OPINION AND ORDER
PHILIP SIMON, District Judge
This action presents a dispute over the arbitrability of a grievance brought by Indiana/Kentucky Regional Council of Carpenters ("the Union") against L. I. Combs Sons, Inc., an Indiana construction company. The grievance is based on an alleged violation of a 2006 collective bargaining agreement. The issue is whether Combs is bound by the 2006 CBA. Combs says that it is not a signatory to the CBA and thus has no responsibility under it. Combs seeks a declaratory judgment that it is not bound by the 2006 CBA and therefore is under no obligation to submit to arbitration pursuant to its terms. The Union relies upon a Memorandum of Agreement that it executed with Combs almost three decades ago ("the 1981 MOA") as the source of Combs' contractual duty to comply with the 2006 CBA.
The matter is before me now on Combs' Motion for Summary Judgment. (DE 24). Combs offers several arguments as to why it is not bound by the 2006 CBA. In particular, I find the arguments of repudiation, lapse and laches to be persuasive, and thus summary judgment will be granted in favor of Combs.
Before delving into the facts, there is a preliminary issue concerning summary judgment procedure that I should note. The Union earlier complained that Combs had not properly set out a "Statement of Material Facts" to which the Union could respond with its own "Statement of Genuine Issues" as contemplated by Local Rule 56.1(a). Ironically, after the Union's motion to strike was denied, and the Union was given an opportunity to respond to the summary judgment motion, the Union failed to avail itself of the opportunity to expressly controvert Combs' factual assertions. As a result, pursuant to L.R. 56.1(b), "the facts as claimed and supported by admissible evidence by the moving party are admitted to exist without controversy."
BACKGROUND
On June 1, 1981, Robert Rider, the bookkeeper for Combs, signed the 1981 MOA with a predecessor to the Union. (DE 24, Ex. 1). Rider was never an officer, director, or general manager of Combs. (DE 24, Ex. 2). The 1981 MOA that Rider signed on behalf of Combs states that Combs recognized the Union as the "sole and exclusive collective bargaining representative" of the employees of Combs Sons. (DE 24, Ex. 1). The 1981 MOA stated that Combs acknowledged receipt of, and adopted, a collective bargaining agreement with the Union. The 1981 MOA further provides that either party could amend or terminate the MOA if it "notif[ied] the other in writing at least three (3) calendar months prior to the expiration of the Master Agreement adopted herein." (DE 24, Ex. 1).
Despite the acknowledgment statement in the 1981 MOA, Rider and Combs deny receiving a copy of any underlying agreement to the MOA, including the referenced "Master Agreement." (DE 24, Ex. 2-3). Combs asserts that the only reason for executing the 1981 MOA was to facilitate the continued employment of two union construction workers at a local hospital after their construction company went out of business. (DE 24, Ex. 3). The president of Combs, a member of the hospital's board, agreed to compensate the workers as a convenience to the hospital. (DE 24, Ex. 3).
After executing the 1981 MOA, Combs may have retained Union employees and contributed to union employee benefit plans until some time around 1990. (DE 24, Ex. 6). After that, the Union did not interact with Combs in any way. Then, nearly 15 years later, in June 2005, the Union demanded that Combs submit to a payroll audit pursuant to the 1981 MOA. (DE 24, Ex. 4). Combs responded on July 14, 2005 with a letter to the Union stating that Combs did not have a valid collective bargaining agreement with the Union. (DE 24, Ex. 6). In the July 2005 letter, Combs explained its belief that the 1981 MOA was invalid because the bookkeeper (Mr. Rider) had no authority to bind the corporation to contracts and cited the fact that the Union had slept on its rights since Combs had no union employees for at least 15 years. (DE 24, Ex. 6).
The Union evidently dropped the matter — at least there is no evidence to the contrary — and nearly four more years quietly passed by. It wasn't until March 11, 2009, that Combs received a letter from the Union which provided notice of an alleged violation of "our Collective Bargaining Agreement" — the claim being that Combs was using non-union subcontractors at one of its job sites. (DE 24, Ex. 7). The Union contends that this conduct violated the 2006 CBA, a successor agreement between the Union and the Northwest Indiana Contractors Association, to which the 1981 MOA ostensibly bound Combs. (DE 24, Ex. 11). The Union sought to arbitrate the grievance, (DE 24, Ex. 11-12), but after this action was brought, I ordered the cancellation of scheduled arbitration proceedings and enjoined those proceedings until the issues presented by this action are resolved. (DE 8).
DISCUSSION
This matter is before me on Combs' motion for summary judgment. Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c)(2); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A genuine issue of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Lewis v. Downey, 581 F.3d 467, 472 (7th Cir. 2009); Branham v. Snow, 392 F.3d 896, 901 (7th Cir. 2004). When examining the evidence, the Court should resolve all ambiguities and draw all inferences in favor of the non-moving party. Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010).
A. Jurisdiction
There is an initial question of whether I have jurisdiction. Section 301 of the Labor Management Relations Act "confers federal subject-matter jurisdiction only over `[s]uits for violation of contracts.'" Textron Lycoming Reciprocating Engine Div. v. United Automobile, Aerospace Agricultural Implement Workers of Am., 523 U.S. 653, 656 (1998) (quoting 29 U.S.C. § 185(a)). Based on this statutory language, the Supreme Court held that section 301 does not provide federal subject-matter jurisdiction for suits merely seeking a finding that a contract is invalid. Id. at 657. The Supreme Court nonetheless determined that employers accused of violating a CBA may seek a declaratory judgment from a federal court invalidating the CBA, because it is the underlying grievance that causes the employer to assert an invalid contract as its defense. Id. at 658; J.W. Peters, Inc. v. Bridge, Structural Reinforcing Iron Workers, 398 F.3d 967, 973 (7th Cir. 2005). Because Combs filed suit seeking a declaratory judgment regarding the validity of the 2006 CBA in direct response to the Union's allegations of a grievance under the 2006 CBA, this suit constitutes an action "for violation of contracts" under section 301.
