1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 BRIAN D. GARCIA, Case No. 18-cv-2541-BAS-AGS
12 Plaintiff, ORDER: 13 v. (1) OVERRULING DEFENDANT’S 14 ANDREW M. SAUL, Commissioner of OBJECTIONS (ECF No. 31); the Social Security Administration, 15 (2) ADOPTING REPORT AND Defendant. 16 RECOMMENDATION (ECF No. 30); 17 (3) GRANTING PLAINTIFF’S 18 MOTION FOR SUMMARY 19 JUDGMENT (ECF No. 22); (4) DENYING DEFENDANT’S 20 CROSS-MOTION FOR 21 SUMMARY JUDGMENT (ECF No. 24); AND 22 (5) REMANDING ACTION FOR 23 FURTHER PROCEEDINGS
24 25 Plaintiff Brian D. Garcia, proceeding pr o se, commenced this action seeking review
26 of a final decision by the Social Security Commissioner ending his benefits under Titles II 27 and XVI of the Social Security Act. The Court referred this matter to the Magistrate Judge 28 for a Report & Recommendation (“R&R”) in accordance with 28 U.S.C. § 636(b)(1)(B) 1 and Civil Local Rule 72.1(c)(1). After the parties filed cross-motions for summary 2 judgment, U.S. Magistrate Judge Andrew G. Schopler issued an R&R recommending that 3 this Court grant Plaintiff’s motion (ECF No. 22) and deny the Commissioner’s cross- 4 motion (ECF No. 24).1 (ECF No. 30.) The Commissioner then filed objections to the 5 R&R. (ECF No. 31.) The Court finds these motions suitable for determination on the 6 papers submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). 7 For the following reasons, the Court OVERRULES the Commissioner’s objections, 8 ADOPTS the R&R, GRANTS Plaintiff’s Motion for Summary Judgment, DENIES the 9 Commissioner’s Cross-Motion for Summary Judgment, and REMANDS this action for 10 further proceedings and factual development consistent with this order. 11 I. ADMINISTRATIVE AND FACTUAL BACKGROUND 12 In 2004, the Social Security Administration (“SSA”) notified Plaintiff that he was 13 eligible to receive disability benefits under the Social Security Act. (Administrative 14 Record (“AR”) 54–59, ECF No. 19.) In its letter to Plaintiff, the Agency specified that it 15 would review Plaintiff’s case in March 2005 and would continue his benefits—if he was 16 still disabled. (AR 57.) In a decision dated June 9, 2005, Plaintiff was found disabled as 17 of October 25, 2002, due to “advanced degenerative disc disease of the lumbar spine” and 18 “morbid obesity.” (AR 14, 16, 88; see also AR 272.) Around 2007, Plaintiff underwent 19 gastric bypass surgery and lost approximately 250 pounds. (AR 18, 36, 86, 325; see also 20 AR 20.) 21 In a letter dated May 22, 2014, the SSA informed Plaintiff that based on medical 22 reports it received, Plaintiff’s condition is “not severe enough to keep [him] from working”; 23 therefore, it determined that Plaintiff’s disability had ceased as of May 2014. (AR 68–71.) 24 On July 11, 2014, Plaintiff submitted a request for reconsideration regarding the cessation 25 of his benefits. (AR 72.) In Plaintiff’s request, he indicated that he was currently being 26 treated by an orthopedic surgeon, Dr. William Tontz. (AR 72; see also AR 81.) After a 27 1 The Court interprets Plaintiff’s brief (ECF No. 22) as a summary judgment motion. See Erickson 28 1 hearing on March 17, 2015, a Disability Hearing Officer upheld Plaintiff’s cessation of 2 benefits. (AR 14; see also AR 85–94.) In the Disability Hearing Officer’s Report, Dr. 3 Tontz is listed as one of three doctors not contained in the claim’s file but who relate to 4 Plaintiff’s alleged disability. (AR 77.) In the Summary of Evidence dated March 18, 2015, 5 the same hearing officer indicated that there “was no opinion provided by a treating 6 physician in file to consider, and there are no matters reserved to the Commissioner” when 7 making this decision. (AR 89.) However, the summary noted Plaintiff’s testimony that he 8 saw Dr. Tontz within the last year, at which time Dr. Tontz “looked at [Plaintiff’s] MRI 9 and told him not to exercise, and that he was too young to fuse his spine.” (AR 86.) 10 On April 8, 2015, Plaintiff—who was not represented by counsel—requested a 11 hearing before an Administrative Law Judge (“ALJ”). (AR 101.) Plaintiff completed a 12 Recent Medical Treatment form dated February 5, 2016, indicating, again, that he was 13 currently being treated by his “surgeon,” Dr. Tontz, “who said ‘no work’” because his 14 “back is in really bad shape.” (AR 255.) Plaintiff attached a letter from Dr. Tontz stating 15 that Plaintiff is “unable to perform any meaningful work secondary to severe nerve 16 compression and arthritis in his lumbar spine.” (AR 255–56.) On September 20, 2017, 17 ALJ Ben Willner heard Plaintiff’s case. (AR 33.) At this hearing, Plaintiff testified his 18 “surgeon” said that Plaintiff “couldn’t do any meaningful work,” would need future 19 surgery, and should not “do anything too strenuous or lifting,” or else his “spine could 20 collapse.” (AR 44–45.) 