Mikki v. Berryhill

Filing 21

REPORT AND RECOMMENDATION re 16 MOTION for Summary Judgment filed by Naseem Mikki, 17 Cross MOTION for Summary Judgment filed by Nancy Berryhill. Objections to R&R due by 7/25/2018. Replies due by 8/1/2018. Signed by Magistrate Judge Mitchell D. Dembin on 7/11/18.(dlg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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NASEEM A. MIKKI,

Case No.: 17-cv-01103-GPC-MDD
Plaintiff,

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v.

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NANCY A. BERRYHILL, Acting
Commissioner of Social Security,

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REPORT AND
RECOMMENDATION ON MOTION
AND CROSS MOTION FOR
SUMMARY JUDGMENT

Defendant.

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Plaintiff Naseem A. Mikki (“Plaintiff”) filed this action pursuant to 42

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U.S.C. § 405(g) for judicial review of the final administrative decision of the

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Commissioner of the Social Security Administration (“Commissioner”)

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denying Plaintiff’s application for Title XVI Supplemental Security Income

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(“SSI”) under the Social Security Act (“Act”). (A.R. 173-82).1

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For the reasons expressed herein, the Court recommends the case be
REMANDED to the ALJ for further proceedings.

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“A.R.” refers to the Certified Administrative Record filed on August 18, 2017, and located
at ECF No. 8.
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I. BACKGROUND

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Plaintiff was born November 22, 1992. (A.R. 26). Plaintiff received

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supplemental security income benefits based on disability as a child. (A.R.

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82). He was 5 years old on the alleged disability onset date of March 1, 1997.

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(A.R. 34). Plaintiff was 23-years-old, which categorized him as younger

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individual at the time the instant application for benefits was filed. (A.R. 82);

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20 C.F.R. §§ 404.1563, 416.963.

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A.

Procedural History

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When Plaintiff attained age 18, eligibility for continued disability

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benefits was redetermined, as required under the rules for establishing

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disability in adults. (A.R. 82) On July 1, 2011, it was determined Plaintiff

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was no longer disabled as of September 30, 2011. (Id.). On February 29,

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2012, Plaintiff filed a written request for a hearing on the denial of his

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application for benefits. (Id). 20 C.F.R. 416.1429 et seq. Although informed of

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the right to representation, Plaintiff appeared and testified without the

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assistance of an attorney or other representative at a hearing held May 16,

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2013, in San Diego, California. (A.R. 82). The ALJ determined Plaintiff’s

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disability ended on September 30, 2011, and Plaintiff had not become

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disabled again since that date. (A.R. 90). Plaintiff requested a review of the

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decision by the Appeals Council. On September 27, 2013, Plaintiff (now

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represented by counsel) moved to withdraw his request for review of the first

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application and simultaneously filed a second application for benefits. On

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October 22, 2013, the Appeals Council granted the request making the ALJ’s

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decision of May 31, 2013 the final decision in Plaintiff’s first application.

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(A.R. 96).; 20 C.F.R. 416.1471(a).

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Plaintiff’s second application for benefits alleged his disability began
March 1, 1997. (A.R. 34). Plaintiff was represented by attorney Vijay Patel.
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(Id). The claim was denied initially on January 7, 2014, and again upon

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reconsideration on April 4, 2014. (Id). On May 9, 2014, Plaintiff filed a

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written request for hearing. (Id). 20 C.F.R. 416.1429 et seq. Plaintiff

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appeared and testified at a hearing held on March 22, 2016, in San Diego,

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California. (Id). Gloria J. Lasoff, an impartial vocational expert testified.

