Parker v. Bowen

Decision Date13 May 1986
Docket NumberNos. 84-7678,84-8630,s. 84-7678
Parties, 13 Soc.Sec.Rep.Ser. 298, Unempl.Ins.Rep. CCH 16,782 Nelda A. PARKER, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services, Defendant-Appellee. Autry R. HAND, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services, Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Frank W. Donaldson, U.S. Atty., Jenny L. Smith, Asst. U.S. Atty., Birmingham, Ala., William Kanter, Howard S. Scher, Appellant Staff, Civil Div., Dept. of Justice, Washington, D.C., for defendant-appellee in No. 84-7678.

James A. Turner, Turner, Turner & Turner, Tuscaloosa, Ala., for plaintiff-appellant in No. 84-7678.

Amy D. Levin, Asst. U.S. Atty., Atlanta, Ga., William Kanter, Appellate Staff, Civil Div., Dept. of Justice, Washington, D.C., for defendant-appellee in No. 84-8630.

William I. Aynes, Atlanta, Ga., for plaintiff-appellant in No. 84-8630.

Appeal from the United States District Court for the Northern District of Alabama.

Appeal from the United States District Court for the Northern District of Georgia.

Before GODBOLD, Chief Judge, RONEY, TJOFLAT, HILL, FAY, VANCE, KRAVITCH, JOHNSON, HATCHETT, ANDERSON, and CLARK, Circuit Judges.

ANDERSON, Circuit Judge:

The only issue which we will address en banc concerns the proper scope of federal court review in Social Security cases where the Appeals Council, on its own motion, rejects the administrative law judge's ("ALJ") decision. 1 We conclude that in such circumstances, the function of judicial review is limited to determining whether the Appeals Council's decision is supported by substantial evidence on the record as a whole. We also hold that the Appeals Council's rejection of an ALJ's credibility findings is a relevant factor in determining whether there is substantial evidence to support the decision of the Appeals Council. Thus, the Appeals Council should ordinarily reject the ALJ's credibility findings expressly and state the reasons for its conclusion.

I. BACKGROUND
A. Hand v. Heckler

Autry Hand was born in 1940, and has past relevant work experience as a mechanic and a security guard. He underwent a bilateral laminectomy and discectomy in 1980, and has complained of lower back pain since his operation. He also suffers from severe tremors in his hands, of unknown origin.

In 1980, Hand filed an application for Social Security disability benefits. The ALJ concluded that Hand was disabled since he did not retain the functional capacity to engage in any substantial gainful work activity. In reaching this determination, the ALJ found that the credible evidence established that Hand's pain imposed severe limitations on his functional capacity.

The Appeals Council reviewed the ALJ's decision on its own motion, and reversed the ALJ's finding of disability because Hand's impairments did not prevent him from performing his past relevant work as a security guard. The Appeals Council considered Hand's allegations of severe pain, but concluded that the medical evidence did not establish the existence of an impairment that could reasonably be expected to produce such pain.

Hand filed suit in the district court challenging the Secretary's denial of disability benefits, but the district court affirmed the Secretary's decision because substantial evidence supported the Appeals Council's determination that Hand could still perform his prior security guard work. On appeal, a panel of this court concluded that substantial evidence supported the Secretary's finding that Hand's impairments did not prevent the performance of his past work as a security guard. Hand v. Heckler, 761 F.2d 1545, 1547-49 (11th Cir.), vacated for reh'g en banc sub nom. Parker v. Heckler, 774 F.2d 428 (11th Cir.1985). In reaching this conclusion, the panel held that since the Appeals Council has the power to review de novo and reverse the ALJ's factual findings, federal courts may only review the decision of the Appeals Council to determine if it is supported by substantial evidence. Id. at 1547 n. 1 (citing Beavers v. Secretary of Health, Education & Welfare, 577 F.2d 383 (6th Cir.1978)).

B. Parker v. Heckler

Nelda Parker is a fifty-two year old licensed practical nurse whose prior work experience was as a nurse, bookkeeper and general office worker in a doctor's office. During the last three years of her employment, her declining health forced her to work only part-time, and in March 1983, Parker retired and has not worked since then.

In 1983, Parker applied for Social Security disability benefits. The ALJ found that she was suffering from hypertensive cardiovascular disease, fibromuscular dysplasia, and exogenous obesity, and concluded that she was disabled.

