DENISE K. LARUE, Magistrate Judge.
Plaintiff Steven M. Walton applied for disability benefits under the Social Security Act. The defendant Commissioner of Social Security denied his applications and Mr. Walton filed this suit for judicial review of those denials. The parties have briefed their positions and the matter is ready for decision. Upon the parties' consents, the assigned district judge referred this Cause to this magistrate judge to conduct all proceedings and to order entry of a final judgment. Notice, Consent, and Reference of a Civil Action to a Magistrate Judge [doc. 15]. This Entry explains the Court's reasons for ordering the separate judgment.
Judicial review of the Commissioner's factual findings is deferential: courts must affirm if her findings are supported by substantial evidence in the record. 42 U.S.C. § 405(g); Skarbek v. Barnhart, 390 F.3d 500, 503 (7th Cir. 2004); Gudgel v. Barnhart, 345 F.3d 467, 470 (7th Cir. 2003). Substantial evidence is more than a scintilla, but less than a preponderance, of the evidence. Wood v. Thompson, 246 F.3d 1026, 1029 (7th Cir. 2001). If the evidence is sufficient for a reasonable person to conclude that it adequately supports the Commissioner's decision, then it is substantial evidence. Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971); Carradine v. Barnhart, 360 F.3d 751, 758 (7th Cir. 2004). This limited scope of judicial review derives from the principle that Congress has designated the Commissioner, not the courts, to make disability determinations:
Young v. Barnhart, 362 F.3d 995, 1001 (7th Cir. 2004). Carradine, 360 F.3d at 758. While review of the Commissioner's factual findings is deferential, review of her legal conclusions is de novo. Jones v. Astrue, 623 F.3d 1155, 1160 (7th Cir. 2010).
The Social Security Act defines disability as the "inability to engage in any substantial gainful activity by reason of any medically-determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months . . . ." 42 U.S.C. § 423(d)(1)(A); 20 C.F.R. § 404.1505(a). 42 U.S.C. § 1382c(a)(3)(A); 20 C.F.R. § 416.905(a). A person will be determined to be disabled only if his impairments "are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work." 42 U.S.C. §§ 423(d)(2)(A) and 1382c(a)(3)(B). 20 C.F.R. §§ 404.1505, 404.1566, 416.905, and 416.966. The combined effect of all of an applicant's impairments shall be considered throughout the disability determination process. 42 U.S.C. § § 423(d)(2)(B) and 1382c(a)(3)(G). 20 C.F.R. §§ 404.1523 and 416.923.
The Social Security Administration has implemented these statutory standards in part by prescribing a "five-step sequential evaluation process" for determining disability. If disability status can be determined at any step in the sequence, an application will not be reviewed further. At the first step, if the applicant is currently engaged in substantial gainful activity, then he is not disabled. At the second step, if the applicant's impairments are not severe, then he is not disabled. A severe impairment is one that "significantly limits [a claimant's] physical or mental ability to do basic work activities." Third, if the applicant's impairments, either singly or in combination, meet or medically equal the criteria of any of the conditions included in the Listing of Impairments, 20 C.F.R. Pt. 404, Subpt. P, Appendix 1, Part A, then the applicant is deemed disabled. The Listing of Impairments are medical conditions defined by criteria that the Social Security Administration has pre-determined are disabling. 20 C.F.R. § 404.1525. If the applicant's impairments do not satisfy the criteria of a listing, then her residual functional capacity ("RFC") will be determined for the purposes of the next two steps. RFC is an applicant's ability to do work on a regular and continuing basis despite his impairment-related physical and mental limitations and is categorized as sedentary, light, medium, or heavy, together with any additional non-exertional restrictions. At the fourth step, if the applicant has the RFC to perform his past relevant work, then he is not disabled. Fifth, considering the applicant's age, work experience, and education (which are not considered at step four), and his RFC, the Commissioner determines if he can perform any other work that exists in significant numbers in the national economy. 42 U.S.C. § 416.920(a)
The burden rests on the applicant to prove satisfaction of steps one through four. The burden then shifts to the Commissioner at step five to establish that there are jobs that the applicant can perform in the national economy. Young v. Barnhart, 362 F.3d 995, 1000 (7th Cir. 2004). If an applicant has only exertional limitations that allow her to perform the full range of work at her assigned RFC level, then the Medical-Vocational Guidelines, 20 C.F.R. Part 404, Subpart P, Appendix 2 (the "grids"), may be used at step five to arrive at a disability determination. The grids are tables that correlate an applicant's age, work experience, education, and RFC with predetermined findings of disabled or not-disabled. If an applicant has non-exertional limitations or exertional limitations that limit the full range of employment opportunities at his assigned work level, then the grids may not be used to determine disability at that level. Instead, a vocational expert must testify regarding the numbers of jobs existing in the economy for a person with the applicant's particular vocational and medical characteristics. Lee v. Sullivan, 988 F.2d 789, 793 (7th Cir. 1993). The grids result, however, may be used as an advisory guideline in such cases.