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Plaintiff’s mother, Ilham Mikki, also appeared and testified. (Id).
On May 18, 2016, the ALJ issued a written decision that found Plaintiff

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not disabled under section 1614(a)(3)(A) of the Act. (A.R. 42). On April 19,

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2017, the ALJ’s decision became the final decision of the Commissioner when

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the Appeals Council denied Plaintiff’s request for review. (A.R. 1-3). On May

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31, 2017, Plaintiff filed this Complaint seeking judicial review of the

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Commissioner’s decision. (ECF No. 1). On August 18, 2017, Defendant filed

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an Answer and lodged the administrative record with the Court. (ECF Nos.

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7, 8). On October 30, 2017, Plaintiff filed A Motion for Summary Judgment.

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(ECF No. 16). On November 16, 2017, the Commissioner filed a cross Motion

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for Summary Judgment and a Response in Opposition to Plaintiff’s Motion

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for Summary Judgment. (ECF Nos. 17, 18). On December 1, 2017, Plaintiff

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filed a Response in Opposition to the Acting Commissioner’s Cross Motion for

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Summary Judgment. (ECF No. 19).
II. DISCUSSION

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A.

Legal Standard
Sections 405(g) and 1383(c)(3) of the Social Security Act allow

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unsuccessful applicants to seek judicial review of a final agency decision of

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the Commissioner. 42 U.S.C. §§ 405(g), 1383(c)(3). The scope of judicial

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review is limited in that a denial of benefits will not be disturbed if it is

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supported by substantial evidence and contains no legal error. Id.; see also

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Batson v. Comm’r Soc. Sec. Admin, 359 F.3d 1190, 1993 (9th Cir. 2004).
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Substantial evidence means “more than a mere scintilla” but less than a

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preponderance. Sandqathe v. Chater, 108 F.3d 978, 980 (9th Cir. 1997). “[I]t

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is such relevant evidence as a reasonable mind might accept as adequate to

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support a conclusion.” Id. (quoting Andrews v. Shalala, 53 F.3d 1035, 1039

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(9th Cir. 1995)). The court must consider the record as a whole, weighing

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both the evidence that supports and detracts from the Commissioner’s

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conclusions. Desrosiers v. Sec’y of Health & Human Services, 846 F.2d 573,

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576 (9th Cir. 1988). If the evidence supports more than one rational

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interpretation, the court must uphold the ALJ’s decision. Batson, 359 F.3d

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at 1193. When the evidence is inconclusive, “questions of credibility and

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resolution of conflicts in the testimony are functions solely of the Secretary.”

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Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982).

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Even if a reviewing court finds that substantial evidence supports the

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ALJ’s conclusions, the court must set aside the decision if the ALJ failed to

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apply the proper legal standards in weighing the evidence and reaching his or

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her decision. Batson, 359 F.3d at 1193. Section 405(g) permits a court to

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enter a judgment affirming, modifying or reversing the Commissioner’s

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decision. 42 U.S.C. § 405(g). The reviewing court may also remand the

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matter to the Social Security Administration for further proceedings. Id.

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The Commissioner uses a five-step sequential evaluation process to

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determine whether an applicant is disabled and entitled to benefits. 20 C.F.R.

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§ 416.920(a)(4). First, the Plaintiff must not be engaged in substantial,

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gainful activity. 20 C.F.R. § 416.920(a)(4)(i), (b). Second, Plaintiff must have

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a “severe” impairment. Id. § 416.920(a)(4)(ii), (c). Third, the medical

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evidence of Plaintiff’s impairment is compared to a list of impairments that

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are presumed severe enough to preclude work. 20 C.F.R. § 416.920(a)(4)(iii),

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(d). If Plaintiff’s impairment meets or is equivalent to the requirements for
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one of the listed impairments, benefits are awarded. Id. If Plaintiff’s

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impairment does not meet or is not equivalent to the requirements of a listed

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impairment, the analysis continues to a fourth and possibly fifth step and

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considers Plaintiff’s residual functional capacity.
At the fourth step, Plaintiff’s relevant work history is considered along

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with Plaintiff’s residual functional capacity. If Plaintiff can perform

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Plaintiff’s past relevant work, benefits are denied. Id. § 416.920(a)(4)(iv), (e).

