McDonald v. Secretary of Health and Human Services, s. 86-1288

• Decision Date: 17 July 1986
• Docket Number: Nos. 86-1288,86-1359,s. 86-1288
• Citation: 795 F.2d 1118
• Parties: Claire McDONALD, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 1118

795 F.2d 1118

14 Soc.Sec.Rep.Ser. 219

Claire McDONALD, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellant.

Nos. 86-1288, 86-1359.

United States Court of Appeals First Circuit.

July 17, 1986.

Etzion Brand, Office of the General Counsel, Social Sec. Div., with whom William F. Weld, U.S. Atty., Marianne B. Bowler, Asst. U.S. Atty., Donald A. Gonya, Chief Counsel for Social Sec., Randolph W. Gaines, Deputy Chief Counsel for Social Sec. Litigation, and A. George Lowe, Chief, Disability Litigation Branch, were on brief, for appellant.

Sarah F. Anderson with whom Sandra Smales, Greater Boston Legal Services, Linda L. Landry, Neighborhood Legal Services, and Laura Rosenthal, Massachusetts Law Reform Institute, were on brief, for appellees.

Before CAMPBELL, Chief Judge, and COFFIN and TORRUELLA, Circuit Judges.

LEVIN H. CAMPBELL, Chief Judge.

In this class action, applicants for social security disability insurance benefits challenge two regulations promulgated by the Secretary of Health and Human Services. First, the applicants challenge "Step 2" of the Secretary's sequential evaluation process, under which the Secretary may deny disability benefits if he determines that the applicant's impairment is not "severe." Second, they challenge the Secretary's policy prior to December 1, 1984, of not considering the combined effects of multiple impairments in determining whether an applicant was disabled. The district court found that both of these policies were invalid. It accordingly enjoined the Secretary from applying the regulations and ordered him to redetermine class members' eligibility for benefits. We vacate in part, affirm in part, and remand.

I. BACKGROUND

The Old Age Survivors and Disability Insurance ("OASDI") and Supplemental Security Income ("SSI") disability programs provide for the payment of benefits to persons who are disabled within the meaning of the Social Security Act. For both programs, a claimant is considered "disabled" if he or she is unable "to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment...." 42 U.S.C. Sec. 423(d)(1)(A); 42 U.S.C. Sec. 1382c(a)(3)(A) (1982). ¹ A person is to be considered disabled only if "his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy...." 42 U.S.C. Sec. 423(d)(2)(A) (emphasis added).

Since 1978, the Secretary of Health and Human Services has implemented this definition of disability by applying a five-step sequential inquiry into whether or not an applicant for benefits should be considered "disabled" and thus eligible for benefits. 20 C.F.R. Sec. 404.1520 (1985). First, the Secretary determines whether the claimant is currently engaged in "substantial gainful activity"; if so, then a "not disabled" finding is warranted. Second, in the step at issue in the instant case, the Secretary must determine whether the claimant has a "severe" condition or impairment, i.e., one that "significantly limits his or her physical or mental ability to perform basic work-related functions." If the claimant's impairment is "non-severe," then he or she is considered not disabled, without any consideration of age, education, or work experience, and without any further consideration of steps three through five.

If the claimant's impairment is deemed severe, then the evaluation proceeds to the third step. At this stage, the claimant's impairment is evaluated in light of certain listed impairments. If the impairment is equivalent to one of those listed, the claimant is automatically considered disabled. If not, then under Step 4 the Secretary will determine whether the claimant is able to do his or her past work. If the claimant can perform past work, a not disabled finding results. Finally, and only if none of the other steps in the process warrants a finding of either disability or non-disability, the claimant's age, education, and work experience are considered, along with his or her residual functional capacity, to determine whether there is other work in the national economy that the claimant can perform. If such work does exist, the claimant is not considered disabled; if it does not, the claimant is disabled.

In 1980, the Secretary amended the disability regulations to provide, for the first time, that in determining disability, he would not consider the combined effects of unrelated impairments at the Step 2 severity stage unless all of the impairments were severe. 20 C.F.R. Sec. 404.1522 (1981). Congress specifically overruled this policy of the Secretary in its 1984 amendments to the Social Security Act, which became effective on December 1, 1984. 42 U.S.C. Sec. 423(d)(2)(C) (Supp.1984). The Secretary has considered the combined effects of impairments since that date, see 20 C.F.R. Sec. 404.1523 (1986), but has refused to redetermine the claims of those applicants who alleged multiple impairments prior to December 1, 1984.

