Melanie B v. Commissioner of Social Security

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 5 AT TACOMA 6 MELANIE B, Case No. 3:25-cv-05514-TLF 7 Plaintiff, v. ORDER REVERSING AND 8 REMANDING DEFENDANT’S COMMISSIONER OF SOCIAL DECISION TO DENY BENEFITS 9 SECURITY, 10 Defendant. 11 12 Plaintiff filed this action pursuant to 42 U.S.C. § 405(g) for judicial review of 13 defendant’s denial of plaintiff’s application for supplemental security income (“SSI”) and 14 disability insurance benefits (“DIB”). Pursuant to 28 U.S.C. § 636(c), Federal Rule of 15 Civil Procedure 73, and Local Rule MJR 13, the parties have consented to the 16 jurisdiction of a Magistrate Judge. Dkt. 2. Plaintiff challenges the ALJ’s decision finding 17 that plaintiff was not disabled. Dkt. 4, Complaint. 18 FACTUAL AND PROCEDURAL BACKGROUND 19 Plaintiff filed her claim for DIB on May 28, 2020, and for SSI on December 9, 20 2020, alleging disability as of May 28, 2020.1 AR 194. Her applications were denied 21 initially and upon reconsideration. Id. ALJ Allen Erickson held a hearing on June 23, 22 23 1 Plaintiff originally alleged disability beginning October 31, 2017, but later amended her onset date at her 24 hearing in 2022. AR 194. 1 2022, and subsequently issued a decision finding plaintiff not disabled. AR 194-203. 2 The Appeals Council granted plaintiff’s request for review and remanded her claim for 3 further proceedings. AR 211-13. The ALJ held a second hearing on February 27, 2024, 4 and again issued a decision finding plaintiff not disabled. AR 17-28.

5 The ALJ found that plaintiff’s bipolar and depressive disorder was a severe 6 impairment and that she had the residual functional capacity (“RFC”) to perform a full 7 range of work at all exertional levels except she could understand, remember, and apply 8 short, simple instructions; perform routine, predictable tasks; make simple decisions; be 9 exposed to occasional, routine workplace changes; have occasional interaction with the 10 general public; and could not work in a fast-paced, production-type environment. AR 20, 11 22. 12 The ALJ found plaintiff could perform work existing in the national economy and 13 was accordingly not disabled. AR 26-27. The Appeals Council denied plaintiff’s request 14 for review, making the ALJ’s decision the final decision of the Commissioner. AR 1-3.

15 DISCUSSION 16 Pursuant to 42 U.S.C. § 405(g), this Court may set aside the Commissioner's 17 denial of Social Security benefits if the ALJ's findings are based on legal error or not 18 supported by substantial evidence in the record as a whole. Revels v. Berryhill, 874 19 F.3d 648, 654 (9th Cir. 2017) (internal citations omitted). Substantial evidence is “‘such 20 relevant evidence as a reasonable mind might accept as adequate to support a 21 conclusion.’” Biestek v. Berryhill, 587 U.S. 97, 103 (2019) (internal citations omitted). 22 The Court must consider the administrative record as a whole. Garrison v. Colvin, 759 23 F.3d 995, 1009 (9th Cir. 2014). The Court also must weigh both the evidence that

24 1 supports and evidence that does not support the ALJ’s conclusion. Id. The Court may 2 not affirm the decision of the ALJ for a reason upon which the ALJ did not rely. Id. 3 Rather, only the reasons identified by the ALJ are considered in the scope of the Court’s 4 review. Id.

5 Plaintiff assigns error to the ALJ’s decision regarding her subjective symptom 6 testimony and the lay witness testimony and contends that the proper remedy is to 7 remand for an award of benefits. Dkt. 9. 8 1. Plaintiff’s statements regarding subjective symptoms 9 The ALJ’s determinations regarding a claimant’s statements about limitations 10 “must be supported by specific, cogent reasons.” Reddick v. Chater, 157 F.3d 715, 722 11 (9th Cir. 1998). In assessing a Plaintiff’s credibility, the ALJ must determine whether 12 Plaintiff has presented objective medical evidence of an underlying impairment. If such 13 evidence is present and there is no evidence of malingering, the ALJ can only reject 14 plaintiff’s testimony regarding the severity of his symptoms for specific, clear, and

