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w . vi ll anova . e du/thir dc ir c uit_2010/1932NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N o. 09- 1501 V I CT O RI A BE EK S,

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( O pi ni on fi l ed : February4, 2010)

OP I NI ON A M B R O , C i r cui tJ udge V i ct or i a B eeks appea l s fr om the D i s tr i ctC our t ’ s or deraff i r m i ng the det erm i nat i onT he A L J ’ s deci s i on beca m e the C om m i s s i oner ’ s fi nal deci s i on on J ul y27, 2007, 1 w h e n th e A p p e a ls C o u n c il d e n ie d B e e k s ’s re q u e s t f o r r e v ie w o f

th e A L J ’s d e c is io n . See 20 C . F. R . §§ 404. 981, 416. 1481. T he D i s tr i ctC our thad j ur i s di ct i on under42 U . S. C . § 405( g) , and w e have 2 appel l at e j ur i s di ct i on pur s uantt o 28 U . S. C . § 1291. 2 of the A dm i nis trat i ve L aw Judg e (“A L J”) den y i ng her cl ai m for So ci al S ecuri tyben efi t s. 1 F o r th e re aso n s tha t fo ll o w , w e v ac ate the D istri ct C o u rt ’s ord er a ff irm ing the A L J’s deci s i on and r emand t he ca s e w i th i ns truct i ons t o r eturn i tt o the C om m i s s i onerforfur ther pr ocee di ngs cons i s t entw i th t hi s opi ni on. B e c a u se w e w rite s o lelyf o r th e p a rties , w e d o n o t re c ite th e f a c ts g iv in g rise to th is appea l . W e exe r ci s e pl enaryr evi ew overl egal i s s ues and r evi ew the A L J ’ s fac tual

2 f in d in g s to d e te rm in e w h e th e r t h e ya re s u p p o rt e d b ys u b s ta n tia l e v id e n c e . A l l en v. B arnh art , 417 F. 3d 396, 398 ( 3d C i r . 2005) . “Subs t ant i al evi dence has been de fi ned as m or e than a mer e s ci nt i l l a. I tm eans s uch r el evantevi dence as a r eas onabl e mi nd m i ght acc eptas adequa t e t o s uppor ta conc l us i on. ” R eef er v. B arnh art , 326 F. 3d 376, 379 ( 3d C ir . 2 0 0 3 ) (i n terna l qu o tat ion m ark s an d cit ati o n s o m itted). T o det erm i ne di s abi l i ty , the A L J us es a fi ve- s t ep s equent i al eval uat i on pr oces s . 20 C .F .R . § 4 0 4 .1 5 2 0 ; s ee al s o P l um m erv. Apf

el , 186 F. 3d 422, 428 ( 3d C i r . 1999) . I f a fi ndi ng of di s abi l i tyornon- di s abi l i tyi s m ade a tanypoi nti n the s equent i al anal y s i s , t he A L J d o e s n o t r e v ie w th e c la im f u rt h e r. 2 0 C .F .R . § 4 0 4 .1 5 2 0 (a )( 4 ). A ts t ep one, the A L J cons i der s w hetherthe cl ai m anti s engage d i n s ubs t ant i al g a in f u l a c tiv ity (“ S G A ” ). Id . § 4 0 4 .1 5 2 0 (a ). If h e o r sh e is s o e n g a g e d , the c laim a n t is3

n o t d is a b le d re g a rd le s s o f h is o r h e r m e d ic a l c o n d itio n . I d. § 404. 1520( b) . I f the cl ai m ant i s notengage d i n s ubs t ant i al gai nful act i vi ty , s t ep tw o r equi r es the A L J t o cons i der w hetheran i m pai r m entorcombi nat i on of i m pai r m ent s exi s t s thats i gni fi cant l yl i m i t s t he c la im a n t’ s p h y s ic a l o r m e n ta l a b ility to d o b a s ic w o rk a c tiv itie s . I d. § 404. 1520( c) . I f the cl ai m ant ’ s condi t i on i s deemed s ever e, the ana l y s i s cont i nues t o s t ep thr ee, i n w hi ch the A L J d e ter m in e s w h e th e r th e c laim a n t’s im p a irm e n ts m e e t all th e sp e c if ic m e d ica l cr iteria of one of the i m pai r m ent s l i s t ed i n an appe ndi x t o the r egul at i ons , or , t aken a s a w hol e, a re m e d ic a lly e q u a l to o n e o f th e m . I d. § 404. 1520( a) ( 4) ( i i i ) . I f s o, he ors he i s found d is a b le d a n d e n title d to b e n e f its ; if n o t, th e A L J m o v e s o n to s te p f o u r. I d. § 4 0 4 . 1 5 2 0 (d), ( e) . T her e, the A L J as s es s es the cl ai m ant ’ s “r es i dual funct i onal capa ci ty . ” I d. § 404. 1520( a) ( 4) ( i v) . I f the cl ai m anti s deemed capa bl e of doi ng hi s orher“pas tr el evant w o rk ,” th e A L J w ill f

