Taking It on the Chenery: Should the Principles of Chenery I Apply in Social Security Disability Cases

INTRODUCTION Facing an increasing caseload, (1) federal courts must review thousands of Social Security disability cases each year, with most ending in reversal of the agency's decision. (2) Judges have grown frustrated with the process, believing that the Social Security Administration often wrongfully denies claims. (3) Indeed, a few courts have even threatened sanctions against the agency for ignoring precedent and thereby "forcing claimant after claimant to file lawsuits in order to obtain deserved benefits." (4) As Congress put it, there is an "increasing number and intensity of confrontations between the agency and the courts as [the agency] refuses to apply circuit court opinions." (5) The principles of SEC v. Chenery Corp. (Chenery I), (6) as applied, exacerbate these issues by preventing courts from directly enforcing their precedents. In Chenery, the Supreme Court established the "simple but fundamental rule of administrative law.... that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency." (7) One important corollary of this rule is that a court generally must remand to an agency if it finds the agency has committed legal error or has failed to address a material issue. (8) The Supreme Court has reaffirmed these principles in a variety of settings. (9) And, as one would expect, federal courts uniformly apply Chenery when reviewing agency decisions--including Social Security disability determinations. (10) In fact, each circuit court of appeals (11) has invoked Chenery in a Social Security disability case without discussing its applicability. (12) But the Supreme Court has not spoken as to whether these principles extend to the Social Security disability setting, (13) and careful examination of the Social Security Act's judicial review provisions (14) indicates these principles may not apply in that context. 42 U.S.C. [section] 405 (g) grants a reviewing court the "power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing." (15) Thus, the plain language of the statute appears to contradict Chenery's remand requirement. (16) Moreover, [section] 405(g) takes the courts outside of "their accustomed role as external overseers of the administrative process," (17) and instead makes them "virtual[] ... coparticipants in the process, exercising ground-level discretion of the same order as that exercised by [administrative law judges] and the Appeals Council." (18) It follows, then, that a Social Security decision may not be a "determination or judgment which an administrative agency alone is authorized to make." (19) The remand process places a burden on both the agency and the courts by forcing each to reconsider cases where the eventual outcome should be clear. Therefore, if Chenery does not apply in Social Security disability cases, wasteful remands can be avoided. This would alleviate congestion in the federal courts and reduce the tension between the courts and the Social Security Administration, as courts could enforce their precedents directly. This Note explores Chenery's applicability in Social Security disability cases. Part I tracks the development of Chenery and its progeny. Part II analyzes the Social Security Act's judicial review provisions and compares them with those typically found in other statutes underlying Chenery's application. Part III explores the legal arguments for and against applying Chenery in Social Security disability cases. It begins with the implicit arguments raised in dicta by the Tenth Circuit in Powell v. Barnhart, (20) before moving on to analyze [section] 405(g)'s "with or without remanding" clause. Finally, the Note concludes by suggesting courts should confront the text of [section] 405 (g), rather than "mechanically import[ing the principles of Chenery and its progeny] into the particular context of social security disability proceedings. …