Hilda L. v. Frank Bisignano, Commissioner of Social Security

Opinion

2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HILDA L.,1 Case No.: 24cv2348-MSB

12 Plaintiff, ORDER REVERSING AND REMANDING 13 v. THE COMMISSIONER’S DECISION

14 FRANK BISIGNANO, Commissioner of [ECF NOS. 10, 16] Social Security,2 15 Defendant. 16 17 18 On December 16, 2024, Plaintiff Hilda Fuamatagi Leomiti Laurenson (“Plaintiff”) 19 filed a Complaint pursuant to 42 U.S.C. § 405(g), seeking judicial review of a final 20 decision by Defendant Frank J. Bisignano, Commissioner of Social Security 21 (“Commissioner”), denying Plaintiff’s application for disability insurance benefits. (See 22 ECF No. 1 at 1.) Based on Plaintiff’s consent [see ECF Nos. 2, 6], this matter is before the 23

24 1 Under Civil Local Rule 7.1(e)(6)(b), “[o]pinions by the Court in [Social Security cases under 42 U.S.C. § 25 405(g)] will refer to any non-government parties by using only their first name and last initial.” 2 In May 2025, Frank Bisignano was sworn in as Commissioner of the Social Security Administration. 26 See https://www.ssa.gov/agency/commissioner.html (last visited Jan. 5, 2026). Accordingly, Frank Bisignano is substituted as the defendant in this lawsuit. See Fed. R. Civ. P. 25(d) (“An action does not 27 abate when a public officer who is a party in an official capacity dies, resigns, or otherwise ceases to 2 28 U.S.C. § 636(c). 3 Now pending before the Court is Plaintiff’s request to reverse the Commissioner’s 4 decision and remand this matter for an award of benefits. (See ECF No. 10 at 14.) The 5 Court has carefully reviewed Plaintiff’s Complaint (“Compl.”) [ECF No. 1], the 6 Administrative Record (“AR”) [ECF No. 8], Plaintiff’s Motion (“Mot.”) [ECF No. 10], and 7 the Commissioner’s Opposition (“Opp’n”) [ECF No. 16]. For the reasons set forth below, 8 the Court ORDERS that judgment be entered REVERSING the Commissioner’s decision 9 and REMANDING this matter for further administrative proceedings. 10 I. PROCEDURAL BACKGROUND 11 On May 18, 2020, Plaintiff filed an application for disability insurance benefits 12 under Title II of the Social Security Act, alleging disability beginning on March 15, 2019. 13 (Mot. at 4.) The Commissioner denied Plaintiff’s application initially on February 3, 2021 14 [AR 186–90]; again upon reconsideration on August 4, 2021 [AR 193–98]; and once 15 more after a hearing and decision issued by Administrative Law Judge (“ALJ”) Kevin W. 16 Messer on April 5, 2022 [AR 151–53]. Plaintiff requested review of the ALJ’s decision. 17 (See AR 154.) The Appeals Council remanded this matter to the ALJ for further 18 administrative proceedings on March 10, 2023. (AR 173–78.) In compliance with the 19 Appeals Council’s remand order, the ALJ held another hearing on December 15, 2023. 20 (See AR 38–65.) As detailed in the ALJ’s decision dated March 4, 2024 [AR 17–31], the 21 ALJ found that Plaintiff has not been disabled under the Social Security Act at any time 22 from the alleged onset date through the date that Plaintiff was last insured. (AR 31.) 23 Again, Plaintiff requested review of the ALJ’s decision. (See AR 1.) The Appeals 24 Council denied Plaintiff’s request for review on October 22, 2024 [AR 1–6], rendering 25 the ALJ’s decision the final decision of the Commissioner. See 42 U.S.C. § 405(h). 26 Plaintiff filed the instant civil action on December 16, 2024, seeking judicial review of