in d th a t h e o r s h e is n o t d is a b le d . Id . If the claim an t can n o t perf o rm pas tr el evantw or k, then the A L J pr ocee ds t o the fi nal s t ep, s t ep fi ve, t o det erm i ne w h e th e r t h e re is o th e r w o rk in th e n a tio n a l e c o n o m yth a t th e c la im a n t c a n p e rf o rm . I d. § 4 0 4 . 1 5 2 0 (a)(4)(v ). O u r pro b lem at th e o u tsetis th at w e c an n o t determ ine th e b asis fo r th e A L J’s rul i ng ats t ep one. Subst ant i al w or k “i nvol ves doi ng s i gni fi cantphy s i cal orm ent al act i vi t i es , ” and “ gai nful w or k” i s done “f orpayorpr ofi t . ” I

d. § 404. 1572. U nderthe reg u lat ion s, ea rnin g s d erive d fro m the w o rk a cti v ityare g en era ll ythe p ri m aryT h e A L J w ill c o n sid e r “ o th e r in f o rm a tio n in a d d iti o n to . . . ea rn in g s if th e re is 3 evi dence i ndi cat i ng that[the cl ai m ant ] m aybe enga gi ng i n s ubs t ant i al gai nful act i vi tyor that[the cl ai m anti s ] i n a pos i t i on t o contr ol w hen ea rni ngs ar e pai d . . . orthe amountof w ag es p aid . . . . ” 2 0 C . F . R . § 4 0 4 . 1 5 7 4 (b)(3 )(i i) . 4 con si derat i on i n ev al uati ng the w ork fo r s ub st anti al gainful act i vitypu rposes. See i d. 3 § 404. 1574( a) ( 1) ( “G ener al l y , i f y ou w or ked fors ubs t ant i al earni ngs , w e w i l l fi nd that y o u are ab le t o d o su b stan ti al ga inf u l acti v ity . H o w ev er, th e f ac t th at y o u r ea rnin g s w ere nots ubs t ant i al w i l l notnece s s ar i l ys how thaty ou ar e notabl e t o do s ubs t ant i al gai nful a c tiv ity.” ). I f

a c la im a n t’ s e a rn in g s e x c e e d g u id e lin e s s e t o u t in th e re g u la tio n , a pr es um pt i on ar i s es thatthe cl ai m anti s engage d i n s ubs t ant i al gai nful act i vi ty . W or k m ay be “s ubs t ant i al ” eve n i f i ti s done on a “ part - t i m e bas i s . ” I d. § 4 0 4 .1 5 7 2 (a ). H o w e v e r, a cl ai m antm ayr ebutthe pr es um pt i on bys how i ng thathi s orherw or k i s done unders peci al c o n d itio n s . See i d. § 416. 973( c) ( “I f y ourw or k i s done unders peci al condi t i ons , w e may fi nd thati tdoes nots how thaty ou have the abi l i tyt o do s ubs t ant i al gai nful act i vi ty . ”) (l is tin g e x a m p le s o f

