REINHARDT, Circuit Judge.
Matthew Johnson appeals from an order of the district court denying his motion for remand and granting summary judgment to the Secretary of Health and Human Services (Secretary). The Secretary had previously determined that Johnson was not disabled and thus not entitled to Supplemental Security Income benefits (SSI) pursuant to 42 U.S.C. §§ 1381a, 1382c(a)(3). We reverse and remand for consideration of new or additional evidence by, and further proceedings before, the Secretary.
On March 23, 1978, Johnson applied to the Department of Health and Human Services (HHS) for SSI, claiming mental and physical impairment. His application and a subsequent request for reconsideration were denied. Thereafter Johnson requested an administrative hearing to determine his eligibility under the SSI program. The presiding administrative law judge (ALJ) found that Johnson was not disabled and consequently did not qualify as an SSI recipient. On March 30, 1979, the Appeals Council denied Johnson's request for review of the ALJ's decision denying his claim. The decision of the Appeals Council became the final decision of the Secretary, and Johnson filed this civil suit in district court.
Under the Social Security Act, the court may remand a case to the Secretary for a rehearing and the taking of additional evidence if it finds there is good cause to do so. 42 U.S.C. § 405(g); Goerg v. Schweiker, 643 F.2d 582, 583 (9th Cir. 1981). Good cause can be shown "where no party will be prejudiced by the acceptance of additional evidence and the evidence offered bears
Johnson is a middle-aged Black who can neither read nor write. He claimed that he had been unable to work since 1969, alleging that he was both physically and psychologically disabled. His asserted physical impairments were mild hypertension, skin disease, chronic low back pain, intermittent abdominal pain, history of an ulcer, and a possible hiatal hernia. Johnson's asserted psychological impairment was diagnosed as borderline mental retardation in an inadequate personality disorder with moderate to severe depression which rendered him unable to function in a work setting.
The new or additional evidence Johnson seeks to have considered by the Secretary consists of a supplemental functional capacity report prepared on April 3, 1980, by Dr. Lavit, the psychologist whose report formed a part of the initial evidence presented to the ALJ, and a vocational evaluation report, dated March 10, 1980, from the Arizona Evaluation Center, Inc. These reports, which did not exist at the time of the administrative hearing, contain information relating to Johnson's psychological and physical impairments.
In his supplemental report, Dr. Lavit evaluated Johnson's psychiatric impairment and in all instances rated the resulting limitations on his ability to perform work at the highest levels. He also concluded that the severity of his emotional disorder would require intensive psychotherapy for a period of two to three years. The Secretary argues, in the alternative, that Dr. Lavit's report is not sufficiently probative or that it relates only to a "worsened" condition. We cannot conclude that the supplemental functional capacity report, read in the context of the record, relates only to a recent deterioration in Johnson's psychological condition. Moreover, the report is probative of whether Johnson's psychological impairment renders him disabled within the meaning of the applicable provisions of the Social Security Act.
The Secretary contends that a letter indicating that the Appeals Council had "reviewed" the new evidence and "does not feel ... that the evidence should change the decision of the Secretary ... which was and is supported by substantial evidence" renders remand unnecessary.
(Emphasis added.) While Johnson did not submit Dr. Lavit's most recent evaluation, or the vocational evaluation report, when he originally requested the Appeals Council to review the ALJ's decision, the Secretary's regulations indicate that when the Appeals Council considers a subsequent request for review accompanied by new and material evidence, the standard to be applied is more exacting than the "substantial evidence" standard. This is particularly true where, as here, the new evidence is highly probative of whether Johnson's impairment makes him eligible for supplemental social security benefits. Since the new evidence has not previously been considered in the manner provided by law, we find that the letter does not obviate the necessity to remand to the Secretary, if there is otherwise reason for remand under the statute.
The applicable statute, 42 U.S.C. § 405(g), requires that where "good cause" exists the case shall be remanded to the Secretary and that the Secretary shall thereafter make specific determinations "after hearing such additional evidence."
To assist the Secretary in his reconsideration of this matter, we call his attention to an error committed by the ALJ. The ALJ concluded that Johnson's problem was simply an unwillingness to work due to "cultural and social attitudes contrary to the work ethic." He said:
We have serious questions as to just what the ALJ had in mind when he referred to "cultural ... attitudes contrary to the work ethic." We note that despite these so-called "cultural attitudes" Johnson left school around the fifth grade in order to work on his parents' farm and that thereafter he worked with a considerable degree of regularity until he incurred an injury more than twenty-five years later.
In any event, the ALJ's analysis is based on an erroneous legal premise. The issue is not whether these "factors," if in fact they exist, constitute a disabling psychological impairment, but whether to the extent they exist, if at all, they are the product of a disabling psychological impairment. In other words, the issue upon remand is whether Johnson suffers from a psychological impairment which results in the manifestations the ALJ originally termed "factors" or in any other manifestations which render him unable "to engage in any substantial gainful activity." 42 U.S.C. § 423(d)(1)(A).
Reversed and remanded for further proceedings consistent with this opinion.
42 U.S.C. § 423(d)(1)(A).