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TURNER v. SULLIVAN

June 5, 1990

ALMA M. TURNER, Plaintiff,
v.
LOUIS W. SULLIVAN, M.D., SECRETARY, DEPT. OF HEALTH AND HUMAN SERVICES, Defendant



The opinion of the court was delivered by: PRATT

 JOHN H. PRATT, UNITED STATES DISTRICT JUDGE

 Plaintiff Alma M. Turner brings this action seeking review of a final decision of the defendant, Secretary of Health and Human Services, denying plaintiff's request for reconsideration of a determination of overpayment of disability benefits under Title II of the Social Security Act, 42 U.S.C. 401 et seq. or, in the alternative, plaintiff's request for a waiver of recovery of the alleged overpayment. Before the Court are plaintiff's motion for judgment of reversal and defendant's motion for judgment of affirmance of the Secretary's decision.

 For the reasons stated below, we find that the Secretary's determination of an overpayment of benefits to plaintiff is correct and that the Secretary's failure to find that plaintiff was without fault in causing the overpayment and subsequent denial of waiver of recovery of the overpayment on that basis, is supported by substantial evidence. We therefore deny plaintiff's motion for judgment of reversal and grant defendant's motion for judgment of affirmance of the Secretary's decision.

 I. Procedural History*

 Plaintiff was first determined to be eligible for Disability Insurance Benefits ("disability benefits") pursuant to Title II of the Social Security Act, 42 U.S.C. § 401 et seq., as of May 15, 1978. Defendant does not dispute this determination of plaintiff's eligibility for disability benefits. At the time of the filing of this action, plaintiff was 65 years old. She has a tenth grade education and has worked primarily as a food server and waitress.

 Beginning in February 1979, and continuing through March 1984, plaintiff worked part-time at Group Counseling Service, Inc., ("GCS"), an alcohol rehabilitation center, preparing and serving food for three hours a day on weekends. *fn1" Plaintiff did not report this work activity to the Social Security Administration ("SSA"), erroneously interpreting her employer as stating that she could work part-time without jeopardizing her disability benefits. This advice was contrary to the statement on plaintiff's original application form which she completed and signed in July 1978 that she "MUST NOTIFY THE SOCIAL SECURITY ADMINISTRATION PROMPTLY IF YOU GO TO WORK whether as an employee or a self-employed person." On April 6, 1984, five years after beginning her work as a waitress, plaintiff was notified by SSA that, because of her employment, her entitlement to disability benefits ceased in November 1979. *fn2" Plaintiff did not submit any evidence to the SSA and her disability benefits were suspended. *fn3"

 Shortly thereafter, plaintiff ceased working and on April 17, 1984, filed a new application for disability benefits. On July 13, 1984, plaintiff also applied for Supplemental Security Income benefits pursuant to Title XVI of the Social Security Act, 42 U.S.C. § 1381 et seq. ("SSI benefits"). Both applications were originally denied. On October 18, 1985, following a hearing, an Administrative Law Judge ("ALJ"), found that plaintiff was disabled and again entitled to disability benefits as of April 14, 1984, and SSI benefits as of July 13, 1984. This finding of entitlement to disability benefits is not challenged.

 On January 13, 1986, the SSA made a final determination that plaintiff had been able to perform substantial and gainful work in the time period 1979-1984. The SSA sent plaintiff an award certificate implementing the decision to award renewed disability and SSI benefits but notifying her of a determination of overpayment for the period between 1980 and 1984. However, the SSA omitted from the award certificate the reason and the amount of the alleged overpayment. A revised notice was sent to plaintiff on March 17, 1986, notifying her that she had been overpaid $ 16,000 for the period between March 1980 and March 1984, and that the benefits due her through December 1985, as a result of the reinstatement of benefits, were being adjusted or "netted" to reduce the amount of her overpayment, as provided in 20 C.F.R. § 404.502. *fn4"

 On February 27, 1986, plaintiff requested a waiver of recovery of the overpayment, documenting the financial difficulties caused by the termination of her disability benefits in 1984. On April 21, 1986, plaintiff requested reconsideration of the determination of overpayment. *fn5"

 On May 26, 1987, following a hearing, the ALJ found that plaintiff was not entitled to disability benefits during the disputed period and that she had been overpaid. However, the ALJ found that plaintiff was without fault in causing the overpayment. In addition, the ALJ found that the partial recovery of plaintiff's overpayment which had already occurred was proper and plaintiff was not entitled to the recovery of the "approximately $ 6,000" *fn6" underpayment of her benefits, deducted by the SSA from plaintiff's second award of disability and SSI benefit payments. The ALJ did determine that plaintiff was entitled to a waiver of future recovery of the remainder of the overpayment since plaintiff was without fault in causing the overpayment and recovery would cause a hardship for her. (R. at 23-24). See Act 204(b); 42 U.S.C. § 404(b) (1982 Ed.).

