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Robert R. v. Social Security Administration Commissioner

United States District Court, D. Maine

February 6, 2019

ROBERT R., Plaintiff
v.
SOCIAL SECURITY ADMINISTRATION COMMISSIONER, Defendant

          REPORT AND RECOMMENDED DECISION

          John C. Nivison U.S. Magistrate Judge.

         On Plaintiff Robert R.'s application for disability insurance benefits under Title II of the Social Security Act, Defendant, the Social Security Administration Commissioner, found Plaintiff not disabled at step 1 of the sequential evaluation process. In denying Plaintiff's application, the ALJ found that in each year after Plaintiff's alleged onset date, Plaintiff's engaged in substantial gainful activity. Plaintiff filed this action to obtain judicial review of Defendant's final administrative decision pursuant to 42 U.S.C. § 405(g).

         Following a review of the record, and after consideration of the parties' arguments, I recommend the Court affirm the administrative decision.

         The Administrative Findings

         The Commissioner's final decision is the September 26, 2017, decision of the Administrative Law Judge. (ALJ Decision, ECF No. 9-2.)[1] Plaintiff alleged the onset of disability beginning September 1, 2014. In 2015, 2016, and 2017, Plaintiff fished for elvers and caught his licensed limit of 16.8 pounds. (R. 15, 18.) In 2015, Plaintiff earned $9, 869 from fishing. Because the season begins in March and ends in May, the ALJ divided the revenue by three months for an average monthly revenue of $3, 289.66. (R. 18.) Plaintiff's revenue in 2016 is not established on the record, though he did catch his limit. In 2017, Plaintiff again caught the limit and the market price Plaintiff received for elvers ranged between $800 and $1700 per pound. (R. 18.) Employing the $800 per pound rate, the ALJ calculated a net monthly revenue of $4, 480 for March, April and May of 2017. (Id.) Plaintiff does not dispute the monthly income calculated by the ALJ, and he does not challenge the ALJ's finding that his revenue in 2016 was similar to 2015 and 2017. (R. 19.)

         Pursuant to Defendant's regulations, a claimant will be found not disabled at step 1 of the sequential evaluation process if the record establishes that the claimant has engaged in substantial gainful activity. 20 C.F.R. § 404.1520(a)(4)(i). Claimants are advised: “If you are working and the work you are doing is substantial gainful activity, we will find that you are not disabled regardless of your medical condition or your age, education, and work experience.” Id. § 404.1520(b). The regulations define “substantial” activity as “work activity that involves doing significant physical or mental activities.” Id. § 404.1572(a). Work “may be substantial even if it is done on a part-time basis.”[2] Id. Work is “gainful” if it is performed for pay or profit. Id. § 404.1572(b). The amount of time devoted to the work activity is not controlling; the regulations require the adjudicator to determine whether the work was substantial and gainful. Id. § 404.1573(e). A claimant is more likely to be found to have performed substantial gainful activity if the claimant's work activity entails “experience, skill, supervision, and responsibilities, or contributes substantially to the operation of a business.” Id. § 404.1573(a).

         The regulations distinguish between self-employed work activity and work for wages. Compare Id. § 404.1574 and 404.1575. If a claimant is self-employed, such as Plaintiff, Defendant “will consider [the claimant's] activities and their value to [the] business to decide whether [the claimant has] engaged in substantial gainful activity.” 20 C.F.R. § 404.1575(a)(2). The relevant regulation provides that Defendant “will not consider … income alone because the amount of income … may depend on a number of factors, ” i.e., factors other than substantial activity. Id. The regulations contemplate a three-test assessment, provided, however, that two of the tests are unnecessary if the first test resolves the issue. Id.

         The tests are as follows:

(i) Test one: You have engaged in substantial gainful activity if you render services that are significant to the operation of the business and receive a substantial income from the business. Paragraphs (b) and (c) of this section explain what we mean by significant services and substantial income for purposes of this test.
(ii) Test Two: You have engaged in substantial gainful activity if your work activity, in terms of factors such as hours, skills, energy output, efficiency, duties, and responsibilities, is comparable to that of unimpaired individuals in your community who are in the same or similar businesses as their means of livelihood.
(iii) Test Three: You have engaged in substantial gainful activity if your work activity, although not comparable to that of unimpaired individuals, is clearly worth the amount shown in § 404.1574(b)(2) when considered in terms of its value to the business, or when compared to the salary that an owner would pay to an employee to do the work you are doing.

Id. Paragraphs (b) and (c), referred to in the first test, explain that if the claimant is not a “farm landlord” and “operate[s] a business by [him]self, any services that [he] render[s] are significant to the business.” Id. 404.1575(b)(1). Additionally, net income less certain special expenses (not applicable in this case) is substantial for social security purposes if, when averaged, it exceeds an amount determined in the regulations. Id. § 404.1575(c) (referring to §§ 404.1574a, 404.1574(b)).[3]

         Standard of Review

         A court must affirm the administrative decision provided the decision is based on the correct legal standards and is supported by substantial evidence, even if the record contains evidence capable of supporting an alternative outcome. Manso-Pizarro v. Sec'y of HHS, 76 F.3d 15, 16 (1st Cir. 1996) (per curiam); Rodriguez Pagan v. Sec'y of HHS, 819 F.2d 1, 3 (1st Cir. 1987). Substantial evidence is evidence that a reasonable mind might accept as adequate to support a finding. Richardson v. Perales,402 U.S. 389, 401 (1971); Rodriguez v. Sec'y of HHS, 647 F.2d 218, 222 (1st Cir. 1981). “The ALJ's findings of fact are conclusive when supported by substantial ...


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