Smith v. O' Malley

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JULIE S., Case No.: 22cv1139-GPC(KSC)

12 Plaintiff, ORDER DECLINING TO ADOPT 13 v. REPORT AND RECOMMENDATION, REVERSING 14 MARTIN O’MALLEY, Commissioner of THE COMMISSIONER’S DECISION Social Security, 15 AND REMANDING CASE FOR Defendant. FURTHER PROCEEDINGS 16

17 On August 3, 2022, Plaintiff Julie S. (“Plaintiff”), with counsel, filed this action 18 seeking review of the Commissioner of Social Security’s final decision denying her 19 application for disability insurance benefits (“DIB”) under Title II of the Social Security 20 Act (“Act”). (Dkt. No. 1.) After full briefing by the parties, (Dkt. Nos. 14, 16, 17), on 21 January 22, 2024, Magistrate Judge Karen S. Crawford issued a report and 22 recommendation (“R&R”) that the Court affirm the Commissioner’s decision. (Dkt. No. 23 20.) Plaintiff filed an Objection to the R&R on February 5, 2024. (Dkt. No. 21.) 24 Defendant Martin O’Malley, Commissioner of Social Security, (“Defendant” or 25 26 27 28 1 “Commissioner”), filed a reply to the Objection on February 20, 2024. (Dkt. No. 22.) 2 Having carefully reviewed the parties’ briefs, the R&R, the Objection, the reply to the 3 Objection, the administrative record, and the applicable law, the Court DECLINES TO 4 ADOPT the R&R, REVERSES the Commissioner’s decision and REMANDS the case 5 for further administrative proceedings. 6 Procedural Background 7 On December 20, 2019, Plaintiff filed an application for disability insurance 8 benefits under Title II of the Social Security Act alleging a disability date of January 9, 9 2018. (Dkt. No. 7, Administrative Record (“AR”) 164-65.) At the hearing, Plaintiff 10 amended her onset disability date to August 21, 2018, the date she stopped working. (AR 11 41.) She alleged impairments due to traumatic brain injury with associated loss of vision 12 and impairment of speech. (AR 83, 88.) 13 Her application for disability was denied on October 30, 2020. (AR 83.) She 14 requested reconsideration on December 30, 2020, which was denied on March 18, 2021. 15 (AR 87, 88.) On May 4, 2021, Plaintiff requested a hearing before an Administrative 16 Law Judge (“ALJ”). (AR 99.) A telephonic hearing was held before ALJ Michael B. 17 Richardson on September 21, 2021. (AR 32-51.) The ALJ heard testimony from 18 Plaintiff and a vocational expert. (Id.) On October 6, 2021, the ALJ rendered his 19 decision and concluded that Plaintiff was not disabled under the Act as of August 21, 20 21 1 Plaintiff argues that the Commissioner’s opposition should not be considered as it was not timely filed. 22 (Dkt. No. 17 at 2.) The Court also notes that the Commissioner filed a late reply to the Objections on February 20, 2024. (Dkt. No. 22.) The Commissioner did not seek leave to file these two filings late. It 23 appears that he may have filed them late because both deadlines fell on legal holidays. The briefing schedule required that Defendant file a response to Plaintiff’s motion on or before Friday, November 10, 24 2023, Veterans’ Day; instead, the Commissioner filed the opposition on Monday, November 13, 2023. 25 (Dkt. Nos. 13, 16.) The R&R required that any reply to any Objections be filed by February 19, 2024, Washington’s Birthday; instead, the Commissioner filed a reply on Tuesday, February 20, 2024. 26 Despite the deadlines falling on a legal holiday, the Commissioner is still required to timely comply with the specific deadlines in the briefing schedule. Nonetheless, because the Court has broad discretion in 27 case management, and there is no evidence of bad faith by the Commissioner nor has any prejudice been identified by Plaintiff, the Court considers Defendant’s opposition as well as the reply to Plaintiff’s 28 1 2018. (AR 16-28.) Plaintiff requested review of the ALJ’s decision by the Appeals 2 Council and submitted new evidence. (AR 161-62, 266-69, 272.) Plaintiff submitted a 3 functional capacity evaluation (“FCE”), dated September 1, 2021, from Barbara 4 Tourtellott, Licensed Occupational Therapist, (“Ms. Tourtellott”).2 (AR 1336-46.) On 5 June 14, 2022, the Appeals Council denied the request for review concluding that the 6 FCE did not demonstrate a reasonable probability that it would change the outcome of the 7 decision. (AR 2.) Therefore, the ALJ’s decision is the final decision of the 8 Commissioner of Social Security and subject to district court review. 