Matthews v. Apfel

• Decision Date: 08 February 2001
• Docket Number: No. 00-1151,00-1151
• Citation: 239 F.3d 589
• Parties: (3rd Cir. 2001) SHARON BINGHAM MATTHEWS, Appellant v. KENNETH S. APFEL, Commissioner of Social Security
• Court: U.S. Court of Appeals — Third Circuit

Page 589

239 F.3d 589 (3rd Cir. 2001)

SHARON BINGHAM MATTHEWS, Appellant v. KENNETH S. APFEL, Commissioner of Social Security

No. 00-1151

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued September 13, 2000

Filed February 8, 2001

On Appeal from the United States District Court for the Eastern District of Pennsylvania District Judge: Hon. Louis Charles Bechtle (D.C. No. 98-CV-01125)

Kenneth M. Kapner, Law Offices of Kenneth M. Kapner, Philadelphia, PA, Thomas D. Sutton (Argued), Leventhal & Sutton, Langhorne, PA, Attorneys for Appellant

James A. Winn, Regional Chief Counsel, David F. Chermol (Argued), Assistant Regional Counsel, Office of the General Counsel, Social Security Administration,

Philadelphia, PA, Michael R. Stiles, United States Attorney, Joan Garner, Assistant United States Attorney, Eastern District of Pennsylvania, Philadelphia, PA, Attorneys for Appellee.

Before: SLOVITER, SCIRICA and ALITO, Circuit Judges

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Sharon Matthews appeals from the District Court's order affirming the denial by the Commissioner of Social Security of Matthews' application for disability insurance benefits (DIB) under Title II of the Social Security Act.¹ This case raises the important issue of the treatment to be given by the district court of evidence submitted by the claimant for the first time to the Appeals Council, which has then denied review. This is an issue on which the Courts of Appeals are divided. Some courts hold that such evidence should be considered by the district court in its review of the final decision of the Commissioner, see Perez v. Chater, 77 F.3d 41, 45 (2d Cir. 1996); O'Dell v. Shalala, 44 F.3d 855, 859 (10th Cir. 1994); Ramirez v. Shalala, 8 F.3d 1449, 1452 (9th Cir. 1993); Nelson v. Sullivan, 966 F.2d 363, 366 (8th Cir. 1992); Wilkins v. Sec'y of DHHS, 953 F.2d 93, 96 (4th Cir. 1991) (en banc), whereas others hold that evidence not presented to the Administrative Law Judge (ALJ) should not be reviewed by the district court nor be the basis of a remand to the Commissioner unless the evidence is new and material and there is good cause for not having produced the evidence earlier, see Falge v. Apfel, 150 F.3d 1320, 1322-23 (11th Cir. 1998), cert. denied, 525 U.S. 1124 (1999); Cotton v. Sullivan, 2 F.3d 692, 695-96 (6th Cir. 1993); Eads v. Sec'y of DHHS, 983 F.2d 815, 817-18 (7th Cir. 1993). In this case, the District Court held that a claimant must demonstrate good cause for not having submitted new and material evidence to the ALJ. Appellant argues that the District Court erred as a matter of law in imposing the good cause requirement. The issue is one of first impression for this court.

I.

Matthews applied for disability benefits on October 15, 1992, alleging disability since December 9, 1991. She claimed hearing loss, arthritis, and right foot drop stemming from an old Achilles tendon rupture. Her claim was denied initially and again on reconsideration. Matthews requested a hearing before an ALJ, which was held on September 21, 1994. The ALJ found that Matthews was not disabled and denied her claim. The Appeals Council granted Matthews' request for review. On review, it vacated the ALJ's decision and remanded for a new hearing. It directed the ALJ to give further consideration to Matthews' residual functional capacity during the entire period at issue and to "[o]btain supplemental evidence from a vocational expert to clarify the effect of the assessed limitations on the claimant's occupational base." Tr. at 363.

A different ALJ held a second hearing on July 11, 1996. At this hearing, Matthews testified, inter alia, of pain in her right foot, ankle, and knee, and she submitted medical reports in connection with these impairments as well as of her hearing loss. Diana Simms, an impartial vocational expert, also testified at the hearing and stated there were a significant number of sedentary and unskilled jobs, such as cashier, that an individual with Matthews' impairments, age, educational background, and employment history could perform. Notably, the ALJ held the record open to allow Matthews to include the final report of her treating physician before issuing the decision.

