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United States District Court, Southern District of New York

March 21, 2003


The opinion of the court was delivered by: Robert P. Patterson, Jr., United States District Judge


Plaintiff, Alberta McFadden ("Plaintiff"), moves on behalf of her minor granddaughter, Shaquan Steed ("Shaquan"), for a judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure ("Fed.R. Civ. P.") reversing the determination of the Defendant, the Commissioner of Social Security ("Defendant" or "Commissioner"), and remanding Plaintiff's claim solely for calculation of benefits, or in the alternative, a remand of Plaintiff's claim for a new hearing or decision pursuant to 42 U.S.C. § 405(g). The Defendant cross-moves for a judgment on the pleadings affirming her final decision that Shaquan was not entitled to child's Supplemental Security Income ("SSI") benefits under 42 U.S.C. § 1382(a)(3)(C)(i). For the reasons stated below, Plaintiff's motion is granted and the claim is remanded solely for the calculation of benefits. Defendant's motion is denied.


In September of 1992, Alberta McFadden filed an application for SSI on behalf of her then 6 year old granddaughter, Shaquan Steed born October 23, 1985, claiming disability based on learning disabilities. (Tr. 35-37). The application was denied initially on December 4, 1992 and upon reconsideration on December 16, 1992. (Tr. 34-43). No further action was taken to pursue that claim. (Tr. 197).

On April 6, 1993, Alberta McFadden again filed an application for SSI on behalf of Shaquan, alleging that the claimant had been disabled since September of 1992. (Tr. 78-83). The application was defied initially on August 10, 1993 and upon reconsideration on September 7, 1993. (Tr. 51-53). Ms. McFadden, proceeding pro se then requested a hearing before an Administrative Law Judge ("ALJ"). (Tr. 54-57).

On May 19, 1994, a hearing was held before ALJ Stephen A. Jones in New York City, his decision was issued on July 18, 1994. (Tr. 10-18, 243-48). Judge Jones found that Shaquan had a learning disability which constituted a severe impairment. (Tr. 247). However, after analyzing her degree of limitation, he concluded that her impairment did not meet or medically equal any listing. (Id.) He determined that she only had moderate limitations in two areas (social function and concentration, persistence and pace) and slight limitations in two others (cognitive function and personal/behavioral function). (Id.) Because she did not satisfy the "one marked plus one moderate" standard required under law at the time to show functional equivalence, her claim was denied. (Id.) On October 20, 1994, the Appeals Council denied review rendering Judge Jones' decision "final." (Tr. 5-6, 251-52).

On December 5, 1994, an action was commenced in this Court for review of the Commissioner's decision. The SSA subsequently filed a motion to affirm the agency's decision and dismiss the complaint. Plaintiff, represented by Bronx Legal Services, filed a cross-motion to remand the case for a new hearing, based in part on two psychiatric reports of Dr. Reagan, a child psychiatrist who had begun treating Shaquan in May of 1995 for Psychotic Disorder, Not Otherwise Specified ("NOS") and acute behavioral problems. (Tr. 259-62). Thereafter, pursuant to an agreement between the parties, by order dated April 17, 1996, the Court remanded the matter for further administrative proceeding pursuant to the sixth sentence of 42 U.S.C. § 405(g). An order by the Appeals Council remanding Plaintiff's claim for a new hearing in accordance with the stipulation was issued on June 28, 1997. (Tr. 254-55).

In August of 1996, Ms. McFadden moved to South Carolina. (Tr. 228). On March 11, 1997 the Plaintiff requested that her claim be transferred there. (Tr. 215).

On January 8, 1998, the ALJ received the exhibits from the 1994 hearing, numbered 1-36 (Tr. 184-185); exhibits 37-43, which included the 1994 decision of ALJ Jones and subsequent correspondence (Tr. 240-258); and exhibits 44 and 45, the psychiatric assessments of Dr. Reagan which were the focus of the remand order. (Tr. 259-262). In a package from the Plaintiff's attorney dated January 19, 1998, the ALJ received a Psychoeducational Evaluation report dated December 18, 1996 (Tr. 269-274), and the Individualized Education Program report from September 13, 1996 to May 30, 1997 (Tr. 275-281), exhibits 46-48. (Tr. 269-282).

