Hudnall v. Dudek

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOHN S. HUDNALL, No. 23-3727

D.C. No.

Plaintiff - Appellant,

4:22-cv-02864-

DMR

v.

OPINION

LELAND DUDEK, Acting

Commissioner of Social Security,

Defendant - Appellee.

Appeal from the United States District Court

for the Northern District of California

Donna M. Ryu, Chief Magistrate Judge, Presiding

Argued and Submitted November 19, 2024

San Jose, California

March 7, 2025

Before: Susan P. Graber, Michelle T. Friedland, and Patrick

J. Bumatay, Circuit Judges.

Opinion by Judge Bumatay

2 HUDNALL V. DUDEK

SUMMARY *

Social Security Disability Benefits

The panel affirmed the district court’s judgment

affirming the denial of John Hudnall’s application for

disability benefits, and held that under the Social Security

Administration’s new regulations promulgated in 2017,

Administrative Law Judges (“ALJs”) are no longer required

to provide germane reasons when discounting the testimony

of lay witnesses.

Prior to the 2017 regulations, this court’s precedent

required ALJs to give germane reasons to each witness when

discounting nonmedical lay testimony in Social Security

proceedings. The 2017 regulations provide that ALJs are not

required to articulate how they considered evidence from

nonmedical sources.

The panel held that because the revised Social Security

regulations covering nonmedical evidence fall within the

Commissioner of Social Security’s broad authority to

promulgate evidentiary rules and nothing indicates that they

are “arbitrary and capricious,” they are the new governing

law. The regulations are clearly irreconcilable with this

court’s precedent requiring “germane reasons” to reject lay

witness testimony. Because the regulations constitute an

intervening higher authority, the germane reasons precedent

no longer applies to claims filed on or after March 27, 2017,

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

HUDNALL V. DUDEK 3

and in considering such claims, ALJs need not explain their

reasons for discounting evidence from nonmedical sources.

With this new governing framework in mind, the panel

held that the ALJ did not err in discounting without

explanation evidence that Hudnall’s wife provided regarding

his limitations.

The panel resolved all other issues in a concurrently filed

memorandum disposition.

COUNSEL

Harvey P. Sackett (argued), Sackett & Associates, San

Francisco, California; Betsy R. Shepard, Dallas, Georgia; for

Plaintiff-Appellant.

Shea L. Bond (argued) and Daniel P. Talbert, Special

Assistant United States Attorneys; Mathew W. Pile,

Associate General Counsel; Office of Program Litigation,

Office of the General Counsel; Ismail J. Ramsey, United

States Attorney; Social Security Administration, Baltimore,

Maryland; for Defendant-Appellee.

4 HUDNALL V. DUDEK

OPINION

BUMATAY, Circuit Judge:

For many years, our court has had a rule for

administrative law judges (“ALJs”) in Social Security

proceedings: “If the ALJ wishes to discount the testimony of

the lay witnesses, he must give reasons that are germane to

each witness.” Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir.

1993). But in 2017, the Social Security Administration

revamped its regulations. The amended regulations now

undermine our “germane reason” requirement. See 20

C.F.R. § 404.1520c(d). Because of this regulatory change,

we hold that our “germane reasons” requirement no longer

applies to Social Security claims filed on or after March 27,

2017. See Revisions to Rules Regarding the Evaluation of

Medical Evidence, 82 Fed. Reg. 5844, 5844 (Jan. 18, 2017).

I.

John Hudnall worked as a financial advisor for fifteen

years. After losing his job, Hudnall became paranoid and

accused his wife of trying to poison him. His wife took him

to the hospital, where he was placed on a psychiatric hold.

Hudnall’s condition improved, and he was released a little

over a week later. For several months after his release,

Hudnall received treatment for major depressive disorder,

anxiety, and insomnia. But between 2016 and 2020, Hudnall

did not seek treatment for his mental health condition. In

2020, when he resumed treatment, his condition improved

once again.

On March 10, 2020, shortly before he restarted

treatment, Hudnall applied for disability benefits under the

Social Security Act. In his application, Hudnall stated that

HUDNALL V. DUDEK 5

he had stopped working on May 1, 2015, because of his

psychological condition. The Social Security

Administration denied Hudnall’s application and his request

for reconsideration. Hudnall then sought a hearing before an

ALJ.

Hudnall submitted, along with other medical evidence, a

“third-party” “function report” prepared by his wife, Miyuki

Sato. In the questionnaire, Sato explained that Hudnall has

had severe depression since 2015 and that he has not been

able to work because “he has challenges in focusing,

socializing, and self care.” Sato described that Hudnall has

trouble staying on task, takes longer than usual to do chores,

and must be reminded to shave or get a haircut. She also

detailed his struggles with organizing his financial affairs

and paying bills on time. But Sato also stated that Hudnall

could drive, shop at the grocery store, count change, and use

a checkbook.

The ALJ considered Sato’s lay evidence together with

the medical evidence. The ALJ accurately summarized

Sato’s observations about Hudnall’s limitations. The ALJ

noted Sato’s statements related to his “alleged disability,”

but the ALJ emphasized that Sato reported that Hudnall

could drive a car, walk 30-40 minutes daily, shop online and

telephonically, and socialize with his immediate family.

