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HART v. SULLIVAN

December 28, 1992

FRANK HART, Plaintiff,
v.
LOUIS W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant.


ARMSTRONG


The opinion of the court was delivered by: SAUNDRA BROWN ARMSTRONG

Plaintiff Frank Hart filed this action against defendant Louis W. Sullivan, M.D., Secretary of Health and Human Services, seeking review of the denial of his application for Social Security disability benefits. The matter is under submission on cross-motions for summary judgment. After having read the papers submitted, including the complete record from the hearing held before Administrative Law Judge Gilbert Pavlovsky on March 28, 1991, and for the reasons stated below, plaintiffs motions for summary judgment is denied and defendants cross-motion for summary judgment is granted.

 I. BACKGROUND

 Plaintiff is a forty year old male who has been abusing illegal drugs and alcohol for his entire adult life. He started using drugs when he was sixteen years old. (Record, p. 81) *fn1" He presently consumes seven or eight, twenty dollar bags of heroin daily. (p. 73) He also uses crack every night, (p. 71) and drinks approximately eight half-pints of hard liquor daily. (p. 85)

 Plaintiff applied for Supplemental Security Income on March 21, 1990, claiming a back injury. (pp. 92-95) The application was denied initially and again upon reconsideration. (pp. 96-98, 101-103) A hearing was held before Administrative Law Judge ("ALJ") Gilbert Pavlovsky on March 28, 1991. The ALJ issued an opinion denying benefits on May 23, 1991. (pp. 47-50) The Appeals Council refused to review the ALJ decision on January 24, 1992. (pp. 6-7) Having exhausted his administrative remedies, plaintiff filed this complaint on March 25, 1992.

 II. STANDARD OF REVIEW

 This Court reviews the ALJ's decision to make sure that the ALJ applied the correct legal standards and that the ALJ's findings are supported by substantial evidence. Martinez v. Heckler, 807 F.2d 771, 772 (9th Cir. 1986). Substantial evidence is defined as "more than a mere scintilla . . . but less than a preponderance" of evidence. Young v. Sullivan, 911 F.2d 180, 183 (9th Cir. 1990) (citations omitted). It is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401, 28 L. Ed. 2d 842, 91 S. Ct. 1420 (1971).

 III. ANALYSIS

 The ALJ based his opinion on two theories. First, the ALJ found that plaintiff was not disabled because he is working and engaging in substantial gainful activity. See 20 C.F.R. 416.920(b). Second, the ALJ found that plaintiff was not disabled because he was capable of performing his past relevant work as a construction worker. See 20 C.F.R. 416.920(e). Because the Court agrees that plaintiff is working and engaging in substantial gainful activity, the Court does not reach the ALJ decision's second basis.

 The first step in deciding whether a claimant qualifies for disability benefits is to consider whether the claimant is performing substantial gainful activities. See Key v. Heckler, 754 F.2d 1545, 1548 (9th Cir. 1985). If the ALJ finds that the claimant is performing substantial gainful activities then the claimant is not disabled and the inquiry is closed. 20 C.F.R. 416.920(b) ("If . . . the work you are doing is substantial gainful activity, we will find that you are not disabled regardless of your medical condition or your age, education, and work experience."); see, e.g., Keyes v. Sullivan, 894 F.2d 1053 (9th Cir. 1990) (denying benefits based solely on claimant engaging in substantial gainful activities).

 A work activity is substantial if it involves significant physical or mental activities. 20 C.F.R. § 416.972(a). It is gainful "if it is the kind of work usually done for pay or profit, whether or not a profit is realized." 20 C.F.R. § 416.972(b).

 The regulations include evaluation guides that establish a presumption of substantial gainful activity based on a claimants earnings. 20 C.F.R. § 416.974. Average monthly earnings of over $ 300 in years before 1990, or $ 500 for years after 1990, create the presumption. 20 C.F.R. §§ 416.974(b)(2)(vi), (vii). Several circuits agree that the presumption is rebuttable by the claimant. See Dugan v. Sullivan, 957 F.2d 1384, 1390 (7th Cir. 1992); Milton v. Schweiker, 669 F.2d 554, 556 (8th Cir. 1982); Coulter v. Weinberger, 527 F.2d 224, 229 (3rd Cir. 1975).

 A. Illegal Activities Can Be Substantial Gainful Activities

 The ALJ based its finding of substantial gainful activity on Mr. Hart's illegal heroin distribution. Substantial evidence in the record establishes that as of the date of Mr. Hart's hearing, he was daily distributing 35 to 40 bags of heroin, with a street value of approximately $ 750. (p. 73-74) He received 7 to 8 bags of heroin each day, with a ...


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