Sanfilippo v. Barnhart

57 F. App'x 526
CourtCourt of Appeals for the Third Circuit
DecidedFebruary 4, 2003
DocketNo. 02-2170
StatusPublished
Cited by1 cases

This text of 57 F. App'x 526 (Sanfilippo v. Barnhart) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sanfilippo v. Barnhart, 57 F. App'x 526 (3d Cir. 2003).

Opinion

OPINION OF THE COURT

FUENTES, Circuit Judge.

Pursuant to 42 U.S.C. § 405(g), Thomas Sanfilippo (“Sanfilippo”) sought judicial review in the United States District Court for the Western District of Pennsylvania of the decision of the Commissioner of Social Security (“Commissioner”) reducing his federal disability insurance benefits under Title II of the Social Security Act (“Act”) by the net amount of a lump-sum workers’ compensation settlement, prorated over a period of 4.3 years. Because we agree that the Commissioner’s determination is a reasonable interpretation of the Act and is not otherwise arbitrary or capricious, we affirm the Order of the District Court granting summary judgment to the Com-misioner.

I. Facts and Procedural History

On February 18, 1987, Sanfilippo, an arborist, suffered neck and back injuries while working. On April 2, 1993, he filed an application for disability insurance benefits. On May 28, 1996, an Administrative Law Judge (“ALJ”) issued a decision awarding Sanfilippo benefits under the Act. In accordance with 42 U.S.C. § 424a(a), the Social Security Administration (“SSA”) offset Sanfilippo’s disability insurance benefits by $243.94 per week ($195.15 per week after the deduction of attorneys’ fees), the amount paid by his employer pursuant to the Pennsylvania Workers’ Compensation Act.

On July 7, 1998, the Pennsylvania Bureau of Workers’ Compensation approved a compromise and release settlement between Sanfilippo and his employer. Under the terms of the settlement, Sanfilippo received a lump-sum payment of $55,000 and, in return, agreed to waive and release his entitlement to all future indemnity, medical and other benefits that might be available to him under the Pennsylvania Workers’ Compensation Act.

On October 23, 1998, SSA informed San-filippo that his disability insurance benefits would continue to be reduced by $195.15 per week — the amount of the lump-sum [528]*528payment prorated over a period of 4.3 years. Sanfilippo requested reconsideration of this offset determination, and, on May 3, 1999, SSA informed Sanfilippo that the reduction of his disability insurance benefits was properly calculated.

At Sanfilippo’s request, an ALJ held a hearing on December 20, 1999. The ALJ granted Sanfilippo’s request for leave to obtain additional information. On June 22, 2000, Sanfilippo submitted an amended order from the Pennsylvania Bureau of Workers’ Compensation stating that the lump-sum payment of $55,000 represented payment in lieu of compensation equal to $29.59 per week for a period of 1,487 weeks, which was Sanfilippo’s life expectancy. On July 17, 2000, the ALJ issued a decision reversing the reconsideration determination and holding that Sanfilippo’s lump-sum payment should be prorated over his life expectancy rather than a 4.3 year period.

On September 8, 2000, the Appeals Council notified Sanfilippo that it was reviewing the ALJ’s decision under the error of law provision of 20 C.F.R. § 404.969. On December 7, 2000, the Appeals Council issued a decision reversing the decision ALJ. The Appeals Council reinstated SSA’s prior determination that Sanfilippo’s lump-sum workers’ compensation settlement should be prorated at the periodic rate received prior to the settlement. Pursuant to 20 C.F.R. § 404.981, the decision of the Appeals Council became the final decision of the Commissioner.

On February 9, 2001, Sanfilippo filed a complaint in the United States District Court for the Western District of Pennsylvania, in which he challenged the decision of the Appeals Council. On cross motions for summary judgment, the District Court granted the Commissioner’s motion for summary judgment. Sanfilippo now seeks appellate review of the District Court’s decision.

II. Jurisdiction and Standard of Review

This Court has jurisdiction over Sanfilip-po’s appeal pursuant to 42 U.S.C. § 405(g). Our review of legal issues is plenary. Schaudeck v. Commissioner of Social Security, 181 F.3d 429, 431 (3d Cir.1999). Our role is not to impose upon SSA our own interpretation of the Social Security legislation. Rather, because Congress has delegated to the Commissioner the responsibility for administering the complex programs, we must defer to her construction, as long as it is reasonable and not arbitrary and capricious. Wheeler v. Heckler, 787 F.2d 101,104 (3d Cir.1986).

III. Discussion

The issue before the Court on appeal is whether the Commissioner properly prorated Sanfilippo’s lump-sum settlement over a period of 4.3 years, or, as Sanfilippo contends, the lump sum award should have been prorated over his life expectancy. Sanfilippo argues that SSA’s Program Operations Manual System (“POMS”), § DI-52001.555C(4), is irrational, arbitrary and fails to approximate as nearly as practicable the reduction of disability insurance benefits prescribed by 42 U.S.C. § 424a(a).

Pursuant to 42 U.S.C. § 424a(a), the Commissioner is required to reduce, or offset, the level of a recipient’s social security disability payments when the total of that recipient’s disability payments and workers’ compensation benefits exceeds eighty percent of his pre-disability earnings. When an individual’s workers’ compensation benefits are paid in a lump-sum, the Act requires the Commissioner to prorate the lump-sum payment and “approximate as nearly as practicable” the rate at which the award would have been paid on a monthly basis. 42 U.S.C. § 424a(b).

[529]*529The Commissioner has developed internal guidelines for calculating the rate by which lump-sum awards may be offset. These guidelines list three steps, in priority order:

1. The rate specified in the lump-sum award.
2. The periodic rate prior to the lump-sum if no rate is specified in the lump-sum award.
3. If workers’ compensation, the State’s workers’ compensation maximum in effect in the year of injury. This figure can be used if no rate is specified in the award or there was no preceding periodic benefit.

POMS § DI-52001.555(c)(4).

In this case, the Commissioner ultimately concluded that the periodic rate paid prior to the lump-sum settlement was the appropriate rate for offsetting the lump-sum amount because the original compromise and release settlement did not specify an offset rate.

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