The opinion of the court was delivered by: WILLIAM C. CONNER
This class action was originally brought before Judge Lasker by applicants for and recipients of benefits based on disability under the federal Supplemental Security Income and Old Age Survivor's and Disability Insurance ("OASDI") programs, administered by the Secretary of Health and Human Services (the "Secretary" or "Defendant") pursuant to the Social Security Act, 42 U.S.C. § 401, et seq., to challenge the Secretary's policy of denying benefits to claimants whose impairments are "not severe" without inquiry into the effect of claimants' ages, educations, and work histories on their ability to work. Defendant contended that the severity regulation is used only to screen out de minimis claims. Plaintiffs replied that the regulation is systematically applied to deny meritorious claims. Plaintiffs also challenged the Secretary's refusal to consider the cumulative effect of different impairments in making severity determinations.
Prior to 1978, the Secretary's regulations provided that a claimant could be denied benefits on medical considerations alone "where the only impairment is a slight neurosis, slight impairment of sight or hearing, or similar abnormality or combination of slight abnormalities." 20 C.F.R. § 404.1502(a) (1968). This "slight impairment" policy was superseded by the "severity regulation," which is step two of a five-step sequential evaluation procedure adopted by the Secretary in 1978, and clarified in 1980. See 20 C.F.R. § 404.1520.
In 1982, the Secretary issued Social Security Ruling ("SSR") 82-55 instructing Social Security administrators not to consider the combined effects of impairments which do not individually meet the Secretary's severity standard. SSR 82-55 also listed 20 specific impairments which the Secretary determined are non-severe per se.
This ruling bound administrative law judges and the Appeals Council, and was made effective retroactively to August 20, 1980. After Congress passed the Disability Reform Act of 1984, the Secretary invalidated his practice of refusing to consider impairments in combination. See SSR-III-II. Subsequently, the Secretary published SSR 85-28, which clarifies the policy for determining when a person's impairment may be found not severe. Among other things, SSR 85-28 rescinds the list of 20 specific non-severe examples published in SSR 82-55.
By order dated July 26, 1984, Judge Lasker conditionally certified a statewide class in this action consisting of all disability claimants whose benefits had been, or would in the future be, denied or terminated pursuant to the severity regulations or Social Security Ruling 82-55, after July 20, 1983. The Court also granted a preliminary injunction, prohibiting the Secretary from denying or terminating disability benefits on the basis of the severity regulations. Dixon v. Heckler, 589 F. Supp. 1494, 1512 (S.D.N.Y. 1984). In addition, the injunction directed the Secretary to identify and notify class members and to reconsider their claims.
On appeal, the Second Circuit affirmed Judge Lasker's Order granting a preliminary injunction. Dixon v. Heckler, 785 F.2d 1102 (2d Cir. 1986). The Supreme Court subsequently granted certiorari, vacated the judgment of the Court of Appeals and remanded the case for further consideration in light of its decision in Bowen v. Yuckert, 482 U.S. 137, 96 L. Ed. 2d 119, 107 S. Ct. 2287 (1987), upholding the facial validity of the severity regulation and its requirement that disability claimants make a threshold showing of impairment, based on medical criteria alone, before vocational factors would be considered. Thereafter, the Second Circuit ordered that the preliminary injunction issued by Judge Lasker be vacated, and remanded the case for further proceedings in light of Yuckert. See Dixon v. Heckler, 827 F.2d 765 (2d Cir. 1987). On November 5, 1987, this Court denied plaintiffs' motion to reinstate the preliminary injunction. Dixon v. Bowen, 673 F. Supp. 123 (S.D.N.Y. 1987).
Before this case was transferred to this Court, Judge Lasker ruled, in a letter dated September 17, 1987, that plaintiffs had "made a sufficient threshold showing under Bowen v. City of New York, 476 U.S. 467, 90 L. Ed. 2d 462, 106 S. Ct. 2022 (1986), to justify their entitlement to discovery as to whether a clandestine policy of the Secretary existed which could support a finding that the statute of limitation should be tolled."
In December 1989, the Secretary moved for summary judgment. Because plaintiffs had not yet completed discovery, the Court deferred consideration of the Secretary's motion in order to allow plaintiffs to take a number of depositions in this action. See Dixon v. Bowen, 126 F.R.D. 483 (S.D.N.Y. 1989). The Court further noted that "if plaintiffs show that the Secretary applied the severity test in a manner stricter than that set forth in his published regulations, which express a policy of using step two to screen out only de minimis cases, plaintiffs will have met the requirements of City of New York." Id. at 488.
