McLeod v. Astrue , 640 F.3d 881 ( 2011 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GENE R. MCLEOD,  No. 09-35190
Plaintiff-Appellant,
D.C. No.
v.
MICHAEL J. ASTRUE,  9:07-CV-52-JCL
ORDER AND
Commissioner of Social Security
AMENDED
Administration,
OPINION
Defendant-Appellee.

On Appeal from the United States District Court
for the District of Montana
Jeremiah C. Lynch, Magistrate Judge, Presiding
Argued and Submitted
January 14, 2010—Seattle, Washington
Filed December 16, 2010
Amended February 4, 2011
Before: Andrew J. Kleinfeld, A. Wallace Tashima, and
Richard C. Tallman, Circuit Judges.
Opinion by Judge Kleinfeld
2195
2198 MCLEOD v. ASTRUE
COUNSEL
Paul B. Eaglin, Eaglin Law Office, Fairbanks, Alaska, for the
appellant.
Jennifer Randall, Special Assistant United States Attorney,
Social Security Administration, Office of the General Coun-
sel, Denver, Colorado, for the appellee.
ORDER
The opinion filed on December 16, 2010 is amended as fol-
lows:
At 20,138 of the slip opinion, replace “VA” with “Veterans
Court” in “to determine whether the error caused prejudice
the VA was to.”
At 20,139 of the slip opinion, replace “VA” with “Veterans
Court” in “the Court required a remand to the VA, even
though she had not shown.”
At 20,139 of the slip opinion, replace “VA” with “Veterans
Court” in “the court held that all the VA statutory provision
did was import.”
At 20,140 of the slip opinion, replace “VA” with “Veterans
Court” in “the Court directed remand to the VA in one of the
two cases before it.”
MCLEOD v. ASTRUE 2199
The amended opinion is filed concurrently with this Order.
No petitions for rehearing or petitions for rehearing en banc
will be entertained, and the mandate shall issue in due course.
OPINION
KLEINFELD, Circuit Judge:
We address harmless error in the context of Social Security
disability.
I. Facts
Gene R. McLeod applied at age 51 for supplemental secur-
ity income based on disability. The Administrative Law Judge
(ALJ) found that he had three severe impairments—
degenerative changes of the lumbar spine, history of coronary
artery disease, and sleep apnea—but none so severe as to rise
to the level of “listed” impairments. He lacked significant pro-
trusion or herniation of the discs or compression of the nerve
root where there was narrowing at L4-5, and catheterization
had restored him to asymptomatic condition regarding his
heart. The ALJ found that McLeod’s medically determinable
impairments could be expected to produce his symptoms, but
his “statements concerning intensity, duration and limiting
effects of these symptoms are not entirely credible.” One of
McLeod’s treating physicians said that he was “very debilitat-
ed” and another said he was “unemployable.” But the ALJ
rejected these opinions insofar as they addressed employabil-
ity, because they gave a conclusory opinion on employability,
the Commissioner’s bailiwick, and “are not function-by-
function analyses of the claimant’s residual functional capaci-
ty.” The ALJ found that McLeod could not perform his past
work as a bartender, breakfast cook, groundskeeper, or golf
pro shop clerk, but had sufficient functional capacity to per-
form such work as gambling cashier, telephone solicitor, and
2200 MCLEOD v. ASTRUE
order clerk, all sedentary jobs with minimal lifting and bend-
ing, allowing for sitting and standing within McLeod’s limita-
tions. The district court denied McLeod’s petition for review.
The medical record, consisting mostly of information from
McLeod’s treating physicians and physicians to whom his
treating physicians referred him for consultation at Depart-
ment of Veterans Affairs facilities, was mixed as to the sever-
ity of McLeod’s condition. A neurosurgeon to whom McLeod
was referred said that McLeod had “no muscle weakness” and
recommended against surgery because of the unlikelihood of
improvement “particularly with unsettled litigation and his
pain behavior on examination.” The VA Neurosurgery Chief
wrote that McLeod’s spinal canal was “open throughout his
lumbosacral region” (which means no compression on
account of narrowing) and that “he has some evidence of
degenerated discs but there is not any evidence of nerve root
compression from these discs.” One treating physician at the
VA said that because McLeod had “back pain with minimal
activity,” and “any work he has done exacerbates the prob-
lem,” he was “unemployable.” But another treating VA physi-
cian said McLeod should be restricted to “light manual
sedentary” work, rather than no work at all.
