Marshall v. Chater

• Decision Date: 29 January 1996
• Docket Number: No. 95-2043,95-2043
• Citation: 75 F.3d 1421
• Parties: , Unempl.Ins.Rep. (CCH) P 15073B Ray MARSHALL, Plaintiff-Appellant, v. Shirley S. CHATER, Commissioner of Social Security, * Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1421

75 F.3d 1421

50 Soc.Sec.Rep.Ser. 103, Unempl.Ins.Rep. (CCH) P 15073B

Ray MARSHALL, Plaintiff-Appellant, v. Shirley S. CHATER, Commissioner of Social Security,^* Defendant-Appellee.

No. 95-2043.

United States Court of Appeals, Tenth Circuit.

Jan. 29, 1996.

James A. Burke, Santa Fe, New Mexico, and Helen Laura Lopez, Albuquerque, New Mexico, on the briefs, for Plaintiff-Appellant.

John J. Kelly, United States Attorney, Joseph B. Liken, Acting Chief Counsel, Tina M. Waddell, Acting Deputy Chief Counsel, and Randall Halford, Assistant Regional Counsel, Office of the General Counsel, Social Security Administration, Dallas, Texas, on the briefs, for Defendant-Appellee.

Before BRISCOE, LOGAN, Circuit Judges, and THOMPSON, ^** District Judge.

RALPH G. THOMPSON, District Judge.

Claimant Ray Marshall appeals the district court's affirmance of the decision by the Secretary of Health and Human Services reopening claimant's March 3, 1988 eligibility determination for blind benefits, terminating his benefits upon a finding that he engaged in substantial gainful activity in 1986, and authorizing recovery of the amounts overpaid to claimant. Because substantial evidence supports the Secretary's determinations and no legal errors occurred, we affirm. ¹

In November 1974, claimant was awarded social security disability benefits because he met the statutory criteria for blindness. A blind benefits recipient is permitted to work so long as his earnings do not constitute "substantial gainful activity" (SGA). See 20 C.F.R. § 404.1584. The determination whether a recipient's earnings are substantial is made by deducting his "impairment-related work expenses" (IRWEs) from his earnings. 42 U.S.C. § 423(d)(4); 20 C.F.R. § 404.1576. SGA for 1986 was a monthly average over $650, in 1987 it was a monthly average over $680, and in 1988, a monthly average over $700. R. II at 603.

In 1979, claimant began to work for the University of New Mexico as a handicap specialist, earning approximately $560 per month. After the job became full-time in 1984 or 1985, claimant began receiving substantial raises in pay. At the end of 1985, claimant was earning $932.66 per month, at the end of 1986, he was earning $1330.67 per month, at the end of 1987, $1369.25 per month, and at the end of 1988, $1591.17 per month. Id. at 525-26. Claimant did not notify the Social Security Administration (SSA) about these significant changes in his earnings and hours.

In 1987, the SSA received information that claimant had earned $11,081 in 1985. Claimant was requested to fill out a work activity report detailing his earnings and expenses. Although claimant was earning $1330.67 per month in April 1987, he reported his earnings as $932.66 per month. Id. at 489. Claimant did not include any IRWE's in the 1987 report, but did describe certain court-ordered expenses. Id. at 490-91.

In December 1987, claimant was notified that he was scheduled for a continuing disability review on January 7, 1988. On that date, he was interviewed by SSA examiner Mueller, and his responses were recorded on several forms, including a work activity report. According to that form, claimant reported his earnings as "about $560" per month, indicated that he had no IRWE's, and stated that his work was part-time and that it extended only from September to May each year. Id. at 503-05. In fact, claimant was actually earning $1369.25 per month, was on full-time status, and had worked through the summer months each year since 1982. Id. at 524-26. Claimant signed the report on the following day, affirming the truth of its contents. Id. at 505. Based on this information, Mr. Mueller concluded that claimant remained eligible for benefits on March 3, 1988.

In 1990, the SSA discovered that claimant earned over $18,000 in 1989, far exceeding the amounts permitted for that year. Id. at 516. Suspecting that claimant was engaging in SGA, the SSA initiated an investigation into claimant's earnings. This investigation revealed that claimant's earnings had exceeded SGA levels since 1984. Id. at 522-26.

The SSA contacted claimant in June and August 1991, seeking more information on his IRWEs, both current and past. Although claimant was able to produce evidence of current IRWEs, he could only document reader expenses prior to 1991.

