Brown v. Astrue, No. 3:2007cv01095 - Document 22 (N.D. Tex. 2008)
Court Description: FINDINGS AND RECOMMENDATIONS on case: Magistrate Judge Jeff Kaplan no longer assigned to case. The Court recommends the hearing decision should be reversed and this case remanded to the Commissioner of Social Security for further proceedings consistent with this opinion. (Ordered by Magistrate Judge Jeff Kaplan on 11/25/08) (tln)
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Brown v. Astrue Doc. 22 TNTHE TINITEDSTATESDISTRICTCOURT NORTHERNDISTRICTOF TEXAS DALLAS DIVISION EDDIED. BROWN Plaintiff, VS. MICHAEL J. ASTRUE, Commissioner SocialSecuritv of Defendant. $ $ $ $ $ $ $ $ $ $ NO.3-07-CV-1095-N FINDINGS AND RECOMMENDATION OF THE UNITED STATESMAGISTRATE JUDGE judicialreviewof a final decision the Commissioner of of PlaintiffEddieD. Brownseeks underTitle II of the Social benefits insurance for denying application disability his SocialSecurity should be decision herein, hearing the stated SecurityAct,42U.S.C.$ 401,et seq. Forthereasons reversed. I. that he is disableddueto a varietyof ailments,including PTSD, depression, Plaintiff alleges a foot injury, a stomachdisorder,and arthritis. After his application for disability insurancebenefits plaintiff requested hearingbeforean administrative a was denied initially and on reconsideration, law judge. That hearingwas held on April 11, 2005. At the time of the hearing,plaintiff was 58 yearsold. He has a high school educationandpastwork experienceas a wastewater plant attendant, a newspaperdeliveryman, and a vending machine owner/attendant. The ALJ found that plaintiff was not entitled to disability insurancebenefitsbecausehe engagedin substantialgainful activity as a vending machine owner/attendantbetweenApril 1994 Dockets.Justia.com and June 1998--hisallegedperiod of disability. Plaintiff appealed this decisionto the Appeals Council. The Council affirmed. Plaintiff then filed this action in federal district court. il. that that In a singlegroundof error, plaintiff contends the ALJ improperlydetermined he gainfulactivitybetween April 1994andJune1998. engaged substantial in A. whetherthe Commissioner's is Judicialreview in socialsecuritycases limited to determining decision is supportedby substantialevidenceand whether the proper legal standardswere used to evaluate evidence.See42 U.S.C.$ a05(g);Ripleyv. Chater,67F.3d552,555 (5th Cir. 1995). the mind might acceptto Substantialevidenceis defined as "such relevantevidenceas a reasonable U.S. 389,401, 9l S.Ct. 1420,1427,28L.Ed.zd v. supporta conclusion."Richardson Perales,402 842 (197l); Austin v. Shalala,994 F .2d I I 70, I 174 (5th Cir. 1993). It is more than a scintillabut Richardson,9l S.Ct. at 1427. The district court may not reweigh the less than a preponderance. evidence or substitute its judgment for that of the Commissioner, but must scrutinize the entire record to ascertainwhether substantialevidencesupportsthe hearingdecision. Hollis v. Bowen,837 F.2d 1378,1383(5th Cir. 1988). A disabledworker is entitledto monthly socialsecuritybenefitsif certainconditionsaremet. gainful 42 U.S.C. g an@). The Act defines "disability" as the inability to engagein substantial activity by reasonof any medically determinablephysical or mental impairment that canbe expected to result in deathor last for a continuedperiod of 12 months. Id. $ 423(dxl)(1t); Cookv. Heckler, a has 750 F.2d 391,393 (5th Cir, 19S5). The Commissioner promulgated five-stepsequential evaluationprocessthat must be followed in making a disability determination: l. Thehearingofficer mustfirst ascertain whether claimant the gainfulactivity. A claimantwho is is engaged substantial in regardless themedical of findings. workingis not disabled 2. The hearins officer must then determinewhether the claimed impairmeni is "severe." A "severe impairment" must significantly limit the claimant'sphysical or mental ability to do basic work activities. This determinationmust be made solely on the basisof the medicalevidence. 3. The hearing officer must then determine if the impairment meets or equals in severity certain impairments described in Appendix I of the regulations. This determinationis madeusing only medical evidence. 4. If the claimant has a "severe impairment" covered by the regulations, the hearing officer must determine whether the claimant can perform his past work despiteany limitations. 5. If the claimant doesnot have the residual functional capacity to perform pastwork, the hearingofficer must decidewhether the claimant can perform any other gainful and substantial work in the economy. This determinationis made on the and work experience, basisof the claimant'sage,education, residualfunctional capacity. Seegenerally,20 C.F.R. $ 404.1520(b)-(0. The claimant has the initial burdenof establishinga I37,146n.5, 107S.Ct. Bowenv.Yuckert,482U.S. disabilityinthefirstfourstepsofthisanalysis. 