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At the fifth step, if Plaintiff is found unable to perform Plaintiff’s past

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relevant work, the issue is whether Plaintiff can perform any other work that

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exists in the national economy, considering Plaintiff’s age, education, work

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experience, and residual functional capacity. Id., §416.920(a)(4)(v), (g). If

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Plaintiff cannot do other work that exists in the national economy, benefits

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are awarded. Id. § 416.920(f).

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B.

The ALJ’s Decision

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Plaintiff alleged he was disabled since March 1, 1997, due to mental

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disorders. (A.R. 38). In the 2013 decision, the ALJ found Plaintiff did not

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have a severe impairment or combination of impairments because his

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physical and mental impairments, considered singly and in combination, did

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not significantly limit his ability to perform basic work activities. (A.R. 42).

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Consequently, in the current decision, the ALJ applied a presumption of non-

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disability. It is well settled that final findings of non-disability made by an

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administrative law judge require a claimant who reapplies for benefits to

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prove changed circumstances to overcome a presumption of continuing non-

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disability. Chavez v. Bowen, 844 F.2d 691, 693-94 (9th Cir. 1988). A finding

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of non-disability creates a presumption that the Plaintiff is capable of

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substantial gainful employment, which can only be overcome by changed

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circumstances establishing disability. Light v. Soc. Sec. Admin., 119 F.3d
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789, 791-92 (9th Cir. 1997).
The ALJ considered the medical and vocational evidence to determine

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whether there were such “changed circumstances” to overcome the

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presumption of continued non-disability from the prior decision. (A.R. 42).

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The ALJ found there were no “changed circumstances” because the current

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record appeared essentially the same as the record from the prior decision.

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(Id.). Specifically, the ALJ found little to no evidence in the record that

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Plaintiff required a higher level of medical care, which suggested his

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impairments have remained essentially unchanged. (Id.). The ALJ also

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found Plaintiff’s physical and mental impairments, considered singly and in

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combination, did not significantly limit Plaintiff’s ability to perform basic

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work activities and he did not have a severe impairment or combination of

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impairments. (Id.).

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The ALJ specifically noted the following to be of particular relevance:

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1.

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Plaintiff generally failed to cooperate as evidenced by his sporadic

Plaintiff’s Credibility

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refusal to speak. For example, Plaintiff refused to speak during an

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evaluation with consultative examiner Dr. Ted Shore, Ph.D., and at his

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second hearing. (A.R. 38, 258). The ALJ also found Plaintiff’s limited

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statements concerning the intensity, persistence and limiting effects of his

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symptoms were not consistent with the record medical evidence. (Id.).

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Specifically, at Plaintiff’s hearing he testified twice that he had thoughts of

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suicide. (A.R. 60, 63). But, the record shows Plaintiff had no suicide

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attempts and no family history of suicide. (A.R. 293, 295). Also, Plaintiff’s

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treatment records from Pacific Health Systems (March 15, 2012, to July 1,

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2014) showed no allegations of suicidal ideation. (A.R. 326-28).

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Additionally, the ALJ found the Plaintiff was not fully credible based in
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part on the Cooperative Disability Investigation (“CDI”) summary report

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dated July 8, 2011. (A.R. 38, 264-69). The CDI report presented

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contradictory evidence in regard to Plaintiff’s statements. Specifically, the

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report indicated Plaintiff went out in public alone, socialized with friends and

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neighbors, and worked at his parents’ grocery store in a customer service

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capacity. (A.R. 38, 264-69). When questioned by the ALJ, however, Plaintiff

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testified he could not remember what type of classes he took from

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kindergarten through high school. (A.R. 61). Similarly, Plaintiff testified he

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did not drive, although the evidence showed Plaintiff had a California driver’s

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license (A.R. 62). In follow up questioning, Plaintiff then testified, contrary to

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his previous statement, he had driven before but did not remember where.

