Tran v. Commissioner, Social Security Administration

Filing 19

ORDER Vacating Decision of Social Security Appeals Council by Judge William J. Martinez on 12/28/2018. (afran)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 17-cv-3029-WJM
NGOC KIM TRAN,
Plaintiff,
v.
SOCIAL SECURITY ADMINISTRATION,1
Defendant.

ORDER VACATING DECISION OF SOCIAL SECURITY APPEALS COUNCIL

This is a Social Security benefits appeal brought under 42 U.S.C. § 405(g).
Plaintiff Ngoc Kim Tran (“Tran”) challenges the final decision of Defendant, the Social
Security Administration (“Administration”), denying his application for supplemental
security income. The denial was affirmed by an administrative law judge (“ALJ”), who
ruled that Tran was not disabled within the meaning of the Social Security Act. The
Social Security Appeals Council then denied review, and this appeal followed.
For the reasons set forth below, the Appeals Council’s decision is vacated and
this case is remanded to the Administration for further proceedings consistent with this
order.

1

The Social Security Administration no longer has a commissioner nor a lawful acting
commissioner. See Letter from Thomas H. Armstrong, General Counsel of the Government
Accountability Office, to President Donald Trump (Mar. 6, 2018), available at https://
www.gao.gov/assets/700/690502.pdf (last accessed Dec. 17, 2018). Lacking any other
alternative, the Court sua sponte substitutes the Social Security Administration itself as the
proper defendant.

I. BACKGROUND
Tran was born in Vietnam in 1973 and was 37 years old on the alleged onset
date of February 1, 2011. (Administrative Record (“R.”) [ECF No. 12] at 106.) His
highest level of educational achievement is an associate’s degree. (R. at 65.) In the
fifteen years preceding the alleged onset date, he worked as a plastic products hand
finisher. (R. at 80, 113.)
Tran applied for disability insurance benefits on December 29, 2014 (R. at 176),
and for supplemental security income on January 23, 2015 (R. at 178). In his own
words, he claimed the following disabilities:
primary severe Mental problem
demand me to do something and see thing is not there
hear thing is not there
cannot concentrate anything
cannot perform any duties
short term memory loss
Isolated myself in the room
cannot handle a noise
it is hard to get a long [sic] with anyone
headache constantly
(R. at 106.) The Administration denied Tran’s applications on March 11, 2015. (R. at
114.) He requested and received a hearing in front of an ALJ, Lowell Fortune. (R. at
60, 130.) That hearing took place on October 14, 2016. (R. at 60.) On December 16,
2016, the ALJ issued a written decision in accordance with the Administration’s five-step
sequential evaluation process.2

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The five-step process requires the ALJ to consider whether a claimant: (1) engaged in
substantial gainful activity during the alleged period of disability; (2) had a severe impairment;
(3) had a condition which met or equaled the severity of a listed impairment; (4) could return to
his or her past relevant work; and, if not, (5) could perform other work in the national economy.
See 20 C.F.R. §§ 404.1520(a)(4), 416.920(a)(4); Williams v. Bowen, 844 F.2d 748, 750–51
(10th Cir. 1988). The claimant has the burden of proof through steps one to four; the Social
Security Administration has the burden of proof at step five. Lax v. Astrue, 489 F.3d 1080, 1084

2

At step one, the ALJ found that Tran had not engaged in substantial gainful
activity since February 1, 2011. (R. at 41.)
At step two, the ALJ found that Tran “has the following medically determinable
and severe impairment: psychotic disorder, not otherwise specified.” (Id.)
At step three, the ALJ found that Tran’s impairment, while severe, does not meet
or medically equal any of the “listed” impairments in the Social Security regulations.
(R. at 42.)
Before proceeding to step four, the ALJ assessed Tran’s residual functional
capacity (“RFC”). The ALJ concluded that Tran has the RFC
to perform a full range of work at all exertional levels but with
the following non-exertional limitations. Physically, no
limitations. Mentally, the claimant is able to use judgment in
making work decisions; respond appropriately to
supervision, coworkers and work situations; and deal with
changes in a routine work setting. The claimant is unable to
interact with the public. The claimant is capable of work not
involving significant complexity or judgment, and which
requires up to three months to learn.
(R. at 43–44.) Then, at step four, the ALJ concluded that Tran’s RFC would permit him
to return to his past job as a hand finisher of plastic products. (R. at 52.)
Given the ALJ’s conclusion at step four, the ALJ found that Tran was not entitled
to Social Security benefits (and therefore did not address step five). (R. at 53.) Tran
appealed to the Social Security Appeals Council, which denied review on October 17,
2017. (R. at 1.) Tran then filed this action seeking review of the ALJ’s December 16,
2016 decision and the Appeals Council’s October 17, 2017 decision to deny review.
(ECF No. 1.)

