Jody Kaufmann v. Kilolo Kijakazi

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JODY KAUFMANN, No. 21-35344
Plaintiff-Appellant,
D.C. No.
v. 3:19-cv-05952-
DWC
KILOLO KIJAKAZI, Acting
Commissioner of Social Security,
Defendant-Appellee. OPINION
Appeal from the United States District Court
for the Western District of Washington
David W. Christel, Magistrate Judge, Presiding
Argued and Submitted March 11, 2022
Portland, Oregon
Filed April 27, 2022
Before: Susan P. Graber, Carlos T. Bea, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Graber
2 KAUFMANN V. KIJAKAZI
SUMMARY *
Social Security
The panel affirmed the district court’s amended
judgment in favor of the Commissioner of Social Security,
who had denied claimant’s request for Social Security
benefits.
Claimant’s initial claim for disability benefits was
denied by an administrative law judge (“ALJ”) in October
2018 while Nancy Berryhill was the Acting Commissioner
of Social Security. In July 2019, the Appeals Council denied
claimant’s appeal while Andrew Saul was Commissioner of
Social Security. Claimant then filed this action, and the
district court issued an initial order reversing and remanding
to the agency. The Commissioner filed a motion under
Fed. R. Civ. P. 59(e) to amend the judgment, the district
court granted the motion, and entered an amended judgment
in favor of the Commissioner.
Claimant challenged the constitutionality of the statute
that governed the President’s removal authority over the
Commissioner, and the district court’s grant of the
Commissioner’s Rule 59(e) motion.
Congress installed as the head of the Social Security
Administration a single Commissioner of Social Security,
who serves a term of six years. 42 U.S.C. § 902(a)(3)
permits the President to remove the Commissioner of Social
Security only for “neglect of duty or malfeasance in office.”
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
KAUFMANN V. KIJAKAZI 3
Claimant argued, and the Commissioner conceded, that the
removal provision violated separation of powers principles
and must be severed from the statute. The panel severed the
removal provision, and held that the President possessed the
authority to remove the Commissioner of Social Security at
will.
The final question was the appropriate remedy for
claimant, whose appeal to the Appeals Council was denied
while Commissioner Saul served under an unconstitutional
removal provision. Claimant did not dispute that the ALJ,
the members of the Appeals Council, Acting Commissioner
Berryhill, and Commissioner Saul all served, at all relevant
times, under valid appointments. Consequently, there was no
reason to regard any of the actions taken by the agency as
void. The panel held that claimant must demonstrate that the
unconstitutional provision actually caused her harm.
Nothing in the record suggested any link whatsoever
between the removal provision and claimant’s case. The
panel disagreed with claimant’s assertion that the
unconstitutional removal provision affected the “expected
value” of claimant’s claim because the Commissioner
theoretically could act in more ways than he could have
without the removal restriction. The panel noted that if it
had agreed with this assertion, it would have required this
court to undo all disability decisions made by the Social
Security Administration while the removal provision was
operative. The panel rejected this. Because claimant did not
show that the removal provision caused her any actual harm,
the panel upheld the Commissioner’s decision denying her
application for benefits.
Federal Rule of Civil Procedure 59(e) allows a district
court to alter or amend a judgment if the court determines
that its original judgment was clearly erroneous. Here, the
4 KAUFMANN V. KIJAKAZI
district court initially held that the ALJ erred by failing to
explain adequately his conclusion that claimant’s daily
activities conflicted with her testimony about the extent of
her limitations. Upon the Commissioner’s filing of a Rule
59(e) motion, the district court concluded that it had clearly
erred, and granted the motion. The panel held that because
the district court properly concluded that it had clearly erred
in its original ruling in favor of claimant, the court’s granting
of the Commissioner’s Rule 59(e) motion fell within the
court’s considerable discretion. The panel, therefore,
affirmed the amended judgment in favor of the
Commissioner.
COUNSEL
Christopher H. Dellert (argued) and Jeffrey Baird (argued),
Dellert Baird Law Offices PLLC, University Place,
Washington; for Plaintiff-Appellant.
