The opinion of the court was delivered by: ARTHUR SPATT, District Judge
MEMORANDUM OF DECISION AND ORDER
Kathleen Calef (the "plaintiff") commenced this action on behalf of
her daughter Heather Calef ("Heather"), pursuant to the Social Security
Act, 42 U.S.C. § 405(g) (the "Act"), seeking review of a final
administrative determination of the Commissioner of the Social Security
Administration (the "Commissioner") which determined that the
disbursements to the plaintiff from a Supplemental Needs Trust
("SNT") constituted unearned income reducing Heather's supplemental
security income ("SSI") benefits.
Presently before the Court are (1) the Commissioner's motion for
judgment affirming its decision and its motion to dismiss the plaintiff's
complaint for failure to state a claim pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure; and (2) the plaintiff's cross-motion
for a remand.
Since June 1992, the plaintiff has received SSI benefits on behalf of
her daughter Heather who had been rendered disabled. On October 15, 1998,
the plaintiff filed a petition to the Supreme Court of the State of New
York, County of Suffolk to transfer a putative tort settlement into a SNT
fund. The petition requested, among other things, that the SNT be amended
to provide the plaintiff with monthly stipends in the sum of $1,000
because she could not work steadily because of her daughter's medical
On December 17, 1998, the Court of Claims of the State of New York
issued an Infant's Compromise Order which settled the state court action.
The Infant's Compromise Order provided, in part, for an initial payment
of $437,377.45 to the plaintiff as trustee of a SNT on behalf of Heather.
On March 1, 1999, the Supreme Court of Suffolk County entered an order
and judgment appointing the plaintiff co-guardian for property management
and guardian of the personal needs of Heather. The court ordered that the
plaintiff be paid
an amount of $1,000 per month from the SNT as a stipend. On March
19, 1999, the plaintiff and the other co-guardian executed the amended
SNT, which was then submitted, together with the court order, to the
Social Security Administration ("SSA").
On September 30, 1999, SSA determined that the plaintiff's monthly
stipend of $1,000, which she began receiving in March 1999, was unearned
income and should have been "deemed" or attributed to Heather. As a
result, SSA concluded that these payments reduced Heather's SSI payments
to a sum of $63 per month from her regularly monthly payment of $523 and
that she received an overpayment in the sum of $2,300 from May 1999
through September 1999 because of the monthly unearned income of $1,000
received by the plaintiff.
The plaintiff requested reconsideration, arguing that her monthly
stipend was earned income and that Heather's SSI benefits were therefore
correct. On October 15, 1999, the Commissioner issued a reconsideration
decision which stated, in relevant part:
You have requested that we reconsider our
determination that the monthly stipend of $1000.00
you receive from Heather Calef's Supplemental
Needs Trust is unearned income. Your
Reconsideration Request states that it is earned
income. To qualify as "earned" income, income must
be from wages or employment. The stipend is not a
wage, as you are Heather's custodial parent, not
her employee. She does not have the authority to
direct your work. You are not self-employed as
your minor child's care-giver. As you are
receiving neither a wage, nor income from
self-employment, the stipend you receive from the
trust fund is "unearned." Our prior decision
regarding this matter is affirmed.
On October 25, 1999, the plaintiff requested a hearing before an
administrative law judge ("ALJ"). In her application, the plaintiff
argued that her monthly stipend was earned
income because she was employed by Heather and was paid by
Heather's SNT. On January 28, 2000, ALJ Sy Rayner conducted a hearing at
which the plaintiff was represented by counsel. At the hearing, the
plaintiff testified that in 1999 her daughter's SSI benefits were in the
amount of $523 per month until SSA reduced the benefit amount to $63 a
month because of the monthly stipend she was receiving from Heather's
SNT. The plaintiff argued that the stipend is a salary paid to her for
services rendered to her daughter. As such, she stated that the monthly
stipend should be characterized as earned income and not unearned income.
In a decision dated February 8, 2000, the ALJ reversed the
reconsideration decision and determined that the plaintiff's monthly
stipend of $1,000 was earned income because the plaintiff received the
stipend from the SNT for services that she performed on Heather's behalf
that a hired caretaker would be paid to perform.
