April 4, 2013
An Open Letter from Former Commissioners of the Social Security Administration
As former Commissioners of the Social Security Administration (SSA), we write to express our significant concerns regarding a series recently aired on This American Life, All Things Considered, and National Public Radio stations across the U.S. (“Unfit for Work: The Startling Rise of Disability in America”). Our nation’s Social Security system serves as a vital lifeline for millions of individuals with severe disabilities. We feel compelled to share our unique insight into the Social Security system because we know firsthand the dangers of mischaracterizing the disability programs via sensational, anecdote-based media accounts, leaving vulnerable beneficiaries to pick up the pieces.
Approximately 1 in 5 of our fellow Americans live with disabilities, but only those with the most significant disabilities qualify for disability benefits under Title II and Title XVI of the Social Security Act. Title II Old Age, Survivors, and Disability Insurance (DI) benefits and Title XVI Supplemental Security Income (SSI) benefits provide critical support to millions of Americans with the most severe disabilities, as well as their dependents and survivors. Disabled beneficiaries often report multiple impairments, and many have such poor health that they are terminally ill: about 1 in 5 male DI beneficiaries and 1 in 7 female DI beneficiaries die within 5 years of receiving benefits. Despite their impairments, many beneficiaries attempt work using the work incentives under the Social Security Act, and some do work part-time. For example, research by Mathematica and SSA finds that about 17 percent of beneficiaries worked in 2007. However, their earnings are generally very low (two-thirds of those who worked in 2007 earned less than $5,000 for the whole year), and only a small share are able to earn enough to be self-sufficient and leave the DI and SSI programs each year. Without Social Security or SSI, the alternatives for many beneficiaries are simply unthinkable.
The statutory standard for approval is very strict, and was made even more so in 1996. To implement this strict standard, Social Security Administration (SSA) regulations, policies, and procedures require extensive documentation and medical evidence at all levels of the application process. Less than one-third of initial DI and SSI applications are approved, and only about 40 percent of adult DI and SSI applicants receive benefits even after all levels of appeal. As with adults, most children who apply are denied SSI, and only the most severely impaired qualify for benefits.
Managing the eligibility process for the disability system is a challenging task, and errors will always occur in any system of this size. But the SSA makes every effort to pay benefits to the right person in the right amount at the right time. When an individual applies for one of SSA’s disability programs, the agency has extensive systems in place to ensure accurate decisions, and the agency is home to many dedicated public servants who take their ongoing responsibility of the proper stewardship of the programs very seriously. Program integrity is critically important and adequate funds must be available to make continued progress in quality assurance and monitoring. In the face of annual appropriations that were far below what the President requested in Fiscal Year 2011 and Fiscal Year 2012, the agency has still continued to implement many new system improvements that protect taxpayers and live up to Americans’ commitment to protect the most vulnerable in our society.
It is true that DI has grown significantly in the past 30 years. The growth that we’ve seen was predicted by actuaries as early as 1994 and is mostly the result of two factors: baby boomers entering their high-disability years, and women entering the workforce in large numbers in the 1970s and 1980s so that more are now “insured” for DI based on their own prior contributions. The increase in the number of children receiving SSI benefits in the past decade is similarly explained by larger economic factors, namely the increase in the number of poor and low-income children. More than 1 in 5 U.S. children live in poverty today and some 44 percent live in low-income households. Since SSI is a means-tested program, more poor and low-income children mean more children with disabilities are financially eligible for benefits. Importantly, the share of low-income children who receive SSI benefits has remained constant at less than four percent.
Yet, the series aired on NPR sensationalizes this growth, as well as the DI trust fund’s projected shortfall. History tells a less dramatic story. Since Social Security was enacted, Congress has “reallocated” payroll tax revenues across the OASI and DI trust funds – about equally in both directions – some 11 times to account for demographic shifts. In 1994, the last time such reallocation occurred, SSA actuaries projected that similar action would next be required in 2016. They were right on target.
