California Social Security Disability Attorney

EAJA Offset

2012-01-22T21:31:00.000-08:00

The recurring question of the reduction of fee awards under 42 U.S.C. §§ 406(a); 1382(d)(2) (hereafter referred to generically as “406(a)”) by the amounts awarded under 28 U.S.C. § 2412. The question arises where counsel has submitted a fee petition or the Social Security Administration reviews the reasonableness of the fees on a review under the expedited fee process on request by the claimant, counsel, or own timely own motion. The result is the same regardless of the scenario under which counsel seeks fees under sec. 406(a) after having first received fees under sec. 2412.

The uncodified portion of the EAJA provides the short answer to the question. The Savings Provisions of Section 206 of Pub.L. 96-481, as amended by Pub.L. 99-80, § 3, Aug. 5, 1985, 99 Stat. 186, provide that:

“(b) Section 206(b) of the Social Security Act (42 U.S.C. 406(b)(1)) [section 406(b) of Title 42, The Public Health and Welfare] shall not prevent an award of fees and other expenses under section 2412(d) of title 28, United States Code [subsec. (d) of this section]. Section 206(b)(2) of the Social Security Act [section 406(b)(2) of Title 42] shall not apply with respect to any such award but only if, where the claimant's attorney receives fees for the same work under both section 206(b) of that Act [section 406(b) of Title 42] and section 2412(d) of title 28, United States Code [subsec. (d) of this section], the claimant's attorney refunds to the claimant the amount of the smaller fee.”

(Emphasis added); see also HALLEX I-1-2-91(A).[i] This uncodified provision articulates the intent of Congress that counsel not receive and keep both EAJA and fees under 42 U.S.C. § 406(b) “for the same work” and if counsel receives both fees then counsel shall refund the smaller fee to the claimant.

In a case remanded under 42 U.S.C. § 405(g)(sentence 4), the court enters judgment and counsel seeks EAJA fees immediately. The court does not retain jurisdiction and the time invested on remand is not part of the court case. See generally Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993). Time invested by counsel either before the first exhaustion of administrative remedies or after the remand from the court are not part of the court case and are not “the same work.” See also HALLEX I-1-2-91(B)(1).

There are times when the EAJA fee can and should offset a fee payable under 42 U.S.C. § 406(a). Those circumstances occur when the fee is “for the same work.” The court retains jurisdiction and work performed on remand is part and parcel of the court case when the court remands pursuant to 42 U.S.C. § 405(g)(sentence 6). Sullivanv. Hudson, 490 U.S. 877, 109 S.Ct. 2248, 104 L.Ed.2d 941 (1989); Melkonyan v. Sullivan, 501 U.S. 89, 111 S.Ct. 2157, 2162-63, 115 L.Ed.2d 78 (1991); Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993). If and only if the court has retained jurisdiction over the proceedings on remand and awards fees pursuant to the EAJA for that time does the offset of the EAJA fee award from the fees payable for that time expended before the Social Security Administration arise.[ii]

The policy concerns are appropriate. The Congressional purpose in enacting the EAJA is patent. Congress sought to offset the costs of litigating against the government where the United States could not prove that its position was substantially justified. Scarboroughv. Principi, 541 U.S. 401, 124 S.Ct. 1856, 1861, 158 L.Ed.2d 674 (2004) citing H.R.Rep. No. 99-120, p. 4; see also POMS GN 03990.001. In some circumstances, the EAJA fee may be the entire fee that counsel can receive. See e.g. McGraw v. Barnhart, 370 F.Supp.2d 1141 (N.D. Okla. 2005) rev’d on other grounds 450 F.3d 493 (10th Cir. 2006). The district court in McGraw illustrates the proposition that in many cases the EAJA fee is the only fee for the court work. This can arise in small benefit level cases (e.g. SSI with income by a non-eligible spouse), closed period (including cases where the back benefit pool is cut off by the claimant getting benefits on a subsequent application with or without the encouragement or assistance of counsel), or other circumstances. Reducing the fee payable for time spent before the Social Security Administration by the amount of the fee received by counsel before the courts defeats the intent of Congress that counsel only get paid once for each hour of work. Reducing the administrative award by the court fees means one set of hours did not get paid, at all.

It is a true observation that the claimant gets no true fee relief by the presence of the EAJA award not offsetting an administrative fee. Where the administrative fee exhausts the 25% withheld for that purpose, the question raised is whether counsel can keep the entire EAJA fee for court work and the entire 25% for the administrative work. The claimant has received some fee relief insofar as counsel had any incentive to take a case to the district court. If it were not for the presence of EAJA fees, many cases would become unviable. This would violate the intent of Congress that people have the resources to litigate against government action that is not substantially justified. Therefore, allowing counsel to retain an EAJA fee and receive fully reasonable compensation for different hours expended before the Social Security Administration is correct.

Finally, any practice by an ALJ, ODAR, Region, or SSA generally to reduce the amount of the sec. 406(a) fees by the amount of the EAJA fees for different time means that counsel that seeks fees both before the Social Security Administration and before the courts for representation of a claimant will have the amount of the EAJA fees offset twice. The courts will offset the amount of a fee payable under 42 U.S.C. § 406(b) by the amount of the EAJA fee. Scarborough, 124 S.Ct. at 1862 fn. 2. It is the court that is obligated not to offset the EAJA fee against the sec. 406(b) fee but to order counsel to reimburse the smaller of the two fees for time paid for twice.

In light of the uncodified portion of the EAJA, the intent of Congress, and the possibility that in many cases the court will order the reimbursement against a fee payable under sec. 406(b), it is not appropriate to reduce, credit, offset, or otherwise take into account the amount of a prior EAJA award in setting the fees payable under sec. 406(a).

[i] This section “provides that when a representative received fees for the same work under both section 206(b) of the Social Security Act and EAJA, the representative must refund to the claimant the amount of the smaller fee.” The “NOTE” in the following paragraph ignores the operative phrase “for the same work.” POMS GN 03990.040 clarifies the “for the same work” requirement for offset. See also POMS SI 00830.100(B)(5).

[ii] A fair question, beyond the pale of this position paper, is whether time expended by counsel after remand from the court under sentence 6 should be the focus of fees under sec. 406(a) or 406(b).

Wall Street Journal and Binder & Binder

2012-01-03T07:48:00.000-08:00

Beginning on December 21, 2011, the Wall Street Journal began a series of articles assailing the disability system and those that work in that system. The first article focuses on Binder & Binder. Damian Paletta and Dionne Searcey has taken the task with relish to assault the system that functions as a safety net, claiming that unemployment fuels the uptick in disability applications.

The assault on representatives and on the system as a whole constitutes a pincer attack with the apparent intent to call for a dismantling of the current structure and placing in it something different. What Paletta and Searcey appear to have missing from the quiver is a basic understanding of the disability program and how Congress intended it to function ab initio.

The basic structure of the Act calls for disability benefits to individuals that suffer from "severe" impairments that can no longer perform not only their past work but any other work that exists in significant numbers either in the region in which the person lives or in several other regions of the country. 42 USC §§ 423(d)(2)(A); 1382c(a)(3)(B). So if a person cannot perform his past work and because of those impairments cannot perform any other work that actually exists in the economy, that person suffers from a disability. Throw in the other statutory factors to consider age, education, and work experience and the pool of people that meet the statutory test expands.

We have several factors that implicate an increasing number of disability applicants. Yes Damian and Dionne, the demographics of the United States are aging. With the baby boomers aging and the average age creeping to over 36, the incidence of disability claims in a statutory construct will increase as a matter of design. Second, the United States witnessed the exportation of unskilled labor to countries with cheaper sources of labor and more lenient laws about workplace and pay. Without getting into an international economics discussion of whether the presence of jobs in Mexico, Malaysia, China, or Nigeria, everyone can agree that the numbers of unskilled labor jobs in the United States has dwindled. If a statute places benefit entitlement on the ability to perform a significant number of jobs in the economy and a whole class of work no longer exists in the economy, then the incidence of disability claims in a statutory construct will increase as a matter of design. Third, the United States economy slid headfirst into a recession beginning in 2008 and although the government would like us to believe that the recession is over we can all take notice that the true unemployment rate, including those that have given up looking for work, remains high. The number of people not in the labor force rose by almost 2 million in just 12 months. Because the statute places benefit entitlement on the ability to perform a significant number of jobs in the economy and a work no longer exists in the economy, then the incidence of disability claims in a statutory construct will increase as a matter of design.

So I agree with Paletta and Searcey, the number of disability claims has risen and that rise is due in part to economic conditions. The Modest Proposal then stands quite starkly in the wind. We can tell people with severe impairments that although they can no longer perform their past work and there is nothing else for them to do in terms of work in the economy that they must whither on the vine or we can fulfill the intent of Congress and extend the lifeline to them. Instead of calling for an overhaul of the disability system, Paletta and Searcey ought be calling on the agency to take a closer look at the world and ask the agency to make reasonable decisions based on the workplace as it exists.