27 the Commissioner’s decision. (See generally Compl.) 2 In rendering his decision, the ALJ followed the five-step sequential evaluation 3 process set forth in 20 C.F.R. §§ 404.1520(a)(4) and 416.920(a)(4). (See AR 18–20.) At 4 step one, the ALJ found that Plaintiff “did not engage in substantial gainful activity 5 during the period from her alleged onset date of March 15, 2019, through her date last 6 insured of September 30, 2022.” (AR 20.) 7 At step two, the ALJ found that Plaintiff has the following severe impairments that 8 significantly limit her ability to perform basic work activities: degenerative disc disease 9 of the lumbar spine with radiculopathy, osteoarthritis of the bilateral knees, and status 10 post total left knee arthroplasty. (Id.) Additionally, the ALJ found that Plaintiff has 11 obstructive sleep apnea, prediabetes, hearing loss, and an ovarian cyst. (Id.) However, 12 the ALJ concluded that each of these impairments are either not severe or not medically 13 determinable. (AR 20–21.) Likewise, the ALJ concluded that Plaintiff’s medically 14 determinable mental impairments are not severe. (AR 21.) 15 At step three, the ALJ found that Plaintiff does not have an impairment or a 16 combination of impairments that meets or medically equals the severity of one of the 17 impairments identified in the Commissioner’s Listing of Impairments. (See AR 22.) 18 Specifically, the ALJ considered listing 1.15 (disorders of the skeletal spine resulting in 19 compromise of a nerve root), listing 1.16 (lumbar spinal stenosis resulting in 20 compromise of the cauda equina), and listing 1.18 (abnormality of a major joint in any 21 extremity) and concluded that the requirements for these listings have not been met. 22 (See AR 22–23.) 23 Before proceeding to step four, the ALJ found that Plaintiff has the residual 24 functional capacity (“RFC”) to: 25 [P]erform light work as defined in [20 C.F.R. §§ 404.1567(b) and 416.967(b)] except . . . [Plaintiff can] occasionally climb ramps or stairs; never climb ladders, 26 ropes[,] or scaffolds; [can] occasionally balance, stoop, kneel, crouch[,] and crawl; 27 and [can] frequently handle and finger with the bilateral upper extremities. 2 reasonably be expected to cause her alleged symptoms. (AR 24.) However, the ALJ 3 concluded that Plaintiff’s “statements concerning the intensity, persistence[,] and 4 limiting effects of these symptoms are not entirely consistent with the . . . evidence in 5 the record.” (Id.) Thus, the ALJ concluded that “the record does not support a more 6 restrictive residual functional capacity than” light work. (AR 27.) 7 At step four, the ALJ found that Plaintiff has the residual functional capacity to 8 perform the requirements of her past relevant work as a receptionist and a customer 9 relations clerk. (AR 30.) The ALJ “accept[ed] the testimony of the vocational expert” 10 that a hypothetical individual with Plaintiff’s residual functional capacity could perform 11 Plaintiff’s past relevant work. (Id.) Having found Plaintiff capable of performing her 12 past relevant work, the ALJ found Plaintiff not disabled. (AR 30–31.) 13 The ALJ did not proceed to step five of the sequential evaluation process. The ALJ 14 concluded that Plaintiff was not disabled within the meaning of the Social Security Act 15 from March 15, 2019, through September 30, 2022, and denied her application for 16 disability insurance benefits. (See AR 31.) 17 III. DISPUTED ISSUES 18 Plaintiff raises two issues as the bases for reversing the Commissioner’s decision. 19 Those issues are (1) whether the Appeals Council erred in failing to apply Social Security 20 Ruling 24-2p and (2) whether the Appeals Council’s error, if any, was harmless. (See 21 Mot. at 8, 12.) Plaintiff argues that remand for further administrative proceedings is 22 unnecessary and instead requests an award of benefits. (See id. at 13.) The 23 Commissioner “is amenable to remand” but argues that an award of benefits is 24 inappropriate, and further administrative proceedings are necessary. (See Opp’n at 3.) 25 IV. STANDARD OF REVIEW 26 Section 405(g) of the Social Security Act allows unsuccessful claimants to seek

27 judicial review of the Commissioner’s final decision. See 42 U.S.C. § 405(g). The scope 2 Berryhill, 891 F.3d 872, 875 (9th Cir. 2018) (citations omitted). The United States 3 Supreme Court interprets “substantial evidence” to mean “more than a mere scintilla,” 4 but only “such relevant evidence as a reasonable mind might accept as adequate to 5 support a conclusion.” Biestek v. Berryhill, 587 U.S. 97, 97 (2019) (quoting Consol. 6 Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). The Ninth Circuit further explains that 7 substantial evidence is “less than a preponderance.” Revels v. Berryhill, 874 F.3d 648, 8 654 (9th Cir. 2017) (quoting Desrosiers v. Sec’y of Health & Hum. Servs., 846 F.2d 573, 9 576 (9th Cir. 1988)). 10 When the evidence is susceptible to more than one rational interpretation, the 11 ALJ’s decision must be upheld. Tommasetti v. Astrue, 533 F.3d 1035, 1038 (9th Cir. 12 2008) (citing Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005)). Although “the ALJ is 13 responsible for determining credibility, resolving conflicts in medical testimony, and [] 14 resolving ambiguities[,]” those findings “must be supported by specific, cogent reasons.” 15 Reddick v. Chater, 157 F.3d 715, 722 (9th Cir. 1998) (citations omitted). 16 Even if the reviewing court finds that substantial evidence supports the ALJ’s 17 conclusions, the court must set aside the ALJ’s decision if the ALJ failed to apply the 18 proper legal standards in weighing the evidence and reaching his or her decision. See 19 Batson v. Comm’r of the Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2004). The 20 reviewing court may enter “a judgment affirming, modifying, or reversing” the 21 Commissioner’s decision. 42 U.S.C. § 405(g). However, the reviewing court “may not 22 reverse an ALJ’s decision on account of an error that is harmless.” Rounds v. Comm’r of 23 the Soc. Sec. Admin., 807 F.3d 996, 1002 (9th Cir. 2015) (quoting Molina v. Astrue, 674 24 F.3d 1104, 1111 (9th Cir. 2012)). The reviewing court may also remand the case to the 25 Social Security Administration for further administrative proceedings. 42 U.S.C. § 405(g). 26 / /

