recognizing that an ALJ must 22 || “provide specific, germane reasons for discounting lay witness testimony”
How later courts described this case
- recognizing that an ALJ must 22 || “provide specific, germane reasons for discounting lay witness testimony”
- declining to find 18 || harmless an ALJ’s failure to consider lay evidence where it “is neither redundant 19 || with [the claimant’s] testimony, nor is it discredited by the same evidence that 20 || purportedly discredits [the claimant’s] testimony”
- stating that remand 10 || for an award of benefits is inappropriate where “there is conflicting evidence, and 11 || not all essential factual issues have been resolved”
- “We are constrained to review the reasons the ALJ asserts.”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
10
11 | KENNETH V.,! Case No. 5:18-cv-00822-MAA
Plaintiff,
13 MEMORANDUM DECISION AND
v. ORDER REVERSING DECISION OF
14 THE COMMISSIONER AND
REMANDING FOR FURTHER
15 || ANDREW M. SAUL. ADMINISTRATIVE PROCEEDINGS
Commissioner of Social Security,
1
Defendant.
17
18 On April 20, 2018, Plaintiff filed a Complaint seeking review of the
19 || Commissioner’s final decision denying his applications for disability insurance
20 || benefits and supplemental security income pursuant to Titles II and XVI of the
21 || Social Security Act. This matter is fully briefed and ready for decision. For the
22 || reasons discussed below, the Commissioner’s final decision is reversed, and this
23 || matter is remanded for further administrative proceedings.
24 | ———
| Plaintiff's name is partially redacted in accordance with Federal Rule of Civil
25 || Procedure 5 2(o)(2)( ) and the recommendation of the Committee on Court
Administration and Case Management of the Judicial Conference of the United
tates.
27 |? The Commissioner of Social Security is substituted as the Defendant pursuant to
38 Federal Rule of Civil Procedure 25(d).
1 ADMINISTRATIVE BACKGROUND
2 On December 24, 2013, Plaintiff protectively filed applications for disability
3 || insurance benefits and supplemental security income, alleging disability beginning
4 || on January 24, 2011. (Administrative Record [AR] 29, 1981, 1994.) Plaintiff
5 || alleged disability because of a torn rotator cuff in his right shoulder, high blood
6 || pressure, torn ligaments, an inability to lift, and severe headaches. (AR 1981,
7 || 1994.) After the applications were denied initially and on reconsideration, Plaintiff
8 || requested a hearing before an Administrative Law Judge (“ALJ”). (AR 29, 2027-
9 || 28.) Ata hearing held on February 4, 2016, at which Plaintiff appeared with
10 || counsel, the ALJ heard testimony from Plaintiff, a medical expert, and a vocational
11 || expert. (AR 1930-78.)
12 In a decision issued on April 28, 2016, the ALJ denied Plaintiff's claim after
13 || making the following findings pursuant to the Commissioner’s five-step evaluation.
14 || (AR 29-41.) Plaintiff had not engaged in substantial gainful activity since his
15 || alleged onset date of January 24, 2011. (AR 31.) He had the following severe
16 || impairments: “right shoulder tear/impingement; left shoulder pain; lumbar strain;
17 || organic brain disorder (possible stroke or withdraw seizures); mood
18 || disorder/depression as per [the Department of Veterans Affairs (“VA”)]; and
19 || personality disorder and substance abuse in remission as per [Plaintiffs]
20 || testimony.” (Ud.) He did not have an impairment or combination of impairments
21 || that met or medically equaled the requirements of one of the impairments from the
22 || Commissioner’s Listing of Impairments. (AR 32.) He had a residual functional
23 || capacity to perform less than the full range of light work. (AR 33.) Based on this
24 || residual functional capacity, Plaintiff would be unable to perform his past relevant
25 || work as an electrician/journeyman. (AR 39.) However, he could perform other
26 || work in the national economy, specifically, the occupations of garment sorter and
27 || assembler of small products. (AR 40.) Accordingly, the ALJ concluded that
28 || Plaintiff was not disabled as defined by the Social Security Act. (AR 41.)