Which takes this conversation back to where it started, Binder & Binder. We have an aging population that lives longer and survives catastrophic illness and injury because of advances in modern medicine that does not necessarily return those people to function. Binder & Binder see clearly an economic opportunity to give significant help to a class of people that the government frequently steamrolls. We can label those people the "arguably disabled." Binder & Binder also seek to help those that chose not to deal with the federal bureaucracy because companies make a living preparing short form tax returns. The government across agencies has gotten so complex that many want a professional to handle the matter. We can label those people the "bureaucracy challenged." Enter Binder & Binder with a business model to address both.

Paletta and Searcey report that Charles Binder received over $22 million in fees in 2010. If we assume an average fee for a successful case of $2,000, then the report in the WSJ means that Charles Binder successfully represented 11,000 people. The agency processed 2.5 million claims in 2005. Report of the SSAB, chart 69. Quadruple the number of people represented by Binder & Binder just for giggles. Assuming that Binder & Binder represented 50,000 people successfully, that is still less than 5% of all the claims handled by SSA in any fiscal year of recent report.

And that is the untold story. Disability claims are rising because of demographics and economics, factors built into the statute. People with impairments are more likely to use professional representation because their cases are difficult or nuanced, or they just don't want to deal with the government while trying to deal with life. What Paletta and Searcey see and report is of no consequence. The sky is not falling. The nation needs economic reforms that will take decades to play out. In the interim, we must take care of those that suffer from severe impairments that have robbed them not only of the ability to perform their past work but also of any other work that exists in the economy.

Hardisty v. Astrue-- EAJA and Unreached Issues

2011-12-21T08:32:00.000-08:00

One of the frequent issues that comes up in the practice of law when fee shifting to the losing side becomes an issue concerns the question of recoverability of fees. Many cases involve more than one issue and the prevailing party sometimes wins on all, some, or just one issue. Sometimes the court reaches all the issues up or down, but with some degree of regularity does not decide all the issues. The Ninth Circuit decisin in Hardisty v. Astrue decided in January 2010. This post explores my opinions and observations on the case in particular and the subject in general.

1. Hardisty v. Astrue, the Boundaries of the Decision

Hardisty v. Astrue, 592 F.3d 1072 (9th Cir. 2010) cert. denied ___ U.S. ___ (2010) stands for the proposition that the Court should not consider issues it did not decide in determining substantial justification. The Court’s reasoning is that fee litigation should not create satellite litigation and that determining substantial justification on unreached issues would necessarily require deciding those issues on the merits first. In a case where the plaintiff prevailed, the Court decides whether the Commissioner was substantially justified administratively and in Court on the issues that the Court actually reached.

In Casey v. Astrue, 2010 WL 2925094, *2 (E.D. Cal. 2010), the District Court did reduce the time paid by 6 hours for issues not reached, relying on Hardisty. The Court reasoned that it should not pay for time expended on issues not reached. That constitutes an over-reading of Hardisty. The Ninth Circuit held that issues not reached cannot form part of the calculus of whether to pay fees under the substantial justification analysis. The issue of whether the Court should pay for such time became moot once the Court reached the issue before it in the negative. Any reading of Hardisty for the proposition that the Court can or should deny fees for issues not reached or issues decided adversely to the plaintiff violates the law of the circuit. See Natural Resources Defense Council, Inc. v. Winter, 543 F.3d 1152, 1162 (9th Cir. 2008) citing Hensley v. Eckerhart, 461 U.S. 424, 440, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Sorenson v. Mink, 239 F.3d 1140, 1147 (9th Cir. 2001). Even in the event of limited success, the prevailing plaintiff recovers a full fee absent some special circumstance under the Equal Access to Justice Act. For instance, raising a frivolous issue might satisfy the special circumstance question.

Even if Hardisty wrote on a blank slate, a reading foreclosing compensation for some issues would not constitute the law of the circuit. United States v. Johnson, 256 F.3d 895, 914 (9th Cir. 2001) (en banc) (opinion of Kozinski,.J.) (plurality) holds that:

where a panel confronts an issue germane to the eventual resolution of the case, and resolves it after reasoned consideration in a published opinion, that ruling becomes the law of the circuit, regardless of whether doing so is necessary in some strict logical sense.

The question of what could be paid in Hardisty was never germane to the question of whether Hardisty could overcome the Commissioner’s affirmative defense of substantial justification on the issue reached by the District Court in that case. It would constitute an anomalous state indeed where a plaintiff could recover for an issue on which he lost under Winter and Sorenson but not recover on an issue that the Court did not reach. The Court should reject the Casey extension of Hardisty as unwarranted and not justified by any part of the Hardisty opinion germane to the resolution of the issue before the Ninth Circuit in that case.

2. Reasonableness of Time Expended

The crux of the Commissioner’s position is that plaintiffs should not recover fees for time not reasonably expended. Certainly the Commissioner cannot press on the plaintiffs’ bar the prescience to know which issues the Court will decide first or place upon them the Hobbesian choice of waiving certain issues on the belief that another issue will win the day. In the case of limited success, the Court should use the same paradigm whether the plaintiff lost outright on an issue or the Court chose not to decide an issue: was the plaintiff reasonable in briefing that issue? The failure to prevail raises a threshold question but does not resolve the issue. The failure to reach an issue does not cut either way.

The Court should use an ad hoc analysis to determine reasonableness of time expended. The issue is fact dependent. Time spent testing the sufficiency of an articulation may frequently be reasonable. The case of Hardisty provides an illustrative analysis. Assuming arguendo that the Court had decided that the Commissioner lacked substantial justification, the question that would arise is whether the plaintiff reasonably expended time addressing the treating and other physician testimony. The two issues have clear commonality. Whether the ALJ articulated specific and legitimate or clear and convincing reasons for rejecting that testimony would necessarily require consideration of the medical baseline, i.e. by how much does the plaintiff’s complaints of limitation exceed the objectively based limitations? In Hardisty, a reasonable plaintiff’s lawyer would either have to include a full discussion of the medical evidence inside of the excess pain analysis or segregate that discussion into an issue of the treatment of the opinion evidence. Briefing or not briefing the opinion evidence would save little time and potentially provide a more confusing or convoluted presentation. Similarly, the plaintiff that prevails on a treating physician opinion must prove up that the boilerplate allegation that the physician merely regurgitated the subjective complaints requires a full consideration of the plaintiff’s testimony.

The majority of the Social Security docket come before the Court at step 4 of the sequential evaluation process. Did the ALJ properly consider and determine the plaintiff’s residual functional capacity? That is the issue. The knife that cuts through that issue comes in two basic serrations: expert opinion evidence and lay evidence. Within those two broad classifications, there are at least seven forms of evidentiary distinction. Because those issues blend together under Reddickv. Chater, 157 F.3d 715, 725 (9th Cir. 1998) (rejecting the quantum of evidence approach), the circumstance where the government lacked substantial justification on one of the seven variations of residual functional capacity evidence and the plaintiff was unreasonable in briefing together or separately one or more of the other six variations should prove rare.

More likely candidates for reasonableness analysis exist in the step 4 or 5 analysis of the ability to perform past relevant work or other work. These two issues rely on the completeness of the hypothetical question or the variation of the vocational testimony from the DOT. These issues always assume the adequacy of the ALJ’s determination of residual functional capacity. When the plaintiff prevails on the ability to engage in substantial gainful activity question, it is more likely that the plaintiff may have unreasonably briefed the residual functional capacity issue on the first half of the step 4 analysis.

The same kind of analysis holds true in the briefing of a step 2 medically determinable severe impairments question or a step 3 listings question. Those issues have common facts but completely different legal principles than does a residual functional capacity issue. Prevailing on step 2 medically determinable severe impairments question or a step 3 listings question would rarely if ever result in a finding that the plaintiff was unreasonable in questioning the residual functional capacity assessment at step 4. Failing to prevail at step 2 medically determinable severe impairments question or a step 3 listings question but prevailing on the residual functional capacity question would leave open a question of reasonableness for case-by-case determination.

3. A Rough Application of Hardisty and Reasonableness

When a plaintiff prevails at a lower step of the sequential evaluation process, it would present a rare case that the plaintiff unreasonably briefed issues at a higher step of the sequential evaluation process. Prevailing at steps 2 or 3 of the sequential evaluation process implies error at steps 4 or 5 of the sequential evaluation process as based on a legally or factually infirm foundation. Although the burden of proof of reasonableness remains with the plaintiff, the burden of persuasion would shift to the Commissioner.

When the Court is convinced that the classification of an impairment as either not medically determinable or non-severe at step 2 of the sequential evaluation process constitutes a material error in the adjudication of the claim, the Court should rarely proceed to consider the remaining steps of the sequential evaluation process unless the Court intends to order the payment of benefits on one or more of those issues.

When the plaintiff prevails at a higher step of the sequential evaluation process and loses at the lower steps of the sequential evaluation process, the burden of proof and the burden of persuasion on the question of reasonableness would still remain with the plaintiff.

Where the Court is convinced that the independent step 5 analysis resulted in a finding of ability to engage in substantial gainful activity arose out of legal error, the Court should never ignore the step 4 residual functional capacity question unless it is clearly frivolous or the Court is ordering the payment of benefits.

The Eastern District of California - Fresno Division

2011-12-08T06:17:00.000-08:00

The Law Offices of Lawrence D. Rohlfing has long had a presence in the Eastern Disrrict of California. The representation of Social Security disability claimants stretches back about 20 years. The office has never had a strong presence at the adminstrative level, just handling court cases for other attorneys and representatives whose clients have suffered a denial of benefits. These cases get to the District Court after administrative hearings in Fresno and Bakersfield, all handled by the Fresno Office of Disability Adjudication and Review.