27 / / 2 A. Whether the Appeals Council Erred in Failing to Apply Social Security 3 Ruling 24-2p 4 1. Summary of the parties’ arguments 5 Plaintiff argues that the Appeals Council failed to apply Social Security Ruling 6 24-2p (“SSR 24-2p”). (Mot. at 8.) On March 4, 2024, the ALJ issued his decision. (See 7 AR 31.) On the date of the ALJ’s decision, the Social Security Administration defined a 8 claimant’s past relevant work (“PRW”) as work that the claimant has performed within 9 the past fifteen years. (Mot. at 8.) On June 6, 2024, the Commissioner published SSR 10 24-2p, which redefined a claimant’s PRW as work that the claimant has performed 11 within the past five years. Id.; see also SSR 24-2p, 89 Fed. Reg. 48480 (June 6, 2024). 12 Plaintiff argues that SSR 24-2p “applies to all ‘decisions’ issued on or after June 22, 13 2024.” (Mot. at 9.) According to Plaintiff, the Appeals Council’s October 22, 2024, 14 decision to deny review of the ALJ’s March 4, 2024, decision constitutes a final 15 “decision” within the meaning of SSR 24-2p. (See id.) Plaintiff supports this argument 16 with citations to the Code of Federal Regulations, Ninth Circuit case law, the Social 17 Security Administration’s Program Operations Manual System, and the Appeals 18 Council’s own decision to deny review. (See id. at 9–11.) Plaintiff argues that, 19 notwithstanding this authority, the Appeals Council did not apply SSR 24-2p at the time 20 that it issued its decision. (Id. at 10.) To summarize, Plaintiff argues that the Appeals 21 Council’s decision was issued after the effective date of SSR 24-2p, and thus, the 22 Appeals Council erred in failing to apply SSR 24-2p. (Id. at 11.) According to Plaintiff, 23 this error is not harmless because, if the Appeals Council had applied SSR 24-2p, “it 24 would have been forced to conclude that [Plaintiff] has no [PRW] and found her 25 disabled under grid rule 202.04.” (Id. at 13.) 26 In response, the Commissioner concedes that the Social Security Administration

27 revised its regulations relating to PRW and changed the lookback period from fifteen 2 September 30, 2022, would be considered by the ALJ.” (Id. at 5.) Thus, the 3 Commissioner does not appear to dispute the applicability of SSR 24-2p to this case. 4 (See generally id.) Instead, the Commissioner states that “[t]he disputed issue before 5 this Court is whether this case should be reversed and remanded for further 6 administrative proceedings rather than a finding of disability” and an award of benefits. 7 (Id. at 3.) To summarize, the Commissioner does not dispute that the Appeals Council 8 erred in failing to apply SSR 24-2p, but the Commissioner does dispute the appropriate 9 remedy. Whether this Court should remand this matter for an award of benefits or 10 further administrative proceedings is a distinct issue that is discussed separately below. 11 2. Applicable law 12 The Ninth Circuit has consistently held that, “on appeal, arguments not raised by 13 a party in its opening brief are deemed waived.” See, e.g., Avenetti v. Barnhart, 456 14 F.3d 1122, 1125 (9th Cir. 2006) (quoting Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 15 1999)). The courts “will not manufacture arguments” for the parties. Arpin v. Santa 16 Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001) (quoting Barnett v. U.S. 17 Air, Inc., 228 F.3d 1105, 1110–11 n.1 (9th Cir. 2000)). When a party fails to clearly and 18 distinctly raise an argument in its opening brief, the Ninth Circuit considers the 19 argument abandoned. Ridgeway v. Walmart Inc., 946 F.3d 1066, 1076 (9th Cir. 2020). 20 3. Analysis 21 The Commissioner’s failure to raise an argument against the applicability of SSR 22 24-2p to Plaintiff’s case constitutes waiver. Plaintiff argues that the Appeals Council 23 failed to apply SSR 24-2p to Plaintiff’s case and instead applied the regulations that were 24 in effect prior to the effective date of SSR 24-2p. (See Mot. at 11.) In the 25 Commissioner’s opening brief, the Commissioner does not appear to dispute the 26 applicability of SSR 24-2p to Plaintiff’s case. (See generally Opp’n.) The Ninth Circuit has

