Court Opinion

ID: 2642455
Source: CourtListenerOpinion
Date Created: 2013-11-15 21:31:19.780453+00
Date Added: 2024-06-11T13:08:22.564563
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                NOV 15 2013

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

MARY F. REEVES,                                  No. 11-56930

              Plaintiff - Appellant,             D.C. No. 2:10-cv-00259-PJW

  v.
                                                 MEMORANDUM*
CAROLYN W. COLVIN, Commissioner
of Social Security,

              Defendant - Appellee.

                   Appeal from the United States District Court
                        for the Central District of California
                   Patrick J. Walsh, Magistrate Judge, Presiding

                           Submitted August 29, 2013**
                              Pasadena, California

Before: GOULD and RAWLINSON, Circuit Judges, and HUCK, District Judge.***

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Paul C. Huck, District Judge for the U.S. District
Court for the Southern District of Florida, sitting by designation.
      Appellant Mary Reeves (Reeves) challenges the denial of her claim for

disability insurance benefits. She argues that the Social Security Administration

(the Agency) erred in concluding that her work at the Veterans Affairs Hospital

(VA) from 1991-1997 constituted substantial gainful activity (SGA) despite her

receipt of special accommodations. We vacate and remand.

      1.     If a claimant engaged in SGA during “any period” in which the

claimant alleges disability, the Agency will find that she is “not disabled.” 20

C.F.R. § 404.1571. The Agency’s “primary consideration” when evaluating

whether work constitutes SGA is “the earnings you derive from the work activity.”

20 C.F.R. § 404.1574(a)(1). Generally, if a claimant “worked for substantial

earnings,” the Agency will find her capable of SGA. Id. Because Reeves’ average

earnings from 1991-1997 exceeded the $500 average monthly threshold, see id.

404.1574(b) & Table 1, she is subject to the presumption that she engaged in SGA.

      2.     The presumption that Reeves engaged in SGA may be rebutted by

excluding “any income that is not directly related to [her] productivity.” Id. at §

404.1574(a)(2). Accordingly, when a claimant’s “earnings exceed the reasonable

value of the work” actually performed, the agency only considers “that part of [the

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claimant’s] pay which [was] actually earn[ed].” Id. To the extent wages are

increased by a subsidy, the amount of the subsidy is deducted from wages. See id.

Special work conditions may constitute “[n]on-specific subsidies,” which can

include, among other things, modified job duties and “unusual assistance or

supervision.” Soc. Sec. Ruling 83-33, 1983 WL 31255, at *4-5 (1983). The

critical inquiry is whether the special conditions have some significant impact on

the value of work performed, such that a portion of the earnings should not be

“counted.” 20 C.F.R. § 404.1574(a)(1)-(2).

3.    In the first federal action, the district court affirmed the Agency’s conclusion

that Reeves’ pay was “commensurate with her work” and thus her work was not

subsidized. Based on this language, the ALJ assumed that he was precluded from

reconsidering the subsidy issue. The district court did not, however, rule on

whether any special work conditions constituted a non-specific subsidy. Indeed,

the court noted that “[w]ork performed under special conditions may, regardless of

the stated level of earnings, indicate that the employee is not working at the

substantial gainful activity level.” (citation and alterations omitted). Ultimately,

the district court remanded the case to the agency for a determination of whether

Reeves was employed in a sheltered workshop. On remand, the ALJ considered an

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assessment from a vocational expert who opined that Reeves’ reduced value to the

VA could have been “substantial” in light of “various costs including: consulting

and contracting to make workstation accommodations; manpower to fulfill balance

of job tasks and cover her desk during her absences; financial outlay for physical

workstation accommodations; costs of lost work time and insurance premium

increases.” The district court’s prior ruling did not preclude consideration of

whether these costs constituted non-specific subsidies. See Soc. Sec. Ruling 83-33,

1983 WL 31255, at *4-5; see also 20 C.F.R. § 404.1573(c).

      4.     Substantial evidence supports the ALJ’s determination that Reeves’

work at the VA was not in a sheltered workshop environment. A sheltered

workshop is an institution designed to prepare impaired individuals for entry into

the general workforce. See Program Operations Manual System (POMS), RS

02101.270. Whether an individual is considered an “employee” in a sheltered

workshop depends on numerous factors, including whether the services have

commercial value and whether wages bear some relationship to the work. See id.

Even in a sheltered workshop, however, a claimant may engage in SGA in light of

“the reasonable worth of the work” performed. 20 C.F.R. § 404.1574(a)(3).

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      The ALJ reasonably concluded that Reeves’ job was not performed in a

sheltered workshop in light of her long tenure, the nature of the work, and the

value of the work to her employer. The ALJ acknowledged that Reeves’ work was

performed under special conditions, but believed that he was precluded from

determining whether those conditions constituted a subsidy. However, because the

district court did not completely resolve the subsidy issue, the ALJ was not

precluded from making that determination. Accordingly, we vacate the judgment

and remand this case to the district court. The district court is instructed to remand

this case to the agency to determine whether the special conditions of Reeves’

workplace constituted a non-specific subsidy. We express no view on the merits of

this inquiry.

      AFFIRMED in part, VACATED and REMANDED in part. Each party

is to bear its costs on appeal.

      The panel retains jurisdiction over this appeal.

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