Earley v. Commissioner of Social Security, 893 F.3d 929 (6th Cir. 2018) (Interpreting Drummond v. Commissioner of Social Security, 126 F.3d 837 (6th Cir. 1997)): Effect of Prior Disability Findings on Adjudication of a Subsequent Disability Claim—Titles II and XVI of the Act.

Issue

Whether, in making a disability determination or decision on a subsequent disability claim with respect to an unadjudicated period, the Social Security Administration (SSA) must consider a finding of a claimant's residual functional capacity (RFC) or other finding required under the applicable sequential evaluation process for determining disability, made in a final decision by an administrative law judge (ALJ) or the Appeals Council (AC) on a prior disability claim.

Statute/Regulation/Ruling Citation

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(42 U.S.C. 405(a) and (h) and 902(a)(5)), 20 CFR 404.900(a), 404.957(c)(1), 416.1400(a), 416.1457(c)(1), AR 98-3(6) (rescinded), AR 98-4(6) (rescinded).

Circuit

Sixth (Kentucky, Michigan, Ohio, Tennessee) Earley v. Commissioner of Social Security, 893 F.3d 929 (6th Cir. 2018) (Interpreting Drummond v. Commissioner of Social Security, 126 F.3d 837 (6th Cir. 1997))

Applicability of Ruling

This ruling applies to determinations and decisions at all administrative levels (i.e., the initial, reconsideration, ALJ hearing, and AC levels).

The decision of the Sixth Circuit in Earley was based, in part, on the panel's interpretation of the Sixth Circuit's prior decision in Drummond. Drummond, in turn, relied in part on the Sixth Circuit's earlier decision in Dennard. The following summaries of the two earlier cases are provided as background material.

Dennard v. Secretary of Health & Human Services, 907 F.2d 598 (6th Cir. 1990)

Mr. Dennard argued that because SSA found him unable to do his past relevant work on his first application for benefits, SSA was precluded from reconsidering this issue and finding in a subsequent decision, involving an unadjudicated period, that Mr. Dennard could perform the same past relevant work. The Sixth Circuit observed that it seemed clear that SSA had reconsidered the nature and extent of Mr. Dennard's exertional level in his former job. The court stated: “We are persuaded that under the circumstances, we must remand this case to [SSA] . . . to determine whether [Mr.] Dennard is disabled in light of the prior determination that he could not return to his previous employment.”

Drummond v. Commissioner of Social Security, 126 F.3d 837 (6th Cir. 1997)

Ms. Drummond argued that, absent evidence of improvement in her condition, the ALJ's finding in a prior claim that she was limited to sedentary work precluded SSA from finding in a subsequent claim that she could perform medium work. The Sixth Circuit 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 decided, in the absence of new and additional evidence or changed circumstances. The court 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 not substantial evidence that Ms. Drummond's condition had improved significantly in the time between the two ALJ decisions, the court concluded that SSA was bound by its previous finding that Ms. Drummond was limited to sedentary work.

Earley v. Commissioner of Social Security, 893 F.3d 929 (6th Cir. 2018)

Description of Case

In 2010, Ms. Earley applied for disability benefits, claiming that she was disabled starting on June 25, 2010. In 2012, an ALJ found that she remained capable of light physical exertion and that she was not disabled for the period from June 25, 2010, through May 15, 2012. Ms. Earley applied again in July 2012, arguing that she became disabled after the decision on her last claim. The same ALJ, invoking Drummond and AR 98-4(6), stated that he was bound by his earlier findings, unless Ms. Earley offered new and material evidence of a changed condition. Because the ALJ found that Ms. Earley had failed to do that, the ALJ again found her not disabled and denied her claim.

On review, the district court reversed. The district court construed Drummond to apply only if it would lead to a favorable outcome for the claimant. Since any preclusive effect of the ALJ's prior findings would make it more difficult for Ms. Earley to be found disabled, the court found that Drummond did not apply.

On appeal, the Sixth Circuit examined and clarified Drummond. The court found that the key principles protected by Drummond, consistency between proceedings and finality with respect to prior adjudicated claims, apply to both individuals and the government. At the same time, these principles do not prevent the agency from giving a fresh look to a new claim containing new evidence or satisfying a new regulatory threshold that covers a new period of alleged disability while being mindful of past rulings and the record in prior proceedings.