B. Combs' Right to a Declaratory Judgment
In order for the Union to pursue the alleged 2009 grievance, Combs must be a party to the 2006 CBA. The Union contends that the 2006 CBA represents a successor agreement to the 1981 MOA, which specifically included an evergreen clause that bound Combs to all successor agreements unless the Union or Combs provided written notice of termination of the MOA at least three months prior to the expiration of the CBA. The key to the Union's stance is the validity of the 1981 MOA and the lack of any subsequent termination of the agreement by Combs.
Combs does not dispute that its bookkeeper, Robert Rider, executed the 1981 MOA. Instead, it argues that the 1981 MOA is void because Rider did not have authority to bind the corporation to any contract, including a collective bargaining agreement. I need not resolve that issue because I find that even if the 1981 MOA were a valid contract, it has been repudiated under the "one-man unit" rule which invalidates the CBA because Combs did not employ any Union members since sometime around 1990. I also find that the CBA lapsed before 2009 based on the Union's conduct, including its failure to seek compliance with the CBA and to communicate with Combs for extended periods of time. Finally, and in any event, laches also bars the Union's claims related to the 2006 CBA.
1. Termination or Repudiation of the MOA before the 2006 CBA
Combs contends that it effectively terminated its obligations under the MOA before the 2006 CBA. A subsidiary question here is whether the 1981 MOA included an "evergreen clause," which would have bound Combs to successor CBAs through 2009 when the grievance at issue arose. An "evergreen clause" is a clause which automatically renew the terms of the contract, binding the parties unless one party terminates the contract. Operating Eng'rs Local 139 Health Benefit Fund v. Gustafson Constr. Co., 258 F.3d 645, 649 (7th Cir. 2001). An evergreen clause exists in the plain language of the 1981 MOA. The 1981 MOA reads:
2. The parties
[i.e., Combs Sons and the Union] do hereby adopt the latest Agreement, and all approved amendments thereto
and any future Agreements between the UNION and the [multi-employer bargaining unit] . . . and agree to be bound by all of the terms and conditions thereof for the duration of such Agreement
and any future Agreements and for the period of any subsequent extensions including any amendments which may be subsequently made
4. Either party desiring to amend or terminate this Memorandum of Agreement must notify the other in writing at least three (3) calendar months prior to the expiration of the Master Agreement adopted therein.
(DE 24, Ex. 1) (emphasis added).
Combs claims that it terminated the 1981 MOA in its 2005 letter such that it was not a party to the 2006 CBA. To effectively terminate a contract containing an evergreen clause, notice of the termination must be clear and unequivocal. See Todd v. Corporate Life Ins. Co., 945 F.2d 204, 208 (7th Cir. 1991); Morris Silverman Mgmt. Corp. v. W. Union Fin. Servs., 284 F. Supp. 2d 964, 974 (N.D. Ill. 2003). Combs' July 2005 letter appears to be the first instance of communication to the Union rejecting the validity of any collective bargaining agreement. In the July 2005 letter, an attorney for Combs stated that it is "L.I. Combs Sons, Inc.'s position that it does not have a valid collective bargaining agreement with your client [i.e., the Union]. . . ." (DE 24, Ex. 6). The Union contends that this letter does not seek to amend or terminate the 1981 MOA. The Union further contends that it has no knowledge of any other communication seeking to amend or terminate the MOA. This is a close call but ultimately I agree with the Union that the statement in the July 2005 letter does not constitute direct notice of termination according to the provisions of the 1981 MOA. There was no reference to the termination clause of the 1981 MOA and no use of the word "terminate." The July 2005 letter cannot properly be construed as effectively invoking the 1981 MOA's termination provisions.
But whether Combs formally terminated the agreement is neither here nor there because there is another basis to get out from under the contract. The July 2005 letter expressly states the corporation's belief that the 1981 MOA was not binding upon it, and thus implies Combs' intent to repudiate any agreement that may have existed. Regardless of any formal termination of the 1981 MOA pursuant to its terms, Combs was within its rights to repudiate its contract with the Union based upon the "one-man unit" rule.
The "one-man unit" rule allows an employer who employs one or fewer permanent bargaining unit employees to repudiate its contract with the union without violating the Labor Management Relations Act. J.W. Peters, Inc., 398 F.3d at 975. In J.W. Peters, the court outlined several NLRB cases where the NLRB applied the "one-man unit" rule. The NLRB justified the rule in Foreign Car Center, Inc., 129 NLRB 319, 320 (1960) based upon "the principle of collective bargaining [that] presupposes that there is more than one eligible person who desires to bargain." Id. at 973. Applying the rule, the NLRB found employers with two or fewer bargaining unit employees within their rights to repudiate the applicable collective bargaining agreement. See Haas Garage Door Co., 308 NLRB 1186 (1992) (finding no violation of labor law when an employer, who had signed a CBA through the multi-employer bargaining unit of which it was a member, repudiated the CBA because it had no more than one unit employee at all the material times); Garman Constr. Co., 287 NLRB 88, 89 (1987) (finding Garman's repudiation of its collective bargaining agreement in "a letter to the union stating that the agreement `is null and void as of the present date'" to be lawful based on the one-man unit rule).
The Union argues that the "one-man unit" rule does not apply in this case because Combs did employ more than one unit employee in 2009 at the time of the alleged grievance. However, the effective repudiation occurred in 2005. The collective bargaining agreement did not survive until 2009 because, as the Union fails to dispute, Combs did not employ any bargaining unit employees from at least 1990 to 2005. See DE 24, Ex. 6. Applying the "one-man unit" rule, Combs successfully repudiated its agreement with the Union in its July 2005 letter. Therefore, the subsequent 2006 CBA never bound Combs, making it irrelevant whom Combs employed in 2009.
