Collins v. Social Security Administration, Commissioner
MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 7/25/2017. (JLC)
2017 Jul-25 PM 04:50
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
) Case No.: 4:16-CV-01149-VEH
NANCY A. BERRYHILL, ACTING )
Plaintiff Jahala Collins (“Ms. Collins”) brings this action under 42 U.S.C.
§ 405(g), Section 205(g) of the Social Security Act. She seeks review of a final
adverse decision of the Commissioner of the Social Security Administration
(“Commissioner”),1 who denied her application for disability insurance benefits
(“DIB”). Ms. Collins filed an application for DIB on November 10, 2013. Thereafter,
she pursued and exhausted the administrative remedies available before the
Nancy A. Berryhill was named the Acting Commissioner on January 23, 2017. See
https://www.ssa.gov/agency/commissioner.html. Under 42 U.S.C. § 405(g), “[a]ny action
instituted in accordance with this subsection shall survive notwithstanding any change in the
person occupying the office of Commissioner of Social Security or any vacancy in such office.”
Accordingly, pursuant to 42 U.S.C. § 405(g) and Rule 25(d) of the Federal Rules of Civil
Procedure, the Court has substituted Nancy A. Berryhill for Carolyn W. Colvin in the case
caption above and HEREBY DIRECTS the clerk to do the same party substitution on CM/ECF.
Commissioner. Accordingly, this case is now ripe for judicial review pursuant to the
provisions of section 205(g) of the Social Security Act (the “Act”), 42 U.S.C. §
The sole function of this court is to determine whether the decision of the
Commissioner is supported by substantial evidence and whether proper legal
standards were applied. Bloodsworth v. Heckler, 703 F.2d 1233, 1239 (11th Cir.
1983). To that end this court “must scrutinize the record as a whole to determine if
the decision reached is reasonable and supported by substantial evidence.”Id.
Substantial evidence is “such relevant evidence as a reasonable person would accept
as adequate to support a conclusion.” Id. The court has carefully reviewed the entire
record in this case and is of the opinion that the Commissioner failed to apply the
correct legal standard. Accordingly, the decision of the Commissioner is due to be
FACTUAL AND PROCEDURAL HISTORY
On October 23, 2013, Ms. Collins filed a Title II application for a period of
disability and DIB, alleging disability beginning September 30, 2012. (Tr. 86). Her
claim was denied initially on March 10, 2014. (Tr. 101). Ms. Collins made a request
for a hearing that was completed on March 13, 2014. (Tr. 107). On October 19, 2015,
Ms. Collins appeared and testified at a hearing before an ALJ. (Tr. 32).
On February 12, 2016, the ALJ issued an unfavorable decision declaring that
Ms. Collins was not disabled and denying her DIB claim. (Tr. 11-26). Ms. Collins
timely requested further review by the Appeals Council (Tr. 7), which was denied on
May 12, 2016. (Tr. 1).
STANDARD OF REVIEW
The court’s review of the Commissioner’s decision is narrowly circumscribed.
The function of this court is to determine whether the decision of the Commissioner
is supported by substantial evidence and whether proper legal standards were applied.
Richardson v. Perales, 402 U.S. 389, 390 (1971); Wilson v. Barnhart, 284 F.3d 1219,
1221 (11th Cir. 2002). This court must “scrutinize the record as a whole to determine
if the decision reached is reasonable and supported by substantial evidence.”
Bloodsworth, 703 F.2d at 1239. This court will determine that the ALJ’s opinion is
supported by substantial evidence if it finds “such relevant evidence as a reasonable
person would accept as adequate to support a conclusion.” Id. Substantial evidence
is “more than a scintilla, but less than a preponderance.” Id. Factual findings that are
supported by substantial evidence must be upheld by the court. The ALJ’s legal
conclusions, however, are reviewed de novo, because no presumption of validity
attaches to the ALJ’s determination of the proper legal standards to be applied. Davis
v. Shalala, 985 F.2d 528, 531 (11th Cir. 1993). If the court finds an error in the ALJ’s
application of the law, or if the ALJ fails to provide the court with sufficient
reasoning for determining that the proper legal analysis has been conducted, the
ALJ’s decision must be reversed. Cornelius v. Sullivan, 936 F. 2d 1143, 1145-46
(11th Cir. 1991).
