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holding that the ALJ failed to fully and properly consider the effects of the claimant's structured educational placement on his overall functioning — i.e., the claimant's most recent IEP authorized his continued placement in day treatment program with no evidence of any suggestion that the claimant return to a less restrictive environment
Summary of this case from Walker v. AstrueOpinion
00-CV-0402C
March 17, 2002
ALAN B. BLOCK, ESQ., NEIGHBORHOOD LEGAL SERVICES, INC., Buffalo, New York, for Plaintiff.
JANE B. WOLFE, ESQ., Assistant United States Attorney, MICHAEL A. BATTLE, ESQ., UNITED STATES ATTORNEY, Buffalo, New York, for Defendant.
INTRODUCTION
Plaintiff Denise Longo initiated this action pursuant to 42 U.S.C. § 405(g) to seek review of the final decision of the Commissioner of Social Security (the "Commissioner") denying her application for Supplemental Security Income ("SSI") benefits on behalf of her child, Eric Smith. Both parties have moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). For the following reasons, plaintiff's motion is granted, and the Commissioner's motion is denied.
BACKGROUND
Eric Smith was born on December 17, 1984 (T. 12). In June 1996, when Eric was twelve years old, his mother filed an application on his behalf for SSI benefits alleging disability due to oppositional defiant disorder ("ODD") coupled with attention deficit hyperactivity disorder ("ADHD") (T. 67-69). The medical evidence in the record shows that Eric underwent two periods of outpatient mental health treatment at Child and Adolescent Treatment Services ("CATS"), first from July 1993 through January 1994, and more recently from September 1995 through March 1996 (T. 142-43). During the initial period of his treatment at CATS, Eric demonstrated increasingly aggressive and oppositional behavior, disrespect for adult authority, fighting with peers, and assaultive behavior toward his younger brother. His academic work was described as "very marginal," and his school behavior was "very problematic" (T. 142). There were "small, temporary improvements" in his behavior during this initial treatment period, which ended in January 1994 when Eric went to live with his father in Ohio (id.).
References preceded by "T." are to page numbers of the transcript of the administrative record, filed by defendant as part of the answer to the complaint.
Eric returned to Buffalo in the summer of 1995, and resumed treatment at CATS in September 1995. He demonstrated the same problems as before, and was diagnosed as "seriously emotionally disturbed" due to his inability to function at home with family members, with peers, or at school (id.). Child psychiatrist Ewen MacPherson, M.D., interviewed Eric on two occasions, and diagnosed "Conduct Disorder based on a positive Connor's behavioral inventory" (T. 143). Dr. MacPherson recommended residential treatment due to Eric's "persistently disruptive behaviors" (id.).
In March 1996, while attending the fifth grade at School #60, Eric was referred to the Buffalo Public Schools Committee on Special Education ("CSE") for psychological evaluation (T. 133). School psychologist Joanne Poch, Ph.D., examined Eric in April 1996 (T. 134-37). Dr. Poch noted a previous referral to the CSE in 1994, but no special education services were administered at that time because Eric moved to Ohio. Upon objective testing and evaluation, Dr. Poch observed extremes of behavior and lack of respect for authority which could not be tolerated in public school (T. 136). Dr. Poch diagnosed Eric as "an Emotionally Disturbed student who should have a 6:1:1 classroom setting," and recommended placement in a day treatment program (T. 137).
On August 13, 1996, a comprehensive consultative psychological evaluation was performed by Charles Chrystal, Ph.D. (T. 151-58). Dr. Chrystal's diagnosis was ADHD (T. 155). He ruled out oppositional defiant disorder. Dr. Chrystal noted that Eric "has suffered physical and psychological abuse at the hands of his biological father, and appears to be trying to identify with the father of his younger brother" (id.). He recommended counseling and evaluation for medication (id.).
In September 1996, Eric began the school year in the sixth grade at School #38, with a 6:1:1 placement (T. 112). In a report dated September 28, 1996, his teacher noted Eric's poor frustration tolerance behaviors, as evidenced by his disrespect toward adults and peers and his physically aggressive behavior (T. 112-15). As a consequence, Eric was referred by the CSE to Baker Victory Services, Inc., an approved in-state private school, for placement in a day treatment program.