27 applied the waiver doctrine specifically in social security cases when the Commissioner 2 ALJ’s interpretation of a disability listing by failing to argue it in the Commissioner’s 3 opening brief. See Avenetti, 456 F.3d at 1125. This case demonstrates that the waiver 4 doctrine applies with equal force to the Commissioner in social security cases. 5 The Commissioner’s silence on the applicability of SSR 24-2p in the 6 Commissioner’s opening brief constitutes waiver. The Court “will not manufacture 7 arguments” for the Commissioner that the Commissioner failed to raise in his opening 8 brief. See Arpin, 261 F.3d at 919 (quoting Barnett, 228 F.3d at 1110–11 n.1). 9 4. Conclusion 10 In conclusion, under established Ninth Circuit precedent, the Commissioner 11 waived any argument that the Appeals Council did not err in failing to apply SSR 24-2p. 12 The Court finds that this argument has been abandoned and will proceed to evaluate 13 the parties’ arguments regarding the appropriate remedy for the Appeals Council’s 14 failure to apply SSR 24-2p. 15 B. Whether Plaintiff Is Entitled to a Finding of Disability and an Award of 16 Benefits 17 1. Summary of the parties’ arguments 18 Plaintiff argues that SSR 24-2p applies to all “decisions” issued on or after June 19 22, 2024, including the Appeals Council’s decision to deny Plaintiff’s request for review 20 on October 22, 2024. (See Mot. at 9.) However, “it is clear from the record that the 21 Appeals Council did not apply the rulings and regulations in effect at the time they took 22 their action.” (Id. at 10.) Under SSR 24-2p, the lookback period for Plaintiff’s PRW is five 23 years prior to Plaintiff’s date last insured of September 2022. (Id. at 12.) Thus, the 24 lookback period for Plaintiff’s PRW begins in September 2017. (Id.) According to 25 Plaintiff, the record reflects that Plaintiff has not worked since February 2017. (Id.) 26 Therefore, if the Appeals Council had applied SSR 24-2p, it would have determined that

27 Plaintiff has no PRW and found her disabled under grid rule 202.04. (Id. at 13.) 2 benefits, and further administrative proceedings are not necessary. (Id.) 3 In response, the Commissioner challenges Plaintiff’s claim that “due to the 4 intervening change in agency policy regarding [PRW], Plaintiff would no longer have 5 [PRW] and would be found disabled . . . on remand.” (Opp’n at 4.) According to the 6 Commissioner, the record contains evidence that Plaintiff may have engaged in work 7 activity during the past five years that would be considered on remand. (Id.) Plaintiff 8 and the Commissioner agree that, under SSR 24-2p, the lookback period for Plaintiff’s 9 PRW begins in September 2017. (Id. at 5; Mot. at 12.) However, while Plaintiff 10 contends that she has not worked since February 2017 [Mot. at 12], the Commissioner 11 contends that “medical records reflect that Plaintiff was working at least to some extent 12 thereafter.” (Opp’n at 5.) Accordingly, the Commissioner argues that “Plaintiff goes too 13 far in asking the Court to declare her disabled.” (Id.) Instead, remand for further 14 administrative proceedings is necessary. (Id. at 6.) To summarize, the Commissioner 15 argues that, even if the Appeals Council properly applied SSR 24-2p, the record contains 16 evidence from which the ALJ could conclude that Plaintiff has PRW and therefore is not 17 disabled. (Id. at 4.) 18 2. Applicable law 19 a. The credit-as-true rule 20 In the Ninth Circuit, an award of benefits is appropriate “only in ‘rare 21 circumstances’ . . . ‘where no useful purpose would be served by further administrative 22 proceedings and the record has been thoroughly developed.’” Treichler v. Comm’r of 23 SSA, 775 F.3d 1090, 1100 (9th Cir. 2014) (citations omitted). A case satisfies the rare 24 circumstances requirement when the court determines: 25 (1) [T]he record has been fully developed and further administrative proceedings would serve no useful purpose; (2) the ALJ has failed to provide legally sufficient 26 reasons for rejecting evidence, whether claimant testimony or medical opinion; 27 and (3) if the improperly discredited evidence were credited as true, the ALJ 2 true rule” or “the Varney rule.” See Treichler, 775 F.3d at 1100. 3 The credit-as-true rule “is ‘settled’ and binding on this Court.” Anderson v. Colvin, 4 223 F.Supp.3d 1108, 1132 (D. Or. 2016) (quoting Garrison, 759 F.3d at 999). Thus, to 5 determine whether an award of benefits is appropriate, the Court must conduct the 6 three-step credit-as-true analysis. See Garrison, 759 F.3d 995 at 1020 (“[W]e have 7 devised a three-part credit-as-true [rule], each part of which must be satisfied in order 8 for a court to remand to an ALJ with instructions to calculate and award benefits . . . .”). 9 Before the analysis can be conducted, however, the Court must determine which 10 decision functions as the “final decision of the Commissioner of Social Security” and is 11 therefore subject to judicial review. See 42 U.S.C. § 405(g). 12 b. Judicial review of the Commissioner’s final decision 13 This Court must determine which decision functions as the “final decision of the 14 Commissioner of Social Security” before deciding whether to remand this matter for an 15 award of benefits or further administrative proceedings. See id. Under the Social 16 Security Act, claimants may only obtain judicial review of the Commissioner’s “final 17 decision.” Id. When the Appeals Council grants a claimant’s request for review, that 18 decision is subject to judicial review as the final decision of the Commissioner. See 20 19 C.F.R. §§ 404.981, 416.1481; see also Sims v. Apfel, 530 U.S. 103, 107 (2000). However, 20 when the Appeals Council denies a claimant’s request for review, that decision “is a non- 21 final agency action not subject to judicial review[,] [and] the ALJ’s decision becomes the 22 final decision of the Commissioner.” Taylor v. Comm’r of SSA, 659 F.3d 1228, 1231 (9th 23 Cir. 2011). Thus, “the Appeals Council’s reasoning for denying review is not considered 24 on subsequent judicial review.” Luther, 891 F.3d at 876. Instead, the court considers 25 the reasoning provided by the ALJ in the ALJ’s decision. Id. 26 3. Analysis