We are deeply concerned that the series “Unfit for Work” failed to tell the whole story and perpetuated dangerous myths about the Social Security disability programs and the people helped by this vital system. We fear that listeners may come away with an incorrect impression of the program—as opposed to an understanding of the program actually based on facts.
As former Commissioners of the agency, we could not sit on the sidelines and witness this one perspective on the disability programs threaten to pull the rug out from under millions of people with severe disabilities. Drastic changes to these programs would lead to drastic consequences for some of America’s most vulnerable people. With the lives of so many vulnerable people at stake, it is vital that future reporting on the DI and SSI programs look at all parts of this important issue and take a balanced, careful look at how to preserve and strengthen these vital parts of our nation’s Social Security system.
Sincerely,
Kenneth S. Apfel
Michael J. Astrue
Jo Anne B. Barnhart
Shirley S. Chater
Herbert R. Doggette
Louis D. Enoff
Larry G. Massanari
Lawrence H. Thompson
Monday, April 8, 2013
Tuesday, August 14, 2012
McLeod or Chaudhry -- the Duty to Develop
In the space of 9 months, I note that the Ninth Circuit has widened the gap in the panel determinations on the duty to develop the record on the question of a VA determination of disability.
McLeod v. Astrue went through three iterations before becoming law of the Circuit. The final decision sets out the facts of McCleod professing ignorance of whether he had a VA disability determination. He had a lay representative before SSA, an attorney before the District Court, and Paul Eaglin in the Court of Appeals. The Cour considered the presence of a lay representative the same as unrepresented in triggering a heightened duty to be "especially diligent" in developing the record. In the final analysis, the ALJ had to do more to get the VA disability rating because of its probative impact on the SSA disability determination.
Chaudhry v. Astrue found its way into the books on August 10, 2012. Jeffrey Baird handled the case on appeal but not before the SSA. Chaudhry testified that he received a 100% disaiblity rating from the VA. The attorney reprenting Chaudhry argued to the ALJ that the claimant did in fact have a 100% disaiblity rating. What the record did contain is a 30% headackes, 30% neck impairment, 20% back impairment, 30% depression, and 20% narcolepsy. The VA increased the rating for depression to 50% as of 2006, well before the case went to hearing. Don't add the numbers together, that isn't how the process works. Suffice it to say that the ALJ added the numbers together using his understanding of the VA methodology instead of the correct methodology that would have added up to 100%. Chaudhry argued through counsel that the ALJ should have gotten the final rating from the VA himself since the attorney at the hearing was wrong about the presence of the 100% finding in the file. Two problems -- the final rating did not wind its way into the record and the person making the representation was an attorney.
And that is the problem. Everyone in the room knows that the ALJ blew it. He added the numbers wrong and the rating really is 100%. The question is whether the Court will place its stamp of approval on a decision that the public knows is palpably and unmistakeably wrong. When the Court rushes in to affirm the wrong decision because what the ALJ did falls within the range of wrong but reasonable, the Court degrades the public confidence in both the SSA and the Court.
This is not a situation where reasonable minds could differ. This case raises the specter of an easily verifiable concrete fact that is either right or wrong. Discretion permits an ALJ to have his own conclusions, but not his own facts on which no reasonable person could differ. In Chaudhry, we have a young man that served the United States, after leaving his native Pakistan, honorably in the military only to have an ALJ's silent speed torpedo his entitlement to disability benefits. Certainly Chaudhry got his VA benefits and if still insured for disability benefits can get SSDI for future periods. But that isn't the promise that we as a nation made to our young men and women that served in the armed forces especially an immigrant that probably served against the cultural norm from which he emerged. What we promised was that if he sustained injury during the course of his military service that he would receive a VA benefit for any compensable disability and if the disability precluded substantial gainful activity that he would receive SSDI to permit him some semblance of a standard of living.