After the completion of discovery, the parties agreed to resolve the remaining matters in this action by trial on a stipulated record. Toward this end, the parties have entered into a stipulation as to the documents and deposition testimony that constitutes the trial record in this case. The parties have also agreed to a number of facts stipulated to be true. Plaintiffs now seek judgment on the following claims: (1) That POMS DI § 2102 and SSR 82-55 violate the severity regulation and the Social Security Act because they do not provide for an individualized functional assessment of severity; (2) that these provisions violate the Second Circuit's requirement that allegations of pain must be fully considered; (3) that POMS DI § 2102 and SSR 82-55 were systematically misapplied by adjudicators; (4) that the severity standard was misapplied even before issuance of POMS DI § 2102; (5) that the Secretary's refusal to consider the combined effects of not severe impairments violated the Social Security Act; and (6) that the SSA's issuance of POMS DI § 2102 and SSR 82-55 violated the notice and comment provisions of the Administrative Procedure Act. Plaintiffs further contend that this Court should toll the statute of limitations as to their claims because of various covert practices on the part of the Secretary and that this Court should grant permanent injunctive relief and should order reopening and readjudication of claims denied as not severe between June 1976 and July 19, 1983.
In Bowen v. Yuckert, 482 U.S. 137, 96 L. Ed. 2d 119, 107 S. Ct. 2287 (1987), the Supreme Court upheld the severity regulation as valid on its face. The Court, in an opinion joined by six Justices, held that a threshold showing of a severe medically determinable impairment required under the severity regulation is consistent with the language and legislative history of the Social Security Act. Noting the "exceptionally broad authority" of the Secretary to prescribe regulations with respect to proving disability under the Act, the Court held that 20 C.F.R. § 404.1520(c) was consistent with the definition of disability provided in section 223(d)(1)(A) of the Act, 42 U.S.C. § 423(d)(1)(A). Specifically, the Court observed that the Act defined "disability" as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. . . ." Yuckert, 482 U.S. at 146 (citing 42 U.S.C. § 423(d)(1)(A)). The Supreme Court noted further that the regulation adopts precisely this type of functional approach to disability. Under the regulation, as under the Act, "if the impairments are not severe enough to limit significantly the claimant's ability to perform most jobs, by definition the impairment does not prevent the claimant from engaging in any substantial gainful activity." Id.
In a footnote, the Court further stated that "the severity regulation plainly adopts a standard for determining the threshold level of severity: the impairment must be one that 'significantly limits your physical or mental ability to do basic work activities'" Id. at 153 n.11 (citing 20 C.F.R. § 404.1520(c)). Thus, the Court remarked that the Act expressly places on the claimant the burden of showing a medically determinable impairment on the claimant and that the Secretary has no need to consider the claimant's age, education, and work experience if the claimant is unable to meet this threshold burden of establishing medical severity. Id. at 148.
Justice O'Connor, in a concurrence joined by Justice Stevens, noted that "respondent's evidence suggests that step two has been applied systematically in a manner inconsistent with the statute." Id. at 157 (O'Connor, J. concurring). Justice O'Connor further stated that, in her view, "step two may not be used to disqualify those who meet the statutory definition of disability." Id. at 158 (O'Connor, J. concurring). "Only those claimants with slight abnormalities that do not significantly limit any 'basic work activity' can be denied benefits without undertaking this vocational analysis." Id. (O'Connor, J. concurring).
Because the Court of Appeals for the Ninth Circuit had not considered the issue, the Supreme Court did not address Yuckert's contention that the regulation was invalid as applied.
B. Facial Validity of SSR 82-55 and POMS DI § 2102
From April 1981 through February 1985, the Secretary required his adjudicators to apply two administrative directives implementing the severity regulation, Program Operations Manual DI § 2102 (the "POMS") and SSR 82-55 (the "SSR"). Plaintiffs assert that on their face, these directives conflict with the Social Security Act ("the Act") and the severity regulation. Plaintiffs argue that while the Act and the severity regulation call for an individualized functional assessment of the claimant's ability to perform work activities, the Secretary's internal policies dictated that adjudicators base determinations solely on the list of 20 profiles. Plaintiffs contend further that these policies precluded adjudicators from taking into account the fact that impairments may affect people differently and that assessment of the effects of impairments cannot be reduced to a simple formula.
Plaintiffs' argument is flawed. In their discussion of the facial validity of the SSR and the POMS, plaintiffs fail to address directly the significance of Yuckert to their facial invalidity claims. Yuckert permits the Secretary to require disability claimants to make a threshold showing of medical severity without consideration of non-medical factors. Plaintiffs' claim that the SSR and the POMS are facially invalid because they prevent adjudicators from making individualized functional assessments with consideration given to all the material evidence is a thinly disguised attempt to relitigate essentially the same question decided in Yuckert : whether medical severity may be determined without consideration of non-medical factors. Yuckert makes clear that at step two, the type of all-inclusive consideration of the material evidence which plaintiffs seek is not mandated.
