de Nemours & Co. v. Collins, 432 U.S. 46, 54-55, 97 S.Ct. 2229, 2234, 53 L.Ed.2d 100 (1977); Baker v. Heckler, 730 F.2d 1147, 1149 (1984).

We believe the Secretary's position on this procedural matter is the preferable and correct one, and is supported by the weight of authority. ⁶ To hold that our task is to review the ALJ's decision and decide whether it is supported by substantial evidence, and ignore the Secretary's decision, is, in a sense, allowing the tail to wag the dog. A hearing before an ALJ is an intermediate step, albeit an important one, in the overall scheme set up by statute and implementing regulations for the disposition of applications for disability benefits. The Social Security Administration has hundreds of administrative law judges deciding in the aggregate hundreds of thousands of disability cases a year. Review of ALJ decisions under Sec. 404.969 is a means to achieve critically needed consistency. DeLong v. Heckler, 771 F.2d 266, 268 (7th Cir.1985).

In view of its overriding power to review any decision of an ALJ, the fact that the Appeals Council initially assigned as its reason for review 20 C.F.R. Sec. 404.970(a)(3) does not mean that we must first examine the ALJ's decision and determine whether it is supported by substantial evidence. See, in this regard, Lopez-Cardona, 747 F.2d at 1083, where the First Circuit, after noting that the Appeals Council had initially referred to 20 C.F.R. Sec. 404.970(a)(3), i.e., lack of substantial evidence, as grounds for reviewing the ALJ's decision, went on to state that even though it might later develop, on actual review, that the ALJ's decision was supported by substantial evidence, the "Appeals Council did not violate its regulations by initiating review." In this same connection, see also Baker v. Heckler, 730 F.2d at 1150, where the Eighth Circuit commented as follows:

Secondly, Baker's argument overlooks the fact that the decision by the Appeals Council to single out a given case for own-motion review necessarily occurs at the beginning of the Appeals Council process. The Council may believe, for example, that the case fits one of the four categories listed in the regulation, but it may turn out, after full examination, that this initial impression was mistaken. We do not believe that the Council is then required to abandon its own review and to allow the ALJ's decision to stand, even when it has a definite and firm conviction that the ALJ was mistaken. The question of power to review must, as a practical matter, be addressed and decided at a preliminary stage, not after the review is completed, at a time when a negative answer to the question would render the whole review process nugatory.

(Emphasis added). See also Razey v. Heckler, 785 F.2d 1426, 1428-29 (9th Cir.1986).

Being of the firm view that the task of the judiciary in a situation of the present sort is to review the decision of the Secretary, and not that of the ALJ, we proceed to consider whether the findings of the Secretary are supported by substantial evidence, which, if they are, is, of course, conclusive on the matter. 42 U.S.C. Sec. 405(g). Substantial evidence has been defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971); Teter v. Heckler, 775 F.2d 1104, 1105 (10th Cir.1985). However, where the Secretary, acting through the Appeals Council, overturns a decision of the ALJ granting benefits, and, in so doing, differs with the ALJ's assessment of witness credibility, the Secretary should fully articulate his reasons for so...