Manjarrez v. Kijakazi ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 IGNACIO M., Case No.: 23-cv-1926-TWR-KSC 12 Plaintiff, REPORT AND 13 v. RECOMMENDATION 14 MARTIN O’MALLEY, Commissioner of Social Security, 15 Defendant. 16 17 Plaintiff filed this action challenging the final decision of the Commissioner of 18 Social Security denying plaintiff’s claim for benefits. Doc. No. 1. This Court directed the 19 parties to explore informal resolution of the matter through the meet-and-confer process, 20 but the parties were unable to resolve the case on their own. Doc. Nos. 9, 10. Having 21 reviewed the parties’ briefing and the Administrative Record (“AR”), the Court issues the 22 following Report and Recommendation to the assigned District Judge. 23 //// 24 //// 25 //// 26 //// 27 //// 28 1 I. BACKGROUND 2 Plaintiff applied for Disability Insurance Benefits. AR 268-74.1 The Social Security 3 Administration denied the claim. AR 146-50. The Administration denied plaintiff’s claim 4 upon rehearing. AR 166-72. Plaintiff requested a hearing before an Administrative Law 5 Judge (“ALJ”). AR 173-74. Plaintiff, represented by counsel, appeared before the ALJ. AR 6 32-54. Plaintiff’s attorney and the ALJ both examined plaintiff at the hearing, and the ALJ 7 received testimony from a vocational expert (“VE”). See id. After reviewing the 8 documentary evidence in the record and hearing the witnesses’ testimony, the ALJ 9 ultimately concluded plaintiff was not disabled. AR 14-26. 10 The ALJ’s decision followed the five steps prescribed by applicable regulations 11 under which the ALJ must sequentially determine (1) if the claimant is engaged in 12 substantial gainful employment; (2) whether the claimant suffers from a “severe” 13 impairment; (3) if any impairment meets or is medically equal to one of the impairments 14 identified in the regulatory Listing of Impairments; (4) the claimant’s residual functional 15 capacity (“RFC”) and whether the claimant could perform any past relevant work; and (5) 16 whether a claimant can make an adjustment to other work based on his or her RFC. See 20 17 C.F.R. § 404.1250(a)(4); AR 18-19. The ALJ’s evaluation ends if at any individual step 18 the ALJ finds the claimant is or is not disabled. See 20 C.F.R. § 404.1250(a)(4). 19 As a threshold finding, the ALJ established plaintiff’s date last insured (“DLI”) was 20 September 30, 1997. AR 19. At step one, the ALJ found plaintiff had not engaged in 21 substantial gainful activity since March 1, 1992, the alleged onset date of his disabling 22 conditions. Id. At step two, the ALJ found plaintiff had the following severe impairments: 23 “alcohol use disorder, HIV, hypertension, sexual arousal disorder, generalized anxiety 24 disorder, adjustment disorder with mixed emotional features, stimulant use disorder, [and] 25 methamphetamines and opiate use in remission in 2022.” AR 19-20. The ALJ also found 26 27 1 The Court adopts the parties’ citations to the certified record in this matter. All other 28 1 plaintiff had the following non-severe impairments: obesity, tobacco use, hepatitis C, and 2 piriformis syndrome. AR 20. At step three, the ALJ found none of plaintiff’s impairments 3 met the applicable regulatory Listings. AR 20-21. 4 At step four, the ALJ found plaintiff had the residual function capacity to “perform 5 medium work” with the modifications that plaintiff could “lift, carry, push, [or] pull 25 6 pounds frequently and 50 pounds occasionally, stand and/or walk 6 hours, [and] sit 6 hours 7 in an 8-hour workday with normal breaks.” AR 21. The ALJ also found plaintiff limited 8 “to understanding, remember, and carrying out simple, routine, repetitive tasks, with breaks 9 every two hours” and “to no interaction with the general public, and to occasional work- 10 related, non-personal, non-social interaction with co-workers and supervisors involving no 11 more than a brief exchange of information or hand-off of product.” Id. The ALJ also found 12 plaintiff “cannot perform highly time pressured tasks such that [plaintiff] is limited to 13 generally goal-oriented work, not time sensitive strict production quotas . . . .” AR 20-21. 14 Finally, plaintiff was limited to working “in a low-stress environment where there are few 15 work place changes” and where plaintiff “has minimal decision-making capability.” AR 16 22. 