An application for benefits, together with any evidence submitted by the applicant and obtained by the agency, undergoes initial review by a state-agency disability examiner and a physician or other medical specialist. If the application is denied, the applicant may request reconsideration review, which is conducted by different disability and medical experts. If denied again, the applicant may request a hearing before an administrative law judge ("ALJ").
As they relate to this case, disability benefits are available through three programs under the Social Security Act. Disability-insurance benefits ("DIB") are available to individuals who have become "insured" by working forty quarters and paying Social Security taxes. Supplemental-security income disability benefits ("SSI") are available to individuals based on financial need. Finally, an unmarried dependent child over the age of eighteen years is entitled to receive child's disability insurance benefits based on the earnings record of an insured parent who is entitled to disability benefits if the child has a disability that began before he became twenty-two years old. 42 U.S.C. § 402(d)(1); 20 C.F.R. § 404.350.
Mr. Walton's claims have taken a circuitous route to this point. On September 14, 2007 (protective filing date of August 24, 2007),
During the first hearing before an ALJ on his claims, Mr. Walton amended his onset date for his claims to January 10, 2008, and he and his counsel signed a motion to that effect. (R. 105-06, 274.) That date was chosen because it was the date of the first diagnosis in the record (as it was constituted at the time) by an acceptable medical source — a psychiatrist or psychologist — of a serious mental impairment
The ALJ issued her decision on February 25, 2010. Initially, she dismissed Mr. Walton's DIB and child-disability claims because the amended onset date of January 10, 2008 rendered both claims moot: that date was long after both May 12, 1984, Mr. Walton's twenty-second birthday, and March 31, 1998, the last day that he was insured for DIB. (R. 145.) Proceeding on only Mr. Walton's claim for SSI benefits, the ALJ found, at step two of the sequential evaluation process, that Mr. Walton has the severe impairments of type II diabetes, obesity, and schizoaffective disorder, bipolar type. At step three, she found that his impairments meet the criteria of listing 12.03 (schizophrenic, paranoid, and other psychotic disorders). (R. 147.) She found that the paragraph A severity criteria of the listing are satisfied because Mr. Walton has medically documented persistence, either continuous or intermittent, of delusions or hallucinations and she found that the criteria of paragraph B are satisfied because his impairments result in marked restrictions in activities of daily living and marked difficulties in maintaining social functioning. Because the listing criteria are satisfied, she found that Mr. Walton was disabled on his amended onset date of January 10, 2008. (R. 148.)
On April 28, 2010, about two months after the ALJ's decision was issued, Mr. Walton submitted a request to the ALJ to reopen the hearing and a request for the Appeals Council to review the ALJ's decision. (R. 215, 217.) His letter to the ALJ and his letter accompanying his request for review explained that, after the hearing, he obtained his prison psychiatric records for the period from November 1986 to November 1987, (R. 554-71),
In both of his letters, Mr. Walton specifically described three of the prison medical records. First, the report of a psychiatrist's evaluation of Mr. Walton on November 7, 1986 noted that, in 1984 (no further identification of the date), Mr. Walton's IQ was tested at the Reception Diagnostic Center
In his letter to the ALJ seeking reopening of her decision, Mr. Walton also stated that his child-disability claim required proof of disability onset before age twenty-two, or by March 12, 1984, while his DIB claim required an onset date before his date last insured, or March 31, 1998. (R. 215.) But the letter stated that, because the newly obtained prison medical records show that his disability began before the DIB deadline, he is entitled to receive "Social Security Disability Insurance benefits," (R. 215, 216); he did not assert that the records show that Mr. Walton's disability began before he reached twenty-two years of age and, therefore, that he also is entitled to child-disability benefits. Mr. Walton's letter accompanying his request for Appeals Council review did not mention child-disability benefits or the March 12, 1984 eligibility date; it argued only that the new evidence showed that his disability began before his eligibility for DIB expired on March 31, 1998. (R. 218-19.)