Relying on the medical evidence, the ALJ found that

Hudnall could perform a full range of work with several

limitations and, ultimately, found him not disabled under the

Social Security Act. In determining Hudnall’s residual

functional capacity, the ALJ relied expressly on the medical

evidence and on Hudnall’s self-reported activities but did not

expressly articulate how she considered Sato’s evidence.

6 HUDNALL V. DUDEK

Hudnall sought review of the ALJ’s decision. The

district court granted summary judgment for the Social

Security Administration. Hudnall timely appeals that

decision. We have jurisdiction under 28 U.S.C. § 1291, and

we review the district court’s decision de novo. Woods v.

Kijakazi, 32 F.4th 785, 788 (9th Cir. 2022). In this opinion,

we address only Hudnall’s challenge to the ALJ’s rejection

of his wife’s lay evidence. We resolve all other issues in a

concurrently filed memorandum disposition.

II.

A.

Our longstanding precedent has required ALJs to give

germane reasons for discounting the testimony of lay

witnesses. See Dodrill, 12 F.3d at 919. Under that

precedent, “competent lay witness testimony ‘cannot be

disregarded without comment.’” Molina v. Astrue, 674 F.3d

1104, 1114 (9th Cir. 2012) (simplified). Although we did

not require discussion of every witness “on a[n]

individualized, witness-by-witness basis,” to reject lay

witness’s testimony, the ALJ had to point to “germane

reasons” for doing so. Id. Our “germane reasons”

requirement was “in accord” with the then-existing Social

Security regulations, which required the ALJ to consider

testimony from a claimant’s family and friends. Id.

But the Social Security Administration promulgated new

regulations in 2017. See 82 Fed. Reg. 5844 (Jan. 18, 2017).

Under the new regulations, nonmedical sources—including

lay testimony from friends and family—are still considered

in determining the “consistency” of “medical opinion(s) or

prior administrative medical finding(s).” 20 C.F.R.

§ 404.1520c(c)(2); see id. § 404.1502(e) (defining

“nonmedical source”). But the regulation provides that

HUDNALL V. DUDEK 7

ALJs “are not required to articulate how [they] considered

evidence from nonmedical sources.” Id. § 404.1520c(d).

These regulations apply to claims filed on or after March 27,

2017. See 82 Fed. Reg. 5844 (Jan. 18, 2017).

Given this new provision, our “germane reasons”

precedent is no longer “in accord” with Social Security

regulations. Although our precedent demands explanation

for the rejection of each lay witness’s testimony, the

governing regulations now expressly allow ALJs to discount

nonmedical evidence without explanation. See Molina, 674

F.3d at 1114 (recognizing that “there is a distinction between

what an adjudicator must consider and what the adjudicator

must explain in the disability determination or decision.”

(simplified)). Ordinarily, only an en banc court may

overrule Ninth Circuit precedent. See Miller v. Gammie, 335

F.3d 889, 892–93 (9th Cir. 2003) (en banc). But that is not

the case when our precedent’s “reasoning or theory . . . is

clearly irreconcilable with the reasoning or theory of

intervening higher authority.” Woods, 32 F.4th at 790

(simplified). And amended Social Security regulations may

qualify as “intervening higher authority.” Id.

The new Social Security regulations dealing with the

treatment of nonmedical sources constitute an intervening

higher authority. Under the Social Security Act, “the

Commissioner has wide latitude ‘to make rules and

regulations and to establish procedures . . . to carry out [the

statutory] provisions,’ in particular regulations governing

‘the nature and extent of the proofs and evidence . . . to

establish the right to benefits.’” Id. (quoting 42 U.S.C.

§ 405(a)); see also Bowen v. Yuckert, 482 U.S. 137, 145

(1987) (observing the Commissioner’s “exceptionally broad

authority” to promulgate evidentiary rules, which may be set

aside only if they exceed the agency’s statutory authority or

8 HUDNALL V. DUDEK

are “arbitrary and capricious”). Because the new regulations

covering nonmedical evidence fall within the

Commissioner’s broad authority and nothing indicates that

they are “arbitrary and capricious,” they are the new

governing law.

The revised Social Security regulations are clearly

irreconcilable with our precedent requiring “germane

reasons” to reject lay witness testimony. Thus, our

“germane reasons” precedent no longer applies to claims

filed on or after March 27, 2017, and in considering such

claims, ALJs need not explain their reasons for discounting

evidence from nonmedical sources, such as the claimant’s

friends and family.

B.

With the new governing framework in mind, the issue

here is straightforward. Hudnall’s wife provided a

questionnaire describing his limitations. Although the ALJ

summarized her statement, Hudnall faults the ALJ for not

providing reasons for rejecting the limitations she described.

Hudnall argues that it was reversible error to fail to give

germane reasons for rejecting this lay evidence. But because

ALJs “are not required to articulate how [they] considered

evidence from nonmedical sources,” 20 C.F.R.

§ 404.1520c(d), the ALJ did not err in discounting the

spousal evidence without explanation.

AFFIRMED.