DEBBIE R. BRAND,
KENNETH S. APFEL,
Commissioner of Social Security,
[1998 DSD 21]
United States District Court
District of South Dakota
MEMORANDUM OPINION AND ORDER
Filed Sept 1, 1998.
Richard H. Battey, Chief Judge
I. PROCEDURAL HISTORY
[¶1] In an opinion dated September 20, 1996, Eugene K. Anthony, an Administrative Law Judge ("ALJ"), denied plaintiff Debbie R. Brand ("Brand") Title II disability benefits under Title II of the Social Security Act ("the Act"), 42 USC §§ 401-33. Brand then requested review by the Appeals Council of the ALJ's decision, and the Appeals Council declined review. Brand next filed a complaint before this Court seeking review of the ALJ's decision denying her social security benefits. On June 10, 1998, Brand filed her motion for summary judgment. Brand urges this Court to reverse the decision of the ALJ denying her benefits and to grant her disability benefits based upon the administrative record. The Commissioner of Social Security ("Commissioner") filed his response urging that he is entitled to summary judgment as a matter of law and that the decision of the ALJ should be affirmed. Brand has filed her reply. This Court has jurisdiction to proceed pursuant to 42 USC § 405(g).
[¶2] Brand was born on March 12, 1952. Brand has a high school education and has been employed in the past in both a full-time and part-time capacity. According to Brand, between 1970 and 1974, she maintained full-time work at several retail stores in Rapid City. Tr. 167-172. In 1975 Brand began work at the Rapid City Howard Johnson's Hotel as a hostess and later as a waitress. In 1976, Brand left Howard Johnson's for the Hotel Alex Johnson, where she worked up to full-time, also as a waitress. Tr. 175. During 1977, Brand married and began working for her husband's carpet installation company, Brand's Carpet Service ("Brand's Carpet"). Tr. 34. While working for her husband's business, Brand's duties included measuring rooms prior to carpet installation, laying carpet, scheduling carpet installations and bookkeeping. Tr. 36-39.
[¶3] Brand was diagnosed with multiple sclerosis as well as depression in 1982, but testified at the administrative hearing held on June 14, 1996, that despite her condition she was able to work for her husband's business until 1985. Tr. 39, 48. Brand originally alleged that her onset date for disability was January 3, 1979, but later amended this date, alleging onset to be January 1, 1985. Tr. 13.
[¶4] In the ten-year period, between 1975 and 1985, the Social Security Administration ("SSA") earnings record indicates that Brand accumulated eighteen quarters of credit ("QCs") towards her eligibility for social security disability insurance. Tr. 106-09. The SSA requires a minimum of 20 QCs per 40-quarter period (10 years) for a worker to be eligible for disability insurance coverage. Between the latter part of 1977 through 1982 (the relevant period in which she was employed by Brand's Carpet) Brand's earnings record, as maintained by SSA, does not reflect a single quarter of credit earned.(fn1) Tr. 106-09.
III. DECISION BY THE ALJ
[¶5] In his opinion of September 20, 1996, the ALJ recognized that Brand's condition had deteriorated throughout the 1980s, but points out that Brand herself acknowledged that disability cannot be medically established prior to January 1, 1985. With this understanding, Brand amended her onset date for disability at the administrative hearing to the January 1, 1985, date. Tr. 15. The ALJ went on to conclude that Brand was insured under the Act as of January 3, 1979, and continued to be so insured through June 30, 1979.(fn2) Tr. 13. The ALJ pointed out that Title II earnings requirements are met by engaging in employment covered by the Social Security Act and through the payment of FICA tax, or by engaging in covered self-employment and paying a self-employment tax. Tr. 13. Analogizing to the payment of an insurance premium, the ALJ explained that, like an insurance policy, once payment of the "premium" stops, insurance coverage eventually lapses. Tr. 13. Thus, the ALJ concluded that for Brand to be entitled to benefits under Title II, she must have been found to be disabled on or before June 30, 1979.
[¶6] At the hearing Brand conceded that she could not be found to be disabled prior to June 30, 1979; however, Brand contended that she met the insured status requirements of the Act through December 31, 1985, if properly credited with the QCs she believes she earned while employed at Brand's Carpet.(fn3) The ALJ rejected this argument, opining that any earnings that Brand made during 1982 could not properly be credited to her earnings record, as they were made while in the employment of Brand's Carpet, a company owned solely by her husband. Tr. 14. In support of this rejection, the ALJ pointed to the Act as it existed in 1982, which excluded from employment, for purposes of social security, services performed by an individual in the employ of his or her spouse. 42 USC § 410(a)(2)(A).
[¶7] The ALJ went on to cite, by way of example, POMS RS01901.019 which states that non-covered employment is:
b. Service performed before 1988 by an individual for his or her spouse.
In his opinion the ALJ also provided an example from POMS which restates the application of the policy:
Covered spousal employment:
Mr. Jones is a self-employed grocer and his wife is paid as a bookkeeper for the business. She has performed these services for many years. All remuneration paid for the wife's services after 12/31/87 [emphasis added] is no longer excluded from employment and is covered for Social Security purposes.
