Purnell v. Colvin

Filing 36

ORDER denying 33 Defendant's Motion to Amend/Correct Judgment. Signed by Magistrate Judge Eileen S Willett on 9/9/16. (DXD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Krista Purnell,

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No. CV-14-02716-PHX-ESW
Plaintiff,

ORDER

v.

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Carolyn W. Colvin, Acting Commissioner
of the Social Security Administration,

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Defendant.

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Pending before the Court is Defendant’s “Motion to Alter or Amend Judgment
Pursuant to Federal Rule of Civil Procedure 59(e)” (Doc. 33). For the reasons set forth
herein, the Motion (Doc. 33) is denied.
I. DISCUSSION
A. Federal Rule of Civil Procedure 59(e)
Under Rule 59(e) of the Federal Rules of Civil Procedure, a party may file a
“motion to alter or amend a judgment.” The Ninth Circuit has explained that
[s]ince specific grounds for a motion to amend or alter are not
listed in the rule, the district court enjoys considerable
discretion in granting or denying the motion.” McDowell v.
Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999) (en banc)
(per curiam) (internal quotation marks omitted).
But
amending a judgment after its entry remains “an
extraordinary remedy which should be used sparingly.” Id.

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(internal quotation marks omitted). In general, there are four
basic grounds upon which a Rule 59(e) motion may be
granted: (1) if such motion is necessary to correct manifest
errors of law or fact upon which the judgment rests; (2) if
such motion is necessary to present newly discovered or
previously unavailable evidence; (3) if such motion is
necessary to prevent manifest injustice; or (4) if the
amendment is justified by an intervening change in
controlling law. Id.

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Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1112 (9th Cir. 2011). Rule 59(e) “may not be

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used to relitigate old matters, or to raise arguments or present evidence that could have

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been made prior to the entry of judgment.” Exxon Shipping Co. v. Baker, 554 U.S. 471,

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485 n.5 (2008) (citation omitted).
B. Analysis of Defendant’s Motion (Doc. 33)
1. First Ground for Rule 59(e) Relief

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Defendant argues that the Court “erroneously concluded that a presumption of

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continuing disability applies in the Plaintiff’s favor in medical improvement cases

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involving a closed period of disability, contrary to the 1984 amendment to the Social

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Security Act, establishing this determination is to be made on a ‘neutral’ basis.” (Doc. 33

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at 3). This is similar to the argument made in Defendant’s Response to Plaintiff’s

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Opening Brief:
At the outset, Plaintiff incorrectly asserts the ALJ failed to
meet the Commissioner’s burden of producing evidence
sufficient to overcome a presumption of continuing disability
in this case. See Tr. 241 (claiming the Commissioner must
rebut a ‘presumption of continuing disability’). Since the
1984 Amendments to the Social Security Act addressing the
medical improvement standard, however, Congress has
specifically rejected the concept of presumed continuing
disability.

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(Doc. 25 at 5-6). Defendant’s argument is contrary to the definition of a presumption of

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law. Defendant’s argument is also contrary to legislative history pertaining to the 1984

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amendments to the Social Security Act, which is summarized below.

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From 1969 to 1976, it was the Social Security Administration’s (“SSA”) policy to
not terminate benefits for anyone whose condition had not improved since the initial
determination of eligibility. H.R. Rep. No. 98–618, 98th Cong., 2d Sess. 1984, 1984 WL
37436, at *9. But that policy was reversed in 1976 in internal SSA directives. Id. In the
1970s, the rate of benefit terminations due to a beneficiary’s recovery or return to work
significantly fell. Id. at *9-10. “As a result, congressional interest was expressed,
beginning in 1978, in requiring SSA to look at people who had been receiving benefits
for a long time to see if they were still eligible.” Id. at 10.