On March 30, 2000, the Appeals Council advised the plaintiff of its
intent to review, on its own motion, the ALJ's decision under the error
of law provision pursuant to 20 C.F.R. § 416.1469 and 416.1470. In a
letter dated June 6, 2000, the Appeals Council notified the plaintiff of
its intention to find the monthly stipend constituted as unearned income
for deeming purposes, and it offered the plaintiff an opportunity to
respond. On August 10, 2000, the Appeals Council issued the
Commissioner's final decision, finding that the plaintiff's monthly
stipend from the SNT was not earned income because it was neither wages
nor self-employment income.
The plaintiff then commenced this action on October 3, 2000. In the
complaint, the plaintiff alleged that, (1) the Commissioner breached the
Due Process Clause of the Constitution by denying the plaintiff SSI
benefits without providing notice with citations to the applicable
regulations and the standards used in computing benefits as required by
Ford V. Shalala, 87 F. Supp.2d 163 (E.D.N.Y. 1999); (2) the
Commissioner has a policy and practice of not acquiescing to state court
orders, thereby violating Executive Order 12612; (3) the Commissioner has
breached her "duty of care that the laws be faithfully executed" by
implementing a "nonacquiescence policy whereby he does not follow the
holding in Christensen v. Harris, 529 U.S. 576,
120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) that a letter-opinion by Executive
Branch counsel does not have the force of law"; (4) the Commissioner has
violated the "the Equal Protection clause of the Constitution by denying
the severely disabled plaintiff SSI benefits because her Guardian-mother
has been paid compensation to be her caretaker and provide for all of the
plaintiff's activities of daily living, rather than a third party being
paid compensation to be her caretaker and provide care of all of the
plaintiff's activities of daily living"; (5) the Commissioner
"implemented an arbitrary and capricious policy and practice not to apply
his own earned income regulations by not including Court ordered
compensation for providing all of the activities of daily living for a
severely disabled minor child as being considered `earned' income"; and
(6) the Commissioner "violated the federal statutory rights of the
plaintiff and thereby committed a
`Bivens' tort." The plaintiff seeks, among other things, an award
of full benefits retroactive to the initial date of her application and
an order directing the Commissioner to comply with the Ford
order, Executive Order 12612, and the Christensen holding.
The Commissioner now moves for judgment on the pleadings affirming the
final decision by the SSA and to dismiss the plaintiff's complaint for
failure to state a claim. The plaintiff moves for a remand.
To review the Commissioner's decision, the Court must determine whether
(1) the Commissioner applied the correct legal standard, see
Tejada v. Apfel, 167 F.3d 770, 773 (2d Cir. 1999); and (2) the
decision is supported by substantial evidence, see
42 U.S.C. § 405(g); Brown v. Apfel, 174 F.3d 59, 61-62 (2d Cir.
1999). Substantial evidence is "more than a mere scintilla."
Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420,
28 L.Ed.2d 842 (1971) (quoting Consolidated Edison Co. v. NLRB,
305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Rather, substantial
evidence requires enough evidence that a reasonable person "might accept
as adequate to support a conclusion." Brown, 174 F.3d at 62-63.
In determining whether the Commissioner's findings are supported by
substantial evidence, "the reviewing court is required to examine the
entire record, including
contradictory evidence and evidence from which conflicting
interferences can be drawn." Id. at 62 (quoting Mongeur v.
Heckler, 722 F.2d 1033, 1038 (2d Cir. 1983) (per curiam)). In
addition, new evidence submitted to the Appeals Council may be considered
as part of the record for the purpose of judicial review. Brown v.
Apfel, 174 F.3d 59, 62 (2d Cir. 1999).
Furthermore, the Court is mindful that "it is up to the agency, and not
this court, to weigh the conflicting evidence in the record." Clark
v. Commissioner of Soc. Sec., 143 F.3d 115, 118 (2d Cir. 1998).
Indeed, in evaluating the evidence, "`the court may not substitute its
own judgment for that of the Secretary, even if it might justifiably have
reached a different result upon de novo review.'" Jones v.
Sullivan, 949 F.2d 57, 59 ...