Budnik v. Colvin

Filing 14

ORDER Reversing and Remanding Defendant's Decision to Deny Benefits by Judge Karen L Strombom. (TW)

1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

8
9
10

WARREN WESLEY BUDNIK,
Case No. 3:16-cv-05343-KLS

11
12
13

Plaintiff,
v.
CAROLYN W. COLVIN, Acting
Commissioner of Social Security,

ORDER REVERSING AND
REMANDING DEFENDANT’S
DECISION TO DENY BENEFITS

14
15

Defendant.

16
17
18
19

Plaintiff has brought this matter for judicial review of defendant’s denial of disability
insurance benefits (“DIB”). Pursuant to 28 U.S.C. § 636(c), Federal Rule of Civil Procedure 73

20

and Local Rule MJR 13, the parties have consented to have this matter heard by the undersigned

21

Magistrate Judge. After reviewing the parties’ briefs and the remaining record, the Court hereby

22

finds that for the reasons set forth below, defendant’s decision to deny benefits should be

23

reversed and this matter should be remanded for further administrative proceedings.

24
25
26
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 1

FACTUAL AND PROCEDURAL HISTORY

1
2
3
4

On September 7, 2013, plaintiff filed an application for DIB, alleging disability as of
January 6, 2012. See Dkt. 9, Administrative Record (“AR”) 12. The application was denied upon
initial administrative review on March 18, 2014, and on reconsideration on September 3, 2014.

5
See AR 12. A hearing was held before an administrative law judge (“ALJ”) on December 22,
6
7
8
9

2015, at which plaintiff, who was unrepresented, appeared and testified, as did a vocational
expert. See id.
In a decision dated January 4, 2016, the ALJ determined plaintiff to be not disabled. See

10

AR 12-28. Plaintiff’s request for review of the ALJ’s decision was denied by the Appeals

11

Council on March 8, 2016, making that decision the final decision of the Commissioner of Social

12

Security (the “Commissioner”). See AR 1-4; 20 C.F.R. § 404.981, § 416.1481. On May 12,

13
2016, plaintiff filed a complaint in this Court seeking judicial review of the Commissioner’s final
14
15

decision. See Dkt. 3. The administrative record was filed with the Court on July 18, 2016. See

16

Dkt. 9. The parties briefing is complete. See Dkts. 11, 12, 13. Thus, this matter is now ripe for

17

the Court’s review.

18
19
20

Plaintiff argues defendant’s decision to deny benefits should be reversed and remanded
for an award of benefits, because the ALJ erred: (1) by failing to assist an unrepresented claimant
in fully developing the record; (2) by failing to meet the Commissioner’s burden at Step Five;

21
22
23
24
25
26

(3) in evaluating plaintiff’s credibility; (4) in failing to properly consider the Department of
Veterans Affairs (“VA”) disability decision; and (5) in failing postpone the second hearing in
light of the fact that plaintiff was unrepresented. See Dkt. 11, p. 1.
DISCUSSION
The determination of the Commissioner that a claimant is not disabled must be upheld by
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 2

1

the Court, if the “proper legal standards” have been applied by the Commissioner, and the

2

“substantial evidence in the record as a whole supports” that determination. Hoffman v. Heckler,

3

785 F.2d 1423, 1425 (9th Cir. 1986); see also Batson v. Comm’r of Social Security Admin., 359

4

F.3d 1190, 1193 (9th Cir. 2004); Carr v. Sullivan, 772 F.Supp. 522, 525 (E.D. Wash. 1991) (“A

5
decision supported by substantial evidence will, nevertheless, be set aside if the proper legal
6
7
8

standards were not applied in weighing the evidence and making the decision.”) (citing Brawner
v. Secretary of Health and Human Services, 839 F.2d 432, 433 (9th Cir. 1987)).