2. Lapse of the CBA
The legal theory of lapse also applies to support judgment as a matter of law in favor of Combs. The conduct of the parties implied that no agreement existed between the parties by June 2005. A contract can be implied in fact when the conduct of the parties infers a meeting of the minds, even in the absence of an express contract. Sullivan v. Randolph, 504 F.3d 665, 668 (7th Cir. 2007); Bricklayers Local 21 of Ill. Apprenticeship Training Program v. Banner Restoration, Inc., 385 F.3d 761, 766 (7th Cir. 2004). Courts have bound employers to collective bargaining agreements based on conduct such as "payment of union wages, the remission of union dues, the payment of fringe benefit contributions, the existence of other agreements evidencing assent and the submission of the employer to union jurisdiction." Bricklayers, 385 F.3d at 766; see, e.g., Sullivan, 504 F.3d at 668. Conversely, collective bargaining agreements can lapse based upon the conduct of the parties. See, e.g., Chicago Dist. Council of Carpenters Pension Fund v. Hunter Alliance, Corp., 1998 WL 155928 at *2 (N.D. Ill. Mar. 30, 1998) (noting the NLRB's decision that a collective bargaining agreement lapsed due to "the absence of bargaining unit employees and absence of communication between the parties" for sixteen years).
Based on the undisputed facts, I find that the 1981 MOA and any of its successor agreements lapsed before June 1, 2006, when the 2006 CBA became effective. First, there is no evidence of any communication, employment of bargaining unit employees, or other interaction between the Union and Combs from approximately 1990 until 2005. In the July 2005 letter, Combs asserted that it had not employed unit employees and/or paid into union employee benefits under the 1981 MOA for at least the previous 15 years. (DE 24, Ex. 6). The Union made no reply disputing the company's assertion that there existed no valid and binding CBA.
Furthermore, the Union, outlining all of its correspondence with Combs in answer to an interrogatory, reveals no correspondence with Combs Sons between June 1, 1981, when the MOA was executed, and June 15, 2005, when the Union's counsel sent the letter to Combs requesting an audit. (DE 24, Ex. 12 at 3-4). So at least from 1990, but arguably from 1981, through July 2005, there is no evidence that Combs: (1) employed bargaining unit employees, (2) paid union wages to bargaining unit employees, (3) remitted union dues, (4) paid fringe benefit contributions mandated by the 1981 MOA, or (5) otherwise submitted to union jurisdiction. Additionally, there is no evidence that the Union communicated with Combs on any matter or attempted to enforce the terms of the 1981 MOA. In fact, upon the Union's first effort to enforce the 1981 MOA in 2005, Combs refused to comply and denied the existence of any relationship with the Union. Even then, both parties agree that the Union did not engage Combs further to ensure their compliance with the agreement. The next time that Combs heard from the Union was nearly four years later, when it informed Combs in 2009 of the alleged grievance that is the impetus for this action.
The 1981 MOA, and the successor CBAs it included, lapsed at some point before June 1, 2006, when the 2006 new CBA became effective. Both parties effectively repudiated the contract by their inaction between 1990 and 2005. There is no need to determine specifically when the 1981 MOA lapsed because 15 years of inaction is more than sufficient to give Combs the reasonable belief that the 1981 MOA was no longer in force.
3. Laches
Finally, there is yet another basis for judgment in favor of Combs — the equitable concept of laches. Laches applies when there is: (1) an "inexcusable delay in asserting a right," (2) "an implied waiver arising from knowing acquiescence in existing conditions," and (3) "a change in circumstances causing prejudice to the adverse party." In re Bender, N.E.2d 170, 184 (Ind. Ct. App.) (citing Shriner v. Sheehan, 773 N.E.2d 833, 846 (Ind. Ct. App. 2002), trans. denied); see also Teamsters Employers Welfare Trust of Ill. v. Gorman Bros. Ready Mix, 283 F.3d 877, 883 (7th Cir. 2002) (indicating that laches is an allowable defense in ERISA cases). The undisputed facts of this case establish these elements.
To determine whether an inexcusable delay occurred, it is first necessary to identify the applicable statute of limitations. Gorman Bros., 283 F.3d at 880. Indiana's two-year statute of limitations applies to "action[s] relating to the terms, conditions, and privileges of employment except actions based upon a written contract." Ind. Code. § 34-11-2-1. The Seventh Circuit has found this statute applicable to a union's Section 301 claim brought against an employer for alleged breach of a collective bargaining agreement. So a claim for breach of the 1981 MOA would be subject to this limitations period. See Int'l Union of Elevator Constructors v. Home Elevator Co., 798 F.2d 222, 223-24 (7th Cir. 1986). Despite a two year statute of limitations, the Union dragged its feet for at least 15 years and arguably much longer. This plainly amounts to inexcusable delay on the Union's part.
Second, the Union implied its waiver of the 1981 MOA through its acquiescence in Combs' non-union behavior from at least 1990 to 2005. What's more, Combs has been prejudiced by the Union's belated assertion that the 1981 MOA is still valid and governs its relationship with Combs. Combs would be penalized for its reliance upon the Union's acquiescence if the Union decided to enforce all the terms of the 1981 MOA and its successor agreements at this late date. How could Combs effectively defend actions it took decades ago? At bottom, the Union has slept on its rights, and so this is one of those rare cases where laches applies.
CONCLUSION
There is no doubt that facts are missing from this story of twenty-nine years. However, the undisputed facts support judgment as a matter of law in favor of Combs Sons, because the agreement represented by the 1981 MOA was effectively repudiated in 2005 under the "one-man unit" rule, and/or lapsed from a period of at least 15 years of non-activity, and/or is now subject to the defense of laches.
Accordingly, plaintiff's Motion for Summary Judgment (DE 24) is GRANTED.
The Clerk shall ENTER JUDGMENT in favor of plaintiff Combs Sons declaring that Combs Sons is not bound by the 2006 collective bargaining agreement and has no obligation to arbitrate the grievance now asserted, and enjoining defendant Union and its representatives from any action or assertion to the contrary.