McLeod’s appeal focuses on the ALJ’s failure to develop
the record further regarding his veteran’s disability and medi-
cal condition. McLeod testified that he received a $296 non-
service-connected pension, based on unemployability, from
the VA. When the ALJ asked him if he had a VA disability
rating, he answered, “I have no idea, Your Honor.” The
record does not reveal whether the VA found McLeod par-
tially or entirely disabled. No evidence of his disability rating
was submitted to the Social Security Administration at any
stage of the proceedings, or to the district court. Based on
McLeod’s testimony about his “pension,” there is a fair
chance he has a disability rating, but the record shows neither
that he has one nor what it is.
MCLEOD v. ASTRUE 2201
Though McLeod had only a lay representative before the
VA, he was represented by an attorney in district court and is
represented, by different counsel, here.
II. Analysis
McLeod argues under Tonapetyan v. Halter1 that the ALJ
erred by failing to develop the record adequately. According
to McLeod, the ALJ should have requested more explanation
from two of his treating physicians at the VA, Dr. Dietz and
Dr. Rossetto, about his ability to work. McLeod also argues
that the ALJ should have obtained whatever VA disability rat-
ing McLeod might have.
[1] The ALJ had no duty to request more information from
the two physicians. It appears from the record that substan-
tially all of their medical records throughout the time they
treated McLeod were before the ALJ. There was nothing
unclear or ambiguous about what they said. They both
thought McLeod had a bad lower back condition, based on his
symptom reports, their examinations, and objective medical
tests. Dr. Dietz thought McLeod could do sedentary work, and
Dr. Rossetto thought McLeod could not work at all. As for the
ALJ rejecting Dr. Rossetto’s opinion on whether McLeod
could work at any job, he was correct that this determination
is for the Social Security Administration to make, not a physi-
cian. “Although a treating physician’s opinion is generally
afforded the greatest weight in disability cases, it is not bind-
ing on an ALJ with respect to the existence of an impairment
or the ultimate determination of disability.”2 McLeod argues
that Dr. Rossetto’s opinion could be read as an evaluation of
his “functional exertional capacity” rather than a conclusion
on his ability to work, but we do not agree. The words are
clear and unambiguous: an “ALJ’s duty to develop the record
further is triggered only when there is ambiguous evidence or
1
242 F.3d 1144 (9th Cir. 2001).
2
Id. at 1148; 20 C.F.R. § 404.1527(e)(1).
2202 MCLEOD v. ASTRUE
when the record is inadequate to allow for proper evaluation
of the evidence.”3
[2] A treating physician’s evaluation of a patient’s ability
to work may be useful or suggestive of useful information,
but a treating physician ordinarily does not consult a voca-
tional expert or have the expertise of one. An impairment is
a purely medical condition. A disability is an administrative
determination of how an impairment, in relation to education,
age, technological, economic, and social factors, affects abil-
ity to engage in gainful activity. The “relationship between
impairment and disability remains both complex and difficult,
if not impossible, to predict. . . The same level of injury is in
no way predictive of an affected individual’s ability to partici-
pate in major life functions (including work) . . . Disability
may be influenced by physical, psychological, and psychoso-
cial factors that can change over time.”4 The law reserves the
disability determination to the Commissioner.5 Rejection of
the treating physician’s opinion on ability to perform any
remunerative work does not by itself trigger a duty to contact
the physician for more explanation.6
[3] The issue of the VA disability rating is more complex.
The record suggests a likelihood that McLeod has some sort
of VA disability rating, yet does not show what it is. That Mc-
Leod failed to submit the rating to the ALJ is not the end of
the matter.
[4] The ALJ has a duty to conduct a full and fair hearing.7
3
Mayes v. Massanari, 276 F.3d 453, 459-60 (9th Cir. 2001). See also
Bayliss v. Barnhart, 427 F.3d 1211, 1217 (9th Cir. 2005) (the ALJ did not
have a duty to recontact doctors before rejecting parts of their opinions).
4
American Medical Association, Guides to the Evaluation of Permanent
Impairment, 5-6 (6th ed. 2008).
5
20 C.F.R. § 404.1527(e)(1).
6
20 C.F.R. §§ 404.1512(e), 416.912 (e).
7
Smolen v. Chater, 80 F.3d 1273, 1288 (9th Cir.1996) (citing Brown v.
Heckler, 713 F.2d 441, 443 (9th Cir. 1983)).