The ALJ issued a decision on April 21, 1997, concluding that Matthews was not disabled. In the decision, the ALJ noted that none of Matthews' treating and examining physicians opined that she could not perform sedentary work. The ALJ found that medical evidence established that the claimant has severe residuals of an injury to her right leg and significant hearing loss, that these impairments do not meet or equal the criteria of the listed impairments, that Matthews' testimony on the severity of her impairments was not credible inasmuch as she could use public transportation and engage in social activities without much difficulty, that Matthews is unable to perform any of her past relevant work as a teacher's aide or hospital worker, but that although she is unable to perform the full range of sedentary work, there are a significant number of jobs in the national economy that she can perform. The ALJ gave examples of sedentary, unskilled jobs in a low-noise environment that Matthews could per form, including work as a cashier in a small office.

Matthews filed a request for review to the Appeals Council on June 23, 1997. On December 8, 1997, more than eight months after the ALJ's decision, Matthews submitted to the Appeals Council a two-page letter and accompanying documents from Richard Baine, a vocational expert, who stated that Matthews lacked the requisite arithmetic and reading skills to work as a cashier. Baine also stated that Matthews' exertional and nonexertional impairments would preclude her from performing any other gainful work activities in the national economy. Tr. at 386-87.

On January 7, 1998, the Appeals Council denied Matthews' request for review. The Appeals Council noted that Social Security Administration regulations "provide that where new and material evidence is submitted with the request for review, the entire record will be evaluated and review will be granted where the Appeals Council finds that the Administrative Law Judge's actions, findings, or conclusion is contrary to the weight of the evidence currently of record," App. at 34, citing 20 C.F.R. SS 404.970 and 416.1470. The Council's action stated that "the Administrative Law Judge's decision stands as the final decision of the Commissioner of Social Security." App. at 34. The Appeals Council then incorporated Baine's report into the administrative record.

Matthews filed suit in the United States District Court for the Eastern District of Pennsylvania, requesting judicial review of the Commissioner's final decision. The parties filed cross-motions for summary judgment. On September 14, 1999, the Magistrate Judge to whom the District Court referred the matter recommended that the Commissioner's motion for summary judgment be granted because the ALJ's decision was supported by substantial evidence. The Magistrate Judge determined that Baine's report was new and material but should not be considered on judicial review because Matthews had failed to demonstrate good cause for failing to present the evidence to the ALJ. The District Court agreed that Matthews had not shown good cause for failure to present Baine's report to the ALJ, adopted the Magistrate Judge's recommendation, and, following a discursive opinion discussing the evidence and the legal issues, granted summary judgment for the Commissioner.

Matthews appealed to this court. She argues that the District Court erred in refusing to consider new evidence "which was presented to and considered by the Commissioner's Appeals Council as part of the administrative record under review" and that the court erred in applying a good cause requirement "which does not exist in the regulations to new evidence which was submitted to and considered by the Commissioner's Appeals Council, which made it a part of the administrative record under review." Br. of Appellant at 1. Our standard of review over the legal question presented is plenary. See Tubari Ltd., Inc. v. NLRB, 959 F.2d 451, 453 (3d Cir. 1992).

II.

The question of law before us is whether the claimant must demonstrate good cause for failure to present to the ALJ new and material evidence presented for the first time to the Appeals Council which, after consideration, denies the review.

The administrative review process is governed by Social Security Administration regulations. If a claimant's disability application is denied, s/he may request a reconsideration by the Social Security Administration. See 20 C.F.R. S 404.900. If the claimant is dissatisfied with the reconsideration determination, s/he may request a hearing before an administrative law judge, where the claimant can present evidence of impairments. See id. If the claimant is dissatisfied with the ALJ's decision, s/he may request the Appeals Council to review the decision. See id. The regulations permit the claimant to submit to the Appeals Council "new and material" evidence that relates to the period on or before the date of the ALJ's hearing decision. See 20 C.F.R. S 404.970(b).² The Appeals Council then must "evaluate the entire record including the new and material evidence submitted." Id. However, the submission of the new and material evidence does not require the Appeals Council to grant review. On the contrary, the regulations provide that the Appeals Council will grant review only if it finds that the ALJ's decision "is contrary to the weight of the evidence currently of record." Id.

Unlike the administrative process, which is governed by the regulations, the standards for judicial review are governed by the Social Security Act. A claimant who was unsuccessful in the administrative process may seek judicial review once there is a final decision by the Commissioner of Social Security. See 42...