Kane v. Heckler

• Decision Date: 16 October 1985
• Docket Number: No. 85-3119,85-3119
• Citation: 776 F.2d 1130
• Parties: , Unempl.Ins.Rep. CCH 16,537 Robert H. KANE, Appellant, v. Margaret HECKLER, Secretary of Department of Health and Human Services. . Submitted Under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 1130

776 F.2d 1130

11 Soc.Sec.Rep.Ser. 236, Unempl.Ins.Rep. CCH 16,537

Robert H. KANE, Appellant, v. Margaret HECKLER, Secretary of Department of Health and Human Services.

No. 85-3119.

United States Court of Appeals,

Third Circuit.

Submitted Under Third Circuit Rule 12(6)

Oct. 16, 1985.

Decided Nov. 12, 1985.

Martin Singer, McArdle, Caroselli, Spagnolli & Beachler, Pittsburgh, Pa., for appellant.

Beverly Dennis, III, Regional Atty., William M. Reinhart, Supervisory Asst. Regional Atty., Deborah Fitzgerald, Asst. Regional Atty., Office of General Counsel, Dept. of Health & Human Services, J. Alan Johnson, U.S. Atty., Albert W. Schollaert, Asst. U.S. Atty., W.D. of Pa., Pittsburgh, Pa., for appellee.

Before ADAMS, Acting Chief Judge, and HUNTER, Circuit Judge, and STERN, District Judge. ^*

OPINION OF THE COURT

ADAMS, Acting Chief Judge.

This appeal from a denial of disability benefits focuses primarily on the importance of a claimant's age in the determination whether he can perform substantial gainful activity and therefore is not disabled within the meaning of the Social Security Act. The Social Security Administration (SSA) employs guidelines on disability determinations that consider age as well as other factors; the agency classifies persons between the ages of 45 and 64 in five-year categories. Because the age of the claimant in this proceeding was close to the border between two categories, and because SSA did not consider its own regulation that provides for flexibility in such a situation, the matter will be remanded for further proceedings.

I.

The claimant, Robert H. Kane, was born on February 17, 1925, and his insured status expired on December 31, 1979, 48 days before his 55th birthday. ¹ He maintains that he was disabled as of 1979, largely because of shrapnel wounds suffered during World War II. In 1979, he complained of weakness and pain in the neck and shoulder, degenerative arthritis of the cervical spine, other musculoskeletal impairments, and cardiovascular disease.

Kane's original application for Title II benefits was denied in 1976. He filed a second application in 1982 that is at issue in this appeal. At his hearing before an Administrative Law Judge (ALJ) on September 26, 1983, Kane testified that he last worked at his job as a furniture salesman in January 1975. He has a 10th grade education. He wears a sling on his left arm, and claims that a tremor in his right hand makes writing difficult. In his testimony, Kane reported pain in his legs, and that as a result he cannot walk more than two blocks without resting. These various ailments cause him to sleep fitfully, he asserts, and prevent him from sitting for long periods of time. He declared that he does only minor household chores, can lift no more than ten pounds, but can drive a car.

The ALJ ruled that Kane was not disabled within the meaning of the Act, and denied the application for benefits. The Appeals Council affirmed. Kane then challenged the final ruling of the Secretary in a complaint filed in district court. The district court entered summary judgment for the Secretary, and Kane brought this appeal.

II.

Kane did not seek judicial review of the first administrative decision, which became final on September 30, 1976, and SSA argues that because Kane has not alleged any different facts in his latest application the prior decision is res judicata.

However, SSA did not raise this argument either in the administrative proceedings or in the district court. Res judicata is an affirmative defense, Davis v. United States Steel Supply, 688 F.2d 166, 170 (3d Cir.1982) (in banc), cert. denied, 460 U.S. 1014, 103 S.Ct. 1256, 75 L.Ed.2d 484 (1983); Fed.R.Civ.Proc. Sec. 8(c), and such a defense may not be presented on appeal if not pleaded in the district court. 18 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure, Jurisdiction Sec. 4405, at 34-35 (1981); Crowder v. Lash, 687 F.2d 996, 1008 (7th Cir.1982); Exxon Corp. v. Texas Motor Exchange of Houston, 628 F.2d 500, 507 n. 3 (5th Cir.1980).

Even if the issue had been properly presented to this Court, res judicata is not appropriate in this case. Kane's circumstances changed between 1976 and 1979; most notably, he grew older at a time in life when age plays an increasingly significant role in disability determinations. In fact, the ALJ in 1983, who also did not address res judicata, disagreed with the earlier decision. He determined, in contrast to the 1976 ruling, that Kane could not return to his former job.