 On February 17, 1988, the Appeals Council granted plaintiff's request for review of the ALJ's decision. The Appeals Council reviewed the entire case pursuant to 20 C.F.R. § 404.976. Plaintiff had sought review by the Appeals Council of the ALJ's decision that plaintiff was not entitled to recovery of the amount already "netted" or withheld. Instead, in a final decision issued May 2, 1988, the Appeals Council found that the ALJ had made an error of law, reversed the ALJ's finding that plaintiff had been without fault for causing the overpayment and denied plaintiff a waiver of its recovery in its entirety.

 Plaintiff, having exhausted her administrative remedies, filed the present suit, seeking a reversal of the final agency decision of overpayment, the finding of fault, and the denial of waiver of recovery of the overpayment.

 II. Discussion

 A. Contentions of the Parties

 In contrast, the defendant asserts that plaintiff waived the right to reconsideration of the determination of overpayment by her failure to make a timely request for administrative review. Consequently, defendant argues that only the final decision of the Secretary is subject to judicial review under 42 U.S.C. § 405(g). Since the Secretary has clearly delegated the duty of making final decisions to the Appeals Council, defendant contends that we must review only the decision of the Appeals Council, not that of the ALJ, to determine whether substantial evidence supports the Secretary's decision. Thus, defendant argues, the only issue before the Court for review is whether the Appeals Council decision, as the final decision of the Secretary, that the ALJ had made an error of law in finding plaintiff without fault and granting a partial waiver of recovery of the overpayment, is supported by substantial evidence. We will deal with each of these questions in turn.

 B. Scope of Review

 It is not disputed that the Secretary delegated his power of review to the Appeals Council, whose decision, not that of the Administrative Law Judge, is subject to judicial review. Much of plaintiff's argument ignores this distinction.

 In reviewing an agency's action, in this case, that of the Secretary speaking through the Appeals Council, "deference is to be afforded the administrative decision and it is not for the trial court to review de novo the Secretary's final decision as to findings of fact and the reasonable inferences to be drawn therefrom." Reyes v. Secretary of Health, Education and Welfare, 155 U.S. App. D.C. 154, 476 F.2d 910, 914 (D.C. Cir. 1973). The Court's inquiry is limited to whether the Secretary's final decision is supported by substantial evidence and untainted by an error of law. Smith v. Bowen, 264 U.S. App. D.C. 104, 826 F.2d 1120, 1121 (D.C. Cir. 1987) (citing Brown v. Bowen, 253 U.S. App. D.C. 409, 794 F.2d 703, 705 (D.C. Cir. 1986)). It is not our function to substitute our judgment for that of the agency.

 If substantial evidence exists, then the Secretary's fact finding is conclusive and his decision must be affirmed. 42 U.S.C. §§ 405(g) and 1383(c)(3); Richardson v. Perales, 402 U.S. 389, 401, 91 S. Ct. 1420, 1427, 28 L. Ed. 2d 842 (1971). Substantial evidence is considered to be "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. at 401 (quoting Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 229, 59 S. Ct. 206, 217, 83 L. Ed. 126 (1938)); Beasley v. Bowen, 693 F. Supp. 1216, 1219 (D.D.C. 1988). The evidence provided clearly must be "more than a mere scintilla." Richardson, 402 U.S. at 401, 91 S. Ct. at 1427, but not "a large or considerable amount of evidence." Pierce v. Underwood, 487 U.S. 552, 565, 108 S. Ct. 2541, 101 L. Ed. 2d 490 (1988).

 The Court is not, however, to merely act as a "rubber stamp" to the administrative decision. Davis v. Heckler, 566 F. Supp. 1193 (D.D.C. 1983). Rather, this standard of review "calls for careful scrutiny of the entire record," Simms v. Sullivan, 278 U.S. App. D.C. 259, 877 F.2d 1047, 1050 (D.C. Cir. 1989) (quoting Brown, 794 F.2d at 705). The Court must determine whether the Secretary, acting through the Appeals Council and ALJ, has "analyzed all the evidence and has sufficiently explained the weight he has given to obviously probative exhibits," ...


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