On October 2, 1996, psychologist Madan Mohan, Ph.D., reviewed Eric's records at the request of the New York State Department of Social Services Office of Disability Determinations. Dr. Mohan determined that although Eric was classified as emotionally disturbed and diagnosed with ADHD, his I.Q. was in the average range. Accordingly, Dr. Mohan stated that Eric "does not meet, medically equal, or functionally equal any childhood listings," and that "[n]o further functional assessment is required. . . ." (T. 87).
On October 4, 1996, Eric underwent admission screening at Baker Victory Services. He was evaluated by Mary Nixon, C.S.W., Clinical Coordinator, and Sebastian Fasanello, M.D., Director of Psychiatry (see T. 163-68). Eric's admission diagnosis was Axis I — Oppositional Defiant Disorder, with a Global Assessment Functioning ("GAF") scale score of 60 (T. 166), indicating moderate difficulty in social, occupational, or school functioning (see excerpt from Diagnostic and Statistical Manual of Mental Disorders-IV ("DSM-IV"), Item 11, Ex. A). As a result of the admission screening, "it was determined that Eric would be an appropriate candidate for Day Treatment based on his need for a highly structured academic environment coupled with significant clinical services." (T. 168.)
On November 13, 1996, psychologist John Gambon, Ph.D., conducted an "Intake Psychological Assessment" involving review of historical material and classroom observation (T. 172-74). Dr. Gambon concurred with the day treatment placement, noting that Eric's "whole demeanor seems to be someone who refuses to accept reasonable authority wherever he finds it." (T. 173.)
On March 11, 1997, teacher Jeana McConkey reported on Eric's academic and behavioral progress (T. 178). Ms. McConkey noted that although he was bright and alert and had shown some improvement academically, Eric needed work on his concentration skills and his overall grades if he was to be promoted to the seventh grade. With respect to behavior, he continued to have problems with peers due to his quick temper, non-trusting attitude, and poor sportsmanship. He showed some improvement in his interaction with staff, and was "very helpful toward [the] teacher most of the time" (id.).
On June 3, 1997, Ms. McConkey reported that Eric continued to show improvement in both his academics and his behavior. He still had problems with concentration, organizational skills, and respect for authority. His overall behavior showed "moderate improvement" (T. 179).
Dr. Fasanello's "Psychiatric Progress Note" dated September 23, 1997, indicated that Eric had demonstrated "gradual and consistent improvement in [his] behavior in school" during his participation in the Baker Victory program (T. 176). His mental status examination was "completely within the realm of normal, he has good concentration ability, his memory is intact, and cognitively, he impresses me as being quite bright" (T. 176-77). Dr. Fasanello upgraded Eric's GAF scale score to 65 (indicating some difficulty in social, occupational, or school functioning, "but generally functioning pretty well" (DSM-IV, Item 11, Ex. A)).
In November 1997, seventh grade teacher Tracy Shores reported that Eric was performing poorly academically "due to incomplete classroom and homework assignments" (T. 181). His grades ranged from 82 in spelling to 45 in Social Studies (id.). Behaviorally, Ms. Shores noted Eric's "mood swings" manifested by slamming books around, mumbling under his breath, and arguing with staff and other students. Ms. Shores recommended Eric's continued placement in the day treatment program due to his need for constant supervision (id.).
Meanwhile, on June 3, 1996, plaintiff filed her application for SSI benefits on Eric's behalf. The application was denied initially (T. 53-55) and upon reconsideration (T. 58-60). Plaintiff requested a hearing to review the denial. On December 10, 1997, a hearing was held before Administrative Law Judge ("ALJ") Richard J. Shay, at which both plaintiff and Eric testified (T. 16-50). Eric was represented at the hearing by JoAnn Lewandowski, a paralegal from the Erie County Department of Social Services.
