Davis v. Schweiker, 79-3264

• Decision Date: 02 April 1981
• Docket Number: No. 79-3264,79-3264
• Citation: 641 F.2d 283
• Parties: Watts E. DAVIS, Plaintiff-Appellee, v. Richard S. SCHWEIKER, Secretary of Health and Human Services, Defendant-Appellant. . Unit B
• Court: U.S. Court of Appeals — Fifth Circuit

Page 283

641 F.2d 283

Watts E. DAVIS, Plaintiff-Appellee, v. Richard S. SCHWEIKER, Secretary of Health and Human Services, Defendant-Appellant.

No. 79-3264.

United States Court of Appeals, Fifth Circuit.

Unit B

April 2, 1981.

Natalie R. Dethloff, Dept. of HEW, Office of the General Counsel, Alan M. Grochal, Baltimore, Md., for defendant-appellant.

Watts E. Davis, pro se.

Appeal from the United States District Court for the Northern District of Alabama.

Before MORGAN, FAY and FRANK M. JOHNSON, Jr., Circuit Judges.

LEWIS R. MORGAN, Circuit Judge.

The Secretary of Health, Education, and Welfare appeals from a decision by the district court that Watts E. Davis was entitled to the disability insurance benefits paid to him by the Social Security Administration. The Secretary contends that Davis was not entitled to disability benefits because he never satisfied the five-month waiting period prescribed by section 223(a)(1) of the Social Security Act, 42 U.S.C. § 423(a)(1). We reverse the district court and remand for further proceedings.

I.

The facts reveal that Davis, then an attorney employed by the City of Birmingham, Alabama, filed an application for Social Security benefits on March 18, 1975, alleging a disability beginning January 1, 1975, due to a heart condition. In April 1975 the Secretary determined that Davis was disabled and granted him a period of disability beginning January 1, 1975. Following the expiration of the statutory five-month waiting period in June 1975, Davis began receiving disability insurance benefits and continued to receive them until June 1976.

In January 1976 Davis notified the Social Security Administration that he had returned to part-time work on May 16, 1975 and to full-time work on June 3, 1975. He reported earnings of approximately $2,800 per month for the full-time work he performed in June and thereafter. His earnings for the May part-time work were not specified. Upon learning that Davis had returned to "substantial gainful activity in June 1975," the Secretary's Division of Reconsideration terminated his benefits and demanded a refund of the $7,984.80 he had received.

The administrative law judge reviewing Davis' case concluded that he was never entitled to disability benefits because he returned to work in June 1975, which was "within 12 months of the onset date of disability." Although the ALJ was aware that Davis had worked part-time during May, she found this fact to be unnecessary to her decision:

(The Act provides that a) claimant must serve a five month waiting period before being entitled to Social Security benefits. Since his first full month of disability started in January, 1975, his waiting period ended with May, 1975. Inasmuch as the claimant returned to work, on a partial basis during the fifth month of his waiting period, May, 1975, the Administrative Law Judge could possibly establish that he did not serve the required waiting period. However, it would serve the same end result to consider the claimant's case based on returning to work full-time effective June, 1975, since he testified to the same at the hearing and in writing.

The ALJ then noted that, under the Secretary's regulations, earnings of more than $200 per month are deemed to demonstrate an ability to engage in substantial gainful activity, 20 C.F.R. § 404.1534(b), and therefore are inconsistent with the finding of "disability" within the meaning of the Act. See 42 U.S.C. § 423(d)(1)(A); 20 C.F.R. § 1532(a). Because Davis earned in excess of $200 per month when he returned to full-time work in June, the ALJ concluded that Davis was never entitled to disability benefits and owed a refund of the monies he had received. The Appeals Council affirmed the ALJ's opinion as the final decision of the Secretary.

On appeal, the district court determined that the ALJ had erred in basing her decision upon Davis' return to work in June. ¹ The court noted that under 42 U.S.C. § 422(c), a disability claimant who satisfies the waiting period is entitled to a period of "trial work" and that services rendered during the trial work period cannot be considered in determining whether a disability has ceased or never existed. The court reasoned that the "trial work" performed by Davis following May 1975 should not have been considered by the Secretary as evidence that Davis had never been disabled. The court remanded for a redetermination in accordance with proper legal standards. The Secretary's appeal to this court was voluntarily dismissed.

On remand the Appeals Council abandoned its earlier theory that Davis' return to work in June 1975 disqualified him for disability benefits. Instead, the council focused on the part-time work Davis had performed in May, before the five-month waiting period had elapsed. Relying solely on the record produced before the ALJ, the Appeals Council found evidence that Davis had "earned well in excess of $200 for the month of May 1975." The council then cited a provision from the Secretary's regulations, 20 C.F.R. § 404.1534(b):

(1) Earnings that will ordinarily show that a person has done substantial gainful activity. We will ordinarily consider that a person's earnings from work activity show that he or she has done substantial gainful activity if

(i) Earnings averaged more than $200 a month in calendar years prior to 1976; (and)

(vii) There is no evidence that the person was unable to do substantial gainful activity....

The Appeals Council concluded that, under this provision, Davis had engaged in substantial gainful activity in May and therefore by definition had not been under a "disability" for "five consecutive calendar months" as required by section 223 of the Social Security Act, 42 U.S.C. § 423. For this reason, the council held that Davis was not entitled to disability benefits.

On a second appeal, the district court reversed the Secretary's decision and held that Davis had established his entitlement to the disability payments he received. The district court properly viewed the issue as whether the Secretary's determination that Davis had not been under a disability for five full months was supported by substantial evidence. Although it found no evidence in the record regarding the amount of Davis' May earnings, the court assumed for the purpose of its decision that Davis had earned more than $200 for his part-time work. Nevertheless, the court concluded that this evidence was "simply not sufficiently substantial to overcome the uncontested medical evidence in the record which the Secretary earlier viewed as sufficient to establish a disability beginning January 1, 1975." The Secretary has appealed from this decision, arguing that the district court completely ignored the regulations regarding substantial gainful activity and the very purpose of the statutory waiting period.

II.

Judicial review of the Secretary's decision regarding disability benefits is limited to determining whether the decision is supported by substantial evidence. Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed. 842 (1971); 42 U.S.C. § 405(g). It is not the function of the courts to...