United States Court of Appeals For the First Circuit ____________________
No. 01-1202
CLAYTON R. SEAVEY, Plaintiff, Appellee,
v.
JO ANNE B. BARNHART, COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. George Z. Singal, U.S. District Judge]
____________________
Before
Lynch, Circuit Judge, Coffin, Senior Circuit Judge, and Young,* District Judge.
____________________
Michael E. Kerpan, Jr., Assistant Regional Counsel, Social Security Administration, with whom Paula D. Silsby, United States Attorney, and James M. Moore, Assistant United States Attorney, were on brief for appellant.
* Of the District of Massachusetts, sitting by designation. Joyce K. Mykleby for appellee.
____________________
December 27, 2001 ____________________
LYNCH, Circuit Judge. This case raises an issue of
importance in the law of this circuit on Social Security
appeals. The issue is this: after an Administrative Law Judge
("ALJ") has erred, when is it appropriate for a court to remand
for further proceedings and when is it appropriate to order
payment of social security benefits? The Commissioner of the
Social Security Administration1 appeals from a district court
order requiring the Commissioner to pay Clayton Seavey
disability benefits, rather than conduct further proceedings,
after the district court found that the Social Security ALJ had
erred at Step 5 of the disability determination process. Seavey
v. Apfel, No. 00-23-B (D. Me. Nov. 30, 2000). The Commissioner
1 In the district court proceedings, the defendant named was Kenneth S. Apfel, then Commissioner of Social Security. By the time this appeal was filed, Larry G. Massanari had become Acting Commissioner of Social Security and was the appellant in this case. After oral argument, Jo Anne B. Barnhart succeeded Acting Commissioner Massanari as the Commissioner of Social Security. Pursuant to F.R.A.P. 43(c), Commissioner Barnhart is substituted as the defendant appellant.
-2- concedes that the ALJ decision was in error, but argues that the
proper remedy was for the district court to remand the case to
the Commissioner for further administrative proceedings. The
district court disposed of the case based upon a rule it had
established in a prior case, Field v. Chater, 920 F. Supp. 240
(D. Me. 1995), which adopted what appears to be either a per se
or a preferential rule that when a court is faced with an error
at Step 5, the appropriate remedy is an order that the applicant
be paid the benefits sought. The issue raised here is also
raised in another case we decide today, Freeman v. Barnhart, No.
01-1293 (1st Cir. 2001). We use this case to express the
general principles for decision.
We affirm the district court's order of remand, but
reverse the order for payment of benefits, and rule that, in
this instance, remand to the Commissioner with instructions for
further proceedings is the appropriate remedy.
I.
The Social Security Administration is the federal
agency charged with administering both the Social Security
disability benefits program, which provides disability insurance
for covered workers, and the Supplemental Security Income
-3- program, which provides assistance for the indigent aged and
disabled. 42 U.S.C. §§ 423, 1381a (1998). In July 1996,
Clayton Seavey applied for benefits under both of these
programs, claiming that pain relating to a back injury and heart
problems rendered him unable to work. After his application was
initially denied by the Commissioner and the Commissioner denied
reconsideration, Seavey received a hearing before an ALJ on
August 13, 1997.
When considering applications, the Commissioner employs
a five step process to determine if an individual is disabled
within the meaning of the Social Security Act. 20 C.F.R. §
416.920 (2001). All five steps are not applied to every
applicant, as the determination may be concluded at any step
along the process. Id. The steps are: 1) if the applicant is
engaged in substantial gainful work activity, the application is
denied; 2) if the applicant does not have, or has not had within
the relevant time period, a severe impairment or combination of
impairments, the application is denied; 3) if the impairment
meets the conditions for one of the "listed" impairments in the
Social Security regulations, then the application is granted; 4)
if the applicant's "residual functional capacity" is such that
-4- he or she can still perform past relevant work, then the
application is denied; 5) if the applicant, given his or her
residual functional capacity, education, work experience, and
age, is unable to do any other work, the application is granted.
Id.
