Acierno v. Barnhart

• Decision Date: 24 January 2007
• Docket Number: Docket No. 03-6217-cv.
• Parties: Vincent James ACIERNO, Plaintiff-Appellant, v. Jo Anne B. BARNHART, Commissioner of Social Security Administration, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

475 F.3d 77

Vincent James ACIERNO, Plaintiff-Appellant, v. Jo Anne B. BARNHART, Commissioner of Social Security Administration, Defendant-Appellee.

Docket No. 03-6217-cv.

United States Court of Appeals, Second Circuit.

Argued: January 16, 2007.

Decided: January 24, 2007.

Sarah Kenney, Kirkpatrick & Lockhart Nicholson Graham LLP (Douglas F. Broder, on the brief), New York, N.Y., for Plaintiff-Appellant.

John M. Kelly, Special Assistant United States Attorney (Roslynn Mauskopf, United States Attorney, Eastern District of New York, Varuni Nelson and Kathleen A. Mahoney, Assistant United States Attorneys, on the brief), New York, N.Y., for Defendant-Appellee.

Before STRAUB and WESLEY, Circuit Judges, and UNDERHILL, District Judge.^*

STRAUB, Circuit Judge.

Plaintiff-Appellant Vincent James Acierno appeals from an August 18, 2003 judgment of the United States District Court for the Eastern District of New York (Allyne R. Ross, Judge) granting judgment on the pleadings and administrative record in favor of Defendant-Appellee Jo Anne B. Barnhart, the Commissioner of Social Security. The Commissioner originally denied Acierno's claim for social security disability benefits on the ground that he was not "insured" under the Social Security Act, 42 U.S.C. §§ 301-1397jj, as amended. See 42 U.S.C. § 423(c)(1) (requiring and defining insured status). On judicial review of the Commissioner's denial, Acierno claimed that he lacked insured status only because his mental illness prevented him from filing his tax returns within the time period set forth at 42 U.S.C. § 405(c)(1)(B), (c)(4), and that the Commissioner committed an error of law by failing to toll the limitations period due to his affliction. In an unreported decision, the District Court concluded that the doctrine of equitable tolling was inconsistent with the congressional intent animating § 405(c)(1)(B), (c)(4) and therefore dismissed Acierno's complaint.

The precise issue on appeal is whether the limitations period set forth at § 405(c)(1)(B), (c)(4) may be equitably tolled. While Acierno's personal circumstances are sympathetic and the result we reach today is harsh, the history, text, and structure of § 405(c) compel us to hold that equitable tolling does not apply to that provision. Only Congress can amend the statute to provide otherwise.

BACKGROUND

I. Social Security Eligibility

An individual's eligibility for social security disability benefits depends on how much he has worked and earned in the 10 years prior to applying for benefits. Those whose work and income history qualify them for coverage achieve "insured" status under the Social Security Act. 42 U.S.C. § 423(a)(1)(A), (c)(1). As is relevant here, to achieve such status, one must accumulate 20 or more calendar "quarters of coverage" within the 40 calendar quarters prior to filing for benefits. 42 U.S.C. § 423(c)(1)(B)(i). This is known as the "20/40 Rule." A "quarter of coverage" is a period of three months during which one earns a certain amount of money in either wages or self-employment income.¹ 42 U.S.C. § 413(a).

In order to keep track of who qualifies for coverage, the Commissioner of Social Security must maintain records of the wages and self-employment income earned by each individual assigned a social security number. 42 U.S.C. § 405(c)(2)(A). In the case of wage earners, the Commissioner typically obtains this information from W-2 forms filed by the employer. See Yoder v. Harris, 650 F.2d 1170, 1174 n. 4 (10th Cir.1981). Regarding the self-employed, the Commissioner gleans this information from tax returns. Id. at 1173. The absence of any entry in the Commissioner's records is evidence that an individual earned no income for the period in question, and therefore did not earn any quarters of coverage. 42 U.S.C. § 405(c)(3).

If the Commissioner's records are incorrect, a person has a limited time within which to correct them. Generally, a person must act to correct errors within three years, three months, and 15 days following the end of the calendar year to which the errors relate. 42 U.S.C. § 405(c)(1)(B), (c)(4). After that limitations period, if the Commissioner's records show no entry for wages paid, those records are presumptive evidence that the person received no wages during the year in question. 42 U.S.C. § 405(c)(4)(B). Importantly, if after the end of the limitations period the Commissioner's records show no entry for self-employment income, those records are conclusive evidence that the person received no such income during the year in question, unless the person can show that he filed a tax return for the relevant year within the limitations period, or one of a handful of narrow exceptions applies. 42 U.S.C. § 405(c)(4)(C), (c)(5). If the person has filed a tax return within the limitations period, then the Commissioner shall correct her records accordingly. 42 U.S.C. § 405(c)(4)(C).

