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Schwandt v. Berryhill

United States Court of Appeals, Eighth Circuit

June 14, 2019

Cheryl J. Schwandt, Plaintiff - Appellant,
Nancy A. Berryhill, Acting Commissioner of Social Security, Defendant-Appellee.

          Submitted: November 15, 2018

          Appeal from United States District Court for the District of Minnesota - Minneapolis

          Before COLLOTON, SHEPHERD, and STRAS, Circuit Judges.


         Cheryl Schwandt appeals a judgment of the district court[1] upholding the denial of her application for disability insurance benefits. We affirm.


         In February 2012, Cheryl Schwandt applied for disability insurance benefits under 42 U.S.C. § 423, claiming a disability onset date of January 1, 2012. Schwandt alleged that avascular necrosis of the knees, a full knee replacement, and chronic pain syndrome limited her ability to work as a dental hygienist. The Social Security Administration granted Schwandt's application in July 2012.

         As it happened, however, the Administration mistakenly recorded an onset date of January 1, 2001. Under the correct onset date of January 1, 2012, benefit payments should have started in June 2012, because a claimant generally must be disabled for a full five months before benefits can be paid. See 42 U.S.C. § 423(a)(1), (c)(2). The erroneous onset date resulted in benefit payments dating back to February 2011, twelve months before the application date. See id. § 423(b). The agency's error thus resulted in Schwandt receiving undeserved payments for the months from February 2011 to May 2012. When the agency discovered the mistake, it sought to recover the overpayments, and declined to grant Schwandt a waiver that would allow her to keep the money.

         Around this time, an agency employee learned that Schwandt's earnings had been "subsidized" since 2010, meaning that Schwandt was paid more than the reasonable value of the actual services she performed. See 20 C.F.R. § 404.1574(a)(2). As a result, the employee thought that Schwandt had not engaged in substantial gainful activity after 2009, and recommended using an amended disability onset date of December 31, 2009, to calculate Schwandt's benefits. The earlier onset date would have allowed Schwandt to keep the overpayments that she received from the government. Acting on this recommendation, an agency disability examiner reopened Schwandt's claim in September 2013 to investigate the matter. After conducting a full review, however, the agency concluded that Schwandt's impairments had not been disabling before 2012, and that the correct onset date was still January 1, 2012.

         In an effort to establish an earlier onset date of December 31, 2009, Schwandt requested a hearing before an administrative law judge. The ALJ informed Schwandt before the hearing that she would evaluate Schwandt's disability status from "December 31, 2009 through the present." Schwandt responded with a letter objecting to any reconsideration of her disability status from 2012 onward, but she did not attempt to withdraw her request for a hearing.

         The ALJ began the hearing by overruling Schwandt's objection to the scope of the hearing. Applying the familiar sequential process, the ALJ then concluded that Schwandt had not been disabled since December 31, 2009. See Bowen v. Yuckert, 482 U.S. 137, 140 (1987); 20 C.F.R. § 404.1520(a)(4). The ALJ determined at step one that Schwandt had been engaged in substantial gainful activity from December 31, 2009, to December 31, 2011, so she was not disabled during that period. Schwandt had not been engaged in substantial gainful activity since January 1, 2012, but the ALJ concluded that Schwandt could perform past relevant work and therefore was not disabled from 2012 onward. As a result, Schwandt was not entitled to any disability insurance benefits. See 42 U.S.C. § 423(a)(1)(E), (d).

         After the Appeals Council denied review of the ALJ's decision, Schwandt sought review in district court under 42 U.S.C. § 405(g). The district court affirmed the Commissioner's disability determination, but remanded to the Administration for further consideration of the overpayment waiver issue. Schwandt appeals the portion of the district court's order affirming the disability determination, and we have jurisdiction despite the pendency of the waiver issue before the agency. See Forney v. Apfel, 524 U.S. 266, 269, 271-72 (1998).

         We review the district court's judgment de novo and will affirm if substantial evidence supports the Commissioner's decision. Vance v. Berryhill, 860 F.3d 1114, 1117 (8th Cir. 2017). Substantial evidence is less than a preponderance, but enough that a reasonable mind would find it adequate to support the Commissioner's decision. Id. "We consider evidence that supports the Commissioner's conclusion, as well as evidence that ...

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