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Pauline Thomas v. Commissioner of Social Security

Date: June 21, 2002
Location: Court of Appeals, Third Circuit


PAULINE THOMAS,
Appellant

v.

COMMISSIONER OF SOCIAL SECURITY

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY
(Dist. Court No. 99-cv-02234)
District Court Judge: William G. Bassler

Argued March 12, 2001

Before: ALITO, RENDELL, Circuit Judges, and
SCHWARZER,* Senior District Judge.

Argued En Banc February 13, 2002

Before: BECKER, Chief Judge, SLOVITER, MANSMANN,
SCIRICA, NYGAARD, ALITO, ROTH, McKEE, RENDELL,
AMBRO, and FUENTES, Circuit Judges.

(Opinion Filed: June 21, 2002)

OPINION OF THE COURT

ALITO, Circuit Judge:

Pauline Thomas worked as an elevator operator until her position was eliminated. Claiming a heart condition and related medical problems, she applied for Supplemental Security Income and Disability Insurance Benefits. The Commissioner of Social Security ("Commissioner") denied her application, and an Administrative Law Judge ("ALJ") also determined that Thomas was not eligible for benefits.

The United States District Court for the District of New Jersey affirmed the ALJ's ruling and held that Thomas was not disabled under the five-step sequential process for determining eligibility for disability benefits because it found that she could continue to perform her previous work as an elevator operator. The District Court's interpretation of the Social Security Act, however, is inconsistent with both a careful reading of the particular provision at issue and the obvious statutory scheme. According to the Commissioner and the District Court, even if Thomas is unable to perform any job that exists in substantial numbers in the national economy and meets all of the other requirements for disability and supplemental security benefits, she may not obtain benefits because she could perform a job-serving as an elevator operator-that, as far as this record reflects, has now entirely vanished. We disagree and therefore reverse the order of the District Court and remand the case for further proceedings.

I.

Pauline Thomas worked as a housekeeper until 1988, when she had a heart attack. She then worked as an elevator operator until she was laid off on August 25, 1995, because her position was eliminated. She applied for Disability Insurance Benefits and Supplemental Security Income Benefits on June 11, 1996, claiming disability related to cardiac problems. She testified that she suffers from irregular heartbeats, high blood pressure, dizziness, and fatigue. Thomas also claimed that she suffers from lower back problems caused by lumbar radiculopathy and asserts that she fractured her right ankle on July 8, 1996. Thomas was 54 years old at the time she applied for benefits.

Thomas's application for Social Security benefits was denied by the Commissioner initially and on reconsideration. A hearing was then held before an ALJ, who determined that Thomas was not entitled to benefits. The ALJ found that Thomas has hypertension, cardiac arrythmia, cervical and lumbar strain/sprain, and a transient ischemic attack, but does not have an impairment listed in the list of impairments presumed to be severe enough to preclude any gainful work. Decision of ALJ at 5.

The ALJ then found that Thomas has the residual functional capacity to perform at least light work and, therefore, that she could perform her past relevant work as
an elevator operator. The ALJ considered Thomas's argument that her past relevant work as an elevator operator no longer exists in the national economy. Id. at 4- 5. Nevertheless, the ALJ decided that the regulations and Social Security Ruling 82-40 exclude from Step Four of the sequential process for determining disability any inquiry into whether the past work actually exists. Id. at 5. The ALJ held that Step Four considers only whether a claimant can perform her previous job. As a result, the ALJ ruled that Thomas was not under a "disability" and ended the evaluation without proceeding to Step Five. Id.

The Appeals Council denied Thomas's request for review, establishing the ALJ's decision as the final decision of the Secretary. Thomas then challenged the ALJ's ruling in the United States District Court for the District of New Jersey, but the District Court held that the ALJ properly applied the sequential process and affirmed his ruling. Thomas appeals from this judgment.

II.

Title II of the Social Security Act, as amended, provides Social Security Disability Insurance benefits for individuals who are "under a disability" and meet the other eligibility requirements. 42 U.S.C. S 423(a). Title XVI of the Act likewise provides Supplemental Security Income benefits for "disabled" indigent persons. 42 U.S.C. S 1382. With respect to individuals who are not blind, the term "disability" is defined as follows:

(1) The term "disability" means- (A) 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. . .

