Second Circuit Rules on SGA

Empire Justice Center October 31, 2018

The Court of Appeals recently remanded the claim of a permanently intellectually disabled claimant whose benefits had been terminated back in 2003. Adelman v. Berryhill, 2018 WL 3763254 (2d Cir. Aug. 8, 2018). The Social Security Administration (SSA) had claimed in 2003 that Jed Adelman had been performing substantial gainful activity (SGA) since 2002, and was thus no longer eligible for Childhood Disability Benefits based on his father’s account. It also charged him with a $16,000 overpayment based on alleged SGA performed at the State University of New York with the services of a job coach and under the auspices of what was then called VESID (Vocational and Educational Services for Individuals with Disabilities), now ACCES-VR.


Jed Adelman, with the assistance of his parents who intervened in the case, repeatedly insisted he was not overpaid, and remained disabled and entitled to ongoing benefits. Over the next decade, Adelman and his parents, usually acting pro se, argued at four administrative hearings and two Appeals Council reviews that the Commissioner had never demonstrated he could perform SGA without substantial accommodations. He continued, for example, to need a job coach. None of the ALJs nor the Appeals Council ever considered the import of 20 C.F.R. § 404.1573(c), providing that work performed under “special conditions that take into account [the claimant’s] impairment may not constitute SGA.” In its final decision in 2014, the Appeals Council again concluded that Adelman had been overpaid and the overpayment should not be waived. It did not fully address Adelman’s claim that he was employed in a special program, nor that he because he had never engaged in SGA, he remained eligible for ongoing benefits.


The District Court granted Adelman’s first request for relief, finding he had not engaged in SGA between February 2002 and April 2003, and was thus not overpaid. It agreed with Adelman’s oft repeated argument that his work was performed under special conditions. The court, however, did not address Adelman’s other claims, including his assertion that he was entitled to ongoing benefits.


The Adelmans appealed to the Second Circuit, arguing that the District Court should have ordered the Commissioner to reinstate Adelman’s benefits retroactively and going forward until the Commissioner met her burden of proving why the benefits should end. They obtained the able assistance of Attorney Carolyn Kubitschek. While the Commissioner did not challenge the District Court’s ruling as to the overpayment, she argued the Court of Appeals lacked subject matter jurisdiction as to ongoing eligibility because Adelman had not administratively exhausted his claim for these benefits. She also argued that even if the claim were remanded, it would be Adelman’s burden to reestablish his entitlement.


The Second Circuit reviewed its exhaustion jurisprudence and concluded that Adelman had indeed satisfied his exhaustion requirement by repeatedly arguing to SSA that he remained entitled to benefits. According to the court, to require Adelman to have filed a new application while his appeals were pending, assuming the application would be premised on the same argument the Commissioner was repeatedly ignoring, would subject a permanently intellectually disabled person to a “Sisyphean process.” It also agreed that Adelman’s request for interim benefits was collateral to his claims. It found there was no valid decision by the Commissioner explaining why Adelman’s benefits should have ended in or before March 2003. And it held that on remand, it would be the Commissioner’s burden to demonstrate his entitlement ended.


Congratulations to Carolyn Kutibschek of Lansner & Kubitschek in New York City for helping to bring this long saga to a close.