The opinion of the court was delivered by: WARD
Plaintiff Maria Ceballos brings this action pursuant to sections 205(g) and 1631(c)(3) of the Social Security Act (the "Act") as amended, 42 U.S.C. §§ 405(g), 1383(c)(3), seeking judicial review of a final decision by the defendant Secretary of Health and Human Services (the "Secretary" of "HHS") denying her application for Supplemental Security Income ("SSI") based on disability (hereinafter "disability benefits"). Although plaintiff has a severe psychiatric impairment, the Secretary held that plaintiff did not suffer from a disability within the meaning of the Act because she retained a residual functional capacity to perform simple, repetitive, low stress, unskilled work. The Secretary has moved for judgment on the pleadings under Rule 12(c), Fed. R. Civ. P. For the reasons to follow, the Court denies the Secretary's motion. The Secretary's decision is reversed and the case is remanded for reconsideration.
Ceballos was born in Puerto Rico on November 4, 1936. She came to the United States in 1979. Plaintiff is separated from her husband and now lives with one of her two adult daughters in New York in a third floor apartment. She has been receiving welfare for the last seven years. Ceballos is literate in Spanish and attended school in Puerto Rico for twelve years, but did not graduate from high school. According to the administrative record, claimant has not engaged In any substantial gainful activity during the past fifteen years. She did, however, at one point since coming to the United States perform some minimal part time work in a flower shop.
Ceballos applied for disability benefits on June 29, 1983 on the basis of an emotional condition, a heart disorder, a hernia, arthritis, and a thyroid condition. The Secretary denied claimant's application initially and on reconsideration. Claimant timely filed a request for a hearing, which was held before Administrative Law Judge Roy Liberman (the "ALJ") on May 24, 1984. Claimant appeared at the hearing with a representative of the United Welfare League. In a written decision issued on July 2, 1984, the ALJ determined that plaintiff was not eligible for disability benefits because she was not disabled within the meaning of the Act. The appeals council denied plaintiff's request for a review of the ALJ's decision on October 11, 1984. Plaintiff then filed this action for judicial review of the Secretary's final determination. The Secretary has moved for judgment on the pleadings.
1. The Disability Reform Act of 1984.
Ceballos applied for disability benefits at least in part on the basis of mental impairments. Congress passed the Social Security Disability Reform Act of 1984 (the "Disability Reform Act"), P.L. 98-460, 98 Stat. 1794, to clarify statutory guidelines for determining qualification for disability benefits. In section 5(c) Congress directed the Secretary within nine months to revise the Social Security Administration's ("SSA") Listing of Mental Impairments and to reevaluate the agency's procedure for predicting the ability to work of mentally impaired individuals. The Secretary published the new regulations August 28, 1985. See 50 Fed. Reg. 35,065(1985) (codified at 20 C.F.R. § 404 subpt. P app.1). In the interim, the Secretary was to make determinations of disability on the basis of mental impairments in accordance with then current guidelines, but unfavorable decisions reached after the bill's enactment on October 9, 1984 were to be reviewed under the newly revised regulations.
When the appeals council denied plaintiff's request to review the ALJ's decision on October 11, 1984, the ALJ's opinion became the Secretary's final decision. Ceballos then falls within that group of claimants whose applications should be remanded for reconsideration in light of the new mental impairment guidelines.
Accordingly, the Court denies the Secretary's motion for judgment on the pleadings and remands this case for reconsideration.
II. Review of the Secretary's Determination.
On remand to reconsider Ceballos' mental impairments under the new guidelines, the Secretary would not necessarily review the ALJ's factual findings on those mental impairments, the balance of Ceballos' application that is based on physical rather than mental ailments, or the adequacy of the hearing Ceballos received. In the interest of economy, the Court will take this opportunity to review the Secretary's decision rather than await a second appeal should he determine that Ceballos is not mentally disabled under the new regulations.
The legal principles that govern the review are well settled. "Disability" is defined in the Act as the "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months." 42 U.S.C. § 423(d)(1)(A). The mere presence of an impairment is not disabling within the meaning of the Act. Rather, a person may be determined to be under a disability only if his or her impairment is of such severity that the claimant is not only unable to do his or her previous work, but cannot engage in any kind of substantial gainful work that exists in the national economy. 42 U.S.C. §§ 423(d)(2)(A), 1382 c(a)(3)(B).
The initial burden of proving disability is on the claimant. 42 U.S.C. § 423(d)(5); see Schauer v. Schweiker, 675 F.2d 55 (2d Cir. 1982); Carter v. Schweiker, 649 F.2d 937, 940 (2d Cir. 1981). The claimant satisfies this burden by making out a prima facie case, that is, by showing that his or her impairment prevents return to his or her prior employment. Parker v. Harris, 626 F.2d 225, 231 (2d Cir. 1980). The burden then shifts to the Secretary, who must produce evidence to show the existence of alternative substantial gainful work that exists in the national economy and that the claimant could perform. Id.
In reaching a conclusion as to disability, both objective and subjective factors are to be considered. These include objective medical facts, diagnoses or medical opinions based on such facts, subjective evidence of pain or disability testified to by the claimant or other witnesses, and the claimant's education background, age, and work experience. Rivera v. Harris, supra, 623 F.2d at 216; Bastien v. Califano, 572 F.2d 908, 912 (2d Cir. 1978). These factors need not be given equal weight. Within the Second Circuit, the "treating physician" rule establishes the weight to be given the medical opinion of the physician who has treated the claimant relative to other medical evidence, including the opinions of other physicians.
