Brewes v. Commissioner of Social Security Administration

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MINDY BREWES, 

Plaintiff-Appellant, No. 11-35216

v.

 D.C. No.

6:09-cv-00748-HO

COMMISSIONER OF SOCIAL SECURITY

ADMINISTRATION, OPINION

Defendant-Appellee.



Appeal from the United States District Court

for the District of Oregon

Michael R. Hogan, District Judge, Presiding

Argued and Submitted

March 9, 2012—Portland, Oregon

Filed June 14, 2012

Before: William A. Fletcher, Raymond C. Fisher and

Jay S. Bybee, Circuit Judges.

Opinion by Judge Fisher

6841

6844 BREWES v. COMMISSIONER SSA

COUNSEL

Jeffrey H. Baird (argued), Seattle, Washington; Alan Stuart

Graf (argued), Summertown, Tennessee, for the appellant.

Dwight C. Holton, United States Attorney; Kelly A. Zusman,

Assistant United States Attorney; David Morado, Regional

Chief Counsel, Seattle Region X; Jordan D. Goddard

(argued), Assistant Regional Counsel, Seattle, Washington,

for the appellee.

OPINION

FISHER, Circuit Judge:

Mindy Brewes appeals an order of the district court affirm-

ing the Commissioner of Social Security’s final decision

denying her disability benefits under Title II of the Social

Security Act. See 42 U.S.C. §§ 401-434. We must decide,

among other things, whether the district court should have

considered evidence Brewes did not submit to the Administra-

tive Law Judge (ALJ) but submitted for the first time to the

BREWES v. COMMISSIONER SSA 6845

Appeals Council, which accepted and considered the new evi-

dence but declined to review the ALJ’s decision.

The Commissioner contends that when the Appeals Coun-

cil denies review of an ALJ’s decision, evidence that was not

before the ALJ is not part of the administrative record before

the district court, even if that evidence was submitted to and

accepted by the Appeals Council. We disagree. We hold that

when a claimant submits evidence for the first time to the

Appeals Council, which considers that evidence in denying

review of the ALJ’s decision, the new evidence is part of the

administrative record, which the district court must consider

in determining whether the Commissioner’s decision is sup-

ported by substantial evidence. Considering the record as a

whole, including the evidence Brewes submitted to the

Appeals Council, we conclude that the Commissioner’s deci-

sion is not supported by substantial evidence. We reverse and

remand for an immediate award of benefits.

Background

Brewes applied for disability benefits in June 2005. She

claims that she has been disabled since February 2004 as a

result of depression, bipolar disorder, anxiety and agoraphobia.1

The record before the ALJ catalogued Brewes’ medical his-

tory from 2002 to 2007. During this period, multiple mental

health specialists diagnosed Brewes with some combination

of major depressive or bipolar disorder, anxiety disorder, and

panic disorder with agoraphobia. In addition to her regular

therapy appointments, Brewes’ doctors treated her with a bat-

1

Before the Commissioner, Brewes also claimed disability resulting

from chronic back pain, and submitted medical records relating to a vari-

ety of physical ailments. After reviewing the evidence of Brewes’ physical

impairments, the ALJ found that Brewes’ physical conditions did not limit

her ability to perform basic work activities. Brewes does not contest this

finding on appeal.

6846 BREWES v. COMMISSIONER SSA

tery of psychopharmacological medications. Unfortunately,

these regimens were of limited success. Brewes’ providers’

treatment notes show that she suffered from persistent and

severe symptoms that significantly curtailed her daily activi-

ties. Brewes often slept 12 hours a day, experienced frequent

panic attacks, could not accomplish household chores and

rarely left the house because doing so exacerbated her anxiety

and panic attacks. When she did go out, she was almost

always with her husband. Over the years, Brewes’ doctors

assigned her Global Assessment of Function (GAF) scores

that ranged from a low of 40 — indicating major functional

impairment in several areas, such as work, family relations,

judgment or thinking — to a high of 60, indicating moderate

difficulty in social or occupational functioning. See Diagnos-

tic and Statistical Manual of Mental Disorders 34 (rev. 4th

ed. 2000).2

Brewes’ hearing testimony, in February 2007, was largely

consistent with the medical record. Describing her symptoms,

Brewes testified,

I have a very hard time with anxiety, constant panic

attacks. When it switches from anxiety to depres-

sion, I have no will to do anything. I cry all the time.

I don’t even take care of myself. It’s hard to even get

up and just take a shower. And when I’m anxious, all

I want to do is lay in a ball and try not to freak out.

Brewes explained that she relied on her husband to handle

most of the household chores because she became too over-

whelmed just thinking about doing them herself. Her day con-

sisted primarily of lying in bed with the television going in

the background; she also took her medication, ate and went to

2

“A GAF score is a rough estimate of an individual’s psychological,

social, and occupational functioning used to reflect the individual’s need

for treatment.” Vargas v. Lambert, 159 F.3d 1161, 1164 n.2 (9th Cir.

