2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-8-2001

Matthews v. Apfel

Precedential or Non-Precedential:

Docket 00-1151

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Recommended Citation

"Matthews v. Apfel" (2001). 2001 Decisions. Paper 22.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/22
Filed February 8, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-1151 

SHARON BINGHAM MATTHEWS, 

 Appellant 

v. 

KENNETH S. APFEL, Commissioner of Social Security 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. No. 98-cv-01125) 

District Judge: Hon. Louis Charles Bechtle 

Argued September 13, 2000 

Before: SLOVITER, SCIRICA and ALITO, Cir cuit Judges 

(Filed February 8, 2001) 

 Kenneth M. Kapner 

 Law Offices of Kenneth M. Kapner 

 Philadelphia, PA 19l07 

 Thomas D. Sutton (Argued) 

 Leventhal & Sutton 

 Langhorne, PA 19047 

 Attorneys for Appellant 
 James A. Winn 

 Regional Chief Counsel 

 David F. Chermol (Argued) 

 Assistant Regional Counsel 

 Office of the General Counsel 

 Social Security Administration 

 Philadelphia, PA 19l0l 

 Michael R. Stiles 

 United States Attorney 

 Joan Garner 

 Assistant United States Attorney 

 Eastern District of Pennsylvania 

 Philadelphia, PA 19l06 

 Attorneys for Appellee 

OPINION OF THE COURT 

SLOVITER, Circuit Judge. 

Sharon Matthews appeals from the District Court's order 

affirming the denial by the Commissioner of Social Security 

of Matthews' application for disability insurance benefits 

(DIB) under Title II of the Social Security Act.1 This case 

raises the important issue of the treatment to be given by 

the district court of evidence submitted by the claimant for 

the first time to the Appeals Council, which has then 

denied review. This is an issue on which the Courts of 

Appeals are divided. Some courts hold that such evidence 

should be considered by the district court in its review of 

the final decision of the Commissioner, see Perez v. Chater, 

77 F.3d 41, 45 (2d Cir. 1996); O'Dell v. Shalala, 44 F.3d 

855, 859 (10th Cir. 1994); Ramirez v. Shalala, 8 F.3d 1449, 

1452 (9th Cir. 1993); Nelson v. Sullivan , 966 F.2d 363, 366 

(8th Cir. 1992); Wilkins v. Sec'y of DHHS, 953 F.2d 93, 96 

(4th Cir. 1991) (en banc), whereas others hold that evidence 

_________________________________________________________________ 

1. Matthews also applied for supplemental security income (SSI) under 

Title XVI of the Social Security Act. Because the relevant regulations and 

statutory provisions of SSI track those of DIB, we will refer only to the 

former in the text. 

 2 
not presented to the Administrative Law Judge (ALJ) should 

not be reviewed by the district court nor be the basis of a 

remand to the Commissioner unless the evidence is new 

and material and there is good cause for not having

produced the evidence earlier, see Falge v. Apfel, 150 F.3d 

1320, 1322-23 (11th Cir. 1998), cert. denied, 525 U.S. 1124 

(1999); Cotton v. Sullivan, 2 F.3d 692, 695-96 (6th Cir. 

1993); Eads v. Sec'y of DHHS, 983 F.2d 815, 817-18 (7th 

Cir. 1993). In this case, the District Court held that a 

claimant must demonstrate good cause for not having

submitted new and material evidence to the ALJ. Appellant 

argues that the District Court erred as a matter of law in 

imposing the good cause requirement. The issue is one of 

first impression for this court. 

I. 

Matthews applied for disability benefits on October 15, 

1992, alleging disability since December 9, 1991. She 

claimed hearing loss, arthritis, and right foot dr op 

stemming from an old Achilles tendon ruptur e. Her claim 

was denied initially and again on reconsideration. Matthews 

requested a hearing before an ALJ, which was held on 

September 21, 1994. The ALJ found that Matthews was not 

disabled and denied her claim. The Appeals Council 

granted Matthews' request for review. On r eview, it vacated 

the ALJ's decision and remanded for a new hearing. It 

directed the ALJ to give further consideration to Matthews' 

residual functional capacity during the entir e period at 

issue and to "[o]btain supplemental evidence from a

vocational expert to clarify the effect of the assessed 

limitations on the claimant's occupational base." Tr. at 363. 

