United States v. 2012-06-14 | 11-35216 | Mindy Brewes V. Commissioner of Social Securit |…

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 MINDY BREWES,
Plaintiff-Appellant, No. 11-35216
v. D.C. No.
 6:09-cv-00748-HOCOMMISSIONER OF SOCIAL SECURITY
ADMINISTRATION, OPINION
Defendant-Appellee. 
Appeal from the United States District Court
for the District of Oregon
Michael R. Hogan, District Judge, Presiding
Argued and Submitted
March 9, 2012—Portland, Oregon
Filed June 14, 2012
Before: William A. Fletcher, Raymond C. Fisher and
Jay S. Bybee, Circuit Judges.
Opinion by Judge Fisher
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COUNSEL
Jeffrey H. Baird (argued), Seattle, Washington; Alan Stuart
Graf (argued), Summertown, Tennessee, for the appellant.
Dwight C. Holton, United States Attorney; Kelly A. Zusman,
Assistant United States Attorney; David Morado, Regional
Chief Counsel, Seattle Region X; Jordan D. Goddard
(argued), Assistant Regional Counsel, Seattle, Washington,
for the appellee.
OPINION
FISHER, Circuit Judge:
Mindy Brewes appeals an order of the district court affirm-
ing the Commissioner of Social Security’s final decision
denying her disability benefits under Title II of the Social
Security Act. See 42 U.S.C. §§ 401-434. We must decide,
among other things, whether the district court should have
considered evidence Brewes did not submit to the Administra-
tive Law Judge (ALJ) but submitted for the first time to the
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Appeals Council, which accepted and considered the new evi-
dence but declined to review the ALJ’s decision.
The Commissioner contends that when the Appeals Coun-
cil denies review of an ALJ’s decision, evidence that was not
before the ALJ is not part of the administrative record before
the district court, even if that evidence was submitted to and
accepted by the Appeals Council. We disagree. We hold that
when a claimant submits evidence for the first time to the
Appeals Council, which considers that evidence in denying
review of the ALJ’s decision, the new evidence is part of the
administrative record, which the district court must consider
in determining whether the Commissioner’s decision is sup-
ported by substantial evidence. Considering the record as a
whole, including the evidence Brewes submitted to the
Appeals Council, we conclude that the Commissioner’s deci-
sion is not supported by substantial evidence. We reverse and
remand for an immediate award of benefits.
Background
Brewes applied for disability benefits in June 2005. She
claims that she has been disabled since February 2004 as a
result of depression, bipolar disorder, anxiety and agoraphobia.1
The record before the ALJ catalogued Brewes’ medical his-
tory from 2002 to 2007. During this period, multiple mental
health specialists diagnosed Brewes with some combination
of major depressive or bipolar disorder, anxiety disorder, and
panic disorder with agoraphobia. In addition to her regular
therapy appointments, Brewes’ doctors treated her with a bat-
1Before the Commissioner, Brewes also claimed disability resulting
from chronic back pain, and submitted medical records relating to a vari-
ety of physical ailments. After reviewing the evidence of Brewes’ physical
impairments, the ALJ found that Brewes’ physical conditions did not limit
her ability to perform basic work activities. Brewes does not contest this
finding on appeal.
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tery of psychopharmacological medications. Unfortunately,
these regimens were of limited success. Brewes’ providers’
treatment notes show that she suffered from persistent and
severe symptoms that significantly curtailed her daily activi-
ties. Brewes often slept 12 hours a day, experienced frequent
panic attacks, could not accomplish household chores and
rarely left the house because doing so exacerbated her anxiety
and panic attacks. When she did go out, she was almost
always with her husband. Over the years, Brewes’ doctors
assigned her Global Assessment of Function (GAF) scores
that ranged from a low of 40 — indicating major functional
impairment in several areas, such as work, family relations,
judgment or thinking — to a high of 60, indicating moderate
difficulty in social or occupational functioning. See Diagnos-
tic and Statistical Manual of Mental Disorders 34 (rev. 4th
ed. 2000).2
Brewes’ hearing testimony, in February 2007, was largely
consistent with the medical record. Describing her symptoms,
Brewes testified,
I have a very hard time with anxiety, constant panic
attacks. When it switches from anxiety to depres-
sion, I have no will to do anything. I cry all the time.
I don’t even take care of myself. It’s hard to even get
up and just take a shower. And when I’m anxious, all
I want to do is lay in a ball and try not to freak out.
Brewes explained that she relied on her husband to handle
most of the household chores because she became too over-
whelmed just thinking about doing them herself. Her day con-
sisted primarily of lying in bed with the television going in
the background; she also took her medication, ate and went to
2“A GAF score is a rough estimate of an individual’s psychological,
social, and occupational functioning used to reflect the individual’s need
for treatment.” Vargas v. Lambert, 159 F.3d 1161, 1164 n.2 (9th Cir.
