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ROSARIO v. SHALALA

September 17, 1993

NANCY ROSARIO
v.
DONNA E. SHALALA



The opinion of the court was delivered by: BY THE COURT; JAMES T. GILES

 GILES, J.

 September 17, 1993

 Nancy Rosario ("Rosario") brings this action pursuant to 42 U.S.C. § 1383(c)(3), which incorporates by reference 42 U.S.C. § 405(g), for review of the final decision of the Secretary of Health and Human Services ("Secretary") denying her claim for supplemental security income benefits under Title XVI of the Social Security Act ("Act"). The parties have filed cross motions for summary judgment. For the following reasons, the plaintiff's motion is GRANTED and defendant's motion is DENIED.

 PROCEDURAL BACKGROUND

 On August 7, 1990, Rosario filed an application for supplemental security income benefits alleging an inability to work since January 1, 1985, because of nervousness, anxiety, arthritis, and asthma. Record, at 59-62. After denials of her application, Rosario filed a timely request for an evidentiary hearing at the Administrative Law Judge (ALJ) level of review. Id. at 106-109.

 On February 3, 1992, an administrative hearing was held wherein Rosario and a vocational expert testified. As a result of the hearing, the ALJ found that Rosario 1) had severe impairments but that they did not meet or equal the criteria in the "Listing of Impairments"; *fn1" (2) had no past relevant work experience; (3) was able to perform work existing in significant numbers in the economy; and (4) had not been under a disability within the meaning of the Social Security Act at any time through the date of his decision. Record, at 11.

 On March 24, 1992, Rosario sought review of the ALJ's decision by the Appeals Council. In her application for review, Rosario alleged that "the ALJ's decision is not supported by substantial evidence because the hypothetical question [posed] to the [Vocational Expert] omitted key findings regarding the functional limitations associated with [her] mental impairment." Record, at 5.

 On November 27, 1992, the Appeals Council denied Rosario's request for review, finding that "[a] review of the tape hearing testimony reveal[ed] [that] the hypothetical question posed to the vocational expert included all of the limitations as found by the Administrative Law Judge . . ." Record, at 3-4.

 Rosario has filed this complaint seeking to reverse the Secretary's Appeals Council decision. Before the court are the parties' cross motions for summary judgment.

 STANDARD OF REVIEW

 Review of the final decision of the Secretary is limited to a determination of whether that decision is supported by substantial evidence. Brown v. Bowen, 845 F.2d 1211, 1213 (3d Cir. 1988). Substantial evidence has been defined as "such evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401, 28 L. Ed. 2d 842, 91 S. Ct. 1420 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 83 L. Ed. 126, 59 S. Ct. 206 (1938)). Substantial evidence is "more than a mere scintilla, but may be less than a preponderance." Woody v. Secretary of Health and Human Services, 859 F.2d 1156, 1159 (3d Cir. 1988).

 Additionally, the Third Circuit has held that an ALJ's findings "should be as comprehensive and analytical as feasible and, where appropriate, should include a statement of subordinate factual foundations on which ultimate factual conclusions are based, so that a reviewing court may know the basis of the decision." Cotter v. Harris, 642 F.2d 700, 705 (3d Cir. 1981). In addition to evidence supporting the result, it is essential that the ALJ's statement include "some indication of the evidence which was rejected." Id. There is a particularly acute need for explanation when relevant evidence has been rejected or when there is conflicting evidence in the record. Id. at 706. The Third Circuit requires that an ALJ do more than simply state ultimate factual conclusions. Stewart v. Secretary of Health, Education & Welfare, 714 F.2d 287 (3d Cir. 1985).

 DISCUSSION

 I. Burdens of Proof

 To be eligible for disability insurance benefits under the Act, a claimant must demonstrate an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months." 42 U.S.C. § 423(d)(1)(A). A claimant is considered to be unable to engage in any substantial gainful activity "only if [her] physical or mental impairments are of such severity that [she] is not only unable to do [her] previous work but cannot, considering ...


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