The ALJ did not reopen her decision but the Appeals Council granted Mr. Walton's request for review. It affirmed the ALJ's finding that he was disabled as of January 10, 2008, but vacated the decision with respect to the issue of disability before that date. The Council recognized that Mr. Walton had amended his alleged date of onset only because the prison medical records before that date had not been obtained. It found that the newly obtained prison medical records from 1986 and 1987 showed mental issues existing before Mr. Walton's date last insured of March 31, 1998, and, therefore, it decided to reopen Mr. Walton's claims. The Council instructed the ALJ on remand to consider new and material evidence in order to determine the severity of Mr. Walton's impairments prior to January 10, 2008 and to issue a new decision with respect to disability before that date. The Council did not specifically mention DIB, SSI, or child-disability benefits or restrict the ALJ on remand to an earliest possible onset date or to any closed period of consideration.
A new hearing was held on remand and a different ALJ issued two decisions: one on DIB and SSI benefits and the other on child-disability benefits. (R. 12 (DIB, SSI), 23 (child), 30 (child).)
(R. 16.) The last paragraph refers to the definitional criteria for satisfying listing 12.05, mental retardation: "significantly subaverage general intellectual functioning with deficits in adaptive functioning initially manifested during the developmental period; i.e., the evidence demonstrates or supports onset of the impairment before age 22." 20 C.F.R. Part 404, Subpart P, Appendix 1, Part A, § 12.05. Regarding the prison medical records, the ALJ wrote: "The records are from a remote period, twenty three years prior to the established onset, and there is no further treatment documented in the record until 2008. I have considered the Westville Correctional Center records and find they have no relevance to the later evidence of record." (R. 18.)
At step four, the ALJ found that Mr. Walton had no relevant past work. At step five, the ALJ found that there were a significant number of jobs in the national economy that he could perform with his RFC and vocational characteristics. He concluded that Mr. Walton was not not under a disability during his insured period from October 1, 1997 through March 31, 1998 and that he was not disabled for SSI purposes before January 10, 2008, the onset date determined by the first ALJ.
In his child-disability decision, the ALJ acknowledged that Mr. Walton alleged that his disability commenced before he was twenty-two years old. At step one, he found that, because Mr. Walton had demonstrated the ability to engage in substantial gainful activity after he attained age twenty-two years — earning $1,386.58 in 1988 and $11,776.03 in 1989, from landscape work — his claim must be denied. (R. 25.)
The Appeals Council denied Mr. Walton's request to review the decision, (R. 1),
(R. 671.) The stipulation and order do not mention separate determinations for DIB, SSI, and child-disability benefits. Instead, the Court ordered the Commissioner to determine whether an onset date earlier than January 10, 2008 can be determined, to obtain medical expert testimony on inferring an onset date, and to make a "new decision" for the period from Mr. Walton's first date of eligibility for DIB and his previously amended onset date (which does not include the requisite date for child-disability benefits).
The same ALJ who held the second hearing held a third hearing on remand. On July 23, 2013, he issued a decision on Mr. Walton's DIB and child-disability claims. He wrote that his decision addressed "the claimant's Title II [DIB] disability claim on his own earnings as well [as] his Title II claims for child's benefits based on his parents' records. The claimant is alleging disability since October 1, 1997.
At step two, the ALJ found that Mr. Walton has the severe impairments of borderline personality disorder and paranoid personality disorder. At step three, he found that Mr. Walton impairments meet the criteria of listing 12.05D, mental retardation. He found that the mental retardation manifested itself before age 22, based on his tested IQ between 60 and 70, and that his impairments cause marked restrictions in activities of daily living and marked difficulties in maintaining social functioning, (R. 687), which findings satisfy the criteria of listing 12.05D. The ALJ discussed only the 1986-1987 prison medical "treatment records," (R. 687), and cited them as the only evidence supporting his conclusion that listing 12.05D was met:
(R. 687.) The ALJ concluded that Mr. Walton is entitled to DIB, SSI, and child-disability benefits during the period October 1, 1997, to January 9, 2008. (R. 688.)
About one month later, on August 26, 2013, the ALJ issued a second decision amending his first decision because the first decision had "inadvertently" stated that Mr. Walton was entitled to child-disability benefits. Noting that a child's disability must have begun before attaining age twenty-two years, the ALJ found that he was not, in fact, entitled to child benefits: "[a]s the claimant was found to be disabled from October 1, 1997 to January 9, 2008, he is not entitled to Child Disability Benefits." (R. 699.)
Mr. Walton sought review by the Appeals Council but it found "no reason under our rules to assume jurisdiction." (R. 598.) However, in its decision, the Council declared that the ALJ properly denied child-disability benefits because Mr. Walton's disability had to have been established prior to May 13, 1984, and the ALJ found only that he was disabled during the "closed period" of October 1, 1997 to January 9, 2008. (R. 598-99.) It stated that the ALJ had "fully considered and evaluated the evidence and reached the appropriate conclusion on the issues regarding the finding of disability," and that his amended decision complied with both the district-court and Appeals-Council remand orders. (R. 599.) Mr. Walton then filed this suit for judicial review.