On February 3, 1998, the remand hearing was held before ALJ Peter J. Baum in Florence, South Carolina, at which the ALJ took testimony from Ms. McFadden. (Tr. 216-239). Shaquan was not present at the hearing. That same day, prior to the commencement of the hearing, the Plaintiff's attorney submitted exhibits 49-54 (Tr. 283-348), which included the Curriculum Vitae, Outpatient Evaluation and Psychiatric Review Technique of board certified Psychiatrist, James W. Thrasher, M.D., J.D. (Tr. 283-300); an Individualized Education Program report from New York City Public Schools, dated June 19, 1995 (Tr. 302-312); an Individualized Education Program report from the Clarendon County School District #3, dated May 26, 1997 (Tr. 340-348);*fn1 and material from the underlying 1994 decision. (Tr. 313-339).

The ALJ considered the matter de novo under the interim regulations in effect from February 11, 1997 through December 31, 2000. The ALJ noted that Dr. Thrasher's evaluation, dated January 27, 1998, reported that Shaquan exhibited disabling symptoms, including auditory hallucinations, disrupted thought process and delusional thinking. (Tr. 201-202). However, the ALJ stated, "Dr. Thrasher's opinions regarding the severity of the claimant's impairments and whether she meets the requirements of a Listing are given no weight. His opinions are based upon the claimant's status without medication!" (Tr. 202).

In a decision dated April 11, 1998, Judge Baum denied Shaquan's claim based on a finding that the Plaintiff was not disabled. (Tr. 194-205). Judge Baum did find that Shaquan had several impairments, including "a psychotic disorder, controlled on medication," borderline intellectual functioning, a learning disorder, and a history of oppositional defiant disorder, and that one or more of these impairments passed the severity threshold. (Tr. 199, 203). However, the ALJ found that the limitations exhibited by Shaquan did not satisfy the two marked limitations standard under the 1997 regulation. While the ALJ found that Shaquan had a marked limitation in the area of cognitive/communicative functioning, he found that her degree of limitation in the area of social functioning was less than marked and that she actually exhibited no limitations in the remaining three areas (motor functioning, personal functioning, and concentration, persistence, and pace). (Tr. 203-4).

On April 30, 1998, Plaintiff filed a timely request for review of the ALJ'S decision, submitting with the request evidence relating to Shaquan's recent school attendance and behavior. (Tr. 189-93). By order dated October 27, 1998, the Appeals Council denied any further review. (Tr. 187).*fn2

In the instant motion, the Plaintiff contends that the Commissioner's decision was erroneous and must be reversed for two reasons: (1) the Commissioner made an improper assessment of the evidence of the record of Shaquan's disability; and (2) the Commissioner improperly relied on "failure to follow prescribed treatment" as a basis for denial. The Defendant argues that the decision was not based on "failure to follow prescribed treatment," rather, the decision was based on the Plaintiff's failure to meet the statutory standard for disability as defined under 42 U.S.C. § 1382(a)(3)(C)(i).


In deciding a motion for judgment on the pleadings, the court is limited to considering the factual allegations set forth in the complaint and the corresponding answer. Fed.R.Civ.P. 12(c).*fn3 A party is entitled to judgment on the pleadings only if it is clear that no material issues of fact remain to be resolved and that it is entitled to judgment as a matter of law. See Juster Assocs. v. Rutland, 901 F.2d 266, 269 (2d Cir. 1990).

Plaintiff moves for an order reversing Defendant's determination pursuant to 42 U.S.C. § 405(g), which provides in pertinent part:

Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision. . . . The findings of the Commissioner of Social Security as to any fact, if supported by substantial evidence, shall be conclusive.
See also Richardson v. Perales, 402 U.S. 389, 401 (1971); Perez v. Chater, 77 F.3d 41, 47 (2d Cir. 1996).

