Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_06-cv-00629/USCOURTS-azd-4_06-cv-00629-1/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:416 Denial of Social Security Benefits

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

NANCY COOMER, as Personal

Representative of the Estate and on Behalf

of Danny Coomer, Deceased,

Plaintiff, 

vs.

MICHAEL J. ASTRUE, 

Commissioner of the Social 

Security Administration,

Defendant. 

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No. CIV 06-629-TUC-CKJ 

ORDER

On April 11, 2008, Magistrate Judge Jacqueline Marshall issued a Report and

Recommendation [Doc. # 28] in which she recommended that Plaintiff’s Motion for

Summary Judgment [Doc. # 14] be denied and Defendant's Cross-Motion for Summary

Judgment [Doc. # 17] be granted. On April 25, 2008, Plaintiff filed Objections to Report and

Recommendation. Defendant has not filed a response.

Magistrate Judge’s Statement of the Procedural Background and Factual Assertions

The Court accepts the procedural background as set forth in the Report and

Recommendation. 

The Court accepts the facts as set forth by the magistrate judge except the Court finds

that there was usually two employees working at the store during the week and one employee

working at the store on the weekends, see Administrative Record (“AR”), p. 645A,Coomer

hired the services of an accountant to prepare store taxes and a bookkeeper, Linda Franklin

Case 4:06-cv-00629-CKJ Document 31 Filed 10/22/08 Page 1 of 7
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( “Franklin”), to compute payroll. When Franklin took over the duty of preparing daily

deposits in March of 1995, the store deposit records were in disarray. AR, p. 668.

Standard of Review

The findings of the Commissioner are meant to be conclusive, 42 U.S.C. §§ 405(g),

1383(c)(3), and a decision to overturn a denial of benefits is appropriate only if the denial “is

not supported by substantial evidence or [if the denial] is based on legal error.” Matney v.

Sullivan, 981 F2d 1016, 1019 (9th Cir. 1992), citations omitted; Massachi v. Astrue, 486 F.3d

1149 (9th Cir. 2007). “Substantial evidence is such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.” Parra v. Astrue, 481 F.3d 742, 746 (9th

Cir. 2007). The standard is less than a “preponderance of the evidence” standard. Matney,

981 F.2d at 1019. Further, a denial of benefits is to be set aside if the Commissioner has

failed to apply the proper legal standards in weighing the evidence even though the findings

may be supported by substantial evidence. Frost v. Barnhart, 314 F.3d 359, 367 (9th Cir.

2002). Indeed, this Court must consider both evidence that supports, and evidence that

detracts from, the conclusion of the Administrative Law Judge (“ALJ”). Frost, 314 F.3d at

366-67.

Objections of Plaintiff

The Administrative Law Judge (“ALJ”) determined that Danny Coomer (“Coomer”)

had engaged in substantial gainful activity (“SGA”) as the sole proprietor of a feed business.

Plaintiff asserts that the ALJ erred in discounting or selectively reading evidence from other

persons (i.e., Christopher Stump (“Stump”), Linda Franklin (“Franklin”), and vocational

expert David P. Goguen, M.A., C.R.C. (“Goguen”)) for a proper understanding of what

constituted management of the business. Plaintiff also asserts that the ALJ misconstrued

Coomer’s testimony. Plaintiff asserts that the Report and Recommendation perpetuates these

errors.

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Substantial Gainful Activity

SGA is work done for pay or profit that involves significant physical or mental

activities. 20 C.F.R. § 404.1572(a)-(b). If a claimant is self-employed, the Commissioner

is to consider the work activities the claimant performed and their value to the business to

determine whether the claimant engaged in SGA. 20 C.F.R. § 404.1575(a)(2). The

regulations set forth three alternative tests for determining whether a person is engaged in

SGA:

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 . . .

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 individual in your community

who are in the same or similar businesses as their means of livelihood.

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 [the Commissioner’s Earnings Guidelines] 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.

20 C.F.R. § 404.1575(a)(2)(i)-(iii). Under test one, services are considered significant to a

business that involves more than one person “if [the claimant] contribute[s] more than half

the total time required for the management of the business, or [the claimant] render[s]

management services for more than 45 hours a month regardless of the total management

time required by the business.” 20 C.F.R. § 404.1575(b)(1).