1 When he requested review by the Appeals Council, Plaintiff submitted
2 || several pages of additional evidence. (AR 46-1978.) On March 8, 2018, the
3 || Appeals Council denied Plaintiff's request for review. (AR 1-8.) Thus, the ALJ’s
4 || decision became the final decision of the Commissioner.
5
6 DISPUTED ISSUE
7 The parties raise the following disputed issue: whether the ALJ properly
8 || considered the report of a vocational rehabilitation counselor from the VA. (ECF
9 || No. 31, Parties’ Joint Stipulation [“Joint Stip.”] at 4.)
10
11 STANDARD OF REVIEW
12 Under 42 U.S.C. § 405(g), the Court reviews the Commissioner’s final
13 || decision to determine whether the Commissioner’s findings are supported by
14 || substantial evidence and whether the proper legal standards were applied. See
15 || Treichler v. Commissioner of Social Sec. Admin., 775 F.3d 1090, 1098 (9th Cir.
16 || 2014). Substantial evidence means “more than a mere scintilla” but less than a
17 || preponderance. See Richardson v. Perales, 402 U.S. 389, 401 (1971); Lingenfelter
18 || v. Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007). Substantial evidence is “such
19 || relevant evidence as a reasonable mind might accept as adequate to support a
20 || conclusion.” Richardson, 402 U.S. at 401. The Court must review the record as a
21 || whole, weighing both the evidence that supports and the evidence that detracts from
22 || the Commissioner’s conclusion. Lingenfelter, 504 F.3d at 1035. Where evidence is
23 || susceptible of more than one rational interpretation, the Commissioner’s
24 || interpretation must be upheld. See Orn v. Astrue, 495 F.3d 625, 630 (9th Cir.
25 || 2007).
26 ///
27
28 || ///
1 DISCUSSION
|| A. Lay Witness’s Statement.
3 1. Legal Standard.
4 Plaintiff challenges the ALJ’s consideration of a report written by Stephen
5 || Long, a vocational rehabilitation counselor at the VA. (Joint Stip. at 6; see also AR
6 || 1579-80, 2430.) According to the regulations in effect when Plaintiff filed his
7 || applications, a vocational rehabilitation counselor is not classified as an acceptable
8 || medical source, but rather is classified as an “other” source within a class of lay
9 || witnesses that includes counselors, developmental center workers, social workers,
10 || and relatives, among others. See 20 C.F.R. §§ 404.1513(d) (2013), 416.913(d)
11 | (2013).
12 “In determining whether a claimant is disabled, an ALJ must consider lay
13 || witness testimony concerning a claimant’s ability to work.” Bruce v. Astrue, 557
14 F.3d 1113, 1115 (th Cir. 2009) (quoting Stout v. Commissioner, Social Sec.
15 |) Admin., 454 F.3d 1050, 1053 (9th Cir. 2006)) (internal quotation marks omitted).
16 || Indeed, an ALJ is “required to consider and comment upon competent lay
17 || testimony, as it concerned how [a claimant’s] impairments impact his ability to
18 || work.” Bruce, 557 F.3d at 1115. Such testimony “cannot be disregarded without
19 || comment.” Jd. (quoting Nguyen v. Chater, 100 F.3d 1462, 1467 (9th Cir. 1996)
20 || Gnternal quotation marks omitted)). See also Taylor v. Comm’r of Social Sec.
21 || Admin., 659 F.3d 1228, 1234 (9th Cir. 2011) (recognizing that an ALJ must
22 || “provide specific, germane reasons for discounting lay witness testimony”).
23 However, an ALJ’s failure to provide germane reasons to reject a lay
24 || witness’s statement may be harmless error. See Molina v. Astrue, 674 F.3d 1104,
25 | 1122 (9th Cir. 2012). An ALJ’s failure to state any reasons at all to reject a lay
26 || witness’ statement may be harmless error where the lay witness “does not describe
27 || any limitations not already described by the claimant, and the ALJ’s well-supported
28 || reasons for rejecting the claimant’s testimony apply equally well to the lay witness
1 || testimony.” See id. at 1117. Similarly, an ALJ’s statement of reasons that are
2 || legally insufficient to reject a lay witness’s statement may be harmless error if the
3 | lay witness’s statement is similar to the claimant’s testimony, which the ALJ
4 || properly discredited. See, e.g., Sievers v. Berryhill, 734 F. App’x 467, 470 (9th Cir.
