Raul Garcia v. Comm'r of Soc. Sec. ( 2018 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 18a0238n.06
No. 17-3970
UNITED STATES COURT OF APPEALS FILED
FOR THE SIXTH CIRCUIT May 10, 2018
DEBORAH S. HUNT, Clerk
RAUL GARCIA, )
)
Plaintiff-Appellant, )
ON APPEAL FROM THE
)
UNITED STATES DISTRICT
v. )
COURT FOR THE
)
NORTHERN DISTRICT OF
COMMISSIONER OF SOCIAL SECURITY, )
OHIO
)
Defendant-Appellee. )
OPINION
)
)
BEFORE: DAUGHTREY, STRANCH, and THAPAR, Circuit Judges.
JANE B. STRANCH, Circuit Judge. Petitioner Raul Garcia seeks review of the district
court’s decision affirming the Appeals Council’s determination that Garcia was not without fault
for a benefit overpayment of $37,425.40. According to Garcia, he submitted incomplete
information about his workers’ compensation benefits, which would have offset his Social
Security benefits if properly reported, only because he misunderstood the Social Security
Administration’s requests for information. An Administrative Law Judge found this explanation
compelling and waived overpayment after deeming Garcia to be without fault. The Appeals
Council reversed after finding that the evidence in the record instead indicated that Garcia was
not without fault. This court reviews only the final agency action, here the decision of the
Appeals Council, and asks whether it is supported by substantial evidence. Because we find that
it is, we AFFIRM.
Case No. 17-3970, Garcia v. Comm’r of Soc. Sec.
I. BACKGROUND
Garcia worked for the United States Postal Service until his retirement at the end of 2011.
He suffered multiple on-the-job injuries and submitted four separate workers’ compensation
claims, dated September 2008, February 2010, August 2011, and October 2011. Amid these
injuries, Garcia applied for disability insurance benefits under Title II of the Social Security Act.
Garcia disclosed in his April 2011 application that he had filed or intended to file for workers’
compensation claims. Specifically, Garcia noted that he had two pending workers’
compensation claims and one approved claim at the time of his application. He indicated that he
understood the notice requirements related to these claims: “I must notify Social Security
immediately if I am awarded monetary compensation or if my claims are approved/denied.” The
Social Security Administration (the Administration) denied this initial application in May 2011.
Garcia filed a second application for disability insurance benefits in early 2012. He again
indicated that he had filed or intended to file for workers’ compensation benefits but was not yet
receiving any. The Social Security records for that application show that Garcia said he was not
receiving periodic workers’ compensation payments and had not received a lump sum award, but
that he had a still-pending claim. The Administration awarded Garcia monthly disability benefits
starting in April 2012. The notice of benefits details what to do in the case of a workers’
compensation award:
If you receive workers’ compensation and/or public disability payments, we may
have to reduce your Social Security benefits. At that time, we may also have to
recover any money that should not have been paid. Please let us know as soon as
a decision is made on your claim for these payments.
Social Security followed up with Garcia via survey form in July 2012 and March 2013.
In July 2012, Garcia responded that his workers’ compensation claim had not been awarded or
denied but was instead still pending. He indicated that he expected a decision in 2013. Garcia
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provided a similar status update in March 2013, except that he annotated the survey form to say
that his workers’ compensation “award” (as opposed to “claim”) remained pending and he did
not know when to expect a decision. In his March 2013 response, Garcia agreed to report
workers’ compensation benefits and agreed to promptly “repay any overpayment created” as a
result of such benefits.
The Administration again followed up with Garcia in March 2014. He then disclosed
that he had been receiving monthly workers’ compensation payments since October 2012. The
Administration confirmed Garcia’s workers’ compensation benefits with the Department of
Labor before determining that Garcia’s workers’ compensation benefits should have reduced or
offset Garcia’s disability insurance benefits significantly. Determining that Garcia had been
overpaid by $37,425.40, the Administration sought repayment. Garcia filed a request for a
waiver of recovery, which the Administration denied after finding that Garcia was not without
fault. Garcia then sought and received a hearing before an Administrative Law Judge (ALJ).