A different ALJ held a second hearing on July 11, 1996. 

At this hearing, Matthews testified, inter alia, of pain in her 

right foot, ankle, and knee, and she submitted medical 

reports in connection with these impair ments as well as of 

her hearing loss. Diana Simms, an impartial vocational 

expert, also testified at the hearing and stated there were a 

significant number of sedentary and unskilled jobs, such as 

cashier, that an individual with Matthews' impairments, 

age, educational background, and employment history

could perform. Notably, the ALJ held the record open to 

 3 
allow Matthews to include the final report of her treating 

physician before issuing the decision. 

The ALJ issued a decision on April 21, 1997, concluding 

that Matthews was not disabled. In the decision, the ALJ 

noted that none of Matthews' treating and examining

physicians opined that she could not perfor m sedentary 

work. The ALJ found that medical evidence established that 

the claimant has severe residuals of an injury to her right 

leg and significant hearing loss, that these impairments do 

not meet or equal the criteria of the listed impair ments, 

that Matthews' testimony on the severity of her 

impairments was not credible inasmuch as she could use 

public transportation and engage in social activities without 

much difficulty, that Matthews is unable to per form any of 

her past relevant work as a teacher's aide or hospital 

worker, but that although she is unable to perform the full 

range of sedentary work, there are a significant number of 

jobs in the national economy that she can per form. The 

ALJ gave examples of sedentary, unskilled jobs in a lownoise environment that Matthews could per form, including 

work as a cashier in a small office. 

Matthews filed a request for review to the Appeals 

Council on June 23, 1997. On December 8, 1997, mor e 

than eight months after the ALJ's decision, Matthews 

submitted to the Appeals Council a two-page letter and 

accompanying documents from Richard Baine, a vocational 

expert, who stated that Matthews lacked the r equisite 

arithmetic and reading skills to work as a cashier. Baine 

also stated that Matthews' exertional and nonexertional 

impairments would preclude her fr om performing any other 

gainful work activities in the national economy. T r. at 386- 

87. 

On January 7, 1998, the Appeals Council denied 

Matthews' request for review. The Appeals Council noted 

that Social Security Administration regulations"provide 

that where new and material evidence is submitted with the 

request for review, the entire r ecord will be evaluated and 

review will be granted where the Appeals Council finds that 

the Administrative Law Judge's actions, findings, or 

conclusion is contrary to the weight of the evidence 

currently of record," App. at 34, citing 20 C.F.R. SS 404.970 

 4 
and 416.1470. The Council's action stated that "the

Administrative Law Judge's decision stands as thefinal 

decision of the Commissioner of Social Security." App. at 

34. The Appeals Council then incorporated Baine's r eport 

into the administrative record. 

Matthews filed suit in the United States District Court for 

the Eastern District of Pennsylvania, r equesting judicial 

review of the Commissioner's final decision. The parties 

filed cross-motions for summary judgment. On September 

14, 1999, the Magistrate Judge to whom the District Court 

referred the matter recommended that the Commissioner's 

motion for summary judgment be granted because the 

ALJ's decision was supported by substantial evidence. The 

Magistrate Judge determined that Baine's r eport was new 

and material but should not be considered on judicial 

review because Matthews had failed to demonstrate good 

cause for failing to present the evidence to the ALJ. The 

District Court agreed that Matthews had not shown good 

cause for failure to present Baine's r eport to the ALJ, 

adopted the Magistrate Judge's recommendation, and,

following a discursive opinion discussing the evidence and 

the legal issues, granted summary judgment for the 

Commissioner. 

