WILLIAM H. BAUGHMAN, JR., Magistrate Judge.
Before me
For the reasons set forth below, the decision of the Commissioner will be reversed and the matter remanded for further proceedings.
The facts in this matter are somewhat complex. I note first that this claim (Chorak 3) is connected to a prior proceeding arising from a 2012 application for disability insurance benefits (Chorak 2) that resulted in a 2106 decision by United States District Judge Lioi that reversed the Commissioner's decision to deny benefits and remanded the matter for further proceedings.
For present purposes, while the Chorak 2 application was just beginning the judicial review process, Chorak, in September 2015, filed a new application — i.e., this one (Chorak 3) — for disability insurance benefits.
The ALJ at that 2017 hearing, who was the same ALJ as at the 2014 hearing (Chorak 2), initially found that because of new medical evidence adduced since another ALJ's 2009 decision in Chorak 1, as well as new evidence of "claimant's recovery from his mental disorders" during that time, it "would not be appropriate to be bound, in their entirety," by the findings of the ALJ in Chorak 1.
The ALJ in the present matter initially found that new evidence required new findings at various steps of the sequential evaluation process:
Chorak essentially contests the changed findings of the ALJ at Steps One,
The Commissioner, in turn, argues that the ALJ correctly determined Chorak's income for both 2012 and 2014, that he reasonably concluded that the mental impairments were not severe and that any claim of a Step Four err was waived.
In note initially that Chorak's claims here are considered under the well-established substantial evidence standard.
Before proceeding further, I note that an additional aspect to the Step One argument was raised during oral argument. Specifically, that discussion concerned, in part, a claim — never briefed — that the ALJ erred as to finding substantial gainful activity for the years 2012 and 2016 because the ALJ examined those years without a mandate to do so in the remand and/or any notice to the parties that such re-examination would occur.
In that regard, it is important to keep in mind, as I have previously found, that Social Security claimants are entitled to due process at the hearing level because they have a property interest in any potential benefit.
That said, an ALJ on remand is not limited to only addressing issues discussed by the district court and specifically given as the basis for the remand.
The key here is that any such reconsideration be in a manner that affords due process.
The Sixth Circuit recently considered due process as it concerned claims for Social Security benefits in the case of Hicks v. Commissioner of Social Security.
In light of the indication of fraud by counsel, the Commissioner decided to redetermine if benefits should be awarded.
Hicks's claim on appeal was that due process in her case required, at a minimum, that she have been given a fair opportunity to rebut the Commissioner's fact assumption — that the original medical submissions were tainted by fraud — before a neutral decisionmaker.
In this case the ALJ at the 2017 hearing after the remand specifically discussed Chorak's work history for 2016. In particular, the ALJ brought up on the record that Chorak had received an insurance license with Mutual of Omaha in March 2016.
This record shows conclusively that the ALJ brought up at the 2017 the issue of whether Chorak had substantial gainful activity (SGA) during 2016. Further, in that regard the ALJ invited Chorak's counsel to submit tax information for 2016 for the record. Given this on the record discussion and the fact that Chorak's counsel made no objection, counsel cannot here claim a due process violation occurred when the ALJ, without notice or a chance to respond, undertook to examine whether Chorak had substantial gainful activity for 2016. Indeed, as I noted in an earlier decision, "[i]t is again difficult to find a reversible due process violation in actions taken with full knowledge of counsel but without objection."
The same reasoning does not exactly apply for the year 2012. For that year, both parties now agree that no new evidence came into the record. Thus, there is no evidence in the 2017 hearing transcript that the ALJ had any intention of re-examining the SGA finding for 2012. Still, the Hicks template provides the analytical way forward as to 2012. Most importantly, Hicks focuses on the need for due process to rebut "fact findings" or assumptions that, if not contested, could be the basis for a denial of benefits. For the year 2012, as noted, no new facts came into the record. Rather, the ALJ in 2017 re-determined 2012 SGA from existing facts. As such, Chorak's remedy is not to assert that he was denied a chance to challenge before the ALJ any erroneous factual assumption by the Commissioner but is precisely the one he is now employing — to seek judicial review of the 2012 SGA re-determination by this Court on the grounds that it was not supported by substantial evidence understood in light of the correct legal standard.
In sum, I find no due process violations in how the ALJ considered Chorak's SGA for 2012 and 2016.