5 || 2018); Watkins v. Commissioner of Social Sec. Admin., 611 F. App’x 903, 904 (9th
6 || Cir. 2015).
7
8 2. Background.
9 In January 2011, while he was working as an electrician, Plaintiff injured his
10 right shoulder, right arm, upper back, and neck when he tried to pick up a 200-
11 || pound transformer. (AR 2295.) In December 2012, Plaintiff had surgery on his
12 || right shoulder. (AR 2266.)
13 In December 2013, Plaintiff was hospitalized for two weeks for alcohol
14 || withdrawal and “significant deconditioning.” (AR 2339.) In June 2014, a
15 || neuropsychological evaluation revealed that Plaintiff had a “Mild Neurocognitive
16 || Disorder due to multiple etiologies,” which VA physicians interpreted to mean that
17 || his “ability to learn and retain new information over time is within the impaired
18 || range of functioning.” (AR 2431; see also AR 2432.) Plaintiff also has a VA
19 || disability rating of 50 percent based on a mood disorder. (AR 2439.)
20 In July 2014, Mr. Long, the vocational rehabilitation counselor at the VA,
21 || submitted a statement about Plaintiff's medical history and employment prospects.
22 || (AR 1579-80, 2430.) In pertinent part, Mr. Long wrote that Plaintiff's physical
23 || impairments, relating to his 2011 workplace accident, resulted in limited function of
24 || the shoulder that prevents overhead work. (AR 1579.) Mr. Long also wrote that
25 || Plaintiffs psychological impairments included depression and substance abuse
26 || disorders in remission, which had side effects such as chronic headaches and loss of
27 || short-term and long-term memory. (/d.) With respect to Plaintiff's ability to work,
28 || Mr. Long wrote the following:
1 [Plaintiffs] [history of traumatic brain injury] and difficulty as a
2 historian in addition to his lack of experience outside of electrical and
3 air conditioning fields suggest his access to the labor market is very
4 limited. His chronic [headaches] which affect concentration also
5 compromise his ability to [return to work]. [Plaintiff] has current,
6 marketable skills, . . . but his physical limitations from [the right]
7 shoulder restrict [him] from returning to his career as an electrician.
8 While his memory-concentration issues secondary to [a traumatic
9 brain injury] and [headaches] impact his ability to pursue alternative
10 career paths. [Plaintiff] is not considered a candidate for formal
11 vocational rehabilitation counseling at this time or capable of returning
12 to competitive employment. He may be a candidate for avocational
13 activities at the medical center to occupy his time with more health
14 enhancing activity.
15 || (AR 1580, 2430.)
16 Thus, Mr. Long recommended that Plaintiff eventually be considered for
17 || vocational rehabilitation therapy activities such as gardening, lapidary work, and
18 || computer clinics. Ud.) In January 2015, Plaintiff began vocational rehabilitation
19 || therapy activities at the VA by enrolling in a woodworking clinic. (AR 1260,
20 || 1273.) Plaintiffs performance in the woodworking clinic consistently was rated as
21 || “good.” (AR 816, 825, 852, 920, 939, 957, 974, 1003, 1024, 1058, 1079, 1102,
22 || 1161, 1194, 1247.)
23 In his decision, the ALJ described and assessed Mr. Long’s statement as
24 || follows:
25 The next opinion considered is from Steve Long, M.S.,
26 vocational rehab counselor. In a partial report signed in July 2014, Mr.
27 Long concluded that [Plaintiffs] limitations from right shoulder
28 restrict [Plaintiff] from returning to his career as an electrician.