9 Factual Background 10 Plaintiff, a resident of San Diego, California, was born on June 8, 1972 and was 45 11 years old at the time of the onset of disability on January 9, 2018, and her highest 12 education is a B.A. (AR 35, 197.) She has past relevant work as a Senior Global Project 13 Manager for a pharmaceutical research company. (AR 197.) On January 9, 2018, 14 Plaintiff was involved in an automobile accident where she suffered a traumatic brain 15 injury (“TBI”) and stopped working in August 2018 due to her condition. (AR 22.) 16 A. The ALJ’s Decision 17 For the purposes of the Social Security Act, a claimant is disabled if she is unable 18 “to engage in any substantial gainful activity by reason of any medically determinable 19 physical or mental impairment which can be expected to result in death or which has 20 lasted or can be expected to last for a continuous period of not less than 12 months.” 42 21 U.S.C. § 423(d)(1)(A). In order to determine whether a claimant meets this definition, 22 the ALJ employs a five-step sequential evaluation. 20 C.F.R. § 404.1520(a). If the ALJ 23 determines that a claimant is either disabled or not disabled at a step in the process, a 24 decision or determination is made, and the ALJ does not continue on to the next step. Id. 25

26 2 Plaintiff’s counsel explained that the FCE report, which was conducted prior to the ALJ hearing, was 27 erroneously faxed to the hearing officer with the wrong cover sheet and was not considered by the ALJ. (AR 268.) In the request for review by the Appeals Council, Plaintiff requested the case be remanded so 28 1 § 404.1520(a); Bray v. Comm’r of Soc. Sec. Admin., 554 F.3d 1219, 1222 (9th Cir. 2009). 2 In brief, the ALJ considers whether the claimant is disabled by determining: (1) whether 3 the claimant is “doing substantial gainful activity”; (2) whether the claimant has a 4 “severe, medically determinable physical or mental impairment . . . or a combination of 5 impairments that is severe” and that has lasted for more than 12 months; (3) whether the 6 impairment “meets or equals” one of the listings in the regulations; (4) whether, given the 7 claimant’s residual functional capacity (“RFC”), the claimant can still do his or her “past 8 relevant work”; and (5) whether the claimant “can make an adjustment to other work.” 9 20 C.F.R. § 404.1520(a)(4)(i)-(v). Between steps three and four, the ALJ must assess the 10 claimant’s RFC. Id. § 404.1520(e); Bray, 554 F.3d at 1222–23; Garrison v. Colvin, 759 11 F.3d 995, 1011 (9th Cir. 2014). The burden of proof is on the claimant at steps one 12 through four but shifts to the Commissioner at step five. Bray, 554 F.3d at 1222. 13 Here, the ALJ applied the five-step sequential framework to determine that 14 Plaintiff is not disabled. (AR 18-27.) At step one, the ALJ found that Plaintiff has not 15 engaged in substantial gainful activity since August 21, 2018, the amended alleged onset 16 date of disability. (AR 18.) At step two, the ALJ found that Plaintiff has the following 17 severe impairments: traumatic brain injury (“TBI”) with residual neurocognitive disorder 18 (post-concussive syndrome), and somatic disorder. (AR 18.) At step three, the ALJ 19 found that Plaintiff does not have an impairment or combination of impairments that 20 meets or medically equals the severity of one of the listed impairments in 20 C.F.R. Part 21 404, Subpart P, Appendix 1. (AR 19.) The ALJ determined that Plaintiff has the RFC to 22 perform light work as defined in 20 C.F.R. § 404.1567(b)3 except that she “is unable to 23 climb ladders, ropes, or scaffolds, or crawl or balance; she is able to occasionally climb 24 25 3 “Light work involves lifting no more than 20 pounds at a time with frequent lifting or carrying of 26 objects weighing up to 10 pounds. Even though the weight lifted may be very little, a job is in this category when it requires a good deal of walking or standing, or when it involves sitting most of the time 27 with some pushing and pulling of arm or leg controls. To be considered capable of performing a full or wide range of light work, you must have the ability to do substantially all of these activities.” 