The Court should get out of the business of excusing bad decisions by the SSA under the guise of permitting a wide range of discretion. The Court should get into the business of narrowing the range of discretion so that claimants like Chaudhry have their cases determined based on the facts of the case instead of the lottery of the identity of the individual ALJ. Someone pass a note to the Court -- "there are administrative law judges that make mistakes and the Court is the last protection against gross error." This case involves the grotesque error of harming our servicemen and women.
McLeod v. Astrue went through three iterations before becoming law of the Circuit. The final decision sets out the facts of McCleod professing ignorance of whether he had a VA disability determination. He had a lay representative before SSA, an attorney before the District Court, and Paul Eaglin in the Court of Appeals. The Cour considered the presence of a lay representative the same as unrepresented in triggering a heightened duty to be "especially diligent" in developing the record. In the final analysis, the ALJ had to do more to get the VA disability rating because of its probative impact on the SSA disability determination.
Chaudhry v. Astrue found its way into the books on August 10, 2012. Jeffrey Baird handled the case on appeal but not before the SSA. Chaudhry testified that he received a 100% disaiblity rating from the VA. The attorney reprenting Chaudhry argued to the ALJ that the claimant did in fact have a 100% disaiblity rating. What the record did contain is a 30% headackes, 30% neck impairment, 20% back impairment, 30% depression, and 20% narcolepsy. The VA increased the rating for depression to 50% as of 2006, well before the case went to hearing. Don't add the numbers together, that isn't how the process works. Suffice it to say that the ALJ added the numbers together using his understanding of the VA methodology instead of the correct methodology that would have added up to 100%. Chaudhry argued through counsel that the ALJ should have gotten the final rating from the VA himself since the attorney at the hearing was wrong about the presence of the 100% finding in the file. Two problems -- the final rating did not wind its way into the record and the person making the representation was an attorney.
And that is the problem. Everyone in the room knows that the ALJ blew it. He added the numbers wrong and the rating really is 100%. The question is whether the Court will place its stamp of approval on a decision that the public knows is palpably and unmistakeably wrong. When the Court rushes in to affirm the wrong decision because what the ALJ did falls within the range of wrong but reasonable, the Court degrades the public confidence in both the SSA and the Court.
This is not a situation where reasonable minds could differ. This case raises the specter of an easily verifiable concrete fact that is either right or wrong. Discretion permits an ALJ to have his own conclusions, but not his own facts on which no reasonable person could differ. In Chaudhry, we have a young man that served the United States, after leaving his native Pakistan, honorably in the military only to have an ALJ's silent speed torpedo his entitlement to disability benefits. Certainly Chaudhry got his VA benefits and if still insured for disability benefits can get SSDI for future periods. But that isn't the promise that we as a nation made to our young men and women that served in the armed forces especially an immigrant that probably served against the cultural norm from which he emerged. What we promised was that if he sustained injury during the course of his military service that he would receive a VA benefit for any compensable disability and if the disability precluded substantial gainful activity that he would receive SSDI to permit him some semblance of a standard of living.
The Court should get out of the business of excusing bad decisions by the SSA under the guise of permitting a wide range of discretion. The Court should get into the business of narrowing the range of discretion so that claimants like Chaudhry have their cases determined based on the facts of the case instead of the lottery of the identity of the individual ALJ. Someone pass a note to the Court -- "there are administrative law judges that make mistakes and the Court is the last protection against gross error." This case involves the grotesque error of harming our servicemen and women.
Thursday, May 17, 2012
Beltran v. Astrue
On May 2, 2012, the Ninth Circuit decided Beltran v. Astrue. Attorneys that handle Social Security disability cases consider the issue of signficant number of jobs (SNOJ) in the economy to constitute the Holy Grail. Pursued and promised but never quite attained. This case is a baby step closer to that Holy Grail.
As the third attorney on the case, I had some reluctance to pursue the SNOJ issue. This nuanced issue typically requires finesse and a perfect record. The record had some traps but overall a tip in favor of pursuit. The ALJ in the case denied Beltran disability insurance benefits as of her date last insured. The ALJ reasoned that the ability to perform 135 jobs in a single sedentary occupation represented a large enough occupational base to expect the vocational adjustment. The ALJ granted Beltran SSI benefits ... beginning 6 days after the expiration of her date last insured for SSDIB benefits.
