Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 84 C 5677 - James B. Parsons, Judge.
Before CUDAHY, COFFEY, and FLAUM, Circuit Judges.*fn*
FLAUM, Circuit Judge. This is an appeal from an order of the district court affirming the decision of the Secretary of Health and Human Services (Secretary) to deny plaintiff's application for social security disability benefits. The major issue we will address concerns the proper scope of judicial review in social security cases where the Appeals Council has reversed, pursuant to 20 C.F.R. § 404.970(a), an Administrative Law Judge's (ALJ) grant of disability benefits. We hold that our review in such cases is limited to determining whether the Appeals Council's decision is supported by substantial evidence on the record as a whole. Because the Appeals Council's decision in this case was not supported by substantial evidence, we reverse and remand to the district court with instructions to remand to the Secretary for further agency proceedings.
Appellant, Elisa Bauzo, was born in 1935 and completed her eighth grade education in Puerto Rico. She does not read or write English and has a limited understanding of oral English. On January 7, 1983, Bauzo filed concurrent applications for disability insurance benefits and supplemental security income alleging that she became unable to work on July 9, 1979 due to both a dislocated disc and a hernia. She complained of back, chest and leg pains, and nervousness. Following initial denial and denial upon reconsideration, an ALJ conducted a hearing during which Bauzo was represented by counsel.
At the hearing, Bauzo testified through her interpreter that she could walk only three blocks and climb the flight of stairs to her second-story apartment. She alleged that she was unable to sit for more than one-half hour, bend at the waist or lift objects because of back pain. Her typical day consists of caring for both herself and her eleven-year-old stepson; which includes cooking and doing the dishes. She is able to grocery shop once a week with assistance. her hobbies are arranging flowers, working on macrame and watching television. She does not drive, do her own laundry or use public transportation without assistance.
Until 1974 Bauzo worked as an industrial sewing machine operator for five different companies in Puerto Rico. From 1974 to 1979, she was a punch press operator in a company that manufactures equipment for pin ball machines. Her back problems began in 1979 when she strained her back at work while pushing a cart containing a heavy load of materials. Because of her difficulty in walking, her vision problems, her inability to bend and sit, and her nervousness, Bauzo believes that she would be unable to return to her past work.
After listening to Bauzo's testimony and reviewing the medical exhibits, the ALJ issued a written decision granting benefits to Bauzo. The ALJ found that Bauzo was suffering from severe lumbar disc disease and angina and that she was unable to perform her past relevant work as a punch press operator and sewing machine operator due to her inability to either sit for more than one-half hour or lift more than ten pounds. The ALJ then applied Rule 201.17 of the "Grid", 20 C.F.R. Part 404, Subpart P, Appendix 2, Sedentary TAbles, which directed a finding of disability. On its own motion, however, the Appeals Council reversed and held that the ALJ's decision was not supported by substantial evidence. 20 C.F.R. § 404.970(a)(3). Specifically, the Appeals Council determined that Bauzo's allegations of severe and disabling pain were not credible in view of the medical evidence, that Bauzo retained the functional capacity to perform work-related functions except for work involving constant standing or walking or lifting over twenty pounds, and that Bauzo's impairments did not prevent the performance of her past relevant work. The Appeals Council found, therefore, at the fourth step of regulatory test for disability,*fn1 that Bauzo was not disabled.
Bauzo then sought review of the Appeals Council's decision in the district court, which determined that the Appeals Council's decision was supported by substantial evidence. Accordingly, the district court granted summary judgment for the Secretary.
Last year, in Scott v. Heckler, 768 F.2d 172, 178 (7th Cir. 1985), we held that 20 C.F.R. § 404.970(a) limits the authority of the Appeals Council to initiate own motion review of an ALJ's decision. Section 404.970(a) provides:
(a) The Appeals Council will review a case if -
(1) There appears to be an abuse of discretion by the ...