MCLEOD v. ASTRUE 2203
We held in Tonapetyan v. Halter8 that “[a]mbiguous evidence,
or the ALJ’s own finding that the record is inadequate to
allow for proper evaluation of the evidence, triggers the ALJ’s
duty to conduct an appropriate inquiry.”9 The ALJ must be
“especially diligent” when the claimant is unrepresented or
has only a lay representative, as McLeod did.10 A specific
finding of ambiguity or inadequacy of the record is not neces-
sary to trigger this duty to inquire, where the record estab-
lishes ambiguity or inadequacy.11
[5] The record here was inadequate. McLeod testified that
he was receiving a VA pension based on unemployability, but
that he had no idea whether he had a disability rating. This
testimony suggests a likelihood that he had one. If he did, it
might very well matter.
[6] We held in McCartey v. Massenari12 that “although a
VA rating of disability does not necessarily compel the SSA
to reach an identical result, 20 C.F.R. § 404.1504, the ALJ
must consider the VA’s finding in reaching his decision”13
and the ALJ “must ordinarily give great weight to a VA deter-
mination of disability.”14 That is not to say that the VA rating
is conclusive. In McCartey, we commented that “because the
VA and SSA criteria for determining disability are not identi-
cal,”15 the record may establish adequate reason for giving the
VA rating less weight. In some circumstances, the VA may
assign a partial rather than a total disability rating to a veteran,16
8
242 F.3d 1144 (9th Cir. 2001).
9
Id. at 1150 (citing Smolen, 80 F.3d at 1288) (quotation marks omitted).
10
Id. (citing Cox v. Califano, 587 F.2d 988, 991 (9th Cir. 1978)).
11
Id.12
298 F.3d 1072 (9th Cir. 2002).
13
Id. at 1076.
14
Id.15
Id.16
See 38 C.F.R. §§ 4.1 (explaining that VA disability percentage ratings
represent the average impairment in earning capacity resulting from dis-
eases and injuries), 4.15 (limiting VA total disability ratings to “any
impairment of mind or body which is sufficient to render it impossible for
the average person to follow a substantially gainful occupation”).
2204 MCLEOD v. ASTRUE
and a partial disability rating might cut against rather than in
favor of an SSA determination that the individual could not
perform remunerative work of any kind.
Even though it is not binding or conclusive, the VA disabil-
ity rating has to be considered. The ALJ did not mention it in
her decision and did not consider it. No doubt she failed to
consider the VA rating because it was not in the record and
she did not know what disability rating if any the VA had
assigned to McLeod. Nevertheless, she erred by not trying to
get whatever VA disability rating existed.
[7] We must apply the holding in McCartey, that the VA
disability rating must be considered and ordinarily must be
given great weight, together with the holding in Tonapetyan,
that inadequacy of the record to allow for proper evaluation
triggers a duty of inquiry. These two holdings taken together
establish that when the record suggests a likelihood that there
is a VA disability rating, and does not show what it is, the
ALJ has a duty to inquire. McLeod might have had a letter
from the VA telling him what his disability rating was, or pro-
viding him with the basis on which he got his pension, that
he could have brought in had the ALJ given him a continu-
ance and told him to bring in his letter. Alternatively, the ALJ
could have obtained McLeod’s disability rating herself.17
Then she could have evaluated his disability properly under
Tonapetyan. By failing to obtain and consider McLeod’s VA
disability rating, the ALJ erred, denying him the “full and fair
hearing” to which he was entitled.
That leads us to the next question, what we are to do about
the error. We still do not know what determination the VA
made regarding McLeod’s claimed disability. We therefore do
not know whether the ALJ’s failure to obtain the rating
caused McLeod any harm.
17
38 C.F.R. § 1.506 (stating that VA records required for official pur-
poses will be furnished to any other agency of the U.S. Government “in
response to an official request, written, or oral”).
MCLEOD v. ASTRUE 2205
[8] The answer to what we must do about the error is pro-
vided by a recent Supreme Court decision, Shinseki v. Sanders.18
In Sanders, the VA had denied disability benefits to two vet-
erans, Woodrow Sanders and Patricia Simmons, because the
record failed to adequately support their claims. In one
instance, the VA had told the veteran what additional infor-
mation was needed, but failed to specify what portion of that
evidence the veteran would be responsible for providing. In
the other, the VA failed to tell the veteran what information
she needed to provide and failed to notify her of a relevant
medical exam the VA had scheduled on her behalf. In both
instances, the VA failed to perform its duty to help a veteran
develop his claim.
[9] The Court held that to determine whether the error
caused prejudice the Veterans Court was to “apply the same
kind of ‘harmless-error’ rule that courts ordinarily apply in
civil cases.”19 The Court went further, holding that the burden
is on the party attacking the agency’s determination to show
that prejudice resulted from the error.20 Overruling the Federal
Circuit, the Court held that prejudice cannot be presumed
from any kind of error.21 Where harmfulness of the error is not
apparent from the circumstances, the party seeking reversal
must explain how the error caused harm. The first veteran had
not told the Veterans Court, the Court of Appeals, or the
Supreme Court what specific evidence he would have sought,
had the VA told him he needed it, and the Court denied relief.