17 Although the ALJ found plaintiff had no past relevant work, the ALJ also found at 18 step five that plaintiff could perform some jobs existing in significant numbers in the 19 national economy, including laboratory equipment cleaner, industrial cleaner, and kitchen 20 helper. AR 25-26. The ALJ thus concluded plaintiff was not disabled. AR 26. The 21 Commissioner’s decision became final on August 15, 2023, when the Appeals Council 22 denied plaintiff’s request for rehearing. AR 1. This appeal followed. 23 II. STANDARD OF REVIEW 24 This Court will affirm the ALJ’s decision if (1) the ALJ applied the correct legal 25 standards; and (2) the decision is supported by substantial evidence. See Batson v. Comm’r 26 of the Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2004). Under the substantial 27 evidence standard, the Commissioner's findings are upheld if supported by inferences 28 1 reasonably drawn from the record, and if there is evidence in the record to support more 2 than one rational interpretation, the Court will defer to the Commissioner. Id. 3 Even if the ALJ makes an error, this Court can nonetheless affirm the denial of 4 benefits if such error was “harmless, meaning it was ‘inconsequential to the ultimate 5 nondisability determination.’” Ford v Saul, 950 F.3d 1141, 1154 (9th Cir. 2020) (quoting 6 Tommasetti v. Astrue, 533 F.3d 1035, 1038 (9th Cir. 2008)). The Court’s ability to uphold 7 the ALJ’s decision is limited in that this Court may not make independent findings and 8 therefore cannot uphold the decision on a ground not asserted by the ALJ. See Stout v. 9 Comm’r of the Soc. Sec. Admin., 454 F.3d 1050, 1054 (9th Cir. 2006). 10 III. ANALYSIS OF THE COMMISSIONER’S DECISION 11 The parties identify only a single issue for this Court’s review: whether the ALJ 12 erred by failing to determine whether plaintiff would be required to complete, and whether 13 he could in fact complete, a probationary or training period prior to engaging in ordinary 14 work. Doc. No. 11 at 6; Doc. No. 17 at 3. More specifically, the parties dispute whether 15 making such a finding fell within the scope of the ALJ’s mandatory obligation to fully 16 develop the record. Compare Doc. No. 11 at 9 with Doc. No. 17 at 7. It is not disputed that 17 plaintiff’s RFC, as found by the ALJ, precluded sustained interactions with co-workers. 18 See AR 22. The parties dispute only the significance and effect of this fact. 19 Plaintiff claims the mere fact that the ALJ was aware of this restriction triggered the 20 ALJ’s duty to sua sponte ascertain whether the jobs existing in the national economy for 21 which plaintiff was qualified would require plaintiff to go through a training or 22 probationary period. See Doc. No. 11 at 8. According to plaintiff, this is a relevant 23 consideration because even though plaintiff would be able to perform some work if he did 24 not have to regularly interact with co-workers, he would nonetheless be disabled if working 25 would require an initial training period because his inability to interact with coworkers 26 would prevent him from completing any kind of training period given the need for 27 increased personal interaction during training. See id. Defendant does not explicitly deny 28 this could be a valid basis for finding a plaintiff disabled. Instead, defendant argues it was 1 plaintiff’s burden to tender that issue to the ALJ and prove the underlying facts, and so the 2 ALJ had no obligation to engage in independent factfinding beyond ascertaining whether 3 there were jobs suitable for plaintiff given plaintiff’s RFC. See Doc. No. 17 at 3-7. 4 Case law establishes the existence of the ALJ’s mandatory duty to develop the 5 record, which exists even when a claimant is represented by counsel at the hearing before 6 the ALJ. See E.M. v. Kijakazi, 591 F. Supp. 3d 595, 618 (N.D. Cal. 2022). But that duty is 7 hardly boundless because the claimant bears the ultimate burden of proving disability, and 8 the ALJ’s duty to further develop the record is only triggered when the evidence is 9 “ambiguous” or “inadequate” such that an ALJ cannot properly evaluate it. See id. (citing 10 Mayes v. Massanari, 276 F.3d 453, 459 (9th Cir. 2001)). The parties agree there is no 11 binding authority that resolves the specific issue of whether an ALJ must independently 12 engage in factfinding about probationary or training periods when faced with a claimant 13 whose RFC precludes sustained workplace interactions with colleagues. See Doc. No. 11 14 at 7; Doc. No. 17 at 5. But, as the Court has already explained, they diverge markedly on 15 what the result should be. 16 Whether the facts of this case triggered the ALJ’s affirmative duty to inquire further 17 may prove outcome determinative because, although it is undisputed the ALJ did not 18 inquire