SSR 00-4p and Why the Courts Should Not Grant Auer Deference

We have the administrative notice regulations.  The regulations provide:

(d) Administrative notice of job data. When we determine that unskilled, sedentary, light, and medium jobs exist in the national economy (in significant numbers either in the region where you live or in several regions of the country), we will take administrative notice of reliable job information available from various governmental and other publications. For example, we will take notice of—

(1) Dictionary of Occupational Titles, published by the Department of Labor;
(2) County Business Patterns, published by the Bureau of the Census;
(3) Census Reports, also published by the Bureau of the Census;
(4) Occupational Analyses, prepared for the Social Security Administration by various State employment agencies; and
(5) Occupational Outlook Handbook, published by the Bureau of Labor Statistics.

We would expect that the regulation has a predictable application.  Administrative notice accepts as presumed to be true the matters notices through the notice and comment process.  The APA, which may or may not apply in Social Security proceedings but is still instructive, provides that:

When an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary.

The DOT, CBP, and OOH form the foundation of the Medical-Vocational Guidelines, the "grids."  If the APA applies directly or by analogy, then a party can show that the rule directed by the grids is wrong.  But the agency recognizes that the adjudicator cannot rebut the conclusions directed by the grids.  This means that the ALJ cannot find unskilled work for a 55-year-old claimant limited to light or sedentary work.

That understanding brings the discussion back to SSR 00-4p.  We have already discussed the problem of the ruling attributing to the DOT a description of work as the maximum of each occupation.  In a nutshell, to summarize that post, the DOT describes the occupational definitions as representing the typical way in which work gets done in the occupations analyzed and described.

But SSR 00-4p does something else that is antithetical to SSR 83-5a:  it allows the agency adjudicator to rebut that which the agency has found to be true and presumed to be true through the notice and comment process.  Heckler v. Campbell lays out the scope of administrative notice encapsulated in the grids and in the administrative notice regulations:

The first inquiry involves a determination of historic facts, and the regulations properly require the Secretary to make these findings on the basis of evidence adduced at a hearing. We note that the regulations afford claimants ample opportunity both to present evidence relating to their own abilities and to offer evidence that the guidelines do not apply to them.The second inquiry requires the Secretary to determine an issue that is not unique to each claimant — the types and numbers of jobs that exist in the national economy. This type of general factual issue may be resolved as fairly through rulemaking as by introducing the testimony of vocational experts at each disability hearing. See American Airlines, Inc. v. CAB, 123 U.S.App. D.C. 310, 319, 359 F.2d 624, 633 (1966) (en banc).

As the Secretary has argued, the use of published guidelines brings with it a uniformity that previously had been perceived as lacking. To require the Secretary to relitigate the existence of jobs in the national economy at each hearing would hinder needlessly an already overburdened agency. We conclude that the Secretary use of medical-vocational guidelines does not conflict with the statute, nor can we say on the record before us that they are arbitrary and capricious.

 Campbell stands for a straightforward application of Chevron deference without applying the doctrine.  Part of that rests at the broad delegation of authority to the Commissioner to promulgate regulations to flesh out the Social Security Act.

As applied, SSR 00-4p permits the agency adjudicator to rebut application of the DOT to a particular fact question -- does a significant number of jobs exist?  That is the second Campbell inquiry:  the types and numbers of jobs that exist in the national economy.   The types and number of jobs is not unique to each claimant.  The types and number of jobs is a stable answer at any given point in time.  SSR 00-4p's grant of authority of an adjudicator to accept evidence contrary to administrative notice does so at the sacrifice of administrative efficiency and has led to the needless hindrance of an overburdened agency.

A second problem arises from the application of SSR 00-4p to the administrative notice regulation -- it carves out the DOT and its companion Selected Characteristics of Occupations as somehow functionally and substantively difference from CBP and the OOH. If anyone has the Census Reports or the occupational analyses prepared for SSA by the states, we should publish them.  But we do have access to CBP through the American FactFinder and BLS publishes the OOH describing all 840 SOC groups either in detail or in a snapshot. 