The Second Circuit has held in a child's SSI disability case, "[w]here an administrative record supports disparate findings," the reviewing court "must accept the ALJ'S factual determinations." Quinones v. Chater, 117 F.3d 29, 36 (2d Cir. 1997). The Court must "determine whether the Commissioner's conclusions `are supported by substantial evidence in the record as a whole or are based on an erroneous legal standard.'" Schaal v. Apfel, 134 F.3d 496, 501 (2d Cir. 1998) (internal citation omitted). "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.'" Id. (quoting Richardson v. Perales, 402 U.S. at 401. Moreover, "`substantial evidence' does not mean evidence that will support a finding only if farfetched, unreasonable inferences are made. Any other view would make `substantial evidence' a hollow phrase and turn judicial review into a mere rubber stamp for agency action." Jaques v. Railroad Retirement Board, 736 F.2d 34, 42 (2d Cir. 1984).

In deciding whether the disability determination under review is supported by substantial evidence, the Second Circuit has held that a court should "first satisfy [itself] that the claimant has had `a full hearing under the Secretary's regulations and in accordance with the beneficent purposes of the [Social Security] Act.'" Echevarria v. Sec'y of Health and Human Svcs., 685 F.2d 751, 755 (2d Cir. 1982) (quoting Gold v. Sec'y of HEW, 463 F.2d 38, 43 (2d Cir. 1972)). "The need for this inquiry arises from the essentially non-adversarial nature of a benefits proceeding . . . the ALJ, unlike a judge in a trial, must himself affirmatively develop the record." Id. "The duty exists even when the claimant is represented by counsel." Perez v. Chater, 77 F.3d at 47. "A reviewing court is charged with the responsibility of ensuring the evidence is both `developed and considered.'" Cullinane v. Sec'y of Dept. of Health and Human Svcs., 728 F.2d 137, 139 (2d Cir. 1984) (internal citation omitted).


1. ALJ did not fulfill duty to develop record

The case was remanded for further administrative proceedings, pursuant to an agreement between the parties. (Tr. 255). By order of the Appeals Council dated June 28, 1997, the Administrative Law Judge was to evaluate the severity of the claimant's impairment under the provisions of Public Law 104-193, in view of the detailed psychiatric assessment of E. Reagan, M.D. (Id.) Dr. Reagan, a child psychiatrist, found that in addition to her severe learning disorder, Shaquan suffered from Psychotic Disorder (NOS) and Oppositional Defiant Disorder ("O.D.D."). (Tr. 262). The prior reports covering Shaquan's condition were from several years earlier, conducted by school social workers or consultants who did not have medical degrees, and found only a learning disability and no psychiatric disorders. However, after Shaquan got "sick . . . real bad" and started hearing voices, Ms. McFadden took her to get treatment from Dr. Reagan on May 12, 1995 when Shaquan was nine years old. (Tr. 227, 352). Accordingly, the task before the ALJ was to gather sufficient evidence of Shaquan's psychiatric and mental health condition which developed subsequent to the 1992 and 1993 psychoeducational tests relied on by Judge Jones in his 1994 decision. (Tr. 246).

Judge Baum opened the remand hearing, February 3, 1998, with an acknowledgment that he had rushed to the hearing without the benefit of a complete record. He stated, "I know I rushed this matter to hearing and I've done that for one primary reason and that is Alberta McFadden and Shaquan Steed have been waiting now since 1992 to get a decision in this matter. I know I rushed this matter to hearing, I know I did so without receiving the information that I requested from New York. . . . I only come over here every two months, and I didn't want to wait two months for you to have to come over here to tell your story, I thought we'd best plow ahead with your testimony." (Tr. 221). He also stated that after the hearing he was going to study all of the documents in the file, including the numerous documents that were submitted on the day of the hearing and any other necessary documents, and when he had a chance to study all the evidence, he would make the fairest decision he could. (Tr. 219). At the close of the hearing the ALJ stated, "there's just too many loose ends for me to understand this case. So we're going to do our best to get all the evidence in, in [sic] together so I have a chance to study it and make a fair decision." (Tr. 238).

The ALJ did not wait to review any of the documents that he felt at the time of the hearing were necessary to render a fair decision.*fn4 Despite the ALJ'S resolve to get all the evidence in, he rendered the decision on April 11, 1998, with the addition of only one document: a letter written by Dr. Reagan in February 1998, stating in toto that, "[t]his child, Shaquan Steed, has not been seen in our Child Psychiatry Clinic since 6/6/96" and attaching a copy of the Lincoln Medical and Mental Health Center discharge summary and initial screening form, which do not add anything to the detailed psychiatric assessments of May 1995 and March 1996. (Tr. 201, 350-354).