Once the applicant has met his or her burden at Step
4 to show that he or she is unable to do past work due to the
significant limitation, the Commissioner then has the burden at
Step 5 of coming forward with evidence of specific jobs in the
national economy that the applicant can still perform. Arocho
v. Sec'y of Health & Human Servs., 670 F.2d 374, 375 (1st Cir.
1982). If the applicant's limitations are exclusively
exertional, then the Commissioner can meet her burden through
the use of a chart contained in the Social Security regulations.
20 C.F.R. § 416.969; Medical-Vocational Guidelines, 20 C.F.R.
pt. 404, subpt. P, App. 2, tables 1-3 (2001), cited in 20 C.F.R.
§ 416.969; Heckler v. Campbell, 461 U.S. 458 (1983). "The
Grid," as it is known, consists of a matrix of the applicant's
exertional capacity, age, education, and work experience. If
the facts of the applicant's situation fit within the Grid's
categories, the Grid "directs a conclusion as to whether the
-5- individual is or is not disabled." 20 C.F.R. pt. 404, subpt. P,
App. 2, § 200.00(a), cited in 20 C.F.R § 416.969. However, if
the applicant has nonexertional limitations (such as mental,
sensory, or skin impairments, or environmental restrictions such
as an inability to tolerate dust, id. § 200(e)) that restrict
his ability to perform jobs he would otherwise be capable of
performing, then the Grid is only a "framework to guide [the]
decision," 20 C.F.R. § 416.969a(d) (2001). See also Pratts v.
Chater, 94 F.3d 34, 39 (2d Cir. 1996) (discussing use of Grid
when applicant has nonexertional limitations).
Seavey was forty-three when he applied for benefits.
His work history is that of an unskilled laborer; his education
ended at seventh grade. At the ALJ hearing, Seavey presented
medical evidence concerning his back pain and the degree of
limitation it imposes on him. He also presented evidence in the
form of an expert report from a psychologist, Dr. Greene. Dr.
Greene's report stated that "Seavey appears to be a 'textbook
example' of an individual with passive-aggressive personality
disorder" who may also meet the diagnostic criteria for avoidant
personality disorder, and that he tested at the borderline
Verbal IQ range. Following the hearing, Seavey's attorney
-6- submitted a letter from Dr. Greene,2 along with psychological
testing results, to clarify Dr. Greene's earlier findings,
particularly her notation that Seavey had an elevated score on
the "Work Interference" scale, indicating behavioral attributes
that would negatively affect his ability to work. Dr. Greene's
letter stated that Seavey may meet the diagnostic criteria for
a Reading Disorder and that "he would have great difficulty
performing any jobs that require much reading."3 However, the
letter also stated that Seavey's low IQ and reading ability,
combined with his desire to get the testing over with quickly,
meant that the Work Interference score might not be valid. Dr.
Greene also noted that she had not observed any problems with
Seavey's concentration, persistence, or pace during her
2 At the close of the hearing, the ALJ indicated that he would keep the record open until September 10, 1997. The supplemental letter from Dr. Greene is dated September 4, 1997 and so we will assume that it was part of the record before the ALJ. It makes little difference to the outcome, as the most substantial evidence of a nonexertional limitation is found in the initial report. 3 Even if Seavey were illiterate, however, that would not amount to a disability; nor is illiteracy considered to significantly limit the jobs available, even to those applicants who are physically limited to sedentary work. 20 C.F.R. pt. 404, subpt. P, App. 2, § 201.00(i).
-7- interactions with him, and that she did not believe he would
"decompensate on the job." In addition, records from one of
Seavey's treating physicians indicate that he did not appear to
have any problems in understanding, concentration, or
persistence.
The ALJ found that Seavey is limited to "light work"
by his back ailment. The ALJ's decision did not mention Dr.
Greene's report and letter or any psychological evidence,4 but
simply found that Seavey "has no significant non-exertional
limitations." The ALJ then used the Grid to find him to be not
disabled. Seavey appealed to the Social Security Appeals
Council, arguing that his mental and cognitive impairments were
significant nonexertional limitations and therefore the Grid was
not dispositive of his claim. Almost two years later, the
Appeals Council denied his appeal.