Under traditional treatment of agency subregulatory publications, the courts grant the power to persuade.  Under the evolving concepts under the Chevron watershed, court grant deference as long as the ruling is not plainly erroneous or inconsistent with the statute or regulation.  SSR 00-4p expands the scope of administrative notice to include the SCO.  The Commissioner can impose more rigorous standards on her adjudicators than either the statute or regulations require.  That deviation from the text of the regulation is a permissible deviation because it does not dampen the rights and legitimate expectations of the potential beneficiaries. 

SSR 00-4p renders administrative notice of CBP and the OOH a nullity.  That use of SSR 00-4p is inconsistent with the text of the administrative notice regulation.  Under either the power to persuade or the grant of deference standard, the Commissioner's resort to SSR 00-4p, as a basis for refusing to take notice and resolve evidentiary conflict with CBP and the OOH, fails.  The courts should not grant either respect or deference to SSR 00-4p vis-a-vis CBP or the OOH. 

Kavanaugh, Deference, the Administrative State, and Smith v. Berryhill

We start with Garco Construction, Inc. v. Speer.  Justices Thomas and Gorsuch dissenting from the denial of certiorari complained that Garco was the right case to revisit and presumably gut if not kill the Auer deference doctrine.  In Perez v. Mortgage Bankers Ass'n, Justice Alito said that he waited for the right case to explore Seminole Rock, the progenitor of Auer deference.  In Decker v. Northwest Environmental Defense Center, Chief Justice Roberts stated that it may be appropriate to review Seminole Rock, but not in that case.  For those keeping score at home, that is four votes to revisit the Seminole Rock-Auer deference doctrine.  Kavanaugh will make five and that my friends is a majority of a nine-person court.  (I write this on the assumption that Judge Kavanaugh will be Justice Kavanaugh in three days or less). 

As a refresher - an agency promulgates regulations permitted by statute to fill in the gaps in the statute or to even interpret the statute.  As long as the interpretation is not inconsistent with the statute or plainly erroneous, the understanding of the statute in the regulations gets deference.  The understanding of the statute may not be the best interpretation, just not inconsistent or plainly erroneous.  That is the Chevron deference doctrine off the back of my hand.  Regulations go through notice and comment requiring the agency to respond.  That regulatory rule making process has a safeguard in the notice and comment process. 

But regulations are written by people and sometimes those regulations are ambiguous.  Enter the Seminole Rock-Auer deference doctrine.  The agency can tell us what the regulation means by stroke of the pen.  That interpretation does not need notice or comment.  No procedural safeguards exist.  The agency just changes its mind. 

Acquiescence Ruling 99-4(11) informed the Social Security world that the Eleventh Circuit decision in Bloodsworth v. Heckler was wrong.  Here is what the agency said in restricting Bloodsworth to the boundaries of the Eleventh Circuit:

The Eleventh Circuit held that an Appeals Council dismissal of a request for review of an ALJ decision is a "final decision of the Secretary made after a hearing" (now a "final decision of the Commissioner of Social Security") within the meaning of section 205(g) of the Social Security Act and, therefore, subject to judicial review.

Contrary to the holding of the court in Bloodsworth, SSA policy is that the regulations make a clear distinction in regard to rights of judicial review between dismissals and determinations on the merits by the Appeals Council. The Appeals Council may take three types of action following an ALJ decision: (1) it may grant a request for review; (2) it may deny a request for review; or (3) it may dismiss a request for review. The dismissal of a request for review of an ALJ decision is binding and not subject to further review. 20 CFR 404.972, 416.1472. See also 20 CFR 404.955, 416.1455, 422.210. The Appeals Council will dismiss a request for review if it is untimely filed and the time for filing has not been extended.[6]The Appeals Council may also dismiss a request for review for other prescribed reasons. 20 CFR 404.971, 416.1471.

SSA's position, based on the above-cited regulations, is that an Appeals Council dismissal is not a "final decision of the Commissioner of Social Security made after a hearing." Therefore, such a dismissal is not judicially reviewable under section 205(g) of the Social Security Act (42 U.S.C. 405(g)).

