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HEMMERLE v. HOBBY

September 2, 1953

HEMMERLE
v.
HOBBY, Federal Security Administrator



The opinion of the court was delivered by: MADDEN

This matter was before the Court upon a motion for summary judgment on behalf of defendant against the plaintiff, pursuant to Rule 56 of the Federal Rules, 28 U.S.C.A., upon the ground that there is no genuine issue as to any material fact and the defendant is entitled as a matter of law to judgment in accordance with the Social Security Act, *fn1" affirming the decision of the Social Security Administration of the Federal Security Agency.

Upon the filing of briefs and argument before the Court the parties stipulated that 'that the record submitted to the Court * * * is complete and that the hearing * * * may be regarded as having been also a final hearing for the determination of the issues raised by all the pleadings filed in the cause'.

 The plaintiff, by his complaint, seeks in this Court a review of the findings of the Federal Security Agency, Social Security Administration, Office of Appeals Council and also of the Referee's decision, in disallowing Old Age Insurance Benefits under the Social Security Act, supra, to the plaintiff, on the ground that he was not a fully insured individual. The basis of such denial by the Federal Security Agency and also on appeal by plaintiff to a Referee of the Federal Security Agency was the finding that the relation of employer and employee did not exist between the plaintiff and the company for which he performed services (Sommerfeld Machine Company) but that the plaintiff during the period in question was an independent contractor.

 These cases are not to be viewed as the ordinary case coming on for trial where the trier of the facts sees and hears the witnesses and appraises the credibility of their testimony and the reasonable inferences to be drawn therefrom; but ours is a more restricted view or properly quoted, a review.

 The Act, Social Security Act, 42 U.S.C.A. § 405(g), among other things, provides for this method of review by the Court but also provides:

 'The findings of the Administrator as to any fact, if supported by substantial evidence, shall be conclusive'.

 And as Judge Chase, speaking for the 2nd Circuit in the matter of Walker v. Altmeyer, 137 F.2d 531, at page 533, said:

 'The facts underlying that decision which were found on substantial evidence were, of course, binding upon the district court. That is not the question this appeal raises. The error into which the court fell was not that of making new and contrary findings but that of substituting new and contrary inference of its own from the found facts which led it to reverse the administrative conclusion which had been reached as to the employee status of the plaintiff. That sort of action went beyond the power of the district court to review in such a suit as this. It was the judgment of the administrative body as to an employer-employee relationship rather than that of the court which the statute made effective provided that judgment was based upon conclusions reasonably reached upon due consideration of all relevant issues presented after parties in interest had been given a fair hearing or a fair opportunity to be heard upon the facts and the applicable law. * * *

 This view of the law was borne out by the 9th Circuit in United States v. Lalone, 152 F.2d 43 and by the 8th Circuit in Social Security Board v. Warren, 142 F.2d 974.

 This court, therefore, must confine itself to inquiry into three things. First, did the plaintiff have an opportunity for a fair hearing? Second, were the conclusions of the Referee reasonably reached and based upon substantial evidence? Third, did the Referee properly apply the law?

 Taking up the last question first, to determine the applicable law we ask, when- legally under the act- does the relationship of employer-employee exist?

 The Act, 42 U.S.C.A. § 410(k)(2), defines under these circumstances an employee as follows:

 'The term 'employee' means * * * (2) any individual who, under the usual common law rules applicable in determining the employer-employee ...


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