Having addressed the process argument as to Step One, I now consider the substantive claim that the ALJ erroneously determined that Chorak's income in 2012 and 2016 constituted substantial gainful activity.
The ALJ in his 2014 decision prior to the remand dealt with Chorak's income during 2011 and 2012 by simply finding that while the record showed that Chorak had income for this period that "approached SCA levels," there were few specifics related to that activity.
By contrast, in the 2017 decision the ALJ found that Chorak had SGA during 2012 because he earned $11, 261.00 "from a brief period of work writing an annuity policy."
The specific evidence that Chorak had written the annuity policies in 2012 was, in fact, new testimony from the 2017 hearing. The ALJ in 2014 explicitly made note in the opinion of the fact that "[Chorak] testified that he did some work in 2011 and 2012 writing annuities for a few clients."
Thus, when Chorak clarified at the 2017 hearing that the income from writing annuities was actually generated during a "brief period of work" in 2012, the ALJ was able to remove any prior uncertainty as to the exact time period involved and then properly place the annuity income in the year 2012.
As such, that is a substantial change in the factual basis for calculating SGA from the 2014 opinion. Yet this fact change was done through testimony given on the record by Chorak with his attorney present. Thus, no due process violation occurred.
The finding that Chorak's income during 2012 constituted SGA depends on the application of SSR 83-34. In that regard, I observe initially that the ALJ did not reference this standard in his opinion nor did he undertake to "show his work" as to how that standard applied to Chorak.
The mere amount of gross income is not determinative of substantial income as defined by the regulations. As the Court found in stated in Young v. Colvin,
Only then is that annual countable income analyzed to see if it is "substantial." Substantial income at that step is found by determining: (a) if the average monthly amount from the yearly countable income is greater than the monthly amount set out in the regulations, or (b) if the monthly average is less than the amount given in the regulation, is the actual monthly average nonetheless comparable to what it was prior to the onset of the claimant's disability or comparable to the monthly average of unimpaired persons in the same community doing the same or similar work.
As the above analytical formula makes plain, "[f]or self-employed individuals, [gross] income is not a dispositive factor...."
In particular, as Chorak points out, the monthly average of his countable income for 2016 was $972.91, which is below the guideline figure of $1130.00 per month, and the monthly average for countable income in 2012 was $907.91, or below the guideline figure of $1010.00.
The absence of any such analytical findings by the ALJ compel the conclusion that the Step One findings are not supported by substantial evidence.
These arguments center on the weight given to various medical opinions and the resulting formulation of the RFC. Essentially, this matter centers on the fact that the ALJ gave only little weight to functional opinions by treating physician Dr. Christopher Stetler, D.O.
I begin by observing that this matter was previously remanded, in substantial part, because the ALJ failed to articulate good reasons for discounting Dr. Stetler's opinion.
1. physical examination findings, including those of Dr. Stetler, consistently showed "preserved strength, reflexes, coordination, sensation and gait;"
2. diagnostic imaging showed only age-commensurate degenerative changes in the spine that did not require surgery;
3. Chorak's daily activities show that he can continue to work, maintain his house and have part-time custody of a minor child.
My analysis here begins by noting the March 2016 findings of Dr. Lin of the Cleveland Clinic, who examined an MRI of Chorak's back and gave a provisional diagnosis of "mechanical back pain, degenerative disc disease and disk protrusion."
Dr. Savage's diagnosis of chronic pain syndrome as an examining consulting physician was neither acknowledged or discussed by the ALJ.
I also observe that the functional opinion given the greatest weight here is that of a non-examining source that only reviewed records through January 2013. Non-examining sources may be given greater weight than examining sources in cases where the non-examining source has reviewed the complete record.
Here, the decision to give greater weight to the non-examining source that did not review the entire record was not explained and so must be reversed as not supported by substantial evidence. In addition, the presence of an unacknowledged and unanalyzed diagnosis by the most recent expert to consider the medical evidence makes it difficult to conclude that the RFC is supported by substantial evidence. If credited, a diagnosis of chronic pain syndrome synthesizes reports of largely normal physical findings regarding Chorak's back with ongoing reports of disabling pain, and does so without having to characterize the pain as a "misrepresentation" that doesn't "correlate with the objective findings."
Therefore, for the reasons stated, the decision of the Commissioner in this case is reversed and the matter remanded for further proceedings consistent with this opinion.
IT IS SO ORDERED.