Harty v. Apfel, 2000 DSD 4

ANTHONY HARTY,
Plaintiff,
v.
KENNETH S. APFEL,
Commissioner, Social Security Administration,
Defendant.
[2000 DSD 4]

United States District Court
District of South Dakota–Western Division
CIV 99-5050

MEMORANDUM OPINION AND ORDER

Michael J. Simpson, Groves, Julius & Simpson L.L.P., Rapid City, SD
Attorney for Plaintiff

Diana J. Ryan, US Attorney's Office, Rapid City, SD
Attorney for Defendant

Filed Jan 19, 2000.

[¶1] In an opinion dated February 14, 1996, Henry M. Paro, an Administrative Law Judge, denied plaintiff Anthony Harty ("Harty") disability benefits under Title II of the Social Security Act ("the Act"), and supplemental security income under Title XVI of the Act, 42 USC. §§ 401- 433; 1381-1383c. Harty then requested that the Appeals Council review this decision. On December 17, 1996, the Appeals Council vacated the hearing decision and remanded the case to another administrative law judge to develop the record and to evaluate Harty’s self-employment in accordance with the criteria set forth in 20 CFR 404.1575, 20 CFR 416.975 and Social Security Ruling 83-34. On February 27, 1998, Antoinette Martinez, an Administrative Law Judge ("ALJ"), also denied Harty disability benefits under the Act. Harty then requested that the Appeals Council review the ALJ’s decision, and the Appeals Council declined review. On July 9, 1999, Harty filed a complaint before this Court seeking review of the ALJ’s decision. He now urges this Court to reverse the decision of the ALJ (Docket#10). The Commissioner of Social Security ("Commissioner") filed his response seeking summary judgment as a matter of law (Docket #11). Harty has filed his reply. This Court has jurisdiction to proceed pursuant to 42 USC. § 405(g).

[¶2] Harty was born on March 21, 1949, and is currently 50 years old. AR 88. He has a twelfth-grade education and past work experience as a self-employed farmer. AR 217, 340, 451. Harty has never been married and has no children. AR 204-205. On October 10, 1990, Harty broke his back in three places, broke his right leg, and suffered an abdominal injury in a dump truck accident. AR 170.

[¶3] During the administrative hearing on April 17, 1997, Harty testified that before his accident, he was lifting, driving a tractor, shoveling grain, and doing other farm work. AR 56-57. Harty also testified that after the accident he still did these same activities but could not work as fast or as long as before the accident and could only lift up to 30 pounds. AR 56-57. In addition, Harty stated in 1991 that he was making 60 percent of the management decisions on the farm. AR 132. On August 31, 1994, Harty applied for disability insurance benefits (DIB) and supplemental security income (SSI),{fn1} alleging an inability to work since October 11, 1990. AR 204.

[¶4] In assessing the sequential process{fn2} which is required when determining if an individual is disabled and thus entitled to benefits, the ALJ concluded that Harty had engaged in substantial gainful activity within the meaning of 20 CFR §§ 404.1575(a)(2); 416.975(a)(2).{fn3} AR 20. This decision was based upon Harty’s own testimony which revealed that both before and after his injury he did lifting on the farm, drove the tractor, shoveled grain, filled drills for planting and other work activity. AR 18. However, after the injury the work was more difficult, took longer, and he was no longer able to work 12 to 16 hour days. AR 19. Considering that Harty was doing physical labor and making management decisions, the ALJ found that even with the reduced number of hours of work, Harty’s activities were still worth at least $500 per month. AR 19. The ALJ also considered Harty’s income tax returns both before and after the accident. AR 19. The returns showed that Harty’s income did not substantially change after the accident, which according to the ALJ bolstered the notion that Harty’s work activity was substantial gainful activity after the alleged onset date. AR 19.

[¶5] Because Harty continued to work on his farm after the alleged onset date and because this work was worth more than $500 per month, the ALJ found that Harty had engaged in substantial gainful activity and therefore could not be considered "disabled" under the Act. See 20 CFR §§ 404.1520; 416.920.{fn4} AR 20. Because the ALJ determined that Harty was not disabled at step one of the analysis, no medical findings were made in this case. AR 20.