Legislators found that

“SSA’s standard procedures for re-examining only a small number of beneficiaries
seemed to be inadequate in light of the declining number of benefit terminations for
return to work.” Id.
In 1980, “Social Security Disability Amendments made a number of significant
changes in disability program operations.” Id. “[T]he legislation required a dramatic
increase in the amount of management review and oversight of the program, with the
objective of tightening central federal control . . . and re-invigorating ongoing review of
current beneficiaries.” Id. One amendment required review at least once every three
years of all beneficiaries not permanently disabled, beginning in January 1982. Id. The
Department of Health and Human Services moved up the implementation date of that
amendment and accelerated the rate of review. Id.
“Beginning in March 1981, SSA began sending out about three times the normal
number of [continuing disability investigation] cases . . . .” Id. In 1984, the rate of
termination in those cases on initial review was about forty-five percent. Id. The reexamination of large numbers of disability beneficiaries “resulted in termination of
benefits for many beneficiaries whose medical condition [had] not changed substantially
since they were allowed benefits.” Id. at *11.
SSA’s policies were severely criticized in federal courts, “particularly in the Ninth
Circuit Court of Appeals which ha[d] ruled twice that SSA must demonstrate either
medical improvement or (in the later ruling) clear and specific error in the original award,
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in order to terminate disability benefits.” Id. In Finnegan v. Matthews, 641 F.2d 1340,
1344-45 (9th Cir. 1981), the Ninth Circuit Court of Appeals held that in determining
whether to terminate an individual’s disability benefits, an ALJ must “focus on whether a
clear and specific error had been committed during the previous state determination
of eligibility and on whether the recipient's medical condition has materially improved.”
In Patti v. Schweiker, 669 F.2d 582, 587 (9th Cir. 1982), the Ninth Circuit Court of
Appeals held that a determination that a claimant is disabled gives rise to a presumption
that the disability is continuing and SSA must “meet or rebut” that presumption with
substantial evidence that the claimant’s condition has improved.
As the Ninth Circuit explained in a 1983 decision, the Secretary of the Department
of Health and Human Services 1 announced that she did “not acquiesce in” and would not
follow the holdings in Patti and Finnegan. Lopez v. Heckler, 713 F.2d 1432, 1434 (9th
Cir. 1983). “Instead, the Secretary has ordered that Social Security disability benefits be
terminated on the ground of lack of disability regardless of whether the recipient’s
medical condition has improved since the time of the initial disability determination.” Id.
(citing Social Security Ruling 81–6) (emphasis added).
In 1984, legislators recognized that the problems with SSA’s review of ongoing
benefits arose, “at least in part, because the criteria for termination of benefits as a result
of review were [left] unstated in the law.” H.R. Rep. No. 98–618, 1984 WL 37436, at
*11. SSA “had wide discretion to apply whatever standards it deemed appropriate.” Id.
Legislators acknowledged that the standards for obtaining disability benefits had become
stricter, and that applying those stricter standards to existing beneficiaries resulted in the
elimination of “benefits for many more beneficiaries than was anticipated when the 1980
amendments were enacted.” Id.

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At the time, SSA was part of the Department of Health and Human Services.
SSA became an independent agency in 1995. See Social Security Independence and
Program Improvement Act of 1994, Pub. L. No. 103-296, 108 Stat. 1464 (1994).
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The 1984 amendments to the Social Security Act “provide[d] for the first time in
the Social Security statute a specific standard that must be met before a disability
beneficiary can be found to be not disabled.”

Id. at *9.

