Wilson v. Commissioner, No. 02-00197, __ F.3d __ (6th Cir. August 2, 2004)

The Sixth Circuit, in a significant opinion by Judge Ronald L. Gilman, vacated and remanded the District Court's decision affirming the ALJ's denial of benefits. The Court discusses at length the ALJ's duty to explain his reasons for rejecting a treating physician's opinion and finds that the ALJ failed in this case to articulate sufficient reasons for discounting that opinion, that this was not harmless error and that reasons advanced after the fact by agency counsel and the district court did not cure the defect. An excerpt:

The ALJ’s failure to give “good reasons” for not crediting DeWys does not constitute harmless error, notwithstanding the district court’s reasoning and the Commissioner’s argument on appeal. The district court stated that it “appears” that “the ALJ may have incorrectly interpreted Dr. DeWys’s opinion as articulating only those limitations from which [Wilson] was then suffering, rather than recognizing that Dr. DeWys had determined that such limitations originated on December 31, 1993.” . . . The Commissioner asserts that the ALJ’s rejection of DeWys’s opinion is supported by substantial evidence, as the ALJ “could” have relied on evidence in the record—namely, Wilson’s testimony and the opinions of two consulting physicians, which, according to the Commissioner, contradict DeWys’s opinion—to reject the opinion.

The argument is not persuasive in the context of this case. A court cannot excuse the denial of a mandatory procedural protection simply because, as the Commissioner urges, there is sufficient evidence in the record for the ALJ to discount the treating source’s opinion and, thus, a different outcome on remand is unlikely. “[A] procedural error is not made harmless simply because [the aggrieved party] appears to have had little chance of success on the merits anyway.” Mazaleski v. Treusdell, 562 F.2d 701, 719 n.41; see also Ingalls Shipbuilding, Inc. v. Dir., Office of Workers’ Comp. Programs, 102 F.3d 1385, 1390 (5th Cir. 1996). To hold otherwise, and to recognize substantial evidence as a defense to non-compliance with § 1527(d)(2), would afford the Commissioner the ability the violate the regulation with impunity and render the protections promised therein illusory. The general administrative law rule, after all, is for a reviewing court, in addition to whatever substantive factual or legal review is appropriate, to “set aside agency action . . . found to be . . . without observance of procedure required by law.” Administrative Procedure Act, 5 U.S.C. § 706(2)(D) (2001).

The court goes on to discuss situations which might constitute harmless error in a Social Security case. Finally, the court rejects the appellant's contention that the ALJ's failure to identify at step 5 of the SEP the transferable skills that existed in the case was reversible error. It also rejects the assertion that SSR 82-41 requires identification of transferable skills.