Flaten v. Secretary of Health & Human Services

• Citation: 44 F.3d 1453
• Decision Date: 17 January 1995
• Docket Number: No. 93-35366,93-35366
• Parties: , Unempl.Ins.Rep. (CCH) P 14336B Wanda S. FLATEN, Plaintiff-Appellant, v. SECRETARY OF HEALTH & HUMAN SERVICES, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1453

44 F.3d 1453

46 Soc.Sec.Rep.Ser. 382, Unempl.Ins.Rep. (CCH) P 14336B

Wanda S. FLATEN, Plaintiff-Appellant, v. SECRETARY OF HEALTH & HUMAN SERVICES, Defendant-Appellee.

No. 93-35366.

United States Court of Appeals Ninth Circuit.

Argued and Submitted July 11, 1994.

Decided Jan. 17, 1995.

Dale L. McGarvey, McGarvey, Heberling, Sullivan, Kalispell, MT, for plaintiff-appellant.

Barnard F. Hubley, Asst. U.S. Atty., Helena, MT, for defendant-appellee.

Appeal from the United States District Court for the District of Montana.

Before: GOODWIN, D.W. NELSON, and HALL, Circuit Judges.

D.W. NELSON, Circuit Judge:

Appellant Wanda S. Flaten appeals the ruling of the district court affirming the decision of the Secretary of Health & Human Services (the "Secretary") to deny disability benefit payments under section 223 of the Social Security Act (the "Act"), 42 U.S.C. Sec. 423(a)(1). Flaten argues that the district court erred because her current disability, resulting from degenerative disc disease, should relate back to a prior period when she required surgery and was unable to work because of effects of the same disease. Because the prior period of disability occurred before the expiration of her insured status, Flaten contends that she need not prove that her current total disability has existed continuously since sometime on or before the date that her insured status expired. In the alternative, Flaten argues that the district court erred in upholding the Secretary's determination that Flaten has not been continuously disabled since her original surgery before the expiration of her insured status, because the Secretary did not present clear and convincing reasons for refusing to accept the treating physician's retrospective diagnosis of continuing disability from the time of the original surgery. We have jurisdiction under 28 U.S.C. Sec. 1291. We affirm.

I. Facts and Proceedings Below

Flaten is a sixty-year-old woman with an eleventh grade education who has worked as a bartender and as a manager of a cafe and lounge. Because of a fall on the job in 1969, she sustained a back injury that resulted in severe lower back pain. Although she continued working, she was hospitalized in April 1976 because of the severity of her back pain. In August 1977, Flaten underwent surgery, a laminectomy and discectomy at the L-4, 5 level, which provided some relief.

Flaten's surgeon, Dr. Ingraham, noted at the time that the surgery had been successful in relieving the neurological symptomatology and suggested that Flaten should be able to return to work within a few months. Flaten did not apply for disability benefits to cover the period of time that she had been incapacitated. She returned to work as a bartender during the next two years, posting total earnings of $1,725.63 in 1979 and $2,877.55 in 1980. She has not worked since then, and her insured status under the Act lapsed on March 31, 1982.

In 1985, Flaten fell on a boat dock, which may have aggravated her back condition, according to Dr. Ingraham. A short time later, she suffered a recurrence of incapacitating pain that necessitated a second laminectomy in 1986, performed by Dr. Joern. Flaten and her husband testified that she now spends a considerable portion of each day in bed and that her most strenuous activity is caring for house plants in the couple's mobile home. She contends that she has been continuously disabled because of her degenerative disc disease since the acute incident requiring hospitalization in April 1976. To substantiate her claim, she relies on Dr. Joern's opinion that Flaten's current disability is a typical progression of her disease and is directly traceable to the original lumbar injury.

On July 2, 1986, after the second laminectomy, Flaten filed an application for disability benefits in which she requested benefit payments beginning July 1985. The Social Security Administration (the "SSA") denied her application initially and upon reconsideration, informing her that she was ineligible for benefits because her current condition had not become disabling on or before the expiration of her insured status.