SO ORDERED.
Entered this 3rd day of November, 2010.
was examined by Dr. Lin Brown, who found,
inter alia, her spine to be "nontender," there was no pain with the digital palpitation of her myofascial tender points, and that she had decreased range of motion in her wrists. Dr. Brown noted that although Costa's history was consistent with fibromyalgia,
"the absence of fibromyalgia tender points does
suggest that we should look further before accepting this as the diagnostic label of choice."
Admin. R. 409. Later that month, however, after diagnostic testing ruled out rheumatoid arthritis, Dr. Brown opined that "the most likely cause of [Costa's] muscle and joint pain
is fibromyalgia." Admin. R. 221.
"Fibromyalgia is described "a syndrome of chronic pain of musculoskeletal origin but uncertain cause. Further, the musculoskeletal and neurological examinations are normal in fibromyalgia patients, and there are no laboratory abnormalities. The American College of Rheumatology nonetheless has established diagnostic criteria that include pain on both sides of the body, both above and below the waist and point tenderness in at least 11 of 18 specified sites." Johnson v. Astrue, 597 F.3d 409, 410 (1st Cir. 2009) (quotations, brackets, and citations omitted).
An initial evaluation of Costa at the North Country Pain Clinic in October 2006 noted "[e]ven though she does not demonstrate the `tender points' consistently, [Costa] has all other symptoms for fibromyalgia." Admin. R. 258. A fibromyalgia questionnaire completed by Nurse Practitioner Shute, see infra, indicated that Costa exhibited "multiple tender points." Admin. R. 309.
Between October 2006 and the ALJ's decision in February 2008, Costa went to the North Country Pain Clinic approximately once per month. The parties agree that, on average, Costa's pain during the week before each visit averaged a "four" on a ten point scale, with periods as high as "five" or "six." On a few occasions, her average pain was reported at "six" or "seven," with one period reaching a level of "ten." Notes from the pain clinic indicate that at the time Costa reported pain reaching a "ten," she was not observed to be "in any acute distress." Admin. R. 294.
In November 2007, Nurse Practitioner Shute completed a fibromyalgia questionnaire. Although she opined that the prognosis for Costa's left-side CTS, spasmodic torticollis, reactive airway disease, and plantar fasciitis/tendinitis was good, her pain was severe enough to render her incapable of tolerating even "low stress" work and that she was incapable of lifting 10 pounds and could rarely lift even a lesser weight. Shute opined that Costa could not stand, walk or sit for even relatively short periods of time and would need to shift between walking, sitting, and standing at will, and take unscheduled breaks at least hourly. Shute further opined that as a result of her impairments, Costa is likely to be absent from work at least four times per month.
A portion of a report from a an occupational therapist and certified work capacity evaluator who examined Costa in March 2008 indicates that the examiner believed Costa to be capable of at least sedentary work. The court, however, can rely only on the records before the ALJ at the time of the February 2008 hearing.Mills, 244 F.3d at 4-5.
C. Costa's written statements and testimony
In her written submissions and oral testimony to the ALJ, Costa reported: pain and limited movement in her neck; pain in her wrists; pain, numbness, and swelling in her hands; a burning sensation in her shoulder; back, elbow, knee, foot and toe pain; stiffness in her ankles; fatigue; and muscle weakness. She also reported having headaches, dizziness and nausea multiple times a week, as well as symptoms of poor memory and concentration. In addition, Costa is sensitive to smoke and strong odors, and tends to hyperventilate if exposed to these environmental triggers.
Costa does not work and lives with her mother and two school-aged children. Costa consistently has stated that although she helps her mother with the household chores and caring for her children, participation in such daily activities for a period of time can inflame her symptoms and increase her pain. For example, although Costa assists with the household chores, her hands hurt after a period of holding utensils or vacuuming. After doing dishes or vacuuming she often must stop and rest. She is often tired during the day and will nod off.
She also reported that playing computer games hurt her hands and shoulder. Writing too long hurts her hands and makes her handwriting sloppy. Holding the telephone for longer than ten minutes causes her hands to go numb. Washing dishes for too long makes her back hurt so much that she needs to sit down. She needs to rest the laundry basket on the stairs if carrying laundry upstairs. In 2007, she stated that sometimes even lifting and carrying a folder of papers causes pain in her hands.
Costa testified that she has trouble bending, walking and lifting. She can stand only for ten minutes at a time before her back hurts, but sitting in one place also results in pain, so she must move around constantly. She stated that if she uses her hands too much, they start to hurt and occasionally swell. She testified that she did not think that she could return to her former job as a stocking clerk because it involves a lot of climbing, bending, and lifting. In fact, she believes that she cannot do any type of work because of fatigue, pain, and swelling and stiffness in her fingers that make activities difficult to do on a sustained basis and create problems grasping.
D. The ALJ's decision
The ALJ conducted a hearing in January 2008, at which only Costa testified. A month later, the ALJ issued an order denying Costa's request for benefits. He found that Costa had "severe impairments," see 20 C.F.R. § 404.1520(c), resulting from fibromyalgia, chronic pain, carpal tunnel syndrome-left, spasmodic torticollis, and reactive airway disease. The ALJ denied benefits, however, because he concluded that "[Costa] has the residual functional capacity to perform a range of light work except that she should not work in smoky environments." Admin. R. 12. The ALJ found that although "[Costa's] medically determinable impairments could reasonably be expected to produce the alleged symptoms, . . . [her] statements concerning the intensity, persistence and limiting effects of these symptoms are not entirely credible." Id. at 13. In his opinion, there was not sufficient "objective, independently verifiable evidence of the totally disabling nature of [Costa's] impairments." Id. The ALJ stated that although fibromyalgia had been diagnosed, one physician noted that there was an absence of consistent "tender points" that are often found in fibromyalgia patients. Similarly, the ALJ found that the diagnosis of spasmodic torticollis was made "without the benefit of unquestionable objective medical evidence," and that nerve conduction studies regarding her carpal tunnel syndrome were "normal" or only "slightly abnormal." Id.