15 convincing reasons. Ghanim v. Colvin, 763 F.3d 1154, 1163 (9th Cir. 2014). 16 The ALJ found that plaintiff’s testimony was undermined by her daily activities, 17 her receipt of unemployment benefits in 2021, largely normal mental status 18 examinations, and her failure to seek treatment. AR 23-25. 19 a. Daily Activities 20 The ALJ found that plaintiff’s ability to prepare meals, clean her home, pay bills, 21 count change, drive a vehicle, use public transport, and talk to others on the phone or 22 computer undermined the weight that could be given to her testimony. AR 23-24. The 23 ALJ also noted that plaintiff testified that she could accomplish many things during

24 1 ongoing manic episodes. AR 24. An ALJ may discount a claimant's testimony based on 2 daily activities that either contradict their testimony or that meet the threshold for 3 transferable work skills. Orn v. Astrue, 495 F.3d 625, 639 (9th Cir. 2007). 4 Here, the ALJ failed to explain how the listed activities were inconsistent with

5 plaintiff’s testimony, and the Court can see no reasonable inference that such 6 inconsistency exists. Nor do the activities meet the threshold for transferable work skills. 7 The Ninth Circuit has recognized that many home activities are not easily transferable to 8 the workplace, “particularly for claimants suffering from mental illness, who many be 9 able to “limit environmental stressors,” and thus experience “improved functioning,” at 10 home in a way that is impracticable at work.” Smith v. Saul, 820 F. App’x 582, 585 (9th 11 Cir. 2020) (quoting Garrison, 759 F.3d at 1017). 12 b. Unemployment Benefits 13 The ALJ also found plaintiff’s testimony was undermined by her receipt of 14 employment benefits for several months in 2021. AR 24. Receipt of unemployment

15 benefits can, under some circumstances, undermine a claimant’s alleged inability to 16 work full-time. Fennell v. Berryhill, 721 F. App’x 652, 655 (9th Cir. 2018) (ALJ properly 17 discredited claimant’s testimony where she held herself out as available for full-time 18 work when receiving unemployment benefits during the adjudicatory period). The ALJ 19 stated, incorrectly, that the State of Washington requires applicants to certify that they 20 are capable of working a full-time job. AR 24. The defendant repeats this error in their 21 brief. Dkt. 11 at 4. 22 Washington requires that a claimant be “able and available to work,” meaning 23 claimants must be ready, able, and willing to immediately accept any suitable work

24 1 offered. Wash. Rev. Code § 50.20.010(1)(c) (2026). Individuals may not be denied 2 benefits for applying, seeking, or accepting only part-time work. Id. § 50.20.119(1). And 3 the Washington Administrative Code specifically contemplates eligibility for individuals 4 who are disabled and unable to work full-time. See Wash. Admin. Code § 192-170-

5 050(1)(b) (2026) (the department may determine in individual circumstances that less 6 than full-time work is suitable if the disability prevents you from working the number of 7 hours customary to the occupation). 8 Thus, plaintiff’s receipt of Washington State unemployment benefits does not 9 necessarily mean that she certified she could work a full-time job. The ALJ appears to 10 have assumed that plaintiff could only have received unemployment benefits if she 11 made such certification. 12 As the record does not contain plaintiff’s application for unemployment benefits, it 13 unclear what plaintiff’s certification actually said. Accordingly, the Court finds that 14 plaintiff’s receipt of unemployment compensation does not give rise to a legally

15 sufficient reason to reject plaintiff’s allegations. See Carmickle v. Comm’r, Soc. Sec. 16 Admin., 533 F.3d 1155, 1161-62 (9th Cir. 2008) (finding ALJ’s adverse credibility finding 17 not supported by substantial evidence where record failed to establish whether claimant 18 held self out as available for full-time or part-time work; observing that only the former is 19 inconsistent with disability allegations). 20 c. Objective Medical Evidence 21 The ALJ found that the medical evidence failed to document significant objective 22 findings or treatment supporting greater limitations than those assessed in the RFC. AR 23

24 1 24. He noted that plaintiff did not consistently participate in therapy or take psychotropic 2 medication and mental status examinations in the record were largely normal. Id. 3 The unexplained failure to seek and follow through with treatment can be a 4 legally sufficient reason to reject a claimant’s testimony. Molina v. Astrue, 674 F.3d

5 1104, 1113-14 (9th Cir. 2012). But “[w]hen a person suffers from a mental illness, and 6 the mentally ill person does not have the requisite insight into his or her condition to 7 seek or comply with treatment…this fact actually can indicate a greater severity of 8 mental incapacity.” Fife v. Comm’r of Soc. Sec., 583 F. Supp. 3d 1344, 1353 (W.D. 9 Wash. 2022). “[I]t is a questionable practice to chastise one with a mental impairment 10 for the exercise in poor judgment in seeking rehabilitation.” Nguyen v. Chater, 100 F.3d 11 1462, 1465 (9th Cir. 1996). 12 The record, including plaintiff’s own testimony, reveals that plaintiff struggles to 13 understand her mental health conditions, or the symptoms and limitations. See, e.g., AR 14 74 (“I think I’m fine sometimes…[a]nd then I look back and I go, I’m not fine…It’s hard.