Mr. Walton makes one argument: the record evidence shows that he satisfied listing 12.05C before his twenty-second birthday, May 13, 1984, and the ALJ's contrary finding, that he is not eligible for child-disability benefits because he was not found disabled until the "closed period" beginning October 1, 1997, is not supported by substantial evidence and is the result of legal error. The Commissioner counters that the 1986-87 prison medical evidence of "a mental impairment imposing an additional and significant work-related limitation of function," which is required, in addition to an IQ score of 60 through 70, to meet listing 12.05C, "was dated after his attainment of age 22 in May 1984." Defendant's Memorandum in Support of the Commissioner's Decision [doc. 26] ("Response"), at 8. Although she concedes that the ALJ found that "the prison mental health records from 1986 and 1987 indicated that the 12.05D criteria were satisfied, in that the impairments caused at least two marked limitations in areas of functioning," she argues that "those records do not establish that the criteria were satisfied before Plaintiff attained age 22 in May 1984." Id., at 8-9. She also argues that Mr. Walton ignores the medical expert's testimony at the third hearing that the prison records showed marked limitations in social functioning and maintaining concentration, persistence, or pace for only the "closed period," not before Mr. Walton's twenty-second birthday. Id., at 9.
The court concludes that the ALJ's finding that Mr. Walton is not entitled to child-disability benefits is erroneous. In his first decision, the ALJ found that the 1986-87 prison medical records "confirm" that Mr. Walton had mental retardation which initially manifested before age 22 and those records "further confirm" that his impairments caused at least two marked limitations of function (which meant that the criteria of listing 12.05D were satisfied) during the period of October 1, 1997, through January 9, 2008. (R. 687.) Thus, the ALJ found that the prison medical records prove that the initial definitional criteria of the 12.00 listings for mental retardation — significantly sub-average general intellectual functioning, with adaptive-functioning deficits initially manifested before age twenty-two — are satisfied. It is only the listings' severity criteria and the disability onset date that are at issue.
The ALJ also found that the prison medical records show: (1) a psychiatric evaluation noted that Mr. Walton expressed paranoid delusions and seemed genuinely afraid; (2) he was diagnosed with acute paranoid disorder; and (3) a mental status evaluation "confirm[ed]" that he was borderline delusional in his relationships with others, his attention span was impaired, and he appeared to be highly dependent on others. (R. 687.) The ALJ found, based on an articulated evaluation of only the 1986-87 prison medical records, that Mr. Walton has the severe impairments of borderline personality disorder and paranoid personality disorder. (R. 686.) These and the other findings above directly relate to the criteria of 12.05C: an IQ of 60 through 70 together with another mental impairment imposing an additional and significant work-related limitation of function, i.e., another "severe" impairment, which he found existed at step two.
Dr. Paul Wiese, psychologist, testified as the medical expert at the hearing. The ALJ asked Dr. Wiese to summarize the psychological evidence "specifically as it pertains to the period from November 12, 1986 through November 16, 1987." (R. 620.) Dr. Wiese answered that, coupled with Mr. Walton's diagnosis of paranoid personality disorder and possible psychotic disorder, not otherwise specified, he "certainly did have anti-social traits of a significant nature which include anti-social behaviors, poor judgment, fighting, lack of insights, lack of empathy for other, et cetera." (R. 621.) He opined that that, "during that time period, there were sufficient symptoms to suggest that there was a psychosis and that falls under [listing] 12.03 [(schizophrenic, paranoid, and other psychotic disorders)] — in that time period." (R. 621.) He also confirmed that the recorded 1984 IQ score was valid, given Mr. Walton's grade equivalence with regard to his reading and math levels. (R. 622.) The ALJ later directed Dr. Wiese's testimony to Mr. Walton's condition during the "closed period" and Dr. Wiese opined that the records show that Mr. Walton was disabled during that period as well, but he did not modify his opinion regarding the earlier time period or testify as to any factors that differentiated Mr. Walton's condition or disability during the two time periods.
