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Valuable Lessons in Disability Benefits Adjudications

Disability insurance lawyers and claimants should be aware of a recently decided case from the U.S. Court of Appeals for the Seventh Circuit. Garcia v. Colvin, 2013 U.S.App.LEXIS 25452 (7th Cir. December 20, 2013) was a recent opinion authored by Judge Richard Posner, who has gained a reputation for doing more thany jurist since the late Gerald Heaney, who sat on the Eighth Circuit, to improve the quality and fairness of the Social Security system. See, Heaney, Why the High Rate of Reversals in Social Security Disability Cases, 7 Hamline L.Rev. 1 (1984).

This ruling involved Michael Garcia, who was 40 years old when he applied for Social Security disability benefits on account of abdominal pain due to cirrhosis of the liver, Hepatitis C, and other related conditions. Because Garcia's problems had been caused or exacerbated by alcoholism, the Social Security Act bars him from receiving benefits unless the alcoholism ceases to be a "contributing factor" to his disability. See, 42 U.S.C. § 423(d)(2)(C).

Social Security deemed Garcia capable of performing sedentary work; and he appealed. The district court affirmed the administrative law judge's adverse ruling. However, the court of appeals reversed in an opinion authored by Judge Posner that was harshly critical of the Social Security Administration.

The court began its opinion by questioning why the claim was even denied since two doctors who had examined Garcia, one of whom was appointed by the Indiana disability determination service, found him incapable of working since the cirrhosis made him a candidate for a liver transplant. Garcia's platelet count was so low, though, that he was removed from the transplant list; and he was too sick to enable him to even undergo a liver biopsy without risk. And Garcia's abdominal pain was so severe that he had to be repeatedly hospitalized. The court further catalogued his co-morbid impairments beyond the cirrhosis, hepatitis and hernia - lupus, anemia, colitis, anxiety and other psychological problems, and chronic fatigue. Garcia was essentially housebound and unable to even perform household activities other than to babysit an 11-year-old. One doctor described Garcia as "chronic and terminal," and the court characterized him as being "in awful shape."

The court expressed its astonishment that the administrative law judge and district court deemed Garcia capable of full-time employment; and described the ALJ opinion as "riddled with errors." The court was especially critical of the ALJ's finding that Garcia's employment up to the claimed date of disability disqualified him from receiving benefits. The court explained:

One can be employed full time without being capable of substantial gainful activity, paradox though that may seem. Gentle v. Barnhart, 430 F.3d 865, 867 (7th Cir. 2005); Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 915-16, 918 (7th Cir. 2003); Wilder v. Apfel, 153 F.3d 799, 801 (7th Cir. 1998); Kelley v. Callahan, 133 F.3d 583, 588 (8th Cir. 1998). The reasons given in the cases we've just cited are a desperate employee or a lenient or altruistic employer. But another reason why a disabled employee might be treated by his employer as a full-time employee, as by being paid a full-time employee's wages for what was actually part-time work, might be that he possessed skills of such value to his employer that the employer was willing to overlook his inability to work full time--which appears to have been Garcia's situation.

The court also expressed puzzlement at why the administrative law judge gave no weight to the opinion of the treating doctor that Garcia was "disabled and unable to perform any functions." The determination of whether someone is "disabled" is a decision for Social Security to make, and the court agreed with the Government that "whether the applicant is sufficiently disabled to qualify for social security disability benefits is a question of law that can't be answered by a physician." Nonetheless, the court pointed out that "the answer to the question depends on the applicant's physical and mental ability to work full time, and that is something to which medical testimony is relevant and if presented can't be ignored." (citing Bjornson v. Astrue, 671 F.3d 640, 647-48 (7th Cir. 2012); Ferguson v. Commissioner of Social Security, 628 F.3d 269, 272-73 (6th Cir. 2010)). The court also criticized the ALJ's disregard of testimony from the claimant's fiancée, suggesting that while her potential bias would be a factor, the judge said nothing about what parts of the testimony he believed or disbelieved.

The court of appeals ridiculed the ALJ's reliance on an agency doctor's finding that Garcia can walk, stand, stoop, and squat since none of the plaintiff's impairments were related to his musculoskeletal system and sense of balance. In addition, the court attacked the ALJ's finding that the claimant's medical care at onset was too minimal to constitute a disabling impairment by pointing out the ALJ was required to ask

why he didn't seek care--and specifically whether he had health insurance." (citing Social Security Ruling 96-7p, 1996 WL 374186, at *7-8; Shauger v. Astrue, 675 F.3d 690, 696 (7th Cir. 2012); Craft v. Astrue, 539 F.3d 668, 678-79 (7th Cir. 2008); Blakeman v. Astrue, 509 F.3d 878, 888 (8th Cir. 2007); Orn v. Astrue, 495 F.3d 625, 638 (9th Cir. 2007). Persons who don't have health insurance often delay in seeking medical care even for serious conditions. They can't afford hospital bills and don't want to have to declare bankruptcy. (Most personal bankruptcies are the result of inability to pay medical bills, often even if the patient is insured. David U. Himmelstein et al., "Medical Bankruptcy in the United States, 2007: Results of a National Study," 122 Am. J. Med. 741, 743 (2009).) Garcia testified at his disability hearing, without contradiction, that he had no health insurance.

(emphasis in original). The court further questioned the ALJ's rationale that sporadic work through 2010 undermined Garcia's claim since there was no musculoskeletal impairments and no inquiry was made into what kind of work he did and how much of it was performed. The court noted in that part of the discussion that vocational testimony established that even missing one day of work a month would have been excessive.

The court questioned the basis of the ALJ's decision because no physician testified and no medical records supported a conclusion that Garcia could work; and the court concluded: "Garcia is one of the most seriously disabled applicants for social security disability benefits whom we've encountered in many years of adjudicating appeals from benefits denials. We are surprised that the Justice Department would defend such a denial."

Discussion: There is much to take away from this decision that is applicable not only to Social Security disability, but to any disability adjudication. First, the court's finding that the adjudicator cannot disregard the opinions of its own evaluators is a critical observation. The whole point of an independent examination is to elicit an opinion that would be free from the bias inherent in a treating doctor's opinion, since that doctor might want to do a favor for a long-time patient. And the independent doctor would also be free from the bias of a doctor in the employ of the benefits administrator who may be swayed by the notion expressed by Upton Sinclair that "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" I, Candidate for Governor: And How I Got Licked (1935). Judge Posner's discussion of this issue in the Hawkins ruling cited in this opinion is invaluable and more sensible than the Supreme Court's ruling in Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003). While both rulings came to the conclusion that automatic deference to a treating doctor's opinion is unwarranted, in Hawkins, the court ultimately concluded that the treating doctor possessed superior knowledge over the consultant, who had never examined the claimant.

Next, the court's recognition of the possibility that one can be disabled and still working cannot be repeated often enough. To the court's litany of cited cases should be added DeLisle v. Sun Life Assur.Co of Canada, 558 F.3d 440 (6th Cir. 2009) and Mabry v. Travelers Ins. Co., 193 F.2d 497, 498 (5th Cir. 1952), which colorfully noted, "Pinched by poverty, beset by adversity, driven by necessity, one may work to keep the wolf away from the door though not physically able to work; and, under the law in this case, the fact that the woman worked to earn her living did not prevent a jury from finding, from the evidence before it, that she was totally and permanently disabled even while working."

Drawing conclusions from minimal medical treatment without asking why there was limited treatment is also a key aspect of this ruling. Indeed, as Radford Trust v. First Unum Life Insur.Co. of America, 321 F.Supp.2d 226 (D.Mass. 2004) teaches, in addition to a lack of funds or lack of insurance, treatment may be avoided, as in the case of many psychiatrist impairments, due to the patient's denial of the existence of a problem.

Yet another key observation made by the court was its criticism of what Aristotle would have described as the "fallacy of accident" in the ALJ's reasoning. Merriam-Webster defines that term as "the fallacy that consists in arguing from some accidental character as if it were essential or necessary (as in the food you buy you eat; you buy raw meat; therefore you eat raw meat)." See, http://www.merriam-webster.com/dictionary/fallacy%20of%20accident. Here, the ALJ relied on the absence of any musculoskeletal impairment to support a conclusion that Garcia was not disabled; however, as Judge Posner pointed out, there is no logical requirement of musculoskeletal impairments as a precondition to a finding of disability. The court gave several examples, including Alzheimer's disease.

This opinion is a veritable gold mine of critical issues in disability adjudication; and it will no doubt be frequently cited both in Social Security and in other disability cases.

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