United States Court of Appeals

FOR THE EIGHTH CIRCUIT

_____________

No. 98-3640SD

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Dwight L. Holz, *

*

Appellant, *

* On Appeal from the United

v. * States District Court

* for the District of

Kenneth S. Apfel, Commissioner of * South Dakota.

Social Security Administration, *

*

Appellee. *

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 Submitted: July 16, 1999

 Filed: September 13, 1999

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Before McMILLIAN, RICHARD S. ARNOLD, and HANSEN, Circuit Judges.

___________

RICHARD S. ARNOLD, Circuit Judge.

Dwight Holz appeals the District Court’s grant of summary judgment upholding

a partial denial of social security benefits. The administrative law judge (ALJ) found

Holz was disabled within the meaning of the Social Security Act beginning on

February 27, 1995, the date of his fiftieth birthday. The ALJ also found that from

December 13, 1992, through February 27, 1995, Holz was not disabled. We believe
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this latter finding is not supported by substantial evidence, and we therefore reverse the

judgment.

The parties do not dispute that Holz has a severe back impairment and that he

is thereby limited exertionally to sedentary work. It is also undisputed that Holz can

no longer perform his past construction work and that he has no transferrable skills.

The extent of Holz’s nonexertional limitations related to his mental impairments is

disputed.

Upon review following the Commissioner’s denial of Holz’s first application for

benefits, the District Court remanded for further consideration. Specifically, the

District Court found that because the record indicated Holtz potentially had

nonexertional limitations stemming from a mental impairment, the ALJ should not have

relied on Rule 201.18 of the medical-vocational guidelines (see 20 C.F.R. Pt. 404,

Subpt. P, App. 2, Table 1 (1998)) and was instead required to consult a vocational

expert (VE). At a second hearing in February 1997, the ALJ considered additional

benefits applications (for both disability insurance benefits and supplemental security

income) and additional evidence. In relevant part, the additional evidence included a

vocational assessment conducted in November 1994. Test results indicated Holz had

an IQ composite score of 76, verbal and nonverbal reasoning ability in the low average

to borderline range, an above average capacity to perform repetitive manual tasks (but

the report noted that most jobs in this category required long periods in a fixed

position), and a vocabulary below reading levels required for most jobs or training

programs. At the hearing, a VE testified that Holz’s past construction work would be

classified as within the medium or heavy exertional levels, and as skilled or semiskilled,

and that Holtz’s skills would not be transferrable to any jobs in the sedentary category.

The VE was not asked whether jobs existed in the national economy that Holz could

perform.
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In a June 1997 decision, the ALJ found that Holz’s marginal education and

difficulty in reading, writing, and spelling did not erode his residual functional capacity

(RFC) to perform the full range of unskilled sedentary work since December 1992.

The ALJ again relied on Rule 201.18 of the guidelines to find that Holz was not

disabled until he reached the age of 50 on February 27, 1995. The ALJ attached a

Psychiatric Review Technique Form, in which she assessed Holz as having no

restrictions of activities of daily living; no difficulties in maintaining social functioning;

no deficiencies of concentration, persistence, or pace; and no episodes of deterioration

in a work or work-like setting. After the Appeals Council denied review, Holz sought

judicial review of the final agency decision, and the District Court granted summary

judgment in favor of the Commissioner. The District Court held, in part, that the ALJ

properly relied on the guidelines because the evidence supported the ALJ’s conclusion

that Holz had no significant mental impairments. 

We review the ALJ’s decision to determine whether it is supported by substantial

evidence on the record as a whole--that is, whether there exists relevant evidence that

a reasonable person might accept as adequate to support the conclusion. See Ingram

v. Chater, 107 F.3d 598, 600 (8th Cir. 1997). Accordingly, the ALJ's finding that

Holz's nonexertional impairments were not significant is not supported by substantial

evidence.

The Commissioner may use the guidelines to find that a claimant is not disabled

if the claimant does not have nonexertional impairments, or if the nonexertional

impairment does not diminish the claimant's RFC to perform the full range of activities

listed in the guidelines. See id. If the nonexertional impairments significantly affect

the RFC, however, the guidelines are not controlling and may not be used to direct a

conclusion of not disabled. See Thompson v. Bowen, 850 F.2d 346, 350 (8th Cir.

1988). "Adequate training and intellectual capacity are presumed in the [g]uidelines,

and evidence that militates against those presumptions makes the [g]uidelines

inapplicable." Simmons v. Sullivan, 915 F.2d 1223, 1225 (8th Cir. 1990). Holz's
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borderline intellectual functioning, see Thomas v. Sullivan, 876 F.2d 666, 668 n.1 (8th

Cir. 1989) (borderline intellectual functioning describes individuals with IQ between

71 and 84), was a significant nonexertional impairment that needed to be considered

by the VE, see Foreman v. Callahan, 122 F.3d 24, 26 (8th Cir. 1997); Lucy v. Chater,

113 F.3d 905, 908 (8th Cir. 1997). 

We conclude that the case must be remanded to the Social Security

Administration for further proceedings to determine the effect of Holz's borderline

intellectual functioning. See Foreman, 122 F.3d at 26-27. We direct the

Commissioner, on remand, to consider whether the guidelines, to the extent they are

instructive, direct or suggest a finding of disability in the particular circumstances of

this case. Holz was 47 to 49 years old during the period relevant to the disability

determination at issue, he could not perform his past relevant work, he had no

transferrable skills, and he was physically limited to sedentary work. In addition, with

an IQ of 76 and a limited ability to read and write, he may be illiterate, see 20 C.F.R.

§ 404.1564(b)(1) (1998), or nearly so. See also 20 C.F.R. Pt. 404, Subpt. P. App. 2,

§ 201.00(h) & Ex. 2 (1998) (term "younger individual" denotes persons who are 18-49,

but for those who are 45-49, age is less positive factor than for those who are 18-44;

unskilled, illiterate, 45-to-49-year-old who is limited to sedentary work is generally

disabled; Example 2: Illiterate 41-year-old with IQ of 78 restricted to unskilled

sedentary work cannot perform full range of sedentary work, and finding of disabled

is appropriate).

Accordingly, the judgment of the District Court is reversed, and the cause

remanded to that Court with instructions to remand the matter to the Commissioner of

the Social Security Administration for further proceedings in light of this opinion.

It is so ordered.
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A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.