further, it is also undisputed that plaintiff did not raise the issue during the 19 administrative hearing. See Doc. No. 17 at 7; Doc. No. 18 at 3. Thus, the Court must 20 determine which of the parties to this dispute bore the burden of first tendering this specific 21 issue. The default rule is that a claimant “must raise issues at [the] administrative hearings 22 in order to preserve them on appeal” before an Article III court. See Meanel v. Apfel, 172 23 F.3d 1111, 1115 (9th Cir. 1999); accord Shaibi v. Berryhill, 883 F.3d 1102, 1109 (9th Cir. 24 2018). The history of the doctrine is a bit tortuous. Shortly after the Ninth Circuit decided 25 Meanel in 1999, the Supreme Court issued an opinion that could be interpreted as 26 abrogating Meanel. See Sims v. Apfel, 530 U.S. 103, 120 (2000) (“[W]e hold that a 27 judicially created issue-exhaustion requirement is inappropriate. Claimants who exhaust 28 administrative remedies need not also exhaust issues in a request for review by the Appeals 1 Council in order to preserve judicial review of those issues.”). For nearly two decades after 2 that, some District Courts treated Meanel as overruled. See, e.g., Moreno v. Berryhill, 2017 3 U.S. Dist. LEXIS 70806, at *8-9 (E.D. Cal. May 8, 2017) (collecting cases and considering 4 a potential conflict in vocational expert testimony for the first time on appeal). Then, in 5 2018, the Ninth Circuit brought Meanel back from the dead, distinguishing Sims as limited 6 only in cases where a claimant failed to present an issue to the Appeals Council in the first 7 instance, and consequently holding that an issue is only waived if the plaintiff fails to 8 present it to the ALJ and the Appeals Council. See Shaibi, 883 F.3d at 1109. 9 The Supreme Court later announced a rule of general application for resolving 10 whether courts should impose an issue exhaustion requirement in certain Social Security 11 cases. See generally Carr v. Saul, 593 U.S. 83 (2021). That case allowed exceptions when 12 the issue would fall well outside the agency adjudicator’s area of expertise or where raising 13 the issue before the agency would be futile. See id. at 92-93. Although, Circuit-level 14 authority provides more on point guidance, the Court notes the Supreme Court’s test for an 15 exception to the waiver rule is relevant because the question not presented to the ALJ in 16 this case dealt squarely with whether plaintiff could work given the nature of his 17 impairments. Because the ALJ is uniquely qualified to resolve that issue, it would not have 18 been futile to raise it at the administrative hearing. Given that conclusion, the Court does 19 not interpret Carr as creating an exception to the ordinary waiver rule in this case. 20 Under controlling Ninth Circuit law, the administrative waiver rule is limited to 21 cases where a plaintiff fails to apprise the Administration of factual matters which the 22 Commissioner is in the best position to evaluate in the first instance. See Silveria v. Apfel, 23 204 F.3d 1257, 1260 n.8 (9th Cir. 2000). When the matter before the court is a purely legal 24 question—such as whether the Commissioner followed the appropriate legal rules in 25 evaluating a claim and the evidence is undisputed—the Court may review the matter 26 notwithstanding the plaintiff’s failure to raise it before the Administration. See id. Thus, 27 whether the Commissioner’s final decision will be affirmed or vacated in this matter 28 depends entirely on whether the facts of this case were sufficient to trigger the ALJ’s duty 1 to develop the record. If they were, the ALJ failed to follow the law and the matter must 2 be remanded. If they were not, the ALJ appropriately discharged his duties and the 3 Commissioner’s final decision must be affirmed. 4 Plaintiff’s case depends on out-of-circuit authority. See Doc. No. 11 at 7 (citing 5 Sczepanski v. Saul, 946 F.3d 152 (2d Cir. 2020)). In Sczepanski, which bears some 6 similarity to this case, the plaintiff testified at the hearing before the ALJ that “she suffered 7 from social anxiety and depression, and that her symptoms were exacerbated by social 8 interaction and stress.” 946 F.3d at 155. She also “testified that she suffered from selective 9 mutism and auditory processing problems, and that she was unable to concentrate in 10 environments with background noise.” Id. The vocational expert opined that plaintiff could 11 work provided she “‘should have essentially no contact with the general public and no 12 more than occasional contact with supervisors or co-workers, no fast paced or assembly 13 line or high quota work and no significant noise at the workplace.’” Id. Notwithstanding 14 that restriction, the expert opined plaintiff “would be able to work as a laundry laborer . . . 