Opinion
No C99-0002L
Filed: July 5, 2000
Plaintiffs Daryl B Pratt, William Pratt, Eileen Pratt, Attorney at Law Robert A. Friedman, Everett, WA, Attorney at Law.
Defendant Kenneth S. Apfel, Brian C. Kipnis, U.S. Attorney's Office Seattle, WA.
This matter comes before the Court on "Defendant's Objections to Magistrate Judge's Report and Recommendation." Having now reviewed the administrative record and the briefs and exhibits submitted by the parties in this action, the Court hereby grants plaintiffs unopposed motion to substitute Daryl Pratt's parents as plaintiffs, grants plaintiffs unopposed motion to file supplemental authority, reverses the administrative decision denying benefits, and remands to the Administrative Law Judge ("ALJ") for an award of benefits.
On June 27, 1997, ALJ John R. Bauer determined that claimant Daryl Pratt was disabled as a result of alcoholism and bipolar disorder. Pursuant to Section 105 of Public Law 104-121 (codified at 42 U.S.C. § 423(d)(2)(C)) and the implementing regulations, the ALJ was then required to determine whether Pratt's alcoholism was a contributing factor material to the finding of disability. The key inquiry is whether the claimant would still be found disabled if he stopped using alcohol, which, in turn, requires an evaluation of which mental limitations would remain if plaintiff stopped drinking. If drug abuse or alcoholism are found to be contributing factors material to the finding of disability, benefits must be denied.
For ease of reference, Mr. Pratt, rather than his parents, is identified as the plaintiff or claimant throughout this Order.
After summarizing medical evidence regarding work-related limitations arising from plaintiffs combined impairments and the fact that plaintiff was apparently drinking during periods of mania, the ALJ determined that, if Pratt "were abstiment, the claimant's impairments, considered singly and in combination, would not meet or equal the criteria of any listed impairment." Administrative Record ("AR") 18. Having reviewed the record and the Magistrate Judge's careful analysis of the evidence, the Court finds that this conclusion is not supported by substantial evidence. While the medical experts generally agreed that plaintiffs substance abuse complicated his bipolar disorder, the record is equally clear that none of the experts was able to form an opinion regarding what the severity of plaintiffs impairments would be if he abstained from alcohol. The AU's conclusion on this point is nothing more than a guess.
The Court must affirm the Commissioner's decision if it is based on the proper legal standards and the findings are supported by substantial evidence in the record. Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989). Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971). Where the evidence is susceptible to more than one rational interpretation, it is the Commissioner's conclusion which must be upheld. Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982).
Plaintiff appealed to the Appeals Council of the Social Security Administration and then to this Court on the grounds that the AU had improperly weighed the medical evidence and rejected the experts' opinion that it was impossible to determine what the course of plaintiffs bipolar disorder would be if he stopped using alcohol. Plaintiffs counsel based his arguments on three policy statements or internal guidelines generated by the Social Security Administration, all of which provide that if it is not possible to determine whether the claimant would be disabled if he abstained from substance abuse, the substance abuse should be considered "not material." See Social Security Advisory Service DAA QA Teletype, dated 8/30/96 ("When it is not possible to separate the mental restrictions and limitations imposed by the DAA and the various other mental disorders shown by the evjdence, a finding of "not material" would be appropriate."); DI 90070.050 DAA Material Determinations ("SAA will make a finding that DAA is material only when the evidence establishes that the individual would not be disabled if he/she stopped using drugs or alcohol."); Social Security Hallex, I-50314A Subject: Drug Addiction or Alcoholism ("Make a finding that DAA is material only when the evidence establishes that the individual would not be disabled if he/she stopped using drugs or alcohol.").