20 C.F.R. 28 1 ramps and stairs, stoop, kneel, and crouch; she must avoid all exposure to hazards such as 2 unprotected heights or dangerous moving machinery; she is able to understand, 3 remember, and carry out simple, routine, repetitive tasks, with no production quotas or 4 production line work; and she is unable to work at over a moderate level of noise.” (AR 5 21.) 6 At step four, given Plaintiff’s RFC, the ALJ determined that Plaintiff is unable to 7 perform any past relevant work. (AR 26.) Finally at the fifth step, considering Plaintiff’s 8 age, education, work experience, her RFC to perform light work as well as her additional 9 limitations, the ALJ concluded that there are jobs that exist in significant numbers in the 10 national economy that the claimant can perform. (AR 26.) As such, the ALJ concluded 11 Plaintiff has not been under a disability as defined in the Social Security Act from August 12 21, 2018 through the date of the decision. (AR 27.) 13 Discussion 14 A. Standards of Review 15 1. Standard of Review of Magistrate Judge’s Report and Recommendation 16 The district court’s duties in connection with an R&R from a magistrate judge are 17 set forth in Federal Rules of Civil Procedure 72(b) and 28 U.S.C. § 636(b). The district 18 court “may accept, reject or modify, in whole or in part, the findings and 19 recommendations made by the magistrate.” 28 U.S.C. § 636(b); see Wang v. Masaitis, 20 416 F.3d 992, 1000 n.13 (9th Cir. 2005); United States v. Reyna-Tapia, 328 F.3d 1114, 21 1121–22 (9th Cir. 2003) (en banc). However, the district court must conduct a do novo 22 review of any part of the R&R that has been objected to. Fed. R. Civ. P. 72(b)(3). Here, 23 Plaintiff filed an Objection to the Magistrate Judge’s R&R; thus, the Court will conduct a 24 de novo review of the Commissioner’s final decision. 25 2. Standard of Review of Commissioner’s Final Decision 26 Section 205(g) of the Act permits unsuccessful claimants to seek judicial review of 27 the Commissioner’s final agency decision. 42 U.S.C. § 405(g). The reviewing court may 28 enter a judgment affirming, modifying, or reversing the Commissioner’s decision, and 1 may also remand the matter to the Commissioner of Social Security for further 2 proceedings. Id. 3 The scope of the reviewing court is limited; it may only “set aside the ALJ’s denial 4 of benefits . . . when the ALJ’s findings are based on legal error or are not supported by 5 substantial evidence in the record as a whole.” Parra v. Astrue, 481 F.3d 742, 746 (9th 6 Cir. 2007) (internal quotations omitted). “‘Substantial evidence’ means more than a mere 7 scintilla, but less than a preponderance, i.e., such relevant evidence as a reasonable mind 8 might accept as adequate to support a conclusion.” Robbins v. Soc. Sec. Admin., 466 F.3d 9 880, 882 (9th Cir. 2006). However, “[w]here evidence is susceptible to more than one 10 rational interpretation, it is the ALJ’s conclusion that must be upheld.” Burch v. 11 Barnhart, 400 F.3d 676, 679 (9th Cir. 2005). 12 B. Analysis 13 Plaintiff argues that the FCE conducted by Barbara Tourtellott, a licensed 14 occupational therapist, was improperly discredited by the Appeals Council and that error 15 was not “harmless.”4 (Dkt. No. 14 at 17, 19.) In response, the Commissioner contends 16 that the new evidence from the occupational therapist does not undermine the ALJ’s 17 decision which is supported by substantial evidence because the FCE is based on 18 Plaintiff’s self-reports and not on any objective or laboratory findings. (Dkt. No. 16 at 2- 19 3.) In reply, Plaintiff maintains that FCEs are probative and utilized to determine 20 whether a claimant is disabled.5 (Dkt. No. 17 at 7-8.) Moreover, she claims the FCE was 21

