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JULIAN v. FOLSOM

March 21, 1958

Samuel JULIAN, Plaintiff,
v.
Marion B. FOLSOM, Secretary of Health, Education and Welfare, Defendant



The opinion of the court was delivered by: BRYAN

This is an action, pursuant to 42 U.S.C.A. § 405(g), to review a final decision of the Secretary of Health, Education and Welfare.

Plaintiff, who became entitled to old age insurance benefits under Section 202(a) of the Social Security Act, 42 U.S.C.A. § 402(a), when he reached 65, in December 1953, was allowed benefits based, as the Act provides, on his average monthly wages prior to reaching that age.

Under Section 215(e)(4)(A) of the Social Security Act, 42 U.S.C.A. § 415(e)(4)(A), wages received by an individual 'in any year any part of which was included in a period of disability' are not to be counted in computing his average monthly wages for purposes of determining the amount of his benefits. Section 216(i) of the Act, 42 U.S.C.A. § 416(i) provides that a period of disability means a continuous period of not less than six full calendar months during which there was 'inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.'

 A person covered by the Act may file an application for a disability determination, and, if a period of disability is established upon such application, the wages earned in such period are not counted in computing average monthly wages for benefit purposes, as Section 215(e)(4)(A) provides, and there is a so-called 'wage freeze'.

 Plaintiff's earnings during a five and one-half year period immediately before he became 65 were very much less than his prior earnings, and the inclusion of such earnings in the average of his monthly wages for purposes of determining his social security benefits, reduced the benefits payable to him. Claiming that he was unable to engage in any substantial gainful activity during this period because of disability arising from an injury which he had suffered in 1948, plaintiff, on June 28, 1955, filed application under the Act for a disability determination so that his reduced earnings could be excluded in computing his average monthly earnings for benefit purposes.

 Plaintiff's application came before the Bureau of Old Age and Survivors Insurance of the Social Security Administration and was denied. Plaintiff took issue with this determination and, at his request, he was granted a hearing on his claim before a referee. At the hearing the record before the Bureau was considered and additional evidence not before the Bureau was taken. On this amplified record the referee determined that the claimant was entitled to the period of disability which he sought.

 The Appeals Council of the Social Security Administration, on its own motion, then reviewed the decision of the referee. No further evidence was taken and the Council based its decision solely on the record before the referee. It reversed his decision and determined that the claimant was not entitled to any period of disability under Section 216(i) of the Social Security Act as amended. In essence, this constitutes the final decision of the Secretary under review here.

 The complete record on which the decision was made has been certified to this court. Both parties have moved for summary judgment, relying, as they must, on the record so certified.

 Section 205(g) of the Social Security Act (42 U.S.C.A. § 405(g), as amended in 1939, 53 Stat. 1370, and thereafter amended by various of the reorganization acts) provides for review by the courts of any final decision of the Secretary. It further provides that 'The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive * * *.'

 The Administrative Procedure Act enacted in 1946 also provides for judicial review of the action of administrative agencies. Under Section 10 of that Act (5 U.S.C.A. § 1009) 'Except so far as (1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion. (a) Any person suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof.' The reviewing court shall '* * * hold unlawful and set aside agency action, findings and conclusions found to be * * * (5) unsupported by substantial evidence in any case subject to the requirements of sections 1006 and 1007 of this title or otherwise reviewed on the record of an agency hearing provided by statute * * *.' It is further provided that 'In making the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party, and due account shall be taken of the rule of prejudicial error.'

 The Social Security Act plainly is not excepted from the review provisions of the Administrative Procedure Act under Section 10. The later enacted provisions of Section 10 must be read in pari materia with those of the Social Security Act. Cf. Willapoint Oysters v. Ewing, 9 Cir., 174 F.2d 676, 685-687; United States ex rel. Trinler v. Carusi, 3 Cir., 166 F.2d 457. Without dealing with the question of whether, at this time, the scope of review provided in the Administrative Procedure Act is any broader, as a practical matter, than that in the Social Security Act, *fn1" the review to be made in the case at bar must meet the standards set by the more expansive language of the later act.

 Thus, while no hearing de novo may be had by the court and any actions, findings and conclusions of the Secretary supported by substantial evidence are conclusive on the reviewing court, the courts 'must be influenced by a feeling that they are not to abdicate their conventional judicial functions' and are responsible for assuring that an agency 'keeps within reasonable grounds.' Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 490, 71 S. Ct. 456, 95 L. Ed. 456. The record as a whole must be reviewed and the court must set aside any actions, findings and conclusions unsupported by substantial evidence. O'Leary v. Brown-Pacific-Maxon, 340 U.S. 504, 508, 71 S. Ct. 470, 95 L. Ed. 483; Universal Camera Corp. v. National Labor Relations Board, supra; Gooding v. Willard, 2 Cir., 209 F.2d 913, 916.

 The Court of Appeals of this circuit in the Gooding case described the application of this 'substantial evidence' test in the following language:

 '* * * 'substantial evidence' means more than evidence which, considered by itself alone, would be sufficiently persuasive to induce the trier of fact to give it the credence and weight essential to support findings. It must have those characteristics to such an extent that in the setting made by the entire record the trier may reasonably find in accordance with it after giving due consideration to whatever else is shown both in opposition or in accord. Judicial review has been extended by the Administrative Procedure Act to ...


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