EDWARD M. CHEN, United States District Judge
In January 2011, Plaintiff John F. Walters filed applications for disability insurance benefits and supplemental security income benefits under Titles II and XVI of the Social Security Act. See AR 123-38. The applications were denied initially in May 2011, see AR 30-41, and then upon reconsideration in December 2011. See AR 46-47, 58-62. Mr. Walters then requested a hearing before an administrative law judge ("ALJ"). See AR 66. A hearing was held before ALJ Major Williams, Jr., in April 2013. See AR 467. Subsequently, on July 8, 2013, ALJ Williams issued his decision, concluding that Mr. Walters was not disabled from April 1, 2009 (the alleged onset date) through the date of his decision. See AR 13-29. In August 2013, Mr. Walters asked that the Appeals Council for the Social Security Administration review the ALJ's decision, see AR 9A, but that request was denied in March 2015. See AR 6-8. Mr. Walters then initiated the instant action, challenging the ALJ's decision.
Mr. Walters has exhausted his administrative remedies with respect to his claim of disability. This Court has jurisdiction to review pursuant to 42 U.S.C. § 405(g). Mr. Walters has moved for summary judgment, seeking a reversal of the Commissioner's decision and a remand for further consideration. The Commissioner has cross-moved for summary judgment. Having considered the parties' briefs and accompanying submissions, including but not limited to the administrative record, and good cause appearing therefor, the Court hereby
In January 2011, Mr. Walters filed applications for disability insurance and supplemental security benefits. According to Mr. Walters, he suffered from a hereditary bone disease and arthritis, which affected, inter alia, his knees, lower back, ankles, feet, right hand, and right arm, and he became unable to work as of April 1, 2009. See AR 30, 36, 478-80. As noted above, ALJ Williams rejected Mr. Walters's claim for benefits, applying the five-step sequential evaluation process provided for by 20 C.F.R. § 404.1520.
Celaya v. Halter, 332 F.3d 1177, 1180 (9th Cir. 2003).
In the instant case, ALJ Williams made the following rulings regarding the five steps.
At step one, the ALJ found that Mr. Walters had not engaged in substantial gainful activity since the alleged onset date of April 1, 2009. See AR 15.
At step two, the ALJ determined that Mr. Walters suffered from a number of severe impairments, including progressive diffuse osteoarthritis, hereditary multiple exostoses, chronic hepatitis C, and chronic pain syndrome. See AR 15.
At step three, the ALJ concluded that Mr. Walters did not have an impairment or combination of impairments that met or medically equaled the severity of one of the listed impairments set forth in 20 C.F.R. Part 404, Subpart P, Appendix 1. See AR 16.
At step four, the ALJ found that Mr. Walters had the residual functional capacity ("RFC") to perform less than the full range of medium work. More specifically, the ALJ held that Mr. Walters could "sit for six hours in an eight hour workday with normal breaks; ... stand and/or walk for four hours in an eight hour workday with normal breaks; ... lift and carry 25 pounds frequently and 50 pounds occasionally; [and] perform[] all other postural activity [except for crawling] on an occasional basis." AR 18. The ALJ further held that Mr. Walters had "no limitations relative to using his bilateral upper extremities for reaching and for fine and gross manipulation." AR 18. Based on this RFC, the ALJ concluded that Mr. Walters could not perform any of his past relevant work, such as a lawnmower salesman and a helicopter pilot and maintenance worker. See AR 26.
Finally, at step five, the ALJ found that, based on Mr. Walters's age, education, work experience, and RFC, there were "jobs that exist[ed] in significant numbers in the national economy that [he could] perform." AR 27.
After a final decision on a claim for benefits by the Commissioner, the claimant may seek judicial review of that decision by a district court. See 42 U.S.C. § 405(g). The Commissioner's decision will be disturbed only if the ALJ has committed legal error or if the ALJ's findings are not supported by substantial evidence. See Stout v. Comm'r of Soc. Sec. Admin., 454 F.3d 1050, 1052 (9th Cir. 2006) ("We will uphold the Commissioner's denial of benefits if the Commissioner applied the correct legal standards and substantial evidence supports the decision."). Substantial evidence is relevant evidence — "more than a scintilla, but less than a preponderance" — that a reasonable mind may accept to support a conclusion. Lingenfelter v.