s p e c ia l c o n d itio n s ). T hr oughoutthe al l eged pe r i od of di s abi l i ty , B eeks w as empl oy ed part - t i m e ( 20 h o u rs p e r w e e k ) a s a sc h o o l aid e . S h e w a s la id o f f in A u g u st 2 0 0 6 , ab o u t a m o n th p rio r to the admi ni s tr at i ve hea r i ng, due t o fundi ng cutbacks bythe ci ty . A . R . 288. A tthe t i m e of herl ay off, s he w as earni ng $10. 50 perhour . Pr i ort o 2006, herannual earni ngs w er e as f o llo w s : $ 7 ,9 9 0 in 2 0 0 2 , $ 8 ,9 5 6 .5 0 in 2 0 0 3 , $ 7 ,1 4 5 .2 5 in 2 0 0 4 , a n d $ 7 ,8 8 3 .8 8 in 2 0 0 5 . A .R . 5 6 .A headi ng i n t he A L J ’ s deci s i on s t at es thatB eeks “has notengage d i n s ubs t ant i al 4 gai nful act i vi tys i nce O ct ober1, 2002, t o the al l eged ons etdat e. ” A . R . 18. W e agr ee w i th the D i stri ctC ou rtthat the A L J’ s i nclusi on of the w ord “no t ” i n thi s heading w as a typ o g ra p h ic a l e rr o r, g iv e n th e a n a lysis th e A L J c o n d u c te d a t s te p o n e . 5 A ts t ep one, the A L J found thatB eeks “w as w or ki ng dur i ng m os tof the t i m e s he al l eged di s abi l i ty , ” ea r ni ng $10. 50 perhour , 20 hour s perw eek. A . R . 20. W hi l e B eeks cl ai m ed she w as afforded speci al accom m od at i on s atw ork, the A L J foun d thattho se acc om m odat i ons cons i s t ed mer el yof co- w orker s occa s i onal l yhel pi ng her , and thi s w as nota form al acc om m odat i on. T he A L J concl uded that , as compar ed t o the other empl oy ees i n herpos i t i on, B eeks w or ked the s ame num berof hour s , w as expec t ed t o do the s ame w or k, and w as pai d t he s ame am ount . B eeks ’ s r ece ntl ay off r es ul t ed fr om fundi ng cut s , notherdi s abi l i ty , and the A L J not ed thatB eeks w as col l ect i ng unempl oym ent , forw hi ch s he mustcert i fys he i s r eady , w i l l i ng, and abl e t o w or k. T he A L J concl uded thatB eeks ’ s empl oym ent“equa t ed t o s ubs t ant i al gai nful act i vi ty , ” and 4 that“the onl yr eas on s he [w a] s notw or ki ng m or e hour s i s thatherj ob does notal l ow for a n ym o re , n o t f

o r a n yo th e r r e a s o n .” A .R . 1 9

– 2 0 . In th is an aly sis, h o w ev er, th e A L J fa il ed to co n side r (or m en ti o n ) th at B ee k s’s earni ng s as a s cho ol ai de af t er the all eged on setof h er di sabi l i ty , excep ti n 2 00 6, w ere l ess than the ave r age mont hl yal l ow ance forpr es um ed s ubs t ant i al act i vi ty . T o i l l us tr at e, di vi di ng B eeks ’ s 2004 earni ngs bythe tw el ve mont hs i n w hi ch theyw er e ea rned, s he e a rn e d a n a v e ra g e o f

$ 5 9 5 .4 4 p e r m o n th in 2 0 0 4 , b e lo w th e su b sta n tial g a in f u l ac tiv ity6

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$ 8 1 0 . See h ttp ://w w w .s s a .g o v /O A C T /C O L A /s g a .h tm l. T he s ame hol ds true for2002 ( $665. 83, bel ow the $780 thr es hol d) , 2003 ( $746. 38, bel ow the $ 80 0 thr eshold) , and 20 05 ($656 . 99 , below the $ 83 0 thr eshold) . F or these y ears , B e e k s’s e m p lo ym e n t is n o t p re su m p tiv e lysu b sta n tial a c tiv ity . B e c a u se th e A L J f a iled to r ecogni ze thi s i s s ue and c ons i deri ti n hi s s t ep one a nal y s i s , w e mustvaca t e and r emand. W e not e furtherthatthe A L J cont i nued t o s t eps tw o thr ough fourw i thouts t at i ng w hetherhe w as pr ocee di ng i n t he al t ernat i ve orpr ocee di ng pas ts t ep one onl yas t o the p e rio d in w h ich B e e k s w a s u n e m p lo y e d (a f ter A u g u st 2 0 0 6 ). W h ile w e c o u ld re c o n c ile the A L J ’ s anal y s i s byconcl udi ng thats t eps tw o thr ough fouranal y zed w hetherB eeks w as d is a b le d o n ly d u ri n g th e p e ri o d s h e w a s u n e m p lo y e d , th is w o u ld b e g u e s s w o rk o n o u r p a rt . M or eover , ats t ep four“pas tr el evantw or k” mustal s o be s ubs t ant i al gai nful act i vi ty . 20 C . F. R . § 404. 1560( b) ( 1) . T he A L J concl uded thatB eeks had the r es i dual funct i onal c a p a c ity to p e rf

o rm lig h t w o rk a n d c o u ld p e rf o rm h e r p a s t r e le v a n t w o rk a s a s c h o o l a id e . T he A L J’ s r econ si derat i on of st ep o ne o n rem and m ayaffect w hetherB eeks’s w ork as a s chool ai de cons t i tut es “pas tr el evantw or k. ” T herefore, w e vaca t e and rem and for further el abo rat i on of the st ep o ne an al y si s, part i cul ar l yas t o w hetherB eeks ’ s w or k as a s chool ai de cons t i tut ed SG A thr oughoutt he e n t i r e a l l e g e d p e r i o d o f d i s a b i l i ty.