The rule, which has been the law of this circuit for at least five years, provides that a treating physician's opinion on the subject of medical disability, i.e., diagnosis and nature and degree of impairment, is; (i) binding on the fact-finder unless contradicted by substantial evidence; and (II) entitled to some extra weight because the treating physician is usually more familiar with a claimant's medical condition than are other physicians, although resolution of genuine conflicts between the opinion of the treating physician, with its extra weight, and any substantial evidence to the contrary remains the responsibility of the fact-finder.
Schisler v. Heckler, 787 F.2d 76, 81 (2d Cir. 1986) (citing Bluvband v. Heckler, 730 F.2d 886, 892-93 (2d Cir. 1984)). The merits of this rule are not in issue. Havas v. Bowen, 804 F.2d 783, slip op. at 6382 (2d Cir. 1986) (Secretary has made no attempt to appeal the rule to the Supreme Court and denies following policy of nonacquiescence); Schisler v. Heckler, supra, 787 F.2d at 83 (same).
The Secretary has the duty of making the determination of disability under the principles set forth above. It is not the function of this Court, which sits in the present context as a reviewing court, to determine de novo whether the claimant is disabled. Assuming the Secretary has applied proper legal principles, judicial review is limited to an assessment of whether the findings of fact are supported by substantial evidence. If they are so supported, they are conclusive. 42 U.S.C. § 405(g). See Rivera v. Harris, supra, 623 F.2d at 216; Bastien v. Califano, supra, 572 F.2d at 912. Where evidence has not been properly evaluated because of the application of an erroneous legal standard, however, the determination of the Secretary may not be upheld. See Marcus v. Califano, 615 F.2d 23, 28 (2d Cir. 1979). "Substantial evidence" means "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401, 28 L. Ed. 2d 842, 91 S. Ct. 1420 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 83 L. Ed. 126, 59 S. Ct. 206 (1938)). See generally Parker v. Harris, supra, 626 F.2d at 230-32.
Additionally, the reviewing court must determine that the claimant has received a full and fair hearing. Because a hearing on disability benefit entitlement is not an adversarial proceeding, the ALJ incurs a general obligation affirmatively to develop the record to ensure that all the necessary and relevant information is produced. Echevarria v. Secretary of HHS, supra, 685 F.2d 751, 755 (2d Cir. 1982). That a claimant is represented by counsel or a paralegal does not obviate this affirmative duty to develop the record. See, e.g., Decker v. Harris, 647 F.2d 291, 299 (2d Cir. 1981).
B. The Secretary's Determination.
The Secretary assessed whether plaintiff was suffering from a disability as defined under the Act by following a five step sequential evaluation process, of which the "severity regulations" are a part.
The Second Circuit recently described the process mandated by the Secretary's regulations as follows:
The first step in the sequential process is a decision whether the claimant is engaged in substantial gainful activity." If so, benefits are denied. 20 C.F.R. §§ 404.1520(a), (b), 416.920(a), (b)(1983). If not, the second step is a decision whether the claimant's medical condition or impairment is "severe." If not, benefits are denied. 20 C.F.R. §§ 404.1520(c), 416.920(c). If the impairment is "severe," the third step is a decision whether the claimant's impairments meet or equal the "Listing of impairments" set forth in subpt. P, app. 1, of the social security regulations, 20 C.F.R. §§ 404.1520(d), 416.920(d). These are impairments acknowledged by the Secretary to be of sufficient severity to preclude gainful employment. If a claimant's condition meets or equals the "listed" impairments, he or she is conclusively presumed to be disabled and entitled to benefits. If the claimant's impairments do not satisfy the "Listing of Impairments," the fourth step is assessment of the individuals "residual functional capacity," i.e., his capacity to engage in basic work activities, and a decision whether the claimant's residual functional capacity permits him to engage in his prior work. If the residual functional capacity is consistent with prior employment, benefits are denied. 20 C.F.R. §§ 404.1520(d), 416.920(e). If not, the fifth and final step is a decision whether a claimant, in light of his residual functional capacity, age, education, and work experience, has the capacity to perform "alternative occupations available in the national 647 F.2d 291, 298 (2d Cir. economy." Decker v. Harris, 647 F.2d 291, 298 (2d Cir. 1981); 20 C.F.R. §§ 404.1520(f), 416.920(f). If not, benefits are awarded.
Dixon v. Heckler, 785 F.2d 1102 (2d Cir. 1986) (quoting City of New York v. Heckler, 742 F.2d 729, 732 (2d Cir. 1984), aff'd, 54 U.S.L.W.(1986)).
In evaluating Ceballos' application, the ALJ found as step one that she had not engaged in any substantial gainful activity since June 29, 1983. (Tr. 11). Under step two, the ALJ found that claimant suffered from a "severe psychiatric impairment, namely a depressive neurosis," "low back pain and [a] thyroid condition." (Tr. 11). As step three, the ALJ decided that none of Ceballos' conditions, considered separately or in combination, equalled any of the "Listing of Impairments" found in Appendix 1. Specifically, the ALJ found that none of Ceballos' problems "significantly limit[ed] her ability to engage in basis work activities of a physical nature" or create any exertional limitations. (Tr. 11-12). In reaching that conclusion the ALJ discounted Ceballos' subjective testimony concerning her complaint as "lacking in credibility due to exaggeration and inconsistencies." Id. Step four by which the Secretary assesses whether claimant's residual functional capacity permitted a return to her prior job was, in light of Ceballos' work experience, moot. Despite the lack of any prior work experience or "any acquired work skills which are transferable to the skilled or semi-skilled work functions of other work," (Tr. 12), the ALJ baldly asserted by way of conclusion that "[c]onsidering the range of work at all exertional levels which the ...