STATUTORY AND REGULATORY FRAMEWORK
To qualify for disability benefits and establish his or her entitlement for a
period of disability, a claimant must be disabled as defined by the Social Security Act
and the Regulations promulgated thereunder.2 The Regulations define “disabled” as
“the inability to do 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
twelve (12) months.” 20 C.F.R. § 404.1505(a). To establish an entitlement to
disability benefits, a claimant must provide evidence about a “physical or mental
impairment” that “must result from anatomical, physiological, or psychological
abnormalities which can be shown by medically acceptable clinical and laboratory
diagnostic techniques.” 20 C.F.R. § 404.1508.
The Regulations provide a five step process for determining whether a claimant
The “Regulations” promulgated under the Social Security Act are listed in 20 C.F.R.
Parts 400 to 499, revised as of April 13, 2017.
is disabled. 20 C.F.R. § 404.1520(a)(4)(i-v). The Commissioner must determine in
(1) whether the claimant is currently employed;
(2) whether the claimant has a severe impairment;
(3) whether the claimant’s impairment meets or equals an impairment
listed by the [Commissioner];
(4) whether the claimant can perform his or her past work; and
(5) whether the claimant is capable of performing any work in the
Pope v. Shalala, 998 F.2d 473, 477 (7th Cir. 1993) (citing to formerly applicable
C.F.R. section), overruled on other grounds by Johnson v. Apfel, 189 F.3d 561, 56263 (7th Cir. 1999); accord McDaniel v. Bowen, 800 F.2d 1026, 1030 (11th Cir. 1986).
The sequential analysis goes as follows:
Once a claimant has satisfied steps One and Two, [he] will automatically
be found disabled if [he] suffers from a listed impairment. If the
claimant does not have a listed impairment but cannot perform [his]
work, the burden shifts to the [Commissioner] to show that the claimant
can perform some other job.
Pope, 998 F.2d at 477; accord Foote v. Chater, 67 F.3d 1553, 1559 (11th Cir. 1995).
The Commissioner must further show that such work exists in the national economy.
FINDINGS OF THE ADMINISTRATIVE LAW JUDGE
After consideration of the entire record, the ALJ made the following findings:
The claimant meets the insured status requirements of the Social
Security Act through December 31, 2017. (Tr. 13).
Although the claimant alleged an onset date of September 30,
2012, the undersigned finds that the claimant engaged in
substantial gainful activity from January 1, 2011, to at least
December 31, 2012, and likely thereafter.3 (20 C.F.R. § 404.1571
et seq.). (Tr. 13).
There has possibly been a continuous 12-month period during
which the claimant did not engage in substantial gainful activity.
The remaining findings address that period. (Tr. 16).
The claimant has the following severe impairments: mild chronic
kidney disease; obesity; neuropathy, NOS; status post possible
Lyme disease infection; osteoarthritis/Lyme arthritis;
degenerative disc disease of the lumbar spine; and chronic
sinusitis. (20 C.F.R. § 404.1520(c)). (Tr. 14).
The claimant does not have an impairment or combination of
impairments that meets or medically equals the severity of one of
the listed impairments in 20 C.F.R. Part 404, Subpart P, Appendix
1. (20 C.F.R. § 404.1520(d), § 404.1525, § 404.1526). (Tr. 18).
After careful consideration of the entire record, the undersigned
finds that the claimant has the residual functional capacity to
perform light work4 as defined in 20 C.F.R. § 404.1567(b) except
Ms. Collins originally alleged a disability onset date of September 30, 2012. (Doc. 8 at
1). However, in her brief, she has conceded that the ALJ was correct in finding that her
ownership of the consignment store, “Bargains 4U” (Tr. 13), with the period ending on
December 31, 2012, qualified as substantial gainful activity for step one of the disability analysis.
(Doc. 8 at 11-12). Therefore, Ms. Collins recognized that the ALJ correctly adjusted her
disability onset date to December 31, 2012, and determined that she could not be found disabled
prior to that date. (Doc. 8 at 11).
Light work “involves lifting no more than 20 pounds at a time with frequent lifting or
carrying of objects weighing up to 10 pounds. Even though the weight lifted may be very little, a
job is in the category when it requires a good deal of walking or standing, or when it involves
she can frequently climb ramps and stairs but never climb ladders
or scaffolds. This person can frequently balance but can only
occasionally stoop, crouch, kneel and crawl. This individual
should never be exposed to unprotected heights, dangerous
machinery, dangerous tools or hazardous processes and should be
exposed to no more than moderate noise levels. In addition to
normal workday breaks, this person would be off-task up to five
percent of an eight-hour workday, in non-consecutive minutes.