Vocational Expert Evidence

Plaintiff asserts that the ALJ erred in failing to consider the uncontradicted report of

vocational expert Goguen. Goguen analyzed what constituted “management of the business”

in connection with Coomer’s feed store by reviewing testimony, affidavits, and the

Dictionary of Occupational Titles (“DOT”). Plaintiff asserts that 20 C.F.R. § 404.1566(d)

indicates the Commissioner takes administrative notice of the reliability of job data

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information in the DOT. Plaintiff argues that the DOT cannot be summarily dismissed and

that vocational expert testimony must be considered. Lester v. Chater, 81 F.3d 821, 830-31

(9th Cir. 1995). That regulation states:

(d) Administrative notice of job data. When we determine that unskilled, sedentary,

light, and medium jobs exist in the national economy (in significant numbers either

in the region where you live or in several regions of the county), we will take

administrative notice of reliable job information available from various governmental

and other publications. For example, we will take notice of --

(1) Dictionary of Occupational Titles, published by the Department of Labor

* * * * *

20 C.F.R. § 404.1566(d)(1). The “for example” language of the C.F.R. implies that

administrative notice of reliable job information will be taken, but that information may be

taken from various sources, including those listed as examples. At least one other court has

found that the Commissioner may take notice of the DOT. See McBurrows v. Commissioner

of Social Security, 928 F.Supp. 724, 728 (E.D.Mich. 1996). Further, the Ninth Circuit has

stated that the “Secretary may rely on the general job categories of the Dictionary, with its

supplementary Selected Characteristics, as presumptively applicable to a claimant’s prior

work. Villa v. Heckler, 797 F.2d 704, 798 (9th Cir. 1986). Although Villa did not address

whether the Commissioner shall or may consider the DOT, it did state that the Commissioner

was not required to rely on the DOT. In this case, the ALJ considered the plain and simple

meaning of the word “management” in assigning a meaning to its use in the regulations. The

ALJ considered Goguen’s memorandum and determined that little weight should be afforded

to the memorandum because it relied heavily on Stump’s statements, which were vague and

ambiguous, that contradicted Coomer’s testimony. In other words, the ALJ considered the

DOT as set forth in the memorandum yet determined it was entitled to little weight. The ALJ

determined that Coomer’s testimony, given, at a time closer to the time of the events, was

more probative. 

Plaintiff further asserts that 20 C.F.R. § 404.1560(b)(2) notes that the Commissioner

will consider the DOT and vocational expert testimony in determining whether a claimant

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can perform his past work. However, the issue before the ALJ was not whether Coomer

could perform his past work, but whether he was engaged in SGA. 

The Court finds that the ALJ was not required to consider the DOT. Nonetheless, the

ALJ did consider the DOT as set forth in Goguen’s memorandum and determined it was

entitled to little weight. Additionally, the Court notes that the ALJ set forth the reasons for

giving the memorandum little weight. The Court finds there is substantial evidence to

support the ALJ’s conclusion to afford the memorandum little weight. Furthermore, the

ALJ’s consideration is not based on legal error.

Consideration of the Evidence as a Whole

Plaintiff asserts that the ALJ erred by failing to consider the evidence as a whole. Day

v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 1975), see also 20 C.F.R. § 404.1520(a)(3)

(“We will consider all evidence in your case record when we make a determination or

decision whether you are disabled.”). Plaintiff asserts that the ALJ needed to consider

evidence from lay witnesses regarding the management activities at the feed store. The ALJ

stated:

The claimant was the sole proprietor of his feed business which accounted for

substantial income to him. He performed all management duties, including hiring and

paying employees, ordering feed to replenish his stock, paying bills, banking, keeping

records, setting prices, hiring an accountant, setting the hours of operation, and the

overall supervision of employees, who worked fairly independently. 

Administrative Record, pp. 574-75. The ALJ further stated:

[The claimant’s ex-wife] confirmed that the employees operated fairly independently

at work, but she did not contradict the claimant’s testimony that he had the

responsibility for such management decisions as hiring employees, paying the bills,

setting the hours of operation, hiring the accountant, and approving all tax filings.