1998).
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doctors appointments. She testified that she rarely left the
house, and almost never on her own.
The ALJ denied Brewes’ application for disability benefits.
He found that she suffered from major depressive disorder,
panic disorder with agoraphobia, mixed personality disorder
and a history of opioid dependence, all of which qualified as
“severe impairments,” but concluded that Brewes’ statements
concerning the intensity, persistence and limiting effects of
her symptoms were “not entirely credible.” He found that
Brewes retained the residual functional capacity to perform
“simple one-, two-, three-step work with limited interaction
with co-workers and no public interaction.” Relying on the
testimony of a vocational expert, the ALJ found that such
work was available in the national economy for a person of
Brewes’ age, education and experience. He thus concluded
that Brewes was not disabled and denied her application for
disability benefits.
Brewes sought Appeals Council review of the ALJ’s deci-
sion. She submitted additional evidence, which the Appeals
Council received and made part of the record. In April 2009,
the Council denied Brewes’ request for review. It noted that
it “considered the additional evidence [and] found that this
information [did] not provide a basis for changing the Admin-
istrative Law Judge’s decision.” Notice of Appeals Council
Action 1-2 (Apr. 27, 2009).
Brewes appealed to the district court, which affirmed the
denial of benefits. Citing a concurring opinion in an unpub-
lished decision of this court, the district court refused to con-
sider the additional evidence that was before the Appeals
Council but not before the ALJ. Brewes timely appealed. We
have jurisdiction pursuant to 42 U.S.C. § 405(g) and 28
U.S.C. § 1291.
Standard of Review
We review de novo the district court’s judgment upholding
the Commissioner’s denial of social security benefits. See
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Vernoff v. Astrue, 568 F.3d 1102, 1105 (9th Cir. 2009). We
must “independently determine whether the Commissioner’s
decision (1) is free of legal error and (2) is supported by sub-
stantial evidence.” Smolen v. Chater, 80 F.3d 1273, 1279 (9th
Cir. 1996).
Discussion
I.
To begin, we address whether the district court should have
considered the evidence that Brewes submitted for the first
time to the Appeals Council. Brewes contends that although
this evidence was not before the ALJ, it was properly before
the district court because the Appeals Council incorporated it
into the administrative record and considered it in deciding
not to review the ALJ’s decision. The Commissioner, in con-
trast, argues that the new evidence is not part of the adminis-
trative record and that the district court could consider it only
if Brewes showed (1) that the evidence was material and (2)
that she had good cause for failing to raise it before the ALJ.
This question has split the circuits. See Higginbotham v.
Barnhart, 405 F.3d 332, 335-36 (5th Cir. 2005) (discussing
the circuit split).
The Social Security Act provides for federal court review
of final decisions of the Commissioner. In such a proceeding,
“the Commissioner . . . shall file a certified copy of the tran-
script of the record including the evidence upon which the
findings and decision complained of are based.” 42 U.S.C.
§ 405(g). Based on “the pleadings and transcript of the
record,” the court hearing the case may enter “a judgment
affirming, modifying, or reversing the decision of the Com-
missioner . . . with or without remanding the cause for a
rehearing.” Id.
[1] We have held that we do not have jurisdiction to
review a decision of the Appeals Council denying a request
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for review of an ALJ’s decision, because the Appeals Council
decision is a non-final agency action. See Taylor v. Comm’r
of Soc. Sec. Admin., 659 F.3d 1228, 1231 (9th Cir. 2011).
When the Appeals Council declines review, “the ALJ’s deci-
sion becomes the final decision of the Commissioner,” id.,
and the district court reviews that decision for substantial evi-
dence, based on the record as a whole, see Tackett v. Apfel,
180 F.3d 1094, 1097 (9th Cir. 1999). The question, then, “is
whether the ‘whole’ record includes . . . evidence submitted
to the Appeals Council, or just . . . evidence that was before
the ALJ.” O’Dell v. Shalala, 44 F.3d 855, 858 (10th Cir.
1994).
[2] We are persuaded that the administrative record
includes evidence submitted to and considered by the Appeals
Council. The Commissioner’s regulations permit claimants to
submit new and material evidence to the Appeals Council and
require the Council to consider that evidence in determining
whether to review the ALJ’s decision, so long as the evidence
relates to the period on or before the ALJ’s decision. See 20
C.F.R. § 404.970(b).3 Claimants need not show “good cause”
before submitting new evidence to the Appeals Council. See
id.; see also O’Dell, 44 F.3d at 858. The Council will grant
the request for review “if it finds that the administrative law
judge’s action, findings, or conclusion is contrary to the
weight of the evidence currently of record.” 20 C.F.R.