The problems start at the ODAR level. For the fiscal year ending September 2011, the hearing office had an average allowance of 49.9%. One very experienced judge pays 29.7% of the cases that he hears; another experience ALJ pays 38.1% of the cases that he hears. Compare these numbers to the average allowance rate for every ALJ in the Social Security system of 62.4% and the problems begin to crystallize. The Fresno ODAR is almost one standard deviation from the mean not as a rogue ALJ but as an office. There are worse offices in the nation but Fresno ODAR is a bad place to have a Social Security disabiliity claim heard. A claim has a 20% lower chance of getting paid in Fresno than in a hypothetical average ODAR.

These cases that get denied end up at the Appeals Council. The AC grants review in about 25% of the cases that it hears. Some of the 75% that the AC denies end up in federal court. The United States District Court for the Eastern District of California, Fresno Division, hears the cases that the Fresno ODAR and the AC deny.

I do not have any statistics but my experience informs me that the Fresno District Court changed in the last 10 years. It has become more apt to affirm bad decisions of the Commissioner of Social Security. Perhaps this arises from a cultural shift, perhaps from an incredible case overload in cases of all types, or some other reason that escapes by narrow view. The message in the past 5 years form the Fresno Division has been clear, it is not a claimant friendly forum.

So how do we can we possiby detect a shift in the decisions of the Fresno District Court, principally by the Magistrate Judges in Fresno? The Ninth Circuit Court of Appeals reviews the decisions of the District Court. The Ninth Circuit "publishes" all of its opinions, those certified for publication in the official reports and deemed precedential and those that get classified as memorandum dispositions that lack the force of precedence. The cases decided after November 10, 2009, are searchable by court of origin and parties. The Ninth Circuit calls the Fresno Division the "Fresno District Court." The Fresno District Court classifies Social Security cases as suing the Commissioner of Social Security with the abbreviation of either CSS or CSSA.

In the last 2 years, the Ninth Circuit decided 11 cases coming out of the Fresno District Court. It reversed in 6 and affirmed in 5. One of the 5 affirmances was a pro per. So in attorney represented cases, the Fresno District Court has found itself reversed in 60% of the cases. The average reversal rate for any District Court group of decision is less than 20%. The reversal rate over a two year period forms the basis for a real concern. Not all deserving cases get appealed for legal, logistical, or business reasons. If the Fresno District Court gets reversed 6 out of 10 times in attorney represented cases, experience teaches that there are other cases that suffered "affirmance of the Commissioner's decision" that did not get appealed to the Ninth Circuit.

The system needs to work. The public needs to have confidence that the system works. The Social Security disability program already has the appearance of a lottery with benefits dependent on the identity of the decision-maker rather than the facts of the cases. When an ODAR gets well below average in allowances in a program that is based on the presenced of jobs in the economy in a region bereft of jobs, then the District Court must provide real and meaningful review that holds the feet of the administration to the fire. Administrative discretion cannot replace the public expectation of evenhanded administration of justice.

Your mileage may vary.

Taylor v. Commissioner of SSA

2011-11-07T16:47:00.000-08:00

The Ninth Circuit published an important decision the end of October, Taylor v. Commissioner. Taylor affirms the principal of Ramirez v. Shalala, 8 F.3d 1449, 1451-54 (9th Cir. 1993) that when the Appeals Council denies a request for review that included new and material evidence, the court will review the sufficiency of the decision in light of that evidence. That isn't new but there was a battle brewing in the Ninth Circuit over whether Ramirez was good law or an anomaly where the government did not contest the issue. Pamela Rymer had pressed the AC-evidence issue but never got any traction. Her death in September leaves a question whether any other judge of the court will lean on that claim. Taylor signals strongly that the battle is over.

Taylor extends the treating physician rule to its logical step. The Commissioner may not toss aside opinions of nurse practictioners or physcian's assistants without a germane articulation beyond the lack of "MD" status. This makes sense. In the world of scarce resources, many people including most particularly the poor cannot afford first class medical care. Many see the NP or PA in the office and rarely see the MD. Most conditions don't require the MD anyway, especially the chronically ill or injured on a maintenance program. The decision in Taylor conforms with the Commissioner's views expressed in SSR 06-03p.

People need access to care. Whether the condition manifests itself as back pain, diabetes, depression, or some other manifestation of ill health, people need access. Telling those that access care through NPs and PAs that they will lack the capacity to prove the nature and extent of their limitations before the SSA forces those individuals into a catch-22 that harms the public interest. Without access to Medicare or Medi-Cal/Medicaid because of the receipt of care through expensive means translates later into a lack of care at all. The vicious circle that wedding the disability program to the exclusive province of MDs and PhDs would end in less care for everyone. Medical care is a scarce resource. As a society, we need to marshall those resources in an intelligent and insightful manner that maximizes the good of individuals and society.

Taylor pushes the envelope. It should push the envelope. The only loser from this decision are the minority of Administrative Law Judges that look for reasons to deny rather than looking for evidence of eligibility under the statutory and regulatory standards.

Carrillo Yeras v. Astrue

2011-10-26T21:56:00.000-07:00

Carrillo-Yeras v. Astrue is an important win for claimants seeking the disability benefits found in the Social Security Act. Ms. Carrillo applied for benefits and received a denial by Administrative Law Judge decision. She excercised her rights under the regulations to both file a request for review to the Appeals Council and to file a new claim for benefits with SSA. As of this year, the agency has withdrawn that dual track process as an option for claimants denied by an ALJ. Social Security Ruling 11-1p. The dual track appeal and refile remains a viable option for claimants once they receive a denial of review by the Appeals Council -- they may proceed to the District Court and file a new claim. This case will have continued ramifications even under current agency policy.

The case is simple. Ms. Carrillo re-filed in 2003 after the ALJ denied her first case. The agency decided that she met the requirements for disability. The Appeals Council granted the request for reivew of the first case and reopened the second case, sending them both back to the same ALJ for a new consolidated decision. It is clear that the only reason that the Appeals Council granted the request for review of the first decision was to provide a vehicle to reopen the second case and allow the ALJ to make one decision applicable to both. SSA calls this a "substitution of judgment." Any system based on discretion must reject the substitution of judgment of one fact finder by another. The regulations permit an out for this basic principle in reopening and revision. 20 C.F.R. §§ 404.988 and 416.1488.

I assume good faith unless bad faith reaches up and slaps me in the face. I entertain that the Appeals Council had a legitimate reason for reopening the grant of benefits on the subsequent claim that would permit the substitution of judgment. The Ninth Circuit decision describes a process that took 23 months from the date that the Appeals Council stated that it would reopen to the date that the ALJ told Ms. Carrillo that he found that she was never entitlted to the benefits paid to her and her family.

As an exception to the prohibition of a substitution of judgment, the regulations narrowly prescribe the circumstances that SSA can engage in a reopening and revision that constitutes a "take away." The agency must complete the investigation within 6 months or diligently under the circumstances. 20 C.F.R. §§ 404.991a, 416.1491. If the agency takes longer than 6 months and has not acted diligently under the circumstances, any change to the reopened decision must find in the claimant's favor, i.e. not a take away.

This maes sense. The reopening puts the claimant on the edge of the precipice. For the next 6 months or during a period of diligent investigation to the point of decision, that person's finances and health insurance hang in the balance. If the agency does not complete the investigation, it should not have the ability to claw back the properly paid benefits and cease the ongoing benefits. The agency can always conduct a continuing disability review to remove the person from the disability rolls later by showing improvement or that the first decision rested on error. SSA has its remedies. Restricting the reopening and revision process levels the playig field and removes the punitive component of taking away granted benefits to individuals acting in good faith for those claims on the cusp.

But did you notice the name of the lawyer representing Carrillo-Yeras? I enjoyed working on and arguing that case. The win is just sweet.

Aarestad v. Commissioner

2011-09-19T07:02:00.000-07:00

I know, unpublished opinions are not precedent and don't matter much. Unless of course you are one of the litigants in an unpublished opinion. Aarestad v. Commissioner is a bad decision.

Aarestad applied for widow's benefits. The Court held that she "worked only sporadically before the alleged onset of disability (which suggests that her decision not to work was not based on disability) ..." Did I mention that Aarestad applied for widow's benefits? Of course she worked sporadically. She and her deceased husband made a socio-economic decision that she not work because not everyone has abandoned the one-income household model. Some couples don't have to send both people back to work.

There are clear advantages to a single income household. Not only the obvious with raising children but also in the mundane day-to-day of living. If both people work, the chores of cooking, cleaning, and laundry mean that one or both members of the family are working not 40 hours per week but more like 60 hours per week. That usually defaults to the wife, which is why married men live longer than their bachelor friends and married women don't live as long as their single friends. Life expectancy is how we make plans.

There is a discrete difference between a lifetime of sloth and a legitimate sociological choice that is in the cultural norm. A history of sloth can form a legitimate basis for discounting a claim of disability. A legitimate choice to live on the wages of one partner in the marriage while the other stays home is not a history of sloth or a legitimate basis for discounting the surviving spouse's testimony.