Garcia testified at the hearing that he had provided the Administration with paperwork
regarding his workers’ compensation payments back in February 2012, and he therefore assumed
that the update questionnaires related to a still-outstanding lump sum payment. The ALJ
accepted Garcia’s explanation that he was confused by the Administration’s forms and granted
him a waiver. The Appeals Council issued a Notice of own-motion review and reversed the
ALJ’s favorable decision. Garcia appealed the final agency action to the district court, which
affirmed the Appeals Council, and the case is now before us.
II. ANALYSIS
A. Jurisdiction & Standard of Review
Jurisdiction exists over this appeal under 28 U.S.C. § 1291 because the district court
rendered a final appealable order. When reviewing a district court’s decision in a Social Security
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case, “[w]e apply the same standard of review as the district court,” and we “uphold the
Commissioner’s decision if it is supported by substantial evidence.” Howard v. Comm’r of Soc.
Sec., 276 F.3d 235, 237 (6th Cir. 2002); see also 42 U.S.C. § 405(g) (providing that “the findings
of the Commissioner of Social Security as to any fact, if supported by substantial evidence, shall
be conclusive”). Where the Appeals Council and the ALJ have reached different conclusions,
the decision of the Appeals Council serves as the Commissioner’s final agency action that is
subject to our review. Mullen v. Bowen, 800 F.2d 535, 546 (6th Cir.1986) (en banc).
“A showing of substantial evidence to support the position of the plaintiff will not defeat the
Appeals Council’s decision if the record has substantial evidence to support the Appeals
Council’s decision as well.” Johnson v. Sec’y of Health & Human Servs., 948 F.2d 989, 992 (6th
Cir. 1991) (citing Kinsella v. Schweiker, 708 F.2d 1058 (6th Cir.1983) (per curiam)). In other
words, even if the facts in the record support multiple conclusions, we will affirm the
determination of the Appeals Council if it is supported by substantial evidence. Id. at 992–93.
B. Overpayment
The Social Security Act provides that when a claimant has been overpaid, “proper
adjustment or recovery shall be made.” 42 U.S.C. § 404(a). An overpayment is the difference
between the amount paid to the claimant and the amount the claimant was actually entitled to
receive under the Act. 20 C.F.R. § 404.504. In the case of an overpayment, “there shall be no
. . . recovery by the United States from, any person who is without fault if such adjustment or
recovery would defeat the purpose of this subchapter or would be against equity and good
conscience.” 42 U.S.C. § 404(b)(1). The regulations instruct that a fault determination turns on
whether the overpayment resulted from:
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(a) An incorrect statement made by the individual which he knew or should have
known to be incorrect; or
(b) Failure to furnish information which he knew or should have known to be
material; or
(c) With respect to the overpaid individual only, acceptance of a payment which
he either knew or could have been expected to know was incorrect.
20 C.F.R. § 404.507. If the claimant is not without fault, then he is not entitled to a waiver of
overpayment, and the Administration will pursue recovery. Id. § 404.511. Here, the ALJ
determined that Garcia was without fault, but the Appeals Council reached the opposite
conclusion. At issue now is whether the Appeals Council’s findings as to fault are supported by
substantial evidence.
C. Substantial Evidence
Substantial evidence supports the Appeals Council’s decision. The Appeals Council
noted that Garcia furnished information he knew or should have known to be incorrect when he
returned the forms in July 2012 and March 2013 but did not disclose his monthly workers’
compensation payments. Even as he withheld information about these payments, the Appeals
Council noted, Garcia knew or should have known that this information was material—at least
one of the forms unambiguously stated as much. Garcia asserted that he assumed the forms
referred to the outstanding lump sum award, but neither form distinguishes between monthly
payments and lump sum payments, nor cabins the type of information sought. The Appeals
Council also noted that although Garcia claimed to have informed the Administration of his
workers’ compensation benefits in February 2012, the documents to which he referred lacked
both receipt stamps and payment information. He therefore “accepted payments which he either
knew or could have been expected to know were incorrect.”