22 4 Pursuant to 42 U.S.C. § 405(g), the Court may set aside the Commissioner’s denial of Social Security 23 benefits when the ALJ ’s findings are based on legal error or not supported by substantial evidence in the record as a whole. Bayliss v. Barnhart, 427 F.3d 1211, 1214 n.1 (9th Cir. 2005) (emphasis added); 24 Stone v. Heckler, 761 F.2d 530, 531 (9th Cir. 1985) (“We reverse only if the ALJ's decision was not 25 supported by substantial evidence in the record as a whole or if the ALJ applied the wrong legal standard.”). Here, because the Court concludes the Commissioner’s decision was not supported by 26 substantial evidence rather than legal error, the harmless error analysis does not apply. 5 In response to the Commissioner’s argument that Plaintiff waived any challenge to the ALJ’s findings 27 and conclusions, (Dkt. No. 16 at 4), Plaintiff also replies that the Agency and/or the ALJ did not provide germane reasons for discounting the FCE report of Ms. Tourtellott. (Dkt. No. 17 at 4-7.) First, Plaintiff 28 1 not based solely on her subjective reports but involved observations by the evaluator and 2 results from standardized tests. (Id. at 8-10.) 3 Federal courts “do not have jurisdiction to review a decision of the Appeals 4 Council denying a request for review of an ALJ's decision, because the Appeals Council 5 decision is a non-final agency action.” Brewes v. Comm'r of Soc. Sec. Admin., 682 F.3d 6 1157, 1159-60 (9th Cir. 2012). Instead, when the Appeals Council denies a claimant's 7 request to review an ALJ's decision, the ALJ’s decision becomes the final decision of the 8 Commissioner and federal courts review the ALJ’s decision for substantial evidence 9 based on the record as a whole. Id. at 1161-62; see 42 U.S.C. § 405(g) (The Social 10 Security Act allows district court review of any “final decision of the Commissioner of 11 Social Security”). “[W]hen the Appeals Council considers new evidence in deciding 12 whether to review a decision of the ALJ, that evidence becomes part of the administrative 13 record, which the district court must consider when reviewing the Commissioner’s final 14 decision for substantial evidence.” Brewes, 682 F.3d at 1163; Wischmann v. Kijakazi, 68 15 F.4th 498, 504 (9th Cir. 2023) (Because the Appeals Council accepted [the claimant’s] 16 new evidence, it became “part of the administrative record, which the district court must 17 consider.”). But if “the Appeals Council only looked at the evidence, and determined it 18 d[oes] not meet the standard for consideration,” then “the new evidence d[oes] not 19 20

21 22 germane reasons to discount the FCE. Second, Plaintiff argues that the Agency failed to provide germane reasons for concluding that the FCE did “not show a reasonable probability that it would 23 change the outcome of the decision.” (Dkt. No. 17 at 4.) However, an Appeals Council’s denial of Plaintiff's request for review is not subject to judicial review. Brewes v. Comm'r of Soc. Sec. Admin., 682 24 F.3d 1157, 1161–62 (9th Cir. 2012); Taylor v. Comm'r of Soc. Sec. Admin., 659 F.3d 1157, 1161–62 25 (9th Cir. 2011). Further, an Appeals Council is not mandated to make any evidentiary findings or reasons for denying review. Gomez v. Chater, 74 F.3d 967, 972 (9th Cir.1996), superseded by 26 regulation on other grounds as stated in Hudson v. Astrue, CV 11–0025–CI, 2012 WL 5328786, at *4 n. 4 (E.D. Wash. Oct. 29, 2012) (“in rejecting [new] evidence, the Appeals Council is not required to make 27 any particular evidentiary finding.”). Thus, Plaintiff’s argument that the Agency and/or the ALJ did not provide germane reasons for discounting the FCE is without merit. The Court agrees with the 28 1 become part of the record, and [the court] may not consider it.” Amor v. Berryhill, 743 2 F. App'x 145, 146 (9th Cir. 2018) (citing 20 C.F.R. § 416.1470(b), and Lowry v. 3 Barnhart, 329 F.3d 1019, 1024 (9th Cir. 2003)); 20 C.F.R. § 404.970 (standard when the 4 Appeals Council will review a case). 5 Here, the parties do not dispute that the Appeals Council considered the new 6 evidence when it denied the request for review.7 In fact, the Commissioner included the 7 FCE report as part of the administrative record.8 (See Dkt. No. 9.) Therefore, the Court 8 reviews the ALJ’s decision in light of the record as a whole, including the FCE report 9 submitted for the first time to the Appeals Council, to determine if the ALJ’s decision is 10 supported by substantial evidence. See Brewes, 682 F.3d at 1163. 11 12