A rule of law is based on the assumptions that under-gird that rule. Failing to recognize the nuances of the rationale behind a rule of law is dangerous not only to the person involved but to future cases. The infection starts in misapplication in unpublished opinions, spreads into published opinions, and pretty soon the law becomes absurd. Charging the stay-at-home partner for a life decision that finds solid cultural and sociological underpinnings is an attack on the social fabric and the family. The Court needs to divorce itself from the dangerous path that Aarestad takes. Whether she otherwise deserved to win is a different story but piling on bad reasons is the kind of hyperbole and exaggeration that we all find "not credible."

Social Security Ruling 11-1p

2011-09-17T13:33:00.000-07:00

Effective July 28, 2011, the Social Security Administration (SSA) reverted back to an old policy that forbade claimants from filing new applications while they appealed an Administrative Law Judge (ALJ) decision to the Appeals Council (AC). The policy change is found in Social Security Ruling 11-1p. Claimants for benefits enjoyed the option of filing a new claim for benefits while pursuing an older claim before the Appeals Council when the agency changed its policy in 1999.

It wasn't just largesse that that pushed SSA to allow the new claim filing in 1999. It was then taking the AC about 3 years to decide whether to grant or deny review of an ALJ decision. The wait for 3 years and then another 2 years to get to an ALJ on a second claim for benefits put a staggering toll on claimants whose cases teetered on the cusp. For the chronically ill, the absence of access to medical care for 5 years or dependency on the public healthcare system was sometimes a death knell. The 1999 policy allowed those new claims to progress through the initial and reconsideration stages during that 3 year spell at the AC. Many of those people received benefits on the new application, a few on reconsideration, and others got in line at the hearing office to see an ALJ on that subsequent claim. The hearing office was not supposed to decide those cases pending at the AC, although it did happen from time to time.

Under Joanne Barnhart, SSA began to take a hard look at those egregious wait times for hearings and before the AC. When Michael Astrue took over as the new Commissioner of Social Security, that concern took concrete form. Commissioner Astrue mandated that the hearing offices decide all cases pending more than 1000 days old and gradually reduced that "aged" case mandate to 750 days. Average processing times have been reduced to between 186 and 504 days. The wait at the AC has been reduced from 3 years to about 1 year.

With quicker processing times both at the hearing level and at the AC, the need for the new application policy dissipated. Many claimants still filed new claims and got granted on those cases while old cases meandered through the administrative process. Since the AC continued to deny review of unfavorable ALJ decision 70-75% of the time, getting that new application in early did make a big difference.

The downside for claimants filing new applications rested in the nasty tendency of the AC to take the grant of the new application with the ALJ denial of the old claim, fold them together, and send both back to the denying ALJ for a second look. It doesn't take a rocket scientist to figure out what a lot of ALJs did with those now combined claims. It presented a situation fraught with peril as the disabled claimant had to decide with the ALJ's permission whether to dismiss the request for hearing on the old claim to keep the new claim or roll the dice and proceed to have both cases adjudicated. Some of these cases had explicit reopening of the second claim by the AC, others implicitly giving the ALJ permission, and some giving no hint at what the AC intended at all. Once in a while, a claimant would receive a remand on the old case from the AC with an express affirmation of the subsequent grant. The varied scenarios that a subsequent grant created with cases pending at the AC probably played a big part in rescission of the policy to allow the subsequent application.

As a proponent of not putting all of my client's eggs in one basket, I routinely advised my clients to reapply for benefits after filing a request for review or District Court action. That advice as to the latter stage will continue to constitute the modus operandi of responsible representatives absent circumstances such as an expired insured status for Title II (SSDIB) benefits and no eligibility for Title XVI (SSI). I have seen far too many times the absence of that subsequent application hurt the claimant that changed age categories or suffered medical deterioration come back and bite the claimant in the pocketbook. That general presumption to re-file at the AC level of review now requires finesse and lawyering.

The AC will treat the submission of new evidence that does not relate to the period of time adjudicated by the ALJ to represent a protected filing date of a new application. In practical terms, this means that representatives must submit new evidence to the AC throughout the process arguing both that the new evidence undermines the ALJ decision and that if the evidence is dated after the date of the ALJ decision that it constitutes a protected new filing date on a new claim should the AC not grant the request for review. Representatives that do not refresh the medical records before the AC or remind the AC that the claimant has now entered a new age category "and this is a protected filing of a new application" will commit material error on behalf of their clients. The word for that error is "malpractice." Just as attorneys and non-attorney representatives that did not advise on the filing of a new application in the past have hurt their clients, I fear that the non-diligent representatives will fail to take advantage of the rules that now require us to make the protected filing date pitch.

Electronic Folders ... the New SSA

2011-09-11T23:38:00.000-07:00

We now live in two worlds. In one world, people we live in the communication age with electronics dominating our activities. In the other world, we live in the world of paper, real paper with edges and paper cuts. Practicing law is no different, not even with the Social Security Adminstration.

When I started this journey in 1985, files were all paper. Attorneys or their designated employee or copy service traveled to the Office of Hearings and Appeals to make copies of paper files. This laborious task required disassembling the files, removing staples, and running the exhibits through a copy machine. So high tech services scanned the pages, only to print them out later. The person making the copies had to reassemble all the exhibits into the folder. The paper folders got transferred from the field offices to the disability determination services, back again ... twice usually. Then the file would wind its way to the OHA hearing offices. If the case went onto review to the Appeals Council, the file got shipped off to Falls Church, Virgina. Extraordinary delays as paper got pushed back and forth through the system.

Enter the age of electronics and the digitization of files. The OHA became the Office of Disability Adjudication and Review. ODAR started sending and giving out discs with the claim files on them. This created security issues. To protect privacy, ODAR started encrypting discs that it mailed to the appointed representatives or to the unreprented claimants. But now the process has turned up another notch.

In the current age of file transmissions, representatives must sign up for the Electronics Records Epxress. The ERE requires the erstwhile representative to log in through 3 layers of seurity to get to the client's file. Viewing the TIF files as a photo is cumbersome and inefficient. Reviewing the files in PDF requires a download and conversion or download as a PDF file. The whole idea of securing the personal identifying information is a great idea but the keys for encryption on the representative end no longer comes automatically with possession of a password encrypted disc. It requires the representative to install and operate encryption software on the end user computers.

The whole process becomes cumbersome and costly. Another barrier to the entry into the marketplace of representing the disabled in their pursuit of benefits denied by the federal bureaucracy. As the federal government raises the cost of representing human beings, the federal government discourages representation. The loser in the final analysis is the person that finds it more and more difficult to find quality representation by attorneys with new and fresh ideas. That leaves the old guard in place with less competition from upstarts. Having been an upstart and having been in the business long enough to be considered old guard, I like to see young people getting into the business and forcing competition.

And that is the real problem. Technology puts us all at risk for identity theft. The winners in the battle agaist identity theft are the new parasitic industries that do not produce but only secure. While we need security, the cost of security dampens the market and squeezes marginally profit businesses out. Not a good result for the consumer ... not a good result at all.

Electronic Banking and Social Security

2011-07-05T14:53:00.000-07:00

The Social Security Adminsitration will no longer allow people to choose whether to have their benefits sent to them by paper check or deposited directly into their bank account. For people that apply for Social Security or Supplemental Security Income benefits on or after May 1, 2011, SSA will pay benefits electronically. People that are in pay status currently must transition to electronic benefit transmittal not later than March 1, 2013. The alternative, a Direct Express® card will provide the vehicle to pay benefits.

SSA intends this move as a cost saving measure. Cutting out the automated printing of checks with the costs of mailing with the substituted computer controlled transfer of funds will obviously save money. There is a downside.

With paper checks, the beneficiary has to go to the bank and cash or deposit the check. It takes a voluntary act. Without that voluntary act, I can see the estate of a deceased person getting hit with overpayments as post mortem bank transactions continue.

In this information age, we have or at least could automate a significant portion of our banking. The regular ones that don't change -- mortgage, car payment, credit line payments, etc. It is forseeable that an individual could pass on from this experience and have banking transactions continue until someone else notifies the bank, SSA, and the other interested parties that the beneficiary has passed on.

Whether the agency has adequate safeguards to protect against what I perceive as inevitable overpayments remains to be seen. The push towards automation and the desire to save scarce government resources (i.e. shrinking government payroll) should move forward with caution to we as the taxpayers do not trade one set of fiscal problems for another set of fiscal problems.

More on Judges that Vary from the Norm

2011-06-19T14:58:00.000-07:00

The House of Representatives Subcommittee on Social Security from the Ways and Means Committee sent an inquiry to the Office of Inspector General about Administrative Law Judges that say "yes" too often. The Committee on Ways and Means summarizes the letter as asking five basic questions:

Revew ALJ workloads, adherence to Agency policies and procedures, and related monitoring.
Provide information on those ALJs who differ very significantly from their peers in their productivity or decisional outcomes.
Assess what factors may account for any variances in these rates, as well as how the ALJs obtained the cases they worked and whether they held hearings. The
Describe and assess the use and effectiveness of management controls regarding ALJ adherence to SSA policies and procedures and any constraints, including statutory limitations, which make it difficult to ensure ALJs’ adherence to those policies and procedures.
Describe and assess the effectiveness of SSA’s quality review system for ALJ decisions, including reviews by the Appeals Council and the Office of Quality Performance.

