Hawrelak v. Commissioner of Social Security
Filing
51
OPINION: Plaintiff's Objections to the Magistrate Judge's Report and Recommendation 48 are OVERRULED. The Report and Recommendation 47 is ACCCEPTED AND ADOPTED as the Opinion and Order of the Court, subject to the modifications of the Statement of Facts. Defendant's Motion for Summary Affirmance 44 is GRANTED. Plaintiff's Motion for Summary Judgment 41 is DENIED. This case is CLOSED. (SEE WRITTEN OPINION) Entered by Judge Sue E. Myerscough on 9/30/2015. (GL, ilcd)
E-FILED
Wednesday, 30 September, 2015 04:42:50 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
RONALD M. HAWRELAK,
Plaintiff,
v.
CAROLYN W. COLVIN, Acting
Commissioner, Social Security
Administration,
Defendant.
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No. 13-cv-3026
OPINION
SUE E. MYERSCOUGH, U.S. District Judge:
Now before this Court are cross motions for summary
judgment (d/e 41, 44), the Report and Recommendation of United
States Magistrate Judge Tom Schanzle-Haskins (d/e 47), Plaintiff’s
Objections to the Report and Recommendation (d/e 48),
Defendant’s response to the objections (d/e 49), and Plaintiff’s
reply (d/e 50).
Upon careful review of the record and the pleadings, the Court
will OVERRULE the objections, and ACCEPT and ADOPT the Report
and Recommendation as the ORDER and OPINION of the Court,
subject to modifications of the Statement of Facts to be noted.
I. LEGAL STANDARD
The Court’s standard of review for a magistrate judge’s report
and recommendation depends upon whether a party files
objections. If a party does not object to the report and
recommendation, the Court need not conduct a review by any
standard. See Lardie v. Birkett, 221 F.Supp.2d 806, 807
(E.D.Mich.2002). If a party does object to portions of the report and
recommendation, pursuant to Federal Rule of Civil Procedure
72(b)(3), this Court determines “de novo any part of the magistrate
judge’s disposition that has been properly objected to.” Although
this Court does not need to conduct a new hearing on the entire
matter, the Court must give “fresh consideration to those issues to
which specific objections have been made.” 12 Charles Alan
Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and
Procedure § 3070.2 (2d ed. 1997); Wasserman v. Purdue Univ. ex
rel. Jischke, 431 F.Supp.2d 911, 914 (N.D. Ind. 2006).
Page 2 of 33
This Court may “accept, reject, or modify the recommended
disposition; receive further evidence; or return the matter to the
magistrate judge with instructions.” Fed.R.Civ.P. 72(b)(3).
Here, the Plaintiff made objections to the report and
recommendation, so the Court will review those aspects of the
report de novo.
In the Court’s de novo review of the ALJ’s decision, adopted by
the Appeals Council, the standard of review for the ALJ’s findings
adopted by the Appeals Council, is substantial evidence.
Substantial evidence is “‘such relevant evidence as a reasonable
mind might accept as adequate’” to support the decision.
Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). The
standard of review for procedural errors is harmless error, or
whether the error is such that the Court believes it may change the
ultimate decision of the ALJ or Appeals Council. McKinzey v.
Astrue, 641 F.3d 884, 892 (7th Cir. 2011)
([A]dministrative error may be harmless: we will not remand a case
to the ALJ for further specification where we are convinced that
the ALJ will reach the same result.”)
Page 3 of 33
II. BACKGROUND
The Court adopts the factual findings made by the Magistrate
Judge, subject to those facts which have been revised in the below
summary:
Plaintiff Ronald M. Hawrelak (Hawrelak) was born in Canada
on June 21, 1940. From 1966 to 1976, he worked in Canada for
Avco Financial Services (Avco). Canadian law requires both
employees and their employers to make equal contributions to the
Canadian Pension Plan based on the employee’s earnings. In 1976,
Hawrelak moved to the United States. He worked in the United
States from 1976 until his retirement in 2005. Hawrelak became a
United States citizen in 1993.
On October 4, 2005, Hawrelak applied for Social Security
Retirement benefits. He also applied for retirement benefits from
Canada. On November 9, 2005, the Canada Pension Plan informed
Hawrelak that his application was approved and he was eligible for
a monthly pension of $278.93 (Canadian), beginning December
2005. On December 9, 2005, The Social Security Administration
(SSA) awarded Hawrelak $1625.00 per month in benefits to begin in
December 2005.
Page 4 of 33
On February 26, 2006, Hawrelak notified the SSA that he was
approved for retirement benefits from Canada, and asked for
confirmation that his Social Security benefits would not be reduced.
Hawrelak received no direct response to this letter; however on
June 19, 2007, the SSA issued him a Notice of Change in Benefits.
