Thomas Williams v. Louis W. Sullivan, M.D., Secretary of Health and Human Services

This is an appeal from a denial of disability benefits under the Social Security Act, 42 U.S.C.A. § 301 et seq. (West 1991). Following a hearing in 1989, the administrative law judge found that appellant Thomas Williams was disabled as of March 28, 1988. Williams sought review by the Appeals Council regarding the date of onset of his disability, requesting that the Council award retroactive benefits back to December 1986. Upon review, the Appeals Council determined that Williams was not disabled at all. The district court affirmed the ruling of no disability by the Appeals Council. Because the Appeals Council acted within its discretion when it reviewed the case in full, and its conclusion that Williams was not disabled was supported by substantial evidence, we will affirm.

Williams applied for disability insurance benefits on October 20, 1987, alleging disability as of October 1986. His claim was denied, and Williams took no appeal. On June 15, 1988, this time with the assistance of counsel, he filed a new application for disability insurance benefits, stating that his disabling condition was "orthopedic, neurological, neuropsychiatric, psychiatric, psychological, pulmonary, internal, diabetic and conditions related thereto." App. at 82. His claim was again denied on December 15, 1988, and he exhausted his administrative remedies.

Williams appeared at an administrative hearing before an Administrative Law Judge (ALJ) on August 8, 1989. The ALJ issued a decision on August 24, 1989, finding Williams disabled as of March 28, 1988, but not earlier. Williams requested review by the Appeals Council regarding the date of onset of total disability. He asserted an onset date of total disability as of December 1986, and requested additional retroactive disability insurance benefits. On January 29, 1991, the Appeals Council issued a decision which held that, not only was Williams not entitled to an earlier date of onset of total disability, but he was not entitled to any disability benefits whatsoever. This decision was adopted by the Secretary.

Williams appealed this decision to the district court. The district court affirmed the Secretary's decision, finding that it was supported by substantial evidence. This appeal followed. We have jurisdiction under 28 U.S.C. § 1291 (1988).

Title II of the Social Security Act provides for the payment of disability insurance benefits to those who have contributed to the program and suffer from a physical or mental disability. 42 U.S.C. § 423(a)(1)(D) (1988). "Disability" is defined in section 423(d) as follows:

(1) The term "disability" means--

(A) 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 12 months

. . . . .

(2) For purposes of paragraph (1)(A)--

(A) An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy.

. . . . .

(3) For purposes of this subsection, a "physical or mental impairment" is an impairment that results from anatomical, physiological, or psychological abnormalities which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques.

42 U.S.C.A. § 423(d) (West 1991). See also 42 U.S.C. § 1382c(a)(3)(A) (1988). The Secretary of Health and Human Services has established a five step sequential evaluation process for determining whether a person is disabled. 20 C.F.R. § 404.1520 (1991). The Supreme Court explained the operation of this sequential evaluation process thus:

The first two steps involve threshold determinations that the claimant is not presently working, and has an impairment which is of the required duration and which significantly limits his ability to work. In the third step, the medical evidence of the claimant's impairment is compared to a list of impairments presumed severe enough to preclude any gainful work. If the claimant's impairment matches or is "equal" to one of the listed impairments, he qualifies for benefits without further inquiry. If the claimant cannot qualify under the listings, the analysis proceeds to the fourth and fifth steps. At these steps, the inquiry is whether the claimant can do his own past work or any other work that exists in the national economy, in view of his age, education, and work experience. If the claimant cannot do his past work or other work, he qualifies for benefits.

Sullivan v. Zebley, 493 U.S. 521, 110 S.Ct. 885, 888-89, 107 L.Ed.2d 967 (1990).1 The claimant bears the burden of persuasion through step four, while at step five, the burden shifts to the Secretary to show that the claimant is capable of performing substantial gainful employment other than the claimant's past relevant work. Bowen v. Yuckert, 482 U.S. 137, 146 n. 5, 107 S.Ct. 2287, 2294 n. 5, 96 L.Ed.2d 119 (1987).

The Secretary concedes that Williams satisfies the requirements of the first two steps of the sequential evaluation process, i.e., that Williams was not working (step one) and had a "severe impairment" (step two). Williams does not, however, meet the requirements of step three, and there is substantial evidence to support the Secretary's decision at step four that Williams was capable of returning to his past relevant work as a security guard.

