NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        SEP 28 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

ALLISON MAE VARELA,                             No.    19-16785

                Plaintiff-Appellant,            D.C. No. 2:18-cv-01335-JAT

 v.
                                                MEMORANDUM*
ANDREW M. SAUL, Commissioner of
Social Security,

                Defendant-Appellee.

                   Appeal from the United States District Court
                            for the District of Arizona
                   James A. Teilborg, District Judge, Presiding

                          Submitted September 17, 2020**
                             San Francisco, California

Before: SCHROEDER, W. FLETCHER, and HUNSAKER, Circuit Judges.
Dissent by Judge HUNSAKER

      Allison Varela appeals from the Social Security Administration’s decision

denying Disability Insurance Benefits and Supplemental Security Income, which

was reversed and remanded for rehearing by the district court. We have jurisdiction


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
under 28 U.S.C. § 1291, and we reverse the district court and remand for payment

of benefits.

      Here, the parties do not dispute that the Administrative Law Judge (ALJ) erred

by improperly rejecting Varela’s treating physician’s opinion. The district court

applied the correct standard in reviewing the ALJ’s rejection of Varela’s treating

physician because two non-examining physicians contradicted the treating

physician’s opinion. See Ford v. Saul, 

, 1154 (9th Cir. 2020).

Accordingly, the ALJ was required to provide “specific and legitimate reasons”

supported by substantial evidence to reject it.

the treating

physician’s narcolepsy diagnosis concluding that it is a “psychological condition[]”

the physician was not qualified to diagnose and that it was inconsistent with other

medical evidence in the record. This was wrong on both counts. The treating

physician, a neurologist, was qualified to diagnose narcolepsy and his diagnosis

relied on, and was consistent with, objective medical evidence.

      Based on this error, the district court remanded for rehearing. We review the

decision to remand for a rehearing rather than an award of benefits for an abuse of

discretion. Treichler v. Comm’r of Soc. Sec. Admin., 

, 1098 (9th Cir.

2014). We hold that the district court abused its discretion because, crediting

Dr. Anderson’s opinion as true, there is no doubt that Varela was disabled. Further

administrative proceedings are not necessary where the ALJ improperly rejected



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evidence, the record has been fully developed, and further proceedings would not be

useful.

And given the ALJ’s significant factual mistake, this case

should not be remanded for more proceedings. See Benecke v. Barnhart, 

, 595 (9th Cir. 2004) (quoting Moisa v. Barnhart, 

, 887 (9th Cir.

2004)) (“Allowing the Commissioner to decide the issue again would create an

unfair ‘heads we win; tails, let’s play again’ system of disability benefits

adjudication.”). We reverse the decision of the district court and remand with

instructions to remand to the Commissioner of Social Security for an award of

benefits.

      Costs are awarded to Varela.

      REVERSED AND REMANDED FOR PAYMENT OF BENEFITS.




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                                                                           FILED
Varela v. Saul, No. 19-16785                                               SEP 28 2020
                                                                       MOLLY C. DWYER, CLERK
HUNSAKER, Circuit Judge, dissenting:                                     U.S. COURT OF APPEALS


      I agree that the Administrative Law Judge erroneously rejected the diagnosis

of Allison Varela’s treating physician, but I disagree this case should be remanded

for an immediate award of benefits. We remand for an award of benefits under the

credit-as-true rule only in “rare circumstances.” Treichler v. Comm’r of Soc., Sec.

Admin., 

, 1099 (9th Cir.2014) (citing 42 U.S.C. § 405(g)). We have

instructed that a reviewing court may credit rejected testimony as true and remand

for an award of benefits only if: “(1) the ALJ failed to provide legally sufficient

reasons for rejecting the evidence; (2) there are no outstanding issues that must be

resolved before a determination of disability can be made; and (3) it is clear from

the record that the ALJ would be required to find the claimant disabled were such

evidence credited.” Benecke v. Barnhart, 

, 593 (9th Cir. 2004). “Where

there is conflicting evidence, and not all essential factual issues have been resolved,

a remand for an award of benefits is inappropriate.” 

.

      Here, the record is not “free from conflicts and ambiguities” as to leave no

doubt regarding Varela’s disability. Dominguez v. Colvin, 

, 407 (9th

Cir. 2015). The treating physician’s opinion at issue has internal inconsistencies and

the two non-examining physicians rendered their opinions without the benefit of the

treating physician’s diagnosis. On the current record, there are unanswered questions


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regarding the extent of Varela’s disability and the district court did not abuse its

discretion in determining that “further administrative proceedings would be useful.”

. Accordingly, I would affirm the district court and

remand to the ALJ for rehearing.




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