Debra Hutchison v. Shirley Chater ( 1996 )

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No. 96-1509
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Debra Hutchison, for *
Donald Hutchison, *
*
Appellant, * Appeal from the United States
* District Court for the
v. * Southern District of Iowa.
*
Shirley S. Chater, Commissioner *
of the Social Security *
Administration, *
*
Appellee. *
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Submitted: September 11, 1996
Filed: November 5, 1996
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Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit
Judge, and WOLLMAN, Circuit Judge.
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WOLLMAN, Circuit Judge.
Debra Hutchinson, on behalf of her son Donald Hutchinson, appeals
from the district court's judgment affirming the final decision of the
Commissioner of the Social Security Administration (Commissioner), that
Donald Hutchinson is liable for an overpayment of Supplemental Security
Income (SSI) benefits. We affirm in part, reverse in part, and remand.
I.
Donald Hutchinson is a nine-year-old boy who suffers from autism,
microcephaly, poor growth, and developmental delays. Debra Hutchinson
applied for benefits on Donald's behalf on April 19, 1989, which the Social
Security Administration (SSA) awarded on May 18, 1989, with Ms. Hutchinson
becoming Donald's representative payee.
Initially, Ms. Hutchinson reported that the household's only income
was her husband's wages of $5.50 per hour, forty-one hours per week. In
October of 1989, when the SSA conducted a review of Donald's SSI
eligibility, Ms. Hutchinson reported that her husband's wage had increased
to $6.00 per hour and that he was averaging forty-five hours per week. The
SSA did not initiate another review of Donald's eligibility until May of
1991. Ms. Hutchinson testified that she was aware of her continuing duty
to report changes in income to the SSA. Between October of 1989 and May
of 1991, however, other than mentioning that her husband occasionally
performed odd jobs, Ms. Hutchinson never reported a change in household
income even though her husband's wages increased. Ms. Hutchinson did
report in August of 1990 that one of her children had left the household.
The SSA based its calculation of Donald's benefits on the information
supplied by Ms. Hutchinson. It calculated Donald's benefits using income-
deeming rules that we later invalidated in Tyrrell v. Sullivan, 972 F.2d
252 (8th Cir. 1992), as exceeding the Commissioner's authority.
Eventually, the SSA determined that Donald had received an overpayment of
$4,450.00 for the period July 1990 through September 1991 because of
unreported changes in Mr. Hutchinson's wages.
Ms. Hutchinson requested a waiver of the overpayment recovery,
contending that she was not at fault in connection with the overpayment.
The SSA rejected this assertion, finding that because Ms. Hutchinson failed
to report the changes in her husband's income between October of 1989 and
August of 1991, but had reported previous changes, she was aware of and
failed in her duty to report.
A hearing was held before an Administrative Law Judge (ALJ) on
December 1, 1993. The ALJ approved the application of the regulations we
struck down in Tyrrell, affirmed the existence of an
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overpayment, and denied a waiver, finding that Ms. Hutchinson was not
without fault. The Appeals Council denied review, stating that Tyrrell was
inapplicable to Donald's case. The ALJ's decision, therefore, stands as
the Commissioner's final decision.
Having exhausted her administrative remedies, Ms. Hutchinson sought
review of the Commissioner's decision in the district court, which affirmed
the Commissioner's decision. Ms. Hutchinson appeals, arguing that the ALJ
should have applied the post-Tyrrell regulations in determining Donald's
benefits and should have waived the recoupment of any overpayment.
II.
We agree with Ms. Hutchinson's contention that the ALJ should have
determined Donald's benefits using an income-deeming formula consistent
with Tyrrell.
In denying Ms. Hutchinson's request for review, the Appeals Council
stated that Tyrrell was not applicable to Donald's case because the
Commissioner had not issued an "Acquiescence Ruling." Regardless of
whether the Commissioner formally announces her acquiescence, however, she
is still bound by the law of this Circuit and does not have the discretion
to decide whether to adhere to it. "`[T]he regulations of [SSA] are not
the supreme law of the land. "It is, emphatically, the province and duty
of the judicial department, to say what the law is," Marbury v. Madison,
1 Cranch 137 (1803), and the [Commissioner] will ignore that principle at
[her] peril.'" Hillhouse v. Harris, 715 F.2d 428, 430 (8th Cir. 1983) (per
curiam) (quoting Hillhouse v. Harris, 547 F. Supp. 88, 93 (W.D. Ark.
1982)). Tyrrell is, and was at the time of the ALJ's decision, the law of
this Circuit, and the Commissioner
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must abide by it.1
III.
Ms. Hutchinson next argues that the ALJ erred in finding that Donald
was at fault in connection with the overpayment. Ms. Hutchinson misreads
the ALJ's decision, however, for the ALJ found that it was Ms. Hutchinson
who was at fault.
The fault of a representative payee in connection with an overpayment
supports a denial of waiver of that overpayment. Evelyn v. Schweiker, 685
F.2d 351, 352 (9th Cir. 1982); see also Cannuni v. Schweiker, 740 F.2d 260,
263 (3d Cir. 1984) (waiver provisions of regulations apply to
representative payees). We find that the ALJ's determination of Ms.
Hutchinson's fault is supported by substantial evidence.
That portion of the judgment holding Ms. Hutchinson to be liable for
overpayment of benefits is affirmed. That portion of the judgment
affirming the Commissioner's calculation of the amount of overpayment is
reversed, and the case is remanded to the district court with instructions
to remand to the Commissioner for recalculation of the amount of
overpayment under the post-Tyrrell regulations.
1
We note that the Assistant United States Attorney
representing the Commissioner conceded (wisely, we believe) at oral
argument that Tyrrell applies to Donald's case and agreed that we
should remand for a calculation of benefits consistent with that
ruling. He also agreed that it would not be unfair or inequitable
for any recoupment to be paid in installments rather than in a lump
sum.
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A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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