21 In a decision dated September 29, 2017, the ALJ determined that Plaintiff had seen 22 medical improvement and that his disability under sections 216(i) and 223(f) of the Social 23 Security Act ended as of May 1, 2014. (AR 24–25.) In making his decision, the ALJ 24 considered the opinions of four examining doctors who reported differing views on the 25 exertional level that Plaintiff could tolerate. (AR 21.) In the first consultative evaluation 26 from April 2014, Dr. Kirz concluded Plaintiff could tolerate a heavy exertional level. (AR 27 285–90.) The second examination concluding a light exertional level was conducted by 28 Dr. Masters, a State Agency Consultant, in May 2014. (AR 299–300.) The third 1 examination was conducted in December 2014 by Dr. Sabourin, an Orthopedic 2 Consultative Examiner, who concluded a light exertional level. (AR 325–29.) The fourth 3 and final examination concluding a medium exertional level was conducted in December 4 2014 by Dr. Jacobs, a State Agency Consultant. (AR 339–42.) The ALJ afforded the most 5 weight to the opinion of Dr. Jacobs adopting a medium exertional level assessment. (AR 6 21, 23.) The ALJ noted that both orthopedic consultative examiners observed an 7 “exaggeration of symptoms.” (AR 19; see also AR 285, 329.) The ALJ’s decision does 8 not mention Plaintiff’s orthopedic surgeon, Dr. Tontz, despite the administrative record 9 containing statements from Dr. Tontz and statements attributed to him. (AR 14–25; AR 10 255–56; see also AR 76, 86.) 11 On October 29, 2017, Plaintiff requested review of the ALJ’s decision. (AR 178.) 12 Plaintiff submitted a written statement with his appeal, stating that his “surgeon” told him 13 that he needs his “spine fused soon . . . .” (AR 268.) Additionally, Plaintiff attested: “I 14 have in my records that my surgeon [says] that I can’t do any meaningful[ ] work. My 15 back could collapse anytime.” (Id.) On December 12, 2017, the Appeals Council notified 16 Plaintiff that it had granted his request for more time before it acts on his case, giving him 17 25 days within the date of the letter to send the Appeals Council more information. (AR 18 9.) Plaintiff then submitted to the Appeals Council a letter from Dr. Tontz dated January 19 12, 2018, which states that Plaintiff “has been under my care since 2014,” “is diagnosed 20 with severe degenerative disc from L4-S1,” and “has trouble with standing, sitting, 21 twisting, stooping, and lifting.” (AR 8.) Dr. Tontz additionally opined in his letter that 22 Plaintiff “will require a complex anterior lumbar spinal fusion and will need to have 23 extensive post operative follow up treatments.” (Id.) Further, Dr. Tontz opined that 24 Plaintiff “will be unable to work indefinitely because of his severe back injury and complex 25 treatment he requires.” (Id.) 26 The Appeals Council viewed this evidence but ultimately denied review of 27 Plaintiff’s case, therefore making the ALJ’s decision final. (AR 1; see also AR 2, 12.) In 28 a letter dated August 29, 2018, the Appeals Council found that the new evidence did not 1 relate to the period at issue, and therefore the evidence did not affect the decision about 2 whether Plaintiff was disabled during the period evaluated by the ALJ. (AR 1–2.) 3 Plaintiff was unrepresented throughout the SSA’s reconsideration of his cessation of 4 benefits. (See AR 33–35, 178.) Continuing without counsel, Plaintiff seeks judicial review 5 of the Commissioner’s final decision pursuant to 42 U.S.C. §§ 405(g) and 1383(c). 6 II. THE R&R 7 The R&R finds that the SSA wrongfully discounted a treating physician’s letter 8 supporting disability when the SSA incorrectly found that Dr. Tontz did not treat Plaintiff 9 during the relevant time frame. (R. & R. 3:14–4:16.) The R&R concludes the SSA erred 10 because Dr. Tontz’s care took place during the period at issue. (Id.) It finds that Dr. 11 Tontz’s letter provides a stark difference in opinion regarding Plaintiff’s medical condition 12 and because of the traditional deference paid to treating physician’s opinions, the error 13 cannot be deemed harmless. (Id. 5:8–9.) Thus, the R&R recommends this Court grant 14 Plaintiff’s Motion for Summary Judgment and deny Defendant’s Cross-Motion. (Id. 6:8– 15 10.) 16 III. LEGAL STANDARDS 17 A. Review of the R&R 18 The court reviews de novo those portions of the R&R to which objections are made. 19 28 U.S.C. § 636(b)(1). It may “accept, reject, or modify, in whole or in part, the findings 20 or recommendations made by the magistrate judge.” Id. But “[t]he statute makes it clear 21 that the district judge must review the magistrate judge’s findings and recommendations 22 de novo if objection is made, but not otherwise.” United States v. Reyna-Tapia, 328 F.3d 23 1114, 1121 (9th Cir. 2003) (en banc); see also Schmidt v. Johnstone, 263 F. Supp. 2d 1219, 24 1226 (D. Ariz. 2003) (concluding that where no objections were filed, the district court had 25 no obligation to review the magistrate judge’s report). 26 B. Review of a Denial of Social Security Benefits 27 A claimant may obtain judicial review of the Commissioner’s final decision to deny 28 benefits. 