(2) For purposes of paragraph (1)(A)--

(A) An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. For purposes of the preceding sentence (with respect to any individual), "work which exists in the national economy" means work which exists in significant numbers either in the region where such individual lives or in several regions of the country. 42 U.S.C. S 423(d) (emphasis added); see also 42 U.S.C. S 1382c(a)(3) (providing the same definitions for Supplemental Security Income benefits).

Social Security regulations provide for a sequential evaluation process for determining whether a claimant is under a disability. 20 C.F.R. SS 404.1520, 416.920; see also Plummer v. Apfel, 186 F.3d 422, 428 (3d Cir. 1999). At Step One, the Commissioner must determine whether the claimant is currently engaging in a "substantial gainful activity." 20 C.F.R. SS 404.1520(b), 416.920(b). If so, she is not eligible. 20 C.F.R. SS 404.1520(b), 416.920(b). At Step Two, the Commissioner must determine whether the claimant has a "severe impairment." 20 C.F.R. SS 404.1520©, 416.920©. If the claimant does not have a severe impairment, then she is not eligible. 20 C.F.R. SS 404.1520©, 416.920©. At Step Three, if a claimant does not suffer from an impairment on the list of impairments presumed to be severe enough to preclude gainful work, the Commissioner moves to Step Four. 20 C.F.R. SS 404.1520(d), 416.920(d). Step Four requires the Commissioner to decide whether the claimant retains the residual functional capacity to perform her past relevant work. 20 C.F.R. SS 404.1520(e), 416.920(e). The claimant bears the burden of demonstrating an inability to return to her past relevant work. Plummer, 186 F.3d at 428. If the claimant is unable to resume her former occupation, the evaluation moves to Step Five. Id. At Step Five, the Commissioner has the burden of demonstrating that the claimant is capable of performing other jobs existing in significant numbers in the national economy. 20 C.F.R. SS 404.1520(f), 416.920(f). At Step Five, the Commissioner is to consider the claimant's vocational factors. 20 C.F.R. SS 404.1520(f), 416.920(f).

III.

Thomas argues that because her position as an elevator operator was eliminated and does not appear in significant numbers in the national economy, the ALJ should have proceeded to Step Five of the sequential process. We agree that at Step Four, Thomas should have been permitted to show that her previous work as an elevator operator no longer exists in substantial numbers in the national economy.

At Step Four of the sequential process, the Commissioner must determine whether the claimant can perform her past relevant work. Based on the language of the relevant provisions of the Social Security Act and the broader statutory scheme, we hold that, for the purposes of Step Four of the evaluation process, a claimant's previous work must be substantial gainful work which exists in the national economy. Thus, a claimant may proceed to Step Five by showing either that she cannot perform her past relevant work or that the previous work is not substantial gainful work that exists in the national economy.

The statute defines disability as follows: "An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy. . . ." 42 U.S.C. S 423(d) (emphasis added). Thus, an individual is disabled only if "he is not only unable to do his previous work but cannot . . . engage in any other kind of substantial gainful work which exists in the national economy," i.e., any "work which exists in significant numbers either in the region where such individual lives or in several regions of the country." 42 U.S.C. S 423(d)(2)(A) (emphasis added). The phrase "any other" in this provision is important for present purposes. The use of this phrase makes clear that an individual's "previous work" was regarded as a type of "substantial gainful work which exists in the national economy." When a sentence sets out one or more specific items followed by "any other" and a description, the specific items must fall within the description. For example, it makes sense to say: "I have not seen a tiger or any other large cat" or "I have not read Oliver Twist or any other novel which Charles Dickens wrote." But it would make no sense to say, "I have not seen a tiger or any other bird" or "I have not read Oliver Twist or any other novel which Leo Tolstoy wrote." Therefore, if we presume that the statutory provisions at issue here are written in accordance with correct usage, a claimant's ability to perform "previous work" is not disqualifying if that work no longer "exists in the national economy."2 This feature of the statutory language is unambiguous.

Moreover, even if the statutory language were ambiguous, our interpretation would not change. Other things being equal, a statute should be read to avoid absurd results. In re First Merchants Acceptance Corporation v. J.C. Bradford & Co., 198 F.3d 394, 402 (3d Cir. 1999). Here, there is no plausible reason why Congress might have wanted to deny benefits to an otherwise qualified person simply because that person, although unable to perform any job that actually exists in the national economy, could perform a previous job that no longer exists.

