Marlon Coburn v. Nancy A Berryhill ( 2019 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 MARLON C.,1 Case No. 2:18-cv-05409-AFM 12 Plaintiff, MEMORANDUM OPINION AND 13 v. ORDER REVERSING AND 14 REMANDING DECISION OF THE ANDREW SAUL, Commissioner of COMMISSIONER 15 Social Security,2 16 Defendant. 17 18 Plaintiff seeks review of the Commissioner’s final decision denying his 19 applications for Social Security disability insurance benefits and supplemental 20 security income. In accordance with the Court’s case management order, the parties 21 have filed briefs addressing the merits of the disputed issues. The matter is now ready 22 for decision. 23 24 1 Plaintiff’s name has been partially redacted in accordance with Federal Rule of Civil Procedure 25 5.2(c)(2)(B) and the recommendation of the Committee on Court Administration and Case 26 Management of the Judicial Conference of the United States. 27 2 Andrew Saul is now the Commissioner of the Social Security Administration. Pursuant to Rule 25(d) of the Federal Rules of Civil Procedure, Andrew Saul is substituted for Acting Commissioner 28 Nancy A. Berryhill as the defendant in this suit. 1 BACKGROUND 2 Plaintiff previously applied for supplemental security income, alleging that he 3 became disabled on November 19, 2007. Plaintiff was represented by counsel at a 4 June 2012 oral hearing. In July 2012, an administrative law judge (“ALJ”) found 5 Plaintiff capable of performing his past relevant work as a telephone solicitor (DOT 6 299.357-014) as generally and actually performed and not disabled. (Administrative 7 Record (“AR”) 22, 51-64.) No evidence shows that the Appeals Council or a federal 8 district court remanded the claim; nor is there any indication that Plaintiff appealed 9 the matter further. (AR 23, 41.) 10 On November 12, 2014, Plaintiff reapplied for a period of disability, disability 11 insurance benefits, and supplemental security income, amending his alleged 12 disability as commencing on June 1, 2013. (AR 22.) The Commissioner denied 13 Plaintiff’s application by initial determination on March 13, 2015. (AR 22.) On 14 May 22, 2017, ALJ Reich conducted an oral hearing attended by Plaintiff, his 15 counsel, two medical experts, and a vocational expert (“VE”). (AR 19-40.) In a 16 decision dated June 29, 2017, ALJ Reich stated that the prior agency decision remains 17 “final and binding.” (AR 23.) Because Plaintiff had shown new impairments and an 18 increase in severity of his impairments, ALJ Reich did not adopt the prior residual 19 functional capacity (“RFC”) and did not apply res judicata principles to the RFC 20 determination made by the prior ALJ. (AR 23.) However, ALJ Reich stated that 21 there was no change to Plaintiff’s age or vocational profile – apparently applying res 22 judicata principles to these issues. (AR 23.) 23 ALJ Reich found Plaintiff suffered from the following severe impairments: 24 degenerative joint disease of lumbar spine, hypertension, gastroesophageal reflux 25 disease, chronic deep venous thrombosis, bilateral bunions and hammertoes, and 26 deformity of the right fifth finger. (AR 25.) ALJ Reich determined that Plaintiff 27 retained the RFC to perform a range of sedentary work including sitting up to 6 hours 28 total in an 8-hour workday and standing/walking up to 2 hours total in an 8-hour 1 workday. (AR 28.) The RFC also included the following limitations: Plaintiff is 2 unable to climb ladders, ropes or scaffolds; must never crouch, kneel, or crawl; must 3 never push or pull with the lower extremities; can only occasionally push and/or pull 4 with his right upper extremity; and can only frequently use his right hand for fine and 5 gross manipulations. (AR 28.) Relying on the testimony of the VE, ALJ Reich found 6 Plaintiff capable of performing past relevant work as a telephone solicitor. (AR 33.) 7 Accordingly, ALJ Reich determined that Plaintiff was not disabled through the date 8 of her decision. (AR 34.) 9 The Appeals Council denied review of the decision on May 21, 2018, thereby 10 rendering the ALJ’s decision the final decision of the Commissioner. (AR 1-6.) 11 Plaintiff subsequently appealed to this Court. 