Rossello ex rel. Rossello v. Astrue

• Decision Date: 24 June 2008
• Docket Number: No. 07-5130.,07-5130.
• Citation: 529 F.3d 1181
• Parties: Antonia ROSSELLO, on behalf of Joaquin ROSSELLO and Cristina Rossello, Appellant v. Michael J. ASTRUE, Commissioner of Social Security, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

529 F.3d 1181

Antonia ROSSELLO, on behalf of Joaquin ROSSELLO and Cristina Rossello, Appellant v. Michael J. ASTRUE, Commissioner of Social Security, Appellee.

No. 07-5130.

United States Court of Appeals, District of Columbia Circuit.

Argued May 9, 2008.

Decided June 24, 2008.

Appeal from the United States District Court for the District of Columbia (No. 01cv02694).

Jennifer Arnett argued the cause for appellant. With her on the briefs was James Bernard.

Fred E. Haynes, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Jeffrey A. Taylor, U.S. Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.

Before: GINSBURG, BROWN, and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge KAVANAUGH.

KAVANAUGH, Circuit Judge:

Cristina Rossello has a history of serious mental illness. In 1993, her father, Joaquin Rossello, applied for Social Security "childhood disability" benefits on behalf of Cristina. He asserted that Cristina has been continuously disabled since before age 22, which is the relevant statutory trigger for those benefits. In 1995, the Social Security Administration initially denied the Rossellos' claim. The Rossellos then unsuccessfully pursued five years of administrative appeals until the agency issued its final decision denying their claim. In 2000, the Rossellos sought judicial review of the agency's final decision. In 2007, the District Court ultimately affirmed the agency's decision denying Cristina benefits.

We conclude that the Social Security Administration's denial of benefits was not supported by substantial evidence. We therefore reverse the District Court's judgment and direct the District Court to remand the case to the Social Security Administration. Given the amount of time that has passed since the Rossellos' initial 1993 application for benefits, we anticipate that the District Court will quickly issue an order remanding the case and that the Social Security Administration then will prioritize the matter and promptly determine Cristina's entitlement to disability benefits.

I

The Rossello family's journey through the Social Security Administration's hearing process began more than 15 years ago. To appreciate the Rossellos' story, one must begin with an understanding of the Social Security disability-benefits scheme.

One way for disabled adults to obtain government benefits is to qualify based on their parents' status in the Social Security system. Under Title II of the Social Security Act, a disabled adult like Cristina whose parent is entitled to Social Security retirement benefits may herself receive Social Security childhood disability benefits if she has been continuously disabled since before the age of 22 and is dependent on her parent. 42 U.S.C. § 402(d)(1)(B).

The key issue before the Social Security Administration was whether Cristina Rossello has been continuously "disabled" since before the age of 22 — that is, whether she has been unable since turning 22 "to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment." § 423(d)(1)(A). To determine whether an individual has been continuously disabled, the Social Security Administration first considers whether the individual's work activity since turning 22, if any, constitutes "substantial gainful activity"; if so, that disqualifies the claimant from benefits. 20 C.F.R. § 404.1520(a)(4)(i); see also § 404.1571 ("If you are able to engage in substantial gainful activity, we will find that you are not disabled."). The Social Security Administration then considers the medical severity of the individual's impairment and whether the claimant has suffered from that impairment since before turning 22, among other factors. § 404.1520(a)(4)(ii)-(v); see also § 404.1520a (relating to mental impairments).

The Rossellos' odyssey began in February 1993 when Joaquin Rossello applied for Social Security retirement benefits. At the same time, Joaquin also sought childhood disability benefits on behalf of his daughter Cristina, who was then 28 years old and had a history of debilitating mental illness. Joaquin submitted extensive medical evidence showing that Cristina had been diagnosed with chronic mental illness and had been hospitalized multiple times.

In 1995, the Social Security Administration denied Cristina's claim for benefits because the Rossellos had not submitted medical evidence establishing that Cristina's condition began before she turned 22 in 1986, as required by law.

The Rossellos appealed the denial to an administrative law judge and submitted additional medical evidence, including a doctor's certification that Cristina had been diagnosed with and treated for mental disorders from 1980 to 1983 (when she was 16 to 19 years old) and that she had been institutionalized for part of that time. The ALJ nonetheless denied Cristina's claim. The ALJ ruled that the record did not support Cristina's claim that she was disabled before turning 22 because the medical certificate describing her treatment from 1980 to 1983 did not constitute medical evidence of Cristina's condition during that time.