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(Id.). For these reasons, the ALJ found Plaintiff was not fully credible

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because his statements were inconsistent with the record evidence. (A.R. 38).

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2.

Plaintiff’s Medical Records

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The ALJ determined the objective medical evidence did not support

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Plaintiff’s allegations of a having disabling impairment or combination of

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impairments. (A.R. 38). The ALJ specifically found the record medical

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evidence supported a determination that Plaintiff continued to have no

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severe impairment. (Id.).

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a.

Dr. Sultana Hamrang, M.D., Treating Physician

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The record evidence was comprised primarily of the continued

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treatment records of Plaintiff’s treating physician, Dr. Sultana Hamrang,

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M.D. (A.R. 38, 286-393). These records did not support a severe medical

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impairment, singly or in combination. (A.R. 38). Despite Plaintiff’s

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testimony about having suicidal thoughts, Dr. Hamrang reported Plaintiff

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had no suicidal ideation on fourteen separate mental examinations from

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March 28, 2012, through July 21, 2015. (A.R. 60).
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The ALJ also reviewed the updated treatment records of Dr. Hamrang

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and found no evidence of changed circumstances. (A.R. 38). However, the

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ALJ acknowledged that Dr. Hamrang’s progress notes assessed Plaintiff with

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schizophrenia, an impairment not previously alleged. (A.R. 38). The ALJ

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also acknowledged that Plaintiff had been prescribed three psychotropic

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medications including Celexa, Seroquel and Abilify. (A.R. 39).

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In September 2014, the ALJ noted Dr. Hamrang reported Plaintiff was

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compliant with mental health treatment, had a better range affect, responded

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better to questions, was groomed, had some mood disturbance and auditory

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hallucination that was under control, was alert and oriented and had no

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memory impairment. (A.R. 39, 361-62). Consequently, the ALJ found that

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Dr. Hamrang’s updated treatment records were insufficient to show changed

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circumstances. (A.R. 38).

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b.

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The ALJ gave little weight to consultative examiner Dr. Shore’s

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opinions and impressions because they were not consistent with the record

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evidence and were based predominantly on Plaintiff’s mother’s statements

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and what Plaintiff expressed or displayed. (A.R. 40).

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Dr. Ted Shore, Ph.D., Consultative Examiner

The ALJ reviewed Plaintiff’s school transcripts, which indicated he

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completed 72 hours of community service while he worked at Catholic

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Charities. (A.R. 34, 59-63, 86-87). The ALJ determined those actions showed

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an ability to interact with others in a comprehensive way and was not

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consistent with Plaintiff’s interaction during his examination with Dr. Shore.

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(Id.). The ALJ noted Dr. Shore was not able to assess the Plaintiff’s

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cognition, orientation, reality contact, mood, affect, memory, attention,

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concentration span, or fund of knowledge or judgment. (A.R. 40, 260).

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Ultimately, the ALJ determined it was not clear what intelligence test results
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upon which Dr. Shore based his evaluation. (A.R. 40).

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c.

Dr. John Hessler Ph. D., Treating Physician

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The ALJ gave little weight to Dr. Hessler’s opinions and impressions

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because they were not current. (A.R. 41). For example, the ALJ cited to Dr.

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Hessler’s recommendation for Plaintiff to have a complete psychological

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evaluation in order to determine his “psychological conditions” and whether

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he is “capable of undergoing vocational training”. (A.R. 41, 252). The ALJ

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determined this suggested Dr. Hessler was unsure of Plaintiff’s impairments

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and his abilities, which made Dr. Hessler’s assessment questionable. (A.R.

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41). The ALJ further noted the record did not contain any progress notes

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from Dr. Hessler since his 2010 report that supported his opinions and

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impressions. (A.R. 41).

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d.