Christopher Brackett (argued), Special Assistant United
States Attorney; Erin F. Highland, Assistant Regional
Counsel; Willy Le, Acting Regional Chief Counsel, Seattle
Region X; Kerry Jane Keefe, Assistant United States
Attorney; Nicholas W. Brown, United States Attorney;
Office of the General Counsel, Social Security
Administration, Seattle, Washington; for Defendant-
Appellee.
KAUFMANN V. KIJAKAZI 5
OPINION
GRABER, Circuit Judge:
Claimant Jody Kaufmann timely appeals the district
court’s amended judgment in favor of the Commissioner of
Social Security, who had denied Claimant’s request for
Social Security disability benefits. We decide two important
issues. First, 42 U.S.C. § 902(a)(3), which permits the
President to remove the Commissioner of Social Security
only for “neglect of duty or malfeasance in office,” violates
separation of powers principles and must be severed from
the statute. But, because Claimant has not shown that the
removal provision caused her any actual harm, we uphold
the Commissioner’s decision. Second, Federal Rule of Civil
Procedure 59(e) allows a district court to alter or amend a
judgment if the court determines that its original judgment
was clearly erroneous. Because the district court properly
concluded that it had clearly erred in its original ruling in
favor of Claimant, the court’s granting of the
Commissioner’s Rule 59(e) motion fell within the court’s
considerable discretion. We therefore affirm the amended
judgment in favor of the Commissioner.
FACTUAL AND PROCEDURAL HISTORY
Claimant filed for disability benefits beginning in 2015.
An administrative law judge (“ALJ”) presided over a hearing
in May 2018. The ALJ denied benefits in a written decision
issued in October 2018. The ALJ found that Claimant’s
testimony about the extent of her physical limitations was
not credible. The ALJ determined, at step four of the
analysis, that Claimant retained the ability to perform her
past relevant work as an audit clerk and as a medical records
administrator. At the time, Acting Commissioner Nancy
Berryhill was the head of the agency.
6 KAUFMANN V. KIJAKAZI
In July 2019, the Appeals Council denied Claimant’s
appeal without elaboration. At the time, Commissioner
Andrew Saul was the head of the agency.
Claimant then filed this action. Claimant challenged,
among other rulings, the ALJ’s analysis of her testimony.
Claimant did not assert any constitutional challenges to the
district court.
The district court issued an initial order reversing and
remanding to the agency. The court held in relevant part that
the ALJ had failed to provide an adequate explanation for
rejecting Claimant’s testimony. The court therefore entered
a judgment reversing the ALJ’s denial of benefits and
remanding the matter to the agency for further proceedings.
The Commissioner filed a motion pursuant to Federal
Rule of Civil Procedure 59(e) to amend or alter the
judgment, arguing that the court had clearly erred by
overlooking the ALJ’s explanation for rejecting Claimant’s
testimony. The district court agreed with the Commissioner
and entered an order granting the Rule 59(e) motion. The
court then entered an amended judgment in favor of the
Commissioner.
STANDARDS OF REVIEW
“We review de novo the constitutionality of a statute.”
United States v. Hansen, 25 F.4th 1103, 1106 (9th Cir. 2022)
(quoting United States v. Mohamud, 843 F.3d 420, 432 (9th
Cir. 2016)). We review for abuse of discretion the district
court’s ruling on a Rule 59(e) motion. McQuillion v.
Duncan, 342 F.3d 1012, 1014 (9th Cir. 2003). We review
de novo the district court’s assessment of the agency’s
determination. Smith v. Kijakazi, 14 F.4th 1108, 1111 (9th
KAUFMANN V. KIJAKAZI 7
Cir. 2021). We review for substantial evidence the
Commissioner’s factual findings. Id.DISCUSSION
Claimant challenges (A) the constitutionality of the
statute that governs the President’s removal authority over
the Commissioner and (B) the district court’s grant of the
Commissioner’s Rule 59(e) motion.
