Bradley Cardew v. Comm'r of Soc. Sec., 896 F.3d 742

Background

Bradley Cardew, rendered C5–C6 quadriplegic at age 15, applied for retroactive child disability benefits covering a continuous disability beginning in 1999; he filed after his 18th birthday.
In summer 2004 Cardew worked a heavily accommodated three-month paid internship at Lear Corporation, earning $5,502.75; Lear provided many accommodations (30-hour week, frequent breaks, exempted tasks, modified doors) and estimated Cardew was ~35% less productive than peers.
The ALJ denied benefits, finding Cardew engaged in "substantial gainful activity" (SGA) during the internship, that the internship was not an unsuccessful work attempt, and that Lear’s $4,000 door modification was not an impairment-related work expense deductible from Cardew’s earnings.
The Appeals Council denied review and the district court affirmed the ALJ; Cardew appealed to the Sixth Circuit.
The Sixth Circuit held the ALJ applied an incomplete / overly rigid legal framework: the ALJ failed to consider all §404.1573(c) special-condition examples (including family referral) and treated adjusted earnings as a dispositive bright-line measure of SGA.
The Sixth Circuit vacated in part and remanded for further proceedings, affirming the ALJ/district court on the door-modification expense, unsuccessful-attempt, and internship-can-be-SGA issues.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Cardew’s 2004 paid internship constituted SGA	Cardew: special conditions (assistance, lowered productivity, special schedule/equipment, family referral) rebut the earnings-based presumption of SGA	Commissioner: adjusted earnings (after a 35% subsidy) exceeded the regulatory threshold, showing ability to do SGA	Remanded: ALJ failed to consider all §404.1573(c) special conditions and improperly treated adjusted earnings as a bright-line dispositive test; further analysis required
Whether employer-paid door modifications are impairment-related work expenses deductible from earnings	Cardew: cost of accessible doors should be treated in subsidy/expense analysis to reduce countable earnings	Commissioner: Lear paid for the doors; impairment-related expenses must be paid by claimant to be deductible	Affirmed: employer-paid modifications are not deductible impairment-related expenses under §404.1576(b)(3)
Whether the internship was an "unsuccessful work attempt"	Cardew: termination of special conditions at internship end demonstrates unsuccessful attempt	Commissioner: internship ended routinely at term’s conclusion, not because special conditions were removed	Affirmed: not an unsuccessful work attempt under §404.1574(c)
Whether paid internships are per se excluded from SGA	Cardew: internships are less demanding and not competitive, so should be excluded	Commissioner: regulations do not categorically exclude paid internships; they may qualify as SGA	Affirmed: paid internships can qualify as SGA; but special conditions must be considered case-by-case

Key Cases Cited

Biestek v. Comm’r of Soc. Sec., 880 F.3d 778 (6th Cir. 2018) (standard of review: substantial-evidence for ALJ factfinding)
Richardson v. Perales, 402 U.S. 389 (1971) (substantial-evidence standard articulated)
Blakley v. Comm’r of Soc. Sec., 581 F.3d 399 (6th Cir. 2009) (deference to ALJ when supported by substantial evidence)
Key v. Callahan, 109 F.3d 270 (6th Cir. 1997) (ALJ legal-standard review is de novo)
Wilson v. Comm’r of Soc. Sec., 378 F.3d 541 (6th Cir. 2004) (errors of law require reversal despite substantial evidence)
Boyes v. Sec’y of Health & Hum. Servs., 46 F.3d 510 (6th Cir. 1994) (special conditions and poor performance can rebut earnings presumption of SGA)
Chicager v. Califano, 574 F.2d 161 (3d Cir. 1978) (earnings presumption rebuttable)
Keyes v. Sullivan, 894 F.2d 1053 (9th Cir. 1990) (mere existence of earnings over minimum not dispositive; presumption may be rebutted)