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The ALJ gave substantial weight to the State Agency medical

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consultant opinions since these physicians reviewed the medical evidence

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records, including the Plaintiff’s longitudinal treatment history, were

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familiar with Social Security rules and regulations, and their opinions were

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consistent with and corroborate each other. (A.R. 40). The ALJ noted the

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State Agency medical consultants opined Plaintiff had no severe mental or

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physical impairment. (A.R. 40, 99-108, 110-19, 280-85). Additionally, the

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ALJ noted the record medical evidence shows Plaintiff had little to no

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significant and persistent cognitive or memory impairment. (Id.).

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Ultimately, the ALJ determined the evidence supported the state agency

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medical consultants’ opinions that Plaintiff behaved socially appropriately

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with friends and neighbors. (Id.).

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State Agency Medical Consultants

Concluding his findings, the ALJ stated:
For the reasons discussed [] I find that there are no “changed
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circumstances” because the current record appears essentially the
same as at the time of the prior decision….There is little to no
evidence that the claimant has required a higher level of medical
care, further suggesting his impairments have remained
essentially
unchanged….Since
there
are
no
“changed
circumstances” resulting in a greater degree of functional or
vocational limitation, the so-called Chavez presumptions do apply.

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(A.R. 42).

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C.

Issues on Appeal
Plaintiff raises two general assertions of error by the ALJ in his

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Complaint: 1) The ALJ erred in finding the Plaintiff’s psychiatric

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impairments were not severe, (ECF No. 16, pg. 2); and 2) The ALJ erred

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when he failed to consider that Plaintiff’s lack of representation at the first

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hearing constitutes “changed circumstances” and precludes the application of

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res judicata. (Id.). Defendant contends: 1) The ALJ’s findings regarding

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Plaintiff’s mental impairment were without error, (ECF No. 17-1, pg. 4); and

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2) The ALJ did not err in finding that Plaintiff failed to demonstrate changed

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circumstances based on his lack of counsel in 2013. (Id. at pg. 2).

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1. Whether or not the ALJ erred in finding Plaintiff’s
psychiatric impairments not severe.
Plaintiff argues that the ALJ improperly “ignored the substantial and

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undisputed evidence in the record, including mental status examinations

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from his psychiatrist and the findings from the consultative examiner.” (ECF

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No. 16 at 11). “Thus, the ALJ’s finding that [Plaintiff’s] psychiatric

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impairments were not severe was error and not supported by substantial

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evidence.” (Id.) Conversely, Defendant argues “[c]ontrary to Plaintiff’s

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assertion, the ALJ properly declined to find that Plaintiff suffered from a

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severe mental impairment at step two of the evaluation process.” (ECF No.
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17-1 at 4).
Plaintiff’s allegation of error will not be examined here. As discussed

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below, the Court finds that the ALJ improperly applied the res judicata

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presumption of continuing disability to his standard of review in this case.

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This constituted clear error.

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2. Res Judicata Presumption of Non-disability

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It is undisputed Plaintiff previously applied for and was denied

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disability benefits. Specifically, on May 31, 2013, the ALJ found that

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Plaintiff received supplemental disability benefits as a child and, as required

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by law, eligibility for these benefits was redetermined under the rules for

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determining disability in adults when Plaintiff attained age 18. (A.R. 34).

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The Commissioner determined that Plaintiff no longer was disabled as of

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September 30, 2011, considering Plaintiff’s new age category and related

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rules. (A.R. 82).

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On September 27, 2013, Plaintiff filed a second application (the instant

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application) for benefits. On May 18, 2016, the ALJ issued an unfavorable

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ruling. (A.R. 34). The ALJ found Plaintiff had not been under a disability

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since September 27, 2013, the date the instant application was filed. (A.R.