Contrary to Defendant’s

assertion, the amendments reflect “Congress’s decision in 1984 to codify the presumption
that Patti created.” Warren v. Bowen, 804 F.2d 1120, 1121 (9th Cir. 1986) (emphasis
added).
Defendant takes issue with a footnote in the Court’s Order that explains that “[a]n
inference is not the same as a presumption.” After citing definitions provided by an
online dictionary, Defendant states: “It makes no sense to say Congress prohibited
inferences, but still allows presumptions.” Like Defendant, courts and laymen sometimes
use the term “presumption” as a synonym for an inference. 2 HANDBOOK OF FED. EVID. §
301:6 (7th ed. 2015). But a presumption of law is different from an inference. “An
inference is distinguished from a presumption in that in an inference, the existence of
Fact B may be deduced from Fact A by the ordinary rules of reasoning and logic whereas
in a presumption, the existence of Fact B must be assumed because of a rule of law.”
Jack B. Weinstein, Margaret A. Berger & Joseph M. McLaughlin, WEINSTEIN’S FEDERAL
EVIDENCE, §301.02[1] (2010). Even after a presumption has been rebutted, the factual
question at issue remains to be decided by a fact finder who may choose to draw factual
inferences from the evidence. See, e.g., In re Yoder, 758 F.2d 1114, 1119 n.8 (6th Cir.
1985) (“The facts giving rise to the presumption often give rise to an inference that
remains and may still be considered by the factfinder.”); Nunley v. City of Los Angeles,
52 F.3d 792, 796-97 (9th Cir. 1995) (holding that a district court erred in denying request
to reopen the time to appeal a judgment by improperly applying the rebuttable
presumption that the movant received the judgment, and stating that “Regardless of the
quantum of evidence necessary to rebut the presumption, the movant still bears the
burden of proving non-receipt [of notice of the entry of judgment]. . . . Even after the
“bubble” of presumption has “burst,” the factual question of receipt remains and may be

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decided in favor of receipt by a fact finder who may choose to draw inferences of receipt
from the evidence of mailing, in spite of contrary evidence.”) (citing Fed. R. Evid. 301).
Congress decided that the medical improvement determination is to be made
neutrally, “without any initial inference as to the presence or absence of disability being
drawn from the fact that the [claimant] has previously been determined to be disabled.”
Prohibiting such an inference does not eliminate SSA’s burden to produce evidence
showing that a beneficiary’s medical condition has improved and does not eliminate
SSA’s obligation to follow other regulatory procedures in making its determination. 2
For the above reasons, Defendant’s first ground for Rule 59(e) relief is found to be
meritless.

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2. Defendant’s Second Ground for Rule 59(e) Relief
The ALJ determined that a medical improvement occurred as of October 27, 2013.

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In the section explaining the reasons for this finding, the ALJ stated:
As discussed in detail below, the consultative examiners
findings revealed that there was medical improvement in
[Plaintiff’s] ability to function. The examining physician
observed that [Plaintiff’s] muscle strength in all motor groups
was intact with no weakness or atrophy noted (Exhibit 14F).
There was no muscle spasm or tenderness observed and the
examining physician concluded that [Plaintiff] retained the
residual functional capacity to perform work at all exertional
levels.

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(A.R. 23).

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improvement in the section in which the finding was stated. The ALJ’s phrase “as

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discussed in detail below” was a reference to the analysis of Plaintiff’s RFC after October

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26, 2013.

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The ALJ did not provide any additional reasons for finding medical

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This burden is acknowledged in the ALJ’s decision where the ALJ wrote: “In
order to find that the claimant’s disability does not continue through the date of decision,
the undersigned must show that medical improvement has occurred which is related to
the claimant’s ability to work, or that an exception applies (20 CFR 404.1594(a)).” (A.R.
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In its Order, the Court stated that an “ALJ may not move to the evaluation of a
claimant’s RFC without first finding medical improvement, and the Act does not
authorize an ALJ to find medical improvement without making the comparison of prior
and current medical evidence.” (Doc. 32 at 10) (citation omitted). Because the ALJ in
this case proceeded to the RFC assessment without first satisfying the ALJ’s obligation
under 20 C.F.R. § 404.1594(b)(7) to compare Plaintiff’s prior and current medical
evidence in determining whether medical improvement has occurred, the Court found
harmful error. Defendant asserts that the Court has applied a “narrow approach” that is in
direct contravention of Attmore v. Colvin, --- F.3d ----, 2016 WL 3563596, at *3 (9th Cir.
June 30, 2016), which the Ninth Circuit issued shortly after the Court’s Order.
Attmore does not contravene the proposition in the Court’s Order that an “ALJ
may not move to the evaluation of a claimant’s RFC without first finding medical
improvement, and the Act does not authorize an ALJ to find medical improvement
without making the comparison of prior and current medical evidence.”