2287, 2294 n.5, 96 L.Ed.2d I I 9 ( I 987). The burdenthen shifts to the Commissionerto show that the claimant is capableof performing work in the national economy. Id. A hnding that the claimant is disabledor not disabledat any point in the five-step review is conclusive and terminatesthe Lovelace Bowen,8l3 F.2d55,58 (5th Cir. 1987). v. analysis. In reviewing the propriety of a decisionthat a claimantis not disabled,the court'sfunction is to ascertain whether the record as a whole contains substantial evidence to support the Commissioner'sfinal decision. The court weighs four elementsto determinewhether there is and evidence disability: (l) objectivemedicalfacts;(2) diagnoses opinionsof treating of substantial and examiningphysicians;(3) subjective evidence ofpain and disability;and (4) the claimant's age, education,and work history. Martinez v. Chater,64 F.3d 172, 174 (5th Cir. 1995),citing lhren v. Sullivan,925 F .2d 123, 126(5th Cir. 1991). The ALJ hasa duty to fully and fairly developthe facts relating to a claim for disability benefits. Ripley,67 F.3d ar 557. If the ALJ doesnot satisff this duty, the resulting decision is not substantiallyjustified. Id. However, proceduralperfection is not required. The court will reverse an administrative ruling only if the claimant shows that his substantive rights were prejudiced. Smith v. Chater,962 F.Supp.980, 984 (N.D. Tex.1997). B. Plaintiff arguesthat the ALJ failed to apply the proper legal standardin determining that he engagedin substantialgainful activity as a vending machine owner/attendantbetween April 1994 gainful activity is not disabledregardless of in and June 1998. A claimantwho engages substantial or education, work experience.20 C.F.R. $ 404.1520(b). Work is his medical condition, dEa, considered"substantial"when it "involves doing significant physical or mental activities." Id. "gainful" when "it is the kind of work usually done for pay or $ 404.1572(a). Work is considered profit, whetheror not a profit is realized." Id. g 404.1572(b).When a claimant is self-employed, gainful activity if any one of the following testsis met: in he engages substantial (1) that are significantto the operationofthe he rendersservices incomefrom the business; businessand receivesa substantial (2) his work activity, in terms of hours, skills, energy output, efficiency, duties, and responsibilities,is comparableto that of unimpaired individuals in the community who are in the same or similar businesses their meansof livelihood; or as (3) his work activity, although not comparable to that of unimpaired individuals, is clearly worth more than an average monthly wage set forth in the regulationswhen consideredin terms or of its value to the business, when comparedto the salarythat an owner would pay to an employeeto do the samework. Seeid. $ 404.1575(aXzXD-(iiD. At the administrative hearing, plaintiff testified that he worked in the newspapervending only 40 hours amonth afterthe dateof his allegedonsetof disability. (SeeTr. at14,96lbusiness 62). However, the ALJ found this testimony to be inconsistent with information contained in monthly reportsplaintiff madeto his probation officer, which indicatedthat he worked in the family (Id.atl5).'TheALJfurther vendingbusinessfromT:00a.m.to5:00p.m.MondaythroughFriday. noted that plaintiff "consistentlyreported stable ongoing employment," earning approximately 52,200per month from full-time work. (/d,). Relying on thesemonthly probationreports,the ALJ concluded that plaintiff engagedin work that constituted substantialgainful activity through June 30,1998. (td.). determinecredibility, and resolveconflicts,see Although the ALJ may weigh the evidence, (SthCir. 1988), alsomustcomplywiththeregulations. he &owen,864F.2d340,347 Johnsonv. e.g., requiresthe ALJ to determinewhetherthe claimant"render[ed]services Section404.1575(a)(2)(i) that are significant to the operation of the businessand receive[d] a substantialincome from the claimantrenders"significant business." See 20 C.F.R. $ 404.1575(aX2Xi). A self-employed seryices" when he "contribute[s] more than half the total time required for the managementof the of servicesfor more than45 hours a month regardless the or business, [he] render[s]management time requiredby the business." Id. $ 404.1575(bX1). Here, the ALJ made no total management findings regarding the nature of the servicesthat were required for managementof the newspaper of vending business,the amount of time plaintiff devotedto the management the business,or whether plaintiffs management time constituted more than half the total time required for t Plaintiffpled guilty to statedrug chargesand servedsix-months in prison. Following his releasefrom prison in July 1996,plaintiffremained on community supervisionfor l0 years. (SeeTr. at 53, 609, 867, 873'75,879, 980). managementof the business. In fact, the administrativerecord suggests that plaintiff may not have performed any managementservicesat all. In a Work Activity Report datedJuly 25, 2}0z,plaintiff described responsibilities "pick[ing] up papers drop offpoint, [and] deliver[ing] themto the his as at vending machinesand customers." (SeeTr. at263). Plaintiff explainedthat his wife and daughters devoted 50%-60%of their time assistingin the delivery of papersand also "did the billing and paperwork becauseI don't figure too well." (Id. at264). Rather than demonstrating that plaintiff indicates that other vendingbusiness, evidence this rendered to "significantservices" the newspaper family members contributed substantialeffort to the operation of the businessand may have been activities. for solely responsible all of the management Even assumingthat there is substantialevidenceto support a finding that plaintiff rendered the "significant seryicas"to the vending business, ALJ nevermadefindings as to whetherplaintiff if "substantial" it meetsthe income"from the business.Incomeis considered receiveda "substantial or income"in20 C.F.R.