After Flaten supplemented the record with medical evidence relating to her first surgery, she requested a hearing before an Administrative Law Judge ("ALJ"). On October 27, 1988, the ALJ denied her claim. The Appeals Council vacated that decision and remanded the case for further development of the record and use of the appropriate medical-vocational rules. On October 20, 1989, a second ALJ denied Flaten's application. The Appeals Council again vacated the decision because the ALJ failed to request reports of earnings for 1979 and 1980, which were necessary for the appropriate calculation of the final date of insured status, and because the ALJ inappropriately made a determination that Flaten had been disabled since July 1985, a date indisputably after the expiration of her insured status. On February 6, 1991, a third ALJ found that Flaten's insured status extended until March 31, 1982, but he denied her claim for benefits. Although finding that Flaten had not engaged in any substantial gainful activity since the initial period of disability in April 1976, the third ALJ found that she retained sufficient residual functional capacity to perform sedentary work after her recuperation from the 1977 surgery through the date that her insured status lapsed. The ALJ thus decided that Flaten was not disabled from a time on or before the lapse of her insured status. On July 17, 1991, the Appeals Council denied review, and the third ALJ's decision became the Secretary's final ruling, pursuant to 20 C.F.R. Sec. 404.981.

Flaten then brought an action for review of the Secretary's decision under section 205(g) of the Act, 42 U.S.C. Sec. 405(g). After Flaten filed a motion for summary judgment, the case was referred to a magistrate judge who applied a relation-back doctrine that links a recurrence of a disability to an earlier occurrence, during insured status, of a period of disability stemming from the same underlying cause. Because the relation-back doctrine provides automatic eligibility for benefits for a second period of disability after remission, even though the onset of the second period does not meet the insured status requirement, the magistrate judge recommended reversal of the Secretary's denial of benefits. The Secretary objected to the report and recommendation, and the district court sustained those objections, holding that the relation-back doctrine was not applicable. After remand to the magistrate judge, the district court entered a final order on March 3, 1993 affirming the Secretary's decision. Flaten timely appealed to this court on April 2, 1993.

II. Standard of Review

This court reviews a district court's order upholding the Secretary's denial of benefits de novo. Matthews v. Shalala, 10 F.3d 678, 679 (9th Cir.1993). The scope of our review, however, is limited: we may set aside a denial of benefits only if it is not supported by substantial evidence or if it is based on legal error. Gonzalez v. Sullivan, 914 F.2d 1197, 1200 (9th Cir.1990). Substantial evidence is relevant evidence which, considering the record as a whole, a reasonable person might accept as adequate to support a conclusion. Tylitzki v. Shalala, 999 F.2d 1411, 1413 (9th Cir.1993). If the evidence can reasonably support either affirming or reversing the Secretary's conclusion, the court may not substitute its judgment for that of the Secretary. Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971); Matney ex rel. Matney v. Sullivan, 981 F.2d 1016, 1019 (9th Cir.1992).

III. Discussion

A. Relation Back and the Continuity Requirement

Flaten bases her claim for disability benefits on a novel legal theory that a subsequent period of disability should "relate back" to a prior period of disability from the same cause if the prior disability period occurred while the claimant was insured under the Act, even though the claimant did not work for a sufficient period of time to continue her insured status after the end of the earlier period of disability. Flaten argues that her disability satisfies the statutory definition in Section 423(d), because it is undisputed that Flaten was physically disabled for a period of more than twelve months before the expiration of her insured status. Although the ALJ found that Flaten no longer suffered from a disability because of medical improvement as of February 3, 1978, the records also support the conclusion that she has been physically disabled as a result of the same degenerative disc disease processes since July 1985.

Flaten claims that her current disability is undisputed because the first two ALJs made an explicit finding to the effect that she has been disabled since July 1985. The Appeals Council vacated those findings, however, with an explicit statement that any finding of a second disability commencing after the expiration of insured status is beyond the jurisdiction of the ALJ in assessing eligibility for benefits arising from an alleged onset of disability beginning prior to the expiration of insured status. At each stage of this case, the Secretary has noted that the first two ALJ decisions were vacated and remanded by the Appeals Council. The magistrate judge erred, therefore, in accepting the vacated ALJ factual findings as undisputed fact, because the district court's review is necessarily limited to the final decision of the Secretary (in this case, the third ALJ decision and the affirming decision of the Appeals Council), although it may review the record as a whole to decide whether that final decision is supported by substantial evidence. See Taylor v. Heckler, 765 F.2d 872, 875 (9th Cir.1985).

Because the Secretary did not object to the magistrate judge's recommendation on the specific grounds that the judge had accepted a vacated finding as undisputed fact, however, we...