Williams was born in 1934. He went to a segregated school in South Carolina for less than one full year. He has the equivalent of only a first grade education, and is unable to read, write or do simple arithmetic. He did agricultural work in the South. Upon moving north, he did construction work for two years and then worked in a steel drum factory, where he performed various jobs including welding and "feeding the weld." He stopped working when the factory closed in 1983. Afterwards he worked as a security guard for about a year. At this job he spent his time walking or standing, and occasionally had to shovel snow. He stopped working in 1986.

Williams has arthritis and controlled diabetes for which he takes insulin daily. He takes medication for pain and walks with a cane. In preparation for his compensation case, he was examined in 1988 by five physicians and one psychologist for orthopedic, neuropsychiatric, and psychological disorders. Three of the doctors were Social Security consultative physicians, two of whom diagnosed Williams as having diabetes and arthritis. Two physicians, Drs. Ahmad and Pollock, were retained by Williams' counsel to perform orthopedic and neuropsychiatric exams, respectively. An IQ test administered by the psychologist yielded a verbal scale IQ of 66 on the Wechsler Adult Intelligence Scale.

The Administrative Law Judge found that Williams retained the residual functional capacity to perform the physical requirements of medium work2 except for work requiring intellect to perform complex and detailed tasks. Although the ALJ concluded that Williams' work history did not indicate or reveal lifelong mental retardation, the ALJ nevertheless concluded that Williams' intellectual deficit was sufficient to establish disability. The ALJ held that Williams was "unable to perform his past relevant work as a welder and security guard in light of the decision in Velazquez,"3 app. at 27, and found him under a "disability" since March 28, 1988, the date the psychologist administered the IQ test.

The ALJ concluded that Williams did not have an impairment or combination of impairments listed in, or medically equal to any listed in the regulations, 20 C.F.R. Pt. 404, Subpt. P., App. 1 (1991). Consequently, under step three of the sequential evaluation process, the ALJ stated that Williams could not be presumed disabled. Similarly, under step four, the ALJ found that "based on an exertional capacity for medium work, and the claimant's age, education, and work experience, section 404.1569 and Rule 203.10 & 203.18 (at onset), Table No. 1, Appendix 2, Subpart P, Regulation No. 4 would direct a conclusion of 'not disabled.' " App. at 27. Thus, despite concluding that the sequential evaluation procedure set out in the regulations would dictate a finding of "not disabled," the ALJ nevertheless found that Williams was disabled. The ALJ reasoned that Williams was unable to perform his past relevant work as a welder or security guard because of a recent reduction in intellect, which the ALJ found to be manifest as of March 28, 1988 but not before.

Upon review of the ALJ's findings, the Appeals Council concluded that the limitations on Williams' ability to perform work-related activities did not preclude the performance of his past work as a security guard. The Council found that Williams' only medically determinable severe impairments were arthritis and lumbar strain, and that he was still able to perform medium work. These impairments were neither listed in nor medically equal to any listed in the regulations. The Appeals Council did not consider Williams' mental impairments; instead it concluded that his allegations about inability to handle the demands of his past work were not credible. Consequently, the Appeals Council concluded that Williams was not disabled as defined in the Social Security Act at any time.

Our standard of review is whether the district court properly found that the Appeals Council's determination was supported by substantial evidence. Brown v. Bowen, 845 F.2d 1211, 1213 (3d Cir.1988). An appellate court is limited in its scope of judicial review as set forth in 42 U.S.C. § 405(g) (1988), which provides that a court may review the Secretary's factual findings only to determine whether they are supported by substantial evidence in the record. Cotter v. Harris, 642 F.2d 700, 704 (3d Cir.1981). "Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Kangas v. Bowen, 823 F.2d 775, 777 (3d Cir.1987). Neither the district court nor this court is empowered to weigh the evidence or substitute its conclusions for those of the fact-finder. Early v. Heckler, 743 F.2d 1002, 1007 (3d Cir.1984).

Williams first challenges the Appeals Council's authority to review his entire case. He appealed one narrow issue, the onset date of his disability, but the Appeals Council reviewed his entire record and reversed the ALJ's determination of disability altogether. Williams asserts that this policy of wide open review is fundamentally unfair and violates due process because it chills a claimant's right to appeal by implicitly threatening the potential loss of benefits already granted.