Seavey then sought review in federal district court.
The district judge assigned the case to a magistrate judge, who
prepared a report and recommendation. As to the Supplemental
Security Income claim, the magistrate judge found that the ALJ
4 During the hearing, the ALJ, referring to Dr. Greene's initial report, noted that "[t]here's no evidence that there's anything of a disabling nature in his psychological profile in this report."
-8- had erred by applying the Grid to Seavey after stating in the
hearing that the psychological profile did not indicate anything
of a "disabling nature." Seavey v. Apfel, No. 00-23-B, 2000 WL
1499277, at *2 (D. Me. Oct. 6, 2000). The correct question, the
magistrate judge's report said, is not whether the nonexertional
limitations are themselves disabling, but whether the
nonexertional limitations significantly limit the applicant's
ability to perform work at a given exertional level (in Seavey's
case, "light" work). Id. If so, then the Grid is not
dispositive. Id. The magistrate judge's report stated that the
Commissioner bears the burden of proof at Step 5, and that when
nonexertional limitations have more than a marginal effect, the
Commissioner must present testimony from a vocational expert.
Id. at *3. Finally, the magistrate judge's report recommended
that the district judge order the Commissioner to pay
Supplemental Security Income benefits to Seavey.5 Id. Although
the magistrate judge’s review of the ALJ’s decision was to
5 The magistrate judge recommended affirmance of the denial of Seavey's application for Social Security disability benefits because Seavey had not demonstrated he was disabled on or before December 31, 1995, the last date that he was covered by Social Security disability insurance. Seavey, 2000 WL 1499277, at *2. There has been no appeal from that determination, so the SSD claim has been abandoned.
-9- determine whether substantial evidence supported the findings of
the ALJ, Ward v. Commissioner of Social Security, 211 F.3d 652,
655 (1st Cir. 2000), the district court’s review of the
magistrate judge’s decision is de novo as to objections raised.
28 U.S.C. § 636(b)(1)(C) (1994).
The district judge agreed with the magistrate judge's
report and, in a one paragraph order, vacated the ALJ decision
and ordered the Commissioner to pay benefits to Seavey.
II.
The Commissioner argues that, although the ALJ erred
in not discussing the evidence of psychological impairment, the
evidence, including Dr. Greene's report, did not necessarily
establish the existence of a significant nonexertional
limitation. Therefore, the Commissioner says, the ALJ's opinion
could have been affirmed in its current state on the assumption
that the ALJ had implicitly discredited Dr. Greene's letter and
report. This argument is not persuasive because, although "a
nonexertional impairment can have a negligible effect," ordinarily the
ALJ "must back such a finding of negligible effect with the evidence to
substantiate it," Talbot v. Heckler, 814 F.2d 1456, 1465 (10th Cir.
1987), unless the matter is self-evident.
-10- Alternatively, the Commissioner argues that the proper
remedy would be a remand for further administrative proceedings.
She argues that a remand with an order to pay benefits is only
appropriate where the evidence shows a "virtually certain
entitlement to benefits."
The Commissioner further maintains that this magistrate
judge has a policy of remanding with an order to pay benefits,
rather than remanding for further administrative proceedings,
whenever it finds an error at Step 5 in the process.6 Counsel
for Seavey disputed that point at oral argument. The magistrate
judge, in his Report and Recommendation for this case, relied
upon his reasoning in a previous case, Field v. Chater, 920 F.
Supp. 240 (D. Me. 1995), cited in Seavey, 2000 WL 1499277, at
*3. In Field, the magistrate judge wrote that "[w]hen the
Commissioner had a full and fair opportunity to develop the
record and meet her burden at Step 5, there is no reason for the
court to remand for further factfinding." Field, 920 F. Supp.