9

Substantial evidence is “such relevant evidence as a reasonable mind might accept as

10

adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401 (1971) (citation

11

omitted); see also Batson, 359 F.3d at 1193 (“[T]he Commissioner’s findings are upheld if

12

supported by inferences reasonably drawn from the record.”). “The substantial evidence test

13
requires that the reviewing court determine” whether the Commissioner’s decision is “supported
14
15

by more than a scintilla of evidence, although less than a preponderance of the evidence is

16

required.” Sorenson v. Weinberger, 514 F.2d 1112, 1119 n.10 (9th Cir. 1975). “If the evidence

17

admits of more than one rational interpretation,” the Commissioner’s decision must be upheld.

18

Allen v. Heckler, 749 F.2d 577, 579 (9th Cir. 1984) (“Where there is conflicting evidence

19
20

sufficient to support either outcome, we must affirm the decision actually made.”) (quoting
Rhinehart v. Finch, 438 F.2d 920, 921 (9th Cir. 1971)). 1

21
22
23
24
25
26

1

As the Ninth Circuit has further explained:
. . . It is immaterial that the evidence in a case would permit a different conclusion than that
which the [Commissioner] reached. If the [Commissioner]’s findings are supported by
substantial evidence, the courts are required to accept them. It is the function of the
[Commissioner], and not the court’s to resolve conflicts in the evidence. While the court may
not try the case de novo, neither may it abdicate its traditional function of review. It must
scrutinize the record as a whole to determine whether the [Commissioner]’s conclusions are
rational. If they are . . . they must be upheld.

Sorenson, 514 F.2d at 1119 n.10.

ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 3

1
2
3
4

II.

VA Disability Rating
Plaintiff challenges the ALJ’s treatment of plaintiff’s 80% disability rating by the VA

(the “VA disability rating”). Dkt. 11, pp. 10-12. The VA determined plaintiff 80% disabled,
based in part on low back pain, attention deficit disorder (“ADD”), and degenerative joint

5
disease of the left and right ankle. AR 149-56. The VA determination notes that plaintiff has
6
7

difficulty adapting to work, near continuous panic affecting the ability to function independently,

8

appropriately and effectively, difficulty in adapting to stressful circumstances, near-continuous

9

depression affecting plaintiff’s ability to function independently and appropriately, and difficulty

10

adapting to a work setting. AR 151. The VA disability determination also outlines plaintiff’s

11

occupational and social impairments. AR 152.

12

Although a determination by the VA about whether a claimant is disabled is not binding

13
on the SSA, an ALJ must consider that determination in reaching his or her decision. McCartey
14
15

v. Massanari, 298 F.3d 1072, 1076 (9th Cir. 2002); 20 C.F.R. § 404.1504. Further, the ALJ

16

“must ordinarily give great weight to a VA determination of disability.” McCartey, 298 F.3d at

17

1076. This is because of “the marked similarity” between the two federal disability programs.

18

See id. (describing similarities in the programs). However, “[b]ecause the VA and SSA criteria

19
20

for determining disability are not identical,” the ALJ “may give less weight to a VA disability
rating if he gives persuasive, specific, valid reasons for doing so that are supported by the

21
22
23

record.” Id. (citing Chambliss v. Massanari, 269 F.3d 520, 522 (5th Cir. 2001).
The ALJ gave “little weight” to the VA disability determination. AR 26. The ALJ also

24

noted that the VA “assigned the claimant a service-connected disability rating of 70% for ADD

25

and primary insomnia” and that “[t]he claimant’s overall VA service-connected disability rating

26

is 80%.” AR 26. Although the ALJ acknowledged that she “must ordinarily give great weight” to
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 4

1

a VA disability determination, see AR 26 (citation omitted), she observed that she is “not

2

compelled to reach the identical result” in making a disability determination. AR 26. The ALJ

3

discounted plaintiff’s VA disability determination for two reasons. First, the ALJ determined that

4

the VA disability determination does not “satisfy the agency’s requirement of specific function-

5
by-function work-related limitations.” AR 26. Second, the ALJ determined that the VA disability
6
7

determination is already incorporated into medical opinions and “does not show the claimant is

8

more limited” than set forth in the residual functional capacity. AR 26. The ALJ also noted that a

9

claimant rated as having a service-connected physical impairment is “not necessarily disabled”

10

because the process is “designed to determine a service member’s fitness for duty and/or whether

11

or not he/she meets retention standards.” AR 26. The ALJ determined that the VA disability

12

rating “lacks probative value” because it “does not provide a function-by-function analysis of the

13
claimants’ abilities.” AR 26. The Court finds that the ALJ did not provide persuasive, specific, or
14
15

valid reasons for giving little weight to the VA disability rating.