Workloads are just way too high. The agency expects 700 dispositions per year, about 500 of them merits decisions. The math is really quite simple. Assume an ALJ works 52 weeks per year less 14 federal holidays and 5 weeks vacation. That puts the wok load down to 45 weeks. At 40 hours per week, that translates to 1800 hours. Deduct from that amount one-half hour for each non-merits disposition (dismissals for late filing, res judicata, etc.) and that leaves 1700 hours fro 500 cases. Best case scenario, 3.4 hours to read a 300 page record, decide what experts are needed for the hearing, hold the hearing, make a decision, review the written decision, and sign off. Compare that 3.4 hours to the 10 to 20 hours that most attorneys put into a single case and we begjn to see a slant in the system,.

There is a wide discrepancy between ALJs in the nation, within a region, and within a single office. The Wall Street Journal reported the numbers. Just focusing on merits decisions, the average over the last couple years hovers around 65% favorable decisions. The standard deviation is about 18%, meaning that 68% of judges will pay between 47% and 83% of cases that they hear. That means that an ALJ can grant 100% of cases and still fall within 2 standard deviations from the average, but there is a whole raft of judges that pay so few cases that they are are in the 2nd or less percentile. If Congress wants to encourage the agency to push ALJ's towards a smaller deviation standard and with a possibllity of an ALJ falling outside of 2 standard deviations from the mean by paying too many and too few cases, bring it on. There are far too many judges paying too few than there are two many cases.

What factors cause the wide discrepancy and what can SSA do about it? That brings up my pet peeve: judges that just don't follow the law. The reason that some judges don't pay deserving cases can be as varied as the size of the ALJ corps. But judges that are bent on denying claims will look for reasons that violate the beneficial intent of the Social Security Act, the regulations, and agency policy every day. The damage done to deserving individuals and families in pulling the rug out from beneath society's promise to help the disabled contravenes the idea of the social compact. Disability benefits becomes an entitlement when people lose the ability to work - substantial gainful activity under the Act.

I look forward to an investigation into the discrepancies and variances between judges hearing cases. The public deserves predictability in cases. It should not be a lottery but a fair and evenhanded adjudication that does not depend on which office or which judge in the office gets assigned. As long as cases get heard by human beings we can expect mistakes. That is human frailty rearing its head. But 13% to 100% is too far of a stretch to believe that bias on both sides is not at issue.

Scalia Prepares to do a 360?

2011-06-13T07:42:00.000-07:00

The Supreme Court decided Talk America, Inc. v. Michigan Bell on June 9, 2011. The FCC says that the telephone company has to allow competitors to connect with their system so that we can call each other. The rule is not in the statute or regulations, it is in an explanation of the regulations. Just a plain old application of my pet peeve, Auer v. Robbins. Antonin Scalia wrote the opinion of the Court in Auer announcing the rule that when an agency interprets its own regulations that the Court will defer to that interpretation unless it is plainly erroneous.

Justice Scalia did not just sign on to the decision in Talk America. Instead, Justice Scalia wrote a separate concurring opinion that says two things: (1) he would reach the same decision in Talk America with Auer; and (2) he is ready to reconsider whether Auer should survive. Hold on, my neck is sore from the snap.

Justice Scalia writes now "For while I have in the past uncritically accepted that rule, I have become increasingly doubtful of its validity." Uncritically accepted? That is a true understatement. It is more accurate that Justice Scalia has championed Auer deference. Justice Scalia contrasts Auer with Chevron deference, saying that if Congress does not like the regulations that an agency promulgates it can amend the statute, preventing a complete merger of legislative and executive government functions. Congress has an interest is keeping power and therefore does not have an incentive to issue vague statutes.

Justice Scalia contrasts the incentive of agencies to issue vague regulations so that they can do what they please in future adjudications. That just is not a fair reading of the Auer doctrine. The Courts do not defer to the agency's interpretation of a vague regulation when the agency is defending agency action. The Courts defer to the agency's interpretation of a vague regulation when either the agency is not a party to the litigation or the interpretation is not part of the litigation itself, i.e. it was published independent of the litigation. The stretch in the concurring opinion is unwarranted.

In closing out his concurrence, Justice Scalia states the Auer deference makes the Court's job easier and lends "certainty and predictability to the administrative process." But that really is not the point. While we want government to function and to be both certain and predictable, we want it for our own good and not for the good of either the agency or the courts. The public needs to know what the statute and regulations mean. Unless we want the federal government to triple its annual output of statutory-regulatory morass, there will always exist from degree of ambiguity in what Congress and the agencies say. We, as the public, need predictability and certainty in the administrative process.

Certainty and predictability have positive results for us. Certainty and predictability decrease litigation. You and I would not spends hundreds of thousands of dollars on a law suit when we both know the result. Those cases get resolved quickly if they are ever filed. But when the result is uncertain or unpredictable, then we proceed full steam ahead with litigation spending hundreds of thousands of dollars over garden variety ambiguity.

It would certainly be a different matter if the Court were persuaded that the presence of ambiguity in the regulations were an intentional subterfuge that Justice Scalia hints at in Talk America. That would constitute a valid basis for rolling back Auer to curb administrative excess. It comes down to "good faith." If the agency's interpretation constitutes a good faith policy interpretation of a regulation that is vague, then the Court should defer to that interpretation. If the agency's interpretation of a regulation is not a fair and considered judgment, then the Court ought not defer. But that is already the law according to the Supremes.

For whatever the signal is about, Justice Scalia's hint that he might change Auer just adds to litigation and detracts from the certainty and predictability that we need to permit an ordering of our lives. That is good for people and good for the economy.

Keyser v. Commissioner of SSA

2011-06-10T13:17:00.000-07:00

In this Keyser v. Commissioner of SSA, the Ninth Circuit in 2-1 decision makes the "of course" decision that an Administrative Law Judge must follow the regulations. The question is the use of the "psychiatric review techinique." The Social Security Act and the regulations treat the existence of a disability claim based on mental impairments differently. Part of the Act is the requirement that SSA make decsions on mental impairments with the input of a "qualified psychiatrist or psychologist." 42 U.S.C. sec. 421(h). As the majority observes, the regulations impose the duty to do more in the regulations. 20 C.F.R. secs. 404.1520a(e); 419.920a(e). The Administrative Law Judge did not obey the regulations. Seems to me like a no-brainer but Tim Wilborn had to take this case to the Court of Appeals to get relief.

So what is this case all about and why is there a dissent? It comes down to the fallback position in a lot of the 12,000-14,000 Social Security cases that come before the Courts every year - harmless error. The Commissioner in defending the case and the dissent urging her colleagues to find harmless error simply misunderstand the Congressional intent behind the need to treat mental impairments with a slightly different brush than non-mental impairments.

Whether it is historical or current bias, we expect people to "snap out of it" or "get over it." "Pull yourself up by your own bootstraps" becomes the refrain. But for people with depression, anxiety, and a bipolar disorder, it frequently is not that simple. Consider for instance the evidence that bipolar disorders are caused by a chemical imbalance in the brain. Depression can result from or cause a chemical imbalance in the brain. The person loses the ability to snap, get over, or pull herself up. That takes us full circle -- Congress made the decision that SSA must treat mental impairments in a more careful manner. The Commissioner takes that one step further and requires his ALJs to consider mental impairments in the same careful manner. Only by following the psychiatric review technique can we know that the ALJ's conclusion about the severity of the mental impairment is factually supported.

The ALJ corps seems to have difficulty in showing its work and the agency defends that sloppiness in court. The administrative decision in this case wants to entertain the fiction that it is OK to defend sloppy by having someone else fill in the blanks later. That is not what the Act or the regulations require. Honestly, is it too much to ask for the decsions to follow the law?

Bassett v. Astrue

2011-06-06T07:40:00.000-07:00

The Seventh Circuit Court of Appeals decided Bassett v. Astrue on May 27, 2011. The facts are simple enough. Bassett alleged that he was disabled in April 2005. The Administrative Law Judge found that he became disabled in December 2007. Losing 32 months of benefits translates for most disability recipients to around $30,000. For someone that has lost the ability to engage in work, that is a healthy chunk of change.

The ALJ found that Bassett could perform "light" work in 2005 but by the end of 2007 he had gotten worse and could perform only "sedentary" work. Bassett turned 55 in December 2007. The ALJ picked Bassett's birthday as the date that his ability to perform work changed from light to sedentary. Because Social Security disability considers age, Bassett wins at 55 whether he could perform light or sedentary other unskilled work, only. If Bassett were under 55 and limited to sedentary unskilled work, he wins disability benefits. The United States District Court for the Central District of Illinois decided that the ALJ had made a mistake in picking Bassett's 55th birthday as the date that he could no longer perform light work but was limited to sedentary work. Bassett won the court case. Implicit in the decision of the District Court is the decision that no reasonable person would have picked Bassett's birthday as the change date because substantial evidence did not support that date. In an abrupt about face, the District Court found that the ALJ and the attorneys defending the ALJ decision were substantially justified in making that determination, denying Bassett the right to recover his attorney fees from the government for forcing him to take such a silly ALJ decision to court.