In September 1991, the SSA purportedly sent claimant a notice that it was considering whether he had engaged in SGA after July 1984, and inviting him to submit additional information. Claimant states that he never received any such notice, and there is no evidence of this notice in claimant's file. In October 1991, the SSA notified claimant of its determination that claimant had engaged in SGA starting in July 1984, and that his benefits were being terminated retroactively to September 1984. Id. at 546-48. Claimant was also notified that he had been overpaid by $94,686. Id. at 549-51. Claimant filed a motion for reconsideration of this initial decision.

On December 20, 1991, the SSA issued a notice regarding its impending reconsidered decision. The notice informed claimant of the SSA's tentative decision, identified the evidence it considered, and gave claimant ten days to submit additional information. Id. at 586-88. On February 7, 1992, the SSA issued its reconsidered decision, finding that, even after considering claimant's IRWEs, his earnings constituted SGA after February 1986. Id. at 603-05.

At the same time, claimant filed suit in the United States District Court for the District of New Mexico. On December 17, 1991, the district court issued a temporary restraining order directing the SSA to pay benefits retroactively for November and December, and to continue claimant's benefits pursuant to 42 U.S.C. § 423(g). In February 1992, the district court concluded that continued benefits were not available in medical cessation cases, and that claimant's complaint should be dismissed for failure to exhaust his administrative remedies. On appeal, we affirmed the dismissal, holding that claimant was not excused from the exhaustion requirement because the alleged lack of notice in September 1991 did not state a colorable constitutional claim. See Marshall v. Shalala, 5 F.3d 453, 455 (10th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1309, 127 L.Ed.2d 660 (1994).

Claimant requested a hearing before an ALJ. After a prehearing conference, the ALJ remanded the case to the SSA for a new reconsideration, noting the absence of a discernible basis for reopening the March 3, 1988 determination and the procedural irregularities which occurred in the case. On remand, the SSA identified "new and material evidence" as the basis for its reopening. R. II at 756. On September 8, 1992 and October 21, 1992, the SSA again determined that claimant began performing SGA in February 1986. Id. at 761-63, 764-67.

An administrative hearing was held in March 1993. In a detailed 128-page decision, the ALJ concluded that claimant had received the September 1991 notice; that even if he did not, he was given adequate notice and an opportunity to respond either through his oral contacts with the SSA in June and August 1991 or through the December 20, 1991 reconsideration letter; that the SSA was entitled to reopen the March 3, 1988 determination based either on new and material evidence or on claimant's fraud or similar fault; that claimant had engaged in SGA since February 1986, and thus was not entitled to benefits after April 1986; that claimant had been overpaid by $82,349; and that the SSA was entitled to recover this amount because claimant was not without fault for the overpayment. The Appeals Council denied review, making the ALJ's decision the final decision of the Secretary.

Claimant sought review in the United States District Court for the District of New Mexico. The case was assigned to a magistrate judge who, after a hearing, recommended that the decision be affirmed. The district court adopted the recommendation, and this appeal followed.

In social security cases, we review the Secretary's decision only to determine if it is supported by substantial evidence and if correct legal standards were applied. Castellano v. Secretary of Health & Human Servs., 26 F.3d 1027, 1028 (10th Cir.1994). Substantial evidence is " 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.' " Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)). We may neither reweigh the evidence nor substitute our judgment for that of the Secretary. Casias v. Secretary of Health & Human Servs., 933 F.2d 799, 800 (10th Cir.1991).

Claimant first argues that the Secretary had no authority to terminate his benefits in the fall of 1991 because he demonstrated his current eligibility for benefits at that time. Claimant's current eligibility, however, had no bearing on whether his prior earnings rendered him ineligible for benefits in 1986. After completing trial work and reentitlement periods, a blind person's entitlement to cash benefits ends "the month in which [he] demonstrate[§ his] ability to engage in [SGA]." § 404.1586(a)(3). Assuming that claimant first engaged in SGA in 1986, his entitlement to benefits ended at that time. Whether he again became eligible for benefits was the subject for a new application, and did not affect the Secretary's right to terminate benefits on claimant's old application. See Dugan v. Sullivan, 957 F.2d 1384, 1389 (7th Cir.1992) (noting that a claimant must reapply for benefits after a retroactive termination); Wonica v. Secretary of Dep't of Health & Human Servs., 792 F.Supp. 8, 11-12 (E.D.N.Y.1991) (holding that claimant who ceased engaging in SGA was not entitled to automatic reinstatement of benefits, without filing a new application, because reentitlement period had ended); cf. § 404.1592a(a) (providing...