Wallace v. Secretary of Health and Human Services

• Decision Date: 19 December 1983
• Docket Number: No. 83-5238,83-5238
• Citation: 722 F.2d 1150
• Parties: , Unempl.Ins.Rep. CCH 15,023 Dolores WALLACE, Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES.
• Court: U.S. Court of Appeals — Third Circuit

Page 1150

722 F.2d 1150

3 Soc.Sec.Rep.Ser. 307, Unempl.Ins.Rep. CCH 15,023

Dolores WALLACE, Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES.

No. 83-5238.

United States Court of Appeals Third Circuit.

Argued Nov. 14, 1983.

Decided Dec. 19, 1983.

Frank A. Cristaudo (argued), West Deptford, N.J., for appellant.

W. Hunt Dumont, U.S. Atty., Paul Blaine (argued), Asst. U.S. Atty., Trenton, N.J., for appellee; Mary Gibbons Whipple, Jerome B. Simandle, Asst. U.S. Attys., Trenton, N.J., on brief.

Before ADAMS, BECKER and VAN DUSEN, Circuit Judges.

OPINION OF THE COURT

PER CURIAM.

This is an action pursuant to 42 U.S.C. Sec. 405(g) to review a denial of disability benefits under Title II of the Social Security Act, 42 U.S.C. Sec. 416(i), 423 (1976). By letter opinion, the district court granted summary judgment affirming the determination of the Secretary of Health and Human Services (Secretary) that Dolores Wallace was not disabled. The district court concluded that the factual findings made by the Administrative Law Judge (ALJ) were supported by substantial evidence, ¹ and this appeal followed pursuant to 28 U.S.C. Sec. 1291. For the reasons stated, we will vacate the district court judgment and remand for further proceedings.

I

Dolores Wallace is a fifty-four year old high school graduate who worked as a record labeller and inspector for Columbia Records for approximately 9 years. In early November 1978 she ceased working because of a back injury and has not worked since. In the course of explaining her duties as an inspector, Wallace testified that the records passed her station on a conveyor belt and she lifted and pushed stacks of records weighing up to 25 lbs. Her functions were to look for records that were warped, scratched, or improperly labelled and to discard defective records. Tr. at 46-47, 76-79, 87. In addition she had to read computer cards, place records in proper jackets, and write basic data on computer cards such as her name, number of records, and type of defect. Tr. at 65, 87. She was placed on the job after only "a couple of hours" of training. Tr. at 13, 88. She inspected over 2800 records per day, and noted that her fingers were constantly moving all day. Tr. at 12. She stated that she always had to keep up with the records and this put a strain on her because if she fell behind she would be forced to work "extra hard" to fulfill her quota. Tr. at 87. Regarding her physical condition, Wallace testified that she did light housework and drove an automobile when her back was not bothering her. She stated that she could take care of her own needs, but was unable to tolerate stress.

The medical evidence indicates that Wallace suffered from severe lower back pain in November 1978 and was discharged after a six day hospitalization with a diagnosis of acute lumbar strain and sprain. Subsequently, she was treated by Dr. Kaufman who concluded that in 1979 she was neurologically intact and that while there was occasional exacerbation of her condition, she was not totally disabled. Tr. at 156-62 (Report of 12/21/79). In July 1980, Wallace was evaluated by Dr. Heist who concluded that orthopedically she could perform substantial gainful activity which did not require strenuous activity. Tr. 165. In November 1980, Dr. Kaufman submitted another report which suggested that Wallace's chronic back problems resulted in disability because she was unable to obtain work light enough not to aggravate her problem. Tr. 171. In December 1980, however, Dr. Obade concluded from his examination of Wallace that she was a candidate for sedentary work. Tr. 122-23. In April 1981 Wallace was again seen by Dr. Kaufman who concluded that because of her recurrent orthopedic problems and "hives" she was unable to work. In the spring of 1981, Dr. Sibert, a psychiatrist, evaluated Wallace and concluded that as a result of her physical problems in conjunction with her psychological disorder, "[a]t the present time, this individual is not capable of gainful employment in an open, competitive labor market." Tr. at 202.

Dr. Rubin, a vocational expert called by the ALJ, classified Wallace's former work as a record labeller as unskilled, but determined that the job as a record inspector was semi-skilled. He also opined that the job imparted transferable skills. Based upon the ALJ's hypothetical questions, the expert concluded that Wallace had the vocational background to perform various types of sedentary work activities such as those of a mail order taker or bench inspector.

