On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 83-2352)
GILES, J., District Judge
Charles Purter filed an action in the district court to review his claim for disability benefits under 42 U.S.C. § 401 et seq. (1982), and for supplemental security income benefits (SSI), id. § 1381 et seq. (1982), both of which were denied by the Secretary of Health and Human Services (Secretary). Under consideration was plaintiff's third application for benefits. The court below adopted the report of the magistrate recommending that the action be dismissed based on the principle of res judicata. Accordingly, summary judgment was entered in favor of the Secretary.
On appeal, we are asked to decide whether the district court erred in applying the doctrine of res judicata, and if so, whether the Secretary's final decision denying Purter's third application for benefits is supported by substantial evidence in the record as a whole. Because we find that the lower court improperly applied res judicata principles to bar Purter's claim and the Secretary applied an improper legal standard to determine whether he was disabled under the Social Security Act (Act) due to alcoholism, we shall vacate the summary judgment order with directions to remand the matter to the district court with directions to remand the matter to the district court with directions to, in turn, remand to the Secretary for further proceedings consistent with this opinion.
Purter, now a forty-five year old man, has only a ninth-grade education. He worked as a laborer in a box spring factory until he was laid off in December 1975 due to a combination of physical ailments. Claimant has not returned to his former place of work nor obtained other gainful employment.
He first applied for disability and SSI benefits on June 3, 1977, alleging that he became disabled in December 1975 as the result of high blood pressure, seizures and back problems. His initial claim was disallowed by the Social Security Administration in August 1977, and again upon reconsideration in November 1977. Purter then requested a hearing before an Administrative Law Judge (ALJ) in January 1978.
The ALJ reviewed a record replete with medical diagnoses of excessive alcohol use and other persuasive evidence that claimant's physical condition was steadily deteriorating. Purter entered Presbyterian University Hospital (Presbyterian) on November 14, 1974 suffering from a seizure disorder. The attending physician found that Purter's seizure disorder and high blood pressure were complicated by his ingestion of alcohol. The doctor described claimant as "a heavy drinker all his life" and noted that Purter had been drinking his usual per diem quota of two pints of alcohol on the day of his admission. Purter promised to discontinue his drinking habits, was given medication to control his seizures and was released from the hospital.
Three months later, he entered St. Francis General Hospital (St. Francis), seeking relief from multiple seizures. On intake, the primary diagnosis was "chronic alcoholism," with a seizure disorder secondary to the same. Plaintiff was discharged with instructions to take his medications and advised to enter that hospital's "Alcoholic Clinic."
In May 1975, plaintiff was admitted to St. Francis for a three-day stay resulting from continued seizures. Purter's condition was found in part attributable to "ethanol" abuse. These records note Purter's history of daily alcohol ingestion and his failure to take his prescribed seizure and high blood pressure medications.
On May 13, 1977, police found Purter lying in a pool of blood suffering from a stab wound in the back. Purter was taken to Presbyterian where medical, records reveal that he was intoxicated upon admission.
Two physicians to whom Purter was referred for examination by the state disability board submitted reports. Dr. Goldstein, a neurologist, filed a report which contains Purter's admission that he was a regular drinker and promise to "cut down on his ... intake." Dr. Norman Davis' examination confirmed the earlier diagnoses contained a claimant's medical history: seizure disorder, high blood pressure and chronic alcoholism. Notably, his diagnosis linked Purter's seizures to his consumption of alcohol. Dr. Goldstein emphasized that, although Purter's long-term prognosis was bleak, it could be substantially improved with abstention from alcohol.
On April 25, 1978, the ALJ nevertheless concluded that claimant did not suffer from any disabling impairment. The ALJ found that the seizure disorder was controllable with proper use of medication. Further, he concluded that plaintiff's abuse of alcohol was not disabling because it had not resulted in any organ damage nor manifested itself in any other significant mental impairment.
By the time plaintiff filed his second application for benefits, March 29, 1979, the symptomology indicated in his records had only marginally evolved. Again, Purter's chief complaints were high blood pressure and seizure disorder. He specifically denied alcohol abuse, but admitted to memory loss. Plaintiff's second claim was disallowed by the state disability agency on June 15, 1979, and again upon reconsideration on September 26, 1979.
In support of his second application, Purter submitted hospital records filed with his first application and supplied additional medical data. Central Medical Health Services (Central) records covering the period from August 1975 to July 1978 show that he had been treated there on two occasions for ailments indirectly related to his alleged disabilities: once for pneumonia, then for lacerations resulting from being hit by a bottle. Purter was also admitted to Central on another occasion suffering from a seizure. He had failed to take his seizure medication for six months. He was referred back to St. Francis for further care.
Purter entered St. Francis at least six times from August 11, 1978 to February 8, 1980, suffering from seizures of varying degrees. His seizures were found to be related to his failure to comply with the prescribed medical regimen. Failure to follow the prescribed medical regimen was, in turn, linked to his primary disorder -- alcoholism. An attending nurse's notes show that Purter was genuinely confused over the nature of his condition. He was effectively substituting alcoholic beverages for seizure medication.
At a hearing before and ALJ on February 29, 1980, Purter testified that he had been a heavy drinker, but had stopped drinking alcohol on the advise of his doctors. He later contradicted this testimony, remarking that he drank on occasion, and had even taken a drink on the previous evening.
On April 1, 1980, the ALJ found that there was no new evidence or clear error in the prior decision by the agency to warrant a reopening of the earlier application. Further, he concluded that since the prior decision involved the same facts and the same issues, the April 25, 1978 decision of the ALJ was res judicata as to the evidence up to that April 1978 date. The ALJ then reviewed the record evidence which was not precluded by res judicata. He found that Purter was disabled when drinking, but that he could control his disabling conditions with medication if he discontinued the use of alcohol.
On June 4, 1980, Purter filed a petition for reconsideration of the ALJ's decision denying benefits. Purter's attorney argued that his inability to adhere to the prescribed medical treatment was the result of alcoholism. Claimant submitted two affidavits, including his own sworn statement, which confirmed his attendance at Alcoholic's Anonymous in May 1980. The Appeals Council found that he was not addicted to alcohol and denied Purter's request for benefits.
Purter then challenged the Secretary's decision as to the second application for benefits in federal district court. Adopting the opinion of the magistrate to whom the case was referred, the court initially held that it was without jurisdiction to review the ALJ's application of administrative res ...