6 The Commissioner also argues that, in this case, the ALJ error was actually in Step 4, not Step 5, as nonexertional limitations are a component of the applicant's "residual functional capacity," which is determined at Step 4. We do not see how this technicality would affect the outcome of the case -- particularly since the denial of benefits occurred at Step 5 -- and therefore, we will not address this issue.
-11- at 243. The opinion in Field distinguished that case from a
decision of this court, Rose v. Shalala, 34 F.3d 13, 19 (1st
Cir. 1994), in which we remanded for further proceedings because
the ALJ's error in applying the Grid at Step 5 meant that the
vocational expert had not been asked the proper questions about
a nonexertional limitation. Field, 920 F. Supp. at 243. The
opinion in Field emphasized that "where the problem is . . . the
more fundamental problem of insufficient evidence on an issue
for which the Commissioner carries the burden," further
proceedings are not warranted. Id. at 243. In this case, the
magistrate judge looked no further than the Field case to
conclude that "the [C]ommissioner's failure to carry his burden
at Step 5 requires remand for payment of benefits," Seavey,
2000 WL 1499277, at *3, without analyzing the differences
between the cases.
Seavey responds that the Commissioner is simply being
held to the same standard as any other litigant in any other
case -- if he does not meet his burden, then an order to pay
benefits is appropriate. He claims that "[t]he Secretary who
has the benefit of institutional expertise and a huge federal
bureaucracy in effect argues that no matter how egregious the
-12- error they must be given one chance after another to remedy
their mistake unless the record demonstrates with virtual
certainty that the applicant will win on remand." In essence,
Seavey argues that the Commissioner wants an impermissible
second bite at the apple.
The premise of Seavey’s position is that the
Commissioner should be treated like any other litigant and that
remanding and allowing new evidence would be giving the
Commissioner an unfair advantage. The premise is not entirely
correct. Because of the nonadversarial nature of Social
Security disability determinations, the Commissioner is not a
litigant and has no representative at the agency level. Indeed,
the model is investigatory, or inquisitorial, rather than
adversarial. Sims v. Apfel, 530 U.S. 103, 110 (2000). It is
the ALJ's duty to investigate and develop the facts and develop
the arguments both for and against the granting of benefits.
Id. At the ALJ level, the applicant is the only litigant
presenting evidence. While the agency may have already
generated evidence and the ALJ may generate more -- for example,
by sending the applicant for a consultative exam or by calling
a medical or vocational expert -- these experts function as
-13- consultants in the adjudicative process, assisting the ALJ in
determining what the outcome should be. They are not experts
retained in an effort to shore up an agency’s litigation
position. That is because, until the ALJ renders a decision on
whether an applicant is disabled or not, the agency has not
taken a final position. Consequently, when an ALJ improperly
concludes that a nonexertional impairment has no significant
impact on residual functional capacity, that is an adjudicator
making a mistake, not a party litigator failing to present
evidence.
III.
Standard of Review
Judicial review of Social Security administrative
determinations is authorized by 42 U.S.C. § 405(g) (1994). Both
the fourth and sixth sentences of this subsection grant federal
courts the power to remand cases to the Commissioner. The
fourth sentence of this subsection states that a reviewing court
"shall have power to enter, upon the pleadings and transcript of
the record, a judgment affirming, modifying, or reversing the
decision of the Commissioner of Social Security, with or without
remanding the cause for a rehearing." 42 U.S.C. § 405(g). The
-14- sixth sentence states that the court "may at any time order
additional evidence to be taken before the Commissioner of
Social Security, but only upon a showing that there is new
evidence which is material and that there is good cause for the
failure to incorporate such evidence into the record in a prior
proceeding." Id. As discussed below, we view this case as
governed by the fourth sentence of § 405(g). See Sullivan v.
Finkelstein, 496 U.S. 617, 625-26 (1990); see also Shalala v.
Schaefer, 509 U.S. 292, 296-97 (1993).