Tr. 14. In coming to this finding, the ALJ acknowledged that refusing to credit Brand's earnings account for her work at Brand's Carpet results in a harsh outcome, but went on to insist that he is not "at liberty to ignore the implementing regulations as they exist and must be applied to the 1982 wages." Tr. 15. Hence, the ALJ found that because no credit could be given to Brand's earning record for the 1982 wages, her insured status rightly expired on June 30, 1979. Further, the ALJ found that on this basis, Brand could not be found "disabled" as she had not alleged or established disability prior to her date last insured. Tr. 15.
IV. STANDARD OF REVIEW
[¶8] The decision of the ALJ must be upheld if it is supported by substantial evidence in the record as a whole. 42 USC § 405(g); Metz v. Shalala, 49 F3d 374, 376 (8th Cir. 1995) (citing Sullins v. Shalala, 25 F3d 601, 603 (8th Cir. 1994), cert. denied, 573 US 1076, 115 S. Ct. 722, 130 L. Ed. 2d 627 (1995)); Smith v. Shalala, 987 F2d 1371, 1373 (8th Cir. 1993). Substantial evidence is less than a preponderance, but enough evidence that a reasonable mind might find it adequate to support the conclusion. Fines v. Apfel, No. 97-3254, 1998 WL 414437, *1 (8th Cir. S.D.) (citing Oberst v. Shalala, 2 F3d 249, 250 (8th Cir. 1993)). See also Shannon v. Chater, 54 F3d 484, 486 (8th Cir. 1995) (citing Richardson v. Perales, 402 US 389, 401, 91 S. Ct. 1420, 1427, 28 L. Ed. 2d 842 (1971)); Onstead v. Sullivan, 962 F2d 803 (8th Cir. 1992) (quoting Whitehouse v. Sullivan, 949 F2d 1005, 1007 (8th Cir. 1991)). Review by this Court extends beyond a limited search for the existence of evidence supporting the Commissioner's decision to include giving consideration to evidence in the record which fairly detracts from the decision. Brockman v. Sullivan, 987 F2d 1344, 1346 (8th Cir. 1993); Locher v. Sullivan, 968 F2d 725, 727 (8th Cir. 1992); Turley v. Sullivan, 939 F2d 524, 528 (8th Cir. 1991).
[¶9] However, the Court's role under section 405(g) is to determine whether there is substantial evidence in the record as a whole to support the decision of the Commissioner and not to reweigh the evidence or try the issues de novo. Murphy v. Sullivan, 953 F2d 383, 384 (8th Cir. 1992). Furthermore, a reviewing court may not reverse the Commissioner's decision "merely because substantial evidence would have supported an opposite decision." Woolf v. Shalala, 3 F3d 1210, 1213 (8th Cir. 1993); Smith v. Shalala, 987 F2d at 1374 (citing Locher, 986 F2d at 727 (quoting Baker v. Heckler, 730 F2d 1147, 1150 (8th Cir. 1984))). The Court must review the Commissioner's decision to determine if an error of law has been committed. Smith v. Sullivan, 982 F2d 308, 311 (8th Cir. 1992); Nettles v. Schweiker, 714 F2d 833, 836 (8th Cir. 1983). The Commissioner's conclusions of law are only persuasive, not binding, on the reviewing court. Smith v. Sullivan, 982 F2d at 311; Satterfield v. Mathews, 483 F. Supp. 20, 22 (E.D. Ark. 1979), aff'd per curiam, 615 F2d 1288, 1289 (8th Cir. 1980). As long as the ALJ's decision is supported by substantial evidence, then this Court cannot reverse the decision of the ALJ even if the Court would have decided it differently. Smith v. Shalala, 987 F2d at 1374.
[¶10] For Brand to be eligible for disability benefits, she must first be regarded as insured. See 42 USC § 423(a)(1); 20 CFR § 404.101(a). In determining whether a claimant is insured, the ALJ must first examine her earnings record. For an individual to be insured she must have an earnings record that reflects at least 20 QCs in the 40-quarter period ending on the date of the alleged disability. See 42 USC § 423(c)(1)(B); 20 CFR § 404.130(b). In Brand's case, it is important to note that not all wages earned by an employee will accumulate QCs for purposes of establishing disability insurance coverage under Title II. Put more precisely, QCs are based only upon earnings covered for social security purposes. 20 CFR § 404.1001(a). Moreover, earnings are only considered covered wages if they result from "employment" as defined by 42 USC § 410(a). See 20 CFR § 404.1001(a)(3). Brand's challenge to the ALJ's decision stems generally from her assertion that her 1982 wages, earned while employed by Brand's Carpet, should be credited to her earnings record. If these wages were credited to her earnings account, Brand could be entitled to disability insurance, as she would have accumulated 20 QCs within a 40-quarter period.