The Commissioner's initial response in this action was based on the record. The Commissioner argued that the ALJ's findings (1) that plaintiffs impairments could be separated by cause and (2) that the limitations attributable to the bipolar disorder did not give rise to a covered disability were supported by substantial evidence. See Defendant's Memorandum, dated 12/23/99, at 8-9 (Dkt. #23) At oral argument before the Magistrate Judge, the Commissioner, for the first time, argued that plaintiffs underlying premise was wrong and that it was plaintiffs burden to prove that his alcoholism was not, in fact, material to the finding of disability. This position is not consistent with the above-cited policy statements and guidelines. Under the Commissioner's new theory, if plaintiff failed to affirmatively show that his residual impairments would be disabling independent of his alcoholism, the alcoholism would be considered "material" and benefits would be denied. Under the instructions given to the ALJ's and available to the public, however, plaintiff need show only that it is not possible to determine the extent of his non-alcohol related impairments. The distinction is critical in this case.
As noted above, the Court disagrees.
The Commissioner cites Brown v. Apfel, 192 F.3d 492 (5th Cir. 1999), and Mittlestedt v. Apfel, 204 F.3d 847 (8th Cir. 2000), as support for the proposition that it is the claimant's burden to prove that he would be disabled in the absence of his drug abuse or alcoholism. In bothBrown and Mittlestedt, however, the ALJs had found that the claimants' only severe impairment at step two of the sequential evaluation was substance abuse. The Fifth and Eighth Circuits were therefore not squarely faced with a situation where there is a separate, independent impairment that may or may not be disabling in the absence of substance abuse.
Whatever the precedential value of Brown and Mittlestedt to the facts of this case, the Commissioner seems to agree that where it is not possible to determine the extent of the impairments that would remain if the claimant were to abstain from drug abuse or alcoholism, a finding of "not material" is appropriate. That position is clearly set forth in the internal memoranda used to evaluate DAA claims, and, despite initial indications that the Commissioner was disavowing those memoranda, the Commissioner has now affirmed his adherence to the stated policy in his reply brief at 7. See Defendant's Reply to Plaintiffs Response to Defendant's Objections to the Magistrate Judge's Report and Recommendation, dated 6/1/00. While not a model of clarity, the Commissioners s current position appears to be that while the claimant has the ultimate responsibility of showing that he is disabled, as that term is defined in the statute, where the claimant shows that it is not possible to separate his mental impairments from his substance abuse-related impairments, he will be deemed to have met his burden. The issue, therefore, is whether the record contains substantial evidence to support the ALJ's finding that it is possible to separate the limitations resulting from plaintiffs bipolar disorder from the limitations resulting from his alcoholism.
The parties spend a considerable amount of time arguing the effect of the Teletype, POMS and Hallex. The Commissioner argues that, because they are internal memoranda designed to assist the ALJs in performing their statutory and regulatory duties, they create no substantive rights in third parties and are not enforceable in a court of law. Plaintiff argues that these policies are known to and relied upon by the public, guide the ALJs' decision-making, and, even if not published as a regulation, have the force and effect of law in individual cases. Because the ALJ's ruling cannot stand under the Commissioner's most recent position statement, the Court need not determine whether an agency can use policy statements and guidelines to shape the type of evidence admitted at administrative hearings and then repudiate those statements/guidelines in litigation in favor of standards or rules that the claimant had no reason to believe would apply.
The Magistrate Judge found, and the Court agrees, that there is not. All of the medical experts acknowledged that they could not separate the impairments or otherwise guess at what plaintiffs condition would be in the absence of his substance abuse. The only reasonable conclusion to draw from such testimony is that such parsing is not possible in this case, requiring a finding that plaintiff's substance abuse was not a contributing factor material to the finding of disability.
For all of the foregoing reasons, the Court hereby finds and ORDERS:
(1) The Court adopts the Report and Recommendation;
(2) Plaintiffs unopposed motions for substitution of parties (Dkt. #28) and to file supplemental brief (Dkt. #29) are GRANTED;
(3) The Court finds that the Commissioner's decision is REVERSED and the case is REMANDED to the ALJ for an award of benefits to, now, plaintiffs parents; and
(4) The Clerk is directed to enter judgment in accordance with this Order and to provide copies of the judgment and this Order to counsel of record and Magistrate Judge Martimez.