13 14 6 In Amor, the Appeals Council declined to consider the supplemental evidence presented by the plaintiff because it was not relevant to the period of disability. Amor v. Colvin, Case No. 3:14–cv–01526–TC, 15 2015 WL 10059306, at *1 (D. Or. Oct. 21, 2015); De Orozco v. Comm'r of Soc. Sec., Case No. 1:18-cv- 00817-SAB, 2019 WL 2641490, at *11 (E.D. Cal. June 26, 2019) (observing that the Ninth Circuit 16 distinguished between instances where the Appeals Council formally considered evidence and made it 17 part of the administrative record with instances where the Appeals Council only looked at the evidence). 7 The Appeals Council stated, “You submitted information from Barbara Tourtellott, Licensed 18 Occupational Therapist, dated August 27, 2021 (18 pages). We find this evidence does not show a reasonable probability that it would change the outcome of the decision. We did not exhibit this 19 evidence.” (AR 2.) 8 The Court recognizes that district courts are divided on the meaning of the Appeals Council boilerplate 20 statement, “We find this evidence does not show a reasonable probability that it would change the 21 outcome of the decision. We did not exhibit this evidence.” Some district courts have found that, where the Appeals Council's decision contained similar language, the Appeals Council merely looked at the 22 new evidence while other courts have concluded the Appeals Council considered the evidence and remanded for further proceedings. Compare Hensley v. Comm'r of Soc. Sec., No. 2:20-CV-1448-KJN, 23 2022 WL 891289, at *13-14(E.D. Cal. Mar. 25, 2022) (holding identical language in Appeals Council's decision showed it only looked at the new evidence); Victor A. v. Kijakazi, No. 2:21-CV-07482-GJS, 24 2023 WL 2614510, at *3 (C.D. Cal. Mar. 23, 2023) (same) with Franz v. Comm'r of Soc. Sec., No. 2:21- 25 CV-583-KJN, 2022 WL 4537991, at *4 (E.D. Cal. Sept. 28, 2022) (“The undersigned construes this as indicating Dr. Vega's statement was in fact considered—otherwise the court cannot understand how the 26 Council could have concluded the opinion would not have changed the outcome.”); Shelly C. v. Saul, No. 2:20-CV-00201-FVS, 2021 WL 2653733, at *8 (E.D. Wash. June 25, 2021) (“This Court joins 27 others in finding that it is not clear how the Appeals Council determined that the new evidence would not impact the outcome of the ALJ's decision while simultaneously not considering it and not 28 1 In the decision, the ALJ assessed Plaintiff with the RFC to perform light work 2 except she “is unable to climb ladders, ropes, or scaffolds, or crawl or balance; she is able 3 to occasionally climb ramps and stairs, stoop, kneel, and crouch; she must avoid all 4 exposure to hazards such as unprotected heights or dangerous moving machinery; she is 5 able to understand, remember, and carry out simple, routine, repetitive tasks, with no 6 production quotas or production line work; and she is unable to work at over a moderate 7 level of noise.” (AR 21.) Based on this, the ALJ determined she was unable to perform 8 any past relevant work which were designated as “light, skilled and “sedentary, skilled” 9 positions. (AR 26.) After considering her age, education, work experience, RFC, and 10 limitations, the ALJ concluded that she can perform “unskilled light” work. (AR 27.) 11 The ALJ recognized Plaintiff has moderate limitations in “understanding, 12 remembering or applying information”, mild limitations in “interacting with others” and 13 moderate limitations in her ability to “concentrate, persist, or maintain pace.” (AR 20.) 