Although an ALJ's findings of fact may be taken as conclusive, the Appeals Council may review all the evidence of record to decide whether the ALJ's findings are supported by substantial evidence. In Powell v. Heckler, 789 F.2d 176 (3d Cir.1986), this court held that the Appeals Council need not limit its review to the issue appealed, but may review a claimant's entire case provided it gives sufficient notice that appeals will be subject to full review. Id. at 179; see also Hale v. Sullivan, 934 F.2d 895, 898 (7th Cir.1991) (once the Appeals Council receives a timely request for review, it is entitled to review the entirety of the case); Gronda v. Secretary of Health & Human Serv., 856 F.2d 36, 38-39 (6th Cir.1988) (Appeals Council had authority to review entire case within 60 days of ALJ's decision even though claimant only requested review of narrow aspect of case), cert. denied, 489 U.S. 1052, 109 S.Ct. 1312, 103 L.Ed.2d 581 (1989); Bivines v. Bowen, 833 F.2d 293, 297 (11th Cir.1987) (where claimant files application for review, Appeals Council may not revisit unchallenged issues unless it gives claimant notice); Kennedy v. Bowen, 814 F.2d 1523, 1524 (11th Cir.1987) (Appeals Council must give notice of its intent to re-examine issues not challenged by claimant); DeLong v. Heckler, 771 F.2d 266, 267-68 (7th Cir.1985) (application for limited review of date of onset of disability gave Appeals Council the prerogative to broaden the scope of its review).

When Williams was first notified of the results of his hearing before the ALJ, he received a letter stating he had received a favorable decision. This letter contained a paragraph which put him on notice that if he appealed he might lose those benefits:

When you appeal, you request the Appeals Council to review the decision. If the Appeals Council grants your request, it will review the entire record in your case. It will review those parts of the decision which you think are wrong. It will also review those parts which you think are correct and may make them unfavorable or less favorable to you. You will receive a new decision.

App. at 19. This paragraph was sufficient to put Williams on notice that if he appealed he risked losing his award.4 Since this means of notification was reasonably calculated to apprise both Williams and his counsel of the risk associated with appealing the award, no due process violation can be found. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 657-58, 94 L.Ed. 865 (1950).

"[F]undamental fairness requires that partly dissatisfied claimants ... be apprised of the risks inherent in their projected appeals." Powell, 789 F.2d at 180. Here, Williams received, along with the partially favorable hearing decision, a notice explaining his appeal rights. This notice, mailed directly to Williams and his attorney with the hearing decision, plainly stated that if an appeal were taken, the Appeals Council would review the entire record and might make a decision different from that of the ALJ.

Williams argues that the Appeals Council should have notified him within 60 days of the date of the hearing decision of the issues upon which it would review Williams' case. The 60-day limit upon which Williams relies, however, applies only to review initiated by the Council upon its own motion. 20 C.F.R. § 404.969 (1991). Here, Williams himself initiated the request for review. No mandatory deadlines apply to claimant-initiated requests. See Heckler v. Day, 467 U.S. 104, 115-117, 104 S.Ct. 2249, 2255-2256, 81 L.Ed.2d 88 (1984) (federal courts may not prescribe mandatory deadlines with respect to the administration of Social Security disability claims). In any event, because the notice explaining his appeal rights accompanied the letter notifying Williams of the favorable decision of the ALJ, it complies with 20 C.F.R. § 404.969. There was no violation of due process in the Appeals Council's review of the entire record underlying the ALJ's decision.

Williams next asserts that he qualifies for disability because his medical condition renders him disabled per se under step three of the sequential evaluation process. A claimant automatically qualifies for a period of disability if he or she suffers from an impairment listed in or equal to a list of impairments set out in the regulations at 20 C.F.R. Pt. 404, Subpt. P, App. 1. "For wage earners, the listings at step three of the sequential evaluation process provide a convenient way for the Secretary to determine which claimants are per se incapable of performing any gainful activity." Finkelstein v. Sullivan, 924 F.2d 483, 487 (3d Cir.1991) (emphasis in original).

This court has paraphrased steps three through five of the sequential evaluation process thus:

A claimant may show an inability to engage in substantial gainful activity for a continuous period of twelve months in either of two ways: (1) by producing medical evidence that one is disabled per se by meeting or equalling certain listed impairments; or (2) by demonstrating an impairment of such severity as to be unable to engage in any kind of "substantial gainful work which exists in the national economy."