A. The Removal Statute
Title 42 U.S.C. § 902(a)(3) provides that the
Commissioner of Social Security “may be removed from
office only pursuant to a finding by the President of neglect
of duty or malfeasance in office.” Claimant argues that this
provision unconstitutionally limits the ability of the
President to remove the Commissioner. She asserts further
that, because the agency was operating under an
unconstitutional removal provision when it decided her
claim, she is entitled to a new proceeding before the agency.
Claimant forfeited this constitutional argument by
failing to raise it to the district court. See Bolker v. Comm’r,
760 F.2d 1039, 1042 (9th Cir. 1985) (“As a general rule, we
will not consider an issue raised for the first time on
appeal[.]”); see also United States v. Depue, 912 F.3d 1227,
1232–34 (9th Cir. 2019) (en banc) (explaining the difference
between waiver and forfeiture). But we exercise our
discretion to reach the issue, which presents a question of
law that the parties have fully briefed and argued on appeal.
See Bolker, 760 F.2d at 1042 (describing circumstances in
which we have reached an issue raised for the first time on
appeal); see also Phillips v. E.I. DuPont de Nemours & Co.
(In re Hanford Nuclear Rsrv. Litig.), 534 F.3d 986, 1007 (9th
8 KAUFMANN V. KIJAKAZI
Cir. 2008) (“We have discretion, however, to overlook any
[forfeiture].”).
Article II, Section 1 of the Constitution vests the
President with “[t]he executive Power,” Art. II, § 1, cl. 1, and
with the duty to “take Care that the Laws be faithfully
executed,” id. § 3. “The entire ‘executive Power’ belongs to
the President alone.” Seila Law LLC v. Consumer Fin. Prot.
Bureau, 140 S. Ct. 2183, 2197 (2020). Practically, however,
the President must depend on an array of executive agencies
for assistance in exercising that power. Id. To ensure that
the President retains full executive power, the Supreme
Court has “adhered to the general rule that the President
possesses ‘the authority to remove those who assist him in
carrying out his duties.’” Id. at 2198 (quoting Free Enter.
Fund v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 513–14
(2010)). The Court has recognized only “two exceptions to
the President’s unrestricted removal power,” id., “one for
multimember expert agencies that do not wield substantial
executive power, and one for inferior officers with limited
duties and no policymaking or administrative authority,” id.at 2199–2200.
In Seila Law, 140 S. Ct. 2183, the Court considered the
statutory removal provision for the single-member head of
the Consumer Financial Protection Bureau (“CFPB”). The
statute allowed the President to remove the Director of the
CFPB only “for inefficiency, neglect of duty, or malfeasance
in office.” 12 U.S.C. § 5491(c)(3). The Court held that the
Director fell into neither of the two previously recognized
exceptions to the President’s unrestricted removal authority.
Seila Law, 140 S. Ct. at 2200–01. The Court then declined
to recognize a new exception for the structure of the CFPB,
“namely an independent agency led by a single Director and
vested with significant executive power.” Id. at 2201. “Such
KAUFMANN V. KIJAKAZI 9
an agency has no basis in history and no place in our
constitutional structure.” Id.; see id. at 2201–07 (analyzing
in detail historical, structural, and other arguments). Finally,
the Court held that the removal provision was severable from
the statute. Id. at 2211 (opinion of Roberts, C.J., joined by
Alito and Kavanaugh, JJ.); id. at 2245 (Kagan, J., concurring
in the judgment with respect to severability and dissenting in
part, joined by Ginsburg, Breyer, and Sotomayor, JJ.).
In Collins v. Yellen, 141 S. Ct. 1761 (2021), the Supreme
Court considered the similar structure of the Federal
Housing Finance Agency (“FHFA”). Congress installed a
single Director as the head of the FHFA, and Congress
provided that the President may remove the Director only
“for cause.” 12 U.S.C. § 4512(a), (b)(2). The Court held
that this removal provision, too, was unconstitutional:
A straightforward application of our
reasoning in Seila Law dictates the result
here. The FHFA (like the CFPB) is an
agency led by a single Director, and the
Recovery Act (like the Dodd-Frank Act)
restricts the President’s removal power.