On March 27, 1998, the ALJ issued a decision finding that Eric was not entitled to SSI benefits (T. 9-15). The ALJ found that, though severe, Eric's impairments were not functionally equivalent to an impairment listed in the Social Security Regulations at Subpart P, Appendix 1 (the "Listings"). See 20 C.F.R. Pt. 404, Subpt. P, App. 1. On March 10, 2000, the Appeals Council denied review (T. 4-6), and on May 10, 2000, plaintiff filed this action.
On February 26, 2001, the Commissioner filed a motion for judgment on the pleadings, seeking dismissal of the action on the ground that the ALJ's determination is supported by substantial evidence. In response, plaintiff filed a motion for judgment on the pleadings, seeking reversal or remand on the ground that the ALJ failed to correctly evaluate Eric's limitations in the broad areas of social functioning and concentration, persistence, and pace. Oral argument of the motions was heard by the court on November 30, 2001. For the following reasons, plaintiff's motion is granted, and the Commissioner's motion is denied.
DISCUSSION I. Scope of Judicial Review
The Social Security Act states that, upon district court review of the Commissioner`s decision, "[t]he findings of the [Commissioner] as to any fact, if supported by substantial evidence, shall be conclusive. . . ." 42 U.S.C. § 405(g). Substantial evidence is defined as evidence which a "reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938), quoted in Richardson v. Perales, 402 U.S. 389, 401 (1971); Tejada v. Apfel, 167 F.3d 770, 773-74 (2d Cir. 1999). Under these standards, the scope of judicial review of the Commissioner's decision is limited, and the reviewing court may not try the case de novo or substitute its findings for those of the Commissioner. Richardson, 402 U.S. at 401. The court's inquiry is "whether the record, read as a whole, yields such evidence as would allow a reasonable mind to accept the conclusions reached" by the Commissioner. Winkelsas v. Apfel, 2000 WL 575513, at *2 (W.D.N.Y. February 14, 2000) (quoting Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982)).
However, "[b]efore the insulation of the substantial evidence test comes into play, it must first be determined that the facts of a particular case have been evaluated in the light of correct legal standards." Klofta v. Mathews, 418 F. Supp. 1139, 1141 (E.D.Wis. 1976), quoted in Gartmann v. Secretary of Health and Human Services, 633 F. Supp. 671, 680 (E.D.N.Y. 1986). The Commissioner's determination cannot be upheld when it is based on an erroneous view of the law that improperly disregards highly probative evidence. Tejada, 167 F.3d at 773.
II. Children's SSI Benefits
Prior to August 22, 1996, a child was entitled to SSI disability benefits if he suffered from a "medically determinable physical or mental impairment of comparable severity" to one that would disable an adult. 42 U.S.C. § 1382c(a)(3)(A) (1994). In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act ("PRWORA") changed the standard governing child disability claims, replacing the "comparable severity" standard with one that focuses on whether a child has "marked and severe functional limitations. . . ." 42 U.S.C. § 1382c(a)(3)(C)(i). This standard applies to cases that were pending before the Social Security Administration as of August 22, 1996, the PRWORA's enactment date. See McCaskill v. Massanari, 152 F. Supp.2d 270, 273 (E.D.N.Y. 2001).
On February 11, 1997, the Social Security Administration published "interim final rules" to implement the childhood disability provisions of the 1996 Act. See 62 Fed. Reg. 6408. These rules also established a new sequential evaluation process for determining disability for children. The new three-step process required a child to show (1) that he was not working, (2) that he had a "severe" impairment or combination of impairments, and (3) that his impairment or combination of impairments met, medically equaled, or was functionally equivalent to the severity of an impairment in the Listings. See 20 C.F.R. § 416.924(a) (2000) (codifying interim rules). Functional equivalence can be shown when a child has two "marked" limitations or one "extreme" limitation in six broad areas of functioning, including cognition/communication, motor, social, personal, and concentration, persistence or pace. 20 C.F.R. § 416.926a (2000).
On January 2, 2001, final children's regulations took effect, which changed the six areas to acquiring and using information, attending and completing tasks, interacting and relating with others, moving about and manipulating objects, caring for self, and health and physical well-being. See 20 C.F.R. § 416.926b(1). The ALJ was, of course, not bound by these new final regulations when he rendered his decision in March 1998.