27 This Court may not affirm or reverse the Appeals Council’s decision to deny 2 is persuaded by Plaintiff’s argument that the Appeals Council erred in failing to apply 3 SSR 24-2, and the Commissioner has waived any argument to the contrary. The Social 4 Security Administration clearly stated that SSR 24-2p applies to new applications filed on 5 or after June 22, 2024, as well as claims pending on or after June 22, 2024. See SSR 24- 6 2p, 89 Fed. Reg. 48479 n.1 (June 6, 2024). This statement is consistent with the Social 7 Security Administration’s Program Operations Manual System, highlighted in Plaintiff’s 8 brief [see Mot. at 11], which requires the Appeals Council to apply new regulations to 9 pending cases.3 Plaintiff’s case was pending from March 26, 2024 (i.e., the date the 10 Appeals Council acknowledged Plaintiff’s request for review) until October 22, 2024 (i.e., 11 the date the Appeals Council denied Plaintiff’s request for review and the ALJ’s decision 12 became final). (See AR 1–8.) Thus, Plaintiff’s case was pending on the applicable date of 13 SSR 24-2p. Yet, there is no evidence in the record that the Appeals Council considered 14 SSR 24-2p in its decision to deny review of Plaintiff’s claim, despite the assertion that it 15 “applied the laws, regulations[,] and rulings in effect as of the date [it] took this action.” 16 (AR 1.) 17 Although the Court is persuaded by Plaintiff’s argument that the Appeals Council 18 erred in failing to apply SSR 24-2p, to determine whether an award of benefits is 19 appropriate, the Court may only consider the Commissioner’s final decision. 20 Specifically, the Court may only consider the ALJ’s decision because the ALJ’s decision 21 became final after the Appeals Council denied Plaintiff’s request for review. See Taylor, 22 659 F.3d at 1231. 23 The credit-as-true rule is a three-step analysis used to determine whether an 24 award of benefits is appropriate. See Garrison, 759 F.3d at 1020. Failure to satisfy any 25 step of the analysis precludes this Court from awarding benefits. See Dominguez v. 26 Colvin, 808 F.3d 403, 407 (9th Cir. 2016). First, the Court must determine whether