1998).

BREWES v. COMMISSIONER SSA 6847

doctors appointments. She testified that she rarely left the

house, and almost never on her own.

The ALJ denied Brewes’ application for disability benefits.

He found that she suffered from major depressive disorder,

panic disorder with agoraphobia, mixed personality disorder

and a history of opioid dependence, all of which qualified as

“severe impairments,” but concluded that Brewes’ statements

concerning the intensity, persistence and limiting effects of

her symptoms were “not entirely credible.” He found that

Brewes retained the residual functional capacity to perform

“simple one-, two-, three-step work with limited interaction

with co-workers and no public interaction.” Relying on the

testimony of a vocational expert, the ALJ found that such

work was available in the national economy for a person of

Brewes’ age, education and experience. He thus concluded

that Brewes was not disabled and denied her application for

disability benefits.

Brewes sought Appeals Council review of the ALJ’s deci-

sion. She submitted additional evidence, which the Appeals

Council received and made part of the record. In April 2009,

the Council denied Brewes’ request for review. It noted that

it “considered the additional evidence [and] found that this

information [did] not provide a basis for changing the Admin-

istrative Law Judge’s decision.” Notice of Appeals Council

Action 1-2 (Apr. 27, 2009).

Brewes appealed to the district court, which affirmed the

denial of benefits. Citing a concurring opinion in an unpub-

lished decision of this court, the district court refused to con-

sider the additional evidence that was before the Appeals

Council but not before the ALJ. Brewes timely appealed. We

have jurisdiction pursuant to 42 U.S.C. § 405(g) and 28

U.S.C. § 1291.

Standard of Review

We review de novo the district court’s judgment upholding

the Commissioner’s denial of social security benefits. See

6848 BREWES v. COMMISSIONER SSA

Vernoff v. Astrue, 568 F.3d 1102, 1105 (9th Cir. 2009). We

must “independently determine whether the Commissioner’s

decision (1) is free of legal error and (2) is supported by sub-

stantial evidence.” Smolen v. Chater, 80 F.3d 1273, 1279 (9th

Cir. 1996).

Discussion

I.

To begin, we address whether the district court should have

considered the evidence that Brewes submitted for the first

time to the Appeals Council. Brewes contends that although

this evidence was not before the ALJ, it was properly before

the district court because the Appeals Council incorporated it

into the administrative record and considered it in deciding

not to review the ALJ’s decision. The Commissioner, in con-

trast, argues that the new evidence is not part of the adminis-

trative record and that the district court could consider it only

if Brewes showed (1) that the evidence was material and (2)

that she had good cause for failing to raise it before the ALJ.

This question has split the circuits. See Higginbotham v.

Barnhart, 405 F.3d 332, 335-36 (5th Cir. 2005) (discussing

the circuit split).

The Social Security Act provides for federal court review

of final decisions of the Commissioner. In such a proceeding,

“the Commissioner . . . shall file a certified copy of the tran-

script of the record including the evidence upon which the

findings and decision complained of are based.” 42 U.S.C.

§ 405(g). Based on “the pleadings and transcript of the

record,” the court hearing the case may enter “a judgment

affirming, modifying, or reversing the decision of the Com-

missioner . . . with or without remanding the cause for a

rehearing.” Id.

[1] We have held that we do not have jurisdiction to

review a decision of the Appeals Council denying a request

BREWES v. COMMISSIONER SSA 6849

for review of an ALJ’s decision, because the Appeals Council

decision is a non-final agency action. See Taylor v. Comm’r

of Soc. Sec. Admin., 659 F.3d 1228, 1231 (9th Cir. 2011).

When the Appeals Council declines review, “the ALJ’s deci-

sion becomes the final decision of the Commissioner,” id.,

and the district court reviews that decision for substantial evi-

dence, based on the record as a whole, see Tackett v. Apfel,

180 F.3d 1094, 1097 (9th Cir. 1999). The question, then, “is

whether the ‘whole’ record includes . . . evidence submitted

to the Appeals Council, or just . . . evidence that was before

the ALJ.” O’Dell v. Shalala, 44 F.3d 855, 858 (10th Cir.

1994).

[2] We are persuaded that the administrative record

includes evidence submitted to and considered by the Appeals

Council. The Commissioner’s regulations permit claimants to

submit new and material evidence to the Appeals Council and

require the Council to consider that evidence in determining

whether to review the ALJ’s decision, so long as the evidence

relates to the period on or before the ALJ’s decision. See 20

C.F.R. § 404.970(b).3 Claimants need not show “good cause”

before submitting new evidence to the Appeals Council. See

id.; see also O’Dell, 44 F.3d at 858. The Council will grant

the request for review “if it finds that the administrative law

judge’s action, findings, or conclusion is contrary to the

weight of the evidence currently of record.” 20 C.F.R.