§ 404.970(b) (emphasis added). “Because the regulations
require the Appeals Council to review the new evidence, this
320 C.F.R. § 404.970(b) provides:
If new and material evidence is submitted, the Appeals Council
shall consider the additional evidence only where it relates to the
period on or before the date of the administrative law judge hear-
ing decision. The Appeals Council shall evaluate the entire record
including the new and material evidence submitted if it relates to
the period on or before the date of the administrative law judge
hearing decision. It will then review the case if it finds that the
administrative law judge’s action, findings, or conclusion is con-
trary to the weight of the evidence currently of record.
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new evidence must be treated as part of the administrative
record.” Perez v. Chater, 77 F.3d 41, 45 (2d Cir. 1996).
In addition, the Commissioner’s decision is not final until
the Appeals Council denies review or, if it accepts a case for
review, issues its own findings on the merits. See 20 C.F.R.
§§ 404.955, 404.981; see also Bass v. Soc. Sec. Admin., 872
F.2d 832, 833 (9th Cir. 1989) (per curiam) (holding that there
is no final decision until the Appeals Council either grants or
denies review); Perez, 77 F.3d at 44 (same); O’Dell, 44 F.3d
at 859 (same). Thus, as a practical matter, the final decision
of the Commissioner includes the Appeals Council’s denial of
review, and the additional evidence considered by that body
is “evidence upon which the findings and decision com-
plained of are based.” 42 U.S.C. § 405(g); see also Higgin-
botham, 405 F.3d at 337 (“It follows that the record before the
Appeals Council constitutes part of the record upon which the
final decision is based.”).
[3] This conclusion is consistent with our own case law. In
Ramirez v. Shalala, 8 F.3d 1449, 1451-52 (9th Cir. 1993), we
concluded that it was appropriate to consider both the ALJ’s
decision and additional evidence submitted to the Appeals
Council. We noted that although the Council declined to
review the ALJ’s decision, “it reached this ruling after consid-
ering the case on the merits; examining the entire record,
including the additional material; and concluding that the
ALJ’s decision was proper and that the additional material
failed to ‘provide a basis for changing the hearing decision.’ ”
Id. at 1452. The same is true here. See Notice of Appeals
Council Action 1-2 (Apr. 27, 2009) (“[W]e considered the
additional evidence [and] found that this information does not
provide a basis for changing the Administrative Law Judge’s
decision.”). Following Ramirez, we have routinely considered
evidence submitted for the first time to the Appeals Council
to determine whether, in light of the record as a whole, the
ALJ’s decision was supported by substantial evidence. See,
e.g., Lingenfelter v. Astrue, 504 F.3d 1028, 1030 n.2 (9th Cir.
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2007) (noting that when the Appeals Council considers new
evidence in denying a claimant’s request for review, the
reviewing court considers both the ALJ’s decision and the
additional evidence submitted to the Council); Harman v.
Apfel, 211 F.3d 1172, 1180 (9th Cir. 2000) (“We properly
may consider the additional materials because the Appeals
Council addressed them in the context of denying Appellant’s
request for review.”).
[4] The Commissioner urges that these decisions are not
binding precedent as to this issue because whether the addi-
tional evidence was properly before the court was not litigated
in these cases. He maintains that we simply assumed that the
additional evidence was properly before us. Because we agree
with Ramirez’s approach, which has been followed consis-
tently in the published opinions of this circuit, we need not
determine the precedential force of these prior decisions.
Even assuming the Commissioner is correct that they are not
binding, we expressly adopt the approach set forth in
Ramirez.
[5] Accordingly, we hold that when the Appeals Council
considers new evidence in deciding whether to review a deci-
sion of the ALJ, that evidence becomes part of the administra-
tive record, which the district court must consider when
reviewing the Commissioner’s final decision for substantial
evidence. See Tackett, 180 F.3d at 1097-98 (holding that a
court reviewing the Commissioner’s decision must consider
the record as a whole). The district court erred when it refused
to consider the new evidence that Brewes submitted to the
Appeals Council and that the Council considered in denying
Brewes’ request for review.
II.
[6] Here, when we consider the record as a whole, includ-
ing Brewes’ additional evidence, we conclude that the ALJ
erred in denying benefits. The ALJ’s disability determination
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expressly relied on the testimony of the vocational expert,
who testified that an individual of Brewes’ age, educational
background, past work experience and residual functional
capacity could be a photocopying machine operator, laundry
worker or janitor. Relying on this testimony, the ALJ con-
cluded that Brewes could perform work that existed in signifi-
cant numbers in the national economy and therefore she was
not disabled. The vocational expert also testified, however,
that if a person with Brewes’ characteristics were to miss two
or more days of work per month, either because she was
unable to come to work or because she was unable to be pro-
ductive at work, she would be unemployable.