The second veteran’s record suggested the error might have
been harmful, so the Court required a remand to the Veterans
Court, even though she had not shown what additional evi-
dence she might have submitted. The distinction the Court
drew appears to be that in the case of the second veteran,
18
129 S.Ct. 1696 (2009).
19
Id. at 1704.
20
Id. at 1705-06.
21
Id. at 1705.
2206 MCLEOD v. ASTRUE
some “features of the record suggest” that the error was prejudi-
cial.22
[10] We conclude that Sanders applies to Social Security
cases as well as VA cases. In both, the agency has a duty to
help the claimant, so the Social Security Administration’s
duty to assist claimants23 does not distinguish the cases. The
Veterans Court has a statute providing for a harmless error rule24
and the Social Security statute does not so provide,25 but this
makes no difference, because the Court held that all the Vet-
erans Court statutory provision did was import the Adminis-
trative Procedure Act rule and the general federal rule for civil
cases.26 The Court cited 28 U.S.C. § 2111, under which the
harmless error rule applies to “any” case. The Court limited
a burden on the party seeking to uphold a decision to show
absence of prejudice to appropriate criminal cases.27
But Sanders does not mean that the claimant necessarily
has to show what other evidence could have been obtained.
Despite its generalizations about the burden to show preju-
dice, the Court directed remand to the Veterans Court in one
of the two cases before it, even though that veteran had not
shown what additional evidence she might have to show
harm. The Court held that although some features of the
record suggested that the error was harmless, others suggested
22
Id. at 1708.
23
Tonapetyan v. Halter, 242 F.3d 1144, 1150 (9th Cir. 2001).
24
38 U.S.C. § 7261(b)(2).
25
We, however, apply harmless error in the Social Security context.
Stout v. Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1054 (9th Cir. 2006).
26
Shinseki v. Sanders, 129 S.Ct. 1696, 1704 (2009). The Supreme Court
has stated that it “need not decide whether the APA has general applica-
tion to social security disability claims, for the social security administra-
tive procedure does not vary from that prescribed by the APA. Indeed, the
latter is modeled upon the Social Security Act.” Richardson v. Perales,
402 U.S. 389, 409 (1971).
27
Shinseki v. Sanders, 129 S.Ct. 1696, 1706 (2009).
MCLEOD v. ASTRUE 2207
the opposite, and “[g]iven the uncertainties, we believe it is
appropriate to remand this case so that the Veterans Court can
decide whether re-consideration is necessary.”28
[11] We infer from Sanders that, despite the burden to
show prejudice being on the party claiming error by the
administrative agency, the reviewing court can determine
from the “circumstances of the case”29 that further administra-
tive review is needed to determine whether there was preju-
dice from the error. Mere probability is not enough. But
where the circumstances of the case show a substantial likeli-
hood of prejudice, remand is appropriate so that the agency
“can decide whether re-consideration is necessary.”30 By con-
trast, where harmlessness is clear and not a “borderline ques-
tion,”31 remand for reconsideration is not appropriate.
[12] Though the exact distinction between the two veterans
in Sanders is not crystal clear, it is quite clear that no pre-
sumptions operate, and we must exercise judgment in light of
the circumstances of the case. In this case, the circumstances
suggest prejudice at least as strongly as for the veteran whose
case was remanded in Sanders. McLeod’s physicians differ in
their evaluations, and McLeod’s testimony, if true, establishes
that the VA has made some sort of disability determination.
Because we give VA disability determinations great weight,
failure to assist McLeod in developing the record by getting
his disability determination into the record is reasonably
likely to have been prejudicial. The district court reviewing a
Social Security determination “may at any time order addi-
tional evidence to be taken before the Commissioner of Social
Security, but only upon a showing that there is new evidence
which is material and that there is good cause for the failure
to incorporate such evidence into the record in a prior proceed-
28
Id. at 1708.
29
Id. at 1706.
30
Id. at 1708.
31
Id.2208 MCLEOD v. ASTRUE
ing.”32 The ALJ’s failure to help McLeod develop the record
by putting his VA disability determination into the record is
“good cause” under Tonapetyan, and the disability determina-
tion is “material” under McCartey, so the district court should
remand for this purpose.
REVERSED.
32
42 U.S.C. § 405(g).