Costa was examined primarily by her own representative, with very little questioning by the ALJ. Admin. R. 30-31.
The ALJ declined to give controlling weight to Nurse Practitioner Shute's opinion in both a physical capacities and fibromyalgia questionnaires that Costa was completely disabled. The ALJ summarily discounted Nurse Practitioner Shute's opinion, stating that: "I find that there is a lack of objective medical data to support the conclusions drawn by nurse practitioner Shute." Id.
As discussed infra, the ALJ did not address treating source Dr. Stearns' opinion that Costa had marked limitations in her functional capacities.
The ALJ also summarily addressed Costa's daily activities and pain management, concluding that she: "is able to live a fairly active life despite her impairments. . . . Although [Costa] does experience some intermittent pain and uses medication to reduce that pain, she does not live a life that demonstrates that she is incapable of any kind of work." Id.
The ALJ did not make mention of Costa's monthly visits to a pain clinic for trigger point injections beginning in October 2006 and lasting through the decision date.
The ALJ thus concluded, based on "the medical evidence and [Costa's] own description of her functional capacities," that she is capable of "almost a full range of light work that is only reduced by a need to avoid smoky environments due to her reactive airway disease." Id. He opined that she is capable of returning to her past work as a customer service or stocking clerk as it is "actually and generally performed." Id.
Although the ALJ specifically recognizes that Costa amended her alleged onset date from October 20, 2005 to December 6, 2005,see Admin. R. 9, he consistently bases his rulings on the October onset date, see Admin. R. 9, 11, 14. Although not a critical error at this stage, the court notes this inconsistency should it become important on remand.
III. ANALYSIS
A five-step process is used to evaluate an application for social security benefits. 20 C.F.R. § 404.1520(a)(4). The applicant bears the burden through the first four steps to show that she is disabled. Freeman v. Barnhart, 274 F.3d 606, 608 (1st Cir. 2001). At the fifth step, the Commissioner bears the burden of showing that a claimant has the residual functional capacity to perform other work that may exist in the national economy. Id.; see also 20 C.F.R. § 404.1520(a)(4)(v); Heggarty v. Sullivan, 947 F.2d 990, 995 (1st Cir. 1991). The ALJ's conclusions at steps four and five are informed by his assessment of a claimant's residual functional capacity ("RFC"), which is a description of the kind of work that the claimant is able to perform despite her impairments. 20 C.F.R. §§ 404.1520, 404.1545.
Specifically, the claimant must show that: (1) she is not engaged in substantial gainful activity; (2) she has a severe impairment; (3) the impairment meets or equals a specific impairment listed in the Social Security regulations; or (4) the impairment prevents or prevented her from performing past relevant work. The Social Security Act defines disability as the "inability to 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).
Here, the ALJ denied Costa's application because he concluded, at the fourth step of the evaluation, that although Costa was impaired, she possessed the RFC to perform her prior work as a customer service, or stocking clerk. See id. § 404.1520(a)(4)(iv). In general, at the fourth step of the process, the Commissioner considers whether, despite her impairments, the claimant is able to return to her past relevant work. Id. The claimant is required to "lay the foundation as to what activities her former work entailed [and to] . . . point out (unless obvious) — so as to put in issue — how her functional incapacity renders her unable to perform her former usual work."Santiago v. Sec'y of Health Human Servs., 944 F.2d 1, 5 (1st Cir. 1991); see generally Bowen v. Yuckert, 482 U.S. 137, 146 n. 5 (1987); Manso-Pizarro, 76 F.3d at 17.
A. Residual functional capacity
Costa contends that the ALJ's conclusion that she has the residual functional capacity to perform her past relevant work is unsupported by the evidence. She asserts that the ALJ, in concluding that she was capable of performing light work, ignored the opinions of both treating and non-treating physicians who had concluded that she was capable of either medium work, or at most sedentary work. She contends that the ALJ erred because he "is not at liberty to ignore medial evidence, . . . [and improperly] substituted his judgment for the medical opinions of all the medical experts." Cl. Brief at 5-6. The court concludes that the ALJ's residual functional capacity determination was flawed and must be re-examined.
The federal regulations classify the various levels of exertion required for different types of work as: sedentary, light, medium, heavy, and very heavy. 20 C.F.R. § 404.1567.
In a step four analysis, the ALJ, having already determined that the claimant suffers a severe impairment, compares the physical and mental demands of the claimant's past work with her current functional capacity or RFC. "[T]he ALJ is entitled to credit a claimant's own description of her former job duties and functional limitations, but has some burden independently to develop the record." Manso-Pizarro, 76 F.3d at 17 (citations omitted). If the residual function capacity finding is supported by substantial evidence in the record, it is conclusive. Nguyen, 172 F.3d at 35. Findings are not conclusive, however, "when derived by ignoring evidence, misapplying the law, or judging matters entrusted to experts." Id.
"Residual Functional Capacity" is defined as "an assessment of an individual's ability to do sustained work-related physical and mental activities in a work setting on a regular and continuing basis. A `regular and continuing basis' means 8 hours a day, for 5 days a week, or an equivalent work schedule." SSR 96-8p, 1996 WL 374184, at *1 (July 2, 1996).
When an individual is found to have an impairment, his or her ability to work is assessed in two ways: the "medical source statement" and the RFC assessment.
Even though the adjudicator's RFC assessment may adopt the opinions in a medical source statement, they are not the same thing: A medical source statement is evidence that is submitted to SSA by an individual's medical source reflecting the source's opinion based on his or her own knowledge, while an RFC assessment is the adjudicator's ultimate finding based on a consideration of this opinion and all the other evidence in the case record about what an individual can do despite his or her impairment(s).