For most garden variety cases, taking a case like this to the Court of Appeals is a waste of time. The Equal Access to Justice Act, signed into law by President Reagan, permits people and organizations within financial boundaries to recover attorney fees when the government either brings an action or defends an action without "substantial justification." It originally paid for attorney fees at $70 per hour plus an optional COLA. The reimbursement or payment rate is now $125 per hour plus COLA. The COLA brings the rate up to around $175 per hour. So let's assume that an attorney is pretty good and worth $300 per hour in Central Illinois. The cost of taking up an appeal to the Circuit costs either the attorney on a contingency fee basis (Social Security disability cases are required to be contingency fee by law) or the client paying hourly $125 per hour. Taking 60 hours to research, write, and organize such an appeal is cheap. Taking the case up on appeal will cost $7000 minimum in uncompensated time. In my experience, most District Court cases for EAJA purposes are worth less than $6000, the case was not worth taking up. Every once in a while, attorneys need to make an exception and take one of these bad boys out of the pile and appeal. That is a "loss leader." I will entertain the doubt that this was an intentional foray into making a point rather than a good business decision for the client or the attorney.

Since I gave the attorney the benefit of the doubt, I will similarly give the ALJ and the attorneys defending the ALJ the benefit of the doubt. I assume that the ALJ had good reasons for believing that Bassett could perform light work at 52 years of age and therefore not disabled. I further assume that by the time that Bassett turned 55, the evidence was clear that he was limited to sedentary work and disabled. Because there is no mention of trauma in the Court's decision, I finally assume that Bassett had a slow progression of his problems that ate away at his ability to exert himself during the 32 months.

Giving the ALJ and the government lawyers every benefit of the doubt, the decision violated agency policy and commonsense. Social Security Ruling 83-20 tells the ALJ to consult a medical expert to establish the onset date of disability in cases just like this one. By picking Bassett's birthday, the ALJ violated agency policy. This is not an articulation problem, it is a violation of the way that SSA interprets the law. The ALJ doesn't get to interpret the law; the Commissioner gets to interpret the law. Because the ALJ violated the ruling, the Seventh Circuit encouraged reckless and wanton decision-making by ALJs that ignore agency interpretation of the statute and regulations.

The ALJ also violated commonsense. Certainly a birthday can be emotionally challenging as time marches on and the warranty card on our bodies falls further out of date. But to find that this is the date that Bassett fell off the physical ability cliff is silly. It is like an ALJ picking the date that a doctor took an x-ray for a longstanding chronic condition as the date that disability began. This is also the kind of case where the ALJ should have engaged in the Solomonic decision to cut the baby in half. The closer that Bassett got to age 55, the more lenient the ALJ should have looked at the evidence because that is exactly what the statute, regulations, and policy demand the ALJ to do. Finally, it is just plain a slap in the claimant's face to pick his birthday as the onset date of disability when the deterioration was ongoing.

An ALJ has an obligation to pay every dime of benefits owed. An ALJ has an obligation to deny every dime of benefits not owed. When an ALJ asks whether he/she can legally and reasonably pay benefits in cases, people like Bassett get reasonable and trustworthy decisions early. When an ALJ asks for every angle to deny cases, we get shoddy decisions like the administrative decision in this case. A dumb decision by the ALJ and a tragic mistake by the Courts not to tell the ALJ and the attorneys that defend those decisions in court that this kind of frivolous decisions will not only get sent back for a re-do but also find the government paying at least part of the attorney fees incurred to correct the egregious error.

Administrative Law and the Lottery

2011-05-28T11:19:00.000-07:00

Steven Rosales is an attorney in the office and teaches administrative law at California State University Fullerton. Steve had his class watch "Well-Founded Fear." I pass the recommendation on to you.

The synopsis of the movie on the PBS website sets out the foundation of the movie. People that that have left their homes in China, Russia, Rumania, Nigeria, and other places in the world end up in the United States seeking asylum for politics, religion, procreative rights, and others. The lottery that is the administration of the asylum process is simply appalling and a reflection of what happens every day in the practice of Social Security disability.

First, it is a lottery. The luck of the draw determines the outcome of who will get asylum and who will not. An asylum officer tells how his experience changed his apprhear theoach and made him more stingy in terms of granting asylum. The luck of the draw animates many administrative proceedings because the legal construct gives those officers and Administrative Law Judges tremendous discretion to make whatever credibility determination they wish to make. If a claimant or applicant gets the officer or ALJ on a bad day or simply gets a bad officer or ALJ, that person is unlikely to get the relief that the statute promises. One of the truly shocking recurrent themes is the stated bias of the officers depicted that rely on their own fund of knowledge, only to be grossly wrong.

Second, the system is filled with incompetence. The movie subtitles the non-English speaker. We get to hear the professional interpreters butcher, edit, and change the words that were spoken by the applicant for asylum. That is truly disturbing because neither the officer nor the applicant has the facility to know that the interpreter is making grave errors. So much rides on the competence and accuracy of the interpretation. I know from my own practice that interpreters do make mistakes. My limited Spanish language facility permits me to catch truly egregious errors in translation. Long-winded answers in a foreign tongue translated to a short sentence in English is a big clue that the interpreter has fouled the exchange. Of course there are professionals that are bilingual and they then enjoy the biggest advantage to protect the applicant or claimant either as the officer-ALJ or the representative-attorney.

Public confidence in any system of adminstrative decisions has to rest on the assumption that justice is meted out in a just manner. Similar circumstances achieving similar results with the decision-maker carrying out carefully crafted rules and guidelines without letting unstated personal bias change he decision. Of course some of the decision-making is just dishonest. Not in a corrupt way but in failing to be honest with the person in front of them about the problems that the officer or ALJ had to give that person an opportunity to either explain why the assumptions are not worth a warm pitcher of spit.

Roberts v. Commissioner of SSA

2011-05-24T14:27:00.000-07:00

Today the Ninth Circuit decided Roberts v. Commissioner. Another disability claim by a person claiming disability that went before an Administrative Law Judge without the benefit of counsel. Once a person gets to the hearing stage, the default should be to hire an attorney to handle the job. See Why Hire and SSDI Attorney.

The big deal is that the Social Security Administration tells its ALJs that they must get a waiver signed by the claimant for benefits if that person wants to proceed without an attorney. The form is:

I understand my right to representation at the hearing. I voluntarily waive this right, and I request to proceed without a representative. I also acknowledge that I received a list of organizations that provide legal services prior to receiving the Notice of Hearing.

As the Court framed it:

ALJ “should ensure on the record” that an unrepresented claimant “has been properly advised of the right to representation and . . . is capable of making an informed choice about representation,” and goes on to list several questions that an ALJ may wish to ask the claimant in order to accomplish this. HALLEX I-2-6-52.

If the ALJ didn't do what SSA told the ALJ to do, why should the Court simply let the agency off the hook? Reverse and send the case back for a hearing with the Roberts represented by an attorney.

But this is why Lockwood was so important. Either the agency is bound by its own rules and procedures or SSA can simply disregard what it tells the agency and the world how it handles the largest adjudicative body in the world. The statute (42 USC sec. 406(c)) is pretty clear:

The Commissioner of Social Security shall notify each claimant in writing, together with the notice to such claimant of an adverse determination, of the options for obtaining attorneys to represent individuals in presenting their cases before the Commissioner of Social Security. Such notification shall also advise the claimant of the availability to qualifying claimants of legal services organizations which provide legal services free of charge.

The government assumes that we read every piece of paper that slides across the inbox of life. More importantly, the government assumes that we understand every piece of paper. Except SSA recognizes that this is not necessarily true. SSA knows that claimants for disablity either do not read or do not understand every piece of paper that they are charged with reading. Fusing together that recognition of reality with the literal words of the statute, the Court should have found that the ALJ in this case violated the spirit of the statutory text even if he complied with the letter of the law.

That seems to have been lost on this generation. The intent of the statute seems to have gone away to be replaced by the requirement that Congress imagine every consequence and every problem. I won't hold my breath waiting for Congress to gain that kind of prescience. The regulation (20 CFR sec. 404.1706) tells us that:

We will also tell you that a legal services organization may provide you with legal representation free of charge if you satisfy the qualifying requirements applicable to that organization.

And there it is. A promise to tell us more than the written word contained in a notice with a raft of other papers. What does "we will also tell you" mean? According to HALLEX I-2-6-52, it means that an ALJ will tell "us" before starting an administrative hearing.

Some Judges Can't Say No, but Others Can't Say Yes

2011-05-21T10:08:00.000-07:00

According to the Wall Street Journal, one administrative law judge in West Virginia just can't say no to disability claims that come before him. The attack on ALJ David Daugherty is simply poor journalism. Now that the gantlet is on the ground, let's take a look at the numbers that the WSJ reproduced from the Social Security Administration web site.

Does Judge Daugherty hear too many cases? Apparently not. Frederick McGrath heard cases in 9 different hearing offices during the same period. ALJ McGrath decided procedurally or on the merits 1,749 cases during half the fiscal year.

Does hearing a lot of cases mean that the ALJ is giving away the farm? Apparently no. ALJ McGrath has an allowance rate the fluctuates from office to office and has an allowance rate of only 69.5%. So this ALJ is the tops in getting cases decided and right in the middle of the pack for percentage of cases in which he granted benefits.