Our review of a district court's decision to affirm or
reverse a final decision of the Commissioner is de novo and we
use the same standard to review the correctness of the
Commissioner's decision as does the district court: that is,
whether the final decision is supported by substantial evidence
and whether the correct legal standard was used. 42 U.S.C. §
405(g); Ward, 211 F.3d at 655. Questions of law are reviewed de
novo, both by the district court and by this court. Id.; Brown
v. Apfel, 71 F. Supp. 2d 28, 30 (D.R.I. 1999), aff'd, 230 F.3d
1347 (1st Cir. 2000). Since the district court appears to have
adopted a rule of law as to disposition on remand, our review of
this rule is de novo.
-15- Some of our sister circuits have held that, although
district court decisions reversing or affirming a decision of
the Commissioner are reviewed de novo, a district court's
decision as to whether to remand for proceedings or order
payment once an error has been found should be reviewed only for
abuse of discretion. See Higgins v. Apfel, 222 F.3d 504, 505
(8th Cir. 2000); Harman v. Apfel, 211 F.3d 1172, 1176-78 (9th
Cir.), cert. denied, 531 U.S. 1038 (2000); Nelson v. Apfel, 210
F.3d 799, 801-02 (7th Cir. 2000). Seavey has urged us to adopt
this approach, and the Commissioner has not contested this point
before us.7
However, we find that the decision as to what remedy
to apply under sentence four of § 405(g) is largely dictated by
the type of error made by the ALJ or Commissioner, as discussed
below, and therefore is not, for the most part, a matter of
discretion. Unlike in appeals where the district court has
acted as the trial court, the district court here has no
7 We note that, in many of the cases holding that abuse of discretion is the proper standard of review, the deferential standard benefitted the Commissioner, as the district court had ordered further proceedings upon remand and the applicant was seeking an order for immediate payment. See Higgins, 222 F.3d at 505; Harman, 211 F.3d at 1174; Nelson, 210 F.3d at 801.
-16- institutional advantage over this court. The district court
reviews the same cold administrative record as do we, applying
the same "substantial evidence" test. The First Circuit has
never recognized any distinction between the scope of a district
court's review of Social Security determinations and the scope
of appellate review. See, e.g., Ward, 211 F.3d at 655; Nguyen
v. Chater, 172 F.3d 31, 35 (1st Cir. 1999) (per curiam); Splude
v. Apfel, 165 F.3d 85, 88 (1st Cir. 1999). Similarly, under the
Administrative Procedure Act, courts of appeals directly review
the administrative action and use the same standard of review as
the district court. Baystate Alternative Staffing, Inc. v.
Herman, 163 F.3d 668, 674 (1st Cir. 1998). We are not convinced
that we should now create an exception to this general rule for
cases challenging the remand instructions when the Commissioner
or ALJ has erred. Therefore, we review de novo the district
court's decision to order payment.8
8 Even if we were to apply the abuse of discretion standard, the result would be the same in this case. The district court's rule that an order for payment is appropriate whenever the Commissioner has failed to disprove disability at Step 5 is an erroneous interpretation of the law; abuse of discretion review encompasses errors of law. See United States v. Davis, 261 F.3d 1, 21 (1st Cir. 2001).
-17- IV.