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42). The ALJ further ruled that Plaintiff’s first application, decided on May

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31, 2013, created the presumption that Plaintiff continued to be able to do

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work in accordance with the prior assessed RFC triggering the application of

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res judicata on Plaintiff’s second application. The application of res judicata

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shifted the burden to Plaintiff to demonstrate changed circumstances to

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overcome the presumption of non-disability from the 2013 decision. See

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Social Security Ruling 97-4.2 (Id.)
The Court finds two errors in the ALJ’s decision that preclude the

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application of res judicata. First, the ALJ erred by failing to address the

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effect of Plaintiff’s unrepresented status in his first application on the

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applicability of res judicata to Plaintiff’s subsequent application. Second, the

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ALJ erred by improperly applying res judicata to Plaintiff’s subsequent

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application where Plaintiff raised a new issue of mental impairment not

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presented in the prior application.
a. If a plaintiff is unrepresented at a prior hearing for benefits,

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the application of res judicata is improper unless the record

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shows the ALJ conscientiously and scrupulously protected the

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plaintiff’s interests. Cox v. Califano, 587 F.2d 988 (9th Cir. 1978).

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Plaintiff asserts his lack of representation in his previous hearing is an

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independent factor in preventing the Commissioner from applying res

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judicata. (ECF No. 16, pg. 13). Specifically, Plaintiff contends that a review

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of the record shows “the ALJ’s decision [in the current case] makes no

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mention that Plaintiff’s waiver of his right to representation in the prior

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hearing justified application of res judicata.” (ECF No. 19 at 2). According to

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Plaintiff, the only issue raised by the ALJ as justification for application of

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res judicata was the issue of changed circumstances. (Id.).

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Defendant argues, “[t]here was no evidence that Plaintiff’s mental

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impairments were significant enough to deny him a meaningful opportunity

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to be heard, to continue the appeal process, or to seek counsel….” (ECF 17 at

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Acquiescence Rulings “are binding on all components of the Social Security
Administration,” except under specified circumstances, and accorded deference by a
reviewing court. 20 C.F.R § 402.35(b)(2).
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4). “Therefore, the ALJ properly applied the Chavez presumption and found

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no ‘changed circumstances’ as to preclude a presumption of continuing non-

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disability based upon the 2013 determination.” (Id.).

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There is no constitutional guarantee of the right to counsel in Social

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Security cases. The right to counsel is provided by statute. See 42 U.S.C. §

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406. A plaintiff can knowingly and intelligently waive his statutory right to

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counsel. Duns v. Heckler, 586 F. Supp. 359, 364 (N.D. Cal. 1984). However,

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the real issue in such cases is not whether the waiver was knowing or

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intelligent, but whether without representation, the ALJ met his heightened

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duty to “scrupulously and conscientiously probe into, inquire of, and explore

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for all the relevant facts…. [and] be especially diligent in ensuring that

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favorable as well as unfavorable facts and circumstances are elicited.” Cox v.

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Califano, 587 F.2d 988, 991 (9th Cir. 1978). When the “heavy burden

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imposed by Cox” is not met in this context, and the unrepresented plaintiff

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may have been prejudiced, “the interests of justice demand that the case be

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remanded.” Vidal, 637 F.2d 710, 714-15 (9th Cir. 1981).

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Here, it is unclear whether the ALJ properly insured that the 2013

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administrative hearing was fair to Plaintiff in the absence of representation.

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This is because the transcript from the first hearing was not included in the

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current record presented for review. A review of other cases faced with the

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same issue shows that when determining if the ALJ met his burden under

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Cox, courts have had the benefit of the prior record and hearing transcript.

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See Vidal, 637 F.2d at 714 (“[I]t is clear from the record that the claimant

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was totally incapable of challenging the vocational expert’s conclusions.”);

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Palacios v. Astrue, No. 10 Civ. 0368 (C.D.C.A. Feb. 28, 2011) (“Having

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scrutinized the record, the Court finds that Plaintiff knowingly and

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voluntarily waived his right to counsel and the ALJ met his burden to
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conscientiously and scrupulously probe into all the relevant facts at the

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hearing.”); Hartwell v. Astrue, No. 12 Civ. 01652 (C.D.C.A.) (“When plaintiff

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complained that she had difficulty understanding the medical expert’s

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testimony, the ALJ explained in detail the two ways in which minors can

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qualify for social security benefits.) (A.R. 39-40, 46-49).”).

