EFFECTIVE/PUBLICATION DATE: 6/1/98
Acquiescence Ruling 98-4(6)
Whether, in making a disability determination or decision on a subsequent disability claim with respect to an unadjudicated period, where the claim arises under the same title of the Social Security Act (the Act) as a prior claim on which there has been a final decision by an Administrative Law Judge (ALJ) or the Appeals Council, the Social Security Administration (SSA) must adopt a finding of a claimant's residual functional capacity, or other finding required under the applicable sequential evaluation process for determining disability, made in the final decision by the ALJ or the Appeals Council on the prior disability claim.1
Sections 205(a) and (h) and 702(a)(5) of the Social Security Act (42 U.S.C. 405 (a) and (h) and 902(a)(5)), 20 CFR 404.900, 404.957(c)(1), 416.1400, 416.1457(c)(1).
Sixth (Kentucky, Michigan, Ohio, Tennessee)
Drummond v. Commissioner of Social Security, 126 F.3d 837 (6th Cir. 1997).
This Ruling applies to determinations or decisions at all administrative levels (i.e., initial, reconsideration, ALJ hearing and Appeals Council).
Grace Drummond applied for disability insurance benefits on July 6, 1987, claiming a disability onset date of November 17, 1985. The claim was denied initially and upon reconsideration. A hearing was held before an ALJ who concluded that the claimant was not disabled and denied her claim. The ALJ found that Ms. Drummond was unable to perform her past relevant work but retained the residual functional capacity for sedentary work.
Ms. Drummond filed a subsequent application for disability insurance benefits on June 21, 1989. This claim was denied initially and again upon reconsideration. After a hearing was held, an ALJ found that the claimant suffered from combined musculoskeletal and multiple body system impairments but retained the residual functional capacity for medium level work and could perform her past relevant work as a textile machine operator. Accordingly, the ALJ found that Ms. Drummond was not disabled. After the Appeals Council denied the claimant's request for review, she sought judicial review. The United States District Court for the Eastern District of Kentucky granted summary judgment to SSA finding that substantial evidence supported SSA's denial of benefits.
On appeal to the Court of Appeals for the Sixth Circuit, Ms. Drummond argued that, based on principles of res judicata, the first ALJ's determination that she was limited to sedentary work must be followed by the second ALJ in the absence of evidence of an improvement in her condition since the first hearing. Declining to address this issue initially on appeal, the Sixth Circuit reversed the judgment of the district court and remanded the case with instructions to remand it to SSA for further proceedings to determine whether res judicata is applicable against SSA and, if so, whether there was substantial evidence to support a finding that the claimant's condition had improved since the time of her first application.2
On remand, after oral argument was held before the Appeals Council on September 27, 1993, the Appeals Council issued a decision denying Ms. Drummond s claim for disability insurance benefits. The Appeals Council found that 42 U.S.C. 405(h) could not be applied against SSA as a bar to prevent reconsideration of an issue because SSA was not a party to the benefits determination.
Ms. Drummond sought judicial review of the Appeals Council's decision and the United States District Court for the Eastern District of Kentucky affirmed SSA's decision denying disability benefits. The district court found that "administrative res judicata does not apply to the Commissioner when a transitory condition such as health is involved ...." The claimant appealed this decision to United States Court of Appeals for the Sixth Circuit.
Relying on the Fourth Circuit's decision in Lively v. Secretary of Health and Human Services, 820 F.2d 1391 (4th Cir. 1987), the claimant argued that res judicata applied and that, absent evidence of an improvement in her condition, the first ALJ's finding that she had a residual functional capacity limited to sedentary work was binding on SSA in deciding her subsequent claim.3 Noting the similarity between the Lively case and the case at bar, the Sixth Circuit observed that the court in Lively had relied on "[p]rinciples of finality and fundamental fairness drawn from § 405(h)" to conclude that "evidence, not considered in the earlier proceeding, would be needed as an independent basis to sustain a finding [of the claimant's residual functional capacity] contrary to the final earlier finding."4
The Court of Appeals for the Sixth Circuit found the reasoning of the Lively court persuasive and stated that "[a]bsent evidence of an improvement in a claimant's condition, a subsequent ALJ is bound by the findings of a previous ALJ." The court held that SSA could not reexamine issues previously determined in the absence of new and additional evidence or changed circumstances. The court indicated that to allow such a reevaluation "would contravene the reasoning behind 42 U.S.C. § 405(h) which requires finality in the decisions of social security claimants." The Court of Appeals further stated that "[j]ust as a social security claimant is barred from relitigating an issue that has been previously determined, so is the Commissioner."