The Rossellos sought relief from the Social Security Administration's Appeals Council, which exercises discretionary review of ALJ decisions. 20 C.F.R. §§ 404.968, 404.970. The Appeals Council granted review but explained that Cristina's earnings in 1986 and 1987 (when she was 22 and 23 years old) suggested she had performed substantial gainful activity since turning 22 — meaning she could not meet the statutory requirement that a claimant be continuously disabled since before the age of 22. The Appeals Council noted that Cristina earned an average of $334.42 per month in 1986 and $587.04 per month in 1987. Under the Social Security regulations, average monthly earnings of more than $300 in 1986 or 1987 create a presumption that an individual "engaged in substantial gainful activity." § 404.1574(b)(2)(i) & tbl. 1. Average monthly earnings below $190 create a presumption that an individual did not engage in substantial gainful activity. See SSR 83-33, Titles II and XVI: Determining Whether Work is Substantial Gainful Activity Employees, 1983 WL 31255, at *2 (Soc.Sec.Admin.Nov.30, 1982). As a result of Cristina's monthly earnings in 1986 and 1987, it appeared to the Appeals Council that Cristina was not continuously disabled since before the age of 22 and therefore did not qualify for childhood disability benefits. See 20 C.F.R. § 404.1520(a)(4)(i).

Before making a final ruling, the Appeals Council allowed the Rossellos to submit rebuttal evidence to show that Cristina's earnings in 1986 and 1987 were "subsidized" — meaning that the work was done under special conditions because of Cristina's impairment and that her earnings exceeded the reasonable value of her work. § 404.1574(a)(2). Any portion of wages that is considered a subsidy does not count as "earnings" in determining whether an individual performed substantial gainful activity. See id. If Cristina's earnings in 1986 and 1987 were subsidized and her average monthly unsubsidized earnings fell below the $300 threshold in the Social Security regulations, then the presumption that she had engaged in substantial gainful activity would drop out.

Under the Social Security regulations, subsidization occurs, for example, "when a person with a serious impairment does simple tasks under close and continuous supervision." Id. Circumstances indicating a "strong possibility" that earnings are subsidized include that "the employee receives unusual help from others in doing the work," that there "appears to be a marked discrepancy between the amount of pay and the value of the services," or that "[m]ental impairment is involved." SSR 83-33, 1983 WL 31255, at *4. As the Social Security Administration has explained, "An employer may, because of a benevolent attitude toward a handicapped individual, subsidize the employee's earnings by paying more in wages than the reasonable value of the actual services performed. When this occurs, the excess will be regarded as a subsidy rather than earnings." Id. at *3.

The Rossellos produced significant, uncontested evidence that Cristina's earnings were subsidized. They submitted multiple affidavits describing Cristina's jobs in 1986 and 1987 as provided "by the generosity and compassion of family or acquaintances that would not have hired her otherwise because of her serious mental limitations." Affidavit of Maria Antonia Rossello (July 19, 2000), Joint Appendix ("J.A.") 153. According to the Rossellos, Cristina's primary job in 1986 and 1987 consisted of working in an office for her uncle (with whom she was living at the time). Cristina's uncle stated that Cristina was "not productive and performed only basic tasks like stuffing envelopes and elementary clerical work." Affidavit of Jorge Rossello (June 16, 2000), J.A. 158; see also id. ("had she not been my niece, we would not have hired her"). Cristina's uncle offered her the job because he "could provide her with a sheltered environment where she could be supervised all the time." Id.

In its final ruling, the Appeals Council nonetheless denied the Rossellos' appeal. Relying on 20 C.F.R. § 404.1574(b), the Appeals Council ruled that Cristina's average monthly earnings of more than $300 in 1986 and 1987 indicated that she had performed substantial gainful activity since turning 22. The Appeals Council never expressly mentioned subsidization or analyzed Cristina's earnings under the relevant regulations; instead, it simply stated that "there is no evidence to indicate that any of [Cristina's] work activity was performed in a ... special environment." Appeals Council Decision (Sept. 21, 2000), J.A. 32. The Appeals Council held that because Cristina had performed substantial gainful activity since turning 22, she therefore was not disabled under the Act and was ineligible for childhood...