Remedy Upon Remand
Applying our standard of review here, we hold that the
district court committed error by remanding with instructions to
pay. Such a result is inconsistent with our precedent and an
unnecessary abrogation of the Commissioner's authority to
adjudicate applications for disability benefits.9
9 Before addressing the remedial issue, we pause to note another issue argued by the parties. The magistrate judge assumed that at step 5 the Commissioner bears the burden of proof, which influenced the magistrate judge's recommendation for disposition. Seavey, 2000 WL 1499277, at *3. There is, however, some dispute over who bears the burden of proof at the fifth step of the disability determination process. At the fifth step, the Commissioner bears some type of burden to come forward with evidence showing that there are jobs that the applicant can perform despite his limitations. However, the parties dispute whether this is a burden of proof or merely a burden of production. In a sense, this discussion relies on a series of misnomers, as the Commissioner is not actually represented as a litigant. It may be better to think of this not as a shifting of burdens, but rather as a rule providing that the applicant is not under any obligation to produce evidence at Step 5. This is not a new debate, see Dobrowolsky v. Califano, 606 F.2d 403, 406 (3d Cir. 1979), but there continues to be no clear answer within appellate case law. In the First Circuit, our terminology has not been entirely consistent. Compare Heggarty v. Sullivan, 947 F.2d 990, 997 (1st Cir. 1991) (per curiam) (referring to Agency's "burden of proof"), with Torres v. Sec'y of Health & Human Servs., 677 F.2d 167, 168 (1st Cir. 1982) ("burden . . . of showing"), Arocho, 670 F.2d at 375 ("burden of coming forward with evidence"), and Geoffroy v. Sec'y of Health
-18- The question of remedy is tied to the strictures of §
405(g): “the findings of the Commissioner of Social Security as
to any fact, if supported by substantial evidence, shall be
conclusive.” 42 U.S.C. § 405(g). Hence, the responsibility for
weighing conflicting evidence, where reasonable minds could
differ as to the outcome, falls on the Commissioner and his
designee, the ALJ. Walker v. Bowen, 834 F.2d 635, 639-40 (7th
Cir. 1987). It does not fall on the reviewing court. The
question of what instructions should accompany a remand order
will turn on the nature of the error at the ALJ proceedings.
& Human Servs., 663 F.2d 315, 317 (1st Cir. 1981) ("responsibility to establish"). In most cases involving review of Social Security administrative determinations, the distinction between a burden of proof and a burden of production will be meaningless, as our inquiry into the evidence (like that of the district court) is limited to a determination of whether the Commissioner's decision was supported by substantial evidence. Miranda v. Sec'y of Health, Educ. & Welfare, 514 F.2d 996, 998 (1st Cir. 1975). It is possible in some case that the Commissioner's burden may have some relevance in determining whether further proceedings are appropriate. Nonetheless, in this case, it is not determinative. The only evidence introduced by the Commissioner at Step 5 was the Grid, which was insufficient as a matter of law to deny benefits, given that Seavey had introduced evidence to support his claim that nonexertional limitations significantly limited his ability to work. Rose, 34 F.3d at 19; Heggarty, 947 F.2d at 995-96; 20 C.F.R. § 416.969a.
-19- Here, the Commissioner agrees that the ALJ was in error
because the ALJ ignored relevant and material evidence. The
reports were relevant to show that Seavey had nonexertional
limitations that could significantly impair his ability to
perform the full range of light or sedentary work and, hence,
that reliance on the Grid was inappropriate. Rose, 34 F.3d at
19; Heggarty, 947 F.2d at 995-96; 20 C.F.R. § 416.969a. The
Commissioner says that ordinarily in cases with this sort of
error, she would have voluntarily sought remand to the ALJ. The
Commissioner did not do so here because, in the Commissioner's
view, the court can review the record and decide that the only
reasonable conclusion is that Seavey has not shown that any
nonexertional limitation significantly affects his ability to
perform light work, and therefore he is not disabled. But, the
Commissioner says, if the court does not agree that this is the
only reasonable conclusion, then we should send the matter back
for further proceedings.
Thus, we are confronted with a case where the ALJ did
not make any findings on a key issue -- whether Seavey has a
significant nonexertional impairment. As a result, there was no
evidence introduced on a second, subordinate issue; if the ALJ
-20- had found that Seavey had a significant, nonexertional
limitation, he would have then progressed to a finding of
whether the combined exertional and nonexertional impairments
rendered Seavey unable to perform a significant number of light
or sedentary jobs. Seavey does not advance the argument before
this court that the record, as it currently stands, conclusively
shows that he is disabled under the meaning of the statute.
That would require vocational evidence to establish whether
there are jobs he could perform, given his combined exertional
and nonexertional limitations. Heggarty, 947 F.2d at 996.
Instead, Seavey maintains that the Commissioner is to blame for
the insufficiency of the record, as the Commissioner failed to
call a vocational expert to testify at the hearing, and
therefore she need not be given a second chance through further
proceedings.10
Such an approach, however, is not consistent with the
dictates of § 405(g) or with the approach generally taken when
reviewing administrative actions. Instead, the rule we adopt is
10 This was not Seavey's original position before the district court. Originally, he sought only a remand for further proceedings, but the magistrate judge suggested he request an order to pay instead.