SSI carries with it a benefit tied to financial status of income and resources and grants the beneficiary Medi-Cal coverage. Medi-Cal grants access to emergency rooms and public clinics and hospitals. The private medical providers do not treat Medi-Cal recipients.
SSDIB carries with it a benefit that does not depend on household income and resources and grants the beneficiary Medicare coverage after 2 years of pay status. Medicare grants access to doctors and hospitials. The private medical providers do treat Medicare recipients. For Beltran, pursuing the case had real importance to her in terms of monthly benefit and access to medical care.
The case did have a couple of problems. Had I represented Beltran at the District Court level, I would have included a borderline age situation. Lockwood v. Astrue had not been decided and that decision would have mired the presentation of Beltran to a crawl. Serendipity saved me from pressing an issue that probably would have won at the District Court level but provided Beltran with no additional past due benefits. What I perceived as an error turned out to bring good fortune to the case.
And the real reason to blog about this case ... the strident dissent from Judge Ikuta. In April, the Ninth Circuit issued a decision in Molina v. Astrue. That decision broadened the use of the harmless error doctrine. The author of that opinion, Judge Ikuta. The majority opinion in Molina and the dissent in Beltran paints Judge Ikuta into the corner of apologist for bad decisions from the Social Security Administration. Harmless error means that the ALJ decision contains error. Excusing error as harmless and expanding the use of that doctrine means that the adadge "close enough for government work" continues to have vitality.
Judge Ikuta complains that the Court usurps the perogative of the agency to make fact findings based on the slimmest of evidence. Healthcare Employees Union v. NLRB rejected the "rational basis" test that the NLRB sought in review of agency decisions. The Ninth Circuit, like all courts, reviews decisions of agencies on the record as a whole. During the expansion of agency power in the last 80 years, the courts have never abdicated the role of making sure that any agency decision make sense. In other words, the fact that there exists a rational discernable basis for a decision has never and should never rescue the decision from the probing eye of the court.
In footnote 1 of the dissent, Judge Ikuta complains that alcohol abuse caused some of the problems and limitations found by the ALJ to afflict Beltran. Judge Ikuta states that problems caused by a history of alcohol abuse don't count in the disability analysis. First, the ALJ already backed out ethanol from the equation in finding Beltran eligible for benefits 6 days later. Second, the statute and the regulations remove benefit eligibility if the disabling limitations would evaporate with abstinence. The footnote represents a misstatement of law and fact.
The statute requires that Beltran and other claimants for benefits have the capacity to perform a signficant number of jobs in the region in which they live or several regions of the country in light of the residucal capacity for work and in consideration of age, education, and work experience. While it is true that employment practices and openings don't count, that truism pales when the statute requires consideration of age. The Commissioner's regulations call this the ability to adjust to other work. For someone aged 50 or over, the ability to perform every single unskilled sedentary job in the nation does not provide a significant enough occupational base. For a person aged 55 or over, the ability to perform every single unskilled sedentary and light job in the nation does not provide a significant enough occupational base. Beltran was 49 years, 11 months, and 3 weeks old at the time that her insured status expired. The ALJ granted SSI benefits a week later and found that 1 occupation representing at most 135 jobs represented a signficant number. That kind of sophist analysis deserves the searching scrutiny of the court to second guess the decisions of an ALJ.
Public confidence in a system of administrative adjudication demands better and the majority got it right in holding SSA's feet to the fire.
As the third attorney on the case, I had some reluctance to pursue the SNOJ issue. This nuanced issue typically requires finesse and a perfect record. The record had some traps but overall a tip in favor of pursuit. The ALJ in the case denied Beltran disability insurance benefits as of her date last insured. The ALJ reasoned that the ability to perform 135 jobs in a single sedentary occupation represented a large enough occupational base to expect the vocational adjustment. The ALJ granted Beltran SSI benefits ... beginning 6 days after the expiration of her date last insured for SSDIB benefits.
