Applying The "Spririt Of Rule 702," In The Administrative Law Process

In review of Social Security Administration's (SSA) denial of disability benefits to the plaintiff, affirming as supported by the substantial evidence that the plaintiff was “capable of making a successful adjustment to other work" so that he was not entitled to disability, noting that while the FRE does not apply to the administrative process, the circuits are split about whether the "spirit of Rule 702" and Daubert does apply, in Brault v. Social Sec. Admin., Com'r, __ F.3d __ (2d Cir. June 29, 2012) (No. 11–2121–cv)(per curiam)

The Federal Rules of Evidence do not apply in a broad range of proceedings, most notably in the administrative law process. Yet this does not mean that no evidentiary standards apply. Frequently administrative bodies adopt provisions from the FRE or other evidence codes. An interesting example arises in the administrative law context of presentation of expert witness opinion evidence. Recently, the Second Circuit had occasion to examine what it regarded as a circuit split with a sister circuit, the Seventh, regarding the place of FRE 702 and Daubert in administrative law process. The circuit took the occasion to express puzzlement over the Seventh Circuit's approach and noted that it was somewhat unique.

In the case, plaintiff Brault sought, but was denied, disability benefits from the Social Security Administration. The plaintiff sought review of this result, which involved a hearing before an Administrative Law Judge. The plaintiff presented evidence and argument in opposition to opinion testimony by the government's vocational expert. The expert contended that the plaintiff was not entitled to disability status because the plaintiff could still perform "other work that exists in significant numbers in the national economy.” The ALJ was not persuaded by plaintiff's suggestion that this finding was not reliable and accordingly the ALJ denied the plaintiff disability. The district court only affirmed the ALJ decision against the Plaintiff's disability status. The plaintiff sought review by the Second Circuit, basing its challenge in large part on the treatment of expert evidence testimony in the Social Security hearing process.

In appealing the denial of disability, the plaintiff focused in part on the testimony in the record from the government's vocational expert. The Circuit noted that the plaintiff characterized this as his "Daubert objection, even though the rule of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) does not apply in Social Security administrative proceedings." Brault, __ F.3d at __. Despite his objections, the ALJ heard the positions of the parties regarding use of the vocational expert testimony. There was no challenge to the expert's qualifications, but rather to the reliability of the technique employed by the expert in order to determine whether there were a significant number of other positions available that the plaintiff could fill. The ALJ "never directly" acknowledged the plaintiff's objections to the expert evidence. By implication, in affirming the ALJ's determination, the circuit rejected the plaintiff's "challenge to the reliability" of the expert's testimony on appeal. Brault, __ F.3d at __

The basis of the plaintiff's objection to the testimony was based on how the expert calculated whether there were a significant number of other jobs in the economy that the plaintiff could still perform, even suffering from some impairment. This calculation was not straight-forward. Rather, it involved translating data generated to show work effort required to estimate the number of open positions available that the plaintiff could perform. In this transformation process, the circuit noted, data is necessarily lost. For example, if the expert found that one data series displayed as many as 13,000 different variable types (e.g., job position work effort descriptions), he had to estimate the number of open positions in the current market when these positions were reported on a scale that allowed only 1,000 position descriptions, not 13,000. The plaintiff contended that the expert improperly calculated the number of persons in each group and often by double-counting expanded the number of available positions in plaintiff's job category. The circuit rejected that the ALJ had a duty to address the plaintiff's objection:

[T]hat the ALJ was required to inquire into Brault’s objection, whether or not the ALJ discussed it on the record, is dubious. Currently, such a “duty to inquire” exists only in the Seventh Circuit. In Donahue, the Seventh Circuit drew inspiration from Fed. R. Evid. 702 and Daubert. While recognizing that Rule 702 does not apply in disability proceedings, the court held that the spirit of Rule 702 did. In that court’s view, “the idea that experts should use reliable methods . . . plays a role in the administrative process because every decision must be supported by substantial evidence,” and thus evidence is per se not substantial if “vital testimony has been conjured out of whole cloth.” Therefore in the Seventh Circuit, if the basis of a vocational expert’s conclusions is questioned, “the ALJ should make an inquiry (similar though not necessarily identical to that of Rule 702) to find out whether the purported expert’s conclusions are reliable.”

The Donahue rule, however, has not been a popular export. The Ninth Circuit’s Bayliss decision, while not explicitly rejecting Donahue, reached a conclusion necessarily in conflict with it. See 427 F.3d at 1218 (“A VE’s recognized expertise provides the necessary foundation for his or her testimony. Thus, no additional foundation is required.”). In fact, no court outside the Seventh Circuit has agreed with Donahue and its offspring.
Brault, __ F.3d at __ (citing Donahue 279 F.3d at 446; Babb v. Astrue, 2:10-CV-49-DBH, 2010 WL 5465839, at *3 (D. Me. Dec. 29, 2010), report and recommendation adopted, CIV. 10-49-P-H, 2011 WL 672438 (D. Me. Feb. 16, 2011) (disagreeing with Donahue); Pritchett v. Astrue, No. 5:09-CV-144 (CAR), 2009 WL 4730326, at *3-*4 (M.D. Ga. Dec. 4, 2009) (same); Masters v. Astrue, No. 07-123-JBC, 2008 WL 4082965, at *4 n.8 (E.D. Ky. Aug. 29, 2008) (same).

The Second Circuit explained the basis of its rejection of the Seventh Circuit's Donahue approach:

[T]here appear to be good reasons to question Donahue’s approach. Donahue relied heavily on the principles, if not the actual authority, of Fed. R. Evid. 702 and Daubert, 509 U.S. 579. But Congress has provided, quite clearly, that the Federal Rules of Evidence do not apply in Social Security proceedings. 42 U.S.C. § 405 (“Evidence may be received at any hearing before the Commissioner of Social Security even though inadmissible under rules of evidence applicable to court procedure.”); see also Richardson v. Perales, 402 U.S. 389, 400-01 (1971) (“[S]trict rules of evidence, applicable in the courtroom, are not to operate at social security hearings . . . . [A]dministrative procedure, and these hearings, should be understandable to the layman claimant, should not necessarily be stiff and comfortable only for the trained attorney, and should be liberal and not strict in tone and operation. This is the obvious intent of Congress so long as the procedures are fundamentally fair.”).
Brault, __ F.3d at __


Brault is the latest case to probe how significantly the FRE 702 standard of reliable evidence is incorporated into the standard of review available for agency decisions -- whether there is "substantial evidence" for the agency's findings. As noted by the Second Circuit, the Seventh had a difficult, if not impossible balance, to maintain. As the Second Circuit observed, Donahue seemed to be problematic. Even the Seventh Circuit seemed to have observe there were problems, although the circuit left it "unclear ... why the Seventh Circuit would acknowledge in Donahue that ALJs are not bound by the Rules of Evidence, but then turn around and require ALJs to hew so closely to Daubert’s principles.

Federal Rules of Evidence
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