The claimant is capable of performing past relevant work as a
consignment store operator. This work does not require the
performance of work-related activities precluded by the
claimant’s residual functioning capacity. (20 C.F.R. § 404.1565).
The claimant has not been under a disability, as defined in the
Social Security Act, from September 30, 2012, through the date
of this decision. (20 C.F.R. § 404.1520(f)). (Tr.26).
The ALJ erred in using Ms. Collins’s gross income instead of her net
income in determining if her consignment owner job was SGA.
The court may only reverse a finding of the Commissioner if it is not supported
by substantial evidence. 42 U.S.C. § 405(g). “This does not relieve the court of its
responsibility to scrutinize the record in its entirety to ascertain whether substantial
evidence supports each essential administrative finding.” Walden v. Schweiker, 672
sitting most of the time with some pushing and pulling of arm or leg controls. To be considered
capable of performing a full or wide range of light work, you must have the ability to do
substantially all of these activities. If someone can do light work, we determine that he or she can
do sedentary work, unless there are additional limiting factors such as loss of fine dexterity or
inability to sit for long periods of time.” 20 C.F.R. § 404.1567.
F.2d 835, 838 (11th Cir. 1982) (citing Strickland v. Harris, 615 F.2d 1103, 1106 (5th
Cir. 1980)).5 However, the court “abstains from reweighing the evidence or
substituting its own judgment for that of the [Commissioner].” Id. (citing Laffoon v.
Califano, 558 F.2d 253, 254 (5th Cir. 1977)).
As stated above, this court has a duty to review all legal standards used by the
ALJ de novo. Davis, 985 F.2d at 531. Upon review, the undersigned has determined
that the ALJ committed reversible error in analyzing Ms. Collins’s previous
employment as a consignment store owner. In order for a self-employed individual
to have engaged in SGA, he or she must have “render[ed] services that are significant
to the operation of the business and received substantial income from the business.”
20 C.F.R. § 404.1575(a)(2)(i) (emphasis added). “Significant service” is defined as
“contribut[ing] more than half the total time required for the management of the
business, or  render[ing] management services for more than 45 hours a month
regardless of the total management time required by the business.” 20 C.F.R. §
404.1575(b).6 Further, the C.F.R. articulates that in order to determine “substantial
Strickland is binding precedent on this Circuit. See Bonner v. City of Prichard, 661
F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting as binding precedent all decision of the
former Fifth Circuit handed down prior to October 1, 1981).
Because of the ALJ’s legal error in determining substantial income as set out below,
this court declines to provide any conclusion regarding the “hours worked” aspect of the ALJ’s
SGA analysis. On remand, the ALJ should develop the record more fully and determine which
business activities performed by Ms. Collins were specifically managerial duties and how many
income,” the ALJ must “deduct [Ms. Collins’s] normal business expenses from [her]
gross income to determine net income;” the net income figure being the one applied
to the SGA standard. 20 C.F.R. § 404.1575(c)(1).
In this case, in determining if Ms. Collins’s consignment shop owner job was
SGA, the ALJ assessed her income by using her gross income as the final, applicable
amount, not the required net income. (See Tr. 15-16 “Her business generated a
substantial income in 2011 and 2012 as she had $16,474 of gross income from
BARGAINS4U in 2011 and $20,251 of gross income in 2012.” (citation omitted)).
This was error. On the record, the court cannot determine whether or not that legal
mistake constitutes harmless error. Cf. Diorio v. Heckler, 721 F.2d 726, 728 (11th
Cir. 1983) (applying harmless error doctrine when mistake made by ALJ did not alter
the outcome). For the reasons articulated above, this case is to be remanded.
The court finds that the ALJ committed reversible error in his disability
analysis by using Ms. Collins’s gross income to determine that her consignment
owner job was SGA. Accordingly, the decision of the Commissioner will be
remanded by separate order.
hours per week she spent on those duties.
DONE and ORDERED this the 25th day of July, 2017.
VIRGINIA EMERSON HOPKINS
United States District Judge
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