Ray v. Bowen

• Decision Date: 29 March 1988
• Docket Number: No. 86-3044,86-3044
• Citation: 843 F.2d 998
• Parties: , Unempl.Ins.Rep. CCH 17971.3 William N. RAY, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 998

843 F.2d 998

21 Soc.Sec.Rep.Ser. 313, Unempl.Ins.Rep. CCH 17971.3

William N. RAY, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services Defendant-Appellee.

No. 86-3044.

United States Court of Appeals Seventh Circuit.

Argued Nov. 17, 1987.

Decided March 29, 1988.

Alan Mills, James P. Chapman & Assoc., Ltd., Chicago, Ill., for plaintiff-appellant.

Donald McDougall, Asst. U.S. Atty., Hammond, Ind., for defendant-appellee.

Before BAUER, Chief Judge, COFFEY, Circuit Judge, and PELL, Senior Circuit Judge.

COFFEY, Circuit Judge.

William Ray appeals the district court's order granting summary judgment in favor of the Secretary of Health, Education and Welfare (Secretary) on Ray's suit pursuant to 42 U.S.C. Sec. 405(g), seeking judicial review of the Secretary's denial of disability benefits under the Social Security Act. Ray argues that the Secretary's decision denying him disability benefits was not supported by substantial evidence, that the evidence demonstrated that he was disabled under the pertinent regulations, and that any alleged lack of relevant medical evidence to support a finding of disability is a result of the Secretary's breach of his statutory duty to develop the record. Because the Appeals Council failed to comment on its assessment of certain material evidence presented, we reverse and remand this case to the Secretary for further proceedings consistent with this opinion.

I. BACKGROUND AND PRIOR PROCEEDINGS

William Ray is a fifty-year old man with a fifth grade education. From 1955 until October 24, 1975, Mr. Ray was employed as a welder with American Bridge, a division of the United States Steel Company located in Gary, Indiana (American Bridge). In 1965, Mr. Ray's right leg was amputated below the knee as the result of a work-related injury. Mr. Ray received a prosthesis and returned to work for American Bridge, though he occasionally required medical attention to correct complications with his artificial leg.

On October 24, 1975, Mr. Ray suffered a dizzy spell and chest pains which caused him to pass out at work. He was immediately hospitalized and diagnosed by Dr. Buyer as suffering from alcoholic cardiomyopathy. ¹ He never returned to work at American Bridge, but was retired as of the date of his hospitalization. Ray filed for disability insurance benefits on January 23, 1976 stating that he had been disabled since October 24, 1975 as a result of his amputated leg and a "heart condition." His application was denied initially and on reconsideration. Ray requested and received a hearing before an Administrative Law Judge (ALJ) on October 22, 1976. He was not represented by counsel at that hearing. On February 7, 1977, the ALJ denied Ray's application for disability benefits. The Appeals Council declined review. Ray then filed this action seeking review of the Secretary's decision on June 30, 1977. On October 14, 1983, over six years later, the district court denied cross motions for summary judgment and remanded the case to the Secretary. ² In its order remanding the case to the Secretary, the district court noted that the administrative record was replete with references to Mr. Ray's alcoholism and that the ALJ had neither considered this factor in his decision denying benefits, nor had he developed the record concerning Ray's alcohol dependency. Because of this failure to develop the record, the district court ordered the Secretary: 1) to make a meaningful record regarding Ray's alcoholism, and 2) to allow Ray to rebut an adverse post-hearing medical report on which the ALJ had relied.

On remand, Ray's application was assigned to the same ALJ. Five days prior to a scheduled supplemental hearing in this matter, Ray's attorney made a motion for a continuance in order to secure additional medical evidence, to schedule Ray for a psychological evaluation and to issue a subpoena for Dr. Lanman, the physician on whose 1976 report the ALJ had previously relied. The ALJ denied these motions and held the supplemental hearing on May 29, 1985. At the hearing, Mr. Ray and his nephew testified at length about the history and effects of Ray's alcoholism during the relevant period. ³ The ALJ also admitted into evidence Mr. Ray's employment and medical records from American Bridge, as well as medical records pertaining to Mr. Ray's inpatient treatment for alcoholism in March and April of 1985. The ALJ held the record open for approximately seven more months in order to permit Ray's attorney to furnish additional documents. The ALJ then issued his recommended decision on January 13, 1986, in which he again denied Ray's claim for disability benefits.