$ 404.1575(cXl),t ifthe incomeis "comparable of requirements "countable 2 Section 404.1575(c) provides,in pertinentpart: expenses (1) Determining countableincome. We deductyour normal business your gross income to determinenet income, Once we determineyour net from value of any significantamountof unpaid help income,we deductthe reasonable dutiesthat ordinarily children,or others, Miscellaneous furnishedby your spouse, significant. We deduct would not havecommercialvaluewould not be considered impairment-relatedwork expensesthat have not already been deducted in are work expenses explainedin determiningyour net income. Impairment-related g 404.1576. We deduct unincurredbusinessexpenses paid for you by another occurswhen a sponsoring expense individual or agency. An unincurredbusiness person incurs responsibility for the payment ofcertain business agency or another or and expenses, e.g.,rent,utilities,or purchases repair of equipment, providesyou with equipment, stock, or other material for the operation of your business. We deduct soil bank paymentsif they were included as farm income. That part of your income remaining after we have made all applicable deductions representsthe actual value of work performed. The resulting amount is the amount we use to determine if you have done substantialgainful activity. For purposesof this section,we refer to this amountas your countableincome. to that which [the claimant] had before becoming disabled,or is comparableto that of unimpaired self-employed individualsin [the claimant's]communityengaged the sameor similar businesses. in " SSR 83-34, 1983WL 31256at *4 (emphasis original). Here,the ALJ found that plaintiff earned in 82,200 per month as a vending machine owner/attendant. However, no attempt was made to determinewhetherplaintiffs incomemet the requirements "countable income,"was comparable of to the incomehe received beforebecomingdisabled, wascomparable the incomeof unimpaired or to self-employedindividuals engagedin the same or similar businesses.Without these predicate findings, the court is unable to determinewhether there is substantialevidenceto supportthe ALJ's income" from the vending business.Seeid.,1983 conclusionthat plaintiff receiveda "substantial incomealoneis not a reliablefactor in determining[substantial WL 3 1256at * I ("Self-employment gainful activityl."). Nor did the ALJ satisfy the requirementsfor finding substantialgainful activity under 20 plaintiff s "hours,skills, energyoutput, or C.F.R. $ 404.1575(aX2XiD (iii). The ALJ nevercompared to efficiency,duties,and responsibilities" thoseof unimpairedindividualsin his community, see20 a and never assigned value to plaintiff s work activity "in terms of its C.F.R. $ 404.1575(a)(2)(ii), See see value to the business," id. $ 404.1575(aX2XiiD. also SSR 83-34,1983WL 3 1256at *9. Becausethe ALJ failed to make findings required for the correct application of section 404.1575, (2) When countableincome is consideredsubstantial. We will consideryour countable income to be substantialif-(i) It averages more than the amountsdescribedin $ 404.1574(bX2);or (ii) It averages but it is lessthan the amountsdescribedin $ 404.1574(bX2) comparable what it was beforeyou becameseriouslyimpaired if we had to either your earnings is comparable that of unimpairedself-employed or to not considered as personsin your communitywho are in the sameor a similar business their means of livelihood. 20 C.F.R.$ 404.1575(c). the final decision of the Commissionermust be reversedand remandedfor further proceedings,See Schlosserv. Astrue,546F.Supp.2d664,669 (8.D. Mo.2007); Gaudreauv. Commissioner ofsocial Security, I 60 F.Supp.2d 285, 293-94 (D. Conn. 200I ). RECOMMENDATION The hearing decision should be reversedand this caseremandedto the Commissionerof Social Securityfor further proceedings consistent with this opinion. A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any party may file written objectionsto the recommendationwithin 10 daysafter 28 being servedwith a copy. ^See U.S.C. $ 636(bX1);FBn.R. Ctv. P.72(b). The failure to file written objections will bar the aggrieved parfy from appealing the factual findings and legal conclusions of the magistratejudge that are acceptedor adoptedby the district court, except upon Ass'n,79F.3d 1415,l4l7 (5th Automobile grounds plain error. SeeDouglass UnitedServices v. of Cir. 1996). DATED: November 2008. 25. S]-ATESI{AGISTRATE JUDGE
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