12 DISPUTED ISSUES 13 1. Whether Chavez res judicata principles preclude Plaintiff from relitigating 14 the past relevant work issue. 15 2. Whether the ALJ erred at step four in finding Plaintiff engaged in past 16 relevant work as a telephone solicitor. 17 STANDARD OF REVIEW 18 Under 42 U.S.C. § 405(g), the Court reviews the Commissioner’s decision to 19 determine whether the Commissioner’s findings are supported by substantial 20 evidence and whether the proper legal standards were applied. See Treichler v. 21 Comm’r of Soc. Sec. Admin., 775 F.3d 1090, 1098 (9th Cir. 2014). Substantial 22 evidence means “more than a mere scintilla” but less than a preponderance. See 23 Richardson v. Perales, 402 U.S. 389, 401 (1971); Lingenfelter v. Astrue, 504 F.3d 24 1028, 1035 (9th Cir. 2007). Substantial evidence is “such relevant evidence as a 25 reasonable mind might accept as adequate to support a conclusion.” Richardson, 402 26 U.S. at 401. This Court must review the record as a whole, weighing both the 27 evidence that supports and the evidence that detracts from the Commissioner’s 28 conclusion. See Lingenfelter, 504 F.3d at 1035. Where evidence is susceptible of 1 more than one rational interpretation, the Commissioner’s decision must be upheld. 2 See Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007); Batson v. Comm’r of Soc. Sec. 3 Admin., 359 F.3d 1190, 1196 (9th Cir. 2004) (“When evidence reasonably supports 4 either confirming or reversing the ALJ’s decision, [the court] may not substitute [its] 5 judgment for that of the ALJ.”). 6 DISCUSSION 7 1. Whether Chavez res judicata principles should apply to the past relevant 8 work issue in Plaintiff’s present application 9 a. Relevant Law 10 In Chavez v. Bowen, the Ninth Circuit established that principles of res judicata 11 apply to administrative decisions, although less rigidly than in judicial proceedings. 12 844 F.2d 691, 693 (9th Cir. 1988). The ALJ in Chavez determined that the plaintiff 13 could not have returned to his previous work. Id. at 692. However, the ALJ also 14 found him capable of engaging in a wide range of other SGA employment and not 15 disabled. Id. The plaintiff then reapplied for disability insurance, and a second ALJ 16 found him capable of his past relevant work, without referring to the first ALJ’s 17 findings. Id. On appeal, the plaintiff contended that the second ALJ erred because 18 he failed to consider the first ALJ’s finding concerning the plaintiff’s inability to 19 return to his previous work. Id. at 693. 20 The Ninth Circuit agreed and concluded that “the first [ALJ’s] findings 21 concerning [Plaintiff’s] [RFC], education, and work experience are entitled to some 22 res judicata consideration in subsequent proceedings.” Id. at 694. Because no “new 23 information … not presented to the first [ALJ]” had been offered, the second ALJ 24 could not “reopen the prior determinations concerning the claimant’s ability to 25 perform his past relevant work.” Id. Because the “second [ALJ] failed to afford 26 preclusive effect to the first judge’s determinations” absent any new and material 27 evidence, his decision was not supported by substantial evidence, and the case was 28 1 remanded. Id.3 The Ninth Circuit in Chavez also held that Plaintiff’s “attainment of 2 ‘advanced age’ constitutes a changed circumstance precluding the application of res 3 judicata to the first ALJ’s ultimate finding against disability.” 844 F.2d at 693. 4 Evidence is “new” if the prior ALJ did not consider it. Ellis v. Astrue, 2011 5 WL 5877490, at *6 (D. Nev. Sept. 28, 2011). New evidence must also be material 6 to warrant a new review of the administrative record. Huerta v. Berryhill, 2019 WL 7 2009112, at *5 (C.D. Cal. May 7, 2019). Evidence is material “if it bears directly 8 and substantially on the matter in dispute and if there is a ‘reasonable possibility’ that 9 the new evidence would have changed the outcome of the determination.” Id. 10 (finding new evidence regarding Plaintiff’s surgery was also material because the 11 increase in severity of the disability gave a ‘reasonable possibility’ of a changed 12 opinion) (citing Bruton v. Massanari, 268 F.3d 824, 827 (9th Cir. 2001); see also 13 La Cruz v. Colvin, 2016 WL 6562930, at *7 (C.D. Cal. Mar. 7, 