§ 404.970(b) (emphasis added). “Because the regulations

require the Appeals Council to review the new evidence, this

3

20 C.F.R. § 404.970(b) provides:

If new and material evidence is submitted, the Appeals Council

shall consider the additional evidence only where it relates to the

period on or before the date of the administrative law judge hear-

ing decision. The Appeals Council shall evaluate the entire record

including the new and material evidence submitted if it relates to

the period on or before the date of the administrative law judge

hearing decision. It will then review the case if it finds that the

administrative law judge’s action, findings, or conclusion is con-

trary to the weight of the evidence currently of record.

6850 BREWES v. COMMISSIONER SSA

new evidence must be treated as part of the administrative

record.” Perez v. Chater, 77 F.3d 41, 45 (2d Cir. 1996).

In addition, the Commissioner’s decision is not final until

the Appeals Council denies review or, if it accepts a case for

review, issues its own findings on the merits. See 20 C.F.R.

§§ 404.955, 404.981; see also Bass v. Soc. Sec. Admin., 872

F.2d 832, 833 (9th Cir. 1989) (per curiam) (holding that there

is no final decision until the Appeals Council either grants or

denies review); Perez, 77 F.3d at 44 (same); O’Dell, 44 F.3d

at 859 (same). Thus, as a practical matter, the final decision

of the Commissioner includes the Appeals Council’s denial of

review, and the additional evidence considered by that body

is “evidence upon which the findings and decision com-

plained of are based.” 42 U.S.C. § 405(g); see also Higgin-

botham, 405 F.3d at 337 (“It follows that the record before the

Appeals Council constitutes part of the record upon which the

final decision is based.”).

[3] This conclusion is consistent with our own case law. In

Ramirez v. Shalala, 8 F.3d 1449, 1451-52 (9th Cir. 1993), we

concluded that it was appropriate to consider both the ALJ’s

decision and additional evidence submitted to the Appeals

Council. We noted that although the Council declined to

review the ALJ’s decision, “it reached this ruling after consid-

ering the case on the merits; examining the entire record,

including the additional material; and concluding that the

ALJ’s decision was proper and that the additional material

failed to ‘provide a basis for changing the hearing decision.’ ”

Id. at 1452. The same is true here. See Notice of Appeals

Council Action 1-2 (Apr. 27, 2009) (“[W]e considered the

additional evidence [and] found that this information does not

provide a basis for changing the Administrative Law Judge’s

decision.”). Following Ramirez, we have routinely considered

evidence submitted for the first time to the Appeals Council

to determine whether, in light of the record as a whole, the

ALJ’s decision was supported by substantial evidence. See,

e.g., Lingenfelter v. Astrue, 504 F.3d 1028, 1030 n.2 (9th Cir.

BREWES v. COMMISSIONER SSA 6851

2007) (noting that when the Appeals Council considers new

evidence in denying a claimant’s request for review, the

reviewing court considers both the ALJ’s decision and the

additional evidence submitted to the Council); Harman v.

Apfel, 211 F.3d 1172, 1180 (9th Cir. 2000) (“We properly

may consider the additional materials because the Appeals

Council addressed them in the context of denying Appellant’s

request for review.”).

[4] The Commissioner urges that these decisions are not

binding precedent as to this issue because whether the addi-

tional evidence was properly before the court was not litigated

in these cases. He maintains that we simply assumed that the

additional evidence was properly before us. Because we agree

with Ramirez’s approach, which has been followed consis-

tently in the published opinions of this circuit, we need not

determine the precedential force of these prior decisions.

Even assuming the Commissioner is correct that they are not

binding, we expressly adopt the approach set forth in

Ramirez.

[5] Accordingly, we hold that when the Appeals Council

considers new evidence in deciding whether to review a deci-

sion of the ALJ, that evidence becomes part of the administra-

tive record, which the district court must consider when

reviewing the Commissioner’s final decision for substantial

evidence. See Tackett, 180 F.3d at 1097-98 (holding that a

court reviewing the Commissioner’s decision must consider

the record as a whole). The district court erred when it refused

to consider the new evidence that Brewes submitted to the

Appeals Council and that the Council considered in denying

Brewes’ request for review.

II.

[6] Here, when we consider the record as a whole, includ-

ing Brewes’ additional evidence, we conclude that the ALJ

erred in denying benefits. The ALJ’s disability determination

6852 BREWES v. COMMISSIONER SSA

expressly relied on the testimony of the vocational expert,

who testified that an individual of Brewes’ age, educational

background, past work experience and residual functional

capacity could be a photocopying machine operator, laundry

worker or janitor. Relying on this testimony, the ALJ con-

cluded that Brewes could perform work that existed in signifi-

cant numbers in the national economy and therefore she was

not disabled. The vocational expert also testified, however,

that if a person with Brewes’ characteristics were to miss two

or more days of work per month, either because she was

unable to come to work or because she was unable to be pro-

ductive at work, she would be unemployable.