Collins, 141 S. Ct. at 1784. The Court rejected, as
unpersuasive, several proffered distinctions between the
agencies; “the Constitution prohibits even ‘modest
restrictions’ on the President’s power to remove the head of
an agency with a single top officer.” Id. at 1787 (quoting
Seila Law, 140 S. Ct. at 2205).
With that background in mind, we turn to Claimant’s
constitutional challenge. Congress installed as the head of
the Social Security Administration a single Commissioner of
Social Security, who serves a term of six years. 42 U.S.C.
§ 902(a)(3). As noted at the outset, Congress provided that
10 KAUFMANN V. KIJAKAZI
the President may remove the Commissioner during the six-
year term only for “neglect of duty or malfeasance in office.”
Id. Claimant argues, and the Commissioner concedes, that
the removal provision is unconstitutional. Moreover, shortly
after the Supreme Court decided Collins, the Office of Legal
Counsel fully and persuasively analyzed this issue and
concluded that, in light of Collins and Seila Law, the removal
provision is both unconstitutional and severable from the
statute. Constitutionality of the Commissioner of Social
Security’s Tenure Protection, 45 Op. O.L.C. __, 2021 WL
2981542, at *7–11 (O.L.C. July 8, 2021). We agree that the
removal provision is both unconstitutional and severable.
The removal provision violates separation of powers
principles. For the purpose of the constitutional analysis, the
Commissioner of Social Security is indistinguishable from
the Director of the FHFA discussed in Collins and the
Director of the CFPB discussed in Seila Law. As the Office
of Legal Counsel emphasized, several features of the Social
Security Administration—“a single Commissioner whose
term extends longer than the President’s, the immense scope
of the agency’s programs, the Commissioner’s broad power
to affect beneficiaries and the public fisc, and the [agency’s]
largely unparalleled structure”—compel the conclusion that
the removal provision is unconstitutional. Id. at *7.
But the removal provision is severable from the
remainder of the statute. “[O]ne provision of a [statute] may
be invalid by reason of its not conforming to the
Constitution, while all the other provisions may be subject
to no constitutional infirmity.” Seila Law, 140 S. Ct. at 2208
(quoting Loeb v. Trs. of Columbia Twp., 179 U.S. 472, 490
(1900)). We “must sustain [the Act’s] remaining provisions
‘unless it is evident that the Legislature would not have
enacted those provisions independently of that which is
KAUFMANN V. KIJAKAZI 11
invalid.’” Free Enter. Fund, 561 U.S. at 509 (quoting New
York v. United States, 505 U.S. 144, 186 (1992)) (ellipsis and
brackets omitted). The remaining provisions of the Act are
capable of fully independent function, and nothing in the
text, structure, or history of the statute makes it “evident”
that Congress would have preferred, as an alternative to a
Commissioner who is removable at will, no Social Security
Administration at all. See id. (holding that the severability
of a removability provision was “clear” because “[t]he
remaining provisions are not incapable of functioning
independently, and nothing in the statute’s text or historical
context makes it evident that Congress, faced with the
limitations imposed by the Constitution, would have
preferred no Board at all to a Board whose members are
removable at will.” (citation and internal quotation marks
omitted)). In sum, we sever the removal provision and hold
that the President possesses the authority to remove the
Commissioner of Social Security at will.
The final question, then, is the appropriate remedy for
Claimant, whose appeal to the Appeals Council was denied
while Commissioner Saul served under an unconstitutional
removal provision. The Supreme Court held in Collins that
an unconstitutional removal provision does not affect the
authority of the underlying agency officials to act. 141 S.
Ct. at 1787–88 & n.23. Here, Claimant does not dispute that
the ALJ, the members of the Appeals Council, Acting
Commissioner Berryhill, and Commissioner Saul all served,
at all relevant times, under valid appointments. “As a result,
there is no reason to regard any of the actions taken by the
[agency] as void.” Id. at 1787.