2016). Materiality 14 should not be “tested as strictly in the administrative as in the judicial context.” Booz, 15 734 F.2d at 1381 (adopting the Fifth Circuit’s “reasonable possibility” test over the 16 Fourth and Tenth Circuit’s “reasonably likely” standard because the reasonable 17 possibility test was a less strict standard). The ALJ may deviate from a prior ALJ’s 18 assessment where the “new and material evidence supports such a deviation.” Chao 19 v. Astrue, 2012 WL 868839, at *14 (E.D. Cal. Mar. 13, 2012) (finding the ALJ 20 properly based his opinion on new and material evidence even by discounting such 21 evidence because the ALJ incorporated the evidence into the conclusion of the 22 decision) (citing Chavez, 844 F.2d at 693-694; Stubbs-Danielson, 539 F.3d at 1172- 23 1173; AR 97-4(9)). 24 /// 25 /// 26 3 See also Stubbs-Danielson v. Astrue, 539 F.3d 1169, 1173 (9th Cir. 2008) (citing Chavez) (“a 27 previous ALJ’s findings concerning … work experience are entitled to some res judicata consideration and such findings cannot be reconsidered by a subsequent judge absent new 28 information not presented to the first judge”). 1 b. Analysis 2 Plaintiff contends that he has presented new and material evidence – 3 specifically, his certified earnings record and detailed earnings query − which rebuts 4 the continuing application of Chavez principles to his vocational profile. 4 (ECF No. 5 27 at 6.) The transcript of Plaintiff’s first administrative hearing in 2012 does not 6 mention either piece of evidence. (AR 41-50.) The Commissioner does not contest 7 or rebut the Plaintiff’s assertion that “no evidence suggests that the [prior] ALJ had 8 in her possession a copy of the certified earnings record present in this record.” (ECF 9 No. 27 at 6.) Because the prior ALJ did not have or consider the earnings record and 10 earnings query now presented by Plaintiff, both pieces of evidence qualify as “new 11 evidence.” 12 The certified earnings record and the detailed earnings query are in the current 13 record (AR 199-202, 204-205), and both are material because there is a “reasonable 14 possibility” that this evidence could have changed the outcome of the determination 15 here, as detailed below. See Huerta, 2019 WL 2009112, at *5. For his 2011 position 16 (which the ALJ may well have relied on for SGA), the new records show that Plaintiff 17 worked five hours per day and three days per week as a telephone solicitor while 18 making six dollars per hour. (AR 200, 224.) At that rate of pay and work, it would 19 have taken Plaintiff a year to make his reported income of $5,049.70. (AR 200, 224.) 20 Earnings over $1000 per month result in a presumption of SGA under the Social 21 Security Regulations. Keyes v. Sullivan, 894 F.2d 1053, 1056 (9th Cir. 1990); SSR 22 83-33. Plaintiff’s reported income in 2011 likely does not amount to SGA, and 23 Plaintiff’s 2011 employment as a telephone solicitor would likely not constitute past 24 relevant work. Therefore, the certified earnings record and detailed earnings query 25 both qualify as “new and material” evidence that rebut application of Chavez res 26 27 4 Because the severity of his impairments increased, Plaintiff met his burden of proving a change in circumstance concerning the presumption of continuing nondisabilitiy, which the Commissioner 28 does not contest. 1 judicata principles to Plaintiff’s vocational profile, and to the extent ALJ Reich 2 applied res judicata principles to the first ALJ’s past relevant work finding, that was 3 error. 4 2. Whether ALJ Reich erred in her step four finding that Plaintiff could 5 perform his past relevant work 6 a. Relevant Law 7 In determining whether the claimant is disabled, an ALJ is required to find 8 whether the claimant can perform his past relevant work given his RFC. The phrase 9 “past relevant work” is defined in the Commissioner’s regulations: Past relevant is 10 work that you have done within the past 15 years, that was substantial gainful activity, 11 and that lasted long enough for you to learn to do it. (20 C.F.R §§ 404.1560(b)(1); 12 416.960(b)(1).) If a claimant’s earnings surpass an amount specified by the Social 13 Security Regulations, SGA is presumed. See Keyes, 894 F.2d at 1056. The Social 14 Security Regulations show that in 2011, the year of Plaintiff’s contended work as 15 telephone solicitor, the monthly SGA amounts for non-blind claimants was $1000. 