[7] The additional evidence Brewes submitted to the

Appeals Council was directly responsive to the vocational

expert’s testimony. In a joint letter, Brewes’ treating psychol-

ogist, Karen Dimalanta, and her mental health nurse practi-

tioner, Carol Stampfer, opined that “it is likely [Brewes]

would miss quite a few days a month from even a simple job,

as she would not be able to leave home to go to work and if

she did make it to work her concentration and attention would

be poor due to her symptoms.” They explained Brewes’ diag-

noses, including bipolar disorder. They identified her many

medications and reported that despite Brewes’ “compliance

with medications and therapy, her symptoms have decreased

minimally and impair her daily activities, relationships, and

ability to work.” Dimalanta and Stampfer reported, based on

their review of Brewes’ medical records, that her symptoms

had been consistent for about a decade, and they found no evi-

dence of malingering or exaggeration.

The Commissioner argues that the Dimalanta/Stampfer let-

ter is not material because it is inconsistent with Dimalanta’s

treatment notes. First, we do not agree with the Commission-

er’s contention that Brewes must show that the letter meets

§ 405(g)’s materiality standard. Section 405(g) materiality is

not at issue here because that standard applies only to new

evidence that is not part of the administrative record and is

BREWES v. COMMISSIONER SSA 6853

presented in the first instance to the district court. See 42

U.S.C. § 405(g) (“The [district] court may . . . at any time

order additional evidence to be taken before the Commis-

sioner, . . . 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 pro-

ceeding.”). As discussed above, evidence submitted to and

considered by the Appeals Council is not new but rather is

part of the administrative record properly before the district

court. Here, the Appeals Council accepted Brewes’ proffered

new evidence and made it part of the record, apparently con-

cluding that it was material within the meaning of 20 C.F.R.

§ 404.970(b). See supra note 3. The Commissioner does not

contend that the Council erred by considering this additional

evidence.

Second, we see no inconsistency between the Dima-

lanta/Stampfer letter and Dimalanta’s treatment notes. In the

letter, Dimalanta and Stampfer noted that Brewes’ symptoms

were sometimes so severe that she was unable to attend ther-

apy sessions but that she was “compliant with treatment” and

“participated in her treatment on a consistent basis.” Although

the Commissioner highlights a September 2006 treatment

note in which Dimalanta reported that Brewes had “not fol-

lowed through on recommendations for the most part,” subse-

quent notes reflect Brewes’ engagement with her treatment

and her efforts to use the coping skills and make the behav-

ioral changes that Dimalanta suggested. Furthermore, diffi-

culty following through on treatment recommendations is

entirely consistent with Brewes’ impairments. As Dimalanta

noted in November 2006, Brewes “has some very difficult

cognitive distortions to overcome [and] is emotionally para-

lyzed in regard to making progress due to the enourmous [sic]

questions that she is unable to answer.” The Commissioner’s

proffered inconsistencies are simply not inconsistent.

[8] In sum, the vocational expert testified before the ALJ

that the three kinds of jobs for which Brewes was qualified

6854 BREWES v. COMMISSIONER SSA

would not tolerate absences of two days a month. Dimalanta

and Stampfer’s opinion that Brewes would likely miss multi-

ple days each month was not contradicted in the record. Tak-

ing the entire record into account, including the

Dimalanta/Stampfer letter, we hold that the Commissioner’s

decision denying Brewes disability benefits is not supported

by substantial evidence.

III.

“We have discretion to remand a case either for additional

evidence and findings or to award benefits. We may direct an

award of benefits where the record has been fully developed

and where further administrative proceedings would serve no

useful purpose.” Smolen, 80 F.3d at 1292 (citation omitted).

[9] Further proceedings are not necessary here; there are

no outstanding issues to be resolved. See id. The complete

record shows that Brewes is likely to miss multiple days of

work per month. The vocational expert testified that a person

with Brewes’ characteristics who would miss that much work

was not employable. A finding of disability is therefore

required. See Lingenfelter, 504 F.3d at 1041 (considering

additional evidence submitted to the Appeals Council and

reversing and remanding for an award of benefits where voca-

tional expert testified that claimant’s limitations would render

him unemployable); Ramirez, 8 F.3d at 1455 (reversing and

remanding for an award of benefits based on new evidence

submitted to the Appeals Council).

Conclusion

[10] We hold that the district court erred by not consider-

ing the evidence Brewes submitted to the Appeals Council.

We reverse the Commissioner’s decision and remand for a

payment of benefits.

REVERSED AND REMANDED FOR PAYMENT OF

BENEFITS.