Thomas Bundy has also heard cases in a number of hearing offices. As the second most prolific ALJ in the system, he decided 763 cases on the merits and granted the claim in 23.3% of the cases. If we assume for the sake of argument that people do sustain serious injuries and illnesses and that the presence of a disability system as part of the social safety net is a good thing, then administrative law judges must grant some claims. The average allowance rate for ALJ's in the past 5 years has hovered around the mid-60's of cases decided on the merits. This excludes dismissals for procedural errors, withdrawals of claims by people that change their minds, and other cases disposed of but not on the merits. Assume the number is 65%, not as it should be but as it is.

According to the implication in the WSJ, ALJ Daugherty pays 35% too many cases. Applying the dust that the WSJ throws at this judge, that is 255 people.

Now let's be fair and apply the same analysis to ALJ McGrath. With a 69.5% allowance rate, he has no problem saying "no" to claimants. If we use strict numbers though, that is 60 too many people.

On the other end of the spectrum, ALJ Bundy decided 23.3% of cases favorably to people stating that their injuries or illnesses prevented them from working for 12 or more months. At 42% below the magic number, that is 320 people that should have gotten benefits but did not.

You decide. Would you prefer that people that don't deserve benefits get some or would you prefer that people that deserve benefits get none. For many people applying for benefits that have to go before an ALJ, it is a crap shoot. While I can't defend Daugherty's numbers and find that judge's with McGrath's numbers look fantastic, I ache for the human beings that get stuck with someone like Bundy's numbers. And it isn't just that he grants benefits to so very few people. No, it is also that he is so damn prolific at the process of denying claims.

That is the problem. Figures lie and liars figure. Without knowing how well the state agency's are at sorting out the claims before they get to the ALJ level, it is impossible to gauge the fairness of an ALJ. The Social Security Advisory Board publishes data on claims and the report for 2006 (chart 69 on page 91) is readily available. The Appeals Council reviews ALJ decisions and finds over 25% of the nearly 90,000 cases faulty. The federal courts review another 12,000 of the cases that the Appeals Council did not send back to an ALJ for another hearing and reverses SSA in about half of those cases. People that have to take a claim for disability through SSA, to the courts, and back to SSA ... well those people 5 years or more before they get the benefits that are eventually awarded. Imagine every financial problem from loss of home, vehicles, savings; all of that happens to people that are subject to ALJs that can't find a way to say "yes" when benefits really are due.

Perhaps Daugherty is too trusting. He believes that people and doctors are basically honest. He probably is too. When an ALJ is basically untrusting, he says that he believes that people and doctors are dishonest and would and do lie to get benefits. I don't expect an ALJ to be naive, but so assume that most people have no integrity constitutes a pretty dim view of humanity.

Trust Fund Exhaustion One Year Sooner -- 2036 !!!

2011-05-15T12:28:00.000-07:00

The bullet points taken from SSA's news report of the 2011 Annual Report to Congress:

The Social Security trust funds will not meet expenditures in 2036 instead of 2037 and will then be able to pay 77% instead of 78% of expected benefits.

SSA's non-interest income could not meet program costs in 2010 and will not for the next 75 years.

The shortfall for the next 75 years is 2.22% of payroll, instead of 1.92% stated in the 2010 report to Congress.

In the next 75 years, SSA would need an additional $6.5 trillion in funds today to meet all expected benefits.

SSA collected $637 billion in taxes on income; $117 billion in interest; $24 billion in taxes on SS benefits; and $2 billion in transfers from the general fund during 2010.

Against the $781 in income, SSA paid out from the old age trust fund $713 billion.

The OASDI trust funds had $2.6 trillion in assets, up by $69 billion from 2010.

157 million people had taxable earnings covered by Social Security during 2010.

54 million people received $702 billion in benefits in 2010.
SSA paid out $6.5 billion to administer the entire program in 2010, or 0.9% percent of all expenditures.

The trust fund earned 4.6% interest on assets in 2010.

These statistics tell you and me that in order to continue the Social Security program through the next century, Congress can either increase taxes, decrease benefits, or change participation rules. Increasing taxes during a recession and with the Republicans in control of the House is unlikely. Decreasing benefits is political suicide with 54 million people getting benefits currently and knowing that the number will only increase.

That leaves changing benefit participation. I have advocated that increasing the age minimum for retirement is the easiest target. (See my post of May 3, 2011). Even if increasing the minimum age for retirement causes a shift in some of those individuals to the disability program, that is unlikely to be true to all or even most retirees. Medical care advances should continue to keep us healthier and capable longer than our ancestors experienced.

The Congressional Budget office should run the numbers. The American people should not have loose rhetoric on which to make the decision. The CBO should give the numbers on lifting the cap on taxable earnings, increasing the tax rates on earnings, decreasing benefits, and increasing the retirement age. Only with concrete numbers can the American people make intelligent choices, choices that Congress seems unable or unwilling to make.

NOSSCR Conference in Baltimore - May 2011

2011-05-09T07:17:00.000-07:00

I will attend the NOSSCR conference this week in Baltimore, Maryland. The conference should see circa 1000 attendees from across the country with a smattering of government lawyers and bureaucrats sprinkled into the mix. The program features 41 breakout sessions plus the general session Thursday morning.

I am co-presenting with Jeffrey Baird and Tom Sutton on Friday morning:

Auer Watershed--What to Do about Agency Disregard of Published Policy

Jeffrey Baird, Esq.

Lawrence Rohlfing, Esq.

Thomas Sutton, Esq.

The Rulings, POMS, and HALLEX describe the how and why of the complex regulatory paradigm. Sometimes the agency violates its own policies, Hansen v. Schweiker says that POMS isn't enforceable. Auer calls for controlling deference. The session will focus on the differences between the deference, respect, and blind eye that precedent tells us applies.

Immediately following the Auer presentation, Tom and I will present again:

Post-Litigation Attorney Fees after Gisbrecht and Ratliff

Lawrence Rohlfing, Esq.

Thomas Sutton, Esq.

In this workshop, we will survey the landscape of 42 USC 406(b) fees in the years since the Supreme Court decided Gisbrecht, and EAJA fees in the months since it decided Ratliff. We will also discuss the interplay between these fees, as well as the role of 406(a) fees after litigation. The issues of reasonableness in 406(b) applications (especially in light of the Ninth Circuit's en banc Crawford opinion) and substantial justification in EAJA applications will be featured in our discussion.

SSA announces top baby names

2011-05-05T11:29:00.000-07:00

Boys:	1) Jacob	Girls:	1) Isabella
	2) Ethan		2) Sophia
	3) Michael		3) Emma
	4) Jayden		4) Olivia
	5) William		5) Ava
	6) Alexander		6) Emily
	7) Noah		7) Abigail
	8) Daniel		8) Madison
	9) Aiden		9) Chloe
	10) Anthony		10) Mia

The list of top 10 baby names is here. Some of us are old enough to remember when Social Security was not the repository for every child's name within the year of birth. I got my Social Security card and number when I got ready to drive and work as a teenager. Now, babies get their Social Security card and number immediately. SSA says that getting a SSN is voluntary and necessary only to access the financial system, get medical insurance coverage, or get government services. Also necessary to deduct the child dependent from the parent's taxes. But taking SSA's word on its face, I am unaware of anyone that would forgo medical coverage for their children voluntarily. Nor are many anxious to forfeit a legitimate tax deduction.

At least we know what names are popular before our children go kindergarten to find others similarly labeled.

Retirement Program Broke in 2037

2011-05-03T22:34:00.000-07:00

Well, not broke, just able to pay 78% of promised benefits. So why be concerned about something that is 26 years away? I will be 67 and full retirement age in 2037. If the system cannot pay the promised benefit in 2037, then I and a lot of other late boomers need to start adjusting our retirement plans.

Raising taxes places additional strain on individuals and families. Lowering benefits changes retirement savings plans for individuals at and over 50 mid-stream. With the cost of the trust fund's operations already exceeding income for 2010, again next year, and permanently in 2015, the time to act is now.

The choices come in three flavors.

1. Raise FICA taxes on employees and employers without changing the benefit calculus.
2. Change the benefit calculus to lower benefits now to and extend the life of the program later.
3. Raise the retirement age.

Raising taxes has an immediate and adverse consequence on family budgets. Changing the benefit calculations in the long term means will cause a dramatic impact in catch-up savings impacting those closest to retirement age the most. Raising the retirement age extends the work life of healthy individuals, decreases the payouts by eliminating months or years of payments in perpetuity, and increases the FICA payments during that extended work-life.

Wishing and hoping that Social Security will be around when we reach retirement age will not make it happen. Congress needs to take leadership, swallow the bitter medicine, and explain the simple truth to the American people. The concept of a system of providing benefits to aged Americans depended on a large base of contribution and a narrow peak of receipts. That paradigm has shifted as median age of 36.5 has climbed 2 years in the past decade. No smoke, no mirrors, just a plan. We need another Moynihan with the gravitas to lead the charge and save the system.