16 20 C.F.R. §§ 404.1574(b), 416.974(b); Substantial Gainful Activity, Social Security 17 (2019), https://www.ssa.gov/oact/cola/sga.html. 18 At step four, “claimants have the burden of showing that they can no longer 19 perform their past relevant work.” 20 C.F.R. § 404.1520(e); Pinto v. Massanari, 249 20 F.3d 840, 844 (9th Cir. 2001) (remanding where the ALJ made few findings and 21 relied largely on the VE’s conclusions, because absent specific findings on the record 22 at step four, there can be little meaningful judicial review). Although the burden of 23 proof rests on the claimant in step four, an ALJ must make specific factual findings 24 to support her conclusions. Pinto, 249 F.3d at 845. An ALJ is required “to make 25 specific findings on the record at each phase of the step four analysis [which] provide 26 for meaningful judicial review.” Trautloff v. Comm’r of Soc. Sec. Admin., 2017 WL 27 1098815, at *4 (C.D. Cal. Mar. 22, 2017) (quoting Pinto, 249 F.3d at 847). In 28 Trautloff, the ALJ concluded that past work was performed with SGA without any 1 further explanation. Trautloff, 2017 WL 1098815, at *4. The court found that such 2 boilerplate findings were not specific enough to allow for meaningful review of the 3 ALJ’s step four determination. Id. The Commissioner’s path could not “reasonably 4 be discerned from any of the ALJ’s boilerplate findings at step four.” Id. at *5. 5 As stated in SSR 82-62, “the decision as to whether the claimant retains the 6 functional capacity to perform past work … has far-reaching implications and must 7 be developed and explained fully in the disability decision.” See Razzari v. Berryhill, 8 2017 WL 6539790, at *6 (N.D. Cal. Dec. 21, 2017) (finding legal error warranting 9 reversal where the ALJ failed to make findings or explain his conclusion that the 10 claimant was capable of performing past relevant work). Additionally, a court may 11 not “affirm the decision of an agency on a ground that the agency did not invoke in 12 making its decision.” Pinto, 249 F.3d at 847. Therefore, if the Commissioner’s 13 contention would require a court “to affirm the denial of benefits on a ground not 14 invoked by the Commissioner in denying the benefits originally,” then the Court must 15 decline to follow this contention. Id. at 848. 16 b. Analysis 17 Here, ALJ Reich did not make specific factual findings sufficient to allow 18 meaningful judicial review of her past relevant work conclusion. The ALJ concluded 19 that Plaintiff’s past relevant work was as a telephone solicitor. The decision, 20 however, did not discuss SGA in the section regarding past relevant work and instead 21 apparently assumed SGA (possibly relying on the decision of the first ALJ on the 22 basis of Chavez). Because there is no discussion or analysis regarding SGA in ALJ 23 Reich’s decision and because the Court has found that Chavez principles do not apply 24 to this issue, there can be no meaningful judicial review of the ALJ’s step four 25 determination concerning the issues of SGA and past relevant work. This is 26 reversable error because the ALJ “fell short of meeting … the responsibility to 27 provide ‘a discussion of the evidence and the reason or reasons upon which’ [her] 28 1 adverse determination is based.” Trautloff, 2017 WL 1098815, at *4 (quoting 2 Treichler, 775 F.3d at 1103); see also Pinto, 249 F.3d at 845. 3 For similar reasons, the Commissioner’s past relevant work argument in the 4 briefing is not persuasive. The Commissioner contends that Plaintiff had SGA 5 income in 2009 as a telephone solicitor. (ECF No. 28 at 5.) Yet nowhere in the 6 ALJ’s decision is Plaintiff’s 2009 employment discussed. During the hearing, 7 Plaintiff testified regarding his employment in 2009, stating that he worked with a 8 manager and, for a time, trained four telemarketers − although apparently himself not 9 working as a telemarketer at this time. (AR 2764.) That testimony is not clear 10 regarding how the duties of the mentioned jobs (manager, trainer, and telemarketer) 11 differed or