(10th Cir. 2007).

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II. STANDARD OF REVIEW
The Court reviews the Administration’s decision to determine whether substantial
evidence in the record as a whole supports the factual findings and whether the correct
legal standards were applied. Wall v. Astrue, 561 F.3d 1048, 1052 (10th Cir. 2009).
Substantial evidence is the amount of relevant evidence that a reasonable mind might
accept as adequate to support a conclusion. Id. “It requires more than a scintilla, but
less than a preponderance.” Lax, 489 F.3d at 1084. Evidence is not substantial if it is
overwhelmed by other evidence in the record. Grogan v. Barnhart, 399 F.3d 1257,
1261–62 (10th Cir. 2005). In reviewing the Administration’s decision, the Court may
neither reweigh the evidence nor substitute its judgment for that of the agency. Salazar
v. Barnhart, 468 F.3d 615, 621 (10th Cir. 2006). “On the other hand, if the ALJ failed to
apply the correct legal test, there is a ground for reversal apart from a lack of substantial
evidence.” Thompson v. Sullivan, 987 F.2d 1482, 1487 (10th Cir. 1993).
III. ANALYSIS
Tran presents three arguments for vacating the ALJ’s decision and one argument
for vacating the Appeals Council’s decision. (ECF No. 15 at 12–20.)3 The Court finds
that the argument regarding the Appeals Council has merit and that it would be
imprudent to evaluate the ALJ’s decision before the Appeals Council revisits its decision
denying review.
While Tran’s case was pending before the Appeals Council, it sent him a letter
announcing amended regulations that had gone into effect regarding when the Appeals

3

All ECF page citations are to the page number in the ECF header, which does not
always match the document’s internal pagination.

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Council would review a case. (R. at 29.)4 Those amended regulations stated that the
Appeals Council
will review your case for any of the following reasons:
***
The Appeals Council receives additional evidence that you
show is new, material, and relates to the period on or before
the date of the hearing decision. You must show that there
is a reasonable probability that the additional evidence would
change the outcome of the decision. You must also show
“good cause” for why you missed informing us about or
submitting it at least 5 business days before the date of your
hearing.
(Id.)5 The letter went on to announce that the Appeals Council had preemptively found
good cause to accept new evidence:
Because your case was pending at the Appeals Council
before our rule about when to give us evidence became
effective, we will find that you showed good cause for not
submitting additional evidence earlier. We will find that
some other unusual, unexpected, or unavoidable
circumstance beyond your control prevented you from telling
us about or giving us the evidence earlier.[6] We will make
this good cause finding for additional evidence that you have
already submitted and for additional evidence that you
submit before we issue our action in your case.
You must still show that the additional evidence is also
new and material, relates to the period at issue, and
shows a reasonable probability of changing the
outcome of the hearing decision.
(R. at 30 (boldface in original).)
4

The Appeals Council was referring to the regulatory amendments promulgated at
81 Fed. Reg. 90987 (Dec. 19, 2016), which became effective May 1, 2017.
5

This language is at least a paraphrase, and sometimes a verbatim repetition of,
20 C.F.R. § 404.970(a)(5) & (b).
6

This sentence is mostly verbatim from the good cause regulation at 20 C.F.R.
§ 404.970(b)(3).