15 an industrial cleaner . . . and a shirt folder.” Id. Plaintiff’s counsel attempted to question 16 the expert about whether different standards for allowed absenteeism would apply during 17 jobs as ordinarily performed versus during a probationary or training period, and the expert 18 opined there would be a difference in employer’s tolerance for absenteeism. Id. 19 Specifically, the expert opined employers would tolerate up to two absences per month 20 during regular work, but probationary periods would typically have a zero-tolerance 21 attendance policy. Id. 22 The ALJ’s ultimate decision included, as part of plaintiff’s RFC assessment, that 23 plaintiff would be allowed to miss up to one day of work per month. Id. The ALJ concluded 24 plaintiff was not disabled and made no mention of probationary or training periods in the 25 decision. Id. The Second Circuit reversed. Id. at 162. The Court reasoned there was an 26 unresolved inconsistency in the record because the evidence showed the plaintiff might be 27 subjected to a probationary period with a zero-tolerance attendance policy, but the ALJ’s 28 RFC assessment would allow the plaintiff to miss up to one day of work per month. See id. 1 at 158-59, 161-62. The Court remanded so the ALJ could further develop the record to 2 determine whether “even a fraction of the 3 million jobs identified by the vocational expert 3 do not have probationary periods (or permit[ed] absences during their probationary 4 periods),” in which case the plaintiff would still be found not disabled. Id. at 162. 5 In an appropriate case, Sczepanski might prove persuasive, but this case differs in a 6 material way because, unlike the plaintiff in Sczepanski, the plaintiff in this case did not 7 question the VE at the hearing about the possibility that ubiquitous probationary periods 8 might complicate plaintiff’s ability to obtain and maintain work. In Sczepanski, the Second 9 Circuit did not hold that an ALJ must always resolve the issue of a probationary period 10 when the plaintiff’s RFC might arguably conflict with a probationary period. Rather, as 11 this Court has explained, the Second Circuit ruled much more narrowly in that it only 12 faulted the ALJ from failing to resolve an evidentiary conflict that appeared in the record 13 based on the VE’s testimony. Thus, the Court finds Sczepanski distinguishable from this 14 case and declines to follow it. 15 Binding Ninth Circuit case law, however, provides the rule of decision in this case. 16 In the Ninth Circuit, an ALJ discharges the independent duty to develop the record by 17 questioning a vocational expert whether, consistent with the job descriptions in the 18 Dictionary of Occupational Titles (“DOT”), sufficient jobs exist which the plaintiff may 19 perform given his or her residual functional capacity. See Shaibi v. Berryhill, 883 F.3d 20 1102,1108-1110 (9th Cir. 2018). When a plaintiff wishes to challenge that conclusion, it is 21 the plaintiff’s burden to adduce supporting evidence. See id. In Shaibi, the VE at the 22 administrative hearing testified about the number of jobs available in the regional and 23 national economy for which plaintiff was qualified given his RFC. See 883 F.3d at 1108. 24 The plaintiff in Shaibi argued, for the first time on appeal, the ALJ should have sua sponte 25 compared the VE’s estimates against other data in the County Business Patterns (“CBP”) 26 and Occupational Outlook Handbook (“OOH”), both of which are subject to 27 “administrative notice” under the controlling regulations. Id. The Ninth Circuit rejected 28 plaintiff’s argument. Id. at 1108-09. The Court reasoned that, at least when a benefits 1 claimant is represented by counsel, the plaintiff bears the burden of presenting an 2 evidentiary challenge to the VE’s testimony. Id. The Court held the ALJ is only under a 3 duty to resolve apparent conflicts in the VE’s testimony, not to raise and resolve 4 hypothetical conflicts between the VE’s testimony and some other, unspecified evidence 5 that might conceivably enter the record. See id. at 1109-10. 