Similarly, the affidavit of Christopher Stump does not contradict the claimant in this

respect . . . Mr. Stump, who worked as store manager from August 1994 to August

1996, opined that such “management” tasks included closing the cash register at

night, determining changes to standard orders, and arranging for changes to the

employees’ schedules. He does not say, however, that employees could do such

things as hire and fire themselves, set their own wages, determine the retail prices,

adjust the hours of operation, and withdraw funds from the business’s accounts at

will. . . 

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Similarly, the affidavit of former employee Linda Franklin (Exhibit B55) [indicates

that she] worked as a bookkeeper for the claimant from March 1995 to March 1997.

Id., at 575-76. 

The ALJ considered the management activities conducted by Coomer. The ALJ also

considered the activities of the employees. In arguing that the accountant and bookkeeper

performed payroll, tax, and bank deposit preparation, Plaintiff does not provide any authority

that these activities are managerial rather than clerical. Contrary to Plaintiff’s assertion, the

ALJ considered the evidence as a whole, but clearly did not accept Plaintiff’s argument that

certain functions completed by employees were managerial in nature. The ALJ’s conclusion

that Coomer engaged in SGA by rendering services that were significant to the business and

by receiving a substantial income from the business, 20 C.F.R.§ 404.1575(a)(1), is supported

by substantial evidence and is not based on legal error.

Summary Dismissal of Coomer’s Medical Impairments

Plaintiff argues that the ALJ failed to consider that Coomer’s medical impairments

affected Coomer’s ability to consistently be involved with the business. However, the

regulations provide that “[i]f you are doing [SGA], we will find that you are not disabled.”

20 C.F.R. § 404.1520(a)(4)(I). Indeed, the Ninth Circuit has stated that “if a beneficiary is

engaged in SGA he is no longer entitled to benefits.” Katz v. Sec’y of Health & Human

Services, 972 F.2d 290, 293 (9th Cir. 1992). Plaintiff has provided no authority for her

assertion that the medical condition should be considered in determining whether a claimant

is engaged in SGA.

Moreover, Plaintiff’s objection is based on Coomer being confined to a hospital or his

home for extended periods of time in which, Plaintiff asserts that management functions were

performed by others. Coomer had approximately two Chrohn’s disease related episodes that

required hospitalizations per year. See AR, p. 85. The evidence establishes that Coomer was

not able to be present in the store for periods of time. See e.g., AR, p. 668. However, this

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fails to establish that Coomer did not hire and pay employees, order the feed to replenish the

stock, set the prices, set the hours of operation, and supervise the employees who worked

fairly independently. Although the affidavit of Franklin indicates that Franklin would pay

bills, make bank deposits and maintain the books, Plaintiff has not presented any authority

that these functions were managerial as opposed to clerical. The Court notes that the DOT

indicates that reconciling cash with receipts is a managerial function. See Plaintiff’s MSJ,

p. 9. Nonetheless, as discussed by the magistrate judge, the majority of the managerial

functions set forth in the DOT were performed by Coomer or did not need to be performed

by anyone. The ALJ noted that Franklin did not spend even close to 45 hours a month

working at the business. However, the ALJ considered that Franklin did not state that

employees were permitted to hire and fire, set wages, determine retail prices, etc. In other

words, the ALJ was considering the managerial functions conducted by Coomer rather than

the amount of time he expended in performing those functions. 

The Court finds that substantial evidence supports the ALJ’s determination that

Coomer engaged in SGA under test one of 20 C.F.R. § 404.1575(a)(2)(i),

 

Accordingly, after an independent review, IT IS ORDERED:

1. The Report and Recommendation [Doc. # 28] is ADOPTED;

2. Plaintiff's Motion for Summary Judgment [Doc. # 14] is DENIED;

3. Defendant's Cross-Motion for Summary Judgment [Doc. # 17] is GRANTED;

4. Summary judgment is awarded in favor of Defendant and against Plaintiff;

5. The decision of the ALJ is AFFIRMED; 

6. The Clerk of the Court shall enter judgment in this case and shall then close

its file in this matter.

DATED this 22nd day of October, 2008.

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