That issue is now before the Supreme Court in Smith v. Berryhill on a petition for certiorari.  The Solicitor General agrees with Smith that the AR followed by the Sixth Circuit is wrong and that the Supreme Court needs to resolve the issue to fix the split in the circuits. 

In the administrative state, the courts permit the agency to interpret the statute.  In the administrative state, the courts permit the agency to change the rules by interpreting the regulations.  When the agency takes these acts through the subregulatory process, the agency does so without notice and comment.  Our liberal colleagues may not like the conservatives on the Supreme Court but on this issue and in reigning in the agency's reinterpretations in flux, those justices hostile to the blowing winds of discretion are our friends. 

Social Security Rulings 96-7p and 16-3p

The Commissioner published Social Security Ruling 96-7p to establish the bases on which the agency will assess the credibility of claimants on July 2, 1996.  The Commissioner entitles the interpretive ruling as, Evaluation of Symptoms in Disability Claims: Assessing the Credibility of an individual's Statements.  The ruling uses the words credibility, credible, or other form of the word 52 times.

The Commissioner published Social Security Ruling 16-3p effective March 28, 2016. The purpose of the ruling appears under the heading -- Purpose:

We are rescinding SSR 96-7p: Policy Interpretation Ruling Titles II and XVI Evaluation of Symptoms in Disability Claims: Assessing the Credibility of an Individual's Statements and replacing it with this Ruling. We solicited a study and recommendations from the Administrative Conference of the United States (ACUS) on the topic of symptom evaluation. Based on ACUS's recommendations and our adjudicative experience, we are eliminating the use of the term “credibility” from our sub-regulatory policy, as our regulations do not use this term. In doing so, we clarify that subjective symptom evaluation is not an examination of an individual's character. Instead, we will more closely follow our regulatory language regarding symptom evaluation.

(We discussed this last year.)  There it is -- credibility is a stranger to the regulations.  The character of the person, nestled at the heart of the credibility analysis, has no connection to the two-part analysis of the claimant's subjective perception of limitation on the ability to function.

The question heats up because the courts have thousands of cases pending where the ALJ corps used the credibility analysis from SSR 96-7p to trash the claimant's testimony.  The Commissioner now defends those decisions as compliant with SSR 96-7p and the SSR 16-3p does not apply to decisions made prior to March 28, 2016.  I call BS.

The rulings do not have force of law.  They warrant deference only to the extent that they interpret either the statute or the regulations.  When the rulings interpret the statute or regulations, they receive deference unless plainly erroneous or inconsistent with the statute or regulations.  Quang Han Van v. Bowen; Holohan v. Massanari   Because SSR 96-7p lacks force of law, any compliance with a discarded interpretation of the regulations or statute is irrelevant.  The court does not enforce the ruling; the court enforces the regulation as interpreted by the ruling under the doctrine of deference.  Auer v. Robbins ; see also Social Security Ruling 00-1c (Supreme Court defers to a policy memorandum).

 While the rulings bind the ALJ, a rescinded ruling does not bind anyone.  Because the Commissioner states as a matter of executive discretion that SSR 96-7p does not reflect an accurate reading of the regulation and is actually inconsistent with the regulation, no court should use it for guidance.  The Commissioner informs the public and the court that SSR 96-7p is wrong.  The proper inquiry turns on consistency with the medical evidence.  SSR 16-3p.  To the extent that an ALJ decision rejected limitation testimony based on credibility rather than consistency with the medical evidence, the ALJ erred.  The inquiry must turn to materiality. 

Lockwood is Dead, Long Live HALLEX

This goes in the category of "I told you so." 

Lockwood v. Commissioner Soc. Sec. Admin.  stands for the proposition that an ALJ need not discuss why she didn't use a higher age category in a borderline age situation.  The court rejected use of POMS  DI 25015.005(B)(4) as applying to the burden of explaining the decision to use the chronological age -- because it wasn't in force when the ALJ decided the case; because it conflicted with HALLEX II-3-5-2; and because the courts don't enforce either HALLEX or POMS. 