Kangas, 823 F.2d at 777. Williams claims he meets the criteria set forth in the listing of impairments for mentally retarded persons. Those criteria provide that

Mental retardation refers to a significantly subaverage general intellectual functioning with deficits in adaptive behavior initially manifested during the developmental period (before age 22).

. . . . .

The required level of severity for this disorder is met when ...

. . . . .

C. A valid verbal, performance, or full scale IQ of 60 through 70 and a physical or other mental impairment imposing additional and significant work-related limitation of function.

20 C.F.R. Pt. 404, Subpt. P, App. I, § 12.05. Under these criteria, a claimant is presumptively disabled if a) he is mentally retarded, as evidenced by an IQ between 60 and 70, and has been so since before the age of 22; and b) he has another impairment, in addition to the mental retardation, that imposes an additional and significant work-related limitation of function.

With regard to the first requirement, Williams submitted evidence to support his claim of mental retardation, but the evidence was insufficient to substantiate a mental impairment existing prior to age 22. Williams submitted the report of Dr. Dyer, a psychologist, who diagnosed him as having a verbal IQ of 66 on the Wechsler Adult Intelligence Scale (WAIS). Dr. Dyer's report concluded that Williams' "prospects for success would be virtually nil in any employment requiring complex oral communication, fine perceptual-motor skills, perceptual speed, rapid cognitive processing of large amounts of information, or basic reading, applied arithmetic, and written language skills." App. at 188. Dr. Dyer mentioned nothing about Williams' former employment in a steel drum factory or as a security guard.

Both the ALJ and the Appeals Council stated that Dr. Dyer's report was deficient since Dr. Dyer administered only a verbal IQ test rather than full scale and performance IQ tests as well. Section 12.05(C) calls for a "valid verbal, performance, or full scale IQ of 60 through 70." 20 C.F.R. Pt. 404, Subpt. P, App. 1, § 12.05(C) (emphasis added). Since the different types of IQ tests are separated by a disjunctive, the Secretary's position that a valid verbal score by itself cannot be acceptable is incorrect. The regulations make it clear that any well-standardized psychological test may be useful in establishing the existence of a mental disorder. The WAIS is given as an example of a useful test for establishing mental retardation, but the regulations do not require that the WAIS be used, nor do they require that the test be administered by a physician. Instead, the regulations state that "a standardized intelligence test, e.g. the WAIS, should be administered and interpreted by a psychologist or psychiatrist qualified by training and experience to perform such an evaluation." Id. at § 12.00(D). Under the regulations, therefore, a valid verbal scale IQ test administered by a qualified professional using the WAIS may be sufficient to establish mental retardation.

The Appeals Council also rejected Williams' claim of mental impairment because it found his evidence "not credible." Once a claimant has submitted sufficient evidence to support his or her claim of disability, the Appeals Council may not base its decision upon mere disbelief of the claimant's evidence.5 Instead, the Secretary must present evidence to refute the claim. See Smith v. Califano, 637 F.2d 968, 972 (3d Cir.1981) (where claimant's testimony is reasonably supported by medical evidence, the finder of fact may not discount the testimony without contrary medical evidence).

Williams' IQ score is not sufficient, however, to establish deficient intellectual functioning initially manifested during the developmental period (before age 22). Dr. Dyer's report measured only his "current intellectual functioning," app. at 188, and did not document lifelong mental retardation. The psychiatric reports of two other physicians were silent with respect to Williams' intellectual capacity. A neuropsychiatric examination was performed by Dr. Pollock, who concluded only that Williams was depressed. Dr. Shah, a psychiatrist, concluded that Williams did "not have any acute psychiatric problems at the present time." App. at 176. Neither physician administered intelligence tests.

Williams' mental retardation is further put into doubt by the fact that Williams did, in fact, maintain a job for most of his adult life. The regulations indicate, in the context of mental retardation, that an ability to hold a job is "particularly useful in determining the individual's ability or inability to function in a work setting." 20 C.F.R. Pt. 404, Subpt. P, App. 1, § 12.00(D). In his testimony before the ALJ regarding his 22 years of employment at a steel drum factory Williams stated that he was able to learn new tasks. He learned how to weld while on the job, for example. Williams presented no evidence of a traumatic condition that would cause mental retardation to spring into existence at an adult age. Even the ALJ found that "it is unclear as to what extent the claimant's limited IQ is due to his restricted and limited education as opposed to a deficit in native intellect.... It may well be that the claimant has suffered a decrease in his intellectual ability recently due to his marked reduction in activity." App. at 25.