A party challenging an agency’s past actions must
instead show how the unconstitutional removal provision
actually harmed the party—for example, if the President
12 KAUFMANN V. KIJAKAZI
would have removed the agency’s head but for the provision
or, alternatively, if the agency’s head “might have altered his
behavior in a way that would have benefited” the party. Id.
at 1789. Claimant therefore must “demonstrat[e] that the
unconstitutional provision actually caused [her] harm.”
Decker Coal Co. v. Pehringer, 8 F.4th 1123, 1137 (9th Cir.
2021) (citing Collins, 141 S. Ct. at 1788–89). “Absent a
showing of harm, we refuse to unwind the decision[] below.”
Id.
Claimant has presented neither evidence nor a plausible
theory to show that the removal provision caused her any
harm. Claimant does not assert, for example, that the
President took an interest in her claim or that the
Commissioner directed the Appeals Council to decide her
case in a particular way because of the statutory limits on the
President’s removal authority. Nothing in the record
suggests any link whatsoever between the removal provision
and Claimant’s case. See, e.g., Collins, 141 S. Ct. at 1802
(Kagan, J., concurring in part) (opining that “I doubt the
mass of [Social Security Administration] decisions—which
would not concern the President at all—would need to be
undone” because “[w]hen an agency decision would not
capture a President’s attention, his removal authority could
not make a difference”); Ramos v. Comm’r, No. 1:20-cv-
01606-EPG, 2022 WL 105108, at *3–4 (E.D. Cal. Jan. 11,
2022) (collecting cases and concluding that the claimant
“has not shown any connection between the denial of
benefits and the unconstitutional removal provision”).
During oral argument, Claimant asserted that the
unconstitutional removal provision affected the “expected
value” of Claimant’s claim because the Commissioner
theoretically could act in more ways than he could have
without the removal restriction. That argument is not
KAUFMANN V. KIJAKAZI 13
particularized to Claimant; if we agreed, then it would
require us to undo all disability decisions made by the Social
Security Administration while the removal provision was
operative. We reject the argument. As an initial matter, the
reasoning is illogical. Even accepting the questionable
premise that the Commissioner might act differently with
respect to an individual claimant, the Commissioner just as
readily might act in a claimant’s favor as in a claimant’s
disfavor. So, without some evidence of how the
Commissioner was inclined to exercise expanded authority
with respect to the particular claimant, we fail to see how
even the theoretical “expected value” of Claimant’s case
would change. In any event, the argument rests solely on
speculation that the Commissioner theoretically might have
acted differently. Claimant cannot meet her burden of
showing actual harm with speculation alone. Cf. Munns v.
Kerry, 782 F.3d 402, 411 (9th Cir. 2015) (holding that
speculation cannot satisfy Article III standing requirements).
In sum, we hold that the removal provision in 42 U.S.C.
§ 902(a)(3) violates separation of powers; that the provision
is severable; and that, unless a claimant demonstrates actual
harm, the unconstitutional provision has no effect on the
claimant’s case. Because Claimant has not shown actual
harm, we uphold the Commissioner’s decision.
B. Rule 59(e) Motion
Federal Rule of Civil Procedure 59(e) provides that a
party may file a “motion to alter or amend a judgment”
within “28 days after the entry of the judgment.” Fed. R.
Civ. P. 59(e). “[A] Rule 59(e) motion is an ‘extraordinary
remedy, to be used sparingly in the interests of finality and
conservation of judicial resources.’” Wood v. Ryan,
759 F.3d 1117, 1121 (9th Cir. 2014) (per curiam) (quoting
Kona Enters., Inc. v. Est. of Bishop, 229 F.3d 877, 890 (9th
14 KAUFMANN V. KIJAKAZI
Cir. 2000)). “A district court may grant a Rule 59(e) motion
if it ‘is presented with newly discovered evidence,
committed clear error, or if there is an intervening change in
the controlling law.’” Id. (quoting McDowell v. Calderon,
197 F.3d 1253, 1255 (9th Cir. 1999) (en banc)) (emphasis
omitted). District courts have “considerable discretion” in
deciding Rule 59(e) motions. Turner v. Burlington N. Santa
Fe R.R. Co., 338 F.3d 1058, 1063 (9th Cir. 2003).