As an initial matter, Mr. Walters asserts that the ALJ's findings may not have been supported by substantial evidence because, in August 2015 (i.e., several months after the Appeals Council denied him relief with respect to ALJ Williams's decision), the Social Security Administration issued a decision on a subsequent disability application filed by Mr. Walters and found him to be disabled as of July 9, 2013 — i.e., exactly one day after ALJ Williams's decision which found him to be not disabled from April 1, 2009, to July 8, 2013. See Mot., Ex. A (notice of award). Mr. Walters argues that, given these circumstances, a remand to the agency is warranted so that it, in effect, reassess whether ALJ Williams's decision was correct.
Mr. Walters's argument in support of a remand is predicated on Luna v. Astrue, 623 F.3d 1032 (9th Cir. 2010). In Luna, the claimant filed for benefits and the ALJ found her to be not disabled through January 27, 2006. The claimant appealed this decision but, while her appeal was pending, she filed a second application for benefits which was granted on August 20, 2007. See id. at 1033. The notice of award reflected that the claimant was disabled as of January 28, 2006 — i.e., "one day after the date [the claimant] was found not to be disabled based on her first application. [The claimant] did not provide any further information about the second, successful application." Id.
"Before the district court the parties [in Luna] agreed that the case should be remanded to the agency to reconcile the denial of benefits based on [the claimant's] first application with the grant of benefits based on her second application, but they did not agree on the terms of the remand." Id. The claimant argued that the agency's second decision granting benefits "indicated that she was disabled for the earlier time period covered by her first application as well, so the proper remedy would be a remand ordering that benefits be paid for the earlier time period." Id. The Social Security Administration argued that the remand should be for reconsideration as to whether the claimant was actually disabled during the period relevant to her first application for benefits. The district court agreed with the agency and "remanded for resolution of factual issues pursuant to 42 U.S.C. § 405(g)." Id.
Section 405(g) provides in relevant part as follows:
42 U.S.C. § 405(g). "New material is material when it bear[s] directly and substantially on the matter in dispute, and if there is a reasonabl[e] possibility that the new
The Ninth Circuit agreed with the district court that "the finding of disability based on [the claimant's] second benefits application was new and material evidence warranting remand for further factual consideration because it commenced at or near the time [she] was found not disabled based on the first application." Id. It explained as follows: "the `reasonable possibility' that the subsequent grant of benefits was based on new evidence not considered by the ALJ as part of the first application indicates that further consideration of the factual issues is appropriate to determine whether the outcome of the first application should be different." Id.
The Ninth Circuit also underscored that this was not "a case where an initial denial and subsequent award were easily reconcilable on the record before the court" — e.g., where the second application involved different medical evidence, a different time period, and a different age classification. Id.
Id. (emphasis added).
Luna is analogous to the instant case. In Luna, the claimant was denied benefits through January 27, 2006, but then was awarded benefits starting the very next day. Here, Mr. Walters was denied benefits through July 8, 2013, but then was awarded benefits starting the very next day. In Luna, the claimant did not provide any information about her second application other than that it was successful and that she was awarded benefits as of the day following the ALJ's decision denying benefits on her first application. Here, Mr. Walters has not provided any information about his second application other than that it was successful and that he was awarded benefits as of the day following the ALJ's decision denying benefits on his first application. Given these circumstances, the Court is hard pressed to see why resolution of this case should be any different from the resolution of Luna — i.e., a remand so that the Commissioner may further consider potentially new and material evidence. Here, as in Luna, this is not a case where the first and second agency decisions are easily reconcilable based on the record before the Court.
In her papers, the Commissioner contends that Luna is distinguishable because, there, the agency actually agreed that the case should be remanded so that the agency could reconcile the denial of benefits based on the claimant's first application with the grant of benefits based on her second application.