Matthews appealed to this court. She argues that the 

District Court erred in refusing to consider new evidence 

"which was presented to and consider ed by the 

Commissioner's Appeals Council as part of the 

administrative record under review" and that the court 

erred in applying a good cause requir ement "which does not 

exist in the regulations to new evidence which was 

submitted to and considered by the Commissioner's 

Appeals Council, which made it a part of the administrative 

record under review." Br. of Appellant at 1. Our standard of 

review over the legal question presented is plenary. See 

Tubari Ltd., Inc. v. NLRB, 959 F.2d 451, 453 (3d Cir. 1992). 

II. 

The question of law before us is whether the claimant 

must demonstrate good cause for failure to pr esent to the 

ALJ new and material evidence presented for thefirst time 

 5 
to the Appeals Council which, after consideration, denies 

the review. 

The administrative review process is gover ned by Social 

Security Administration regulations. If a claimant's 

disability application is denied, s/he may r equest a 

reconsideration by the Social Security Administration. See 

20 C.F.R. S 404.900. If the claimant is dissatisfied with the 

reconsideration determination, s/he may r equest a hearing 

before an administrative law judge, wher e the claimant can 

present evidence of impairments. See id. If the claimant is 

dissatisfied with the ALJ's decision, s/he may r equest the 

Appeals Council to review the decision. See id. The

regulations permit the claimant to submit to the Appeals 

Council "new and material" evidence that r elates to the 

period on or before the date of the ALJ's hearing decision. 

See 20 C.F.R. S 404.970(b).2 The Appeals Council then must 

"evaluate the entire record including the new and material 

evidence submitted." Id. However, the submission of the 

new and material evidence does not requir e the Appeals 

Council to grant review. On the contrary, the r egulations 

provide that the Appeals Council will grant r eview only if it 

finds that the ALJ's decision "is contrary to the weight of 

the evidence currently of record." Id. 

Unlike the administrative process, which is governed by 

the regulations, the standards for judicial review are 

governed by the Social Security Act. A claimant who was 

unsuccessful in the administrative process may seek

judicial review once there is a final decision by the 

_________________________________________________________________ 

2. The applicable subsection of the regulation provides in full: 

 (b) If new and material evidence is submitted, the Appeals Council 

 shall consider the additional evidence only wher e it relates to 

the 

 period on or before the date of the administrative law judge 

hearing 

 decision. The Appeals Council shall evaluate the entire record 

 including the new and material evidence submitted if it relates to 

 the period on or before the date of the administrative law judge 

 hearing decision. It will then review the case if it finds that the 

 administrative law judge's action, findings, or conclusion is 

contrary 

 to the weight of the evidence currently of r ecord. 

20 C.F.R. S 404.970(b). The applicable section of the SSI regulation is 

substantially the same. See 20 C.F.R.S 416.1470(b).

 6 
Commissioner of Social Security. See 42 U.S.C. S 405(g); 

see also Mathews v. Eldridge, 424 U.S. 319, 328 (1976). If 

the Appeals Council denies the request for r eview, the ALJ's 

decision is the Commissioner's final decision. See Sims v. 

Apfel, 530 U.S. 103, 120 S. Ct. 2080, 2083 (2000). 

The Act provides that "[t]he findings of the Commissioner 

of Social Security as to any fact, if supported by substantial 

evidence, shall be conclusive." 42 U.S.C.S 405(g) (emphasis 

added). Sentence Four of S 405(g) provides that "[t]he court 

shall have power to enter, upon the pleadings and transcript 

of the record, a judgment affir ming, modifying, or reversing 

the decision of the Commissioner of Social Security, with or 

without remanding the cause for a rehearing." Id. 

(emphasis added). 

If the claimant proffers evidence in the district court that 

was not previously presented to the ALJ, then the district 

court may remand to the Commissioner but that 

disposition is governed by Sentence Six ofS 405(g). That 

sentence provides, 

 The court may, on motion of the Commissioner of 

 Social Security made for good cause shown befor e the 

 Commissioner files the Commissioner's answer , 

 remand the case to the Commissioner of Social 

 Security for further action by the Commissioner of 

 Social Security, and it may at any time or der additional 

 evidence to be taken before the Commissioner of Social 

 Security, but only upon a showing that there is new 

 evidence which is material and that there is good cause 

 for the failure to incorporate such evidence into the 

 record in a prior proceeding; and the Commissioner of 

 Social Security shall, after the case is remanded, and 

 after hearing such additional evidence if so or dered, 

 modify or affirm the Commissioner's findings of fact or 

 the Commissioner's decision, or both, and shallfile 

 with the court any such additional and modified 

 findings of fact and decision, and a transcript of the 

 additional record and testimony upon which the 

 Commissioner's action in modifying or affir ming was 

 based. 