Plaintiffs, consisting of all Massachusetts disability applicants who have been or will be denied benefits on the ground that they do not have a severe impairment, ² brought the present class action, challenging both the severity test for determining eligibility for disability benefits, and the policy of the Secretary of not redetermining the claims of those claimants whose non-severe multiple impairments were not considered in combination prior to December 1, 1984, the effective date of the 1984 amendments to the Social Security Act.

On motion for summary judgment, the United States District Court for the District of Massachusetts held that the Step 2 severity regulation is "inconsistent with the Social Security Act" and thus "invalid as written." McDonald v. Heckler, 624 F.Supp. 375, 380 (D.Mass.1985). It accordingly enjoined the Secretary from further enforcing the Step 2 rules and regulations and ordered her to redetermine the eligibility of class members without consideration of Step 2.

In a separate order, the district court further granted summary judgment in favor of plaintiffs in their challenge to the Secretary's policy regarding the combination of impairments. It directed the Secretary to consider the combined effect of non-severe impairments when evaluating, on remand pursuant to the court's previous order, the claims for disability benefits of those class members who received a final decision from the Secretary prior to December 1, 1984. McDonald v. Heckler, 629 F.Supp. 1138, 1139-40 (D.Mass.1986).

We shall consider the Step 2 regulation and the combination requirement in turn.

II. THE SEVERITY REGULATION

The Step 2 "severity" test has been a controversial aspect of the sequential evaluation process promulgated in 1978. The Secretary describes it as follows:

(c) You must have a severe impairment. If you do not have any impairment(s) which significantly limits your physical or mental ability to do basic work activities, we will find that you do not have a severe impairment and are, therefore, not disabled. We will not consider your age, education, and work experience.... ³

20 C.F.R. Sec. 404.1520(c) (1986).

Critics contend that the application of this regulation has improperly and unfairly increased the number of claimants who are denied benefits based entirely on the purported medical non-severity of their impairment, without any consideration of the effect of the impairment on their ability to perform gainful activity. To date, ten courts of appeals other than our own have addressed the validity of the Step 2 regulation. Five have held the regulation invalid on its face, on the ground that the Social Security Act does not permit a finding of non-disability based on medical factors alone, without consideration of vocational factors. Baeder v. Heckler, 768 F.2d 547 (3d Cir.1985); Johnson v. Heckler, 769 F.2d 1202, reh'g denied by an equally divided court, 776 F.2d 166 (7th Cir.1985); ⁴ Brown v. Heckler, 786 F.2d 870 (8th Cir.1986); Yuckert v. Heckler, 774 F.2d 1365 (9th Cir.1985), cert. granted, --- U.S. ----, 106 S.Ct. 1967, 90 L.Ed.2d 652 (1986); Hansen v. Heckler, 783 F.2d 170 (10th Cir.1986). The five remaining courts have upheld the regulation, but only if applied as a de minimis policy designed to screen out totally frivolous claims. Chico v. Schweiker, 710 F.2d 947, 954-55 n. 10 (2d Cir. 1983); Evans v. Heckler, 734 F.2d 1012 (4th Cir.1984); Stone v. Heckler, 752 F.2d 1099 (5th Cir.1985); Farris v. Secretary of Health and Human Services, 773 F.2d 85 (6th Cir.1985); Brady v. Heckler, 724 F.2d 914 (11th Cir.1984). The Supreme Court recently stepped into the controversy when it granted certiorari in Yuckert, indicating that by the end of the next Term the present controversy should be resolved once and for all.

This court recently addressed the Step 2 regulation in Andrades v. Secretary of Health and Human Services, 790 F.2d 168 (1st Cir.1986), and Munoz v. Secretary of Health and Human Services, 788 F.2d 822 (1st Cir.1986). In each case, the Secretary had denied benefits on the ground that the applicant's impairment was not severe, and the district court affirmed. We vacated both judgments, and remanded the cases to the Secretary for reconsideration in light of Social Security Ruling 85-28, which had recently been promulgated by the Secretary to interpret the severity regulation. We strongly suggested in each case that we considered the Step 2 regulation, as interpreted by the Secretary in Ruling 85-28, to be a valid de minimis screening device. Today we make that suggestion explicit.

We find no indication that Congress intended to preclude the Secretary from using medical factors alone to screen out applicants whose impairments are so minimal that, as a matter of common sense, th...