42 U.S.C. §§ 405(g), 1383(c). “As with other agency decisions, federal court 1 review of social security determinations is limited.” Treichler v. Comm’r of Soc. Sec. 2 Admin., 775 F.3d 1090, 1098 (9th Cir. 2014). The district court “will disturb the denial of 3 benefits only if the decision ‘contains legal error or is not supported by substantial 4 evidence.’” Tommasetti v. Astrue, 533 F.3d 1035, 1038 (9th Cir. 2008) (quoting Orn v. 5 Astrue, 495 F.3d 625, 630 (9th Cir. 2007)). When reviewing whether the Commissioner’s 6 determination is supported by substantial evidence and free of error, the court must 7 consider the record as a whole, “weighing both the evidence that supports and the evidence 8 that detracts from the Commissioner’s conclusion.” Lingenfelter v. Astrue, 504 F.3d 1028, 9 1035 (9th Cir. 2007) (quoting Reddick v. Chater, 157 F.3d 715, 720 (9th Cir 1998)). 10 The court “may at any time order additional evidence to be taken before the 11 Commissioner of Social Security, but only upon a showing that there is new evidence 12 which is material and that there is good cause for the failure to incorporate such evidence 13 into the record in a prior proceeding . . . .” 42 U.S.C. § 405(g). The court “may not affirm 14 simply by isolating a specific quantum of supporting evidence.” Garrison v. Colvin, 759 15 F.3d 995, 1009 (9th Cir. 2014) (quoting Lingenfelter, 504 F.3d at 1035). The court’s scope 16 of review is limited, as it “review[s] only the reasons provided by the ALJ in the disability 17 determination and may not affirm the ALJ on a ground upon which he [or she] did not 18 rely.” Id. at 1010. 19 Social Security proceedings “are inquisitorial rather than adversarial,” and the ALJs 20 who preside over them have a “duty to investigate the facts and develop the arguments both 21 for and against granting benefits.” Sims v. Apfel, 530 U.S. 103, 110–11 (2000) (plurality 22 opinion); see also Schiaffino v. Saul, 799 F. App’x 473, 475 (9th Cir. 2020) (citing this 23 proposition in Sims to find an ALJ erred by dismissing an ambiguous opinion when the 24 ALJ should have further developed the record). Further, the ALJ is responsible for 25 determining credibility, resolving conflicts in medical testimony, and resolving 26 ambiguities. Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989) (citing cases); see 27 also Richardson v. Perales, 402 U.S. 389, 410 (1971) (“[The social security hearing 28 examiner] acts as an examiner charged with developing the facts.”); Armstrong v. Comm’r 1 of Soc. Sec. Admin., 160 F.3d 587, 589 (9th Cir. 1998) (“[T]he ALJ has a duty to assist in 2 developing the record.”). 3 IV. ANALYSIS 4 The Commissioner objects to the R&R and disagrees with the Magistrate Judge’s 5 recommendation to remand this matter so that the ALJ may address the additional evidence 6 from Dr. Tontz. (Objs. 1:23–2:11, ECF No. 31.)2 The Commissioner contends that the 7 ALJ’s decision is supported by substantial evidence notwithstanding the evidence in 8 question. Further, the Commissioner argues that any error that may be attributed to the 9 Agency’s treatment of Dr. Tontz’s opinion is harmless because this evidence would not 10 likely have changed the ALJ’s ultimate conclusion that Plaintiff is no longer disabled. (Id. 11 2:7–11.) Having conducted a de novo review of the R&R, the Court will resolve the 12 Commissioner’s objections within the context of its overall analysis of the case at hand. 13 A. Appeals Council’s Consideration of Additional Evidence 14 Prior to the Appeals Council’s denial of Plaintiff’s request for review, Plaintiff 15 submitted a letter by his treating physician, Dr. Tontz, dated January 12, 2018. (AR 8.) 16 This letter was not provided to the ALJ during Plaintiff’s proceedings but provided to the 17 Appeals Council as new evidence. In denying Plaintiff’s request for review, the Appeals 18 Council explained that this new evidence “does not relate to the period at issue.” (AR 2.) 19 See 20 C.F.R. § 404.970(a)(5). In his Motion for Summary Judgment, Plaintiff argues that 20 the Appeals Council committed a reversible error by failing to ensure that Dr. Tontz’s 21 opinion was properly considered.3 (See Pl.’s Mot. Summ. J., ECF No. 22.) The R&R 22 agrees with Plaintiff. 23 2 For the Commissioner’s Objections, the Court cites to the imprinted electronic case filing page 24 numbers. 25 3 “When the Appeals Council denies a request for review, it is a non-final agency action not subject to judicial review because the ALJ’s decision becomes the final decision of the Commissioner.” 26 Taylor v. Comm’r of Soc. Sec. Admin., 659 F.3d 1228, 1231 (9th Cir. 2011); see also Klemm v. Astrue, 543 F.3d 1139, 1144 (9th Cir. 2008) (“The Social Security Act grants to district courts jurisdiction to 27 review only ‘final decisions’ of the Commissioner.” (citing 42 U.S.C. § 405(g))). Thus, the Court does not have jurisdiction to review the Appeals Council’s decision to deny Plaintiff’s request for review. 