27 2 disability can be made,” that is, whether the record is fully developed. Benecke v. 3 Barnhart, 379 F.3d 587, 593 (9th Cir. 2004). Second, the Court must determine whether 4 “the ALJ failed to provide legally sufficient reasons for rejecting the evidence.” Id. 5 Third, the Court must determine whether “it is clear from the record that the ALJ would 6 be required to find the claimant disabled were such evidence credited.” Id. If each step 7 of the credit-as-true rule is satisfied, then Plaintiff’s case meets the rare circumstances 8 requirement that allows this Court to award benefits. See Treichler, 775 F.3d at 1101– 9 02. 10 a. Fully developed record 11 Courts begin their analysis under the credit-as-true rule by determining whether 12 the record is fully developed. See Garrison, 759 F.3d at 1020. When the record is fully 13 developed, and further administrative proceedings would not be useful, the court 14 should award benefits. Benecke, 379 F.3d at 593. However, remand for further 15 administrative proceedings is appropriate when additions to the record would be useful 16 or when doing so would remedy defects in the original administrative proceedings. See 17 Lewin v. Schweiker, 654 F.2d 631, 635 (9th Cir. 1981). 18 At this step, the Court must determine whether the record “is fully developed, is 19 free from conflicts and ambiguities, and ‘all essential factual issues have been 20 resolved.’” Dominguez, 808 F.3d at 407 (quoting Treichler, 775 F.3d at 1101). A record 21 containing conflicts, ambiguities, or factual issues that need to be resolved before a 22 determination of disability can be made precludes a court from awarding benefits. See 23 Dominguez, 808 F.3d at 407. In Dominguez, the claimant’s medical records contained 24 conflicting evidence regarding the extent of the claimant’s limitations. Id. at 408. 25 Additionally, there was a factual issue as to the claimant’s disability onset date. Id. at 26 409. The court held that the record was not fully developed due to the conflicting

27 evidence and the outstanding factual issue. See id. at 410. This determination 2 the ALJ for further administrative proceedings. Id. 3 Here, like in Dominguez, there are factual issues that must be resolved by the ALJ 4 before this Court may award benefits. Although the parties agree that the lookback 5 period for Plaintiff’s PRW under SSR 24-2p would begin in September 2017, the parties 6 disagree about Plaintiff’s work history during the lookback period. (See Mot. at 12; see 7 also Opp’n at 5.) Plaintiff argues that the evidence in the record indicates she has not 8 worked since February 2017. (Mot. at 12.) Therefore, relying on SSR 24-2p, Plaintiff 9 argues that she has no PRW, and the ALJ would have no choice but to conclude that 10 Plaintiff is disabled. (See id. at 13.) The Commissioner, on the hand, highlights 11 inconsistencies in the record that indicate Plaintiff worked in some capacity after 2017. 12 (Opp’n at 5.) 13 The record supports the Commissioner’s argument that it is unclear when Plaintiff 14 stopped working. Throughout the record, Plaintiff reports that she stopped working in 15 2012 [see AR 539], 2017 [see AR 594], 2018 [see AR 809], and 2019 [see AR 580]. 16 However, Plaintiff’s medical records contradict her reports. (Opp’n at 5.) For example, 17 during a telehealth appointment on October 15, 2020, the provider noted that Plaintiff 18 “works remotely during COVID-19 pandemic.” (Id.; AR 561.) As another example, 19 during a telehealth appointment on June 29, 2021, the provider noted that Plaintiff 20 “reports she is employed in a call center.” (Opp’n at 5; AR 726.) 21 At step one of the sequential evaluation process, the ALJ found that Plaintiff did 22 not engage in substantial gainful activity from March 15, 2019, through September 30, 23 2022. (AR 20.) However, the medical records cited herein and in the Commissioner’s 24 brief indicate that Plaintiff worked in some capacity during 2020 and 2021. Although 25 Plaintiff may have worked after September 2017, it may be the case that Plaintiff did not 26 hold any job for “a period of 30 consecutive days,” and thus, Plaintiff has no PRW. See

27 20 C.F.R. §§ 404.1560(b)(1), 416.960(b)(1) (excluding work from the definition of “past 2 Treichler, 775 F.3d at 1098. Therefore, the record is not fully developed, and further 3 administrative proceedings are necessary to clarify Plaintiff’s work history. 4 On remand, the ALJ would apply SSR 24-2p, which the ALJ did not initially consider 5 in his decision. (See Opp’n at 4.) When issuing his decision, the ALJ relied on Plaintiff’s 6 past relevant work as a receptionist and a customer relations clerk performed prior to 7 the five-year lookback period under SSR 24-2p. (See AR 30.) The Commissioner argues 8 that remand for further administrative proceedings is necessary to allow the ALJ to 9 conduct an updated analysis of the record to reach a conclusion about Plaintiff’s PRW. 10 (See Opp’n at 4.) 11 “Remand for further administrative proceedings is appropriate [when] 12 enhancement to the record would be useful.” Benecke, 379 F.3d at 593. Here, it is 13 uncertain when Plaintiff stopped working and what, if any, PRW would be considered in 14 the ALJ’s analysis if the case was remanded for further administrative proceedings. 15 Conflicts and ambiguities are to be remedied by an ALJ, rather than a court. Treichler, 16 775 F.3d at 1094. Given the contradictions in the record, the Court cannot conclude 17 that the record is fully developed. 18 Because the first step of analysis under the credit-as-true rule is not satisfied, the 19 Court need not address the remaining steps. See Garrison, 759 F.3d 995 at 1020 20 (emphasizing that each part of the credit-as-true rule “must be satisfied in order for a 21 court to remand to an ALJ with instructions to calculate and award benefits”). Although 22 this finding precludes the Court from proceeding to the next step of the analysis or 23 awarding benefits, the Court nevertheless finds it necessary to continue the analysis 24 under the credit-as-true rule for completeness. 25 b. Legal error by the ALJ 26 Assuming arguendo that the first step was satisfied, the Court must consider