14 In assessing that Plaintiff had moderate limitations in her ability to “concentrate, persist, 15 or maintain pace”, the ALJ specifically noted that the “record fails to show any mention 16 of distractibility and an inability to complete testing that assesses concentration and 17 attention.” (AR 20 (emphasis added).) The ALJ concluded that the record shows that 18 Plaintiff had “limited attention and concentration.” (AR 20.) The ALJ also concluded 19 that Plaintiff’s statements as to the intensity, persistence and limiting effects of her 20 symptoms were not entirely consistent with the medical and other evidence even though 21 she had medically determinable impairments that could reasonably be expected to cause 22 her alleged symptoms. (AR 22.) 23 As to concentration and attention, the administrative record includes repeated 24 subjective complaints by Plaintiff of difficulties with concentration and attention, (see 25 AR 60, 549, 563, 556, 687, 691, 698), and even reported marked difficulties with 26 attention and concentration in September 2018, (AR 23, 299). However, there are no 27 objective tests concerning attention and concentration. The record includes tests 28 administered during a psychological testing performed by Dr. Yoshinori Sato, Psy.D., the 1 Agency’s psychological consultive examiner, who concluded Plaintiff showed no 2 cognitive or functional impairment, (AR 1265-71), although Dr. Sato noted that Plaintiff 3 seemed to lose concentration toward the end. (AR 1267-68.) Ultimately, the ALJ only 4 found Dr. Sato’s opinion partially persuasive because the assessment was not supported 5 by other evidence in the record showing “some degree of limitation” in Plaintiff’s ability 6 to function. (AR 25.) The record also does not indicate how long the psychological 7 evaluation lasted. Plaintiff argues that Ms. Tourtellott’s evaluation is the only objective 8 evidence assessing how long Plaintiff can perform normal activities of work. (Dkt. No. 9 17 at 10.) The Court agrees. 10 On August 27, 2021, Ms. Tourtellott conducted a FCE of Plaintiff assessing 11 whether Plaintiff “could work on a full time or part-time basis within at least the 12 sedentary level of physical demand while performing tasks requiring concentration, 13 attention to detail, and following directions as would be required in the workplace” on 14 August 27, 2021. (AR 1338.) Indeed, the FCE included Plaintiff’s subjective report of 15 her function, (AR 1337); however, it also included an assessment of Plaintiff’s ability to 16 perform workplace tasks given her impairments using standardized tests such as the 17 Community Balance and Mobility Scale; the Vitas Verifying Numbers Work Sample; the 18 Minnesota Rate of Manipulation, Turning Test; the Screw Section of the Crawford Small 19 Parts Dexterity Test and Computer Typing Test. (AR 1340-42.) Based on these tests, 20 and Ms. Tourtellott’s clinical observations during the testing, she concluded that Plaintiff 21 is unable to work on a part-time or a full-time basis because she only completed two 22 hours of work prior to demonstrating signs of overexertion and “would not be able to 23 function successfully with the required speed and quality of performance required in a 24 competitive environment given that these environments present much more auditory and 25 visual stimulation.” (AR 1344.) Specifically, as to concentration and attention, Ms. 26 Tourtellot noted that Plaintiff showed problems with concentration especially with 27 additional stimulation in the room. (AR 1342.) She concluded that Plaintiff did not show 28 the ability to maintain “her concentration for the four hours of testing, had difficulty with 1 basic tasks requiring attention to numeric detail, as measured with the Verifying Numbers 2 Worksample, a standardized test in which she scored in the below average range.” (AR 3 1344.) Plaintiff also had difficulty multi-tasking and also reported “brain pain” after 4 about two hours of work simulation and had to take several breaks. (AR 1344.) Ms. 5 Tourtellott concluded that “if she were in the competitive work environment, she would 6 be expected to miss an excessive amount of days from work each week.” (AR 1344.) 