16

First, the ALJ rejected the VA disability determination by reciting case law and noting

17

that the determination does not provide for a function-by-function analysis like social security

18

determination. AR 26. The ALJ thus determined that VA disability determinations “lack

19
20

probative value” because of this lack of function-by-function analysis. However, the ALJ’s
determination is expressly contrary to established law. As noted above, the Ninth Circuit has

21
22
23

specifically determined the ALJ must give great weight to VA disability determinations because
of “the marked similarity” between the determinations. McCartey, 298 F.3d at 1076. Thus,

24

discounting the VA disability determination because of the differences in the disability

25

determinations is legally insufficient and fails to provide the persuasive, specific, or valid reason

26

necessary to give little weight to the VA disability rating.
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 5

Second, the ALJ rejected the VA disability determination because she determined that the

1
2

VA disability rating was already incorporated into the medical opinions and accounted for in the

3

RFC. AR 26. However, the Court finds that neither the RFC nor the ALJ’s discussion of the

4

medical opinion evidence expressly discuss every limitation assessed in the VA disability

5
determination. As noted above, the VA disability determination found that plaintiff has difficulty
6
7

adapting to work, near continuous panic and depression affecting his ability to function

8

independently and appropriately, difficulty in adapting to stressful circumstances, and difficulty

9

adapting to a work setting. See AR 149-52. The RFC does not incorporate all of these

10

restrictions. See AR 16-17. Moreover, the ALJ did not cite to specific medical opinions that

11

incorporate or discuss the limitations assessed by the VA disability determination. See AR 26.

12

Thus, the ALJ’s conclusory statement falls short of the specificity required by this Court. See

13
Embrey v. Bowen, 849 F.2d 418, 421-22; McAllister v. Sullivan, 888 F.2d 599, 602 (9th Cir.
14
15

1989) (the ALJ’s rejection of a physician’s opinion on the ground that it was contrary to clinical

16

findings in the record was “broad and vague, failing to specify why the ALJ felt the treating

17

physician’s opinion was flawed”). Regardless, as discussed below, the ALJ erred in her treatment

18

of the medical opinion evidence. Thus, none of the reasons offered by the ALJ to discount the

19
20

VA disability determination are persuasive, specific, or valid, and the ALJ erred.

21

Whether the ALJ’s Decision is Supported by Substantial Evidence In Light of New
Evidence Submitted to the Appeals Counsel.

22

Plaintiff was unrepresented by counsel at his hearing. See AR 12. After the ALJ issued

23
24

II.

his decision, plaintiff obtained counsel and submitted over 400 pages of new records to the
appeals counsel. See AR 837-1255. Plaintiff argues that new records submitted to the appeals

25
counsel—which Plaintiff maintains the ALJ should have obtained given that plaintiff was
26
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 6

1

unrepresented—undermine the ALJ’s determination. See Dkt. 11, pp. 5-6, 9-10.

2

The Ninth Circuit has held “when a claimant submits evidence for the first time to the

3

Appeals Council, which considers that evidence in denying review of the ALJ’s decision, the

4

new evidence is part of the administrative record, which the district court must consider in

5
determining whether the Commissioner’s decision is supported by substantial evidence.” Brewes
6
7

v. Comm’r of Soc. Sec. Admin., 682 F.3d 1157, 1159-60 (9th Cir. 2012). The Appeals Council

8

considered the medical records submitted by plaintiff (AR 2, 4); thus, the Court must consider

9

this evidence in determining if the ALJ’s opinion is supported by substantial evidence.