[¶6] 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 SCt 722, 130 LEd2d 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, 149 F3d 893 (8th Cir. 1998) (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 SCt 1420, 1427, 28 LEd2d 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).

[¶7] However, the Court's role 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 FSupp 20, 22 (ED 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.

[¶8] The issue in this case is whether Harty’s activities on the farm are "substantial gainful activity" that precludes a finding that he is disabled. See Peterson v. Chater, 72 F3d 675, 676 (8th Cir. 1995). Whether Harty made a profit from his farming or whether he is able to engage in more vigorous activities on the farm are not at issue. See id. (when determining substantial gainful activity, "[t]he question is not whether Peterson made a profit farming, nor whether he has the physical ability to engage in more vigorous farming activities"). Instead, Harty has the burden to prove his "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment." 42 USC § 423(d)(1)(a). The regulation which defines substantial gainful activity for a self-employed person reads:

(a) if you are a self-employed person. . . . We consider that you have engaged in substantial gainful activity if

(1) Your work activity in terms of factors such as hours, skills, energy output, efficiency, duties, and responsibilities, is comparable to that of unimpaired individuals in your community who are in the same or similar business as their means of livelihood;

(2) Your work activity, although not comparable to that of unimpaired individuals, is clearly worth the amount shown in § 404.1574b(2) when considered in terms of its value to the business, or when compared to the salary that an owner would pay to an employee to do the work you are doing; or

(3) You render services that are significant to the operation of the business and receive substantial income from the business.

20 CFR § 404.1575(a)(1)-(3). These three tests were analyzed in great detail, with illustrative examples, in Social Security Ruling ("SSR") 83-34, reprinted in West’s Social Security Reporting Service, Rulings 1983-1991, at 106.

[¶9] Applying the second test of the regulation (404.1575(a)(2), 416.975(a)(2)),{fn5} the ALJ found that Harty’s farm activity was clearly worth the amount shown in §404.1574(b)(2) ($500/month) when considered to the salary that an owner would pay to an employee to do the work you are doing. AR 20. After reviewing the record as a whole, the Court concludes that the ALJ’s finding is supported by substantial evidence.

[¶10] This evidence includes Harty’s testimony which indicates that after the accident, although not as quickly as before the accident, he was lifting (up to 30 lbs), driving a tractor, shoveling grain, and doing other farm work. AR 56-57. Harty also stated, in 1991, that he was making 60 percent of the farm management decisions.{fn6} AR 132. In addition, Harty’s income tax returns show that the gross receipts from his farm totaled: $31,317 in 1987; $29,391.59 in 1988; $28,486.44 in 1989; $32,130 in 1990; $29,191 in 1991; $33,543 in 1992; $32,343 in 1993; $30,761 in 1994; $19,093 in 1995; and $35,052 in 1996. AR 466, 474, 482, 491, 402, 413, 421, 428, 441, 455. It is evident that farming is the kind of work usually done for pay or profit, and that Harty continued farming with the hope of making a living at it. There is certainly no indication that he farmed for personal pleasure or recreational purposes, or as a hobby or public service project. Because profits from the farm are not an issue, the amount of gross receipts also supports the finding that Harty’s farm activities were worth more than $500 per month. See 20 CFR 1572(b) (work activity is gainful if it is the kind of work usually done for pay or profit, whether or not a profit is realized); See e.g., Rollings v. Shalala, 19 F.Supp.2d 1100,1104 (C.D. Cal., July 1, 1994) aff’d Rollings v. Chater, 77 F3d 490, 1996 WL 62687, *1 (9th Cir. 1996) (district court considered a self-employed person’s gross income to determine the value of the services to the business ).