28 1 When the Appeals Council receives a request for review that contains new evidence, 2 it may choose between two options. First, it may “view” the evidence and then send the 3 claimant a notice rejecting the evidence for a valid reason. 20 C.F.R. § 404.970(a)–(c). 4 The Appeals Council may reject additional evidence if the claimant did not have good 5 cause for his delay in producing the new evidence, or if the documents do not relate to the 6 period on or before the date of the ALJ’s decision. Id. Alternatively, the Appeals Council 7 may “consider” the evidence as part of its decision-making process, incorporating the 8 evidence into the official record regardless of whether it grants review. See Brewes v. 9 Comm’r of Soc. Sec. Admin., 682 F.3d 1157, 1162–63 (9th Cir. 2012) (noting the Appeals 10 Council considered the claimant’s new evidence but declined to review the ALJ’s 11 decision). 12 Here, the Appeals Council did not specifically advise Plaintiff that it had rejected 13 or declined to accept Dr. Tontz’s 2018 letter. (See AR 2.) Rather, the Appeals Council 14 considered the evidence and incorporated it into the administrative record. (See id.; AR 15 6, 8.) Specifically, the Appeals Council addressed Plaintiff’s additional evidence by 16 writing: 17 You submitted medical evidence from William Tontz, Jr. M.D., dated January 12, 2018, 2 pages. The Administrative Law Judge decided your case through 18 September 29, 2017. This additional evidence does not relate to the period at 19 issue. Therefore, it does not affect the decision about whether you were disabled beginning on or before September 29, 2017. 20
21 If you want us to consider whether you were disabled after September 29, 2017, you need to apply again. 22
23 (AR 2.) 24 Therefore, the Court concludes that the Appeals Council considered, rather than 25 rejected, Plaintiff’s additional evidence. Two issues bear on the Appeals Council’s 26 consideration of Dr. Tontz’s 2018 letter. The Court will address these issues in turn. 27 the Court may review the additional evidence submitted in its overall review of the Commissioner’s final 28 1 1. Relevant Period 2 The R&R determines the Appeals Council mistakenly concluded that Dr. Tontz’s 3 letter did not relate to the period at issue. (R. & R. 4:3–16.) The Appeals Council should 4 grant review of an ALJ decision if a claimant presents additional evidence that is “new, 5 material, and relates to the period on or before the date of the hearing decision, and there 6 is a reasonable probability that the additional evidence would change the outcome of the 7 decision.” 20 C.F.R. § 404.970(a)(5); see also, e.g., Edgecomb v. Berryhill, 741 F. App’x 8 390, 393 (9th Cir. 2018) (finding that where a physician’s letter submitted for the first time 9 to the Appeals Council contained new and material evidence, it is considered in reviewing 10 the ALJ’s denial of benefits); but see infra Part IV.A.ii. This applies even if the evidence 11 is dated after the relevant period, so long as the evidence discusses the claimant’s medical 12 history going back to the period in question. Edgecomb, 741 F. App’x at 393; accord 13 James Richard L. v. Comm’r of Soc. Sec. Admin., No. 2:19-CV-00008-RHW, 2020 WL 14 998811, at *4 (E.D. Wash. Mar. 2, 2020). 15 Here, the Appeals Council considered and addressed Plaintiff’s new evidence. (See 16 AR 2, 8.) However, the Appeals Council discounted Dr. Tontz’s opinion on the mistaken 17 reasoning that it “does not relate to the period at issue.” (AR 2.) The Appeals Council did 18 not explain its conclusion beyond noting that the letter was dated January 12, 2018, and 19 that the relevant period ended September 29, 2017. (Id.) Therefore, the Court will conduct 20 its own review of the letter to determine if it relates to the relevant period. See Edgecomb, 21 741 F. App’x at 393. 22 Dr. Tontz’s letter is dated January 12, 2018, but it discusses Plaintiff’s medical 23 history going back to 2014, and at the very least October 2017. (AR 8.) In the letter, Dr. 24 Tontz states that Plaintiff has been “under [his] care since 2014 and was last examined on 25 10-05-2017.” (Id.) Dr. Tontz further states that Plaintiff “is diagnosed with severe 26 degenerative disc from L4-S1 . . . .” (Id.) Dr. Tontz also notes that Plaintiff “was referred 27 to a vascular surgeon in October of 2017, for medical clearance as he will require a complex 28 anterior fusion, and will need to have extensive post operative follow up treatments.” (Id.) 1 The ALJ’s decision examined Plaintiff’s “comparison point decision”—the Agency’s prior 2 disability determination—where his medically determinable impairments were 3 “degenerative disc disease of the lumbar spine and morbid obesity.” (AR 16.) Thus, Dr. 4 Tontz’s statements relate to the exact issues contested by Plaintiff and examined in the 5 ALJ’s unfavorable decision. 