Moreover, this Court held recently that where the administrative process does not address an earlier decision, but instead reviews the entire record in the new proceeding and reaches a decision on the merits, the agency has effectively reopened the prior claims and waived application of res judicata. Purter v. Heckler, 771 F.2d 682, 695 (3d Cir.1985). Res judicata therefore does not constitute a bar to Kane's claims.

III.

A.

The ALJ found initially that in 1979 Kane suffered from a severe musculoskeletal impairment and could not return to his former job as a furniture salesman. These findings established the claimant's prima facie case of disability, and shifted to the Secretary the burden of demonstrating that Kane is unable, "considering his age, education, and work experience, [to] engage in any other kind of substantial gainful work which exists in the national economy...." 42 U.S.C. Sec. 423(d)(2)(A) (1982); Rossi v. Califano, 602 F.2d 55, 58 (3d Cir.1979).

To perform the inquiry into residual work abilities that is required by the statute, the Secretary has promulgated medical-vocational guidelines. See 20 C.F.R., Pt. 404, Subpt. P, Apps. 1-2 (1985). These guidelines direct that certain impairments are so severe that claimants who suffer from them are considered disabled. See id. at App. 1. If these strict requirements are not met, the factfinder must apply the rules in Appendix 2, known as "the grids." These rules take into consideration the claimant's physical abilities, age, education, and work experience, and direct a finding of disability or lack of disability depending on the combination of these factors.

The ALJ, as required, applied the grids in Kane's case. He found that Kane remains capable of performing "light work," ² has a limited education, ³ and was 54 years old at the time he last met the earnings requirements. Rule 202.10 requires a finding of not disabled for such a claimant, whether or not his prior work skills are transferable.

B.

In applying the grids and noting Kane's age as 54, despite the fact that Kane's insured status expired only 48 days before his 55th birthday, the ALJ failed to consider 20 C.F.R. Sec. 404.1563(a) (1985). That regulation lists the age categories used on the grids, ⁴ but adds: "we will not apply these age categories mechanically in a borderline situation." Because the ALJ did not address this relevant regulation, and because proper application of the regulation may change the result in this case, the matter must be remanded to the Secretary for further consideration. See Coulter v. Weinberger, 527 F.2d 224, 230 (3d Cir.1975).

The choice of an age category had a decisive impact on the disability determination. If Kane were placed in the "advanced age" category (55 and over), and assuming that the light work and limited education determinations are correct, Kane could be found disabled if his skills were not transferable. Rule 202.02. The ALJ made no finding on transferability of skills, because of his determination that Kane belonged in the lower age category.

In a brief opinion, the district court held that Sec. 404.1563(a) did not apply here. It stated: "we believe a borderline situation refers to a case where all of the factors ... considered together, do not compel a clear cut finding concerning disability. This is not such a case." Even if this interpretation of the regulation were correct, there is not substantial evidence in the record justifying the district court's conclusion. Notably, no factfinder has determined the transferability of Kane's skills, and thus it is not known whether this is a "clear cut" case or not.

More important, the district court's interpretation contravenes the plain language of the regulation, the views of its drafters, and the holdings of the several courts to consider the meaning of the provision. In its comments accompanying promulgation of a predecessor rule to Sec. 404.1563, SSA wrote: "SSA practice over the years, in fact, has been in agreement with the comment that the passage of a few days or months before the attainment of a certain age should not preclude a favorable disability determination." 43 Fed.Reg. 55349, 55359 (1978). SSA reaffirmed this position in adopting the decision in Fogg v. Schweiker, 673 F.2d 1296 (10th Cir.1981); see SSR 82-46C, at 217 (cum. ed. 1982).

The few courts to address a mechanical application of the age categories in a borderline situation have remanded the cases to SSA for more individualized determinations. Chester v. Heckler, 610 F.Supp. 533, 534-35 (S.D.Fla.1985) (claimant's 50th birthday was 30 days after expiration of insured status); Ford v. Heckler, 572 F.Supp. 992, 994 (E.D.N.C.1983) (claimant was two months away from 45th birthday when ALJ decided and 15 days shy when Appeals Council ruled); Hilliard v. Schweiker, 563 F.Supp. 99, 101-02 (D.Mont.1983) (ALJ ruled 88 days before claimant's 55th birthday).

The plain meaning of Sec. 404.1563(a) is that where the claimant's age falls within, in the Secretary's words, a "few months" of the starting date of an age category the grids should not be employed mechanically. There is an assumption inherent in the grids that persons within those categories have certain capabilities, but in a "borderline situation" this assumption becomes unreliable and a more individualized determination is necessary. "[I]t must be kept in mind that the grids do not govern--and indeed were...