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Because Plaintiff is challenging the fairness of his unrepresented status

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in 2013, resulting in the application of res judicata in the instant case, the

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Court must determine whether the ALJ met his heightened duty “to

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conscientiously and scrupulously probe into, inquire of, and explore for all

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the relevant facts” to protect Plaintiff’s interests. Cox, 587 F.2d at 988.

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Without any way to effectively review the 2013 hearing, the Court is unable

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to determine if the ALJ satisfied his heightened duty in the prior case. As

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noted above, the transcript from the 2013 hearing was not included in the

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instant record, however, a review of the record from the 2016 hearing shows

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Plaintiff’s mental acuity similar to the claimant in Vidal. Vidal, 637 F.2d at

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714-15. For example, at the 2016 hearing Plaintiff testified that he did not

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complete high school and could not remember how far in high school he went.

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He also testified that he takes medication because sometimes he wants to kill

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himself. (A.R. 59-60). In fact, Plaintiff’s testimony was so bad that the ALJ

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only asked Plaintiff a few questions before he gave up and turned the

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questioning over to Plaintiff’s counsel.3 (A.R. 59-64). Based upon the limited

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hearing:

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The following colloquy took place between the ALJ and Plaintiff’s attorney at the 2016

ALJ: Mr. Patel, is your client going to be able to testify?
Atty: It’s a very, very, very big struggle, Your Honor. I myself had a very, very difficult

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record before the Court on this issue, the ALJ’s application of res judicata

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cannot be upheld.

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b. Changed circumstances alleged by Plaintiff in the second

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application for benefits bar res judicata.

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A prior final determination that an individual is not disabled creates a

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rebuttable presumption that the individual retains the ability to work after

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the date of the prior administrative decisions. See Schneider v. Comm’r of

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Soc. Sec. Admin., 223 F.3d 968-973 (9th Cir. 2000). The presumption of

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continuing non-disability will not apply, however, “if there are ‘changed

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circumstances’.” Lester, 81 F.3d at 827 (quoting Taylor v. Heckler, 765 F.2d

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872, 875 (9th Cir 1985).

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Changed circumstances include a change or an increase in the severity

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of the claimant’s impairment(s), change in age category, alleged existence of

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an impairment not previously considered or a change in the criteria for

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determining disability. See Acquiescence Ruling SSR 97-4(9) (S.S.A.); see also

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Gregory v. Bowen, 844 F.2d 664, 666 (9th Cir. 1988) (finding that because

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claimant raised the new issue of psychological impairments it would be

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inappropriate to apply res judicata and bar the claim.). Moreover, “[a]ll an

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applicant has to do to preclude the application of res judicata is raise a new

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issue in a later proceeding.” Vazquez v. Astrue, 572 F.3d 586, 598 (9th Cir.

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2009). The newly asserted impairment need not be severe or disabling, res

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judicata is precluded based only upon the assertion of new impairments. Id.

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time, but I would—I had him here because I think it’s very important, Your Honor. I know you
were on the previous case and -- but also, I don’t think you had access to these records that -- of his, you
know, schizophrenia…. (AR at 60). After that exchange the ALJ stopped questioning Plaintiff.

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It does not appear from the ALJ’s 2013 decision that schizophrenia was

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raised or considered as an alleged impairment at that time. (A.R. 82 - 90).