The ALJ did not follow up Dr. Reagan's February 1998 response with an inquiry of Dr. Reagan asking for some further explanation of the degree to which Shaquan's Psychosis (NOS) and behavioral problems had improved under medication and to what extent they remained a problem under medication. Such an inquiry was necessary considering that the discharge summary listed the "Psychotic Disorder 299.0 improved, Conduct Disorder improved, sleep disorder resolved with meds, severe LD [learning disorder]." (Tr. 352). The complexity of Shaquan's psychiatric condition had been documented by Dr. Reagan in a report dated November 1995, "[patient] has not responded well to continued behavioral therapy and medication. Her symptoms are complex. As noted above, the diagnosis is not yet clear (although she does have O.D.D.) her primary complaint (acute) when referred back to psychiatrist . . . was of severe insomnia, auditory hallucinations appeared a prominent factor in etiology of insomnia . . . hence Melaril was begun." (Tr. 260).

At the hearing, the Plaintiff's attorney informed the ALJ that Shaquan was still receiving mental health treatment. (Tr. 236). She stated, "for the last academic year, there was either a social worker or a mental health counselor who saw Shaquan at school from the Clarendon County Mental Health Center." (Id.) The Plaintiff's attorney also noted that she was told that the school mental health workers change so often that obtaining records would be difficult. (Id.) However, the ALJ did not ask for any mental health evaluations from the Clarendon County Mental Health Center or Shaquan's school. The ALJ was also told that Ms. McFadden had scheduled an appointment for Shaquan at the Mental Health Center two weeks later. The ALJ, however, did not request or obtain those mental health records for his review. (Tr. 236).

Dr. Thrasher's January 27, 1998 psychiatric evaluation stated that Shaquan was "actively psychotic" (Tr. 291) and that her social functioning, concentration and adaptation are markedly impaired. (Tr. 292). He also found that "[b]ecause of the severity and early onset of her conditions, the prognosis in this case is guarded." (Tr. 292). However, the ALJ failed to probe into why Dr. Thrasher's prognosis was "guarded," before rejecting Dr. Thrasher's finding that Shaquan's Axis I disorders were — Psychotic Disorder (NOS) 298.9; Learning Disorder (NOS) 315.9; Communication Disorder (NOS) 307.9; and her Axis II disability was — Borderline Mental Retardation (Tr. 291).*fn5

During the hearing the ALJ asked Ms. McFadden, "[i]s it true that when she was taking the medication as prescribed the voices stopped?" (Tr. 227). Ms. McFadden answered, "Yes, they stopped." (Id.) The ALJ then stated,

"[m]y understanding is that if a condition is medicinally controlled, a person does not meet the listing. And in this case, it appears that this condition was obviously medicinally controlled and then has gone out of control only because the medication dosage was cut by a third. So, I'm not going to give any weight to Dr. Thrasher's conclusion that this young lady meets the listing because that suggests that this condition is not amenable to medicinally [sic] amelioration and it quite obviously is from the, from the, [sic] the history that he took and from what Ms. McFadden has told me under oath." (emphasis added) (Tr. 227).*fn6
Asking whether Shaquan's hallucinations had stopped did not address whether Dr. Reagan's finding that Shaquan suffered Oppositional Defiant Disorder and Psychotic Disorder (NOS) had stopped. (Tr. 352). Nor did the ALJ'S question address Dr. Thrasher's finding of psychotic features and deteriorations evidenced by incoherence, loosening of associations, illogical thinking, or poverty of content of speech associated with inappropriate affect. (Tr. 295).

The ALJ'S statements at the hearing were reiterated in his opinion. There he stated, "Dr. Thrasher's opinion regarding the severity of the claimant's impairments and whether she meets the requirements of a Listing are given no weight. His opinions are based upon the claimant's status without medication!" (Tr. 202).*fn7 Thus, Dr. Thrasher's evaluation was not rejected by the ALJ because of the invalidity of its conclusions as to Shaquan's disabilities, but rather because, in the words of the ALJ, "[e]ven within his own report, he stated her hallucinations were stopped while on medication, but the claimant's dosage had been reduced to conserve medication. Ms. McFadden testified that the claimant's hallucinations were controlled when she was on the proper dosage of medication and that she was not taking the proper dosage." (Tr. 202).