10
11
12

The Court finds that, based on the new evidence submitted to the appeals counsel, the
ALJ’s decision finding plaintiff not disabled is no longer supported by substantial evidence. The
over 400 pages of documents submitted by plaintiff undermine the ALJ’s findings regarding the

13
medical opinion evidence and plaintiff’s credibility. For example, in discounting plaintiff’s
14
15

credibility, the ALJ observed that “[t]he first problem is that the claimant’s allegations are not

16

consistent with the objective evidence in the record” and noted that “[t]he record contains no

17

evidence of treatment for the first year after the alleged onset date.” AR 21. However, the newly

18

submitted evidence demonstrates that plaintiff was being treated for various ailments in late 2011

19
20

and early 2012—around the alleged onset date of January 6, 2012—including depression,
anxiety, insomnia, and other physical impairments. See, e.g., AR 1018, 1021, 1024. In addition,

21
22
23

the ALJ afforded the State agency medical consultant Dr. Guillermo Rubio’s opinion great
weight regarding plaintiff’s physical limitations and ability to conduct work-related activities.

24

See AR 23. The ALJ noted that Dr. Rubio’s opinion is “consistent with the imaging studies and

25

the results of the few physical examinations in the record.” AR 23. However, Dr. Rubio did not

26

review the additional over 400 pages of medical records, which also contain support for
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 7

1

plaintiff’s physical impairments. See, e.g., AR 837-1255. Thus, based upon new evidence

2

considered by the appeals counsel, and based upon the record as a whole, the ALJ is required to

3

revisit the entire sequential evaluation process upon remand.

4

III.

This Matter Should Be Remanded for Further Administrative Proceedings

5
The Court may remand this case “either for additional evidence and findings or to award
6
7

benefits.” Smolen, 80 F.3d at 1292. Generally, when the Court reverses an ALJ’s decision, “the

8

proper course, except in rare circumstances, is to remand to the agency for additional

9

investigation or explanation.” Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004) (citations

10

omitted). Thus, it is “the unusual case in which it is clear from the record that the claimant is

11

unable to perform gainful employment in the national economy,” that “remand for an immediate

12

award of benefits is appropriate.” Id.

13
Benefits may be awarded where “the record has been fully developed” and “further
14
15

administrative proceedings would serve no useful purpose.” Smolen, 80 F.3d at 1292; Holohan v.

16

Massanari, 246 F.3d 1195, 1210 (9th Cir. 2001). Specifically, benefits should be awarded

17

where:

18
19
20

(1) the ALJ has failed to provide legally sufficient reasons for rejecting [the
claimant’s] evidence, (2) there are no outstanding issues that must be resolved
before a determination of disability can be made, and (3) it is clear from the
record that the ALJ would be required to find the claimant disabled were such
evidence credited.

21
22
23

Smolen, 80 F.3d 1273 at 1292; McCartey v. Massanari, 298 F.3d 1072, 1076-77 (9th Cir. 2002).
Because issues still remain in regard to the medical opinion evidence in the record and plaintiff’s

24

credibility, and because the ALJ failed to provide sufficient reasons for rejecting the VA’s

25

disability rating decision, remand for further consideration of these issues—as well as, if

26
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 8

1

necessary, the issue of whether plaintiff is capable of performing her past relevant work or other

2

jobs existing in significant numbers in the national economy2—is warranted.

3

CONCLUSION

4

Based on the foregoing discussion, the Court hereby finds the ALJ improperly concluded

5
plaintiff was not disabled. Accordingly, defendant’s decision to deny benefits is REVERSED
6
7
8

and this matter is REMANDED for further administrative proceedings in accordance with the
findings contained herein.
DATED this 19 day of October, 2016.

9
10
11

A

12

Karen L. Strombom
United States Magistrate Judge

13
14
15
16
17
18
19
20
21
22
23
24
2

25

If a claimant cannot perform his or her past relevant work, at step five of the sequential disability evaluation
process, the ALJ must show there are a significant number of jobs in the national economy the claimant is able to
do. See Tackett, 180 F.3d at 1098-99; 20 C.F.R. § 416.920(d), (e).

26
ORDER REVERSING AND REMANDING
DEFENDANT’S DECISION TO DENY BENEFITS - 9