Here, the district court initially held that the ALJ erred
by failing to explain adequately his conclusion that
Claimant’s daily activities conflicted with her testimony
about the extent of her limitations. See, e.g., Burrell v.
Colvin, 775 F.3d 1133, 1138 (9th Cir. 2014) (holding that
the ALJ erred because “the ALJ did not elaborate on which
daily activities conflicted with which part of Claimant’s
testimony”). In describing the ALJ’s explanation, the
district court’s initial ruling cited only a single page of the
ALJ’s decision. The Commissioner timely filed a Rule 59(e)
motion, asserting that the court had clearly erred.
Commendably, the district court candidly confessed clear
error and granted the Commissioner’s Rule 59(e) motion.
Looking to all the pages of the ALJ’s decision, the court held
that, contrary to its original ruling, the ALJ had, in fact,
explained which daily activities conflicted with which parts
of Claimant’s testimony.
We reject Claimant’s argument that the district court
abused its considerable discretion. 1 To the contrary, the
1
In the context of an appeal involving a Social Security disability
ruling, it is difficult to see how a Rule 59(e) error could warrant relief
independently. We may affirm on any ground supported by the record,
and we review de novo the district court’s assessment of an ALJ’s
decision. So, even if a district court erred in granting a Rule 59(e)
KAUFMANN V. KIJAKAZI 15
court’s ruling fell squarely within the Rule’s parameters.
Rule 59(e) permits, if not encourages, a district court to
correct its own clear errors. Conservation of judicial
resources supports a court’s confessing error before the issue
reaches us.
The district court accurately assessed the bounds of its
discretion and acted well within those limits. The court
correctly noted that “Rule 59(e) provides an ‘extraordinary
remedy, to be used sparingly in the interests of finality and
conservation of judicial resources.’” (Quoting Carroll v.
Nakatani, 342 F.3d 934, 945 (9th Cir. 2003)). And the court
recognized that “[t]he Court may alter or amend a judgment
under Rule 59(e) where the Court has committed clear
error.”
We agree with the Commissioner and the court that, in
its original decision, the court clearly erred by overlooking
the ALJ’s full explanation. Looking to the entire record,
motion, we ordinarily would not reverse unless we also concluded, on
independent review, that substantial evidence did not support the ALJ’s
decision or that the ALJ had legally erred. In other words, in most if not
all Social Security cases, it serves little purpose to ask the somewhat
convoluted question whether the district court abused its discretion in
holding that it earlier had committed clear error. The only meaningful
question is whether the ALJ’s decision was sound. Cf. Rinchuso v.
Brookshire Grocery Co., 944 F.3d 725, 730 (8th Cir. 2019) (“The district
court abused its discretion in denying Rinchuso’s Rule 59(e) motion after
its order granting summary judgment misidentified a method of proof as
a theory of recovery. Even so, abuse of discretion in denying a Rule
59(e) motion is harmless if the court did not err in assessing the
underlying claim.”); Smith v. Wal-Mart Stores, Inc., 167 F.3d 286, 289
(6th Cir. 1999) (reviewing de novo the denial of a Rule 59(e) motion
from the grant of summary judgment). We nevertheless address the issue
as presented to us, in order to reaffirm that a district court properly grants
a Rule 59(e) motion when its initial ruling contained a clear error.
16 KAUFMANN V. KIJAKAZI
substantial evidence supports the ALJ’s conclusion that
Claimant’s testimony about the extent of her limitations
conflicted with the evidence of her daily activities, such as
sewing, crocheting, and vacationing, and supports the ALJ’s
finding that Claimant’s testimony was not fully credible.
See, e.g., Ghanim v. Colvin, 763 F.3d 1154, 1165 (9th Cir.
2014) (“Engaging in daily activities that are incompatible
with the severity of symptoms alleged can support an
adverse credibility determination.”).
AFFIRMED.