In considering the evidence, the ALJ found, "[the] [e]vidence submitted . . . failed to show any significant deterioration or change in the claimant's medical condition when she is taking her medication as prescribed." (Tr. 203). The record, however, does not support this conclusion, it only supports the conclusion that the hallucinations stopped when she received her medication as prescribed. (Tr. 227). The Lincoln Medical and Mental Health Center March 1996 discharge form states that only Shaquan's sleep disorder was "resolved" with medication but that her Psychotic Disorder and Conduct Disorder were merely "improved." (Tr. 352). In 1998, Dr. Thrasher diagnosed Shaquan as "actively psychotic," with disrupted thought process and anxious and scared affect, five days prior to the hearing, when Shaquan was receiving one third of her prescribed dosage. (Tr. 291, 295). There is no medical evidence contradicting Dr. Reagan's and Dr. Thrasher's findings.

The Defendant maintains that Dr. Thrasher's 1998 opinion is "contradicted by other substantial evidence of record." (Tr. 202). The Defendant relies on a report from Selma Landisberg, Ph.D., a consultative examiner, dated July 26, 1993, when Shaquan was seven years old, as evidence of Shaquan's behavior. (Def. Memo at 22, 28). However, the onset of Shaquan's psychotic disorder apparently occurred when she was eight-nine years old. (Tr. 262, 289). In addition, in the case of a growing child, the Defendant's reliance on a report written nearly five years prior to the ALJ's decision, as substantial evidence of a child's current condition, seems highly questionable.

Moreover, as evidence "contradictory" to Dr. Thrasher's report, the ALJ also relied on the background section of the Clarendon County school evaluation, dated December 18, 1996, written by Roy N. Fowler for Dr. Ken Dye, neither of whom appears to have a medical degree. (Tr. 202; Def. Memo at 10; Tr. 274, 269). The evaluation claimed, "Shaquan was helpful and pleasant. . . . No behavioral problems have been recorded at home. Behavioral milestones were normal and no unusual instances or trauma noted. The examinee has failed no grades in school." (Tr. 269). This description hardly seems "reliable" considering Ms. McFadden's testimony in February 1998 of Shaquan's recent history as being a child that had been held back two grades in school, expelled twice, didn't listen to her teachers, had frequent fights at school and with her siblings, tore up her room and would not help with chores around the home. (Tr. 231-233). That testimony is supported by the school disciplinary report for the 1997-1998 school year, as Shaquan received disciplinary penalties including two resulting in "paddling," two resulting in suspensions and one resulting in Shaquan having to be "carried home." (Tr. 193). However, the ALJ did not wait to review the school disciplinary report before rendering his decision. (Tr. 193, 202).

The Secretary has a duty to "develop a record establishing substantial evidence that the claimant's impairment `is reasonably remediable by the particular individual involved, given . . . her social or psychological situation.'" Preston v. Heckler, 769 F.2d 988, 990-991 (4th, Cir. 1985) (quoting Tome v. Schweiker, 724 F.2d 711, 714 (8th Cir. 1984). Since the ALJ did not have an adequate record to determine that all of Shaquan's mental health impairments were remedied upon her taking her full dosage of medication, the ALJ must have decided this case based on the conclusion that Shaquan had not followed her prescribed treatment.*fn8 (Tr. 202). In that situation, the Secretary must also show that "`this claimant lacks good cause for failing to follow a prescribed treatment program.'" Preston, 769 F.2d at 990-991 (quoting Gordon v. Schweiker, 725 F.2d 231, 236 (4th Cir. 1984); Dawkins v. Bowen, 848 F.2d 1211, 1213-14 (11th Cir. 1998).