After finding that there was no substantial evidence that Ms. Drummond's condition had improved significantly during the time period between the two ALJ hearings, the court concluded that SSA was bound by its previous finding that the claimant was limited to sedentary work. The Court of Appeals thereupon reversed the judgment of the district court and remanded with instructions for the district court to remand the case to SSA for an award of benefits.
Under SSA policy, if a determination or decision on a disability claim has become final, the Agency may apply administrative res judicata with respect to a subsequent disability claim under the same title of the Act if the same parties, facts and issues are involved in both the prior and subsequent claims. However, if the subsequent claim involves deciding whether the claimant is disabled during a period that was not adjudicated in the final determination or decision on the prior claim, SSA considers the issue of disability with respect to the unadjudicated period to be a new issue that prevents the application of administrative res judicata. Thus, when adjudicating a subsequent disability claim involving an unadjudicated period, SSA considers the facts and issues de novo in determining disability with respect to the unadjudicated period.
The Sixth Circuit concluded that where a final decision of SSA after a hearing on a prior disability claim contains a finding of a claimant's residual functional capacity, SSA may not make a different finding in adjudicating a subsequent disability claim with an unadjudicated period arising under the same title of the Act as the prior claim unless new and additional evidence or changed circumstances provide a basis for a different finding of the claimant's residual functional capacity.
This Ruling applies only to disability findings in cases involving claimants who reside in Kentucky, Michigan, Ohio, or Tennessee at the time of the determination or decision on the subsequent claim at the initial, reconsideration, ALJ hearing or Appeals Council level. It applies only to a finding of a claimant's residual functional capacity or other finding required at a step in the sequential evaluation process for determining disability provided under 20 CFR 404.1520, 416.920 or 416.924, as appropriate, which was made in a final decision by an ALJ or the Appeals Council on a prior disability claim.5
When adjudicating a subsequent disability claim with an unadjudicated period arising under the same title of the Act as the prior claim, adjudicators must adopt such a finding from the final decision by an ALJ or the Appeals Council on the prior claim in determining whether the claimant is disabled with respect to the unadjudicated period unless there is new and material evidence relating to such a finding or there has been a change in the law, regulations or rulings affecting the finding or the method for arriving at the finding.
1 Although Drummond was a title II case, similar principles also apply to title XVI. Therefore, this Ruling extends to both title II and title XVI disability claims.
2 Drummond v. Secretary of Health and Human Services, No. 92-5649 (6th Cir. April 26, 1993).
3 In Lively, the Fourth Circuit held that where a final decision of SSA after a hearing on a prior disability claim contained a finding about a claimant's residual functional capacity, SSA may not make a different finding based on the same evidence when adjudicating a subsequent disability claim arising under the same title of the Act and covering a period not adjudicated in the decision on the prior claim. 820 F.2d at 1392. On July 7, 1994, SSA published Acquiescence Ruling 94-2(4) at 59 FR 34849 to reflect the holding in Lively.
4 Lively, 820 F.2d at 1392.
5 In making a finding of a claimant's residual functional capacity or other finding required to be made at a step in the applicable sequential evaluation process for determining disability provided under the specific sections of the regulations described above, an ALJ or the Appeals Council may have made certain subsidiary findings, such as a finding concerning the credibility of a claimant's testimony or statements. A subsidiary finding does not constitute a finding that is required at a step in the sequential evaluation process for determining disability provided under 20 CFR 404.1520, 416.920 or 416.924.
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