The Commissioner protests that ordering a remand would "produce an absurd result" — i.e., it would "not only permit[], but encourage[], a plaintiff to provide the federal court as little information and evidence as possible [in an initial application], even though the plaintiff is responsible for providing medical evidence and knows what evidence he submitted or alerted the agency to when he filed the second application." Opp'n at 5-6. The Court is not persuaded. A claimant for disability or supplemental security benefits has little incentive to withhold information that would support an application for benefits; in other words, it is hard to imagine that a claimant would risk an immediate award of benefits just so as to set up a potentially successful second application. This is especially so because, even if the second claim is granted, the differing results could be justified on the basis of differing evidence submitted by the claimant in each proceeding. The risks would seem too high to justify a strategy to sandbag. Moreover, the Commissioner's position ignores the ALJ's duty to fully and fairly develop the record (more specifically, where there is ambiguous evidence or where the record is inadequate to allow for proper evaluation of the evidence). See Mayes, 276 F.3d at 459-60.
The Court acknowledges the Commissioner's point that it is not necessarily inconsistent for the agency to deny a first application for benefits and then grant a second application, even when the timing is such as is presented here; that is, it is entirely possible for two ALJs to view the same or similar time period and reach reasonable, but differing, conclusions on disability. Cf. Burch, 400 F.3d at 680-81 (noting that an ALJ's decision must be upheld where the evidence is susceptible to more than one rational interpretation). But the larger point here is that a remand is needed to see if the different results can be reconciled in the first place. The Commissioner is putting the cart before the horse. Cf. Chudy v. Colvin, 10 F.Supp.3d 203, 207 (D. Mass. 2014) (stating that, in the absence of evidence as to why the agency ruled in the claimant's favor on the second application, "it is simply prudent to have the matter reconsidered on remand").
Finally, the Court takes into account that there are some opinions from other circuits in tension with Luna. In particular, in Allen v. Commissioner of Social Security, 561 F.3d 646 (6th Cir. 2009), the Sixth Circuit was presented with similar circumstances — i.e., the claimant was denied benefits with respect to his first application but granted benefits with respect to his second application, and the benefits began the day after the ALJ's denial. See id. at 647, 649-50. The court concluded that "a subsequent favorable decision itself,
Id. at 653 (emphasis added).
In Luna, the Ninth Circuit did not necessarily hold that the second agency decision awarding benefits constituted new evidence itself. The Ninth Circuit stated: "the `reasonable possibility' that the subsequent grant of benefits was based on new evidence not considered by the ALJ as part of the first application indicates that further consideration of the factual issues is appropriate to determine whether the outcome of the first application should be different." Luna, 623 F.3d at 1033. In any event, even if Luna and Allen do conflict, Allen is not binding authority on this Court
In his papers, Mr. Walters argues that, although there should be a remand under Luna to determine whether the agency decisions on his two applications are reconcilable, there is an independent basis to remand — and that remand will involve a different analysis. More specifically, Mr. Walters argues that this Court should remand to the agency for further proceedings because the ALJ relied heavily on the opinion of a consulting physician, Dr. Chen, and, in December 2013, approximately six months after the ALJ issued his decision, the California Department of Social Services Disability Determination Service Division ("California DDSD") removed Dr. Chen from its consultative examination panel. See AR 465; see also SSR 96-6p (stating that "[s]tate agency medical and psychological consultants are highly qualified physicians and psychologists who are experts in the evaluation of the medical issues in disability claims under the Act" and that, "[a]s members of the teams that make determinations of disability at the initial and reconsideration levels of the administrative review process (except in disability hearings), they consider the medical evidence in disability cases and make findings of fact on the medical issues");
AR 465.
Mr. Walters did provide the Appeals Council with information about Dr. Chen's "disqualification" in February 2014. See AR 463-64. The Appeals Council made that new evidence part of the administrative record. See AR 5. Nevertheless, even considering the new evidence, the Appeals Council declined to give Mr. Walters any relief, stating, inter alia: "We have found no reason under our rules to review the Administrative Law Judge's decision" and "We found that this [new] information does
Under Ninth Circuit law, "when the Appeals Council considers new evidence in deciding whether to review a decision of the ALJ, that evidence becomes part of the administrative record, which the district court must consider when reviewing the Commissioner's final decision for substantial evidence." Brewes v. Comm'r of SSA, 682 F.3d 1157, 1163 (9th Cir. 2012); see also id. at 1162 (stating that, "as a practical matter, the final decision of the Commissioner includes the Appeals Council's denial of review, and the additional evidence considered by that body is `evidence upon which the findings and decision complained of are based'").