This notice explained that the Windfall Provision applied to
Hawrelak’s benefits offering because he is “entitled to a pension
based on work which is not covered by Social Security,” no doubt
referring to the Canadian Pension Plan. R. 106. The SSA reduced
Hawrelak’s monthly benefits to $1483.40 and informed him that he
had been overpaid $2400.00.1
Hawrelak challenged the applicability of the Windfall Provision
to his Canadian pension, arguing that it was not a pension subject
to 42 U.S.C. § 415(a)(7)(A), but rather a secondary retirement plan
based only on employee contributions, excepted by POMS RS
00605.364(A)(1). Hawrelak claims that Avco did not make
contributions to this plan, relying on the November 9, 2005 notice
from the Canada Pension Plan, which stated that his benefits were
Because SSA later waived collection of the overpayment, the Court will not
address the matter in this opinion.
1
Page 5 of 33
calculated on the record of “your contributions and earnings
contained in the Canada Pension Plan.” He concluded from this
language that only he and not Avco contributed to the plan.
Additionally, he relied on a document entitled “Your Canada
Pension Plan Statement of Contributions.” This statement charted
his personal contributions to the plan each year, as well as his
pensionable earnings. The statement does not include any
contributions from Avco or any other employer, but in a footnote
states:
You and your employer each paid contributions of 4.95%
on your earnings between the minimum of $3,500 and the
maximum of $46,300 for 2009. These are called “pensionable
earnings.” Self-employed individuals paid contributions of
9.9% on these amounts.
An Administrative Law Judge (ALJ) held a hearing on
Hawrelak’s case on March 10, 2009, and issued an opinion on
March 24, 2009. The ALJ held that the Windfall Provision applied,
and the benefits calculations were correct. Hawrelak requested that
the ALJ decision be reviewed by the Appeals Council, but the
Appeals Council denied his request.
Hawrelak initially brought this action to seek judicial review of
the Appeals Council’s denial; however, this Court remanded the
Page 6 of 33
matter to the Commission because the Commission had lost the
tape recording of the administrative hearing. The Court ordered a
de novo hearing under 42 U.S.C. § 405(g). A second hearing was
held before the ALJ on April 15, 2014. The ALJ issued a
Recommended Decision on May 5, 2014. The ALJ again held that
the Windfall Provision applied and the benefits calculations were
correct. Additionally, the ALJ addressed the individual questions
and contentions listed in a summary of the case that Hawrelak
provided in advance of the April 15th hearing.
On May 9, 2014, the Appeals Council issued an Unfavorable
Decision referring to the same hearing in the name of Doris
Hawrelak, Hawrelak’s wife. Doris Hawrelak also challenged a
benefits reduction based on Hawrelak’s earnings, but she is not a
party to this case. On August 20, 2014, the Appeals Council issued
an order vacating the Unfavorable Decision in the name of Doris
Hawrelak, and issued its own decision, adopting the Recommended
Decision of the ALJ issued to Ronald Hawrelak.2
In the Report and Recommendation, the Statement of Facts states that the
Appeals Council vacated the ALJ decision and entered its own decision which
adopted the facts and findings of the ALJ. The Appeals Council actually took
two separate actions as noted here: (1) vacating the decision issued to Doris
2
Page 7 of 33
Hawrelak had submitted a number of exceptions to the
Recommended Decision to the Appeals Council, and the Council
addressed all of these exceptions. In regard to the exceptions
submitted by Hawrelak, alleging that the ALJ “abused her power
and was lawless, unfair, incompetent and bias,” the Appeals
Council “determined that there was no abuse of discretion.” R. 8.
The Appeals Council ultimately decided that the Windfall provision
was correctly applied and that the calculations of Hawrelak’s
benefits were accurate. R. 9.
On September 11, 2014, the Commissioner moved for the
Court to lift the stay on this case (d/e 36) and the motion was
granted. After the Commissioner answered Hawrelak’s complaint
(d/e 39), both parties moved for Summary Judgment (d/e 41,44).
On May 7, 2015, United States Magistrate Judge Tom SchanzleHaskins issued a Report and Recommendation finding that the
Appeals Council’s decision is supported by substantial evidence and
that any procedural errors in the process were harmless (d/e 47).
III. ANALYSIS
Hawrelak; and (2) issuing a decision, adopting the Recommended Decision of
the ALJ issued to Ronald Hawrelak.
Page 8 of 33
In Hawrelak’s Response to the Magistrate Judge’s Report and
Recommendation, he raises 37 objections to Judge SchanzleHaskin’s recommendation (d/e 48). These 37 objections can best
be broken down into seven categories of review for this Court.
Hawrelak makes three substantive objections to the Magistrate
Judge’s Report and Recommendation: (1) the report includes
factual errors in its Statement of Facts; (2) the ALJ’s decision
adopted by the Appeals Council is not supported by substantial
evidence; and (3) the Magistrate Judge improperly substituted his
own judgment within his review of the Appeals Council’s decision.
Hawrelak also objects to the Magistrate Judge’s finding that the
procedural errors in the process were harmless, citing four errors:
(1) the April 15, 2015 hearing was not a proper de novo hearing; (2)
Hawrelak was unable to properly make exceptions to the ALJ’s
decision before the Appeals Council’s review; (3) the review
procedure afforded Hawrelak, as a whole, is inadequate; and (4) the
ALJ abused her discretion during the April 15, 2014 hearing.
A. Any Factual Errors Made in the Report and
Recommendation are Harmless.
Page 9 of 33
Hawrelak raises several objections to the Statement of Facts in
the Report and Recommendation. The Court finds that none of
these objections affect the legal findings of the Magistrate Judge,
and therefore are harmless error.3 In his first and twenty-fourth
objections, Hawrelak notes that the Magistrate Judge stated, “On
August 20, 2014, the Appeals Council vacated the ALJ’s decision
and entered its own decision.” The actions of the Appeals Council
were twofold. First, the Appeal’s Council acted upon the
Unfavorable Decision sent to Doris Hawrelak, Hawrelak’s wife,
which was issued in error by the ALJ. See R. 16. The Appeals
Council vacated this errant decision. R. 10. Second, the Appeals
Council acted on the ALJ’s properly issued Recommended Decision.
See R. 17. The Appeals Council entered its own decision, adopting
the findings and conclusions of the Recommended Decision, which
constitutes the final decision of the Commissioner. R. 8-9.
However, this lack of clarity regarding the Appeals Council’s actions
does not change the Magistrate Judge’s correct understanding that
the Unfavorable Decision issued by the Appeals Council, which
Proper modifications of these facts have been included in the Background of
this opinion. See Part II.
3
Page 10 of 33
adopted the facts and findings of the ALJ’s Recommended Decision,
was the final decision of the Commissioner. As such, any error is
harmless.
In his third objection, Hawrelak notes that the Notice of Change
in Benefits does not refer specifically to the Canada Pension Plan,
but rather “a pension based on work which is not covered by Social
Security.” R. 106-109. Hawrelak is correct about the wording of
the notice; however, it is clear from these proceedings that the
notice is referring to Hawrelak’s pension from the Canada Pension
Plan. Nevertheless, the Magistrate Judge’s findings did not rely on
his understanding of the Notice of Change, but rather on the
footnote from the Statement of Contributions submitted by
Hawrelak—which reads, “You and your employer each paid
contributions”— and his analysis of Canadian law. Therefore, any
error here is also harmless.
Finally, in Hawrelak’s seventeenth and twenty-third objections,
he notes that the Report and Recommendation cites to the
Unfavorable Decision issued to Doris Hawrelak, which was vacated
by the Appeals Council, rather than the Recommended Decision
issued to Ronald Hawrelak, which was adopted by the Appeals
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Council, when putting forth its Statement of Facts. See (d/e 47).
Hawrelak is correct in his statement; however the two decisions are
identical. See R. 53-72, 75-94. Therefore, any error is again
harmless.
B. The ALJ’s Decision, Adopted by the Appeals Council, is
Supported by Substantial Evidence.
In Hawrelak’s seventh, thirteenth, twenty-first, twenty-fifth,
twenty-sixth, twenty-seventh, thirty-second, thirty-fourth, and
thirty-sixth objections, he argues that the Magistrate Judge erred in
his finding that the decision of the ALJ, adopted by the Appeals
Council, is supported by substantial evidence. Because this
Court’s review of Hawrelak’s objections is de novo, this Court
reviews the decision. See, e.g., Welsh v. Halter, 170 F. Supp. 2d
807, 816 (N.D. Ill. 2001). Substantial evidence is “‘such relevant
evidence as a reasonable mind might accept as adequate’” to
support the decision. Richardson v. Perales, 402 U.S. 389, 401
(1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229
(1938)).
This Court must accept the ALJ’s findings if they are
supported by substantial evidence and may not reweigh the
Page 12 of 33
evidence or substitute the Court’s own judgment for that of the ALJ
or Appeals Council. See Delgado v. Bowen, 782 F.2d 79, 82 (7th
Cir. 1986). The ALJ and Appeals Council must articulate at least
minimal analysis of all relevant evidence. See Herron v. Shalala, 19
F.3d 329, 333 (7th Cir. 1994).
i.
The ALJ’s Finding That the Windfall Exception
Applies to Hawrelak’s Case is Supported by
Substantial Evidence.
Hawrelak’s retirement benefits are subject to the Windfall
Provision. The Windfall Provision applies if: (1) the claimant
becomes eligible for Social Security old-age benefits after 1985; and
(2) for the same months after 1985 that the claimant is eligible for
these old-age benefits, he is also entitled to “a monthly pension(s)
for which [he] first became eligible after 1985 based in whole or in
part on [his] earnings in employment which was not covered under
social security.” 20 C.F.R. § 404.213.
Hawrelak does not contest that he first became eligible for
both his old-age Social Security benefits and his Canadian Pension
Plan benefits in December 2005. Further, Hawrelak does not
contest that his Canada Pension Plan is based on his “earnings in
employment which was not covered under social security.”
Page 13 of 33
Nonetheless, Hawrelak argues that the Windfall Provision does not
apply, because the money he receives from the Canada Pension
Plan is not a “pension” that falls under the regulation.
Hawrelak argues that his benefits from the Canada Pension
Plan are not a pension under the SSA Program Operation Manual
System (POMS) RS 00605.364. POMS RS 00605.364(A)(1)(A) states
that if “employer and employee contributions are used to determine
the payment,” it will generally be subject to the Windfall Provision.
Hawrelak argues, however, that his benefits come only from his own
contributions and not those of his former employer, Avco. If
Hawrelak is correct, then POMS RS 00605.364(A)(1)(B)4 applies,
which states, “[i]f only employee contributions are involved…[the
pension] is subject to [the Windfall Provision] only if it is the
primary retirement plan.” As Hawrelak receives monthly benefits of
only $278.93 from the Canada Pension Plan, and receives monthly
benefits of $1483.40 from Social Security, it is clear that Social
Security is Hawrelak’s primary retirement plan. Therefore, the only
In Hawrelak’s twenty-eighth and thirty-third objections, he takes issue with
the Magistrate Judge’s characterization of his argument as falling under POMS
RS 00605.364(A)(1) rather than (A)(1)(B). The Court overrules Hawrelak’s
objection to this characterization, as (A)(1)(B) is a sub-provision of POMS
00605.364(A)(1) and so is contemplated within the Magistrate Judge’s
description of Hawrelak’s argument.
4
Page 14 of 33
question is whether Hawrelak’s benefits from the Canada Pension
Plan are based on “employer and employee” contributions or “only
employee contributions.”
Hawrelak relies on three pieces of documentary evidence to
support his claim that the monthly benefits come from only his
contributions. The first document is a November 9, 2005 Notice of
Entitlement, which states: “The monthly amount was calculated on
the record of your contributions and earnings contained in the
Canada Pension Plan….” R. 116. The second document is a
Statement of Contributions from Canada Pension Plan dated
February 3, 2011, which has columns listing the year, Hawrelak’s
contribution to the plan, and Hawrelak’s pensionable earnings. R.
456-7. The document also contains a footnote which reads: “You
and your employer each paid contributions of 4.95% on your
earnings…for 2009.” R. 456. The final document is a May 27,
2014 letter from Service Canada, which states: “the contributions
provided on your statement of contributions are your personal
contributions to the Canada Pension Plan and does not include
contributions from any employers.” R. 32.
Page 15 of 33
The documents Hawrelak cites do not satisfy his burden of
proof in this case. To merit reversal and remand, Hawrelak must
show that substantial evidence does not exist to support the
conclusion that Avco contributed to his Canadian pension. The
only one of these three documents that addresses whether or not an
employer contribution is included in the Canada Pension Plan is the
Statement of Contributions. The footnote in that document clearly
states that both employees and employers make contributions to
the plan, and the exception is self-employed individuals. The rest of
the statement does not suggest anything to the contrary, as the
column that Hawrelak refers to shows “Your Contribution” not
“Total Contribution.” The Notice of Entitlement does not state that
only employee contributions are made to the plan, but rather
addresses how the monthly payment is calculated. As noted in the
Statement of Contributions, the contributions of employees and
employers are equal, so the calculation of the monthly payment can
be made from the employee’s contribution alone just as easily as it
can be made from the combined contribution.