SSR 96-5p, 1996 WL 374183, at *4 (July 2, 1996). Although determination of a claimant's residual functional capacity is an administrative decision that is the responsibility of the Commissioner, see 20 C.F.R. § 404.1527(e)(2), SSR 96-5p, 1996 WL 374183, at *2, an ALJ, as a lay person, cannot interpret a claimant's medical records to determine her residual functional capacity. Manso-Pizarro, 76 F.3d at 17. Instead, an ALJ must rely on residual functional capacity evaluations from a physician or another expert. Id. at 17-18. Put another way, although an ALJ cannot ab initio interpret medical records to determine a claimant's RFC, he can "render[] common-sense judgments about functional capacity based on medical findings, as long as the [ALJ] does not overstep the bounds of a lay person's competence and render a medical judgment." Gordils v. Sec'y of Health Human Servs., 921 F.2d 327, 329 (1st Cir. 1990); accord Nguyen, 172 F.3d at 35 (ALJ "simply not qualified to interpret raw medical data in functional terms and no medical opinion supported the determination").
Furthermore, although the ALJ is the ultimate arbiter of a claimant's RFC, he is prohibited from disregarding relevant medical source opinions. See SSR 96-5p, 1996 WL 374183 at *5, Where an ALJ's RFC assessment is at odds with a medical source opinion, he must explain his reasons for disregarding that opinion. See 20 C.F.R. § 404.1527(d)(2); SSR 96-8p, 1996 WL 374184, at *7; Marshall v. Astrue, No. 08-cv-147-JD, 2008 WL 5396295, at *4 (D.N.H. Dec. 22, 2008).
In evaluating the nature and severity of an impairment, "[a] treating physician's opinion is generally afforded controlling weight if it is well-supported by medically acceptable clinical and laboratory diagnostic techniques and is not inconsistent with the other substantial evidence in the case record." Lopes v. Barnhart, 372 F. Supp. 2d 185, 193-94 (D. Mass. 2005) (quotations and brackets omitted); see also SSR 96-2p, 1996 WL 374188, at *1 (July 2, 1996); 20 C.F.R. § 404.1527(d)(2). Greater weight is given to a treating source "since these sources are likely to be the medical professionals most able to provide a proper picture of [the claimant's] medical impairment(s)." 20 C.F.R. § 404.1527(d)(2). Further, the ALJ is required to "always give good reasons in the notice of determination or decision for the weight given to a treating source's medical opinion(s)." SSR 96-2p, 1996 WL 374188, at *5, see generally 20 C.F.R. § 404.1527(d)(2). The ALJ's reasoning "must be sufficiently specific to make clear to any subsequent reviewers the weight the [ALJ] gave to the treating source's medical opinion." SSR 96-2p, 1996 WL 374188, at *5.
The court agrees with Costa that the ALJ erred because he improperly ignored a treating source's opinion in direct conflict with his final determination that Costa was capable of "almost a full range of light work that is only reduced by a need to avoid smoky environments." In September 2006, Dr. Stearns' indicated that he "echoed" an occupational therapist's conclusion that Costa was "at the sedentary work level." Dr. Stearns concluded that, "(l)ifting and carrying, I think, are 13 pounds and then she has marked limitation of all her activities." Admin. R. 228.
The ALJ specifically found that Dr. Stearns was a "treating physician." Admin. R. 13.
The ALJ's order, however, does not even mention Dr. Stearns' opinion regarding Costa's work capabilities. "If the RFC assessment conflicts with an opinion from a medical source, the adjudicator must explain why the opinion was not adopted." SSR 96-8p, 1996 WL 374184, at *7. While the ALJ's decision is in line with Dr. Stearns' weight limitations, he completely ignored Dr. Stearns' observations about Costa's "marked" limitations. This is error. See Marshall, 2008 WL 5396295, at *4 (reversing ALJ decision because treating source opinion was "simply overlooked"). The ALJ's decision fails to "explain how any material inconsistences or ambiguities in the evidence in the case record were considered and resolved," SSR 96-8p, 1996 WL 374184, at *7; see Torrey v. Barnhart, No. Civ. 03-293-M, 2004 WL 97648, at *5 (D.N.H. Jan. 21, 2004), and, so far as the record indicates, was "derived by ignoring evidence" on the record.Nguyen, 172 F.3d at 35. The decision is reversed.
The ALJ did mention that Dr. Stearns ordered a cervical MRI that was normal and that Dr. Stearns was unable to pinpoint the cause of her neck pain as evidence that Costa's impairments were not completely disabling. The ALJ did not, however, analyze Dr. Stearns' notes regarding Costa's limitations.
Dr. Stearns' notes do not exactly align with the regulatory definition of "sedentary work," namely, lifting weight no greater than 10 pounds, "occasionally lifting or carrying articles like docket files, ledgers, and small tools," and only occasional walking or standing. 20 C.F.R. § 404.1567(a). Light work involves "lifting no more than 20 pounds at a time with frequent lifting or carrying of objects up to 10 pounds," a "good deal" of walking and standing, and "some pushing and pulling of arm or leg controls." Id. § 404.1567(b). As such, error is found in the decision's conflict with Dr. Stearns' opinion that Costa had "marked limitations."
B. Other issues on remand
The court vacates the ALJ's decision and remands the case for further review because of the ALJ's failure to address Dr. Stearns' RFC assessment. See supra Part III-A. Costa raised a host of other issues that may arise again on remand, and as such, are worth noting. See Forni v. Barnhart, No. 05-cv-406-PB, 2006 WL 2956293, at *8 (D.N.H. Oct. 17, 2006).
Costa asks the court to remand the case for a "step five" consideration of whether there is other work in the regional or national economy she can perform. This would require the court to make its own "step four" determination, which it declines to do, instead reversing and remanding for further consideration by the ALJ consistent with this order.