Id. (emphasis added). Thus, we have r ecognized that 

evidence first presented to the district court must not only 

 7 
be new and material but also be supported by a 

demonstration by claimant of "good cause for not having 

incorporated the new evidence into the administrative 

record." Szubak v. Sec'y of HHS, 745 F.2d 831, 833 (3d Cir. 

1984). 

To summarize the options open to the district court, 

when the Appeals Council has denied review the district 

court may affirm, modify, or reverse the Commissioner's 

decision, with or without a remand based on the record 

that was made before the ALJ (Sentence Four r eview). 

However, when the claimant seeks to r ely on evidence that 

was not before the ALJ, the district court may remand to 

the Commissioner but only if the evidence is new and 

material and if there was good cause why it was not

previously presented to the ALJ (Sentence Six review). See 

Keeton v. DHHS, 21 F.3d 1064, 1067 (11th Cir. 1994); 

Newhouse v. Heckler, 753 F.2d 283, 286 (3d Cir. 1985). 

Other courts of appeals agree with our analysis of the 

appropriate treatment on judicial r eview of evidence that 

was not presented to the ALJ. The fullest discussion of this 

issue appears in the Seventh Circuit's decision in Eads, 

where the court explained that although evidence 

considered by the Appeals Council is part of the 

administrative record on appeal, it cannot be considered by 

the District Court in making its substantial evidence review 

once the Appeals Council has denied review. As the Eads 

court stated, 

 It might seem . . . that the district judge and we would 

 be free to consider the new evidence that was before 

 the Appeals Council in deciding whether the decision 

 denying benefits was supported by the recor d as a 

 whole. And of course this is right when the Council has 

 accepted the case for review and made a decision on 

 the merits, based on all the evidence before it, which 

 then becomes the decision reviewed in the courts. It is 

 wrong when the Council has refused to r eview the 

 case. For then the decision reviewed in the courts is 

 the decision of the administrative law judge. The 

 correctness of that decision depends on the evidence 

 that was before him. He cannot be faulted for having 

 failed to weigh evidence never presented to him. . . . 

 8 
Eads, 983 F.2d at 817 (citations omitted). 

The Eads decision was followed by the Eleventh Circuit's 

decision in Falge, 150 F.3d at 1323 ("when the [Appeals 

Council] has denied review, we will look only to the 

evidence actually presented to the ALJ in deter mining 

whether the ALJ's decision is supported by substantial 

evidence."). It was also followed by the Sixth Circuit in 

Cotton, 2 F.3d at 692, a case that was in a different posture 

than the usual appeal by a claimant from the affirmance of 

the denial of disability benefits. Cotton was an appeal by 

the Secretary from the district court's r eversal of the denial 

of benefits and direction that Cotton be awar ded benefits. 

The district court had based its judgment on new evidence 

that Cotton had presented to the Appeals Council, which 

denied review. In reversing the district court, the Sixth 

Circuit, following Eads, concluded"that the district court 

improperly considered Cotton's new evidence because the 

claimant failed to demonstrate good cause justifying a 

remand for administrative consideration of the new 

evidence." Cotton, 2 F.3d at 696. 

We are not persuaded by the courts of appeals that hold 

to the contrary. Thus, for example, the Second Cir cuit in 

Perez held that evidence first pr esented to the Appeals 

Council is part of the administrative recor d to be

considered by the district court on judicial r eview even 

though the Appeals Council denied review. 77 F .3d at 45. 

The decision in Perez and that on which it relies, the Tenth 

Circuit's decision in O'Dell, ar e based on the regulation that 

requires the Appeals Council to "evaluate the entire record 

including the new and material evidence submitted" in 

determining whether to review the case. 20 C.F.R. 

