Disability Claims, Guidance Documents, and the Problem of Nonlegislative Rules
Two similarly situated claimants apply to the Social Security Administration (SSA) for disability benefits. Both receive unfavorable determinations of their claims—first at the initialdetermination stage, then on reconsideration, and then again at an administrative law judge (ALJ) hearing. Undaunted, both collect further relevant evidence of their disabilities and request a final round of administrative review by the SSA Appeals Council. Why do they go to this effort? Because they—or their attorneys—have read the SSA’s Hearings, Appeals and Litigation Law manual (HALLEX). And this internal guidance document provides that the Appeals Council should “specifically address” additional evidence presented in a request for review. Yet, contrary to the guidance articulated in HALLEX, the Appeals Council dismisses the two claims without even a nod to the claimants’ new evidence.
Next, both claimants take their claims to federal court. One sues in the Ninth Circuit, where the agency’s decision is affirmed. The other goes to the Fifth Circuit, where the agency’s decision is reversed and remanded. These divergent outcomes are emblematic of a broader circuit split over how reviewing courts should respond to cases in which the SSA deviates from HALLEX. A resolution of this split would be beneficial, not only for its impact on numerous disability cases, but also for its relevance to an increasingly pertinent question of administrative law: Are agencies bound to follow their guidance documents?
The term “guidance documents” refers to statements or collections of nonlegislative rules. Guidance documents are thus agency pronouncements that inform the public of legal interpretations, policies, or procedures without conforming to the rulemaking requirements of § 553 of the Administrative Procedure Act (APA). Though such documents are increasingly common, they remain a wellspring of confusion for courts. As in the hypothetical cases presented above, it is not clear when—if ever—an agency is bound by procedures published in a guidance document. This lack of clarity is compounded by a dictum from the Supreme Court’s opinion in Morton v Ruiz, which states that agencies should follow their own “internal procedures” where “the rights of individuals are affected.”