After considering this testimony at the second hearing, the ALJ found essentially that:

1) Wallace was closely approaching advanced age within the meaning of Reg. 404.1563;

2) her high school diploma does not provide entry into skilled work;

3) medical evidence established that she had lower back syndrome which was amenable to control with medication and avoidance of highly stressful situations and that there was "no evidence of any other significant physical or mental impairment" ... Tr. at 17 (emphasis added);

4) there was insufficient evidence of pain of such severity as to preclude performance in all work related activity;

5) she was unable to perform her former work;

6) she had the residual functional capacity, within described restrictions, for sedentary work. Reg. 404.1567(a);

7) she had done semi-skilled work in the past and had other work skills which would be transferable to other lighter sedentary jobs. Reg. 404.1568.

Applying the medical-vocational grids to Wallace, the ALJ concluded that 20 C.F.R. 404.1569 and Rule 201.15, Table No. 1 of Appendix 2, Subpart P directed that she be found "not disabled."

II

An ALJ's findings of fact are conclusive when supported by "substantial evidence." ² Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971); Van Horn v. Schweiker, 717 F.2d 871, 873 (3d Cir.1983). Nevertheless, this Court has developed certain rules to scrutinize the evidentiary basis for administrative findings:

This oft-cited language [describing the standard of substantial evidence] is not, however, a talismanic or self-executing formula for adjudication; rather, our decisions make clear that determination of the existence vel non of substantial evidence is not merely a quantitative exercise. A single piece of evidence will not satisfy the substantiality test if the Secretary ignores, or fails to resolve, a conflict created by countervailing evidence. Nor is evidence substantial if it is overwhelmed by other evidence--particularly certain types of evidence (e.g., that offered by treating physicians)--or if it really constitutes not evidence but mere conclusion .... The search for substantial evidence is thus a qualitative exercise without which our review of social security disability cases ceases to be merely deferential and becomes instead a sham.

Kent v. Schweiker, 710 F.2d 110, 114 (3d Cir.1983) (citations omitted). Having analyzed the evidentiary foundation for the ALJ's conclusions regarding Wallace's non-exertional impairments, we conclude that the ALJ ran afoul of a number of these precepts. ³ As we have previously explained, the process employed to determine whether Wallace is entitled to benefits involves shifting burdens of proof:

There is a two-pronged test for social security act disability: (1) determination of the extent of disability; and (2) determination whether that impairment results in inability to engage in substantial gainful activity. A claimant satisfies [his or her] initial burden of proof by showing that [he or she] is unable to return to [his or her] customary occupation. E.g., Stark v. Weinberger, 497 F.2d 1092 (7th Cir.1974); Baker v. Gardner, 362 F.2d 864 (3d Cir.1966). Once [the claimant] has made such a demonstration, the burden of proof shifts to the Secretary to show that the claimant given [his or her] age, education and work experience, has the capacity to perform specific jobs that exist in the national economy. E.g., Lewis v. Weinberger, 541 F.2d 417 (4th Cir.1976); Hernandez v. Weinberger, 493 F.2d 1120 (1st Cir.1974).

Rossi v. Califano, 602 F.2d 55, 57 (3d Cir.1979).

Since the ALJ found that Wallace was unable to return to her former job, the initial hurdle is satisfied. The burden then fell upon the Secretary to show that Wallace, given her overall condition, nevertheless retained sufficient capacity to perform specific jobs existing in the national economy. Kent v. Schweiker, supra, 710 F.2d at 114.

Because we believe that the ALJ erred in assessing and analyzing Wallace's non-exertional impairment in connection with her residual functional capacity, we cannot say that the Secretary has met this burden.

III

As we have noted, the ALJ concluded that the medical evidence established that Wallace's physical impairment was not disabling since she retained the capacity for sedentary work and because no evidence indicated any other significant physical or mental impairment. While the ALJ's evaluation of the evidence of Wallace's physical impairment may be entitled to deference, the unrefuted medical evidence of mental impairment reveals either the wholesale rejection of this evidence or a mischaracterization of its probative value by the ALJ.

The ALJ in his opinion ⁴ mentions a June 1980 report by Dr. Kaufman which concluded that Wallace is unable to tolerate stressful situations or full-time employment due to a rash and residual back pain. ⁵ In his initial opinion, the ALJ also noted Wallace's complaint that her prior job caused her to become nervous because of production quotas and that she complained of depression; she stated that she could not cope with stress, "as this causes 'hives.' " Tr. at 32. After reviewing the orthopedic evidence which indicated that Wallace retained the physical capacity to do sedentary work, the ALJ noted Dr. Kaufman's April 1981 report. It concluded, as described by the ALJ, that she was unable to work because of her...