6 This Court cannot meaningfully distinguish Shaibi from this case. In both cases, the 7 plaintiff contended, for the first time on appeal, that an ALJ should have identified when 8 the VE’s testimony might conflict with evidence not in the record and sua sponte developed 9 the record to resolve the conflict. True, the potential “conflicts” at issue in the two cases 10 differ superficially. In Shaibi, the plaintiff identified a hypothetical conflict in the number 11 of jobs available, whereas the plaintiff in this case identifies a potential conflict related to 12 plaintiff’s ability to perform available work, at least during a probationary or training 13 period. But in both cases the ALJ would need to look beyond the administrative record 14 based on the VE’s facially adequate testimony because the source of both conflicts was not 15 the VE’s testimony itself, but another body of evidence not presented to the ALJ during 16 the hearing. Because the Court cannot meaningfully distinguish Shaibi, the Court 17 concludes the ALJ was under no duty in this case to raise and resolve—by looking outside 18 the facially adequate record—the probationary period issue plaintiff now presents to this 19 Court. It was, therefore, waived. 20 Plaintiff attempts to liken this case to a case of “obvious or apparent” conflict in the 21 evidence before the ALJ. See Doc. No. 18 at 3 (citing Gutierrez v. Colvin, 844 F.3d 804, 22 808 (9th Cir. 2016); Lamear v. Berryhill, 865 F.3d 1201, 1206 (9th Cir. 2017)). But those 23 cases stand for the much narrower proposition that ALJs must resolve “apparent” conflicts 24 between a VE’s testimony and the specific job descriptions in the DOT. For example, an 25 ALJ must resolve the conflict when a claimant is limited to “occasional” fingering with 26 one hand, but the VE testifies the claimant can perform jobs that require “frequent” 27 fingering under the DOT. See Lamear, 865 F.3d at 1205-06. In contrast, there is no apparent 28 conflict in the record when a job requires “frequent” reaching, even if a plaintiff is limited 1 to no “overhead” reaching; at least where it is apparent as a matter of common sense that 2 overhead reaching is not an indispensable function of the listed occupation. See Gutierrez, 3 844 F.3d at 808-09. This case does not present the same situation as either Gutierrez or 4 Lamear because this is not a case where the VE’s testimony was even arguably inconsistent 5 on its face with the DOT. Rather, the only “conflict” at issue is with extra-record evidence 6 that was never presented to the ALJ. The Court accordingly concludes the conflict here 7 was not “apparent” as plaintiff contends, and the ALJ was under no duty to resolve it. 8 The Court finally considers the negative policy implications of the expanded duties 9 to which plaintiff would hold the ALJ in this case. If, for example, the ALJ was under an 10 obligation to determine plaintiff would likely need to complete a training period, would the 11 ALJ need to go still further by determining whether plaintiff’s disabilities could be 12 accommodated under state and federal anti-discrimination law like 42 U.S.C. section 13 12112(b)(5) or California Government Code section 12940(m)? The ALJ here found 14 plaintiff could perform work as a laboratory equipment cleaner, industrial cleaner, or 15 kitchen helper. Finding out whether plaintiff could be accommodated in all those disparate 16 jobs might requiring calling one or more expert witnesses to opine about on-the-ground 17 working conditions in various sectors of those industries. Might the ALJ need to go still 18 further by resolving each and every ex post facto “conflict” a Social Security claimant can 19 identify after the hearing? At the end of the day, case law does not mandate the ALJ 20 conduct a bespoke evidentiary hearing to exhaust every possible fact that might impede a 21 plaintiff’s ability to work, unless such issues are raised before the ALJ. If particular facts 22 in a particular case might challenge an otherwise reasonable non-disability finding, the 23 plaintiff must tender them. Because plaintiff failed to raise the issue here, the challenge to 24 the VE’s testimony is waived and the Court finds no error in the ALJ’s determination. 25 //// 26 //// 27 //// 28 //// 1 IV___ Conclusion 2 Because the ALJ did not commit an error of law as plaintiff claims, the Court 3 || concludes the ALJ’s determination was supported by substantial evidence and recommends 4 ||the District Judge enter an order affirming the final decision of the Commissioner in this 5 ||matter. The filing of any objections (or responses to those objections) to this Report and 6 || Recommendation shall be controlled by Federal Rule of Civil Procedure 72(b). 7 || Dated: November 25, 2024 Yy | Uf. } 8 UL LA SSS 9 Hori. Karen 8S. Crawford United States Magistrate Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28