27 whether “the ALJ has failed to provide legally sufficient reasons for rejecting evidence, 2 of evidence, but rather the Appeals Council’s failure to apply SSR 24-2p when it denied 3 Plaintiff’s request for review on October 22, 2024. (See Mot. at 11.) The ALJ issued his 4 decision on March 4, 2024 [AR 31], before SSR 24-2p’s effective date of June 22, 2024. 5 See SSR 24-2p, 89 Fed. Reg. 48479 (June 6, 2024). The parties agree that, at the time of 6 the ALJ’s decision, the applicable regulations required the ALJ to consider Plaintiff’s 7 work performed within the preceding fifteen years. (Mot. at 8; Opp’n at 4.) The ALJ 8 properly applied the law as it existed when he rendered his decision and found that 9 Plaintiff had PRW as a receptionist (last performed in December 2015) and a customer 10 relations clerk (last performed in February 2017), both of which fell within the then- 11 applicable lookback period. (See AR 30; see also AR 403). The question, then, is 12 whether the Appeals Council’s failure to apply SSR 24-2p constitutes a “fail[ure] to 13 provide legally sufficient reasons” within the meaning of the credit-as-true rule. See 14 Garrison, 759 F.3d at 1020. 15 The second step of the analysis under the credit-as-true rule typically addresses 16 situations where the ALJ has improperly rejected the claimant’s testimony or a medical 17 opinion. Plaintiff’s case presents a different scenario, that is, the Appeals Council’s 18 failure to apply a superseding legal standard to a pending claim. Nevertheless, the 19 second step’s underlying concern (i.e., whether the Social Security Administration failed 20 to provide legally sufficient reasons for its decision) is implicated here. The Appeals 21 Council failed to apply the correct legal standard when it denied Plaintiff’s request for 22 review. The Appeals Council explicitly stated that it “applied the laws, regulations[,] and 23 rulings in effect as of the date [it] took this action.” (AR 1.) This statement was 24 incorrect. The Appeals Council did not apply SSR 24-2p, which was in effect on October 25 22, 2024. The Appeals Council did not provide any reasons for declining to apply SSR 24- 26 2p, nor could it, as the ruling unambiguously requires application to pending cases. See

27 SSR 24-2p, 89 Fed. Reg. 48479 n.1 (June 6, 2024). The Appeals Council’s representation 2 sufficient explanation exists for the error. 3 The Commissioner argues that the proper remedy for the Appeals Council’s error 4 is remand for the Social Security Administration to apply the correct legal standard in 5 the first instance, consistent with the “ordinary remand rule” that courts “should 6 remand a case to an agency for decision of a matter that statutes place primarily in 7 agency hands.” (Opp’n at 5–6 (quoting INS v. Orlando Ventura, 537 U.S. 12, 16 (2002).) 8 This argument has force, particularly where further development of the record is 9 needed regarding Plaintiff’s work activity during the five-year lookback period. The 10 situation might be different if the record was fully developed and application of SSR 24- 11 2p was purely mechanical, meaning it was undisputed that Plaintiff had no work activity 12 during the five-year lookback period and grid rule 202.04 clearly mandated a finding of 13 disability. Under such circumstances, the second step might be satisfied because the 14 Social Security Administration failed to provide legally sufficient reasons for not applying 15 a mandatory legal standard to a fully developed record. Here, however, the factual 16 ambiguities discussed in the first step preclude such a straightforward application. The 17 inconsistent statements about what year Plaintiff stopped working and the medical 18 records suggesting Plaintiff was working in 2020 and 2021 indicate that application of 19 SSR 24-2p requires factual findings that the Social Security Administration has not yet 20 made. 21 Even assuming the second step applies to the Appeals Council’s failure to apply a 22 superseding legal standard to a pending claim (as opposed to the ALJ’s improper 23 rejection of evidence), the Court cannot conclusively find that this step is satisfied. 24 Although the Appeals Council clearly erred in failing to apply SSR 24-2p, and although it 25 provided no legally sufficient explanation for this failure, the error occurred in the 26 context of an incompletely developed factual record. The proper remedy for such an

