"Good cause" for remand due to Secretary's failure to develop record. ALJ is not at liberty to substitute his own impression of an individual's health for uncontroverted medical opinion. Given unchallenged diagnosis of chronic schizophrenia, coupled with uncontradicted testimony concerning claimant's degeneration in recent years and evidence of gross interference with his interpersonal relations, finding of no severe impairment was not supported by substantial evidence. If Secretary is doubtful as to severity of claimant's mental disorder, appropriate course is to request a consultative evaluation, not to rely on the lay impressions of the ALJ. ALJ incorrectly applied "Listing" standard at Step 2. Certain mental abilities are a prerequisite to working: the regulations suggest as prerequisite to working: the ability to understand, carry out and remember simple instructions, to use sound judgment, to respond appropriately to supervision, co-workers and usual work situations and to deal with changes in a routine work setting. While claimant bears the burden of proof on the issue of disability, the Secretary nonetheless retains a certain obligation to develop an adequate record from which a reasonable conclusion can be drawn.

If applicant has met her burdens of production and proof at Steps 1-4 of sequential evaluation, then SSA has burden at Step 5 of coming forward with evidence of specific jobs in the national economy that the applicant can still perform. ALJ met burden at Step 5 to come forward with evidence by introducing testimony of vocational expert. Where ALJ's decision failed to cite jobs testified to by VE, remand, rather than payment of benefits was appropriate remedy because it was not clear that claimant was entitled to benefits. Remand is proper remedy where there are conflicts in the evidence that must be resolved.

District court erred in sua sponte, affirming denial of benefits without affording claimant an opportunity to brief the issues in the case. Follows holdings of 4th, 5th and 6th circuits. Claimant filed a Rule 59(e) motion to alter or amend the judgment after district court's affirmance and appealed to circuit court when district court denied the motion.

cert. denied 534 U.S. 1085 122 S.Ct. 822, 151 L.Ed.2d 704 (1/7/2002). Determination by Appeals Council that new evidence is not material is reviewable by Federal Court under Service v. Dulles, 354 U.S. 363, 1 L.Ed.2d 1403, 77 S.Ct. 1152 (1957) standard - i.e., decision is reviewable to extent that it rests on an explicit mistake of law or other egregious error. ALJ did not err in deciding the case at step 4 instead of step 5 because the result would have been the same. Court assumes that assembly line and motel laundress jobs, or substantially similar jobs, exist in the economy and that claimant is not disabled if she is capable of doing these jobs. Courts can remand for further proceedings where post-hearing evidence is new and material and there is good cause for failure to present it on a timely basis. Issue (whether claimant's sporadic prior employment should have been considered at Step 4) is waived if it is not raised at the ALJ hearing, at least where the Appeals Council refuses to review the ALJ's decision and it becomes a final decision. However, failure to raise an issue at the Appeal Council does not bar Federal Court review of the issue provided it was raised with ALJ (see Sims v. Apfel, 530 U.S. 103; 120 S. Ct. 2080; 147 L. Ed. 2d 80 (2000)). When the Appeals Court properly denies review of an ALJ's decision, the Federal Court may only look at the evidence presented to the ALJ unless there is good cause for failure to present evidence to ALJ.

At Step 5, SSA bears burden to come forward with evidence showing that there are jobs the claimant can do despite limitations. Since SSA is not represented as a litigant, it is better to think of Step 5 not as a shifting of burdens, but as a rule that the claimant is not under any obligation to produce evidence at Step 5. If an essential factual issue has not been resolved and there is no clear entitlement to benefits, the court must remand for further proceedings rather than order award of benefits. Court should order payment of benefits rather than remand only in the unusual case in which the underlying facts and law compel only one conclusion and SSA has no discretion to act in any way other than to pay benefits (i.e., where there is overwhelming proof of disability).

The court is "ill-equipped to sort out a record that admits of conflicting interpretations."

Remand for legal error not required where there is independent legal ground for the decision (application of correct legal standard would lead to the same result). Where claimant received both Social Security retirement benefits and civil service pension, Windfall Elimination Provision 42 U.S.C. §415(a)(7), formula applied to reduce Social Security benefits. Applies to those eligible for periodic pension payments after 1985. Eligible means satisfies all the prerequisites for payment of pension.

An Appeals Council order remanding a case to the ALJ for further proceedings is not a final decision appealable to the federal courts. Federal court dismissed appeal for lack of jurisdiction. Court leaves open possibility of exceptions where Appeals Council's action is challenged on constitutional or other procedural grounds, or where there is grave hardship.