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Even the Defendant does not contend that schizophrenia was ever a basis for

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Plaintiff’s claim of disability in the prior proceeding. (ECF No. 17-1). In

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Plaintiff’s first application (2013) the ALJ found Plaintiff had the medically

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determinable impairments of speech delay and learning disorder. The ALJ

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also found that during the period under adjudication, the claimant’s mental

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status examination and findings were unremarkable and did not support a

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finding of a medically determined severe mental condition. (AR 89-89). The

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record demonstrates that the ALJ’s 2013 decision did not indicate that

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schizophrenia was presented as a basis for Plaintiff’s claim of disability or

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that he considered it in his findings. (A.R. 85-86).

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In the current case Plaintiff clearly raised the issue of schizophrenia in

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connection with his application for disability benefits that formed the basis of

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the ALJ’s 2016 decision. (A.R. 201). The record shows the ALJ acknowledged,

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“Dr. Hamrang’s findings assessed diagnoses including schizophrenia

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paranoid….” (A.R. 38). This statement demonstrates the ALJ was aware of a

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new diagnosis not considered in Plaintiff’s previous application. The ALJ

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also found, “the updated treatment records of S. Hamrang, M.D. insufficient

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to show changed circumstances.” (A.R. at 38). Pursuant to the applicable

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law, this finding is irrelevant because “a claimant defeats the presumption of

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continuing non-disability by raising a new issue in a later application.”

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Vasquez, 572 F.3d at 586 n. 9.

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Based on the record, Plaintiff presented a new impairment in his 2016

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application and the ALJ erred by applying res judicata and presumption of

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non-disability to Plaintiff’s second application.

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3. Remand for Further Administrative Proceedings Is
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Appropriate
The Court recognizes the importance of administrative res judicata,

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however when the doctrine is erroneously applied, remand is an appropriate

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remedy. “[A] court has discretion to remand for further proceedings when an

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ALJ has committed legal error in denying benefits.” Harman v. Apfel, 211

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F.3d 1172, 1175-78 (9th Cir. 2000). Here the ALJ erred by applying the res

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judicata presumption of continuing non-disability to Plaintiff’s first

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application and subsequent ruling. Based on the record evidence in the case,

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the principle of res judicata is not applicable. Plaintiff’s second application

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for benefits was denied for his failure to overcome the presumption of

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continuing non-disability for the period following the denial of his first

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application. This presumption did not apply for two reasons: 1) because the

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record presented shows Plaintiff alleged a new disability not contained in his

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first application for benefits, and 2) the Court was unable to determine on the

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record before it whether Plaintiff’s waiver of representation at the 2013

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hearing resulted in prejudice or unfairness in the administrative proceeding.

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Vidal, 637 F.2d at 713.
In sum, the ALJ's application of the continuing presumption of non-

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disability arising from the prior ALJ's decision was error. When error exists

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in an administrative determination, “the proper course, except in rare

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circumstances, is to remand to the agency for additional investigation or

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explanation.” INS v. Ventura, 537 U.S. 12, 16 (2002) (citations and quotation

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marks omitted); Moisa v. Barnhart, 367 F.3d 882, 886 (9th Cir. 2004).

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Accordingly, the Court recommends the case be remanded for further

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administrative action consistent with the findings presented herein.

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//

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//
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17-cv-01103-GPC-MDD

IV. CONCLUSION

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The Court RECOMMENDS that the case be REMANDED for further

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proceedings and the ALJ be instructed not to apply the principle of res

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judicata presumption of continuing non-disability. This Report and

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Recommendation of the undersigned Magistrate Judge is submitted to the

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United States District Judge assigned to this case, pursuant to the provisions

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of 28 U.S.C. § 636(b)(1).

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9

IT IS HEREBY ORDERED that any written objection to this report
must be filed with the court and served on all parties no later than July 25,

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2018. The document should be captioned “Objections to Report and

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Recommendations.”

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IT IS FURTHER ORDERED that any reply to the objections shall be

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filed with the Court and served on all parties no later than August 1, 2018.

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The parties are advised that failure to file objections within the specified time

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may waive the right to raise those objections on appeal of the Court’s order.

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Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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Dated: July 11, 2018

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