27 error is to remand for the Social Security Administration to apply the correct legal 2 the first step is not satisfied, the credit-as-true rule does not warrant an immediate 3 award of benefits. The matter must be remanded for further administrative 4 proceedings. 5 c. Whether the ALJ would be required to find Plaintiff disabled 6 In the third and final step of the analysis under the credit-as-true rule, the Court 7 must determine whether “‘the ALJ would be required to find the claimant disabled on 8 remand’ if the ‘improperly discredited evidence were credited as true.’” Dominguez, 9 808 F.3d at 407 (quoting Garrison, 759 F.3d at 1020). If the evidence demonstrates 10 conclusively that the claimant cannot work, then the claimant must be found disabled. 11 See Moore v. Comm’r of the SSA, 278 F.3d 920, 926 (9th Cir. 2002). On the other hand, 12 if “it is not clear from the record that the ALJ would be required to find the claimant 13 disabled if all the evidence were properly evaluated” then “[the] ALJ’s decision cannot 14 be affirmed on the ground that it is supported by substantial evidence.” Dominguez, 15 808 F.3d at 407. 16 If the Court determines that the record creates no doubt as to the claimant’s 17 eligibility for benefits, further administrative proceedings serve no useful purpose. See 18 Garrison, 759 F.3d at 1022. In Garrison, the ALJ erroneously rejected medical evidence. 19 Id. at 1010. Notwithstanding the ALJ’s error, the court found that the record was fully 20 developed and revealed no doubt as to the claimant’s entitlement to benefits. Id. at 21 1022. Accordingly, the court remanded for an award of benefits. Id. at 1023. 22 Plaintiff’s case is distinguishable from Garrison because there is still doubt as to 23 Plaintiff’s entitlement to benefits. A claimant’s PRW is highly relevant to a disability 24 determination. As discussed herein, an ALJ should resolve the inconsistencies regarding 25 Plaintiff’s PRW. Until this is addressed, the Court cannot determine whether the ALJ 26 would be required to find Plaintiff disabled on remand. Moreover, the Court cannot

27 conclusively determine that Plaintiff is disabled using the Medical-Vocational Guidelines 2 are needed to remedy the inconsistencies regarding Plaintiff’s PRW. 3 Plaintiff’s claim fails to satisfy the third step of the credit-as-true rule due to the 4 lack of certainty about Plaintiff’s PRW and the utility of further administrative 5 proceedings. 6 4. Conclusion 7 In conclusion, the Court cannot remand this matter for an award of benefits 8 because all three steps of the credit-as-true rule are not satisfied. There is conflicting 9 evidence in the record regarding Plaintiff’s PRW, and further administrative proceedings 10 would be useful to resolve these conflicts. 11 VI. CONCLUSION 12 Plaintiff argues she has established her entitlement to benefits, and thus, this 13 matter should not be remanded for further administrative proceedings. (Mot. at 13.) 14 The Commissioner asks the Court to remand this matter for further administrative 15 proceedings. (Opp’n at 5.) 16 A reviewing court may enter a “judgment affirming, modifying, or reversing” the 17 Commissioner’s decision. 42 U.S.C. § 405(g). A reviewing court may also remand the 18 case to the Social Security Administration for further proceedings. Id. The reviewing 19 court has discretion in determining whether to remand for further proceedings or award 20 benefits. See Salvador v. Sullivan, 917 F.2d 13, 15 (9th Cir. 1990); McAllister v. Sullivan, 21 888 F.2d 599, 603 (9th Cir. 1989). Remand for further proceedings is warranted where 22 additional administrative proceedings could remedy defects in the decision. See Kail v. 23 Heckler, 722 F.2d 1496, 1497 (9th Cir. 1984). Remand for the award of benefits is 24 appropriate where no useful purpose would be served by further administrative 25 proceedings, where the record has been fully developed, or where remand would 26 unnecessarily delay the receipt of benefits to which the claimant is entitled. See

27 Hoffman v. Heckler, 785 F.2d 1423, 1425 (9th Cir. 1986); Bilby v. Schweiker, 762 F.2d 1 Here, an award of benefits is inappropriate because the record has not been fully 2 developed, and remand for further proceedings is warranted to clarify Plaintiff’s work 3 || history. 4 For the foregoing reasons, the Court ORDERS that judgment be entered 5 || REVERSING the Commissioner’s decision and REMANDING this matter for further 6 || administrative proceedings. 7 IT IS SO ORDERED. 8 || Dated: February 26, 2026 —

_ 2 FZ — 10 Honorable Michael S. Berg United States Magistrate Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28