In reviewing Eric's claim for disability benefits under these standards, the ALJ found that Eric, who was thirteen years old at the time of the hearing decision, never performed substantial gainful activity. The ALJ also found that while Eric's impairments were "severe," i.e., had "more than a minimal impact on his functioning" (T. 12), they did not meet, equal, or functionally equal the criteria for any impairment in the Listings (T. 12-14). The ALJ found no evidence of marked or extreme limitation in any specific area of functioning, and found "less than marked limitation" in the broad area of social functioning (T. 13).
The ALJ considered the medical evidence in the record, including the reports provided by Drs. Fasanello, Chrystal, and Mohan (T. 12-13). The ALJ referred to Dr. Mohan's October 2, 1996 report as a "mental consultative exam," resulting in the opinion that Eric did not meet or equal the Listings (T. 12). The ALJ also noted that Dr. Fasanello's September 1997 progress report indicated "significant improvement in all areas" (id.).
According to the ALJ, although plaintiff's hearing testimony and the various other reports from Baker Victory Services "all seem to be at odds" with the improvement noted in Dr. Fasanello's later report, Eric's demeanor and conversational tone at the hearing provided additional support for accepting Dr. Fasanello's assessment of Eric's overall functioning in the day treatment program (T. 13).
Plaintiff contends that the ALJ erred in failing to consider "other factors" in conjunction with the medical evidence, as required by the interim rules. Specifically, plaintiff cites 20 C.F.R. § 416.924c, which provides as follows:
(a) General. When we evaluate whether your impairment(s) is severe, and if so, whether it causes marked and severe functional limitations, we will consider all factors that are relevant to the evaluation of the effects of your impairment(s) on your functioning, such as the effects of your medications, the setting in which you live, your need for assistive devices, and your functioning in school. Therefore, when we assess your functional limitations, we will consider all evidence from medical and nonmedical sources — such as your parents, teachers, and other people who know you — that can help us to understand how your impairment(s) affects your functioning. Some of the factors we will consider include, but are not limited to, the factors in paragraphs (b) through (g) of this section.
. . . .
(d) Effects of structured or highly supportive settings. Children with serious impairments may spend much of their time in structured or highly supportive settings. A structured or highly supportive setting may be your own home, in which family members make extraordinary adjustments to accommodate your impairment(s); or your classroom at school, whether a regular class in which you are accommodated or a special classroom; or a residential facility or school where you live for a period of time. Children with chronic impairments also commonly have their lives structured in such a way as to minimize stress and reduce their symptoms or signs of impairment; others may continue to have persistent pain, fatigue, decreased energy, or other symptoms or signs, though at a lesser level of severity. Such children may be more impaired in their overall functioning than their symptoms and signs would indicate. Therefore, if your symptoms or signs are controlled or reduced by the environment in which you live, we will consider your functioning outside of this highly structured setting.
20 C.F.R. § 416.924c(a), (d) (2000). According to plaintiff, the ALJ's findings do not indicate whether he considered Eric's social functioning in light of his highly structured "day treatment" placement at Baker Victory in accordance with these requirements.
In particular, plaintiff cites federal and state statutes, regulations, and case law explaining the overriding principles governing public school special education placement decisions. Specifically, under the Individuals with Disabilities Education Act ("IDEA," formerly the Education for All Handicapped Children Act), 20 U.S.C. § 1400, et seq., the school district is required to provide a program of instruction designed to ensure that children with disabilities "benefit educationally from [the] instruction." Board of Educ. of Hendrick Hudson Cent. Sch. Dist. v. Rowley, 458 U.S. 176, 203 (1982). The school district must also take steps to ensure that children with disabilities be educated in the least restrictive appropriate educational environment — i.e., that an appropriate education "be in the mainstream to the extent possible. . . ." M.S. v. Board of Education of the City School District of the City of Yonkers, 231 F.3d 96, 105 (2d Cir. 2000), cert. denied, ___U.S.___, 121 S.Ct. 1403 (2001). Under this principle of "mainstreaming," children with disabilities may be removed from the regular educational environment "only when the nature or severity of the disability of a child is such that education in regular classes with the use of supplementary aids and services cannot be achieved satisfactorily." 20 U.S.C. § 1412(5)(B).
