Hazel Fields v. Kenneth S. Apfel ( 2000 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
_____________
No. 99-3023WM
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Hazel Fields, *
*
Appellant, *
* On Appeal from the United
v. * States District Court
* for the Western District
* of Missouri.
Kenneth S. Apfel, *
*
Appellee. *
___________
Argued: April 13, 2000
Submitted After
Supplemental Briefing: September 20, 2000
Filed: December 8, 2000
___________
Before RICHARD S. ARNOLD, ROSS, and MORRIS SHEPPARD ARNOLD, Circuit
Judges.
___________
RICHARD S. ARNOLD, Circuit Judge.
Hazel Fields seeks appellate review of the District Court's order upholding the
decision of the Commissioner of the Social Security Administration (SSA) that Field's
disability insurance benefits be reduced because she was receiving other public
disability benefits. We conclude that the Commissioner's interpretation of the SSA
regulation in question is reasonable, and accordingly we affirm.
I.
Fields was born in 1943 and has been statutorily blind since childhood. In 1974
she applied for social security disability insurance benefits. In January 1975, the SSA
established a "period of disability" for Fields beginning January 31, 1974, pursuant to
a special regulation concerning blindness, 20 C.F.R. § 404.1582.1 It was determined,
however, that she was not entitled actually to begin receiving benefits because she was
capable of engaging in substantial gainful activity.
Fields worked continuously from January 1974 through June 1987 as a service
representative for the SSA, the very agency that opposes her in this extended litigation.
In August 1987, no longer able to work, she filed a claim to begin receiving her social
security disability benefits and was informed she was entitled to such benefits as of
1
This regulation provides as follows:
If we find that you are blind and you meet the insured status
requirement, we may establish a period of disability for you
regardless of whether you can do substantial gainful activity.
A period of disability protects your earnings record under
Social Security so that the time you are disabled will not
count against you in determining whether you will have
worked long enough to qualify for benefits and the amount
of your benefits. However, you will not necessarily be
entitled to receive disability insurance cash benefits even
though you are blind. If you are a blind person under the
age of 55, you must be unable to do any substantial gainful
activity in order to be paid disability insurance cash benefits.
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July 1, 1987, and would begin receiving them as of December 1987, in light of the
statutory five-month waiting period.
Fields was notified that her monthly primary insurance amount (PIA) was to be
$333.50, effective December 1987. The method used to calculate this amount – called
the average-monthly-wage (AMW) method – was the one applicable to individuals who
"become disabled" before 1979. See 20 C.F.R § 404.204(a). Fields challenged the
computation of her AMW, eventually seeking judicial review of the SSA's final
determination on this issue.2
By letter dated June 21, 1993, while her case was still pending, the SSA notified
Fields that it would be reducing her benefits because she was also receiving other
public disability benefits (a federal disability retirement pension based on her work for
the SSA). The letter stated that benefits should have been reduced beginning July
1987.
A few days later, on June 25, 1993, the District Court issued its opinion, which
concluded that the SSA had used the wrong method in calculating Fields's AMW and
remanded the case to the SSA for a recomputation of benefits. By letter dated
August 17, 1993, the SSA notified Fields that pursuant to 20 C.F.R. § 404.408(a)(2)(i),
she had been overpaid $22,664.60 during the period December 1987 to July 1993,
because she had been receiving other public disability benefits, the disability pension
which she had earned as an SSA employee. Section 404.408(a) provides, in pertinent
part, that a reduction in social security disability benefits is required if:
(1) The individual first became entitled to disability insurance
benefits after 1965 but before September 1981 based on a period of
disability that began after June 1, 1965, and before March 1981, and
2
Fields v. Shalala, No. 92-4015-CV-C-9 (W.D. Mo.).
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(i) The individual . . . is also entitled to periodic benefits under a
workers' compensation law . . . for that month for a . . . disability . . . or
(2) The individual first became entitled to disability insurance
benefits after August 1981 based on a disability that began after February
1981, and
(i) The individual . . . is also, for that month, concurrently entitled
to a periodic benefit (including workers' compensation or any other
payment based on a work relationship) on account of a disability . . . .
(Paragraph (2) applies to Fields's case, according to the SSA.) The letter to Fields
noted that the amount of the overpayment might be adjusted by reason of the District
Court's remand. On October 10, 1993, Fields was advised that as a result of her
increased monthly benefit, as recomputed in accordance with the District Court's order,
the amount of the overpayment was reduced to $21,844.70 for the period of May 1988
through September 1993.
On March 18, 1994, Fields filed a motion for contempt in the District Court,
arguing that the SSA's determination regarding the overpayment and reduction of
benefits was in contravention of the Court's June 25, 1993 order. She argued that the
SSA had conceded that her disability began in 1974 and that the Court's decision relied
on that fact. The contempt motion was denied by order dated October 24, 1995. The
Court held that civil contempt was not appropriate because its order dealt only with the
proper formula to be used in calculating Fields's AMW and did not discuss whether a
public-disability-benefit offset could apply to her.
Upon exhausting her administrative appeals on the determination that her social
security disability benefits were to be reduced by the other public disability benefits she
was receiving, Fields filed a new action in federal district court seeking judicial review
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of this decision.3 Both parties moved for summary judgment. Fields argued that for
purposes of 20 C.F.R. § 404.408(a)(2)(i), her disability began on January 1, 1974, and
thus that the regulation did not apply to her. She also argued that the District Court's
order in her previous case was premised on the fact that her disability began January 1,
1974, and that this holding precluded the SSA from relitigating this issue.
The Commissioner argued that the reduction regulation was correctly applied
because Fields first became entitled to disability insurance benefits in July 1987 for a
disability that began on that date. According to the Commissioner, Fields's entitlement
to a period of disability beginning January 1974 was for the limited purpose of
protecting her insured status, but because she performed substantial gainful activity
through June 1987, she was not under a "disability" within the meaning of the Social
Security Act, 42 U.S.C. § 423(d), until July 1987, the same date that she became
entitled to benefits. Thus, paragraph (2) of the above-quoted regulation did apply.
On October 21, 1997, the District Court granted the Commissioner's motion for
summary judgment. The Court concluded that the Commissioner's interpretation of the
regulation in question was reasonable and thus entitled to deference. The Court
rejected Fields's issue-preclusion argument, concluding that the Court in the previous
action had not reached the precise question of whether the pre-1979 AMW method was
appropriate in Fields's case. Having ruled in favor of the Commissioner, the Court
decided to remand the matter back to the Commissioner for a determination whether
the overpayment assessed against Fields should be waived (see 20 C.F.R. § 404.506).
3
Fields v. Chater, No. 95-4477-CV-C-6 (W.D. Mo.).
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Fields filed a notice of appeal on December 15, 1997. This Court summarily
dismissed the appeal for lack of jurisdiction.4
On May 22, 1998, the Commissioner issued a decision ordering that the
overpayment (as it was then considered by SSA) be waived, so far as past payments
to Fields were concerned. On August 20, 1998, Fields filed a new action in the District
Court.5 Plaintiff asserted that "it may be appropriate to combine [the new suit] with the
prior action" or that "the prior action should be re-opened for a final order to be
entered." She requested a final order so that she could "consider her options regarding
an appeal of the Court's determination on her other issues as decided in the Court's
prior opinion . . . dated 10/21/97."
The Commissioner filed a motion to dismiss, arguing that Fields had gotten the
remedy she sought, and that the matter was moot. In response, Fields asserted that she
"has not quite received all the remedies she has sought" and therefore, the matter was
not moot. She requested that the two cases be consolidated and that a final order be
issued for purposes of appeal. The District Court (understandably) questioned the
correctness of this Court's dismissal of Fields's earlier appeal, but concluded that
consolidation of her present action with a closed case was inappropriate and therefore
granted the Commissioner's motion to dismiss. This appeal followed.
4
We apparently believed the order appealed from was not final. In this we may
have been mistaken. See Forney v. Apfel, 524 U.S. 266 (1998). In any case, Fields
has never received appellate review of her contention that no offset should be
occurring. This is not her fault, and there is no reason why she should not receive that
review now.
5
Fields v. Apfel, No. 98-4206-CV-C-3 (W.D. Mo.).
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II.
On appeal, Fields challenges the applicability of 20 C.F.R. § 404.408(a)(2)(i)
to her case. She again argues that the Commissioner's interpretation of the regulation
is unreasonable, and that the District Court erred in deferring to that interpretation.
She also renews her argument that the District Court's order of June 25, 1993,
establishes that her disability began before February 1981, and therefore precludes the
Commissioner from applying the public-disability-benefits reduction to her case.
We must reject Fields's issue-preclusion argument, substantially for the reasons
given by the District Court. That court's earlier ruling, addressing the proper
computation of benefits by the AMW method, simply assumed that the AMW method
was the appropriate one. That was the position taken by both sides at the time. Thus,
the applicability of the AMW method was not placed in issue, and the court's
assumption that this method applied cannot have preclusive effect. Both the District
Court and the SSA at the time, agreed that Fields's disability had been determined in
1974. A proposition, in order to receive collateral-estoppel effect, must have been
actually litigated previously. That is not the case here.
We turn to the merits. It is paragraph (2) of the regulation that we must interpret.
Specifically, when did Fields become "disabled"? If her disability began after February
1981, paragraph (2) applies, and her benefits must be reduced on account of her receipt
of employment-related disability benefits. If, on the other hand, her disability began
in February 1981, or at any earlier time, the offset is not properly applied. Several
things are clear. First, Fields did not begin receiving benefits until 1987. Second, she
has been awarded a "period of disability" beginning in 1974. However, between 1974
and 1987, she was capable of substantial gainful activity, and in fact did work. So
when did she become "disabled"? In general, someone is disabled, under 42 U.S.C.
§ 423(d)(1), only if there is an "inability to engage in any substantial gainful activity by
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reason of . . . [an] impairment . . .." If this definition applied, Fields would lose,
because she was able to engage in substantial gainful activity until 1987.
However, Fields is blind, and special provisions therefore apply to her. Under
20 C.F.R. § 404.1505(a), there are "different rules for determining disability for people
who are statutorily blind." A definitional section of the statute, 42 U.S.C. § 416(i)(1),
provides as follows:
Except for purposes of sections 402(d), 402(e), 402(f), 423,
and 425 of this title, the term "disability" means (A) inability
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which
can be expected to result in death or has lasted or can be
expected to last for a continuous period of not less than
twelve months, or (B) blindness . . ..
The statute goes on to define "blindness," and there is no dispute that Fields meets this
definition. Under this provision, therefore, blindness is ipso facto a "disability."
Certain sections of the statute are excepted from this definition, but the offset section,
§ 424a, is not one of those listed.
This is not the end of the analysis, however. The amendment to § 424a that the
government wishes to apply to reduce Fields's benefits contained an effective-date
provision. See § 2208(b) of Pub. L. No. 97-35, 95 Stat. 839, which reads as follows:
The amendments made by Subsection (a) [the
subsection that extended reduction of benefits to persons
who had been receiving payments other than workers'
compensation] shall be effective with respect to individuals
who first become entitled to benefits under [42 U.S.C.
§ 423(a)] for months beginning after the month in which this
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Act is enacted [August 1981], but only in the case of an
individual who became disabled within the meaning of [42
U.S.C. § 423(d)] after the sixth month preceding the month
in which this Act is enacted [August 1981].
Thus, the effective-date provision tells us that Congress intended the reduction
requirement to apply to persons who had become disabled after August of 1981, and
that, in making this determination, the definition of disability contained in § 423(d) be
used. Section 423 is one of the statutes excepted from the definition of disability
contained in 42 U.S.C. § 416(i)(1). Accordingly, Fields cannot avail herself, in the
circumstances of this case, of the special provision defining blindness as ipso facto a
"disability." Instead, her situation is governed by the general definition of disability
contained in § 423(d), and, under this definition, she did not become disabled until after
1981. The amendment to § 424a therefore does apply to her, and it is not unreasonable
for the Commissioner to read paragraph (2) of his regulation as using the same
definition of disability that Congress used in § 424a, the statute pursuant to which the
regulation was adopted.
As the District Court observed, this conclusion is consistent with the only other
reported case in point, Giattina v. Chater, 916 F. Supp. 555 (E.D. Va. 1996), aff'd, 125
F.3d 848 (Table), 1997 WL 592740 (4th Cir. 1997).
The Commissioner's interpretation of the regulation is not unreasonable. It
follows the plain language of the regulation, and is consistent with the statute pursuant
to which the regulation was adopted. For these reasons, the judgment of the District
Court is
Affirmed.
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A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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