[¶11] Harty argues that SSR 83-84 and note 4 from Petersen v. Chater, 72 F3d 675, 678 (8th Cir. 1995) are authority for finding that his farm activities are not worth $500 per month. See Plaintiff’s Brief at 15-16. However, the example from the Social Security ruling and the footnote are limited to "management" services on a farm. See SSR 83-84 at 10; Peterson 72 F3d at 678. Whereas, Harty provided both physical labor and management services on his farm. AR 56-57, 132. Furthermore, the Eighth Circuit Court of Appeals, in Petersen, stated that the value of services rendered on a farm is a factual question to be decided by the agency on an adequate fact record. See Peterson 72 F3d at 678. The agency, in this case, decided the factual question against Harty. AR 16-21. This decision 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 SCt 722, 130 LEd2d 627 (1995)); Smith v. Shalala, 987 F2d 1371, 1373 (8th Cir. 1993).

[¶12] Upon careful consideration of the record as a whole and given the deference this Court should show for Appeals Council decisions,{fn7} the Court finds that there exists substantial evidence in the record as a whole for the ALJ to have found that Harty engaged in substantial gainful activity and therefore may not be considered "disabled" under the Act. See 20 CFR §§404.1520; 416.920. To the extent that Harty’s condition has deteriorated since the ALJ’s decision, Harty may reapply for benefits. See Jones v. Callahan, 122 F3d 1148, 1154 (8th Cir. 1997). Based upon the foregoing discussion, it is hereby

[¶13] ORDERED that Harty’s motion seeking reversal of the ALJ’s decision (Docket #10) is denied.

[¶14] IT IS FURTHER ORDERED that the Commissioner’s motion for summary judgment (Docket #11) is granted. Judgment shall be entered in favor of the defendant and against plaintiff.

Footnotes

1. Harty had previously filed for DIB benefits on January 1, 1991, which was denied. AR 88, 104. 

2. The steps are summarized as follows:

(1) First, a determination is made whether claimant is currently engaged in substantial gainful activity; if so, he must be found not disabled.
(2) If claimant is not engaged in substantial gainful activity, the next question is whether he is suffering from a severe impairment, defined as one that significantly limits the ability to perform basic work-related functions. If a severe impairment is not found, claimant must be found not disabled.
(3) If there is a severe impairment, and it is one listed in Appendix 1 to Subpart P, claimant is found disabled on the medical evidence alone. [See Appendix 1 to Subpart P of Part 404, 20 CFR §§ 404.1501 et seq. (1996)].
(4) If the impairment is not listed in Appendix 1, the next inquiry is whether claimant can perform relevant past work. If he can, a finding of no disability is required.
(5) Finally, if claimant cannot perform relevant past work, the question then becomes whether he can nevertheless do other jobs that exist in the national economy, despite his having a severe impairment that prevents return to his previous work. 

McCoy v. Schweiker, 683 F2d 1138, 1141-42 (8th Cir. 1982). See also 20 CFR § 404.1520; 1 Harvey L. McCormick, Social Security Claims and Procedures § 410, at 346 (4th ed. 1991).

3. 20 CFR §§ 404.1575(a)(2); 416.975(a)(2) reads:

your work activity, although not comparable to that of unimpaired individuals, is clearly worth $500 per month when considered in terms of its value to the business, or when compared to the salary that an owner would pay to an employee to do the work you are doing.

4. 20 CFR §§ 404.1520 and 416.920 both state in pertinent part:

(a) If you are doing substantial gainful activity, we will determine that you are not disabled.
(b) If you are working and the work you are doing is substantial gainful activity, we will find that you are not disabled regardless of your medical condition or your age, education, and work experience.

5. The ALJ found that the first test (404.1575(a)(1), 416.975(a)(1)) could not be applied because Harty’s farm was smaller than the average farm in the community. AR 19. In addition, the ALJ mentioned that the farm profits reported on Harty’s income tax returns before and after the injury were similar, but did not apply the third test (404.1575(a)(3), 416.975(a)(3)) in reaching her decision to deny benefits. AR 19. Harty does not argue that either of these two alternative tests should have been applied, but rather that the ALJ improperly concluded that the second test (404.1575(a)(2)) was met. See Plaintiff’s Brief at 11-15. 

6. There is no evidence in the record which shows that Harty’s management activities have declined since 1991.

7. In Mackey, the Court of Appeals stated: “Although we are not bound by the Appeals Council’s evaluation of this . . . evidence, we should give it considerable deference, at least when, as in this case it has support on the record.” 47 F3d at 953. 

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