15 So it is not easy to just judge myself because I really want to be fine.”); AR 103 (“People 16 were the problems, but I was the problem apparently”); AR 141-42 (“people say I do, but 17 I don’t think I’m confused. I think I got it right, and they think I’m confused.”); AR 635 18 (2019 psychological evaluation noting poor social judgment, limited insight). 19 Plaintiff also explained that she stopped taking medication because she was 20 unable to pay a bill and could not return to her prescribing physician. AR 107. She had 21 not started taking medication again, although she wanted to, because she was having 22 difficulty with transportation and coordination of appointments. AR 76, 126-27. 23

24 1 The ALJ erred by failing to consider plaintiff’s difficulty with understanding her 2 conditions, and associated symptoms and limitations; and the ALJ erred when he did 3 not consider plaintiff’s explanations for lack of treatment. Nguyen v. Chater, at 1465; 4 Roberts v. Saul, 825 F. App’x 473, 474 (9th Cir. 2020) (“If a claimant suffers from

5 mental illness, as Roberts does, a general failure to adhere to prescribed medical care 6 is not an adequate ground for discounting the claimant’s testimony.”). 7 The ALJ also found plaintiff’s testimony inconsistent with normal mental status 8 findings in the record. AR 24-25. “Contradiction with the medical record is a sufficient 9 basis for rejecting the claimant’s subjective testimony.” Carmickle, 533 F.3d at 1161. 10 But an ALJ may not reject a claimant’s subjective symptom testimony “solely on a lack 11 of objective medical evidence to fully corroborate the alleged severity of pain.” Bunnell 12 v. Sullivan, 947 F.2d 341, 345 (9th Cir. 1991); Byrnes v. Shalala, 60 F.3d 639, 641-42 13 (9th Cir. 1995) (applying rule to subjective complaints other than pain). 14 Here, although the ALJ acknowledged other abnormal findings in the record such

15 as limited insight, poor judgment, anxiety, and mood swings, he failed to explain why 16 the normal mental status examinations were more persuasive than these abnormal 17 findings. The ALJ’s focus on normal MSE results to the exclusion of other abnormal 18 findings in the record is an erroneously selective focus on evidence. See Ghanim, 763 19 F.3d at 1164 (finding the ALJ must consider evidence in light of the overall record, and 20 treatment records cannot be cherry-picked). 21 Claimants with mental conditions may have symptoms that wax and wane, with 22 downward cycles, cycles of improvement, mixed results from treatment, and such 23 claimants are often unpredictable patients -- their ability to comply with recommended

24 1 medication and other supports may be spotty. Garrison v. Colvin, 759 F.3d 995, 1009 2 (9th Cir. 2014). Especially when a claimant suffers from bipolar disorder, the symptoms 3 are cyclical, and short-lived improvements would not, by themselves, constitute 4 substantial evidence for purposes of over-riding a treating physician’s opinion that the

5 plaintiff is significantly impaired. Buck v. Colvin, 540 Fed. Appx. 772, 773 (9th Cir. 2013). 6 d. Harmless Error 7 An error that is inconsequential to the non-disability determination is harmless. 8 Stout v. Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1054 (9th Cir. 2006)). If the errors of 9 the ALJ result in a residual functional capacity (RFC) that does not include relevant 10 work-related limitations, the RFC is deficient and the error is not harmless. Id; see also, 11 Carmickle v. Comm’r. Soc. Sec. Admin., 533 F.3d 1155, 1160 (9th Cir. 2008).This is 12 because an incomplete RFC leads to incomplete hypothetical questions presented to 13 the VE. Hill v. Astrue, 698 F.3d 1153, 1162 (9th Cir. 2012). 14 Here, if the ALJ had fully considered plaintiff’s testimony, the limitations

