AR 94-2(4)

(Rescinded 1/12/2000 by AR 00-1(4))

EFFECTIVE DATE:07/07/94

AR 94-2(4): Lively v. Secretary of Health and Human Services, 820 F.2d 1391 (4th Cir. 1987) -- Effect of Prior Disability Findings on Adjudication of a Subsequent Disability Claim Arising Under the Same Title of the Social Security Act -- Titles II and XVI of the Social Security Act.

ISSUE

Whether, in making a disability determination or decision on a subsequent disability claim with respect to an unadjudicated period, an adjudicator must adopt a finding regarding a claimant's residual functional capacity, or other finding required under the applicable sequential evaluation process for determining disability, made in a final decision by an Administrative Law Judge or the Appeals Council on a prior disability claim arising under the same title of the Social Security Act.[1]

STATUTE/REGULATION/RULING CITATION

Sections 205(a) and (h) and 1102 of the Social Security Act (42 U.S.C. 405(a) and (h) and 1302), 20 CFR 404.955, 404.957(c)(1), 404.981, 416.1455, 416.1457(c)(1), 416.1481.

CIRCUIT

Fourth (Maryland, North Carolina, South Carolina, Virginia, West Virginia)

Lively v. Secretary of Health and Human Services, 820 F.2d 1391 (4th Cir. 1987)

APPLICABILITY OF RULING

This Ruling applies to determinations or decisions at all levels of the administrative review process (i.e., initial, reconsideration, Administrative Law Judge hearing and Appeals Council).

DESCRIPTION OF CASE

In a decision dated October 19, 1981, an Administrative Law Judge found that the plaintiff, Mr. Lively, was not disabled under Rule 202.10 of the medical-vocational guidelines, 20 CFR Part 404, Subpart P, Appendix 2, and denied his application for disability insurance benefits. In applying Rule 202.10, the Administrative Law Judge found that Mr. Lively had the residual functional capacity for light work. The decision that Mr. Lively was not entitled to disability insurance benefits became the final decision of the Secretary and was affirmed by the district court.

The plaintiff filed a second application for disability insurance benefits on December 14, 1983. After holding a hearing, an Administrative Law Judge concluded that the plaintiff was not entitled to disability insurance benefits. The Administrative Law Judge determined that Mr. Lively retained the functional capacity for the performance of work activity at any exertional level on and prior to December 31, 1981, the date his insured status expired. The Administrative Law Judge did not discuss in his decision the 1981 finding by another Administrative Law Judge that the plaintiff had the residual functional capacity to do only light work. This decision became the final decision of the Secretary and was appealed to the district court. The case was referred to a United States Magistrate who found that the evidence before the Administrative Law Judge on the plaintiff's 1983 application was sufficient to sustain the Secretary's decision that the plaintiff was not disabled as of December 31, 1981. The district court adopted the Magistrate's Report and Recommendation. Mr. Lively then appealed to the United States Court of Appeals for the Fourth Circuit.

HOLDING

The Fourth Circuit stated that: Congress has clearly provided by statute that res judicata prevents reappraisal of both the Secretary's findings and his decision in Social Security cases that have become final, 42 U.S.C. ยง 405(h), and the courts have readily applied res judicata to prevent the Secretary from reaching an inconsistent result in a second proceeding based on evidence that has already been weighed in a claimant's favor in an earlier proceeding.

The court noted that the plaintiff became 55 years of age two weeks after the Administrative Law Judge, in connection with the first application for benefits, found that Mr. Lively was limited to light work. The court further noted that a person with the plaintiff's education and vocational background who is 55 years of age or older and limited to light work would be considered disabled under Rule 202.02 of the medical-vocational guidelines, 20 CFR Part 404, Subpart P, Appendix 2. The court found it inconceivable that Mr. Lively's condition had improved so much in two weeks as to enable him to perform medium work. Accordingly the court held:

Principles of finality and fundamental fairness ... indicate that the Secretary must shoulder the burden of demonstrating that the claimant's condition had improved sufficiently to indicate that the claimant was capable of performing medium work. ... [E]vidence, not considered in the earlier proceeding, would be needed as an independent basis to sustain a finding contrary to the final earlier finding.

STATEMENT AS TO HOW LIVELY DIFFERS FROM SSA POLICY

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 United States Court of Appeals for the Fourth Circuit concluded that where a final decision of the Secretary after a hearing on a prior disability claim contained a finding about a claimant's residual functional capacity, the Secretary 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 there is new and material evidence relating to the claimant's residual functional capacity.

EXPLANATION OF HOW SSA WILL APPLY THE DECISION WITHIN THE CIRCUIT

This Ruling applies only to disability findings in cases involving claimants who reside in Maryland, North Carolina, South Carolina, Virginia, or West Virginia at the time of the determination or decision on the subsequent claim at the initial, reconsideration, Administrative Law Judge hearing or Appeals Council level. It applies only to a finding regarding 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, or a finding required under the evaluation process for determining disability provided under 20 CFR 404.1578, as appropriate, which was made in a final decision by an Administrative Law Judge or the Appeals Council on a prior disability claim. 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 Administrative Law Judge 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.[1] Although Lively 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.


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