Further, the May 2014 letter does not clarify who makes
contributions to the plan. The letter merely clarifies that the “Your
Page 16 of 33
Contribution” column on the Statement of Contributions refers only
to Hawrelak’s Contribution. The Court would not expect the “Your
Contribution” column to refer to anything other than Hawrelak’s
individual contribution, as the May 2014 letter states, because,
again, it is titled “Your Contribution” and not Total Contribution or
even “Contributions”. In this context, the fact that the documents
do not explicitly state that Avco made contributions to the plan is
not persuasive evidence that no such contributions were made. 5
Further, Canadian law provides that Avco was required to
contribute to the plan. Under the Canada Pension Plan, both
employers and employees are required to contribute based on
earnings from pensionable employment. Revised Statutes of
Hawrelak additionally makes an extensive mathematical argument in his
objections (d/e 48 at 25-27). However, Hawrelak’s argument is based on the
dollar amount noted in the “Your Contribution” column of the Statement of
Contributions. Hawrelak argues that by finding that Avco contributed to the
Canada Pension Plan, the Magistrate Judge and Appeals Council must be
finding that the dollar amounts noted on the Statement of Contributions—
Hawrelak uses the first amount, $79.20—represent both Hawrelak and Avco’s
contribution. He further argues that the $79.20 could not represent the
contribution of both Hawrelak and Avco, because it would mean that each of
their individual contributions fell below the 1.6% required by Canada Pension
Plan. However, neither the Magistrate Judge nor the Appeal’s Council found
that the values in the “Your Contribution” column of the Statement of
Contributions represented both Hawrelak and Avco’s contributions. Instead,
both the Magistrate Judge and the Appeals Council found that although the
Statement of Contributions shows only Hawrelak’s contributions, Avco also
made contributions, which are not included on the statement. Therefore,
Hawrelak’s mathematical argument is not dispositive.
5
Page 17 of 33
Canada (R.S.C.) c. C-9 §§ 8-9. Hawrelak’s Notice of Entitlement
states that Hawrelak’s eligibility for benefits was based, in part, on
his pensionable employment. R. 392. Hawrelak argues that his
employment in Canada was not “pensionable employment,” but
rather “excepted employment.” (d/e 46) at 3. He argues that his
Canadian employment falls under R.S.C., 1985, c. C-8, § 6(2)(h),
one of the twelve categories of excepted employment. Exception (h)
states that the following category of employment is not pensionable
employment: “employment in Canada by an employer who employs
persons in Canada but under the terms of a reciprocal agreement
between the Government of Canada and the government of another
country is exempt from liability to make the contribution imposed
on an employer by this Act.” Hawrelak claims that this exception
applies; however if his claim were true, there would exist a
reciprocal agreement of the type noted in the exception. Hawrelak
provides no evidence of a reciprocal agreement that existed between
Canada and the United States.
Further, if Hawrelak’s employment were excepted employment,
Hawrelak would not have been required to make contributions,
either. Canadian law states that employees contributed to the
Page 18 of 33
Canada Pension Plan based on “pensionable employment.” R.S.C.,
1985, c. C-8 § 8. Therefore, if Hawrelak’s employment were
excepted employment, no contributions would have been deducted
from his earnings. R.S.C., 1985, c. C-8 § 8(1) (“Every employee who
is employed by an employer in pensionable employment shall, by
deduction…from the remuneration in respect of the pensionable
employment paid to the employee by the employer, make an
employee’s contribution for the year in which the remuneration is
paid to the employee.”). However, the Statement of Contributions
shows that contributions were deducted based on Hawrelak’s
“pensionable earnings.” R. 456. Obviously, these pensionable
earnings came from Hawrelak’s pensionable employment.
The weight of the above evidence supports the ALJ’s decision,
adopted by the Appeals Council, that Hawrelak’s monthly benefits
from the Canada Pension Plan fall under the Windfall Provision.
Therefore, a “reasonable mind” would surely accept the decision as
adequate. In this case, even if the Court desired to, it could not
substitute its own judgment, contrary to that of the Appeals
Council, after finding substantial evidence that the Windfall
Provision applies to Hawrelak’s situation.
Page 19 of 33
ii.
The Calculation of Hawrelak’s Benefits is Supported
by Substantial Evidence.
Hawrelak further argues that the calculation of the
adjustment to his benefits based on the Windfall Provision is
incorrect. Hawrelak agrees with the calculation of his benefits if the
Windfall Provision does not apply, but he argues that, if it does
apply, the Commissioner calculated the adjustment improperly.
The calculations are carefully detailed in the Commissioner’s
Memorandum in Support of Motion for Summary Judgment (d/e 45
at 7-13). The point of contention between Hawrelak and the
Commissioner is when the subtraction based on Hawerelak’s
Canadian benefits (the subtraction) should be applied. The
Commissioner made the subtraction from the original amount
determined when benefits were first approved, before cost of living
increases were calculated. Hawrelak argues that the subtraction
should be made each year after the benefit amount is adjusted for
cost of living. POMS RS 00605.370 states that the calculations
should be done in the following order: “…b. Subtract one-half of
the applicable monthly pension amount payable in the first month
of concurrent entitlement from the raw [Primary Insurance Amount
Page 20 of 33
(PIA)]. c. Increase the resulting PIA by applicable [Cost of Life
Adjustments] up to the month of concurrent entitlement.” The
Commissioner properly followed POMS when calculating Hawrelak’s
benefits. Therefore, the Appeals Council’s decision is based on
substantial evidence.