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Although not specifically mentioned by the Appeals Council, at least two other facts in
the record support the Appeals Council’s findings. First, the record contains notes from an early
2013 call Garcia had with the Department of Labor in which he was advised that the
Administration would “likely need to know about the [workers’] comp[ensation] he receives
from us as they will likely need to offset their comp[ensation].” Second, Garcia’s initial
application from April 2011 mentioned three of his workers’ compensation claims and confirmed
that he knew that he was to notify the Administration if he was “awarded monetary
compensation.”
Taken together, the facts in the record provide substantial evidence to support the
Appeals Council’s decision. Although substantial evidence of a lack of fault also arguably
exists, it is not for this court to choose between two factually supportable outcomes; we consider
only whether Appeals Council’s decision finds adequate support in the record. Because it does,
we affirm.
D. Garcia’s Arguments
Garcia raises several arguments in support of reversing the district court, none of which
are availing. First, Garcia argues that the Appeals Council was bound by the same substantial
evidence standard that governs our review. This is not so. The regulations instruct that “[i]f the
Appeals Council issues its own decision, it will base its decision on the preponderance of the
evidence.” 20 C.F.R. § 404.979. The preponderance of the evidence standard still applies even
if the Appeals Council’s notice of review cites a lack of substantial evidence as one of the
reasons animating its decision to initiate an own-motion review. See 20 C.F.R. § 404.970(a)
(setting forth circumstances that will trigger review by the Appeals Council). Thus, even if a
lack of substantial evidence triggers review by the Appeals Council, that deficiency does not
alter the standard of review. So although Garcia’s notice stated that the Appeals Council was
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undertaking review of the ALJ’s decision because it was not supported by substantial evidence,
the review by the Appeals Council remained subject to the preponderance of the evidence
standard.
Garcia next argues that the Appeals Council erroneously failed to defer to the ALJ’s
credibility determinations. The ALJ found credible Garcia’s explanation for his failure to submit
information regarding his worker’s compensation benefits: He was confused by the forms and
thought they sought information about only an outstanding lump sum payment. The ALJ also
noted that these forms differed from those Garcia had completed when he initially applied for
SSI benefits. According to the ALJ, the different forms “len[t] credence” to Garcia’s claim of
confusion. The Appeals Council may reject an ALJ’s credibility determination, but “it should do
so expressly, identifying the considerations which led it to its conclusion.” Beavers v. Sec’y of
Health, Ed. & Welfare, 577 F.2d 383, 387 (6th Cir. 1978) (citing Combs v. Weinberger, 501 F.2d
1361 (4th Cir. 1974)). Here, the Appeals Council specifically articulated its reasons for rejecting
this credibility determination. First, the Council noted that the ALJ did not reconcile this
testimony with the conflicting record evidence. Second, the Council found that the record
evidence shows that the Administration sent Garcia the proper follow-up forms. Third, the
Appeals Council concluded that the record did not support Garcia’s claims that he had submitted
any information about his workers’ compensation payments. The decision of the Appeals
Council adequately supported its determination to reject the ALJ’s assessment of Garcia’s
credibility.
Garcia also argued that the district court erred by failing to find that the decision of the
ALJ was supported by substantial evidence. But, as discussed above, the district court’s review
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was cabined to applying the substantial evidence to the decision of the Appeals Council.
Accordingly, this argument is without merit.
III. CONCLUSION
Although the record in this case could arguably support a determination that Garcia was
without fault, we may not substitute our judgment for that of the Appeals Council on this record.
The decision of the Appeals Council is supported by substantial evidence. We therefore
AFFIRM.
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