S 404.970(b). These decisions opine that the purpose of this 

regulation would be undermined if the new evidence 

submitted to the Appeals Council was ignored by the

district court. See, e.g., Perez , 77 F.3d at 45. 

We believe the purpose of that regulation is to give the 

claimant an opportunity to present additional evidence, if it 

is new and material, for consideration by the Appeals 

Council in deciding whether to grant review of the ALJ's 

decision. This is consistent with the policy of giving the 

claimant ample opportunity to prove his or her disability. 

 9 
Counsel for the Social Security Administration advised us 

at oral argument that the Appeals Council grants review 

and remands approximately 25% of its cases to the ALJ, 

thereby using the new and material evidence on claimants' 

behalf. 

However, it is the Social Security Act and not the 

regulations that governs the standar ds for judicial review. 

We have previously held that evidence that was not before 

the ALJ cannot be used to argue that the ALJ's decision 

was not supported by substantial evidence. See Jones v. 

Sullivan, 954 F.2d 125, 128 (3d Cir . 1991) (citing United 

States v. Carlo Bianchi & Co., 373 U.S. 709 (1963)). No 

statutory authority (the source of the district court's review) 

authorizes the court to review the Appeals Council decision 

to deny review. No statutory provision authorizes the 

district court to make a decision on the substantial 

evidence standard based on the new and material evidence 

never presented to the ALJ. Instead, the Act gives the 

district court authority to remand the case to the 

Commissioner, but only if the claimant has shown good 

cause why such new and material evidence was not 

presented to the ALJ. 

To construe the statute otherwise, as Matthews would do, 

would be to set up a conflict between the r egulations and 

the statute on whether good cause need be shown. 

Matthews seeks to support her position by noting that there 

is no requirement in the regulations that the claimant must 

show good cause to the Appeals Council befor e it can 

consider the new and material evidence. However , the 

regulation only concerns the recor d for purposes of 

administrative decisionmaking, i.e., what the Appeals 

Council may consider. For purposes of judicial review, the 

"record" is "the evidence upon which the findings and 

decision complained of are based." 42 U.S.C.S 405(g) 

(Sentence Three). That is the information that was before 

the ALJ, the final administrative decisionmaker when the 

Appeals Council denies review. The new and material

evidence is transmitted with the record so that the district 

court will have before it the evidence that will be the 

subject of the remand if the claimant can show good cause 

why such new and material evidence was not submitted to 

the ALJ. 

 10 
Our holding is consistent with this court's prior opinions. 

In Szubak, the claimant argued that she was entitled to a 

remand for further consideration in light offive medical 

reports compiled after the Secretary's determination that 

claimant submitted for the first time to the district court. 

We held that a claimant must satisfy all thr ee requirements 

of Sentence Six (new, material and good cause) in or der to 

justify a remand. See Szubak, 745 F .2d at 833. Szubak was 

entitled to a remand because she had shown good cause.3 

Significantly, we did not direct the district court to consider 

the effect of the new evidence on the substantiality of the 

evidence previously presented to the ALJ. Instead, we 

directed remand for such a determination to be made by 

the forum which is entrusted by the statutory scheme for 

determining disability vel non. In our subsequent opinion in 

Jones, we made this explicit when we stated that evidence 

not presented to the ALJ "cannot be used to argue the 

ALJ's decision was not supported by substantial evidence." 

954 F.2d at 128 (quotation omitted). 

Our holding is also in accord with sound public policy. 

We should encourage disability claimants to present to the 

ALJ all relevant evidence concerning the claimant's

impairments. If we were to order r emand for each item of 

new and material evidence, we would open the door for 

claimants to withhold evidence from the ALJ in order to 

preserve a reason for remand. See Szubak, 745 F.2d at 834 

("A claimant might be tempted to withhold medical reports, 

or refrain from introducing all r elevant evidence, with the 

idea of obtaining another bite of the apple if the Secretary 

decides that the claimant is not disabled.") (quotation 

_________________________________________________________________ 

3. Both parties refer to our subsequent decision in Frankenfield v. 

Bowen, 861 F.2d 405 (3d Cir. 1988), a decision that adds little to the 

issue under consideration here. There, we remanded the case to the 

Secretary because the ALJ's decision rejecting disability was not 

supported by the medical evidence. We held it was impermissible for the 

ALJ to ignore without explanation the physician's reports and instead 

base the decision solely on the ALJ's "observation of the claimant at the 

hearing." Id. at 408. In the course of our opinion, we referred to a 

subsequent supporting physician's report pr esented to the Appeals 

Council and we cited Szubak but we did not discuss the good cause 

requirement. 

