## Facts

- William D. Allen received Social Security disability benefits in 1994 based on severe mental impairments.
- In 1998, the Social Security Administration found medical improvement and terminated benefits.
- After administrative review, the Appeals Council remanded with instructions that, if warranted by an expanded record, the ALJ should obtain vocational-expert evidence on the effect of limitations on the occupational base.
- On remand, the ALJ again found disability had ceased as of 1998 and that Allen retained residual functional capacity for a limited range of sedentary work.
- Despite primarily nonexertional (mental) limitations, the ALJ relied on the medical-vocational guidelines and Social Security Rulings, without calling a vocational expert, to find other jobs existed in the national economy.
- The district court affirmed, concluding the Commissioner could satisfy the step-five burden through the grids and Social Security Rulings and that calling a vocational expert was discretionary.
- Allen appealed.

## Issues

1. Whether the Commissioner met the step-five burden by relying on the grids and Social Security Rulings without vocational-expert testimony where the claimant had significant nonexertional mental limitations.
2. Whether the ALJ correctly applied the relevant Social Security Ruling to the claimant’s mental limitations so that the step-five finding was supported by substantial evidence.

## Decision

- The Third Circuit reversed the district court and remanded with instructions to return the matter to the Agency for further findings.
- The court agreed generally that the Commissioner may, in appropriate cases, satisfy step five through the grids plus applicable Social Security Rulings without vocational-expert testimony.
- The court held the ALJ misapplied the Social Security Ruling used to account for Allen’s mental limitations, undermining the step-five analysis.
- Because the ALJ did not adequately explain how established mental limitations affected erosion of the sedentary occupational base, the non-disability finding lacked substantial evidence.

## Legal Principles

- At step five, the Commissioner may rely on the medical-vocational guidelines as supplemented by properly applicable Social Security Rulings, even when nonexertional limitations exist, if that framework provides substantial evidence of available work.
- When an ALJ relies on a Social Security Ruling instead of vocational-expert testimony to address nonexertional impairments, the ALJ must accurately connect the claimant’s functional limitations to the degree of erosion of the relevant occupational base.
- Misapplication of an SSR, or an incomplete analysis of nonexertional limitations, defeats substantial-evidence support for a step-five finding and warrants remand for additional findings.

## Conclusion

The Third Circuit held that vocational-expert testimony is not automatically required whenever a claimant has nonexertional mental limitations, but an ALJ’s reliance on the grids and Social Security Rulings must be based on a correct SSR application and an adequate explanation of how the claimant’s limitations affect the occupational base; because that was not done, remand for further findings was required.


Allen v. Barnhart, 417 F.3d 396 (3d Cir. 2005)