[7] The additional evidence Brewes submitted to the
Appeals Council was directly responsive to the vocational
expert’s testimony. In a joint letter, Brewes’ treating psychol-
ogist, Karen Dimalanta, and her mental health nurse practi-
tioner, Carol Stampfer, opined that “it is likely [Brewes]
would miss quite a few days a month from even a simple job,
as she would not be able to leave home to go to work and if
she did make it to work her concentration and attention would
be poor due to her symptoms.” They explained Brewes’ diag-
noses, including bipolar disorder. They identified her many
medications and reported that despite Brewes’ “compliance
with medications and therapy, her symptoms have decreased
minimally and impair her daily activities, relationships, and
ability to work.” Dimalanta and Stampfer reported, based on
their review of Brewes’ medical records, that her symptoms
had been consistent for about a decade, and they found no evi-
dence of malingering or exaggeration.
The Commissioner argues that the Dimalanta/Stampfer let-
ter is not material because it is inconsistent with Dimalanta’s
treatment notes. First, we do not agree with the Commission-
er’s contention that Brewes must show that the letter meets
§ 405(g)’s materiality standard. Section 405(g) materiality is
not at issue here because that standard applies only to new
evidence that is not part of the administrative record and is
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presented in the first instance to the district court. See 42
U.S.C. § 405(g) (“The [district] court may . . . at any time
order additional evidence to be taken before the Commis-
sioner, . . . but only upon a showing that there is new evidence
which is material and that there is good cause for the failure
to incorporate such evidence into the record in a prior pro-
ceeding.”). As discussed above, evidence submitted to and
considered by the Appeals Council is not new but rather is
part of the administrative record properly before the district
court. Here, the Appeals Council accepted Brewes’ proffered
new evidence and made it part of the record, apparently con-
cluding that it was material within the meaning of 20 C.F.R.
§ 404.970(b). See supra note 3. The Commissioner does not
contend that the Council erred by considering this additional
evidence.
Second, we see no inconsistency between the Dima-
lanta/Stampfer letter and Dimalanta’s treatment notes. In the
letter, Dimalanta and Stampfer noted that Brewes’ symptoms
were sometimes so severe that she was unable to attend ther-
apy sessions but that she was “compliant with treatment” and
“participated in her treatment on a consistent basis.” Although
the Commissioner highlights a September 2006 treatment
note in which Dimalanta reported that Brewes had “not fol-
lowed through on recommendations for the most part,” subse-
quent notes reflect Brewes’ engagement with her treatment
and her efforts to use the coping skills and make the behav-
ioral changes that Dimalanta suggested. Furthermore, diffi-
culty following through on treatment recommendations is
entirely consistent with Brewes’ impairments. As Dimalanta
noted in November 2006, Brewes “has some very difficult
cognitive distortions to overcome [and] is emotionally para-
lyzed in regard to making progress due to the enourmous [sic]
questions that she is unable to answer.” The Commissioner’s
proffered inconsistencies are simply not inconsistent.
[8] In sum, the vocational expert testified before the ALJ
that the three kinds of jobs for which Brewes was qualified
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would not tolerate absences of two days a month. Dimalanta
and Stampfer’s opinion that Brewes would likely miss multi-
ple days each month was not contradicted in the record. Tak-
ing the entire record into account, including the
Dimalanta/Stampfer letter, we hold that the Commissioner’s
decision denying Brewes disability benefits is not supported
by substantial evidence.
III.
“We have discretion to remand a case either for additional
evidence and findings or to award benefits. We may direct an
award of benefits where the record has been fully developed
and where further administrative proceedings would serve no
useful purpose.” Smolen, 80 F.3d at 1292 (citation omitted).
[9] Further proceedings are not necessary here; there are
no outstanding issues to be resolved. See id. The complete
record shows that Brewes is likely to miss multiple days of
work per month. The vocational expert testified that a person
with Brewes’ characteristics who would miss that much work
was not employable. A finding of disability is therefore
required. See Lingenfelter, 504 F.3d at 1041 (considering
additional evidence submitted to the Appeals Council and
reversing and remanding for an award of benefits where voca-
tional expert testified that claimant’s limitations would render
him unemployable); Ramirez, 8 F.3d at 1455 (reversing and
remanding for an award of benefits based on new evidence
submitted to the Appeals Council).
Conclusion
[10] We hold that the district court erred by not consider-
ing the evidence Brewes submitted to the Appeals Council.
We reverse the Commissioner’s decision and remand for a
payment of benefits.
REVERSED AND REMANDED FOR PAYMENT OF
BENEFITS.
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