C. The Magistrate Judge Did Not Substitute His Judgment for
That of the Commissioner.
In Hawrelak’s fourth and twenty-second objections, he argues
that the Magistrate Judge improperly substituted his judgment
when evaluating the Commissioner’s final decision. “This Court
must accept the findings if they are supported by substantial
evidence, and may not substitute its judgment.” Delgado v. Bowen,
782 F.25 79, 82 (7th Cir. 1986). This objection again appears to be
the result of a misunderstanding of legal terminology. Under
Delgado v. Bowen, if the Court finds that the lower court’s judgment
is supported by substantial evidence, the Court must affirm that
judgment. The Court is not permitted to make its own independent
decision based on the entirety of the record, but rather must only
evaluate whether the decision of the Appeals Council is based on
substantial evidence. Here, the Magistrate Judge found that “the
Page 21 of 33
Appeals Council’s decision is supported by substantial evidence,”
and so properly recommended that this Court affirm the decision of
the Appeals Council, rather than substitute the Court’s own
judgment.
D. Any Procedural Errors During the Review of Hawrelak’s
Social Security Benefits Were Harmless.
Hawrelak also objects to the Magistrate Judge’s finding that
any procedural errors in the review of Hawrelak’s Social Security
benefits were harmless. See Spiva v. Astrue, 628 F.3d 346,353 (7th
Cir. 2010) (The doctrine of harmless error is indeed applicable to
judicial review of administrative decisions.); see also, McKinzey v.
Astrue, 641 F.3d 884, 892 (7th Cir. 2011)
([A]dministrative error may be harmless: we will not remand a case
to the ALJ for further specification where we are convinced that
the ALJ will reach the same result.”). Hawrelak cites four categories
of perceived procedural error in the review process: (1) the April 15,
2015 hearing was not a proper de novo hearing; (2) Hawrelak was
unable to properly make exceptions to the ALJ’s decision before the
Appeals Council’s review; (3) the review procedure afforded
Hawrelak, as a whole, was inadequate; and (4) the ALJ abused her
Page 22 of 33
discretion during the April 15, 2014 hearing. The Court reviews
these objections de novo, using the doctrine of harmless error. The
Court finds that any errors in the procedure were harmless.
i.
Hawrelak was Given a De Novo Hearing by the ALJ as
Ordered by This Court.
In Hawrelak’s second, fifth, eighth, ninth, eleventh, sixteenth,
eighteenth, twenty-fourth, twenty-ninth, and thirty-first objections,
Hawrelak argues that he was not given a proper de novo hearing by
the ALJ, as this Court had ordered on November 26, 2013 (d/e) 19.
Hawrelak claims the hearing he received was not a de novo hearing,
because the ALJ did not premise her decision on “evidence adduced
at the hearing” and because he did not get to “discuss his case”
(d/e 48). As the Appeals Council noted in its Unfavorable Decision,
Hawrelak misunderstands the meaning of a de novo hearing. R. 9.
The Appeals Council stated that a de novo hearing “provides the
claimant with an opportunity to present testimony about his case
and to present any additional evidence he may wish to have added
to the record.” R. 9.
This Court agrees with the Appeals Council’s description of a
de novo hearing. A de novo review does not eliminate the record
Page 23 of 33
that has been established within previous reviews, but rather
requires a fresh evaluation of that evidence, as well as an
opportunity to submit new evidence for evaluation. See U.S. v.
Shola, 124 F.3d 803, 822 (7th Cir. 1997) (Wood, J., concurring)
(“The very meaning of ‘de novo’ review is that the [reviewing] court
approaches its task from a clean slate, basing its ruling on the
record that has been developed, but drawing its own conclusion.”).
The claimant is not promised anything that he was not promised at
the initial hearing.
Hawrelak repeatedly cites Hallex, a guidebook for the Social
Security Administration, as the authority by which the ALJ’s
procedure should be evaluated; however the proper authority is
Chapter III of the Code of Federal Regulations. Chapter III provides
the following guidance on what claimants can expect at a hearing
before the ALJ:
You may submit new evidence, examine the evidence used in
making the determination or decision under review, and
present and question witnesses. The administrative law judge
who conducts the hearing may ask you questions. He or she
will issue a decision based on the preponderance of the
evidence in the hearing record. 20 C.F.R. §404.929.
