Sharon Earley v. Comm'r of Soc. Sec., 893 F.3d 929

Background

Sharon Earley applied for Social Security disability benefits for a period starting June 25, 2010; ALJ David Redmond denied benefits finding she could perform light work (period: June 25, 2010–May 15, 2012).
Earley filed a new application in July 2012 seeking benefits for a later onset date (May 16, 2012 onward); the same ALJ again reviewed the record.
Judge Redmond believed Drummond required him to give preclusive effect to his earlier RFC determination unless Earley produced "new and material evidence" of changed condition and denied the new application on that basis.
The district court reversed, reading Drummond to apply only when preclusion benefits the claimant; it ordered immediate benefits to Earley.
The Sixth Circuit reversed the district court, holding Drummond’s principles (finality, consistency) apply to both claimants and the government but do not bar fresh review of a new-period application that contains new evidence or meets different regulatory thresholds.
The case was remanded to the agency for reconsideration under the correct standard; immediate benefits were denied because the record did not meet the high standard for awarding benefits on the present record.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Drummond and res judicata principles preclude an ALJ from revisiting prior RFC findings when a claimant files a new application for a later period	Earley: Drummond should not bind an ALJ if preclusion would make it harder for a claimant to obtain benefits; district court applied Drummond only when favorable to claimant	Gov: ALJ may and should treat prior findings as nonbinding and ignore them when reviewing a subsequent application	Sixth Circuit: Drummond’s principles (finality, consistency) apply neutrally to both sides; prior findings are legitimate, nonbinding considerations but do not bar fresh review of a distinct later-period application
Whether res judicata or issue preclusion generally foreclose review of a new-period disability claim	Earley: Prior decision should not be applied to bar benefits for a later onset date	Gov: Prior ALJ findings should not constrain a new adjudication of a later period	Sixth Circuit: Res judicata only bars relitigation of the same claim; issue preclusion rarely applies because medical condition and disability timing change; the ALJ must consider prior findings but may revisit them given new evidence or thresholds
Proper remedy when ALJ misapplies Drummond: award benefits now or remand for reconsideration	Earley: District court should have awarded immediate benefits because record strongly supported disability finding	Gov: Remand is appropriate for correct application of standards and further factfinding	Sixth Circuit: Remand for the agency to reconsider under correct legal standard; immediate award is inappropriate because proof was not overwhelming or uncontradicted

Key Cases Cited

Drummond v. Comm’r of Soc. Sec., 126 F.3d 837 (6th Cir. 1997) (discusses application of prior ALJ findings to subsequent applications and principles of finality)
Barnhart v. Thomas, 540 U.S. 20 (2003) (describes the five-step disability evaluation process)
Albright v. Comm’r of Soc. Sec., 174 F.3d 473 (4th Cir. 1999) (clarifies that prior findings are persuasive factual considerations rather than strict preclusion)
Lively v. Secretary of Health & Hum. Servs., 820 F.2d 1391 (4th Cir. 1987) (illustrates limits on applying preclusion to subsequent disability determinations)
New Hampshire v. Maine, 532 U.S. 742 (2001) (defines res judicata and issue preclusion principles)
United States v. Utah Constr. & Mining Co., 384 U.S. 394 (1966) (recognizes applicability of res judicata to administrative proceedings)
SEC v. Chenery Corp., 318 U.S. 80 (1943) (remand is required when an agency decision rests on inadequate legal reasoning)
Faucher v. Sec’y of Health & Human Servs., 17 F.3d 171 (6th Cir. 1994) (describes when courts may order immediate benefits on review)