Lockwood v. Astrue

2011-05-02T07:27:00.000-07:00

My level of angst rose Friday and approaches crescendo this morning. Under the Supreme Court's docketing procedures, Lockwood got distributed for conference on April 29, 2011. The Court will post the order list this morning. The order list for April 25 was 9 pages long of certiorari denied, habeas denied, mandamus denied, rehearing denied, attorney discipline, and a handful of orders in pending cases. Most other order lists have 2 cases with certiorari granted. Thousands of cases filed each year, less than 100 get granted and set for oral argument. The Supremes have a pretty good idea of how many cases it wants to hear next hear and already has a calendar of oral argument days.

The advertised publication time is 10 AM Eastern Time. At 7:05 AM Pacific Time, I am still waiting.

There it is. Certiorari denied. Posted the news to my brethren on a private list. Truly disappointed for the simple reason that we should be able to trust that what the government says it means. Maybe I am naive or yearn for a utopia that will never appear. But when any agency clears away the haze of ambiguity of a regulation, we should demand the right to bank on it. Litigation ensues when rights and results are unclear. If we all know the result based on settled law, then litigation turns on factual disputes only. When the law is not clear or when one side (the federal government) can run away from clarity, then the whole system fails.

It is an old adage for lawyers. When the facts are one your side, argue the facts. When the facts are not on your side, argue the law. When the law is not on your side, confuse the issues. I tip my hat to the lawyers that represent the Social Security Administration ... you certainly did confuse the issue on this one.

It isn't that there isn't blame to go around. The lawyers for SSA blame the lawyers for the claimant for not raising the issue or not raising the issue properly. Perhaps that is permissible in a truly adversarial position but the Social Security Act is different. It is non adversarial. Government lawyers are also different. They have an obligation not only to a particular case but to the public at large.

More on this topic in the months to come.

Medicare and a Partial Solution

2011-04-27T10:43:00.000-07:00

I watched Hardball the other evening. Matthews played a segment where a woman in Pennsylvania challenged her Congressman who had voted for the Ryan budget over that vote. Her complaint ... that her adult children would not get the same Medicare that she currently used and enjoyed. Matthews relished the way the inept Congressman squirmed.

But lets be two things: honest and clear. Neither side of the aisle can or will leave Medicare intact as the sacred cow. The national health care plan makes deep cuts in Medicare. Fraud and waste will not make up for billions cut from the Medicare budget. There is fraud and waste, getting rid of fraud and waste is good, but the cost of getting rid of fraud and waste is not zero. So how can we make a dent in Medicare?

The first item of cost is eligibility. People on disability have to wait 24 months from their first Social Security check to get Medicare. These are sick and hurting people. They have been out of work for 30 months before Medicare kicks in. Compare that to people that turn 65 ... instant Medicare eligibility. Current full retirement age is 66. Medicare should get permanently attached to full retirement age. That would delay eligibility for a year currently and two full years by 2027 when people born in 1960 or later reach full retirement age.

Premiums should also get further indexed to ability to pay. Currently HHS charges people $555.40 for part A and part B if they have less than 30 quarters of coverage. Most people either have 40 quarters or are/were married to someone that has 40 quarters of coverage. For them, part A is free and part B is $96.40 per month. High income households do pay a little more.

Part A costs $461 alone for people with less than 30 quarters of coverage and $254 for people with 30 to 30 quarters of coverage. For high wage earners, those continuing to have high income after full retirement age, they should start to pick up part of the part A premium.

The Treating Physician Rule

2011-04-26T11:52:00.000-07:00

Some Administrative Law Judges think that the courts have gone too far in imposing a treating physician rule on them in the cases that I have litigated over the last 25 years. The treating physician rule requires that the ALJ give more weight to the opinions of the treating physician than the opinions of one-time consultative examiners and more than the opinions of non-examining physicians.The logic behind the rule is that the treating physician has a greater opportunity to know the person and has the intent to either cure the problem or relieve the patient of the ill effects of the disease or injury. Murray v. Heckler, 722 F.2d 499, 501-502 (9th Cir. 1983).

The case law is equally clear that in order to determine whether the ALJ gave greater weight to the opinions of the treating physician, the ALJ must give specific and legitimate reasons for rejecting the opinions of the treating physician where the opinions of other physicians disagree. Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1995). The ALJ will complain that the weight afforded the treating physician and the obligation to give reasons for rejecting the opinions of the treating physician hamper his ability to make decisions according to how he views the evidence.

That ALJ ignores the very real proposition that the Commissioner of Social Security promises claimants for disability benefits that the Social Security Administration will give controlling weight to the opinions of the treating physician where they are well-supported and "not inconsistent" with other evidence in the record. 20 C.F.R. §§404.1527(d)(2); 416.927(d)(2). The double negative of the "not inconsistent" standard is clearly intentional to mean something that falls between "consistent" and "inconsistent." The "not inconsistent" standard tolerates a degree of deviation to mean that some disagreement will not run afoul of the standard.

Even the the treating physician is not entitled to controlling weight, the Commissioner promises claimants for disability benefits that the Social Security Administration will still reject the opinions of the treating physician for "good reasons." 20 C.F.R. §§ 404.1527(d)(2); 416.927(d)(2). It is apparent to me that a good reason would have to be both specific and legitimate. If the record does not contain evidence that contradicts the opinions of the treating physician, then a good reason would have to be clear and convincing.

The Commissioner also demands that the ALJ give consideration and state the weight given to the opinions of the non-examining physicians. 20 C.F.R. §§404.1527(f); 416.927(f). So in those two instances, the Commissioner binds the hands of the wayward ALJ to give the evidence proper consideration.

The only real disagreement ... the Ninth Circuit does not allow the ALJ to simply disregard favorable evidence that comes form examining physicians. There, the courts require the ALJ to give at least specific and legitimate reasons for rejecting those opinions that help the claimant. The regulations are silent on how to treat its own hired guns. For now, the public deserves to know that the terms of the social contract do not give the random ALJ carte blanch to deny cases for arbitrary reasons but to give good reasons, whether those reasons be specific and legitimate or clear and convincing.

Strauss v. CSSA

2011-04-16T10:02:00.000-07:00

Strauss v. Commissioner of the Social Security Administration is one of those "of course" cases. Simply put, a federal court must find a person claiming disability benefits disabled before ordering the Commissioner to pay disability benefits. The legal principle is simple enough but bore repeating if only to emphasize that the courts have the power to order the payment of benefits.

What I find irritating is the failure of experienced attorneys to get the name of the parties correct. I have been involved in cases with the misnamed defendant. Chavez v. Department of HHS is one. (That opinion stands for the well-worn proposition that the Commissioner gets to tell the world what his regulations mean and the courts must respect that determination, unless plainly erroneous.) I didn't file that case, taking it on later in the game. But come on people, can we exercise just a little care out there?

Pending at the Supreme Court

2011-04-15T21:53:00.000-07:00

Lockwood v. Astrue is currently pending before the Supreme Court. Your erstwhile writer acts the attorney of record. Lockwood concerns application of the borderline age case for an individual about 1 month from turning 55 but the Administrative Law Judge treats her as 54. The regulations promise that the ALJ won't do that. The program operations manual tells SSA to explain why it did or didn't take a flexible approach to age. At issue is whether the Social Security Administration can promise the public one thing in a policy and procedure manual and then run away from that promise in federal court.

It is the social contract theory in administrative law. The Supreme Court changed the paradigm in Chevron. Regulations, not the Courts, get first crack at refining an ambiguous statute. Auer extends that doctrine. The agency gets the first crack at refining an ambiguous regulation. But the Social Security Administration want to defend ALJ decisions in Court more than it wants to defend the right of every federal agency to promulgate regulations and then tell the world what those regulations mean.

Just to make it interesting, the Acting Solicitor General declined to tell the Supreme Court what the executive branch of government thinks about Auer deference. The SG didn't do that in Parra v. Astrue, when the government to the Supremes that the Ninth had the whole deference thing wrong.

Social Security and Paternity

2011-03-24T13:05:00.000-07:00

The Social Security Act permits a child to receive benefits as the survivor of by making an application for benefits after the death of the parent. 42 U.S.C. § 402(d). In order to qualify for child's insurance benefits, the child must show that he was a child of, and dependent on, the wage earner at the time of the wage earner's death. 42 U.S.C. §§ 402(d)(1)(C); 416(h)(3)(C)(ii). The Act provides a safe harbor by turning to state law to determine paternity. 42 U.S.C. § 416(h)(2)(A).

In California, the law has a strong preference for identifying the parents of a child. The legal parent can be related by blood or by relationship. A presumption of child-parent status in California can arise from holding out the child as the wage earner's offspring. Family Code § 7611. Sometimes a child will not have a sociological parent and may have to resort to blood evidence to prove paternity. Family Code § 7555(a).

The Social Security Administration resists applications of unacknowledged minor children of a decedent under the Uniform Act on Blood Tests to Determine Paternity. California Family Code §§ 7550 ff. The administration seems to think that the Probate Code § 6453 requirement for an action during the parent's lifetime, holding out, or impossibility is required. But that section only applies to actions under the Uniform Parentage Act and in particular Family Code § 7630. Those provisions do not facially apply to sec. 7555.

The upshot of all this is that the child is deprived one last time of identifying his father. The lack of legal recognition in the only forum that has an interest can be devastating. SSA needs to get into the 21st century and permit blood evidence to control when that evidence is in the best interests of the child, even if the father did not want to acknowledge his own child.