Dunlap v. Commissioner of Social Security, 5:18-cv-02275

Background

Dunlap (an attorney) applied for DIB and SSI alleging disability beginning Jan 1, 2006; an ALJ in 2010 found her disabled beginning Jan 1, 2009 but not prior; that portion covering 2006–2008 was vacated and remanded by the district court and Appeals Council for further proceedings.
On remand a different ALJ held a 2015 hearing, found Dunlap was self-employed and had rendered significant services, concluded she engaged in substantial gainful activity (SGA) in 2006 and 2008 but not 2007, and therefore confined the sequential analysis to 2007.
The ALJ applied SSR 83-34 to compute "countable income" for a self-employed one-person law practice and declined to allow claimed deductions because Dunlap did not produce supporting documentary evidence.
The ALJ assessed a residual functional capacity (RFC) for light work with limits (e.g., no rapid repetitive left-hand movements; low-stress, occasional interaction) and concluded there were jobs existing in significant numbers for 2007.
Plaintiff challenged (1) whether the ALJ completed the evaluation for 2007, (2) the SGA/SSR 83-34 income calculation, (3) whether the earlier ALJ findings were entitled to collateral estoppel or law-of-the-case effect, and (4) the sufficiency of Step 3/RFC analysis and treatment of medical-opinion evidence (including non-examining expert Dr. Schweid). The magistrate recommended affirming the Commissioner.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did the ALJ comply with the remand and complete the sequential evaluation for 2007?	ALJ failed to complete sequential evaluation for 2007 (typographical error shows wrong dates).	ALJ plainly analyzed 2007 despite a typographical error; remand scope was followed.	Held: ALJ substantially complied and the record contains a sequential evaluation for 2007.
Was the ALJ’s application of SSR 83-34 in finding SGA for 2006 and 2008 supported by substantial evidence?	Dunlap says the ALJ miscalculated countable income and improperly denied impairment‑related and unpaid‑help deductions; pro se status required greater development.	ALJ correctly applied SSR 83-34, gave Dunlap opportunity to document deductions, and properly treated net income as countable income when evidence was lacking.	Held: Substantial evidence supports the SGA finding; ALJ did not err.
Are the first ALJ’s Step 3 and RFC findings (2010) binding under collateral estoppel or law of the case?	Prior ALJ’s Step 3 and RFC for 2006–2008 should have preclusive or law‑of‑the‑case effect.	The earlier ALJ decision was vacated by the Appeals Council and district court; it is not a final decision and is not binding.	Held: Dennard/collateral‑estoppel and law‑of‑the‑case doctrines do not apply because the prior decision was vacated.
Did the second ALJ err at Step 3 or in formulating RFC by failing adequately to consider medical‑opinion evidence (esp. Dr. Schweid) or explain rejections?	ALJ failed to evaluate or explain treatment of Dr. Schweid’s (non‑examining) opinion and did not adequately support RFC; decision precludes meaningful review.	Dr. Schweid was a non‑examining expert; ALJ adopted the relevant severe impairments and incorporated similar limits into the RFC; any omission was harmless and the ALJ complied with the Appeals Council remand instructions.	Held: Any failure to separately discuss Dr. Schweid’s testimony was harmless; the RFC and Step 3 findings are supported by substantial evidence and comport with the remand.

Key Cases Cited

Heston v. Commissioner, 245 F.3d 528 (6th Cir. 2001) (explains the five‑step sequential evaluation).
Wilson v. Commissioner, 378 F.3d 541 (6th Cir. 2004) (discusses burdens at the five steps and the standard of review).
Blakley v. Commissioner, 581 F.3d 399 (6th Cir. 2009) (ALJ must apply correct legal standards; treating‑physician deference principles).
Dennard v. Secretary, HHS, 907 F.2d 598 (6th Cir. 1990) (collateral estoppel in Social Security context).
Drummond v. Commissioner, 126 F.3d 837 (6th Cir. 1997) (Commissioner bound by prior final decisions absent changed circumstances).
Kremer v. Chemical Construction Corp., 456 U.S. 461 (1982) (defines collateral estoppel doctrine).
Gayheart v. Commissioner, 710 F.3d 365 (6th Cir. 2013) (treating‑source/medical‑opinion analysis).
Mefford v. Gardner, 383 F.2d 748 (6th Cir. 1967) (remand orders must be followed in substantial compliance).
Thomas v. Arn, 474 U.S. 140 (1985) (objection procedures for magistrate recommendations).