2. SSR 82-59 requirements were not considered by the ALJ

Pursuant to 20 C.F.R. § 404.1530 and 416.930, and enunciated in SSR 82-59, a claimant may only be denied disability benefits if the Secretary finds that she unjustifiably failed to follow prescribed treatment and that if she had followed the treatment, she would not be disabled under the Act. See SSR 82-59; Teter v. Heckler, 775 F.2d 1104, 1107 (10th Cir. 1985); Jones v. Heckler, 702 F.2d 950, 953 (11th Cir. 1983); Cassiday v. Schweiker, 663 F.2d 745, 749 (7th Cir. 1981).

On the present administrative record, there is not substantial evidence to support a finding that Shaquan unjustifiably failed to follow treatment under 20 C.F.R. § 404.1530. While there is evidence that Dr. Reagan prescribed medicine in 1996, there is no evidence that the claimant has unjustifiably refused to take her medication. (Tr. 352, 228-229). In fact, the evidence shows the opposite. only when Shaquan was moved to South Carolina did she fail to follow her prescribed treatment and then she willingly took one pill a day of her prescription. (Tr. 201, 226, 352). Ms. McFadden testified that she cut down the dosage to 1/3 to conserve it because she didn't have a "medication card" in South Carolina. (Tr. 201, 226, 229, 237).*fn9 While the ALJ did not extensively probe Ms. McFadden's exploration into free community resources, or request financial, he was apparently satisfied with her answer since he stated in his opinion, "when they moved to South Carolina, they did not have a means for getting the medication." (emphasis added) (Tr. 199).*fn10 The ALJ did not explore the reasons why the medication had not been provided nor did he afford Shaquan the opportunity to undergo the prescribed treatment as required by SSR 82-59.*fn11,*fn12

Moreover, SSR 82-59 mandates that "[i]f the issue of "failure" arises at the hearing or [Appeals Council] levels, if not fully developed through testimony and/or evidence submitted, and it has been 12 months after onset, a favorable decision will be issued, and the case will be referred for development of failure to follow prescribed treatment." Here, the medical evidence in the record from Dr. Reagan indicates that Shaquan's psychiatric impairment, with her acute behavioral problems, existed more than twelve months prior to her acceptance of the case on May 31, 1995. (Tr. 262). Furthermore, Dr. Thrasher's January 27, 1998 report and Ms. McFadden's testimony that she was unable to obtain a treating physician in South Carolina are pretty clear evidence that Shaquan's psychiatric impairments and behavior problems had existed for more than one year prior to the hearing, while she was taking 1/3 of her prescribed dosage. (Tr. 290, 229-230). There is no indication that the issue of "failure to follow prescribed treatment" was raised before the hearing. Accordingly, Shaquan is entitled to a favorable decision and the calculation of benefits.

The Court concludes that the Commissioner's determination was not supported by substantial evidence because the ALJ did not develop an adequate record for his decision. The ALJ also committed legal error by not following the mandates of SSR 82-59.


The only issue outstanding, therefore, is whether this case should be remanded for further evidentiary proceedings or solely for an immediate calculation of benefits. Remand in this case would not provide any substantial additional information. Here, there is no actual dispute in the medical evidence that Shaquan suffers from severe psychotic disorders and acute behavioral problems. While the ALJ did not make an express finding that Shaquan would otherwise be disabled, his decision as a whole leaves no doubt that he premised the denial of benefits solely on his belief that claimant's condition could be ameliorated by the prescribed treatment regimen. The record reveals that Ms. McFadden did not have the financial means to obtain the required medication; as such, even upon further evidentiary review, benefits can not be denied on the basis of an unjustified refusal. Accordingly, remand in this case is not warranted. See Balsamo v. Chater, 142 F.3d 75, 82 (2d Cir. 1998). Furthermore, Shaquan is now seventeen and there has been an eleven year administrative delay in this case. There is no justification for further delay. See Curry v. Apfel, 209 F.3d 117, 124 (2d Cir. 2000).


For the foregoing reasons, Plaintiff's motion for an order reversing the determination of Defendant and remanding Plaintiff's claim solely for calculation of benefits is granted. Defendant's cross-motion for an order granting judgment on the pleadings is denied. The Clerk of the Court is directed to enter judgment for Plaintiff and this matter is hereby remanded to the Commissioner solely for the purpose of the prompt calculation of the benefits to which Plaintiff is entitled.


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