It is true that a literal interpretation of the Social Security regulations setting out the five-step evaluation process seems to lead to this result. The regulation describing Step Four states:

Your impairment(s) must prevent you from doing past relevant work. . . . If you can still do this kind of work, we will find that you are not disabled. 20 C.F.R. S 404.1520(e); see also 20 C.F.R. S 416.920(e). Only if a claimant can get by Step Four do the regulations call for an inquiry into whether the claimant can perform any job that actually exists. See 20 C.F.R.S 404.1520(f); 20 C.F.R. S 416.920(f).

Mechanically following the regulations, the ALJ in this case found that Thomas retained the residual functional capacity to perform her previous job as an elevator operator. Without giving Thomas an opportunity to present evidence concerning the existence of elevator operator positions, the ALJ ended the evaluation at Step Four. He rejected Thomas's argument that, because the position of elevator operator is now obsolete, she should be permitted to proceed to Step Five.

Although we acknowledge that the literal language of the regulation governing Step Four appears to support the ALJ's decision to terminate the inquiry at Step Four, this regulation should be read, if possible, so as not to conflict with the statute it implements, see, e.g., Joy Technologies, Inc. v. Secretary of Labor, 99 F.3d 991, 995 (10th Cir. 1996), and if there is such a conflict, the regulation must yield.4 See United States v. Mead Corp., 533 U.S. 218, 226 (2001) (even when an agency is expressly delegated authority to elucidate a specific provision of a statute by regulation, a court should not follow a regulation that is "manifestly contrary to the statute"); Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984); see also Mead Corp., 533 U.S. at 226; Heckler v. Campbell, 461 U.S. 458, 466 (1983). The problem with a literal reading of the regulation regarding Step Four is that it sets up an artificial roadblock to an accurate determination of whether Thomas can "engage in any . . . kind of substantial gainful work which exists in the national economy." 42 U.S.C. S 423(d)(2). If Thomas can show that elevator operator positions really are obsolete, the fact that she still possesses the physical or mental capability to perform the duties of an elevator operator does not mean that she can engage in any substantial gainful activity that actually exists. Accordingly, the ALJ should have allowed Thomas to present evidence on whether elevator operator positions are obsolete. If Thomas had made such a showing, the ALJ then should have proceeded to Step Five of the sequential evaluation to ascertain whether Thomas's medical impairments prevent her from engaging in any work that actually exists.

Step Four was designed to facilitate the determination of whether a claimant has the capacity to work, because it is easier to evaluate a claimant's capacity to return to a former job than to decide whether any jobs exist for a person with the claimant's impairments and vocational background. Nevertheless, we cannot lose sight of the fact that the touchstone of "disability" is the inability to engage in any substantial gainful activity that exists in the national economy. 42 U.S.C. S 423(d)(2). Because a rigid application of Step Four in this case could defeat Congress's unambiguous intent, we must reject such an approach. See Mead Corp., 533 U.S. at 226.

The Commissioner argues that permitting a claimant to proceed to Step Five if she can show that her past job does not exist in significant numbers in the national economy would convert disability benefits into unemployment benefits. We find this argument unconvincing. Awarding disability benefits to a claimant who, as a result of a qualifying impairment, cannot perform any job that actually exists is hardly the equivalent of providing unemployment compensation.5 By contrast, denying benefits because a claimant could perform a type of job that does not exist seems nonsensical.

In our view, the most perceptive precedent addressing the question at hand is Kolman v. Sullivan, 925 F.2d 212 (7th Cir. 1991). The holding in that case-that the ALJ should have continued to Step Five because the claimant's past job was a temporary training position-is inapplicable here, but the Kolman Court did mention in dicta that, even if a claimant's past job was a permanent position, an ALJ would be required to move to Step Five if that past job had disappeared. As the Kolman Court noted, the fact that a claimant could perform a past job that no longer exists would not be "a rational ground for denying benefits." Kolman, 925 F.2d at 213. The Court observed:

The failure of the regulations to require that the job constituting the applicant's past work exist in significant numbers probably just reflects an assumption that jobs that existed five or ten or even fifteen years ago still exist. But if the assumption is dramatically falsified in a particular case, the administrative law judge is required to move on to the next stage and inquire whether some other job that the applicant can perform exists in significant numbers today somewhere in the national economy. Id. at 213-14.