Williams submitted evidence to the ALJ to support his claims, but the evidence was insufficient to substantiate his claim of disability under the regulations, which require that mental retardation exist before age 22. Because Williams did not meet his burden of production, the Secretary was not required to submit conflicting evidence to refute his claims.

In order to qualify for benefits at step three of the sequential evaluation process, a claimant must match or equal a listed impairment. "For a claimant to show that his impairment matches a listing, it must meet all of the specified medical criteria. An impairment that manifests only some of those criteria, no matter how severely, does not qualify." Zebley, 110 S.Ct. at 891 (emphasis in original). "For a claimant to qualify for benefits by showing that his unlisted impairment, or combination of impairments, is 'equivalent' to a listed impairment, he must present medical findings equal in severity to all the criteria for the one most similar listed impairment." Id. (emphasis in original).

Williams failed to meet his burden of proving he was mentally retarded before age 22. He produced evidence of a significant mental impairment, but he did not demonstrate that its onset occurred during the developmental period identified in the listings. Had Dr. Dyer's evidence with respect to Williams' IQ been sufficient to show Williams was mentally retarded prior to age 22, the Secretary would have had to proffer evidence to counteract his claim of disability under the regulations. Dr. Dyer's evaluation was not sufficient to support Williams' claim of retardation prior to age 22, however, so Williams cannot be found disabled under step three of the sequential evaluation process.

With regard to the second prong of section 12.05(C), the requirement of an additional and significant work-related limitation of function, Williams argues that the Appeals Council improperly substituted its own finding concerning Williams' ability to perform his past relevant work for the finding of the ALJ. To the contrary, the Council properly reviewed the record and concluded that Williams did not satisfy the statutory criteria for a finding of disability. There is sufficient evidence in the record to support the Appeals Council's denial of benefits to Williams.

We have in this case a claimant who has worked hard all his life and who suffers from a combination of ailments, such as back pain, numbness in his left arm, and poor vision. He does not meet the statutory definition of disability, however, because he has failed to submit objective medical tests to show that his medical condition and residual capabilities satisfy the Social Security regulations. See Selders v. Sullivan, 914 F.2d 614, 619 (5th Cir.1990). His subjective complaints must be substantiated by medical evidence. 42 U.S.C. § 423(d)(3). Under the Social Security Act, the burden is on Williams to demonstrate by medical signs or findings that he is unable to work. See 20 C.F.R. at § 404.1528. He must show that he has a condition which reasonably could be expected to produce the alleged symptoms that are the cause of his inability to work. See Green v. Schweiker, 749 F.2d 1066, 1069-70 (3d Cir.1984); 20 C.F.R. § 404.1529 (1991).

The doctors who examined Williams for his compensation case presented conflicting evaluations of his health. Williams presented medical evidence to account for a combination of conditions, none of which were severe enough to meet the criteria set out in the regulations. One of the Social Security consultative physicians, on the other hand, gave Williams a thorough examination and found only adequately-controlled diabetes and some arthritis which did not restrict Williams' movements. Another gave Williams an eye examination and a chest X-ray and found nothing unusual.

As we discussed with respect to Williams' mental impairment, the Appeals Council was not free to disregard the diagnoses of Williams' doctors in the absence of conflicting evidence. The fact-finder has an obligation to review all the evidence of record to decide whether or not the claimant's testimony is credible. Van Horn v. Schweiker, 717 F.2d 871, 873 (3d Cir.1983). In determining whether a claimant is entitled to benefits under the Act, the Secretary has an obligation to weigh the medical evidence and make choices between conflicting medical evidence. See Cotter, 642 F.2d at 705. Williams submitted insufficient evidence to account for his back pain and eye problems; consequently the Secretary did not need to submit evidence to refute each of his claims.

Our standard of review dictates that we defer to the Secretary's findings of fact if they are supported by substantial evidence. Such support is present in this case. The record does not support the contention that Williams has an additional and significant work-related limitation of function.