1 Furthermore, [Plaintiffs] memory, concentration, issues secondary to
2 [traumatic brain injury] and headaches affect his ability to pursue
3 alternative career paths. He is not considered capable of returning to
4 competitive employment. [AR 2430.] The undersigned gives the
5 opinion of [Mr.] Long [sic], as the opinion is not from an acceptable
6 medical source. (20 C.F.R. 404.1513(a)(e) and 416.913(a)(e)).
7 | (AR 38.)
8 The ALJ characterized Mr. Long’s statement as “a partial report” (AR 38)
9 || because Plaintiff had submitted only one page of it to the ALJ (AR 2430). Plaintiff
10 || later submitted the complete report, consisting of two pages, for the first time to the
11 || Appeals Council. (AR 1579-80.) The Appeals Council’s order in response was
12 || somewhat ambiguous about whether Mr. Long’s complete report was incorporated
13 || into the record, because the order stated both that the new evidence “does not show
14 || areasonable probability that it would change the outcome of the decision” but also
15 || that the Appeals Council “did not consider and exhibit this evidence.” (AR 2.)
16 || However, the Court concurs with the decisions of other district courts in the Ninth
17 || Circuit that the most plausible interpretation of the Appeals Council’s language is
18 || that the new evidence was incorporated into the record. See, e.g., McLaughlin v.
19 || Saul, 2019 WL 3202806, at *5 (E.D. Cal. July 16, 2019) (collecting cases).
20 || Because the Appeals Council incorporated the complete report into the record, the
21 || Court considers it in reviewing the ALJ’s decision for substantial evidence. See
22 || Brewes v. Commissioner of Social Sec. Admin., 682 F.3d 1157, 1163 (9th Cir.
23 || 2012).
24
25 3. Analysis.
26 The ALJ stated that he “gives the opinion of [Mr.] Long, as the opinion is not
27 || from an acceptable medical source.” (AR 38.) The ALJ’s assessment is missing a
28 || critical phrase and thus omits the ALJ’s finding as to how much weight he afforded
1 || to the lay witness’s statement. However, even assuming that the ALJ intended to
2 |) state that he had given Mr. Long’s opinion “no weight” or “little weight,” the ALJ’s
3 || reason for doing so was not legally sufficient.
4 The only reason the ALJ stated to reject Mr. Long’s statement was that it “is
5 || not from a medical source.” (AR 38.) But a lay witness’s status as a non-medical
6 || source is an improper ground to disqualify him from offering a statement about a
7 || claimant’s ability to work. See Bruce, 557 F.3d at 1116 (“A lay person, .. . though
8 || not a vocational or medical expert, was not disqualified from rendering an opinion
9 || as to how [the claimant’s] condition affects his ability to perform basic work
10 || activities.”); Haagenson v. Colvin, 656 F. App’x 800, 802 (9th Cir. 2016) (“The
11 || only reason the ALJ offered for rejecting their [lay] opinions is that they are not
12 || ‘acceptable medical sources’ within the meaning of the federal regulation.
13 || However, the regulation already presumes that nurses and counselors are non-
14 |) acceptable medical sources, yet still requires the ALJ to consider them as ‘other
15 || sources.””); see also Hayes v. Berryhill, 721 F. App’x 648, 651 (9th Cir. 2018)
16 || (finding erroneous an ALJ’s rejection of a vocational counselor’s report because he
17 || was not an acceptable medical source, but also concluding that the error was
18 || harmless). Thus, this was not a germane reason to reject Mr. Long’s statement.
19 || Although the Commissioner states other possible reasons for rejecting Mr. Long’s
20 |) statement (Joint Stip. at 10-12), the Court may not consider them because the ALJ
21 || did not state those reasons. See Connett vy. Barnhart, 340 F.3d 871, 874 (9th Cir.
22 || 2003) (“We are constrained to review the reasons the ALJ asserts.”).
23 The failure to state a germane reason to reject Mr. Long’s lay witness
24 || statement was not harmless error. See Molina, 674 F.3d at 1115. Mr. Long’s
25 || statement was not substantively similar to Plaintiff's testimony, but rather was
26 || broader. Thus, the ALJ’s reasons for rejecting Plaintiff's testimony (assuming they
27 || were clear and convincing) would not have applied as well to Mr. Long’s statement.