Page 24 of 33
The record shows that Hawrelak was given an opportunity to
engage in all the procedure promised by Chapter III. See R. 493
(“ALJ: Are there any records we’re missing? CLMNT: No.”), R. 494
(ALJ: “now is your opportunity…to say anything you think is
relevant.”).
Hawrelak objects because he believed there would be back and
forth discussion during the hearing. See R. 496 (“CLMT: Well, also,
the way I’m reading some of the, of the purpose of this meeting is to
have some sort of exchange so that I get some understanding.”)
However, as noted by the ALJ, that is not the purpose of the
hearing. The regulations provide that the ALJ “may ask [the
claimant] questions,” but the word “may” shows that it is not
mandatory, and further, the potential questions of the ALJ are
intended to clarify the record. 20 C.F. R. §404.929. In this case,
the ALJ asked Hawrelak no questions at the hearing. However, that
is not surprising considering both that the ALJ had already
presided over an initial hearing on the same facts and that
Hawrelak submitted an extensive summary of his case in
anticipation of the hearing. See R. 502. (“ALJ: ….You submitted
that brief…and actually discussed each one of your exhibits that
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you attached…”). Further, Hawrelak was given the opportunity to
supplement his exhibits. R. 494-507. Therefore, there was no
procedural error, as Hawrelak was granted a proper de novo
hearing.
ii.
Hawrelak was Properly Given the Opportunity to Submit
Exceptions to the ALJ’s Decision.
In Hawrelak’s sixth objection, he argues that he was not given
the opportunity to submit exceptions to the ALJ decision because of
confusion with the Unfavorable Decision issued to Doris Hawerlak
and the Recommended Decision issued to Hawrelak, and because
Hawrelak claims the Recommended Decision was not mailed until
July 1, 2014. Hawrelak argues that because of this confusion, his
exceptions were in response to the Unfavorable Decision issued to
Doris Hawrelak and he was not able to properly respond to the
Recommended Decision. However, as the Court noted in Part III. A.
of this opinion, the Unfavorable Decision and the Recommended
Decision are identical, except for the title and addressee. See R. 5372, 75-94.
Further, Hawrelak was given the appropriate amount of time
to respond to the Recommended Decision. The letter accompanying
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the Recommended Decision issued to Hawrelak states that he must
file his “briefs or written statements within 20 days of the date” that
the Recommended Decision was mailed. R. 74. The Appeals
Council did not issue its decision until August 20, 2014, 50 days
from the date Hawrelak claims the decision was mailed. Therefore,
Hawrelak was given an opportunity to respond to the facts and
findings of the ALJ’s Recommended Decision. In fact, Hawrelak
sent a number of written statements to the Appeals Council dated
both before and after the Recommended Decision was mailed. See
R. 13-49. The Appeals Council responded to all of Hawrelak’s
exceptions in its decision. As a result, any error had no impact on
the Council’s decision and was therefore harmless.
iii.
The Procedure Used in Evaluating Hawrelak’s Claim was
Proper.
In Hawrelak’s seventh and thirtieth objections, he argues that
the procedure for appealing the initial determination of the SSA
does not properly protect his rights. The SSA granted Hawrelak
reconsideration of his benefits decision and found that the decision
was proper. Then, when Hawrelak appealed, the SSA granted him a
de novo hearing of the Commissioner’s decision before an ALJ. The
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ALJ issued an Unfavorable Decision finding that the Windfall
Provision applied to Hawrelak’s Canadian benefits. Hawrelak was
initially denied review by the Appeals Council. He then appealed
that decision in this Court. The Court, after discovering that the
recording of his first hearing was lost, granted him a second de
novo hearing before an ALJ. The ALJ Recommended a Decision
that the Windfall Provision was properly applied. The ALJ’s
subsequent decision was then reviewed and adopted by the Appeals
Council and has now been reviewed by this Court. Hawrelak was
given all the procedural protection the system affords him.
Hawrelak objects to the fact that there is “no opportunity for
personal discussion with an authoritative client advocate” within
the process. (d/e 48) at 34. Hawrelak had the ability to retain an
attorney for any of the proceedings. Hawrelak made a Motion to
Appoint Counsel in this case. (d/e 5). This Court denied his
motion, stating that “civil litigants have no constitutional right or
statutory right to be represented by counsel in federal court.
Zarnes v. Rhodes, 64 F.3d 285, 288 (7th Cir., 1995). The decision to
appoint counsel lies within the broad discretion of the
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Court. Jackson v. County of McLean, 953 F.2d 1070, 1071 (7th Cir.,
1992).” February 26, 2013 Text Order.
