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Article: July 2019: Appellate Practice Update

July 30, 2019
Business Litigation Reports

New Supreme Court Precedent on “Substantial Evidence” Standard of Review On April 1, 2019, the Supreme Court decided a case providing a detailed explanation of the meaning of “substantial evidence” when applying that standard of review. In Biestek v. Berryhill, 139 S. Ct. 1148 (2019), the Supreme Court addressed whether the Social Security Administration’s reliance on expert testimony based on private data, while refusing to provide that data, categorically precluded her testimony from qualifying as substantial evidence. Id. at 1152. In a majority opinion by Justice Kagan, the Court held that there was no such categorical preclusion.

In reaching this conclusion, the Court examined the meaning of substantial evidence. The Court first explained that the standard “is not high,” but “is more than a mere scinitilla.” Id. at 1154 (quotation marks omitted). “It means—and means only—‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’” Id. (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Applying this test, the Court began by stating that a very qualified expert could rely on data not provided if the data was not requested by the other side. Id. at 1155. The Court then held that a refusal to provide requested data could undermine “iffy” testimony to render it not substantial evidence, but if the agency “views the expert and her testimony as otherwise trustworthy, and thinks she has good reason to keep her data private, her rejection of an  applicant’s demand need not make a difference.” Id. at 1156. Thus, the court concluded that there can be no “categorical rule,” and instead the inquiry must be “case-by-case.” Id. at 1157; see also id. at 1156 (“In some cases, the refusal to disclose data, considered along with other shortcomings, will prevent a court from finding that ‘a reasonable mind’ could accept the expert’s testimony. But in other cases, that refusal will have no such consequence.”) (internal citation omitted). Three Justices dissented on the ground that the testimony of the expert at issue did not suffice for substantial evidence—a question the majority did not reach because it believed only the issue of the categorical rule was properly raised—but all agreed that there should be no categorical rule. Id. at 1157 (Sotomayor, J., dissenting); id. at 1161- 62 (Gorsuch, J., joined by Ginsburg, J., dissenting).

The substantial-evidence test is important in administrative law because it is the standard typically applied to a court’s review of agency fact-finding, and Biestek’s analysis of the substantial-evidence test is instructive in two respects. First, as one commentator has noted, the majority’s framing of the test—relying on Consolidated Edison for a “such relevant evidence as a reasonable mind might accept” standard—is arguably more deferential than the framing the Court has used at other times, which aligned “substantial evidence” with the test for challenging jury fact-finding. See Biestek v. Berryhill and Judicial Review of Agency Factfinding, Law & Liberty, (Apr. 10, 2019). Indeed, the majority at one point seemed to suggest than anything more than a mere scintilla of evidence would suffice. See Biestek, 139 S. Ct. at 1156 (“[T]he expert’s opinion will qualify as ‘more than a mere scintilla’ of evidence supporting the ALJ’s conclusion. Which is to say it will count, contra Biestek, as substantial.”). Second, Biestek also shows the need for litigants to keep in mind that, when challenging agency fact-finding, any attempt to propose categorical rules will be unlikely to succeed. Thus, rather than arguing that evidence should be categorically rejected as insufficient, a case-specific argument—like the one accepted by the dissenting Justices—is generally the more promising approach.