A claimant who does not qualify for benefits under step three still has the opportunity to show that his impairment renders him statutorily disabled. If his "impairment is not one that is conclusively presumed to be disabling, the evaluation proceeds" to the fourth and fifth steps. Yuckert, 482 U.S. at 141-42, 107 S.Ct. at 2291-92. Step four of the sequential evaluation process is found at 20 C.F.R. § 404.1520(e):

Your impairment(s) must prevent you from doing past relevant work. If we cannot make a decision based on your current work activity or on medical facts alone, and you have a severe impairment(s), we then review your residual functional capacity and the physical and mental demands of the work you have done in the past. If you can still do this kind of work, we will find that you are not disabled.

The Appeals Council determined that Williams' residual functional capabilities would not prevent him from performing the physical and mental demands associated with his previous duties as a security guard. This determination was based upon substantial evidence.

Williams testified as to his duties as a security guard. None of his responsibilities reached the level of medium work as defined by 20 C.F.R. § 404.1567(c) (1991). Since the ALJ found Williams capable of medium work, Williams by definition retained the "residual functional capacity" to perform his past work as a security guard. "If the claimant is able to perform his previous work, he is not disabled." Yuckert, 482 U.S. at 141, 107 S.Ct. at 2291.

The ALJ declined to proceed to the fourth step in Williams' case, citing this court's decision in Velazquez v. Heckler, 802 F.2d 680 (3d Cir.1986). Instead, the ALJ proceeded directly to step five to consider whether Williams could perform other jobs existing in significant numbers in the national economy. The ALJ misinterpreted Velazquez. In Velazquez, this court held that under step four of the sequential evaluation process, the Secretary must consider vocational factors (age, education and work experience) in determining whether a claimant can do his or her past work. Id. at 682. The Secretary has since promulgated new regulations, which provide that, at step four, vocational factors are not considered in determining whether or not a claimant retains the residual functional capacity to perform past relevant work. 20 C.F.R. § 404.1560(b) (1991). The Appeals Council correctly found the ALJ's misinterpretation of Velazquez to be legal error.

Williams did not qualify for benefits at step three because his medical condition fell short of matching or equalling a listed impairment. The ALJ as finder of fact was required to proceed to step four. " 'If a claimant suffers from a less severe impairment' than the listed impairments, 'the Secretary must determine whether the claimant retains the ability to perform either his former work or some less demanding employment.' "6 Zebley, 110 S.Ct. at 893-94 (quoting Heckler v. Campbell, 461 U.S. 458, 460, 103 S.Ct. 1952, 1953, 76 L.Ed.2d 66 (1983)). The ALJ determined that Williams, from an exertional standpoint, was capable of at least medium work, and there is no medical evidence in the record to establish a manifestation of limited intellectual functioning in the developmental period. The regulations therefore dictate that Williams be found not disabled.

We will first compare your residual functional capacity with the physical and mental demands of the kind of work you have done in the past. If you still have the residual functional capacity to do your past relevant work, we will find that you can still do your past work, and we will determine that you are not disabled, without considering your vocational factors of age, education and work experience.

20 C.F.R. 404.1560(b).

Even if it could be found that Williams was unable to perform his past work as he described it, he would still have to show at step five that he could not perform gainful work in the national economy. See Jock v. Harris, 651 F.2d 133, 135 (2d Cir.1981). "The listings define impairments that would prevent an adult, regardless of his age, education or work experience, from performing any gainful activity, not just 'substantial gainful activity.' " Zebley, 110 S.Ct. at 892 (emphasis in original).

The standards for establishing disability are fairly strict. The regulations provide in part that

The functional capacity to perform medium work represents such substantial work capability at even the unskilled level that a finding of disabled is ordinarily not warranted in cases where a severely impaired individual retains the functional capacity to perform medium work. Even the adversity of advanced age (55 or over) and a work history of unskilled work may be offset by the substantial work capability represented by the functional capacity to perform medium work.

20 C.F.R. Pt. 404, Subpt. P, App. 2, § 203.00(b) (1991). Despite his impairments, Williams cannot be found disabled under the sequential evaluation process set out in the Social Security regulations.

The district court concluded that the Appeals Council properly reversed the ALJ's decision awarding benefits. Because Williams fails to qualify for benefits at step three of the sequential evaluation process and there is substantial evidence to support the Appeals Council's determination that none of Williams' ailments prevented him from working as a security guard, we will affirm the order of the district court.

I agree with the majority that the record reveals substantial evidence that Williams is not disabled. Indeed, the most that can be gleaned from the record is that Williams is art