1. Credibility determination and the Avery factors
Costa contends that the ALJ's conclusions regarding the nature and extent of her pain were legally insufficient and unsupported by the evidence. She argues that the ALJ failed to properly apply the so-called "Avery factors" used to evaluate a claimant's subjective reports of pain. See Avery v. Sec'y of Health Human Servs., 797 F.2d 19, 29-30 (1st Cir. 1986).
Assessment of a claimant's credibility is the exclusive province of the ALJ, who observes the claimant, evaluates her demeanor, and considers how her testimony "fit[s] in with the rest of the evidence." Frustaglia v. Sec'y of Health Human Servs., 829 F.2d 192, 195 (1st Cir. 1987). The ALJ's credibility determination is entitled to deference if it is supported by substantial evidence. Id.
The ALJ must follow a two step process to evaluate a claimant's credibility. See SSR 96-7p, 1996 WL 374186, at *2. The ALJ must first assess the claimant's complaints of pain by exploring whether her limitations are supported by "medical signs and laboratory findings demonstrating the existence of a medically determinable physical or mental impairment(s) that could reasonably be expected to produce the symptoms." Id. at *1; see also 20 C.F.R. § 404.1529(b). Once the claimant demonstrates an underlying "medically determinable" reason for her pain, the ALJ must "make a finding about the credibility of the individual's statements about the symptom(s) and its functional effects," by evaluating "the intensity, persistence, and functionally limiting effects of the symptoms . . . [and] the extent to which the symptoms affect the individual's ability to do basic work activities." SSR 96-7p, 1996 WL 374186, at *1; see also 20 C.F.R. § 404.1529(c)(1).
Here, the ALJ determined that Costa had satisfied this step. Admin. R. 13.
In determining the credibility of a claimant's subjective testimony, the ALJ must consider the entire record, including objective medical evidence, the claimant's statements, information provided by physicians and other witnesses, and any other relevant evidence. SSR No. 96-7p, 1996 WL 374186, at *2. When an ALJ has directly observed the claimant, he is "not free to accept or reject that individual's subjective complaints solely on the basis of such personal observations. Rather, . . . the determination rationale is to contain a thorough discussion and analysis of the objective medical and nonmedical evidence, including the individual's subjective complaints and the adjudicator's personal observations." Avery, 797 F.2d at 29. A claimant's subjective complaints of pain will be deemed credible only if they are consistent with objective medical evidence and other evidence in the record. 20 C.F.R. § 404.1529(a). An ALJ cannot base credibility findings solely on the absence of objective medical evidence, rather, "the absence of objective medical evidence supporting an individual's statements about the intensity and persistence of pain . . . is only one factor that the adjudicator must consider in assessing an individual's credibility and must be considered in the context of all the evidence." SSR No. 96-7p, 1996 WL 374186, at *6; see Pires, 553 F. Supp. 2d at 23 ("mandate to take evidence besides objective medical findings into account has been solidly established in the case law of this and other circuits"). Objective medical evidence does not have to corroborate precisely the claimant's reported pain; rather it only needs to be consistent with those complaints. See Dupuis v. Sec'y Health Human Servs., 869 F.2d 622, 623 (1st Cir. 1989).
In Avery, the court of appeals directed that when evaluating a claimant's subjective complaints of pain and other symptoms, the ALJ should consider a variety of factors including: "1. [t]he nature, location, onset, duration, frequency, radiation, and intensity of any pain; 2. [p]recipitating and aggravating factors (e.g., movement, activity, environmental conditions); 3. [t]ype, dosage, effectiveness, and adverse side-effects of any pain medication; 4. [t]reatment, other than medication, for relief of pain; 5. [f]unctional restrictions; and 6. [t]he claimant's daily activities." Avery, 797 F.2d at 28-29.
The ALJ's decision "must contain specific reasons for the finding on credibility, supported by evidence in the case record, and must be sufficiently specific to make clear to the individual and to any subsequent reviewers the weight the adjudicator gave to the individual's statements and the reasons for that weight." SSR No. 96-7p, 1996 WL 374186, at *4; see Da Rosa v. Sec'y of Health Human Servs., 803 F.2d 24, 26 (1st Cir. 1986); Pires, 553 F. Supp. 2d at 22. While detailed written discussion of the Avery factors is preferred, see Frustaglia, 829 F.2d at 195, an ALJ may comply with Avery if he explores the factors at the administrative hearing, see Forni, 2006 WL 2956293, at *10 (Avery analysis sufficient even though express analysis was cursory, where "searching review" of the record revealed that ALJ reviewed Avery factors at the hearing); Lopes, 372 F. Supp. 2d at 192, so long as there is substantial evidence in the record to support the ALJ's conclusions. Pires, 553 F. Supp. 2d at 24; but see Torrey, 2004 WL 97648, at *5 (error for the ALJ to list factors and not "to discuss those factors or explain how they support his ultimate conclusion").
The overall cursory nature of the ALJ's Avery analysis is troubling. The ALJ's order lists the Avery factors, but only briefly and superficially discusses the objective medical and non-medical evidence. Indeed, most of the analysis concerns a lack of objective medical evidence supporting Costa's pain, but it either completely ignores, or as discussed below, insufficiently addresses key Avery factors. Costa's history of seeking pain management treatment is not discussed in the ALJ's decision, cf. Forni, 2006 WL 2956293, at *10, nor were factors aggravating her joint pain and swelling. While the ALJ's discussion of the objective medical evidence "poses the question of the credibility of [Costa's] subjective complaints, it does not answer it." Valiquette v. Astrue, 498 F. Supp. 2d 424, 433 (D. Mass 2007); see Pires, 553 F. Supp. 2d at 24.