15 described in the RFC may be more restrictive, and that could change the hypotheticals 16 posed, and the result. 17 2. Lay witness evidence 18 An ALJ is “not required to articulate” how he or she evaluated evidence from non- 19 medical sources such as family members using the same factors for evaluating medical 20 evidence. 20 C.F.R. § 404.1502(e). The Ninth Circuit has not yet clarified whether an 21 ALJ is still required to provide “germane reasons” for discounting lay witness testimony, 22 but it has continued to apply this standard. See, e.g., Stephens v. Kijakazi, 2023 WL 23 6937296, at *2 (9th Cir. Oct. 20, 2023) (“We have not yet addressed whether under the

24 1 new regulations an ALJ is still required to provide germane reasons for discounting lay 2 witnesses.”), MacArthur v. Kijakazi, 2023 WL 8519119, at *2 (9th Cir. Dec. 8, 2023) (“An 3 ALJ may discount lay witness opinion evidence by providing reasons germane to each 4 witness for doing so.”) (citing Molina, 674 F.3d at 1111) (internal quotations omitted).

5 Here, the ALJ stated that he considered the third-party statements submitted by 6 plaintiff’s family and friends but found them unpersuasive without elaborating further. AR 7 26. Lay witness testimony as to a claimant’s symptoms or how an impairment affects 8 ability to work is competent evidence that may not be disregarded without comment. 9 Nguyen, 100 F.3d at 1467; see also Vincent v. Heckler, 739 F.2d 1393, 1395 (9th Cir. 10 1984) (an ALJ must explain why “significant, probative evidence has been rejected.”). 11 Having failed to provide an explanation for rejecting probative evidence, the ALJ 12 has erred. On remand, the ALJ is directed to consider the lay witness statements and, if 13 rejecting any of these statements, articulate germane reasons for doing so. 14 3. Whether the Court should reverse with a direction to award benefits.

15 Plaintiff contends the appropriate remedy is to remand for an award of benefits. 16 Dkt. 9 at 13. She argues that her testimony and the lay witness evidence show she 17 could not interact with others on a regular basis and that the vocational expert testified 18 that an individual who could not get along with a supervisor would be unable to work. 19 Dkt. 9 at 14 (citing AR 148). Thus, she contends that remand for benefits is the proper 20 remedy as a vocational consultant has already considered the impact of the relevant 21 limitations. 22 Generally, when the Court reverses an ALJ’s decision, “the proper course, 23 except in rare circumstances, is to remand to the agency for additional investigation or

24 1 explanation.” Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004). When deciding 2 whether to remand for an award of benefits, the Court must first determine whether the 3 ALJ has failed to provide legally sufficient reasons for rejecting evidence. Leon v. 4 Berryhill, 880 F.3d 1041, 1044 (9th Cir. 2017). Second, the Court must determine

5 “whether the record has been fully developed, whether there are outstanding issues that 6 must be resolved before a determination of disability can be made, and whether further 7 administrative proceedings would be useful.” Treichler v. Comm’r of Soc. Sec. Admin., 8 775 F.3d 1090, 1101 (9th Cir. 2014). 9 Only if the first two steps are satisfied can the Court determine whether, “if the 10 improperly discredited evidence were credited as true, the ALJ would be required to find 11 the claimant disabled on remand.” Garrison, 759 F.3d at 1020. Further, “[e]ven if [the 12 Court] reach[es] the third step and credit[s the improperly rejected evidence] as true, it 13 is within the court’s discretion either to make a direct award of benefits or to remand for 14 further proceedings.” Leon, 880 F.3d at 1045 (citing Treichler, 775 F.3d at 1101-02).

15 “[A]n ALJ’s failure to provide sufficiently specific reasons for rejecting the testimony of a 16 claimant or other witness does not, without more, require the reviewing court to credit 17 the claimant’s testimony as true.” Treichler, 775 F.3d at 1106. 18 Here, remand for further proceedings is the appropriate remedy. The relative lack 19 of medical evidence in the record creates some ambiguity as to whether plaintiff is 20 disabled. There are also unresolved issues as to whether plaintiff held herself out as 21 capable of full-time work when she applied for unemployment benefits in 2021. As it is 22 not clear that the ALJ would be required to find plaintiff disabled on review, the Court 23 remands the matter for further administrative proceedings.

24 1 CONCLUSION 2 Based on the foregoing discussion, the Court concludes the ALJ improperly 3 determined plaintiff to be not disabled. Therefore, the ALJ’s decision is reversed and 4 remanded for further administrative proceedings including a de novo hearing, re-

5 evaluation of the testimonial evidence, and the opportunity to submit additional 6 evidence. 7 8 Dated this 17th day of June, 2026. A 9 Theresa L. Fricke 10 United States Magistrate Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24