[¶11] Specifically, Brand has stated three objections to the ALJ's conclusions: (1) that the ALJ's finding that Brand's earning record may not be credited with her 1982 wages is unsupported by substantial evidence and is an error of law; (2) the ALJ's finding that Brand's 1982 wages cannot be credited to her earnings account is a denial of due process and equal protection of the law; and (3) the ALJ's finding that Brand was not disabled prior to her date last insured is not supported by substantial evidence.
[¶12] In 1987, 42 USC § 410(a)(3)(A) of the Act was amended with the words "service performed by an individual in the employ of [her] spouse" being stricken. Pub. L. No. 100-203, § 9004(a)(1). As a result, after 1987, wages earned while in the employment of one's spouse are no longer excluded from covered wages for purposes of quarterly credits. Nonetheless, Brand's "employment" status for purposes of QCs must be analyzed under the law as it existed in 1982, not under the Act as it was amended in 1987. See H.R. Conf. Rep. No. 495, 100th Cong., 1st Sess. 801 (1987), reprinted in USS.C.A.N., 2313-1245, 2313-547; see also Clift v. Sullivan, 927 F2d 367, 368 (8th Cir. 1991) (affirming district court's decision on behalf of defendant commissioner, holding claimant was precluded from counting four credits of work she performed in her spouse's business prior to 1987 amendment, under 42 USC § 410(a)(3)(A)). Hence, under the pre-1987 version of the Act, any wages earned by Brand in 1982 are precluded from counting towards the requisite 20 QCs needed for disability benefits. Clift, 927 F2d at 368.
[¶13] Brand has asserted that the ALJ's finding that the 1982 wages are not covered wages pursuant to 42 USC § 410(a)(2)(A) is an erroneous application of the law. To the contrary of the ALJ's determination, Brand has urged this Court to analyze her employment status under 42 USC § 410(a)(2)(B), which states that the term "employment" shall exclude: "service not in the course of the employer's trade or business, or domestic service in a private home of the employer, performed by an individual under the age of 21 in the employ of his father or mother, or performed by an individual in the employ of his spouse or son or daughter . . ." 42 USC § 410(a)(2)(B). It is true that if Brand had worked for her husband's business after 1987, her employment status would be analyzed under 42 USC § 410(a)(2)(B). However, wages earned prior to the 1987 amendments are subject to the earlier definition of "employment" and are thereby excluded wages for purposes of QC accumulation. Pub. L. No. 100-203, § 9004(a)(2), 101 Stat. 1330 (1987); see also Clift , 927 F2d at 368. On this basis, any further analysis of Brand's 1982 wages under 42 USC § 410(a)(2)(B) is not necessary.
[¶14] Brand has challenged the constitutionality of the ALJ's determination that her wages earned at Brand's Carpet may not be credited to her earnings account based upon both Equal Protection and Due Process. Such a challenge is unsupported by case law. The Eighth Circuit has recently addressed this very same issue. See Clift, 927 F2d at 368-69. In Clift, the Eighth Circuit Court of Appeals held that challenges to 42 USC § 410(a)(2)(A), based upon Due Process and Equal Protection, are without merit. Id. In that opinion, the Court stated: "With respect to Social Security legislation, so long as a classification has some reasonable basis, it is not unconstitutional." Id. The opinion goes on to state: "The legislative history indicates that Congress intended section 410(a)(3)(A) to prevent collusion . . . by excluding a class of people whose situation suggests a high potential for collusion." Id. (citing Tyson v. Heckler, 727 F2d 1029, 1030-31 (11th Cir. ), cert denied, 469 US 853, 105 S. Ct. 176, 83 LEd2d 111 (1984)); see also H.R. Rep. No 728, 76th Cong., 1st Sess. 46 (1939).
[¶15] Brand has also asserted that the ALJ was incorrect in finding that she was not disabled prior to June 30, 1979, her date last insured. Such an assertion is without merit. Although Brand clearly suffered some symptoms of multiple sclerosis and depression prior to June 30, 1979, she testified at the administrative hearing that she was not disabled in 1979, stating that her condition "[r]eally got worse" sometime after the birth of her second child in 1984. Tr. 31. On this basis, Brand amended her onset date to December 31, 1985. Tr. 31-32. The ALJ's acceptance of this date merely echos the assertion already made by Brand at the administrative hearing. Id.
[¶16] Based upon the foregoing discussion, it is hereby
[¶17] ORDERED that judgment shall be entered in favor of the defendant and against the plaintiff. Costs shall not be assessed.
1. Brand claims that the Commissioner should credit her with four additional QCs for 1982, when she worked for Brand's Carpet. Brand asserts that if given credit for these QCs she would have the necessary 20 QCs to be insured under Title II, through December 31, 1985.
2. The ALJ found that Brand had previously applied for a period of disability and disability benefits as of June 1, 1982. Brand was denied coverage for lack of insured status at that time as well. Tr. 13.
3. The ALJ did accept that Brand earned $2,400 in 1982 while working for Brand's Carpet. TR. 14.