Nor does

Attmore contravene the application of that principle in closed period cases. Indeed,
Attmore instructs that “an ALJ should ‘engage[ ] in the same decision-making process’ in
closed period cases as in ordinary termination cases.” 2016 WL 3563596, at *3 (quoting
Waters v. Barnhart, 276 F.3d 716, 719 (5th Cir. 2002)). Thus, the Ninth Circuit held that
“in closed period cases, the ALJ should compare the medical evidence used to determine
the claimant was disabled with the medical evidence existing at the time of possible
medical improvement.” Id.
Further, the administrative decision at issue in Attmore is distinguishable from the
ALJ’s decision in this case. The Ninth Circuit recounted the ALJ’s decision in Attmore
as follows:
Based on [the] medical evidence, the ALJ determined
Attmore was disabled between April 15, 2007 and March 23,
2009. At issue here is the ALJ's medical improvement
finding, which rested on two conclusions. The ALJ first
detailed Dr. Wolf's treatment notes from March 23, 2009 and
concluded Attmore had “benefited from mental health
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treatment and medication management and ha[d] experienced
gradual improvement in her symptoms.” The ALJ then cited
additional treatment notes and concluded Attmore had
“shown improvement in the area of social functioning.”
Based in part on the medical improvement finding, the ALJ
awarded Attmore benefits only for the closed period from
April 15, 2007 through March 23, 2009.

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Id. at *2.

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On appeal, Attmore argued that the decision contained harmful error because it did

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not specifically identify the baseline for comparison when determining that medical

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improvement had occurred. However, the Ninth Circuit observed that the ALJ “made

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extensive findings” that Attmore was disabled from April 15, 2007 through March 23,

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2009. Id. at *4. In finding medical improvement as of March 24, 2009, the ALJ noted

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that the claimant “benefited from mental health treatment and medication management”

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and “experienced gradual improvement in her symptoms.”

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concluded that “the ALJ’s references to ‘improvement’ implied a comparison to

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Attmore’s condition during the disability period, which the ALJ had just discussed.” Id.

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The Ninth Circuit inferred that the ALJ compared the medical evidence from the date of

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possible improvement to the medical evidence used to determine that Attmore was

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disabled and found no legal error. Id.

Id.

The Ninth Circuit

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Here, unlike the administrative decision at issue in Attmore, the ALJ did not

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discuss recent medical records before making the finding that medical improvement had

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occurred.

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examiners [sic] findings revealed that there was medical improvement . . . .” Although

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the ALJ discussed recent medical records when discrediting Plaintiff’s testimony

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regarding the intensity, persistence, and limiting effects of her symptoms, the Court

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cannot draw a “specific and legitimate” inference that in finding medical improvement,

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the ALJ compared the recent medical evidence to the medical evidence used to determine

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that Plaintiff was disabled from September 28, 2012 through October 26, 2013. The

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Court’s Order gives meaning to the plain language of the ALJ’s decision—medical

Instead, the ALJ stated: “As discussed in detail below, the consultative

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improvement was found based on the October 26, 2013 examination with a consulting
physician, who did not review Plaintiff’s medical records. See Brown-Hunter v. Colvin,
806 F.3d 487, 492 (9th Cir. 2015) (explaining that although courts do not fault the agency
“merely for explaining its decision with ‘less than ideal clarity,’ the agency must clearly
state its reasoning because the court can affirm the agency’s decision to deny benefits
only on the grounds invoked by the agency) (quoting Treichler v. Comm’r of Soc. Sec.,
775 F.3d 1090, 1099 (9th Cir. 2014). The ALJ’s decision does not adequately show that
the ALJ applied proper legal standards in finding medical improvement. The Court finds
that Defendant’s second ground for Rule 59(e) relief is without merit.

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II. CONCLUSION
Defendant has not presented a valid basis for granting Rule 59(e) relief.
Accordingly,
IT IS ORDERED denying Defendant’s “Motion to Alter or Amend Judgment
Pursuant to Federal Rule of Civil Procedure 59(e)” (Doc. 33).
Dated this 9th day of September, 2016.

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