how much of 2009 was spent doing each job. In her decision, ALJ Reich 12 did not discuss Plaintiff’s certified earnings record or the detailed earnings query that 13 were new evidence in the record.5 Nor did ALJ Reich make factual findings 14 regarding whether Plaintiff had SGA in 2009 as a telemarketer as compared to a 15 trainer or manager or, for example, how much sitting would be required for each job. 16 Moreover, in the decision’s discussion of “Issues,” ALJ Reich states that in the prior 17 case, Plaintiff had a “history of no past relevant work” which “remain[s] the same.” 18 (AR 23.) Yet, later, the decision refers ambiguously to “work described above,” that 19 the VE supposedly classified as telephone solicitor. (AR 33.) As a result of these 20 ambiguities and inconsistencies, the Commissioner’s “path” concerning the past 21 relevant work finding cannot reasonably be discerned from the discussion in ALJ 22 Reich’s decision, and that decision cannot be affirmed. 23 REMEDY 24 “When the ALJ denies benefits and the court finds error, the court ordinarily 25 must remand to the agency for further proceedings before directing an award of 26 5 While the ALJ mentions the earnings record in discussing the proposed dates of disability, she 27 does not use the earnings record or query as support in her determination on past relevant work. (AR 23, 33.) The transcript of the 2017 hearing is also devoid of any reference to the certified 28 earnings record or detailed earnings query. (AR 2751-2777.) 1 benefits.” Leon v. Berryhill, 880 F.3d 1041, 1045 (9th Cir. 2017). Indeed, Ninth 2 Circuit case law “precludes a district court from remanding a case for an award of 3 benefits unless certain prerequisites are met.” Dominguez v. Colvin, 808 F.3d 403, 4 407 (9th Cir. 2016) (citations omitted). “The district court must first determine that 5 the ALJ made a legal error, such as failing to provide legally sufficient reasons for 6 rejecting evidence…. If the court finds such an error, it must next review the record 7 as a whole and determine whether it is fully developed, is free from conflicts and 8 ambiguities, and all essential factual issues have been resolved.” Id. (citation and 9 internal quotation marks omitted). Moreover, “remand is warranted where additional 10 administrative proceedings could remedy defects in the decision.” Smith-Scruggs v. 11 Astrue, 2010 WL 256546, at *11 (C.D. Cal. Jan 21, 2010). 12 Although the Court has found error, the record on the whole is not fully 13 developed, and factual issues remain outstanding. Because “a judicial judgment 14 cannot be made to do service for an administrative judgment,” when “the record 15 before the agency does not support the agency action [or] … the reviewing court 16 simply cannot evaluate the challenged agency action on the basis of the record before 17 it, the proper course … is to remand to the agency for additional investigation or 18 explanation.” Treichler, 775 F.3d at 1099. The issues concerning Plaintiff’s alleged 19 disability “should be resolved through further proceedings on an open record before 20 a proper disability determination can be made by the ALJ in the first instance.” 21 Brown-Hunter v. Colvin, 806 F.3d 487, 496 (9th Cir. 2015); see also Treichler, 775 22 F.3d at 1101 (remand for award of benefits is inappropriate where “there is 23 conflicting evidence, and not all essential factual issues have been resolved”) 24 (citation omitted); Strauss v. Comm’r of Soc. Sec. Admin., 635 F.3d 1135, 1138 (9th 25 Cir. 2011) (same where the record does not clearly demonstrate the claimant is 26 disabled within the meaning of the Social Security Act). 27 /// 28 /// 1 Accordingly, the appropriate remedy is a remand for further administrative 2 || proceedings.° 3 FISISIOR ICR IORI RICK 4 For the foregoing reasons, IT IS ORDERED that Judgment be entered 5 || reversing the decision of the Commissioner of Social Security and remanding this 6 || matter for further administrative proceedings consistent with this opinion. 1 8 || DATED: 8/14/2019 (hy Mok ALEXANDER F. MacKINNON 11 UNITED STATES MAGISTRATE JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 © Tis not the Court’s intent to limit the scope of the remand. 11