Plaintiffs attempt to salvage their argument by portraying the 20 examples as a "negative listing" or as per se adjudicative rules of the sort rejected by the Supreme Court in Sullivan v. Zebley, 493 U.S. 521, 110 S. Ct. 885, 890, 107 L. Ed. 2d 967 (1990). However, Zebley has no application here. Zebley was not concerned with de minimis screening at step two, but focused on step three, which, as applied to child claimants, allowed a claimant to be found disabled only if medical evidence of his impairment matched or was equal to one of a listing of impairments. See id. at 890. Not only is step three not implicated in the present action, but also the list of 20 examples at issue here performs a function that is precisely the opposite of that performed by the step three lists.
While at step three claimants had to match or equal one of the listed impairments in order to receive benefits, claimants at step two had to show that their disorder was not one of the twenty representative disorders defined as less than severe. Thus the step two list at issue here was not intended as an exclusive set of examples of impairments entitling a claimant to recovery but merely as a representative list of disorders which should be considered not severe. Plaintiffs' argument refuses to acknowledge the plain language of the SSR, which states:
We have tried to identify medical conditions which demonstrate nonsevere impairments. . . . These 20 examples are intended to illustrate a level of impairment severity where the evaluation principle for nonsevere impairments applies. In addition, these 20 examples, while not exhaustive, represent a significant number of specific impairments that serve as guidelines of the level of impairment severity which would warrant a finding that an individual's impairment is not severe.
The 20 examples were not intended to be used as any type of "negative listing." Rather, they were an attempt by the Secretary to illustrate the type of conditions that do not constitute not severe impairments. Considered on its face, such a list is certainly consistent with the regulation's requirement of a threshold showing of medical impairment and is wholly dissimilar to step three lists which purport to define and limit the universe of compensable disabilities.
C. The Requirement that Allegations of Pain be Fully Considered
Plaintiffs note that the Second Circuit has long required that once an impairment that can cause pain has been objectively determined to exist, SSA cannot limit its inquiry to consideration of objective evidence of pain. See Gallagher v. Schweiker, 697 F.2d 82 (2d Cir. 1983). Plaintiffs aver that the POMS and the SSR violated the requirement that subjective as well as objective evidence be taken into account in assessing allegations of pain because, plaintiffs believe, these policy statements required the denial of claims based solely on clinical findings, without regard to testimony and other evidence concerning the existence and extent of pain in a particular case.
Plaintiffs' claim focuses primarily on language found in the SSR to the effect that "in formulating these examples, the potential for severe and prolonged pain has been considered. These conditions are not expected to produce symptoms of severe and prolonged pain."
The Court finds plaintiffs' claim unsustainable. Plaintiffs' argument here would be plausible only if the 20 examples had been formulated as definitive rules. However, as noted above, the 20 examples simply were not intended as a negative listing, but were to be used as illustrative examples of nonsevere impairments. Any allegation of disabling pain by a claimant, whose condition otherwise conformed to one of the examples, would render the listing inapplicable and require further evaluation of the claimant. This is confirmed by unrebutted deposition testimony of two SSA officials.
When asked, with specific reference to example 1-a of the POMS, to define the scope of inquiry as to a claimant's allegations of pain, Albert Harrison, Deputy Director of the Division of Medical and Vocational Policy in SSA's Office of Disability, responded:
What is intended here by the term "symptoms of pain" means minimal pain, minimal pain that doesn't impose any functional limitations.
If there is an allegation of disabling pain or severe pain, prolonged pain that would impact functional capacity, then it would not fit this example.
Harrison Tr. at 220. When asked whether this was articulated in the example, Harrison explained:
It doesn't say that explicitly.
But underlying the concept of not-severe impairment is no more than a minimal limitation of function caused by the impairment.
So, if there was an allegation of more than minimal limitations caused by the -- apparently caused by the pain, then it would -- the pain just couldn't be disregarded, it would have to be explored to see just what the limitations were.
Harrison Tr. at 221. Harrison concluded that "an allegation of disabling pain or severe pain, prolonged pain that would cause functional limitations, would have to be explored." Id.
Similarly, Dr. Henrietta Moritz, Associate Deputy Director at SSA's Office of Medical Evaluation for Policy, testified that the 20 examples would not apply if the claimant alleged pain or any other symptom which would not ordinarily be found as part of the disorder. See Moritz Tr. at 166-68, 71.
Plaintiffs offer little to rebut the testimony of Harrison and Moritz to the effect that allegations of severe or disabling pain would remove a claimant from the domain of the 20 examples. While it is true that the SSR contained language indicating that the examples were not expected to cause severe and prolonged pain and the regulation specified that pain be discounted when it is not expected, it is not the case that this, without more, violates the Second Circuit's requirement that pain be fully considered. Considered facially, the SSR and the regulation provide adjudicators with the necessary leeway to consider pain in accordance with the Second Circuit's requirements. As Harrison's testimony confirms, allegations of severe pain, even when such pain would not be expected, would have had to be explored under the SSR. While there may have been misunderstanding among ...