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Under this authority, Tran submitted two collections of additional evidence to the
Appeals Council: 25 pages of clinical records from the location where Tran receives
mental health treatment (see R. at 2), and an 18-page neuropsychological evaluation
from Shauna L. Casement, Psy.D. (R. at 11). The Appeals Council’s decision denying
review noted the 25 pages of additional clinical records, but not Dr. Casement’s report.
(R. at 2.) As to the 25 pages, the Appeals Council found that the first half (spanning
October through December 2016) did not show “a reasonable probability that it would
change the outcome of the [ALJ’s] decision,” and that the second half (spanning
January through early March 2017) did not “relate to the period at issue.” (Id.)
Therefore, the Appeals Council refused to consider those records. But, again, the
Appeals Council said nothing about Dr. Casement’s report—not even an
acknowledgment of its existence. Tran contends that “[t]his case should be remanded
for that reason alone.” (ECF No. 15 at 19.)
In response, the Administration argues that Dr. Casement’s report does not
relate to the time period at issue and does not create a reasonable probability that it
would change the outcome of the ALJ’s decision. (ECF No. 16 at 13–14.) But this
argument ascribes to the Appeals Council reasoning that the Appeals Council itself
never expressed. This Court must review administrative decisions on the rationale
actually given by the administrative decisionmaker. See SEC v. Chenery Corp., 318
U.S. 80, 87 (1943) (“The grounds upon which an administrative order must be judged
are those upon which the record discloses that its action was based.”). In the absence
of any rationale, the Administration’s only hope is to argue for harmless error—i.e., that
the Appeals Council’s functional rejection of Dr. Casement’s report would have been an

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explicit, substantive rejection had the Appeals Council addressed it.
The Administration does not argue for harmless error. (See ECF No. 16 at 13–
15.) The Court would not find harmless error regardless. Harmless error requires the
Court to be able to “confidently say” that no reasonable administrative decisionmaker
could have reached a different conclusion. See Fischer-Ross v. Barnhart, 431 F.3d
729, 733–34 (10th Cir. 2005). In the context of this case, it means that the Court must
be able to confidently say that the Appeals Council could not have reasonably found
Dr. Casement’s opinion to relate to the time period before the ALJ made his decision,
and could not have reasonably found that Dr. Casement’s report had a reasonable
probability of changing the ALJ’s decision.
As to the relevant time period, the Court cannot confidently say that the Appeals
Council would have found Dr. Casement’s report irrelevant. Dr. Casement’s report is
dated September 28, 2017, more than nine months after the ALJ’s decision, but it
includes her opinion that Tran’s current condition has persisted in essentially the same
state “for the last 33 months in terms of his mental illnesses and functional abilities.”
(R. at 28.) Moreover, it is axiomatic that evidence generated after a particular time
period may nonetheless be relevant to determining the state of affairs during that time
period. See Halvorsen v. Heckler, 743 F.2d 1221, 1225 (7th Cir. 1984) (“There can be
no doubt that medical evidence from a time subsequent to a certain period is relevant to
a determination of a claimant’s condition during that period.”).
As to a reasonable probability that Dr. Casement’s report might have changed
the ALJ’s decision, the Court similarly cannot confidently say that the Appeals Council
could have only decided this issue against Tran. The ALJ had only two acceptable

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medical source opinions, each with somewhat conflicting views. (R. at 50–51.) Neither
of those opinions was as thorough as Dr. Casement’s. In particular, Dr. Casement
performed certain tests apparently not performed by any other psychologist or
psychiatrist, and Dr. Casement described in great detail the outcome of those tests and
her assessment of Tran based on those outcomes. (R. at 18–28.) These are precisely
the sorts of things that Social Security regulations direct ALJs to look for when weighing
the opinions of acceptable medical sources. See 20 C.F.R. §§ 404.1527(c)(3) &
416.927(c)(3) (“The more a medical source presents relevant evidence to support a
medical opinion, particularly medical signs and laboratory findings, the more weight we
will give that medical opinion. The better an explanation a source provides for a
medical opinion, the more weight we will give that medical opinion.”). Accordingly, the
Court is not confident that the Appeals Council would have rejected Dr. Casement’s
report as not reasonably likely to change the ALJ’s decision.
For these reasons, this matter must be remanded to the Appeals Council so that
it can correctly apply its new-evidence rules in the first instance. The Court does not
intend by this opinion to suggest the result that should be reached on remand. See
Kepler v. Chater, 68 F.3d 387, 391–92 (10th Cir. 1995) (“We do not dictate any result
[by remanding the case]. Our remand simply assures that the correct legal standards
are invoked in reaching a decision based on the facts of the case.” (internal quotation
marks omitted)).
IV. CONCLUSION
For the reasons set forth above, the Appeal Council’s decision is VACATED and
this case is REMANDED to the Administration for reconsideration of the Appeals

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Council’s decision to deny Tran’s request for review. The Clerk shall enter judgment
accordingly and shall terminate this case.
Dated this 28th day of December, 2018.
BY THE COURT:

______________________
William J. Martinez
United States District Judge

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