Plaintiff argues that Eric's placement in the private day treatment program at Baker Victory Services, with its own self-contained classroom in a 8:1:1 student/teacher/aide setting (see T. 118), provides substantial evidence of significant limitation in the area of social functioning which the ALJ should have considered in reaching his determination as to Eric's eligibility for SSI benefits. I find this argument compelling for several reasons.
First of all, the Commissioner's regulations require the ALJ to consider the effects of a structured or highly supportive setting (such as the day treatment program at Baker Victory) on the claimant's functioning and, if the claimant's symptoms or signs are controlled or reduced by the structured environment, the ALJ is required to consider the claimant's functioning outside of the highly structured setting. 20 C.F.R. § 416.924c(d).
Here, the ALJ did not discuss — or even mention — his obligations under § 416.924c(d). Instead, the ALJ noted Eric's "significant improvement in almost all areas" after one year in the Baker Victory day treatment placement, referring to Dr. Fasanello's September 1997 progress report (T. 12). The hearing determination contains no discussion of Eric's functioning outside of the highly structured day treatment setting, beyond a brief reference to Ms. Longo's testimony which the ALJ found to be "at odds with Dr. Fasanello's assessment . . ." (T. 13).
In addition, despite his improvement, not a single medical or educational source recommends returning Eric to a less restrictive academic environment. To the contrary, in an annual educational review made subsequent to Dr. Fasanello's September 1997 progress report, Eric's teacher recommended continuing his placement at Baker Victory due to his poor academic performance, inconsistent completion of assignments, mood swings, argumentative and threatening behavior, and need for constant supervision (T. 181). Indeed, Eric's Individualized Education Program ("IEP") dated November 25, 1997, authorizes his continued placement in Baker Victory's day treatment program (T. 117-28), and there is no evidence in the record to suggest that Eric has ever returned to a less restrictive academic setting.
Finally, I find that the ALJ erred in relying on Dr. Mohan's opinion as to whether Eric's impairments met or equaled the Listings. The ALJ stated that Dr. Mohan performed "a mental consultative exam" in connection with his October 2, 1996 report (see T. 12). However, there is no indication in the record before the court that Dr. Mohan examined Eric or performed any medical services beyond reviewing reports already contained in Eric's file.
For these reasons, I find that the ALJ erred in failing to fully and properly consider the effects of Eric's structured educational placement on his overall functioning, as required by § 416.924c of the Commissioner's regulations. Therefore, the ALJ's decision was based on an erroneous application of the law, with the result that highly probative evidence relating to Eric's claim was improperly disregarded. Tejada, 167 F.3d at 773. Accordingly, the decision must be reversed, and the case must be remanded to the Commissioner solely for calculation and immediate award of benefits. See, e.g., Rivera v. Sullivan, 923 F.2d 964, 970 (2d Cir. 1991) (reversal and immediate award of benefits appropriate where evidence clearly established disability, and considering length of time litigation had already consumed); Pfalzgraf v. Shalala, 997 F. Supp. 360, 367 (W.D.N.Y. 1998) (When record contains persuasive proof of entitlement to benefits, and remand for further proceedings would serve no purpose other than to further delay already lengthy administrative proceedings, decision should be reversed and remanded solely for calculation of benefits).
CONCLUSION
For the foregoing reasons, plaintiff's motion for judgment on the pleadings (Item 13) is granted. The Commissioner's motion for judgment on the pleadings (Item 10) is denied. Pursuant to sentence four of 42 U.S.C. § 405(g), the Commissioner's decision is reversed, and the matter is remanded to the Commissioner solely for calculation and immediate award of benefits.
Sentence four of § 405(g) provides:
The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing.42 U.S.C. § 405(g).
The Clerk of the Court is directed to enter judgment in favor of plaintiff.
So ordered.