We know that when the agency tells us what a regulation means, that interpretation of the regulation is controlling unless plainly erroneous or inconsistent with the regulation.  Washington State Dep't of Soc. & Health Servs. v. Guardianship Estate of Keffeler ("While [POMS]administrative interpretations are not products of formal rulemaking, they nevertheless warrant respect."  Keffeler continues:

In short, the Commissioner's interpretation of her own regulations is eminently sensible and should have been given deference under Auer v. Robbins. 

Auer gives controlling deference to an interpretation of a regulation unless plainly erroneous or inconsistent with the regulation.  We eliminate strike three against POMS; let's look at strikes one and two. 

Strike two and inconsistency with HALLEX falls today.  HALLEX I-2-2-42 states clearly that the ALJ will explain why she used the chronological age instead of the higher age category whenever the borderline age situation occurs.  HALLEX and POMS now agree, an explanation is due. 

Strike one and applying the interpretation to the case the court has before it -- IS NOT A RETROACTIVE PROBLEM.  In re Schooner Peggy holds that the court applies the law in effect at the time of decision, not the law in effect at the time of the act.  The Supreme Court grants an exception to prevent manifest injustice.  The ALJ is not a party to court proceedings and it is not unjust to have administrative decisions get decided according to the law as we now understand it. 

Lockwood is dead.  Long live HALLEX ... and POMS too. 

 

ODAR Hasn't Vetted POMS ... So What?

I attended a bench bar meeting at the Los Angeles US Attorney's office for the federal social security practice in the Central District of California last week.   AAJ Gerald Ray spoke on behalf of SSA.  He waxed eloquent about statistics and the need for ALJ decisions to follow policy.   The latter point begs the question -- where do I locate agency policy.

So I asked the question, does the Appeals Council consider POMS to constitute agency policy?   Judge Ray answered the question directly enough;  he said "no."

Never satisfied with the response of the government,  I thought we might unpack that comment in context of Judge Ray's oration and,  what the heck,  the Act, regulations, and the rulings.

SSA receives 2.8 million claims for disability each year.   Of those eventually granted,  SSA grants 75% of those claims in initial or reconsideration stages.  ODAR receives 500,000 claims per year.   ODAR grants less than half of those making 25% of the findings of disability.   So who are the experts at disability adjudication,  the dog or the tail?

So it can't be that the part of the agency that publishes POMS doesn't know what it is talking about.  Clearly it does and directs the state agencies nationwide on how to exclusively adjudicate 2.3 million claims annually without the interference or oversight of ODAR, thank you very much.

The problem arises for claimants that shift during the claim.   They change age categories,  past work ceases to have relevancy,  or the medical evidence changes in a material way.   If the substantive rules effectuating the statute and regulations change too,  then the program is not stable and the failure to have policy apply from top to bottom enhances the lottery effect of a claim for benefits.

SSA does have a caveat on the published e-version of POMS:

Please note that this document is intended for SSA employees. It contains technical terms and instructions that will be unfamiliar to you. If you have difficulty understanding these materials, please click on this link to the Social Security Handbook, which is written in plain language for use by the public.

 Does the Handbook contain agency policy.  Not as far as anyone can tell.  SSA lists POMS as one of its Current Program Rules.  The agency lists the Handbook as one of the Social Security Program Rules but oddly not as current.  More importantly, Judge Ray listed HALLEX as binding but its status is on the same category of POMS as a current program rules set.

The regulations list POMS as other written guidelines that instruct, interpret, clarify, or administrate. 20 CFR sec. 404.1602.   The state agency "will" comply with other written guidelines.  Sec. 404.1603.  SSA can find that the state agency failed to meet the applicable standards if it does not follow POMS.  Sec. 404.1671.

