Opinion ID: 666924
Heading Depth: 2
Heading Rank: 2

Heading: Sufficiency of the evidence to find SGA

Text: 20 Because we conclude that illegal activity may be substantial gainful activity, we must review the ALJ's determination that Corrao is engaged in SGA to determine if it is supported by substantial evidence in the record. Young v. Sullivan, 911 F.2d at 183. 21 Substantial gainful activity is work activity that involves doing significant physical or mental activities on a full or part-time basis, and is the kind of work usually done for pay or profit, whether or not a profit is realized. 20 C.F.R. Secs. 416.972(a) & (b) (1993). Activities that include taking care of oneself, hobbies, therapy, and household tasks are not considered SGA. 20 C.F.R. Sec. 416.972(c) (1993). 22 The regulations establish a presumption of SGA if the claimant earned more than $300 a month in 1989 or $500 a month in 1990. See C.F.R. Secs. 416.974(b)(2) & 416.975(a)(2)(c) (1993); Keyes v. Sullivan, 894 F.2d 1053, 1056 (9th Cir.1990). 3 The presumption is rebuttable by the claimant. See, e.g., Dotson, 1 F.3d at 576; Dugan v. Sullivan, 957 F.2d 1384, 1390 (7th Cir.1992); Keyes, 894 F.2d at 1056. 23 The Secretary found that Corrao acquired approximately $150 worth of heroin daily, or about $4,200 of heroin a month, well over the regulatory baseline. The ALJ concluded that this earning level, in conjunction with the fact that Corrao was, in effect, running a sole proprietorship in drug dealing and performing services significant to that business, establish that Corrao performed SGA. 24 While it is clear that Corrao's income establishes a presumption that he is engaged in SGA, these guidelines are only a presumption and  'do not relieve an ALJ of the duty to develop the record fully and fairly.'  Dotson, 1 F.3d at 576 (quoting Dugan, 957 F.2d at 1390) (citations omitted). For activity to constitute SGA, it still must involve significant physical or mental activities and must be the type of work usually done for pay or profit. 20 C.F.R. Secs. 416.972(a) & (b). 25 In considering whether the presumption is rebutted, the factors to be considered include the responsibilities and skills required to perform the work, the amount of time the individual spends working, the quality of the individual's work, special working conditions, and for individuals who are self-employed, the value of their work to the business. See 20 C.F.R. Secs. 416.973-416.976; see, e.g., Katz v. Secretary of Health & Human Servs., 972 F.2d 290, 293 (9th Cir.1992); Keyes v. Sullivan, 894 F.2d at 1056. Consideration of these factors leads us to conclude that Corrao was not engaged in SGA. 26 First, Corrao spent only a minimal amount of time working. The record reflects that when one of Corrao's purchasers was interested in obtaining drugs, he would contact Corrao. The individual would pick up Corrao, drive him to the purchase area, wait for a few minutes while the transaction was performed, and drive Corrao home. The entire activity, including the car ride, took only twenty-five to forty-five minutes. 27 While the regulations clearly provide that part-time work may be considered substantial, 20 C.F.R. Sec. 416.972(a), substantial work must involve more time than Corrao invested. See Katz, 972 F.2d at 292 (twenty hours per week may be substantial); Keyes, 894 F.2d at 1056 (approximately twenty-five hours a week may be substantial). Rather than working several hours a day, Corrao's activities consumed less than an hour a day, the vast majority of which was spent riding as a passenger in a car. Such slight work performed for minimal periods of time is not substantial gainful activity. See Kornock v. Harris, 648 F.2d 525 (9th Cir.1980) (individual with ability to work several hours daily and only with interruptions due to asthma could not engage in SGA); Cornett v. Califano, 590 F.2d 91, 94 (4th Cir.1978) (ability to work intermittently as dictaphone transcriber a few hours daily at home is not ability to engage in SGA). 28 Even more significant to our holding is our conclusion that Corrao's activities did not require any significant mental or physical exertion. Corrao did no planning prior to these purchases, but instead was contacted by purchasers when they desired some drugs. Corrao did not organize drug dealers, nor did he have an organized or extensive clientele. Instead, the record reflects that two or three people asked him to purchase drugs for them. Corrao did not use his own money for the transactions but was provided with funds by the ultimate purchaser. Finally, although the Secretary found that Corrao received uncut heroin and used his physical and mental capacities to cut it (i.e., to add other substances to it), the record does not support such a finding. Corrao in fact testified that he purchased uncut heroin and gave it directly to the ultimate purchasers. (Admin.Record at 28-30). There is no indication that he ever sold his portion of the drugs for cash or other items. In sum, there is no indication of initiative, organization, responsibility, or physical or mental exertion by Corrao as is required for SGA. 29 The regulations establish a presumption of SGA for self-employed individuals who render services significant to their business's operation and who receive a substantial income from the business. See 20 C.F.R. Sec. 416.975(a)(3). If one has a sole proprietorship, all services rendered are significant to the business. See 20 C.F.R. Sec. 416.975(b)(1). The Secretary applied this section finding that Corrao is engaged in SGA because his activities constitute a sole proprietorship and because all of his activities were significant to his business. We disagree. 30 The Secretary's regulations clearly anticipate their application in the traditional employment context, rendering them difficult to apply in the context of illegal drug purchases. Nevertheless, we cannot agree that Corrao's limited and periodic efforts to obtain heroin constitute a sole-proprietorship in any sense of the word. The concept of a sole proprietorship suggests a business in which the owner invests time and capital, uses management or organizational skills, and hires employees. See 20 C.F.R. Sec. 416.975(b). Corrao did not have employees, manage other workers, or invest his own capital or the capital of others in a potentially profit-making venture. Therefore, he did not act in any sense to operate an ongoing business. Because Corrao did not operate a business, his services were not significant within the meaning of the regulations for self-employed claimants.