Lofty v. Cohen

• Decision Date: 20 March 1970
• Docket Number: Civ. No. 30916.
• Citation: 325 F. Supp. 285
• Parties: Barber LOFTY, Plaintiff, v. Wilbur J. COHEN, Secretary of Health, Education and Welfare, Defendant.
• Court: U.S. District Court — Western District of Michigan

325 F. Supp. 285

Barber LOFTY, Plaintiff, v. Wilbur J. COHEN, Secretary of Health, Education and Welfare, Defendant.

Civ. No. 30916.

United States District Court, E. D. Michigan, S. D.

March 20, 1970.

Morton E. Schneider, Kelman, Loria, Downing & Schneider, Detroit, Mich., for plaintiff.

Robert J. Grace, U. S. Atty., by, Franklin G. Koory, Asst. U. S. Atty., Detroit, Mich., for defendant.

OPINION

THORNTON, District Judge.

Plaintiff brings this suit to review a final decision of the Secretary of Health, Education and Welfare under the provisions of 42 U.S.C.A. § 405(g). Briefly stated, it is plaintiff's position that the decision is erroneous in four respects. First, plaintiff contends that his disability dates from a period prior to June 1965 (the effective date of certain reduction provisions of the Social Security Act, as amended). Second, plaintiff contends that the lump sum settlement entered into in lieu of periodic payments to which he became entitled under the provisions of the Michigan Workmen's Compensation Act was not such a "commutation of, or a substitute for, periodic payments" (42 U.S.C.A. § 424a (b)) as to be subject to the reduction provisions of the amended Act. Third, plaintiff contends that the reduction or crediting provisions of the Act for workmen's compensation benefits are unconstitutional. Fourth, plaintiff contends that if such reductions are to be made the formula applicable should be different from the one here employed.

The factual background of this case is succinctly set forth in the Hearing Examiner's Decision. We quote verbatim the paragraph from that decision setting forth such background:

"The material facts in the case are not in dispute. In essence, they show that on December 9, 1963 the claimant fell in his employer's parking lot and dislocated and fractured his right arm. He was off work for 4½ weeks, returning in January 1964. In the interim his arm had been set and he received physical therapy twice a week. After returning to work he continued to receive medical care. The claimant had little or no use of his right arm, being able to lift it from the elbow only, and, therefore, was placed on small parts only, rather than his usual machine operations where he worked all kinds of machines and had to lift as much as 100 pounds or more. On the small parts operation, he worked with parts weighing at most one-half a pound and operating a drill press, burring and reaming parts weighing from one-half to five ounces. On December 2, 1965 the claimant was accidentally hit on the right arm by another employee and he was treated for this by a doctor. On January 19, 1966, the claimant developed pain in the left shoulder, which was diagnosed as traumatic bursitis. This was his last day of work. He was treated for this condition in January 1966 and throughout February 1966, but with no significant improvement. He was unable to move either shoulder and in the latter month, was given a total disability. He continued to be treated, but as late as June 1, 1966, there was complete loss of function in the right shoulder and severe limitation of motion in the left shoulder. Based upon these facts, the claimant alleged in his application for benefits, and the Administration found, that he was `disabled' from January 19, 1966."

The application for disability was filed March 29, 1966, alleging inability to engage in "substantial gainful activity" from January 19, 1966. This was allowed. In computing the benefits to which plaintiff thereby became entitled, the reduction provisions of the 1965 Amendments to the Social Security Act were applied because of benefits plaintiff had received from workmen's compensation. Plaintiff then sought and received a hearing before the Hearing Examiner contesting the application of the 1965 Amendments to his Social Security benefits. At that hearing plaintiff amended his application to allege that the onset date of his disability was December 1963, rather than January 19, 1966. This brings us to a consideration of plaintiff's First contention.