7 Contrary to the Commissioner’s argument that the FCE contained no objective 8 evidence and only mirrored Plaintiff’s symptom claims, the FCE, in fact, included 9 material, relevant, objective tests and provides additional information that the ALJ noted 10 was missing concerning Plaintiff’s concentration and attention. (See AR 20.) This 11 objective evidence could support Plaintiff’s self-reported limitations and affect the ALJ’s 12 RFC assessment as to concentration, persistence or maintaining pace, which in turn could 13 affect the determination of disability. See Vasquez v. Astrue, 572 F.3d 586, 596 (9th Cir. 14 2009) (“[I]f the Appeals Council had remanded the case for additional review, Dr. 15 Sanchez's findings would have enhanced the information available to the ALJ and 16 provided additional, rather than contradictory, evidence of Vasquez’s condition.”). 17 Therefore, in reviewing the record as a whole, including the FCE, the Court 18 concludes the Commissioner’s denial of benefits was not supported by substantial 19 evidence. See Sakane v. O'Malley, Case No. 1:23-cv-00576-SKO, 2024 WL 361423, at 20 *5 (E.D. Cal. Jan. 31, 2024) (new evidence provided to Appeals Council filled the 21 evidentiary gap the ALJ noted was missing; therefore, considering the record as a whole, 22 the “ALJ’s conclusion about the extent of Plaintiff's limitations and the lack of evidence 23 in support thereof are no longer supported by substantial evidence.”). 24 C. Remand or Award of Benefits 25 The decision whether to remand for further proceedings or order an immediate 26 award of benefits is within the district court's discretion. Harman v. Apfel, 211 F.3d 27 1172, 1175-78 (9th Cir. 2000). In general, when the Court reverses an ALJ’s decision 28 1 “the proper course, except in rare circumstances, is to remand to the agency for additional 2 investigation or explanation.” Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004). 3 Particularly in this case, where the ALJ did not have the opportunity to consider the FCE 4 report in assessing Plaintiff’s RFC, and such consideration may alter the RFC assessment, 5 and ultimately whether Plaintiff is disabled, the Court remands the case for further 6 proceedings.9 See Vasquez, 572 F.3d at 597 (“the ALJ should have been afforded an 7 opportunity to consider additional evidence generated between the ALJ's decision and the 8 Appeals Council hearing, and remand for that purpose.”); Mengistu v. Colvin, 537 F. 9 App'x 724, 725 (9th Cir. 2013) (stating that the court “may consider additional evidence 10 presented for the first time to the Appeals Council when reviewing the agency’s disability 11 determination,” and remanding case to the ALJ because “there [was] a reasonable 12 possibility the report would have changed the [ALJ's] decision”); Kellie K. v. Kijakazi, 13 No. 2:23-CV-0094-WFN, 2023 WL 8473725, at *3 (E.D. Wash. Dec. 7, 2023) 14 (remanding because new evidence submitted to Appeals Council could have changed the 15 outcome because the doctor opined greater limitations than those found by the ALJ); Coe 16 v. Berryhill, Case No. 2:16–cv–09076 (VEB), 2018 WL 1773115, at *5 (C.D. Cal. Apr. 17 12, 2018) (“If the new evidence creates a reasonable possibility that it would change the 18 outcome of the ALJ's decision, then remand is appropriate to allow the ALJ to consider 19 the evidence.”). 20 Conclusion 21 Based on the reasoning above, the Court DECLINES to ADOPT the R&R, 22 REVERSES the Commissioner’s decision and REMANDS the case for further 23

24 25 9 It is in the province of the ALJ to determine a plaintiff’s residual functional capacity impairments, and, ultimately, whether a claimant is disabled under the Act. See Marsh v. Colvin, 792 F.3d 1170, 1173 (9th 26 Cir. 2015) (“[T]he decision on disability rests with the ALJ and the Commissioner of the Social Security Administration in the first instance, not with a district court”); see 20 C.F.R. § 404.1546(c) (“If your 27 case is at the administrative law judge hearing level or at the Appeals Council review level, the administrative law judge or the administrative appeals judge at the Appeals Council (when the Appeals 28 1 || administrative proceedings consistent with the opinion of the Court. The Clerk of Court 2 close the case. 3 IT IS SO ORDERED. 4 Dated: March 5, 2024 <=

6 United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28