The Appeals Council reviewed the ALJ's decision on its own motion, and reversed. Contrary to the findings of the ALJ, the Appeals Council concluded that Parker was not disabled within the meaning of the Social Security Act because her only impairment was non-severe hypertension. The Appeals Council also found that Parker's symptoms of fatigue, blurred vision and difficulty in standing were not disabling because the evidence did not establish the existence of a medical condition that could reasonably be expected to produce symptoms of the severity alleged.

The district court affirmed the Appeals Council's finding of no disability. On appeal, a panel of this court reversed the district court's decision and remanded for an award of benefits. Parker v. Heckler, 763 F.2d 1363 (11th Cir.), vacated for reh'g en banc, 774 F.2d 428 (11th Cir.1985). The panel first concluded that when the Appeals Council reverses an ALJ's finding of disability, federal courts must determine whether the Appeals Council correctly concluded that the ALJ's decision was not supported by substantial evidence. Id. at 1364-66. Relying on Newsome v. Secretary of Health & Human Services, 753 F.2d 44 (6th Cir.1985), the panel reasoned that the Appeals Council does not have "unbridled discretion" to reject the ALJ's determination, but rather may only review a case if (1) the ALJ abused his discretion; (2) there was an error of law; (3) the ALJ's determination is not supported by substantial evidence; or (4) the case involves a broad policy or procedural issue that may affect the general public interest. 763 F.2d at 1365 (citing 20 C.F.R. Sec. 404.970(a) (1985)). After considering the evidence in the record, the panel then concluded that the Appeals Council had no authority to review the ALJ's decision because the ALJ's decision was supported by substantial evidence, and because none of the other three categories of section 404.970(a) were implicated. Id. at 1366.

II. ANALYSIS

We granted en banc consideration in this case to clarify the scope of judicial review in cases where the Appeals Council, on its own motion, reverses an ALJ's decision. Hand and Parker argue that under 20 C.F.R. Sec. 404.970(a) (1985), the Appeals Council's authority to reverse an ALJ's decision is limited to cases where one of four grounds is present: (1) the ALJ abused his discretion; (2) the ALJ made an error of law; (3) the ALJ's decision is not supported by substantial evidence; or (4) the case concerns a broad policy or procedural issue that may affect the public interest. Under this interpretation of the regulations and focusing only on the third 2 of the four grounds, the Appeals Council may review an ALJ's decision, only if that decision is in fact unsupported by substantial evidence; thus, they contend that federal courts must determine whether the Appeals Council was correct in concluding that the ALJ's decision was not supported by substantial evidence.

The Secretary contends, however, that since only the final decisions of the Secretary of Health and Human Services are subject to judicial review under 42 U.S.C. Sec. 405(g), and since the Secretary has clearly delegated the duty of making final decisions to the Appeals Council, federal courts must review the decision of the Appeals Council, not the decision of the ALJ, to determine whether substantial evidence supports the Secretary's decision. The Secretary also argues that 20 C.F.R. Sec. 404.970(a) (1985), which sets forth four categories of cases in which the Appeals Council will grant review, does not limit the Appeals Council's discretion to review ALJs' decisions under 20 C.F.R. Sec. 404.969 (1985).

A. Scope of Review

The Social Security Act provides that federal courts may only review the Secretary's "final decision," and that judicial review of the Secretary's findings of fact is limited to determining whether these findings are supported by substantial evidence. 42 U.S.C. Sec. 405(g). 3 Pursuant to his rulemaking authority under 42 U.S.C. Sec. 405(a), 4 the Secretary has delegated the duty of making "final decisions" to the Appeals Council. See 20 C.F.R. Secs. 404.900, 404.981, 416.1400, 416.1481 (1985). 5 Since the statute provides that federal courts may only review the Secretary's "final decision," and since the Secretary has delegated his authority to make final decisions to the Appeals Council, federal courts must review the Appeals Council's decision to determine if it is supported by substantial evidence. See, e.g., Taylor v. Heckler, 765 F.2d 872, 874-75 (9th Cir.1985); Turner v. Heckler, 754 F.2d 326, 330 (10th Cir.1985); Lopez-Cardona v. Secretary of Health & Human Services, 747 F.2d 1081, 1083 (1st Cir.1984); Baker v. Heckler, 730 F.2d 1147, 1149-50 (8th Cir.1984); Beavers v. Secretary of Health, Education & Welfare, 577 F.2d 383, 386-87 (6th Cir.1978). But see Scott v. Heckler, 768 F.2d 172, 179 (7th Cir.1985); Newsome v. Heckler, 753 F.2d 44, 47 (6th Cir.1985). 6

This interpretation is supported by the Supreme Court's decision in Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). In Universal Camera, the Court rejected the argument that the National Labor...

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