6 Further, the relevant period is “on or before the date of the hearing decision,” which 7 here is September 29, 2017—the date through which the ALJ had decided Plaintiff’s case. 8 (AR 2.) See 20 C.F.R. § 404.970(a)(5). The R&R correctly states that even if Dr. Tontz’s 9 opinion was based entirely on Plaintiff’s last examination on October 5, 2017—six days 10 after the relevant period ended—Dr. Tontz’s opinion would still relate to the period at 11 issue. (R. & R. 4:7–16 (citing Taylor v. Comm’r of Soc. Sec. Admin., 659 F.3d 1228, 1232 12 (9th Cir. 2011)).4 13 Therefore, because Dr. Tontz’s opinion concerns his assessment of Plaintiff’s health 14 condition during the period that he treated Plaintiff—and he claims to have treated Plaintiff 15 since 2014—the opinion relates to the period Plaintiff was found not disabled. Thus, the 16 Court agrees with the R&R’s conclusion that the Appeals Council wrongly concluded that 17 Dr. Tontz’s letter did not relate to the period at issue. 18 2. Good Cause 19 The Commissioner objects to the R&R’s conclusion, claiming that the Appeals 20 Council could have appropriately denied review of Plaintiff’s additional evidence for lack 21 of “good cause.” (Objs. 4:22–5:5.) As of January 17, 2017, the Appeals Council will only 22 consider new evidence if the claimant “show[s] good cause for not informing [the SSA] 23 about or submitting the evidence” sooner. 20 C.F.R. § 404.970(b); see also id. § 404.970(c) 24
25 4 See also Lester v. Chater, 81 F.3d 821, 832 (9th Cir. 1996)) (“[M]edical evaluations made after the expiration of a claimant’s insured status are relevant to an evaluation of the preexpiration condition.”); 26 Smith v. Bowen, 849 F.2d 1222, 1224–25 (9th Cir. 1988) (holding that three doctors’ medical evaluations, occurring some three to nine years after the expiration of the insured status, were “relevant to an evaluation 27 of the pre-expiration condition”); Hartman v. Bowen, 636 F. Supp. 129, 132 (N.D. Cal. 1986) (explaining although plaintiff has to establish that disability existed prior to the expiration date, she is “not confined . 28 1 (providing the Appeals Council may send a notice rejecting evidence where it “does not 2 find [the claimant] had good cause for missing the deadline to submit the evidence” to the 3 ALJ). This new regulation applied when Plaintiff submitted Dr. Tontz’s letter to the 4 Appeals Council. (See AR 2.) 5 The R&R correctly states that this Court need not wrestle with whether Plaintiff had 6 good cause for the late submission, because the Appeals Council never determined 7 otherwise. (R. & R. 5:20–25 (citing Revels v. Berryhill, 874 F.3d 648, 654 (9th Cir. 2017) 8 (“We review only the reasons provided by the [SSA] in the disability determination and 9 may not affirm the [SSA] on a ground upon which [it] did not rely.”).) The Commissioner 10 contends that the “good cause requirement was not referenced by Appeals Council, but it 11 could have [been] . . . .” (Objs. 4:28–5:1.) The Commissioner further notes that the Ninth 12 Circuit has held that obtaining a declaration from a medical source after receiving an 13 unfavorable ALJ decision is not “good cause.” (Id. 5:1–3 (citing Mayes v. Massanari, 276 14 F.3d 453, 462 (9th Cir. 2001) (“A claimant does not meet the good cause requirement by 15 merely obtaining a more favorable report once his or her claim has been denied.”)).) 16 Here, the Court is unpersuaded by the Commissioner’s response that the Appeals 17 Council could have referenced the good cause requirement in its denial of review. The 18 Court reiterates and adopts the R&R’s analysis regarding the good cause requirement. (See 19 R. & R. 5:20–25.) Additionally, in response to the Commissioner’s contention that 20 Plaintiff merely sought out a more favorable report after the ALJ’s decision, the Court 21 notes that Plaintiff referred to Dr. Tontz as his treating physician several times throughout 22 the administrative record and submitted a 2015 letter from Dr. Tontz into the record on 23 February 5, 2016, before his ALJ hearing in 2017. (AR 255–56.) Further, the letter 24 submitted by Dr. Tontz in 2018 largely comports with the previous statements attributed 25 to Dr. Tontz in the record. (See AR 8.) Therefore, the Court rejects the characterization 26 that Plaintiff merely obtained a more favorable report after his claim was denied. And, 27 overall, the Court is unconvinced by the Commissioner’s post hoc response that Plaintiff’s 28 1 new evidence could have been rejected for lack of “good cause” under 20 C.F.R. § 2 404.970(b)–(c). 3 In sum, the Appeals Council erred when it determined that Dr. Tontz’s 2018 letter 4 did not relate to the period at issue. The result of this error is that the Commissioner’s final 5 decision on review improperly excludes Dr. Tontz’s opinion. See Taylor, 659 F.3d at 6 1232–33. 