## Facts

- John R. Wallace, a steelworker, suffered a heart attack and, about a month later, a stroke that caused a visual field defect (homonymous hemianopsia), along with other complications; he later underwent leg vein-transfer surgery.
- Wallace applied for Social Security disability insurance benefits and supplemental security income; the agency denied the claims administratively.
- After an administrative hearing at which Wallace testified and submitted medical evidence from treating physicians, the ALJ closed the record.
- Post-hearing, the ALJ obtained written medical evaluations from two consulting physicians who did not examine Wallace and opined solely from file review that Wallace’s impairments did not meet or equal the regulatory disability criteria.
- The ALJ relied substantially on these post-hearing reports to find Wallace not disabled; the Appeals Council adopted the decision.
- Wallace received a form notice stating additional evidence had been received and inviting only written comments, a written statement of facts and law, or additional evidence; it did not offer a supplemental hearing or cross-examination of the consultants.
- The district court upheld the denial on summary judgment, and Wallace appealed.

## Issues

1. Whether an ALJ may substantially rely on post-hearing medical expert reports without providing an opportunity to cross-examine the report authors, consistent with 42 U.S.C. § 405(b)(1)’s requirement that the decision be based on “evidence adduced at the hearing” and with due process.
2. Whether the denial of benefits was supported by substantial evidence.

## Decision

- The Third Circuit vacated the district court’s judgment and remanded with instructions to remand to the Secretary.
- The court held that, in these circumstances, relying substantially on post-hearing medical reports without a meaningful opportunity for cross-examination violated the claimant’s statutory right under 42 U.S.C. § 405(b)(1).
- Because it found a statutory violation (with related fairness concerns), the court did not reach whether the denial was supported by substantial evidence.
- The remedy was a remand to allow Wallace to cross-examine the two consulting physicians.

## Legal Principles

- Under 42 U.S.C. § 405(b)(1), a disability claimant is entitled to a decision based on “evidence adduced at the hearing,” which limits the agency’s ability to rest a decision on material, adverse evidence generated after the hearing without procedures that allow the claimant to test it.
- When the agency obtains and relies on post-hearing expert medical opinions that are central to the outcome and adverse to the claimant, a meaningful opportunity to confront that evidence—through cross-examination—may be required.
- A generic post-hearing notice inviting only written comments or additional submissions is not an adequate substitute for cross-examination where the ALJ relies substantially on the post-hearing reports.
- The appropriate relief for this procedural violation is remand to provide the required opportunity to challenge the adverse expert evidence, rather than an immediate award of benefits.

## Conclusion

The Third Circuit required remand because the ALJ substantially relied on post-hearing consulting-physician reports without offering Wallace a meaningful opportunity to cross-examine the authors, violating § 405(b)(1)’s requirement that the decision rest on evidence developed through hearing procedures.


Wallace v. Bowen, 869 F.2d 187 (3d Cir. 1989)