The court is also troubled by the ALJ's treatment of Costa's reported daily activities in evaluating her capacity to work. The ALJ noted that she helps care for her school aged children, does light housework, and sometimes shops for food. Admin. R. 13. The ALJ used this observation to conclude that "[a]lthough the claimant does experience some intermittent pain and uses medication to reduce that pain, she does not live a life that demonstrates that she is incapable of any kind of work." Admin. R. 13 (emphasis added). The court reminds the ALJ that "[t]o be found disabled, a claimant must show that [she] cannot perform `substantial gainful activity,' not that [she] is totally incapacitated." Blake v. Apfel, No. 99-126-B, 2000 WL 1466128, at *8 (D.N.H. Jan. 28, 2000) (quotations omitted). "Substantial gainful activity" means an ability to "perform substantial services with reasonable regularity either in competitive or self-employment." Id. (quotations omitted). "[A] claimant's ability to engage in limited daily activities, including light housework, is not necessarily inconsistent with the inability to perform substantial gainful activity." Id. (quotations omitted). The ALJ's cursory analysis of whether Costa's daily activities render her capable of substantial gainful activity is insufficient because it fails to demonstrate how her daily activities relate to actual functional requirements of the job market. See id. For example, the ALJ's simple listing of categories of activities appears to ignore the limited manner in which Costa performs these activities (for example, her reports of inflammation or needing to rest after household chores of a relatively short duration) and its implications for substantial gainful activity. See id. at *9. The court recognizes that it is the ALJ's province to make credibility determinations, and that "[n]o single [Avery] factor is dispositive," Forni, 2006 WL 2956293, at *11, "[t]o determine whether [the claimant's] daily activities evinced [her] ability to perform substantial gainful activity on a daily basis, the ALJ needed to examine more precisely the evidence of [the claimant's] routine and limitations." Blake, 2000 WL 1466128, at *8.
Similarly, although the ALJ summarily discounted Nurse Practitioner Shute's functional assessments, Admin. R. 13, the court notes that Nurse Practitioner Shute opined that because of Costa's impairments, she would be absent from work more than four times per month. Admin. R. 314. Costa testified that prolonged exertion inflames her symptoms to at least near incapacity, and there are records from the North Country Pain Clinic documenting visits approximately monthly for trigger point injections. The ALJ's order contains no analysis on the effect of absenteeism on Costa's functional capacity. See e.g. Rivard v. Barnhart, No. CV-06-54-PB, 2006 WL 2956306, at *5-*6 (D.N.H. Oct. 17, 2006) (error to ignore evidence of absenteeism); cf. Nguyen, 172 F.3d at 35 (ALJ's findings not conclusive if derived by ignoring evidence to the contrary).
It is true that an ALJ is not required to "slavishly" review all of the Avery factors, particularly where the ALJ "thoroughly questioned the claimant . . . in conformity with the guidelines set out in Avery." Frustaglia, 829 F.2d at 195 (citations omitted). Here, however, the ALJ's order and the hearing transcript reveal little inquiry by the ALJ into matters beyond the objective medical evidence. This is not to say that had the ALJ not improperly ignored Dr. Stearns' medical observations about Costa's functional limitations the court would have concluded that the ALJ's decision was unsupported by the evidence. Certainly, when questioned by her representative, Costa discussed some Avery factors. Cf. Lopes, 372 F. Supp. 2d at 192. The court merely notes that the order was, at most, barely sufficient to support the ALJ's conclusion that Costa was capable of light capacity work. Cf. id. On remand, a more complete and comprehensive analysis of the Avery factors (in addition to the medical evidence), insofar as they support or refute Costa's subjective reports of pain, is warranted. See Brown v. Apfel, No. CIV. 00-102-JD, 2000 WL 1875864, at *2 (D.N.H. Dec. 22, 2000) ("As the court has repeatedly explained, a recitation of the standard with little or no discussion of the facts of the case, in the context of the pertinent factors, is insufficient and is not acceptable."); Adie v. Commissioner, 941 F. Supp. 261, 270 (D.N.H. 1996).
2. Fibromyalgia
Finally, the court's concern about the adequacy of the ALJ's decision is heightened by recent circuit precedent involving fibromyalgia. The court of appeals recently stated that "once the ALJ accepted the diagnosis of fibromyalgia, [he] also had no choice but to conclude that the claimant suffered from the symptoms usually associated with such condition, unless there was substantial evidence in the record to support a finding that claimant did not endure a particular symptom or symptoms." Johnson, 597 F.3d at 414 (quotations, emphasis, and brackets omitted) (citing Rose v. Shalala, 34 F.3d 13, 18 (1st Cir. 1994)). In Johnson, the court concluded that because "[t]he primary symptom of fibromyalgia, of course, is chronic widespread pain, and the Commissioner points to no instances in which any of claimant's physicians ever discredited [her] complaints of such pain," the ALJ's decision to discredit the claimant's reports of pain was unsupported by the evidence. Id.
Here, the ALJ summarily dismissed Nurse Practitioner Shute's findings in her fibromyalgia questionnaire because "there is a lack of objective medical data to support [her] conclusions." Admin. R. 13. Although the ALJ correctly noted evidence of the lack of consistent specific "trigger points" indicating fibromyalgia, see supra note 10, there were also instances where examining providers concluded that Costa's pain was real and that she did exhibit tender points. Id. Given the guidance provided by the court of appeals in Johnson, it would be difficult to conclude on this record that the ALJ's decision discrediting Costa was supported by substantial evidence.
Dr. Cataldo, a non-examining physician did opine that Costa's limitations were not supported by evidence in the file. But the court of appeals has questioned the weight that should be given to the opinions of non-examining physicians who do not cite fibromyalgia as a diagnosis or whose assessments were cursory.See Johnson, 597 F.3d at 412-13.
IV. CONCLUSION
Pursuant to sentence four of 42 U.S.C. § 405(g), Costa's motion to reverse and remand the Commissioner's decision (document no. 6) is granted. The Commissioner's motion to affirm the decision (document no. 8) is denied. The Clerk of Court is directed to enter judgment in accordance with this order and close the case.
SO ORDERED.
Dated: November 3, 2010