7 B. Harmless Error Analysis 8 The Court now turns to whether excluding Dr. Tontz’s opinion from the SSA’s final 9 decision was harmless error. In doing so, the Court may include Dr. Tontz’s 2018 letter in 10 its review. See Brewes, 682 F.3d at 1161–62; see also Taylor, 659 F.3d at 1232 (noting 11 the court can review an “improperly rejected opinion in [its] overall review of the ALJ’s 12 final decision”); Harman v. Apfel, 211 F.3d 1172, 1180 (9th Cir. 2000) (stating the court 13 can consider additional materials submitted to the Appeals Council because “the Appeals 14 Council addressed them in the context of denying Appellant’s request for review”). The 15 Commissioner objects that “any error that may be attributed to the Agency’s treatment of 16 [Dr. Tontz’s letter] is harmless because the evidence would not likely have changed the 17 ALJ’s ultimate conclusion that Plaintiff was no longer disabled.” (Objs. 2:9–11.) Further, 18 the Commissioner doubts that Dr. Tontz might have something more to add about 19 Plaintiff’s limitations. (See id. 6:3–13.) 20 The Ninth Circuit has recognized that the doctrine of “harmless error applies in the 21 Social Security context.” Stout, 454 F.3d at 1054. The standard for harmless error remains 22 deferential to the Commissioner, and a court should uphold the decision if the error is 23 “inconsequential to the ultimate nondisability determination.” See Molina v. Astrue, 674 24 F.3d 1104, 1115 (9th Cir. 2012); accord Robbins v. Soc. Sec. Admin., 466 F.3d 880, 885 25 (9th Cir. 2006). 26 Therefore, if excluding Dr. Tontz’s opinion was “inconsequential to the ultimate 27 nondisability determination,” the error is harmless. See Molina, 674 F.3d at 1115. The 28 Court must “look at the record as a whole to determine whether the error alters the outcome 1 of the case.” Id. In doing so, the Court keeps in mind that “[a]s a general rule, where the 2 ‘critical portions’ of a treating physician’s discredited opinion were presented for the first 3 time to the Appeals Council, ‘[t]he appropriate remedy . . . is to remand th[e] case to the 4 ALJ’ to consider the additional evidence.” Gardner v. Berryhill, 856 F.3d 652, 657–58 5 (9th Cir. 2017) (quoting Harman, 211 F.3d at 1180). 6 1. Impact of Dr. Tontz’s Letter 7 To revoke previously awarded benefits, the SSA must conclude that the recipient 8 has made “medical improvement” and can return to work. See Attmore v. Colvin, 827 F.3d 9 872, 873 (9th Cir. 2016). For that medical-improvement determination, the SSA must 10 correctly account for a treating physician’s opinion. See Trevizo v. Berryhill, 871 F.3d 664, 11 675 (9th Cir. 2017) (explaining treating-doctor rule); 20 C.F.R. § 404.1594(b)(6) 12 (incorporating same standards for cessation-of-benefits cases as original applications). 13 Under the relevant regulation, a treating doctor’s opinion is given “controlling weight” so 14 long as it “is well-supported by medically acceptable clinical and laboratory diagnostic 15 techniques and is not inconsistent with the other substantial evidence in [the claimant’s] 16 case record.” Trevizo, 871 F.3d at 675 (alteration in original) (quoting 20 C.F.R. § 17 404.1527(c)(2)). 18 Under the Ninth Circuit’s treating physician rule, the opinion of a treating physician 19 receives the “greatest weight.” E.g., Tonapetyan v. Halter, 242 F.3d 1144, 1148 (9th Cir. 20 2001). The Commissioner should also assign weight to opinions based on the “length, 21 nature, and extent of the treatment relationship; frequency of examination; supportability; 22 and consistency with the overall record.” Fleenor v. Berryhill, 752 F. App’x 451, 452 (9th 23 Cir. 2018); see also 20 C.F.R. § 404.1527(c)(2)–(6); Trevizo, 871 F.3d at 676 (holding 24 that the ALJ committed a reversible error by discounting a medical opinion without 25 weighing these factors); Garrison, 759 F.3d at 1013 (holding that medical opinions that 26 were presented in a check-box form were still entitled to weight because they were “based 27 on significant experience” and “supported by numerous records”). 28 1 An ALJ may only disregard an uncontradicted treating physician’s opinion for 2 “clear and convincing reasons . . . supported by substantial evidence.” Bayliss v. Barnhart, 3 427 F.3d 1211, 1216 (9th Cir. 2005). If the opinion is contradicted by another doctor, the 4 ALJ must still provide “specific and legitimate reasons . . . supported by substantial 5 evidence” before rejecting the opinion. Id. There are many legitimate reasons for 6 disregarding a treating physician’s opinion, including that the opinion is clearly biased, 7 conclusory, or unsupported by clinical findings. Matney v. Sullivan, 981 F.2d 1016, 1019 8 (9th Cir. 1992). 9 As noted in the R&R and the Commissioner’s Objections, after Plaintiff filed his 10 continuing-benefits claim, the SSA substantially changed the way it treats medical 11 opinions. Compare 20 C.F.R. § 404.1527 (claims filed before March 27, 2017), with 20 12 C.F.R. § 404.1520c (claims filed on or after March 27, 2017). The claim here was filed 13 before March 27, 2017, because Plaintiff’s cessation-of-benefits claim was filed on July 14 11, 2014. (AR 72.) Therefore, the relevant law is clear—a treating doctor’s opinion 15 receives the “greatest weight.” See, e.g., Tonapetyan, 242 F.3d at 1148. 