II. Acierno's Illness and Failure to File Tax Returns

In 1990, Acierno was diagnosed with testicular cancer, for which he received chemotherapy. According to his doctors, as a side effect of his chemotherapy he developed "significant psychiatric problems, including depression, anxiety, and manic behavior" that made it difficult for him to "attend to his own personal affairs" and robbed him of the ability to "understand and/or perform the obligations of everyday life."

Although Acierno managed to work for some portions of 1992 and 1993, the record offers conflicting evidence as to whether he was a wage earner or self-employed. His tax returns for those years reflect his income as "self-employment fees." Further, in communications with the Social Security Administration, he repeatedly set forth that he was self-employed at that time. However, at his hearing before an administrative law judge, he testified that he was a wage earner during 1992 and 1993.

In either event, Acierno did not file his 1992 and 1993 tax returns until December 1997, after the limitations period expired as to both years. As a result, the Commissioner recorded no income for Acierno during those years and awarded him no quarters of coverage. Acierno claims that he failed to timely file his tax returns because of the mental illness from which he was suffering, which became so acute in 1993 that he was hospitalized for manic and paranoid behavior. He also claims that he did not timely file because his accountant, without considering the consequences for his social security eligibility, advised his wife that Acierno did not need to consider any "statute of limitations" for filing tax returns since he would not be requesting a refund and since, as a practical matter, it would take a long time to reconstruct the necessary information with little or no input from Acierno, who was too ill to assist.

By the close of 1996, Acierno's physical and mental condition had deteriorated to the point where he could no longer work, and shortly thereafter he filed for social security disability benefits. After a hearing, an administrative law judge denied his application on the ground that he was not insured under the Social Security Act because he did not satisfy the 20/40 Rule. The administrative law judge determined that Acierno was self-employed in 1992 and 1993; he failed to file his 1992 and 1993 tax returns within the limitations period, which created a conclusive, statutory presumption that he did not earn any self-employment income during those years; as a result, he failed to accrue any quarters of coverage for those years; and due to that failure, he had not accrued the required 20 quarters of coverage within the last 40 calendar quarters. Acierno subsequently sought review by the Social Security Administration Appeals Council, which denied his request.

III. The District Court Decision

Proceeding pro se, Acierno sought review of the agency's denial in the District Court for the Eastern District of New York. In September of 2002, the Commissioner moved for judgment on the pleadings and the administrative record, pursuant to 42 U.S.C. § 405(g). Despite multiple extensions and at least one warning that the District Court would decide the pending motion if Acierno failed to submit opposition papers, Acierno failed to file responsive papers. In August of 2003, the District Court decided the motion unopposed.

The District Court first considered whether the administrative law judge erroneously found that Acierno was self-employed during 1992 and 1993. Although there was some evidence to the contrary, the District Court concluded that substantial evidence supported the administrative law judge's factual finding.

The District Court next considered whether the administrative law judge committed an error of law by refusing to equitably toll the time limitation set forth at 42 U.S.C. § 405(c)(1)(B), (c)(4). For reasons apparent from the text, structure, and history of the statutory scheme, the District Court concluded that applying equitable tolling to § 405(c)(1)(B), (c)(4) would frustrate the congressional intent behind those provisions. Accordingly, the District Court granted the Commissioner's motion and entered judgment in her favor.

Acierno timely appealed, and we appointed present counsel to represent him. Before us, Acierno urges that he was a wage earner in 1992 and 1993, and that even if the administrative law judge's finding of self-employment stands, equitable tolling applies to § 405(c)(1)(B), (c)(4).

DISCUSSION

"When deciding an appeal from a denial of disability benefits, we focus on the administrative ruling rather than the district court's opinion." Curry v. Apfel, 209 F.3d 117, 122 (2d Cir.2000). "We review the administrative record de novo to determine whether there is substantial evidence supporting the Commissioner's decision and whether the Commissioner applied the correct legal standard." Pollard v. Halter, 377 F.3d 183, 188 (2d Cir.2004) (internal quotation marks omitted); see also 42 U.S.C. § 405(g...