The ALJ found that Ray had the following severe impairments: "severe status post amputation of the right leg below the knee, which has not prevented work activity; alcoholic cardiomyopathy with occasional arrhythmias; history of alcoholism without evidence of interference with work performance." The ALJ concluded that none of these impairments, when considered in isolation or in combination, met the listings in Appendix 1, Subpart P, Regulations No. 4, which would direct a finding that he was disabled. The ALJ further held that Ray's testimony regarding the effect of his alcoholism on his ability to perform his work assignments was not credible in light of his employment records, which were free of disciplinary action for any alcohol-related incident. Though the ALJ concluded that Mr. Ray could not perform his past relevant work as a welder, he concluded that he retained the capability to do light work. Considering this residual functional capacity, along with Mr. Ray's age, education and work experience, the ALJ concluded that the Medical-Vocational Guidelines ⁴ directed a finding that he was not disabled at any time on or before December 31, 1981, which was the last date that he qualified for disability benefits.

Ray filed exceptions to the ALJ's recommended decision with the Appeals Council and introduced in evidence four additional exhibits relating to the severity of his alcoholism during the relevant period. The Appeals Council adopted the findings and conclusions of the ALJ, though it made several significant modifications to the ALJ's decision. The Council noted first that because Mr. Ray's alcoholism is classified as a mental impairment under the regulations (see 20 C.F.R. Part 404, Subpart P, Appendix 1, Section 12.09), the ALJ should have evaluated the effects of his alcoholism on his ability to work according to the special procedures set out in the regulations. ⁵ To correct the ALJ's omission, the Appeals Council itself completed the required "Psychiatric Review Technique Form" and appended it to its decision. ⁶

The Appeals Council further noted that, in light of Mr. Ray's mental impairment, the ALJ's reliance solely on the Medical-Vocational Rules in determining whether he was disabled was misplaced. The Appeals Council recognized that where a claimant has a combination of impairments that are both exertional and non-exertional, the Medical-Vocational Rules should be used only in evaluating the individual's exertional limitations. Once this determination has been made, it serves as a framework from which to evaluate any further effect that a non-exertional impairment has on the person's remaining work capability. 20 C.F.R. Pt. 404, Subpart P, Appendix 2, Sec. 200.00(e)(2).

The Appeals Council found that on the basis of his exertional limitations only, Ray had the residual functional capacity for light work, and under the pertinent Medical-Vocational Rules, was not disabled by virtue of those impairments alone. The Council further found that Ray's alcoholism (non-exertional limitations) "did not significantly diminish his residual functional capacity for light work." It concluded on this basis that Ray was not disabled on or before December 31, 1981.

On June 25, 1986, Ray renewed his motion for summary judgment in the district court. On September 22, 1986, the district court granted summary judgment in favor of the Secretary. Ray then filed a motion to vacate the judgment on September 25, 1986. That motion was denied on October 23, 1986 and Ray timely filed his Notice of Appeal.

II. SUBSTANTIAL EVIDENCE

We are reviewing the Appeals Council's decision because it is the final decision of the Secretary. ⁷ See Bauzo v. Bowen, 803 F.2d 917, 921 (7th Cir.1986). Under the applicable standard of review, we must determine whether the Appeals Council's decision is supported by substantial evidence. ⁸ Burnett v. Bowen, 830 F.2d 731, 734 (7th Cir.1987). Substantial evidence is " 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,' " Bauzo v. Bowen, 803 F.2d 917, 923 (7th Cir.1986), quoting Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971), taking into account "whatever in the record fairly detracts from its weight." Bauzo, 803 F.2d at 923.

When analyzing a claim for disability benefits, the Social Security regulations prescribe a five-step sequential inquiry to be followed in determining whether a claimant is disabled. Id. at 920 n. 1. The following steps are addressed in order:

1) Is the claimant presently unemployed?

2) Is the claimant's impairment severe?

3) Does the impairment meet or exceed one of the list of specific impairments?

4) Is the claimant unable to perform his former occupation?

5) Is the claimant unable to perform any other work in the economy?

Id.; 20 C.F.R. Part 404.1520. Once a claimant establishes proof regarding steps one through four of the five-step inquiry, he has met his burden of proof. ⁹ The burden then shifts to the Secretary to prove that the claimant remains capable of performing other work in view of the vocational factors of age, education, and work experience. Walker v. Bowen, 834 F.2d 635, 640 (7th Cir.1987).

Based upon the Appeals Council's findings in Ray's case, we are of the opinion that...