16 Here, the Court disagrees with the Commissioner’s suggestion that even if Dr. 17 Tontz’s opinion had been properly considered, it would not have affected the disability 18 determination. (Objs. 6:16–19.) Excluding Dr. Tontz’s letter was not a harmless error 19 because the letter is material. See Luna v. Astrue, 623 F.3d 1032, 1034 (9th Cir. 2010) 20 (“New evidence is material when it ‘bear[s] directly and substantially on the matter in 21 dispute,’ and if there is a ‘reasonabl[e] possibility that the new evidence would have 22 changed the outcome of the . . . determination.’” (quoting Booz v. Sec’y of Health Human 23 Serv., 734 F.2d 1378, 1380 (9th Cir. 1984))). Dr. Tontz’s letter relates to the relevant 24 period as explained above and expresses the opinion of a treating physician, a valid medical 25 source. Dr. Tontz had a history of treating Plaintiff and was operating within his specialty 26 as an orthopedic surgeon, which gave him familiarity with Plaintiff’s condition. (AR 8.) 27 Additionally, Dr. Tontz’s letter contradicts the ALJ’s finding that Plaintiff could 28 perform medium work, estimating that Plaintiff “will be unable to work indefinitely 1 because of his severe back injury and complex treatment he requires.” (Id.) Dr. Tontz 2 indicates that Plaintiff “has trouble with standing, sitting, twisting, stooping, and lifting.” 3 (Id.) These limitations would interfere with Plaintiff’s ability to perform activities for some 4 part of an eight-hour workday, contradicting the ALJ’s finding that Plaintiff can perform 5 medium work. (See AR 18.) Further, the Court rejects the Commissioner contention that 6 Dr. Tontz will not have something more to add regarding Plaintiff’s limitations. (See Objs. 7 6:3–13.) As Plaintiff’s orthopedic surgeon, he would have important medical information 8 regarding Plaintiff’s medical condition. Dr. Tontz’s treating physician opinion contradicts 9 the other medical opinions considered by the ALJ. Therefore, the SSA was obligated to 10 weigh his opinion against the other evidence. See Trevizo, 871 F.3d at 675–66. However, 11 this did not occur. 12 Moreover, aside from Dr. Tontz’s 2018 letter, there are several instances in the 13 administrative record where statements from, or attributed to, Dr. Tontz are apparent. (AR 14 255–56; see also AR 44–45, 73, 76, 77, 81, 86.) For example, Plaintiff completed a Recent 15 Medical Treatment form dated February 5, 2016—over a year prior to his hearing before 16 the ALJ—indicating that he was currently being treated by his “surgeon,” Dr. Tontz, “who 17 said ‘no work’” because his “back is in really bad shape.” (AR 255.) Plaintiff attached a 18 letter from Dr. Tontz dated April 22, 2015, stating that Plaintiff is “unable to perform any 19 meaningful work secondary to severe nerve compression and arthritis in his lumbar spine.” 20 (AR 255–56.) Dr. Tontz’s letter dated January 12, 2018, further supports Plaintiff’s 21 references because it indicates that Dr. Tontz has been Plaintiff’s treating physician since 22 2014. (AR 8.) When combined, this evidence indicates that there was harmful error 23 because the Agency discounted—or at the very least, overlooked—a treating physician’s 24 opinion. 25 Yet, the SSA failed to adequately address Dr. Tontz’s opinion or obtain additional 26 information that Dr. Tontz might provide. The Commissioner contends that the Agency 27 sent a “slow source letter” to Dr. Tontz but received “no response” from him; however, 28 neither the ALJ nor the Appeals Council addressed this issue as a reason to discount Dr. 1 Tontz’s opinions. (Objs. 4:16–18 (citing AR 340).) Rather, the ALJ’s decision does not 2 address Dr. Tontz at all, including his 2015 letter that was already in the record. (See AR 3 11–25; 255–56.) Nor does the existence of a “slow source letter” excuse the Agency’s 4 improper consideration of Dr. Tontz’s 2018 letter. Moreover, the Court underscores that 5 Social Security proceedings “are inquisitorial rather than adversarial,” and the ALJs that 6 preside over them have a “duty to investigate the facts and develop the arguments both for 7 and against granting benefits.” Sims, 530 U.S. at 110–11. 8 Accordingly, Dr. Tontz’s 2018 letter is material, relates to the period at issue, and is 9 “owed deference.” See Garrison, 759 F.3d at 1012–13. Therefore, the Agency’s failure 10 to properly address Dr. Tontz’s opinion was not “inconsequential to the ultimate 11 nondisability determination.” See Molina, 674 F.3d at 1115. This means the error was not 12 harmless. See id. 13 2. Substantial Evidence Objections 14 Although the Court is persuaded that the Agency’s final decision contains harmful 15 error, the Court considers the Commissioner’s remaining objections that involve the 16 substantial evidence standard. The Commissioner objects to the R&R, suggesting that 17 substantial evidence supporting the ALJ’s decision makes the legal error here harmless. 