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.