Here, the Court finds that further development of the record, and subsequent consideration thereof, is needed in order to assess whether there is substantial evidence to support the ALJ's decision. The removal of Dr. Chen from the California DDSD's panel does not automatically render all of his previous opinions invalid. However, it does raise serious questions about whether his opinions in this case are substantiated, especially as Mr. Walters raises a complaint similar to those which led to Dr. Chen's removal. See note 4, supra. The Commissioner did have the developments regarding Dr. Chen before it; the Commissioner suggests, however, that the ALJ's reliance on Dr. Chen's opinion is harmless error. See AR 6-7. However, it is far from clear whether any such reliance was indeed harmless. ALJ Williams relied heavily on Dr. Chen's opinion. See, e.g., AR 23 (ALJ "conclud[ing] that [the] Dr. Chen RFC assessment is entitled to great evidentiary weight"). Moreover, the ALJ also relied heavily on Dr. Chen's opinion as an indirect matter — i.e., because the testifying medical expert, Dr. Brovender, largely agreed with Dr. Chen's opinion and the ALJ gave Dr. Brovender's opinion "the greatest evidentiary weight." AR 24; see also AR 20 (noting that Dr. Brovender "essentially agreed" with Dr. Chen's RFC assessment, "with certain modifications"; adding that "I adopt the RFC of consultative examiner Dr. Chen, as the ME [Dr. Brovender] modified in his persuasive and probative testimony"); AR 474 (testimony of medical expert, Dr. Brovender, at ALJ hearing) (stating that "[t]here was an RFC in [Exhibit] 7F [i.e., Dr. Chen's report] and I would agree with that"). Indeed, giving Dr. Brovender's opinion the great evidentiary weight in the absence of Dr. Chen's similar opinion would be problematic because Dr. Brovender never personally examined Mr. Walters. See Lester v. Chater, 81 F.3d 821, 830-31 (9th Cir. 1995) (noting that, in general, the opinion of a nonexamining physician has less weight compared to a treating or examining physician).
To the extent the Commissioner argues that there is substantial evidence to support
Accordingly, the Court remands for further development of the record, and consideration by the agency thereof, consistent with the above. The Court notes that its order of remand here does not preclude Mr. Walters from participating in the putative class action, Hart v. Colvin, No. C-15-0623 JST (N.D. Cal.) (asking for relief for a class based on the removal of Dr. Chen as a panel physician).
In his papers, Mr. Walters also makes various arguments as to how the ALJ's step five analysis was erroneous — e.g., the ALJ improperly failed to make a finding on transferability of skills and improperly failed to ask the vocational expert if her testimony differed from the DOT. The Court need address these arguments because its ruling above regarding Dr. Chen may affect the agency's step five analysis.
For the foregoing reasons, Mr. Walters's motion for summary judgment is granted, and the Commissioner's cross-motion denied. The Court remands, pursuant to sentence four and sentence six of § 405(g), for further proceedings consistent with the above. See, e.g., Hadera v. Colvin, No. C-12-5315 EMC, 2013 WL 4510662, at *10, 2013 U.S. Dist. LEXIS 119638 at *34 (N.D. Cal. Aug. 22, 2013) ("find[ing] that Plaintiff is entitled to a sentence four remand based on the ALJ's inadequate consideration of whether he has a severe mental impairment, and a sentence six remand based on new, material evidence related to his back problems"); see also Jackson v. Chater, 99 F.3d 1086, 1090, 1097 (11th Cir. 1996) (holding that a "dual basis remand is permissible"; adding that, in a dual basis remand, "[t]he entry of judgment remanding the case does not end the jurisdiction of the district court" as "the district court retains jurisdiction over the case pursuant to sentence six of § 405(g)").
This order disposes of Docket Nos. 13 and 14. The Clerk is instructed to enter judgment and close the file.