SSI carries with it a benefit tied to financial status of income and resources and grants the beneficiary Medi-Cal coverage. Medi-Cal grants access to emergency rooms and public clinics and hospitals. The private medical providers do not treat Medi-Cal recipients.
SSDIB carries with it a benefit that does not depend on household income and resources and grants the beneficiary Medicare coverage after 2 years of pay status. Medicare grants access to doctors and hospitials. The private medical providers do treat Medicare recipients. For Beltran, pursuing the case had real importance to her in terms of monthly benefit and access to medical care.
The case did have a couple of problems. Had I represented Beltran at the District Court level, I would have included a borderline age situation. Lockwood v. Astrue had not been decided and that decision would have mired the presentation of Beltran to a crawl. Serendipity saved me from pressing an issue that probably would have won at the District Court level but provided Beltran with no additional past due benefits. What I perceived as an error turned out to bring good fortune to the case.
And the real reason to blog about this case ... the strident dissent from Judge Ikuta. In April, the Ninth Circuit issued a decision in Molina v. Astrue. That decision broadened the use of the harmless error doctrine. The author of that opinion, Judge Ikuta. The majority opinion in Molina and the dissent in Beltran paints Judge Ikuta into the corner of apologist for bad decisions from the Social Security Administration. Harmless error means that the ALJ decision contains error. Excusing error as harmless and expanding the use of that doctrine means that the adadge "close enough for government work" continues to have vitality.
Judge Ikuta complains that the Court usurps the perogative of the agency to make fact findings based on the slimmest of evidence. Healthcare Employees Union v. NLRB rejected the "rational basis" test that the NLRB sought in review of agency decisions. The Ninth Circuit, like all courts, reviews decisions of agencies on the record as a whole. During the expansion of agency power in the last 80 years, the courts have never abdicated the role of making sure that any agency decision make sense. In other words, the fact that there exists a rational discernable basis for a decision has never and should never rescue the decision from the probing eye of the court.
In footnote 1 of the dissent, Judge Ikuta complains that alcohol abuse caused some of the problems and limitations found by the ALJ to afflict Beltran. Judge Ikuta states that problems caused by a history of alcohol abuse don't count in the disability analysis. First, the ALJ already backed out ethanol from the equation in finding Beltran eligible for benefits 6 days later. Second, the statute and the regulations remove benefit eligibility if the disabling limitations would evaporate with abstinence. The footnote represents a misstatement of law and fact.
The statute requires that Beltran and other claimants for benefits have the capacity to perform a signficant number of jobs in the region in which they live or several regions of the country in light of the residucal capacity for work and in consideration of age, education, and work experience. While it is true that employment practices and openings don't count, that truism pales when the statute requires consideration of age. The Commissioner's regulations call this the ability to adjust to other work. For someone aged 50 or over, the ability to perform every single unskilled sedentary job in the nation does not provide a significant enough occupational base. For a person aged 55 or over, the ability to perform every single unskilled sedentary and light job in the nation does not provide a significant enough occupational base. Beltran was 49 years, 11 months, and 3 weeks old at the time that her insured status expired. The ALJ granted SSI benefits a week later and found that 1 occupation representing at most 135 jobs represented a signficant number. That kind of sophist analysis deserves the searching scrutiny of the court to second guess the decisions of an ALJ.
Public confidence in a system of administrative adjudication demands better and the majority got it right in holding SSA's feet to the fire.
Sunday, January 22, 2012
EAJA Offset
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:
(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.
“(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.”
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.
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. U.S. U.S.
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 U.S. Okla.
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).
Tuesday, January 3, 2012
Wall Street Journal and Binder & Binder
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.
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.
Wednesday, December 21, 2011
Hardisty v. Astrue-- EAJA and Unreached Issues
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.
Thursday, December 8, 2011
The Eastern District of California - Fresno Division
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.
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.
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