SSR 00-4p states that the agency cannot accept evidence from a vocational expert of specialist that conflicts with agency policy.  SSR 13-2p states that the agency requires all adjudicators at all levels of review to follow agency policy and specifically lists POMS right alongside HALLEX.  And other rulings contain cross-references to POMS -- as in, for more information on this topic, see also POMS.
Okay, ODAR doesn't want the lowly technical people to tell its legally trained staff how to adjudicate claims.  I get that.  But the statute and the issue of disability are medically and vocationally technical, not legally technical.  Using legal techniques and a quasi-judicial format can unwrap the issue of disability, but it remains a mixed medical and vocational issue.

I wrote about the transferable skills analysis back in May.  Judge Ray told me off the podium and privately -- but not confidentially -- that ODAR has vocational experts and no need for POMS dissertation on a transferable skills analysis.  I responded that the agency did not pay VE witnesses enough and that we get what we pay for in life.  He conceded that existence of a problem.  The question in this complex question of medicine and the ability to work is whether we have standards (POMS unless contrary to the regulations or the statute) or just let the ALJ corps, medical experts, and vocational experts do and say whatever their own heuristic and biased view of the world tells them is the right result for this case.

One last point: after 30 years, I have a pretty good handle on this stuff.  I can understand the technical writing in POMS.  I don't need the dumbed down version in the Handbook.  But if POMS is not interpretative of ambiguous regulations and it doesn't matter, then delete it.  The whole thing.  To leave it up and when I cite say - "psych, just kidding.  We don't follow POMS" - well that is just a lie published on the internet and available at the District Office and ODAR says it is worthless.  As I said to Judge Ray during the open session, "we'll see."

Almost 3 million claims deserve better than a lottery.  Public confidence in a system of administrative jurisprudence that touches everyone requires a government tell it the straight substantive and procedural rules.  If ODAR hasn't bothered to consider an issue, then it should follow POMS and vet something else later if ever.

The agency obviously differs and uses POMS only when it likes POMS or the result pushed by POMS.  Inconsistent and intellectually dishonest.

Scalia Prepares to do a 360?

The Supreme Court decided Talk America, Inc. v. Michigan Bell on June 9, 2011.  The FCC says that the telephone company has to allow competitors to connect with their system so that we can call each other.  The rule is not in the statute or regulations, it is in an explanation of the regulations.  Just a plain old application of my pet peeve, Auer  v. Robbins.  Antonin Scalia wrote the opinion of the Court in Auer announcing the rule that when an agency interprets its own regulations that the Court will defer to that interpretation unless it is plainly erroneous.

Justice Scalia did not just sign on to the decision in Talk America.  Instead, Justice Scalia wrote a separate concurring opinion that says two things:  (1) he would reach the same decision in Talk America with Auer; and (2) he is ready to reconsider whether Auer should survive.  Hold on, my neck is sore from the snap.

Justice Scalia writes now "For while  I have in the past uncritically accepted that rule, I have become increasingly doubtful of its validity."  Uncritically accepted?  That is a true understatement.  It is more accurate that Justice Scalia has championed Auer deference.  Justice Scalia contrasts Auer with Chevron deference, saying that if Congress does not like the regulations that an agency promulgates it can amend the statute, preventing a complete merger of legislative and executive government functions.  Congress has an interest is keeping power and therefore does not have an incentive to issue vague statutes.

Justice Scalia contrasts the incentive of agencies to issue vague regulations so that they can do what they please in future adjudications.  That just is not a fair reading of the Auer doctrine.  The Courts do not defer to the agency's interpretation of a vague regulation when the agency is defending agency action.  The Courts defer to the agency's interpretation of a vague regulation when either the agency is not a party to the litigation or the interpretation is not part of the litigation itself, i.e. it was published independent of the litigation.  The stretch in the concurring opinion is unwarranted.

In closing out his concurrence, Justice Scalia states the Auer deference makes the Court's job easier and lends "certainty and predictability to the administrative process."  But that really is not the point.  While we want government to function and to be both certain and predictable, we want it for our own good and not for the good of either the agency or the courts.  The public needs to know what the statute and regulations mean. Unless we want the federal government to triple its annual output of statutory-regulatory morass, there will always exist from degree of ambiguity in what Congress and the agencies say.  We, as the public, need predictability and certainty in the administrative process.