28 || For example, Mr. Long’s conclusion that Plaintiff's employment prospects were
1 || “very limited” (AR 1580) was based on his specialized knowledge of vocational
2 || rehabilitation and the labor market, a foundation that Plaintiff lacked. Moreover,
3 | Mr. Long clearly linked Plaintiffs limited employment prospects, particularly from
4 || amental standpoint, to Plaintiffs difficulties as a historian, his deficits in
5 || concentration and memory, and his chronic headaches. (AR 1580.) In comparison,
6 || Plaintiffs testimony was vague: he was unfamiliar with the medical evidence and
7 || had difficulty articulating clearly what his limitations, particularly his mental
8 || limitations, were and why they rendered him incapable of any work. (AR 1953-
9 |) 60.)
10 Because Mr. Long’s statement was qualitatively dissimilar from Plaintiffs
11 || testimony, and because the ALJ’s reasons for rejecting Plaintiffs testimony were
12 || not responsive to the grounds for Mr. Long’s statement, the error in the assessment
13 || of Mr. Long’s statement was not rendered harmless by the ALJ’s findings on the
14 | whole. See Burns v. Berryhill, 731 F. App’x 609, 613 (9th Cir. 2018) (finding an
15 || ALJ’s error in assessing lay testimony was not harmless where the lay witness
16 |) attested to a number of limitations beyond those reported by the claimant himself);
17 || see also Nowling v. Colvin, 813 F.3d 1110, 1122 (8th Cir. 2016) (declining to find
18 || harmless an ALJ’s failure to consider lay evidence where it “is neither redundant
19 || with [the claimant’s] testimony, nor is it discredited by the same evidence that
20 || purportedly discredits [the claimant’s] testimony”). Thus, reversal is warranted.
21
22 | B. Remand for further administrative proceedings.
23 Ninth Circuit case law “precludes a district court from remanding a case for
24 || an award of benefits unless certain prerequisites are met.” Dominguez v. Colvin,
25 | 808 F.3d 403, 407 (9th Cir. 2015) (citations omitted). “The district court must first
26 || determine that the ALJ made a legal error, such as failing to provide legally
27 || sufficient reasons for rejecting evidence.” Jd. “If the court finds such an error, it
28 || must next review the record as a whole and determine whether it is fully developed,
1 || is free from conflicts and ambiguities, and all essential factual issues have been
2 || resolved.” Jd. (citation and internal quotation marks omitted).
3 Although the Court has found an absence of germane reasons to discredit the
4 || lay witness’s statement that was not harmless error, the record on the whole is not
5 || fully developed, and essential factual issues remain outstanding. The discredited
6 || evidence raises factual conflicts about Plaintiff’s level of functioning that “should
7 || be resolved through further proceedings on an open record before a proper
8 || disability determination can be made by the ALJ in the first instance.” See Brown-
9 || Hunter, 806 F.3d at 496; see also Treichler, 775 F.3d at 1101 (stating that remand
10 || for an award of benefits is inappropriate where “there is conflicting evidence, and
11 || not all essential factual issues have been resolved”) (citation omitted); Strauss v.
12 || Commissioner of the Social Sec. Admin., 635 F.3d 1135, 1138 (9th Cir. 2011)
13 || (same where the existing record does not clearly demonstrate that the claimant is
14 || disabled within the meaning of the Social Security Act).
15 Therefore, based on its review and consideration of the entire record, the
16 || Court has concluded on balance that a remand for further administrative
17 || proceedings pursuant to sentence four of 42 U.S.C. § 405(g) is warranted here. It is
18 || not the Court’s intent to limit the scope of the remand.
19
20 ORDER
21 It is ordered that Judgment be entered reversing the decision of the
22 || Commissioner of Social Security and remanding this matter for further
23 || administrative proceedings.
24
25 || DATED: August |4 , 2019
26 /
MARIA
on UNITED ES MAGISTRATE JUDGE
10