18 (Objs. 4:3–5.) The Commissioner contends that the R&R’s recommendation to remand is 19 too heavily based on the potential of additional supporting evidence from a treating 20 physician “who has already shown that he is not inclined to provide detail or support for 21 his conclusions.” (Id. 7:12–15.) The Commissioner claims that Dr. Tontz’s letter is 22 conclusory, not medical opinion, and merely projects about future treatment. (Id. 5:6–10.) 23 The Commissioner further objects that remanding this case for “weak evidence” is 24 “precisely why” the Commissioner changed the regulations to eliminate the treating 25 physician rule. (Id. 4:24–26.) 26 Instead, the Commissioner suggests that the Court should focus on whether the 27 ALJ’s decision was supported by substantial evidence in the record as a whole. (Id. 7:7– 28 10.) To this end, the Commissioner contends that the ALJ’s decision satisfies the 1 substantial evidence standard “notwithstanding the speculative and cursory nature of the 2 evidence upon which the R&R advocates remand.” (Id. 4:3–5.) This is because four 3 examining doctors concluded that Plaintiff had the functional ability to work, and two 4 examiners noted Plaintiff’s “exaggeration of symptoms.” (Id. 5:14–17.) 5 The Commissioner’s arguments miss the mark. Initially, although the treating 6 physician rule may be changed for future cases, it still applies to Plaintiff’s claim here. 7 And this Court has the authority to “disturb the denial of benefits” where “the decision 8 ‘contains legal error.’” See Tommasetti, 533 F.3d at 1038 (quoting Orn, 495 F.3d at 630). 9 While the Commissioner may point to the record to show that evidence supports the ALJ’s 10 decision, the Court here is concerned with harmful legal error—the SSA’s failure to 11 properly address Plaintiff’s treating physician’s opinion. 12 Additionally, the Court disagrees with the Commissioner’s claim that Dr. Tontz’s 13 letter is conclusory and not medical opinion. Dr. Tontz’s letter is not conclusory; it 14 provides details and references information about Plaintiff’s ongoing treatment. (AR 8.) 15 The letter also relates to the period relevant to the disability determination, as explained 16 above. (Id.) Furthermore, Dr. Tontz offers to provide more information, stating: “[p]lease 17 do not hesitate with any questions or concerns.” (Id.) 18 For these reasons, the Court rejects the Commissioner’s objections concerning the 19 substantial evidence standard. Consequently, the Court adopts the R&R’s conclusion that 20 SSA committed a harmful error when it failed to adequately consider and weigh, or reject, 21 Dr. Tontz’s opinion. 22 C. Appropriate Remedy—Remand 23 Having concluded the Commissioner committed harmful legal error, the Court must 24 determine the appropriate remedy. “[T]he proper course, except in rare circumstances, is 25 to remand to the agency for additional investigation or explanation.” Benecke v. Barnhart, 26 379 F.3d 587, 595 (9th Cir. 2004). This “ordinary remand rule” respects the 27 Commissioner’s role in developing the factual record and helps guard against the 28 displacement of administrative judgment by judicial decree. See Treichler, 775 F.3d at 1 || 1099-100. Additionally, when the Appeals Council erroneously rejects new treating- 2 || physician evidence, a “remand to the ALJ for further consideration 1s in order,” rather than 3 ||a remand for an award of benefits. Taylor, 659 F.3d at 1235; see also Harman, 211 F.3d 4 1180 (same). 5 Here, there is clear legal error, but the record has not been fully developed, and it is 6 clear from the existing record that the ALJ would be required to find Plaintiff disabled 7 ||on remand if the improperly discounted medical opinion was credited as true. See 8 || Dominguez v. Colvin, 808 F.3d 403, 407 (9th Cir. 2015). However, it is clear that 9 || additional fact-finding is needed in this case. Because neither the Appeals Council nor the 10 || ALJ properly addressed Dr. Tontz’s opinion, further administrative proceedings would 11 || allow the SSA to consider the opinion in light of the existing record, and to further develop 12 ||the record if necessary. That the ALJ did not have an opportunity to consider material 13 |}evidence because it was presented for the first time to the Appeals Council is yet another 14 reason to conclude that remanding for further proceedings is the appropriate remedy. See 15 || Gardner, 856 F.3d at 657-58. 16 Accordingly, the Court is convinced that remand is appropriate in order for the ALJ 17 ||to consider Dr. Tontz’s opinion and for additional fact-finding. See Taylor, 659 F.3d at 18 |} 1235. 19 CONCLUSION 20 In light of the foregoing, the Court OVERRULES the Commissioner’s objections 21 (ECF No. 31), ADOPTS the R&R (ECF No. 30), GRANTS Plaintiff's motion (ECF No. 22 || 22), DENIES the Commissioner’s cross-motion (ECF No. 24), and REMANDS this action 23 ||for further proceedings and factual development consistent with this order. See 42 U.S.C. 24 405(g), 1383(c). 2 IT IS SO ORDERED. 26 /) . ys 27 DATED: August 20, 2020 nisi dg □ ashaa 6 28 United States District Judge
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