In order for plaintiff to successfully establish the onset of disability date as December 1963, it must be established that from that date on he was unable to engage in "substantial gainful activity." 42 U.S.C.A. § 416(i) (1) (A). The fine lines that have been drawn by those courts which have been confronted with the determination of ability to engage in "substantial gainful activity" in the plethora of reported disability cases are hardly relevant to the circumstances present here. Plaintiff here denies the existence of that which is. No amount of rationalization that we may employ can render negative that which is positive. Plaintiff testified that from January 1964 to January 1966 he had worked forty to fifty hours a week. The fact that he worked on small parts since he could not lift heavier ones does not affect the "substantiality" of his activity in light of a forty- to fifty-hour work week. His earnings record from 1962 through 1965 reflects not only gainful activity but upwardly gainful activity. For the four years 1962 through 1965 his earnings, respectively, were: $4,280.93, $5,965.77, $6,926.71 and $8,117.27. His contention that he was unable to engage in "substantial gainful activity" in 1964 and 1965 is so patently ridiculous as to be meritless on its face. "Thus, even though an enumeration of the medical findings might initially lead to the conclusion that impairments have been established of such proportions that engagement in work activity is highly unlikely, if in fact a claimant has engaged in employment which can reasonably be classified as `substantial gainful activity,' he is thereby precluded by the definition of `disability' from obtaining benefits under the Act." Marshall v. Gardner, 298 F.Supp. 542, 545 (S.D.W.Va. 1968), affirmed 408 F.2d 883 (C.A.4, 1969). Plaintiff is, therefore, not a pre-1965 amended Social Security Act claimant. The decision of the Secretary in this respect is supported by substantial evidence.

Plaintiff's Second contention is that the settlement of his workmen's compensation rights was a "redemption settlement" not a commutation or a substitute for periodic payments within the meaning of 42 U.S.C.A. § 424a(b). A copy of the State of Michigan Workmen's Compensation settlement order of May 19, 1966 is included in the Certification of defendant, attached to the Answer herein—Exhibit No. 11, page 118 of the Certification. It is denominated Redemption Order, and it is to the effect that the employer's entire liability is redeemed by the agreement "by a single payment in lieu of weekly payments and all medical benefits." The net sum payable to the plaintiff was $10,722.00. The Michigan statute pursuant to which the lump sum award was made clearly contemplates that such a lump sum payment is a substitute for plaintiff's claim for future periodic payments. See Walters v. Flemming, 185 F.Supp. 288 (D.Mass. 1960); see also Wehmeier v. W. E. Wood Co., 377 Mich. 176, 139 N.W.2d 733 (1966). The defendant's determination in this respect is supported both by law and reason, and is not erroneous.

We now reach plaintiff's Third contention which he states, in his February 2, 1970 brief, as follows: "We maintain that Section 224¹ which imposes a formula for reducing social security disability benefits when the claimant is receiving workmen's compensation is demonstrably repugnant to the due process clause of the Fifth Amendment." The statute reads as follows:

Section 224 (42 U.S.C.A. § 424a).

"(a) If for any month prior to the month in which an individual attains the age of 62—

(1) such individual is entitled to benefits under section 423 of this title, and (2) such individual is entitled for such month, under a workmen's compensation law or plan of the United States or a State, to periodic benefits for a total or partial disability (whether or not permanent), and the Secretary has, in a prior month, received notice of such entitlement for such month,

the total of his benefits under section 423 of this title for such month and of any benefits under section 402 of this title for such month based on his wages and self-employment income shall be reduced (but not below zero) by the amount by which the sum of—

(3) such total of benefits under sections 423 and 402 of this title for such month, and

(4) such periodic benefits payable (and actually paid) for such month to such individual under the workmen's compensation law or plan,

exceeds the higher of—* * *."

Both plaintiff and defendant cite Flemming v. Nestor, 363 U.S. 603, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960) as supportive of their respective contentions. Plaintiff quotes from Nestor the test of permissible classification— "We must recognize that the Due Process Clause can be thought to interpose a bar only if the statute manifests a patently arbitrary classification, utterly lacking in rational justification." Nestor, supra, at page 611, 80 S.Ct. at page 1373. As to the facts in Nestor and the holding therein, a summary was made by Circuit Judge Gerald McLaughlin in Price v. Flemming, 280 F.2d 956, 958 (C.A.3, 1960), which we here set forth. The Nestor decision—

"concerned the suspension of Nestor's Social Security benefits because of past membership in the Communist party. The district court held that the right of the wage-earner to the primary benefit was a property right and enforceable despite the fact that the 1954 Amendments to the Social Security Act expressly authorized suspension in the particular circumstances. The Secretary appealed that decision directly to the Supreme Court. In the latter's opinion, just rendered as above stated, the Court held:

`We think that the District Court erred in holding that § 202(n) deprived appellee of an "accrued property right." Nestor v. Folsom 169 F.Supp. at page 934. Appellee's right to Social Security benefits cannot properly be considered to have been of that order.'

And further:

`W

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