The court rejected the argument that, “[i]n reviewing a second application by the same individual . . . the administrative law judge should completely ignore earlier findings and applications.” The court explained that “[f]resh review is not blind review” and that “a later administrative law judge may consider what an earlier judge did if for no other reason than to strive for consistent decision making.” Further, the court explained that “it is fair for an administrative law judge to take the view that, absent new and additional evidence, the first administrative law judge's findings are a legitimate, albeit not binding, consideration in reviewing a second application” and, at the same time, that “an applicant remains free to bring a second application that introduces no new evidence or very little new evidence after a failed application.” The court cautioned, however, that a claimant “should not have high expectations about success if the second filing mimics the first one and the individual has not reached any new age (or other) threshold to obtain benefits.”

Holding

The Sixth Circuit stated that, “[w]hen an individual seeks disability benefits for a distinct period of time, each application is entitled to review.” The court explained that if an individual files a subsequent application for the same period and “offers no cognizable explanation for revisiting the first decision, res judicata would bar the second application.” The court further explained that an ALJ honors res judicata “principles by considering what an earlier judge found with respect to a later application and by considering the earlier record” and that, accordingly, “it is fair for an administrative law judge to take the view that, absent new and additional evidence, the first administrative law judge's findings are a legitimate, albeit not binding, consideration in reviewing a second application.” Ms. Earley's new claim involved a new period; therefore, the court held that res judicata did not apply. Accordingly, the court remanded the case for the ALJ to reconsider Ms. Earley's claim for benefits under the correct standard.

Statement as to How Earley Differs From the Agency's Policy

In a subsequent disability claim, SSA considers the issue of disability with respect to a period that was not adjudicated to be a new issue that requires an independent evaluation. Thus, when adjudicating a subsequent disability claim involving an unadjudicated period, SSA considers the facts and issues de novo in determining or deciding disability with respect to the unadjudicated period. SSA does not consider prior findings made in the final determination or decision on the prior claim as evidence in adjudicating disability with respect to the unadjudicated period in the subsequent claim.

In Earley, the Sixth Circuit agreed with SSA's policy that res judicata does not apply with respect to an unadjudicated period. Yet, the Sixth Circuit disagreed with SSA's policy that prior disability findings are not to be considered in the adjudication of disability for a previously unadjudicated period in a subsequent claim. Rather, Earley indicates that such prior findings made at the ALJ hearing or AC level should be considered in the adjudication of disability for an unadjudicated period in a subsequent claim, stating that “it is fair for an administrative law judge to take the view that, absent new and additional evidence, the first administrative law judge's findings are a legitimate, albeit not binding, consideration in reviewing a second application.” Earley indicates that an adjudicator honors the principles of res judicata “by considering what an earlier judge found with respect to a later application and by considering that earlier record.”

SSA interprets Earley to require that, where a final decision after a hearing on a prior disability claim contains a finding of a claimant's RFC or other finding required under the applicable sequential evaluation process for determining disability, SSA must consider such finding(s) as evidence when adjudicating a subsequent disability claim, arising under the same or a different title of the Act, involving an unadjudicated period.

Explanation of How We Will Apply the Earley Decision Within the Circuit

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 AC level. Additionally, it applies only to a finding of a claimant's RFC or other finding that is required at a step in the sequential evaluation process for adjudicating disability (provided under 20 CFR 404.1520, 416.920, or 416.924, as appropriate), made in a final decision (favorable or unfavorable) by an ALJ or the AC on a prior disability claim.^[1]

When a claimant seeks disability benefits for a new period in a subsequent claim, that subsequent claim is entitled to review following the applicable sequential evaluation process. However, such review does not exist in a vacuum. When adjudicating a subsequent claim (arising under the same or a different title of the Act as the prior claim), an adjudicator deciding whether a claimant is disabled during a previously unadjudicated period must consider findings from the decision on the prior claim. As the Court recognized in Earley, things change with the passage of time, such as age and physical condition. As a result, each claim covering a different period should be reviewed as a new claim. However, when a finding of a claimant's RFC or other finding required under the sequential evaluation process for determining disability differs from that in the prior decision, the adjudicator must make clear that they considered the prior finding as evidence in light of all relevant facts and circumstances.^[2]

Where the prior finding was about a fact that is subject to change with the passage of time, such as a claimant's RFC or the severity of an impairment(s), the likelihood that the fact has changed generally increases as the time between the previously adjudicated period and the subsequent period increases. An adjudicator generally should pay particular attention to the lapse of time between the earlier claim and the later claim and the impact of the passage of time on the claim. In situations where minimal time has passed, and no or very little new evidence has been introduced, it is more likely that the prior finding will remain the same. But the adjudicator must consider all relevant facts and circumstances on a case-by-case basis. Additionally, a change in the law, regulations, or rulings affecting a relevant finding or the method for arriving at the finding may be a reason why the prior finding, considered as evidence, is properly departed from in the current determination or decision.