 11 
omitted); Wilkins, 953 F.2d at 97 (Chapman, J., dissenting) 

("By allowing the proceedings to be r eopened and remanded 

for additional evidence, . . . the majority is encouraging 

attorneys to hold back evidence and then seek remand for 

consideration of evidence that was available at the time of 

the ALJ hearing."). Instead, we believe that it is a much 

sounder policy to require claimants to pr esent all material 

evidence to the ALJ and prohibit judicial r eview of new 

evidence unless there is good reason for not having brought 

it before the ALJ. Such a holding is instrumental to the 

speedy and orderly disposition of Social Security claims. 

III. 

The procedure followed by the District Court in this case 

was consistent with the framework outlined above. The 

Magistrate Judge declined to review or r emand for 

consideration of the additional evidence that Matthews had 

submitted to the Appeals Council because the Magistrate 

Judge concluded that Matthews had failed to show good 

cause for not presenting the evidence to the ALJ. Although 

the Magistrate Judge believed that the evaluation pr epared 

by Baine was new and material evidence, an issue not 

reached by the District Court, the Magistrate Judge noted 

that Matthews had not explained why she did not attempt 

to obtain Baine's evaluation at a time when it could be 

considered by the ALJ. The District Court agr eed that the 

claimant had the burden of showing good cause and failed 

to satisfy it, thereby adopting the Magistrate Judge's report.4 

Matthews argues that she did not realize the importance 

of obtaining a vocational evaluation of her arithmetic skills 

early in the proceedings. But Matthews should have known 

that her ability to work was an issue at the ALJ hearing 

that was held after remand by the Appeals Council. Indeed, 

a vocational expert had testified on July 11, 1996 (at the 

second ALJ hearing) that Matthews could perfor m cashier 

_________________________________________________________________ 

4. Matthews argues in passing that once the Appeals Council reviewed 

the evidence, it was introduced into the r ecord in a prior proceeding and 

she has automatically satisfied the good cause r equirement. There is no 

precedent to support such an interpretation of the statutory language 

and we reject it as implausible. 

 12 
and similar types of jobs. Tr. at 169-79. By then, it should 

have been clear to Matthews that her arithmetic and

reading skills were relevant. The ALJ even kept the

administrative record open in order to allow Matthews to 

submit additional evidence. Yet Matthews did not submit 

Baine's report until more than eight months after the ALJ's 

adverse decision. Therefore, we agr ee with the District 

Court that Matthews has not shown any good cause why 

she did not obtain this evidence for the ALJ pr oceeding. 

In the case before us, the Magistrate Judge r eviewed the 

evidence that was before the ALJ and deter mined that there 

was substantial evidence to support the Commissioner's 

decision based on the record befor e it. The District Court 

agreed. Matthews has not put into issue the substantiality 

of the evidence before the ALJ,5 and we have no basis to 

disagree with the District Court's conclusion that the ALJ's 

decision was supported by substantial evidence on the 

record. 

IV. 

For the reasons set forth, we will affir m the order of the 

District Court granting summary judgment for the 

Commissioner. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

_________________________________________________________________ 

5. We will not consider the substantiality of the evidence before the ALJ, 

although Matthews, at the conclusion of her brief, r equests that we 

reverse the decision of the District Court with directions to award her 

the disability benefits she was denied. Our rules make clear that an 

appellant is limited to the issues listed in the statement of issues, see 

Fed. R. App. P. 28(a)(5); L.A.R. 28(1)(a), and this issue is not so 

included. 

 13