Ralph B. Davis firstname.lastname@example.org
October 18, 2013
Editor’s note: The following story is the second in a three-part series examining in greater detail the U.S. Senate Homeland Security and Government Operations Committee’s findings on fraud in the Social Security disability system.
HUNTINGTON, W.Va. — A Senate committee investigating allegations of fraud in the Social Security disability system uncovered years of documented complaints about the behavior of administrative law judge David B. Daugherty, as well as his working relationship with Stanville attorney Eric C. Conn.
However, a report by the Senate Homeland Security and Government Operations Committee — titled “How Some Legal, Medical, and Judicial Professionals Abused Social Security Disability Programs for the Country’s Most Vulnerable: A Case Study of the Conn Law Firm” — found that, despite discovering complaints dating back to 2005, little was done to address the concerns until a 2011 Wall Street Journal story made many of the allegations public.
The 166-page committee report details an alleged scheme by Conn and Daugherty which resulted in Daugherty deciding 3,143 cases handled by Conn between 2005 and 2011. Of those cases, none were denied and only 18 were dismissed. The remainder were approved, often in bulk, resulting in a commitment by the government to pay estimated lifetime benefits of $2.5 billion.
Social Security Administration rules require that all cases appealed to the administrative law judge level are to be assigned to judges in rotation, as they come into the office. However, soon after SSA switched to an electronic case management system in 2003, the report alleges Daugherty discovered and began exploiting a loophole in the system which allowed any judge to reassign cases.
“Judge Daugherty used this loophole to assign cases to himself for decision,” the report says. “When asked why the electronic system allowed him to do this, [head of SSA’s Appeals Council Patricia] Jonas responded ‘no one contemplated that a judge would assign a case to himself.’ SSA Chief Judge Debra Bice also confirmed that Judge Daugherty assigning cases to himself was ‘totally against policy.’”
The first complaint noted in the report was documented in October 2005, when Judge Daniel Kemper emailed Judge Charles Paul Andrus, chief judge of the Huntington Office of Disability Adjudication and Review, to report his discovery that Daugherty had assigned himself cases that had been assigned to other judges, then simply awarded benefits “on-the-record,” or without a hearing.
“I have a court remand on a case which was decided by me on June 27, 2003, and in an earlier decision by Judge Paris on June 28, 2002,” Kemper wrote to Andrus. “Claimant alleged the same onset date in both filings. Thereafter, Daughtery takes the record off the master docket and issues a fully favorable decision on April 11, 2004, with the original onset date of Sept. 12, 2000. He completely ignored both Judge Paris’ decision and mine, making no reference to either in the decision. This makes it particularly difficult now to decide the case on remand.”
In 2006, Judge William Gitlow also noted Daugherty’s habit of pulling cases and approving them without a hearing in an email to a colleague.
“Amazing how it takes a [redacted] ALJ in an office to make numbers each month,” Gitlow wrote. “We have Judge Daugherty here who scans the master docket each month, pays 90-plus percent, and gets out 80-to-100 cases each month. So we make our numbers each month. Without him we would not. Ever.”
However, despite the early complaints, Judge Andrus does not appear in the report to have taken any action to address the problems, beyond issuing an office-wide memo reminding employees that cases were to be assigned in rotation.
In January 2007, Sarah Carver, a senior case technician with Huntington ODAR, noticed that Daugherty had apparently taken an extreme interest in Conn’s cases.
“It has come to my attention the Eric Conn electronic cases are not being equally divided among those judges who have been trained on the electronic files,” Carver wrote in an email to office director Greg Hall. “In fact, as you are now aware, [Judge Daugherty] has, on his own initiative, elected to go in and assign himself SEVERAL electronic cases, all of which are Eric Conn cases.”
Carver also noted a need to train other judges on using the electronic system, saying, “it would put a stop to Eric Conn calling [Judge Daugherty] and giving him a list of his electronic cases, knowing that the other judges are not holdings hearings. How else would [Judge Daugherty] have knowledge of Conn’s pending electronic cases?”
Five months later, Carver would alert Hall to issues with Daugherty’s behavior once again, noting, “This month, [Judge Daugherty] closed 29 electronic cases. 29 of these are Eric Conn cases. Why? We have other representatives which have electronic cases with this office. The word favoritism comes to mind. This is clearly favoritism.”
In August 2007, Donna George, another ODAR employee, noticed that several cases originially assigned to Judge Gitlow had been reassigned to Daugherty. Gitlow would later document George’s concerns in an email to himself.
“On Tuesday, 8/28/07 Donna [George] came to me with my pencil schedule for October Prestonsburg, saying that she wanted to know if I had already prepped two cases,” Gitlow wrote. “I had not yet done so. She explained that while those cases were assigned to me in the system, they had now been changed from being in my name to being in Judge Daugherty’s name. I had no knowledge of this. As such, Donna [George] needed to cancel those two hearings and find two different cases for me.
“I then went to Chief Judge Andrus to explain what happened. Since they were efiles, they were not papered and as such did not have a folder with my initials on it in the master docket drawer. I asked Judge Andrus if Judge Daugherty would know that these had been assigned to me. His response was that if would depend upon where Judge Daugherty had looked. I explained that I was concerned that the office remains above reproach. He led me to believe that he would take care of this problem.”