The Court stands by its decision that this case does not need
the appointment of counsel. Hawrelak has adequately presented
his case at every level. Further, he has not made the Court aware
of any effort to retain counsel of his own accord. Although Hawrelak
has taken exception to the lack of opportunity to argue back and
forth with adjudicators, the process of appeal afforded to Hawrelak
provided him with an opportunity to object to the adjudicators’
decisions. Hawrelak has taken advantage of these opportunities for
appeal. Therefore, there was no procedural error.
iv.
The ALJ Did Not Abuse Her Discretion.
In Hawrelak’s twelfth, fourteenth, nineteenth, twentieth and
thirty-fifth objections, he argues that the review procedure was
flawed, because the ALJ abused her discretion during the April 15,
2014 hearing. Hawrelak supports his contention with several
arguments: (1) the ALJ did not take a more active role because
Hawrelak was pro se; (2) the ALJ used Attorney Jeremy Reppy to
assist in research and writing; (3) Jeremy Reppy did not properly
conduct his research and did not contact Hawrelak; (4) the ALJ did
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not give Hawrelak a de novo hearing; and (5) the ALJ did not
mention the February 26, 2006 letter in her opinion. The Court
finds no error in the actions of the ALJ.
Hawrelak cites language from the Third Circuit advising that
an ALJ “owes a duty to a pro se claimant to help him or her to
develop the administrative record.” Reefer v. Barnhart, 326 F.3d
376, 380 (3d. 2003). The Seventh Circuit agrees with Hawrelak’s
premise that the ALJ has a “heightened” responsibility to develop
the records when a plaintiff is pro se. Luna v. Shalala, 22 F.3d.
687, 692 (7th Cir. 1994) (“[T]he ALJ has a heightened duty to make
sure that the record is developed when a claimant is
unrepresented.”) However, both circuits agree that the Court does
not mandate a specific procedure that the ALJ must follow, but
simply ensures that the record is “adequately developed.” Nelms v.
Astrue, 553 F.3d 1093, 1099 (7th Cir. 2009) (remanding a case
based on the standard that the ALJ must ensure the record is
“adequately developed”); see also Luna, 22 F.3d at 692 (“[A]
significant omission is usually required before this court will find
that the [adjudicator] failed to assist pro se claimants in developing
the record fully and fairly”); Reefer, 326 F.3d at 380 (“we do not
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prescribe any particular procedures that an ALJ must follow”)
(citing Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council,
Inc., 435 U.S. 519, 524-25 (1978)). Hawrelak has adequately
represented himself throughout these continued proceedings. The
ALJ noted throughout the April 15, 2014 hearing how welldeveloped the record was and how thorough Hawrelak was in his
presentation of the evidence. R. 493-509. The Court agrees that
the record was adequately developed, therefore the ALJ was not
required to give Hawrelak further assistance in presenting his case.
The ALJ did not act improperly by using an attorney to assist
her with research and writing. This occurs daily in tribunals
throughout the United States, from the law clerks of this Court to
attorneys like Jeremy Reppy. Hawrelak further contends that he
should have been able to question Mr. Reppy at the hearing and
that Mr. Reppy should have contacted him after the hearing as a
part of Mr. Reppy’s research and writing. Neither of these
contentions is supported by the law. As to Hawrelak’s argument
that the ALJ abused her discretion by not properly awarding him a
de novo hearing, this matter was previously addressed in Part III. D.
i. of this opinion. Finally, the ALJ was not required to mention
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Hawrelak’s February 26, 2006 letter to the Commissioner, which
sought assurance that his award would not change subject to his
Canadian benefits. The ALJ’s responsibility was to rule on
Hawrelak’s claim regarding the Windfall Provision. This
responsibility did not entail discussion of the letter in question.
As the cited actions of the ALJ at the April 14, 2014 were all
reasonable actions, the ALJ did not abuse her discretion, therefore
the Court finds no procedural error.
IV. CONCLUSION
After reviewing the Report and Recommendation, Plaintiff’s
objections, and the record, this Court will accept and adopt the
Magistrate Judge’s Report and Recommendation (d/e 47), subject to
the modifications of the Statement of Facts noted above.
For the foregoing reasons, IT IS HEREBY ORDERED that
Plaintiff’s Objections to the Magistrate Judge’s Report and
Recommendation (d/e 48) are OVERRULED.
IT IS FURTHER ORDERED that the Report and
Recommendation (d/e 47) is ACCCEPTED AND ADOPTED as the
Opinion and Order of the Court, subject to the modifications of the
Statement of Facts noted above.
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IT IS FURTHER ORDERED that the Defendant’s Motion for
Summary Affirmance (d/e 44) is GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Summary
Judgment (d/e 41) is DENIED.
IT IS SO ORDERED. This case is CLOSED.
ENTER: September 30, 2015
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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