Certainty and predictability have positive results for us.  Certainty and predictability decrease litigation.  You and I would not spends hundreds of thousands of dollars on a law suit when we both know the result.  Those cases get resolved quickly if they are ever filed.  But when the result is uncertain or unpredictable, then we proceed full steam ahead with litigation spending hundreds of thousands of dollars over garden variety ambiguity.

It would certainly be a different matter if the Court were persuaded that the presence of ambiguity in the regulations were an intentional subterfuge that Justice Scalia hints at in Talk America.  That would constitute a valid basis for rolling back Auer to curb administrative excess.  It comes down to "good faith."  If the agency's interpretation constitutes a good faith policy interpretation of a regulation that is vague, then the Court should defer to that interpretation.  If the agency's interpretation of a regulation is not a fair and considered judgment, then the Court ought not defer.  But that is already the law according to the Supremes.

For whatever the signal is about, Justice Scalia's hint that he might change Auer just adds to litigation and detracts from the certainty and predictability that we need to permit an ordering of our lives.  That is good for people and good for the economy.

Lockwood v. Astrue

My level of angst rose Friday and approaches crescendo this morning.  Under the Supreme Court's docketing procedures, Lockwood got distributed for conference on April 29, 2011.  The Court will post the order list this morning.  The order list for April 25 was 9 pages long of certiorari denied, habeas denied, mandamus denied, rehearing denied, attorney discipline, and a handful of orders in pending cases.  Most other order lists have 2 cases with certiorari granted.  Thousands of cases filed each year, less than 100 get granted and set for oral argument.  The Supremes have a pretty good idea of how many cases it wants to hear next hear and already has a calendar of oral argument days.

The advertised publication time is 10 AM Eastern Time. At 7:05 AM Pacific Time, I am still waiting.

There it is.  Certiorari denied.  Posted the news to my  brethren on a private list.  Truly disappointed for the simple reason that we should be able to trust that what the government says it means.  Maybe I am naive or yearn for a utopia that will never appear.  But when any agency clears away the haze of ambiguity of a regulation, we should demand the right to bank on it.  Litigation ensues when rights and results are unclear.  If we all know the result based on settled law, then litigation turns on factual disputes only.  When the law is not clear or when one side (the federal government) can run away from clarity, then the whole system fails.

It is an old adage for lawyers.  When the facts are one your side, argue the facts.  When the facts are not on your side, argue the law.  When the law is not on your side, confuse the issues.  I tip my hat to the lawyers that represent the Social Security Administration ... you certainly did confuse the issue on this one.

It isn't that there isn't blame to go around.  The lawyers for SSA blame the lawyers for the claimant for not raising the issue or not raising the issue properly.  Perhaps that is permissible in a truly adversarial position but the Social Security Act is different.  It is non adversarial.  Government lawyers are also different.  They have an obligation not only to a particular case but to the public at large.

More on this topic in the months to come.

Pending at the Supreme Court

Lockwood v. Astrue is currently pending before the Supreme Court.  Your erstwhile writer acts the attorney of record.  Lockwood concerns application of the borderline age case for an individual about 1 month from turning 55 but the Administrative Law Judge treats her as 54.  The regulations promise that the ALJ won't do that.  The program operations manual tells SSA to explain why it did or didn't take a flexible approach to age.  At issue is whether the Social Security Administration can promise the public one thing in a policy and procedure manual and then run away from that promise in federal court.

It is the social contract theory in administrative law.  The Supreme Court changed the paradigm in Chevron.  Regulations, not the Courts, get first crack at refining an ambiguous statute.  Auer extends that doctrine.  The agency gets the first crack at refining an ambiguous regulation.  But the Social Security Administration want to defend ALJ decisions in Court more than it wants to defend the right of every federal agency to promulgate regulations and then tell the world what those regulations mean.

Just to make it interesting, the Acting Solicitor General declined to tell the Supreme Court what the executive branch of government thinks about Auer deference.  The SG didn't do that in Parra v. Astrue, when the government told the Supremes that the Ninth had the whole deference thing wrong.