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May 6, 1985


The opinion of the court was delivered by: Aspen, District Judge:


Casey Ostrowski seeks judicial review of the decision of the Secretary of Health and Human Services ("the Secretary") denying him disability benefits under Titles II and XVI of the Social Security Act. 42 U.S.C. § 401 et seq. (Title II or "SSDI"); § 1381 et seq. (Title XVI or "SSI"). The parties have filed cross-motions for summary judgment. Because the decision of the Secretary contains errors of law and is not supported by substantial evidence, we vacate the denial of benefits and remand for further proceedings.


The following is a brief summary of the facts as revealed by the administrative record. We will develop other facts as they become relevant to the legal issues raised by Ostrowski's appeal.

Ostrowski is now 41 years old. From 1966 to 1980 he worked at several jobs, including bus driver, medical courier, and production control. He held most of his jobs for no more than a few months each, and has not worked since February, 1980. He claims he is disabled because of severe back pain and of severe psychological problems. Both problems have a long history.

Ostrowski testified at his Administrative Law Judge ("ALJ") hearing on October 27, 1982 that his back pain is severe and is felt in his neck and legs as well. He generally does not leave his house for more than a few hours at a time; does very little housework; cannot sit for more than two or three hours; and has difficulty driving, bending or stooping. He spends much of his time watching television. At other times during the last few years he had been able to do some housework and driving. His pain appears to have been varied in severity.

Ostrowski's emotional problems have also lasted many years. He has been in and out of mental institutions at least ten times since 1965. That year he was hospitalized for a type of paranoid psychosis. In 1968, he was hospitalized for "a nervous breakdown." In 1971 and 1973, he was hospitalized for depression. In 1974 he was treated for an unknown psychiatric disorder. In 1979 he was again hospitalized for depression, and a second time for an unknown disorder. In February, 1980 he was hospitalized for bipolar affective disorder, and again in June, 1980 for an unknown disorder. In September, 1980 he was hospitalized for two months for bipolar affective disorder. In 1982 he was treated as an outpatient for severe depression. During the past twenty years he has received sporadic psychotherapy.

The most detailed evidence of his psychiatric problems is contained in the records of his September, 1980 hospital admission and his October, 1981 examination by a consultative examiner, Dr. Benson, hired by the Secretary: When admitted to the hospital in 1980 he was alert and not hallucinatory, but was suicidal with moods rapidly shifting from depressed to anxious. When discharged in November, 1980 he was alert, coherent, non-psychotic, and non-suicidal, but was still depressed and mildly anxious with poor insight and judgment. In October, 1981 Dr. Benson opined that Ostrowski was dreamy but not overly psychotic; that he had had significant psychotic symptoms in the past; that he had a major affect disorder in current remission; that he could perform routine repetitive tasks, follow orders, and respond to normal work pressures. He was not suicidal, hallucinatory, delusional or depressed during that visit.

Ostrowski applied for SSI and SSDI*fn1 benefits in July, 1981. In August and September of 1981 his claims were denied initially, and the denials were affirmed on reconsideration in February, 1982. A de novo hearing before an ALJ was held in October, 1982, and the ALJ issued an opinion denying the SSDI claim in February, 1983. The Appeals Council affirmed this denial but remanded the matter to the ALJ because he had not ruled on Ostrowski's SSI claim. On December 29, 1983, the ALJ denied the SSI claim in an opinion mirroring his earlier one. The Appeals Council affirmed. This suit for judicial review followed.*fn2


A person is "disabled" under the Social Security Act if he cannot "engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months." 42 U.S.C. § 423(d)(1)(A) (SSDI). The Secretary uses a five-step inquiry in deciding whether a claimant is disabled. The Seventh Circuit has stripped the process of its regulatory jargon and nuances, summarizing it as follows:

  (1) Is the claimant presently unemployed? (2) Is
  the claimant's impairment "severe"? (3) Does the
  impairment meet or exceed one of a list of
  specific impairments? (4) Is the claimant unable
  to perform his or her former occupation? (5) Is
  the claimant unable to perform any other work
  within the economy? An affirmative answer leads
  either to the next step or, on steps 3 and 5, to a
  finding that the claimant is disabled. A negative
  answer at any point, other than point 3, stops
  inquiry and leads to a determination that the
  claimant is not disabled.

Halvorsen v. Heckler, 743 F.2d 1221, 1225 (7th Cir. 1984), quoting, Garfield v. Schweiker, 732 F.2d 605, 607 n. 2 (7th Cir. 1984); see also 20 C.F.R. § 404.1521 (1984). In reviewing the Secretary's application of this process, we must uphold her decision as long as her factual findings are supported by substantial evidence and she used the correct legal standards. E.g., Halvorsen, 743 F.2d at 1225. "Substantial evidence" means "such relevant evidence as a `reasonable mind accept[s] as adequate to support a conclusion," considering the record as a whole. E.g., Taylor v. Schweiker, 739 F.2d 1240, 1241 (7th Cir. 1984), quoting, Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971). The "substantial evidence" standard requires the Secretary to base her decision on a careful consideration of all the relevant evidence; she cannot single out those fragments of the record which tend to support her conclusion. Switzer v. Heckler, 742 F.2d 382, 385-86 (7th Cir. 1984); Taylor, 739 F.2d at 1243; Garfield, 732 F.2d at 609-10. In reviewing the ALJ's decision we should consider: (1) the clinical findings of treating and examining physicians; (2) the diagnoses of those physicians; (3) the subjective evidence ...

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