-21- that ordinarily the court can order the agency to provide the
relief it denied only in the unusual case in which the
underlying facts and law are such that the agency has no
discretion to act in any manner other than to award or to deny
benefits. Put differently, if the evidence and law compelled
one conclusion or the other, then the court could order an award
of benefits or affirm a denial of benefits. For example, a
judicial award of benefits would be proper where the proof of
disability is overwhelming or where the proof is very strong and
there is no contrary evidence. See Mowery v. Heckler, 771 F.2d
966, 973 (6th Cir. 1985). Similarly, if correcting the legal
error clarified the record sufficiently that an award or denial
of benefits was the clear outcome, then the court may order
payment or affirm denial. Conversely, if an essential factual
issue has not been resolved, as here, and there is no clear
entitlement to benefits, the court must remand for further
proceedings.11 A number of circuits appear to have adopted this
11 If the district court remands to the agency for further proceedings where the applicant has sought payment of benefits and has requested a remand for further proceedings only as an alternative remedy, the applicant may appeal that remand order to this court. Forney v. Apfel, 524 U.S. 266, 271 (1998).
-22- view. See Holohan v. Massanari, 246 F.3d 1195, 1210 (9th Cir.
2001) ("[A] remand for further proceedings is unnecessary if the
record is fully developed and it is clear from the record that
the ALJ would be required to award benefits."); Faucher v.
Sec'y of Health & Human Servs., 17 F.3d 171, 176 (6th Cir. 1994)
(improper for district court to award benefits where there is
conflicting evidence as to the severity of applicant's
impairment); Davis v. Shalala, 985 F.2d 528, 534 (11th Cir.
1993) ("This court . . . [may] remand the case for an entry of
an order awarding disability benefits where the Secretary has
already considered the essential evidence and it is clear that
the cumulative effect of the evidence establishes disability
without any doubt."); see also Nielson v. Sullivan, 992 F.2d
1118, 1122 (10th Cir. 1993) (remand with order to pay where
passage of time had placed applicant in an older age group,
making award a foregone conclusion); K.C. Davis & R.J. Pierce
Jr., 2 Administrative Law Treatise 163-64 (3d ed. 1994)
(adopting test but adding requirement that the court conclude
that further delay would harm the applicant).
This rule also is consistent with the general rules for
judicial review of administrative action. When an agency has
-23- not considered all relevant factors in taking action, or has
provided insufficient explanation for its action, the reviewing
court ordinarily should remand the case to the agency. Fla.
Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985) ("If the
record before the agency does not support the agency action . . . the
proper course, except in rare circumstances, is to remand to the agency
for additional investigation or explanation.").
The district court's and the magistrate judge's decisions
rest, in part, on the erroneous conclusion that the Commissioner
would not be able to supplement a record upon remand, absent a
showing of "good cause" for failure to introduce the necessary
vocational evidence at the ALJ hearing, and therefore a remand
would not serve any purpose. See Field v. Chater, 920 F. Supp.
240, 244 (D. Me. 1995). However, this reasoning depends on two
incorrect assumptions. First, it assumes that additional
evidence is definitively needed. Additional evidence would only
be necessary in this case if the ALJ determines that Seavey's
evidence indicates a significant nonexertional limitation.12
12 At this stage, we make no determination as to whether an ALJ finding that the evidence was sufficient to show a significant nonexertional limitation, or a finding that the evidence was not sufficient to show a significant nonexertional limitation, would meet the "substantial evidence" test.
-24- Without that preliminary finding, we cannot know whether the
denial of benefits can withstand the lack of vocational
evidence.
Second, the magistrate judge's and district court's
reasoning assumes that good cause is a requirement for
introducing new evidence in a sentence four remand. The "good
cause" concept is derived from the sixth sentence of § 405(g),
quoted above. Field, 920 F. Supp. at 244. The magistrate
judge's recommendation also relies on older Second Circuit
precedent, which also employs the "good cause" reasoning in
determining when orders to pay are appropriate. Id. at 242
(citing Carroll v. Sec'y of Health & Human Servs., 705 F.2d 638,
643-44 (2d Cir. 1983)). However, this reasoning erroneously
combines two separate grants of remand power contained within §
405(g) -- that granted by the fourth sentence and that granted
by the sixth sentence. Since the Second Circuit decided
Carroll, the Supreme Court has made clear that the sixth
sentence of § 405(g) and the fourth sentence of § 405(g) are two
distinct grants of remand power, which apply in two distinct
situations. Shalala v. Schaefer, 509 U.S. 292, 297-301 (1993);
Sullivan v. Finkelstein, 496 U.S. 617, 626 (1990). Sentence six
-25- and its "good cause" limitation come into play only "when the
district court learns of evidence not in existence or available
to the applicant at the time of the administrative proceeding
that might have changed the outcome of that proceeding."
Finkelstein, 496 U.S. at 626. Sentence six has been referred to
as a "pre-judgment remand," employed where the federal court has
not ruled on the validity of the Commissioner's position, while
sentence four has been referred to as a "post-judgment remand."
See Faucher v. Sec'y of Health & Human Servs., 17 F.3d 171, 175
(6th Cir. 1994). This case is clearly governed by sentence four
and therefore the "good cause" restriction of sentence six does
not apply.
Unlike sentence six, sentence four does not contain any
statutory limits on the ability to supplement the record on
remand. Nonetheless, we do not rule out the possibility of some
constraints in unusual cases. In some Social Security cases,
for example, the delay in final disposition of claims may, at
times, make requests by the Commissioner for additional
proceedings a matter of some concern. Many Social Security
applicants are represented by non-lawyers or have no
-26- representation at all, and most are indigent.13 Some circuits
have exercised what we view as a form of equitable power to
order benefits in cases where the entitlement is not totally
clear, but the delay involved in repeated remands has become
unconscionable. E.g., Morales v. Apfel, 225 F.3d 310, 320 (3d
Cir. 2000) (remanding for payment of benefits in light of
"substantial evidence" of a severe mental disability and
"considerable inexplicable delays" resulting in passage of ten
years since application). In such cases, our sister circuits
have warned the Commissioner that administrative deference does
not entitle the Commissioner to endless opportunities to get it
right.14 See, e.g., Miller v. Chater, 99 F.3d 972, 978 (10th
13 Moreover, as representatives are commonly paid for their advocacy during the agency adjudication with a percentage of the lump sum retroactive benefit payment that applicants receive when their applications are approved, see 42 U.S.C. § 406(a)(2)(A) (1994), there is little financial incentive for the agency or the representative to expedite agency proceedings. We do note that the Equal Access to Justice Act, under which the Commissioner may be compelled to pay the attorney's fees and expenses of successful applicants, Schaefer, 509 U.S. at 302-03, provides an incentive to the agency not to take unreasonable positions on appeal. 14 At the same time, the Supreme Court has noted that Congress was fully aware of the serious delays in resolution of disability claims, yet declined to impose deadlines; as a result, the Court vacated an injunction imposing a flat deadline. Heckler v. Day, 467 U.S. 104 (1984).
-27- Cir. 1996) (remanding for fifth administrative hearing, but
cautioning "the agency that the Secretary is not entitled to
adjudicate a case ad infinitum until [she] correctly applies the
proper legal standard and gathers evidence to support [her]
conclusion.") (internal quotations omitted). This, however, is
not such a case, and we need not decide the extent of any such
equitable limits here. In this case, we leave the question of
additional evidence to the discretion of the ALJ, based on his
resolution of the conflicting evidence of nonexertional
impairments.
Accordingly, the order for payment of benefits is vacated
and the case is remanded with instructions to remand to the
Commissioner for further proceedings not inconsistent with this
opinion.
-28-