Two, if a claimant does not have "any impairment or combination of impairments which significantly limits [her] physical or mental ability to do basic work activities," she does not have a severe impairment and is therefore not disabled. 20 C.F.R. S 404.1520©; 20 C.F.R. S 416.920©. In addition, a claimant's burden of proving that her previous work no longer exists is hardly insubstantial. Finally, in the vast majority of cases, a claimant who is found to have the capacity to perform her past work also will have the capacity to perform other types of work. To remain faithful to the statutory scheme, however, the ALJ should move to Step Five and dispose of the case at that stage rather than cutting off the evaluation simply because the claimant has the capacity to perform a job that may not exist.

6. In subsequent cases, the Seventh Circuit has neither implemented nor disavowed this dicta. To be sure, in Knight v. Chater, 55 F.3d 309 (7th We acknowledge that the Commissioner's position is supported by Rater v. Chater, 73 F.3d 796 (8th Cir. 1996), and Pass v. Chater, 65 F.3d 1200 (4th Cir. 1995), but neither opinion is persuasive. Both decisions rely primarily on the Social Security regulations and on Social Security rulings. See Rater, 73 F.3d at 798-99 (relying on Social Security Ruling 82-61); Pass, 65 F.3d at 1204-05 (relying on Social Security Rulings 82-61 and 82 40). Neither opinion, in our judgment, devotes sufficient attention to the language of the statute or the statutory scheme.

IV.

The dissent argues that our reasoning in this case is "flawed in six ways," but the dissent's arguments are unpersuasive. The dissent asserts that the statutory language supports its position, accusing us of "rewriting the statute," "contort[ing] the statutory language," "reject[ing] its literal meaning," and"engraft[ing]" upon it an "additional component." Dissent at 15, 17. In the words of the dissent, the statutory language is "perfectly clear," it "permits no other conclusion," it "clearly mandates" the result reached by the dissent, and its meaning is"plain." Id. Notably absent from the dissent, however, is any attempt to provide reasoned support for these charges. In particular, the dissent makes no effort to respond to our argument that the statutory language, when read in accordance with standard rules of usage, prescribes that the claimant's "previous work" must still"exist[ ] in the national economy." See supra at 6.

Three of the dissent's arguments are beside the point because they are based not on the statute, but on the regulations. The dissent contends that "Step Four requires the Commissioner to decide whether the claimant retains the residual functional capacity to perform her past relevant work"; that "it is not until Step Five that vocational factors (i.e., ability to access other gainful work) are considered"; and that "Steps Four and Five are quite clear." Dissent at 15, 16. Our decision, however, is based not on the regulations but on the statute. To the extent that the regulations are inconsistent with the statute, they are invalid. Thus, the dissent's reliance on the regulations does not respond to the rationale of our decision.

The dissent argues that the Seventh Circuit's decision in Kolman is the "linchpin" of our decision and that it can be "distinguished" from the present case. Dissent at 18. This argument is puzzling because our opinion plainly acknowledges that "[t]he holding [in Kolman] is inapplicable here." Supra at 11. Instead of basing our decision on Kolman, we simply quoted what we recognized as"dicta" in that opinion. Id.

The dissent warns that our interpretation of the statute "would wreak havoc with the evidentiary aspects of the administrative process" by making "vocational concerns" (i.e., whether elevator operator jobs still exist) a part of Step Four. Dissent at 16. This is, to put the point mildly, hyperbole. Cases like the present one are rare, and inquiring whether a job such as that of an elevator operator still exists in the national economy is not complex. We have no doubt that the Social Security System will be able to cope with this decision.

Finally, the dissent attempts to provide a plausible reason why Congress might have wanted to deny benefits to a claimant on the ground that the claimant can perform a previous job that no longer exists. According to the dissent, "[p]revious work essentially serves as a proxy for the ability to perform work." Dissent at 16. Apparently, this means that Congress might have reasoned that if a claimant is able to perform previous work that no longer exists, it is likely that the claimant is also able to perform other work that does exist. Undoubtedly this is true in most cases- but it may not always be true, and it may not be true in this case. The dissent thus provides no answer to the question why Congress might have wanted to preclude benefits for a claimant who is able to perform previous work that no longer exists but is unable to perform any work that does exist.

V.

For the foregoing reasons, we reverse the order of the District Court and remand for further proceedings.

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