In 2009, Gitlow discovered that Daugherty had continued reassigning Gitlow’s cases to himself and once again reported his concerns to Andrus. Despite this, the practice continued on into 2011. Although Gitlow continued to complain, first to Andrus and then further up the chain of command, he told Senate investigators that the only actions he had seen were assurances from Andrus that he would talk to Daugherty and more memos.
“Unfortunately, what I have seen post meeting is a generic message to all the office reminding everyone of the HOCALJ policy on case reassignments,” Gitlow would write in another email to himself in April 2011. “If this is all that [Andrus] meant by putting the instruction to Daugherty in writing, I feel that I have been misguided.”
Andrus would later tell the committee that, although he sent that memo office-wide, he spoke to Daugerty privately, telling him the memo was really meant for him. Following that confrontation, Daugherty replied to Andrus, saying, “Your email prompted me to check my Eric Conn Cases to see if there were any that had been assigned to me from another [judge]. I discovered 23 of them.” Two hours later, Daugherty would send another email, saying, “OOPS! I looked further and found the following,” listing 19 more cases.
Despite many instances of judges and other employees reporting Daugherty’s actions in reassigning cases, the office would not take any concrete steps to end the practice until June 2011 — one month after the Wall Street Journal would report about Daugherty’s relationship with Conn. After the concerns became public, the office implemented a policy barring anyone except the office director and group supervisors from assigning cases.
However, the case assignments were not the only problem in the Huntington ODAR. In September 2002, Daugherty nearly faced official sanction for cancelling 30 hearings scheduled for a three-day period, and instead approving all of them en masse. In an email announcing his action, he justified the cancellations by saying it was “an effort to contribute as many decisions as possible toward this month’s goals.”
When Regional Chief Administrative Judge Frank Cristaudo learned of Daugherty’s action, he was “furious,” he would later tell the committee. In response, he sent an official request to the Associate Commissioner, asking that Daugherty be issued a letter of reprimand.
In that request, Cristaudo included a draft letter of reprimand.
“The principal purpose of scheduling a hearing is to afford the claimant an opportunity to be heard and to review the evidence and cross-examine witnesses,” Cristaudo wrote in the draft letter. “This is an important and solemn event, and no hearing should be scheduled if it is unnecessary. The act of scheduling a case for hearing evinces a belief that the documentary record is not sufficient to decide the case, and that oral testimony is needed. Therefore, no hearing should be cancelled without a compelling reason.
“Moreover, as in this case, the sudden and wholesale cancellation of nearly an entire docket of cases suggests that the hearings were cancelled without individualized attention the cases deserve. What makes your actions even more egregious is that they were motivated by personal interest as well as by your stated desire to promote office productivity. This behavior cannot be tolerated.”
Daugherty, however, would never see the letter, after the agency decided not to issue a reprimand due to concerns of “ALJ independence.”
But during the controversy over the cancelled hearings, the committee report says Daugherty attempted to deflect criticism by accusing Andrus of maintaining “improper social contacts” with Conn.
Daugherty told Cristaudo that Andrus had invited Conn to dinner and a movie, and that Conn was “uncomfortable” with the invitation.
“I did go to a movie with Mr. Conn,” Andrus wrote in reply to Cristaudo. “I have also had lunch with Mr. Conn, with other judges and the hearing clerks present although I do not ever remember having dinner with him. I went with Mr. Conn to the movie to have the opportunity to discuss changes in the scheduling I wanted to do and I wanted to do it outside the hearing of the staff. I don’t believe that Mr. Conn was uncomfortable about the idea as it was his suggestion and each of us paid our own way. Mr. Conn has offered to take me with him to Russia and Brazil at his expense. I politely declined and explained that would be totally improper, and he did not seem offended.
“This is exactly what I was talking about when dealing with Judge Daugherty. At least this time he did not accuse me of doing cocaine in my office.”
The committee report also accuses Conn of taking additional steps to abuse the SSA’s pre-hearing conference procedure. In particular, the report says Conn made a habit of arranging off-the-record, pre-hearing conferences with Judge Gitlow. If Conn determined that Gitlow was inclined to deny a claim, he would then ask for it to be dismissed.
“When it became apparent Judge Gitlow was going to deny a claim, Mr. Conn would immediately move to dismiss the claim before the hearing was concluded,” the report says. “Dismissed claims would have to be re-filed at the initial DDS, repeating the initial application and reconsideration stage of the disability adjudication process. Mr. Conn requested claims be dismissed so frequently that Judge Gitlow believed he ‘had turned it into an art form.’ In fact, Judge Gitlow explained Mr. Conn was about the only representative that would move to dismiss a claim. According to Judge Gitlow, Mr. Conn believed he was better off moving for dismissal and re-filing the application with the DDS than having the claim denied by an ALJ and appealing the denial to the Social Security Appeals Council.”
The report shows that, between 2005 and 2011, Conn had a total of 963 cases go before Gitlow. Of those, 588 were approved and 308 were withdrawn. Only 67 were denied.
Once a claim was refiled, if it were again rejected and subsequently appealed, it was supposed to be heard by the same judge, to prevent attorneys from “judge-shopping.” However, the committee found evidence that 19 of the appealed cases would later be assigned to Daugherty and approved.