Based on these findings, the ALJ found that Mr. Walton was entitled to DIB, SSI, and child-disability benefits for the period October 1, 1997 to January 9, 2008. His sole basis for later eliminating Mr. Walton's entitlement to child-disability benefits is that his finding that Mr. Walton was disabled during the "closed period" from 1997 to 2008 did not constitute a finding that he became disabled in 1984, before he attained the age of twenty-two, which is a prerequisite for child-disability benefits. The ALJ believed that he was constrained to considering only this later closed period and was prohibited from determining whether Mr. Walton was disabled before his twenty-second birthday for two reasons. First, he wrote that this Court's order of remand that concluded the previous suit limited him to issuing a new decision only regarding the closed period. (R. 684.) Second, during the hearing, the ALJ stated that the issue of whether Mr. Walton was disabled before October 1, 1997 — including whether he was disabled in 1984 and, thus, entitled to child-disability benefits — already had been determined by a different judge, (R. 625, 627), and was, therefore, res judicata, "as [Mr. Walton's counsel] pointed out in the earlier hearing," (R. 629). The ALJ was mistaken.
This Court's Order of November 30, 2012, remanding Mr. Walton's claims to the Commissioner on the parties' agreed motion, did not restrict the Commissioner to determining Mr. Walton's entitlement to disability benefits only during the "closed period" of October 1, 1997 to January 9, 2008, and it did not foreclose Mr. Walton's claim for child-disability benefits. It is unfortunate that the parties, in their agreed motion and proposed order, and the Court, in its subsequent adoption of that that proposed order as its order of remand, did not provide specificity regarding Mr. Walton's separate claims for DIB, SSI, and child-disability benefits, and the ranges of possible onset dates for each. But it is clear that the terms of the remand order do not support the ALJ's narrow interpretation of it. The Court's first instruction to the Commissioner was to re-evaluate the prison medical records and consider whether they supported a disability onset date earlier than January 10, 2008. That instruction and open onset start date allowed the Commissioner to find that Mr. Walton's disability began before his twenty-second birthday. The Court's fourth instruction was to obtain, if warranted, medical expert testimony to assist in inferring an onset date, without mentioning any restriction to a date range or a particular disability program. That instruction also permitted a finding that Mr. Walton's disability began before his twenty-second birthday. The Court's fifth instruction was to make a new decision as to the closed period. Because the start date of the period, October 1, 1997, was the date that Mr. Walton first became insured for DIB, that instruction is best understood as requiring a new decision as to Mr. Walton's entitlement to DIB during his insured period. No reason has been advanced why the parties should have agreed to limit Mr. Walton's disability onset date to no earlier than his eligibility for DIB. Mr. Walton's arguments throughout the administration of his claim, and especially after the prison medical records were obtained, certainly suggest that such an agreement would be unlikely.
As noted above, Dr. Wiese, the medical expert, testified specifically that the prison medical records showed that Mr. Walton's diagnoses of paranoid personality disorder and possible psychotic disorder, and his anti-social behaviors, poor judgment, and other symptoms, were sufficient to support a psychosis that falls under listing 12.03 during the time period from November 1986 through November 1987, which was the time period about which the ALJ asked. Dr. Wiese also opined that Mr. Walton's 1984 tested IQ of 66 was likely accurate and was lifelong, meaning that it also accurately represented his IQ in 1984, before his twenty-second birthday. Even more, the ALJ found that the prison medical records proved that Mr. Walton's impairments satisfy a listing — although he felt himself constrained to apply that finding to only a much later period of time. His only reason for not applying that finding to the period before Mr. Walton attained twenty-two years of age — a period much closer to the dates of the prison medical findings than the "closed period" — is that the records were dated after Mr. Walton's twenty-second birthday. But it is a reasonable possibility that, if Mr. Walton satisfied a listing in November 1986, then he satisfied it two years earlier.
The ALJ's statement during the hearing that the question of whether Mr. Walton's disability began before age twenty-two is res judicata is not supported by the record. He referred to only "two prior applications that [Mr. Walton] filled out both of which . . . he did not appeal and they are long past since the time when those can be reopened." (R. 629.) Because nothing about the prior applications — e.g., the dates they were filed, the claims that were made, the evidence that was presented, the dates and findings of the final decisions — were identified by the ALJ or otherwise made part of the present record, the Court cannot find that the ALJ's assertion is supported by substantial evidence or is legally correct. The Court questions whether an earlier determination would preclude a new determination now that new and material evidence — Mr. Walton's prison medical records — was obtained and submitted during the pendency of the present application. To the extent that the ALJ refused to determine whether Mr. Walton's disability began before October 1, 1997, because he found that the issue was res judicata, his finding was erroneous.
Therefore, the Court finds that the ALJ's denial of Mr. Walton's claim for child-disability benefits is erroneous, not supported by substantial evidence, and the result of legal error. Specifically, the ALJ's refusal to determine whether Mr. Walton's disability began before he attained the age of twenty-two was erroneous.
Mr. Watson's claim for child-disability benefits will be remanded for reconsideration consistent with the above discussion and according to the following instructions:
