United States v. 2007-03-22 | 04-57046 | PARRA VMICHAEL J.ASTRUE | precedential | opinion |

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 CATHLEEN PARRA,
Plaintiff-Appellant, No. 04-57046
v. D.C. No.
 MICHAEL J. ASTRUE,* CV-04-03604-CT
Commissioner of the Social OPINION
Security Administration,
Defendant-Appellee. 
Appeal from the United States District Court
for the Central District of California
Carolyn Turchin, Magistrate Judge, Presiding
Submitted February 5, 2007**
Pasadena, California
Filed March 23, 2007
Before: Cynthia Holcomb Hall, Diarmuid F. O’Scannlain,
and Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Hall
*Michael J. Astrue, Commissioner of the Social Security Administra-
tion, is substituted for his predecessor. Fed. R. App. P. 43(c)(2).
**This panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
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COUNSEL
Andrew Koenig, Ventura, California, for the appellant.
Liz Noteware, Assistant Regional Counsel, Social Security
Administration, San Francisco, California, for the appellee.
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OPINION
HALL, Senior Circuit Judge:
In 1996, Congress amended the Social Security Act to pre-
clude an award of disability benefits if drug or alcohol abuse
is “a contributing factor material to the Commissioner’s deter-
mination that the individual is disabled.” 42 U.S.C.
§ 423(d)(2)(C). In this appeal, we confront an issue explicitly
left open by our prior opinions, namely which party bears the
burden of proof on this substance abuse issue. Consistent with
other circuits that have considered this question, we hold that
when evidence exists of a claimant’s drug or alcohol abuse,
the claimant bears the burden of proving that his substance
abuse is not a material contributing factor to his disability.
Because this claimant failed to carry that burden, we affirm
the Commissioner’s denial of benefits.
I. Background
On April 15, 1994, Joseph Parra (“Parra”) applied for Dis-
ability and Supplemental Security Income benefits under
Titles II and XVI of the Social Security Act. Parra alleged dis-
ability since November 1, 1992 due to alcoholism and bursi-
tis. Following a hearing, an Administrative Law Judge
(“ALJ”) denied Parra’s application. The ALJ found that
Parra’s testimony regarding his physical ailments was neither
credible nor medically supported. He also found that 42
U.S.C. § 423(d)(2)(C) barred Parra from receiving benefits
because Parra’s alcoholism was a material contributing factor
to his disability. Parra appealed this decision to the district
court, which remanded the case to the ALJ under 42 U.S.C.
§ 405(g) with instructions to consider a medical examination
performed upon Parra following the ALJ’s decision.
Parra died on September 8, 2000 from cardiovascular col-
lapse, hepatorenal syndrome, hepatocellular carcinoma, and
liver cirrhosis. Parra’s daughter, Cathleen, was substituted as
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plaintiff and testified at a hearing the following month. Subse-
quently, the ALJ issued a decision finding that Parra’s alco-
holism was a material contributing factor to any disability
incurred before July 1, 1999. Because Parra’s disability insur-
ance coverage lapsed on December 31, 1995, he was entitled
to no relief.1 Cathleen again sought review by the district
court, and the parties stipulated to a second 42 U.S.C.
§ 405(g) remand to reconsider her testimony and the weight
it should be given.
A third hearing was held before a different ALJ on January
3, 2003. At the hearing, Cathleen testified that, during his
insured period, her father experienced pain in his hands and
knees and also suffered from hearing difficulties, confusion,
and paranoia. She also testified that he drank to the point of
intoxication “occasionally” and that his alcohol use was not
“excessive,” although when pressed for details she explained
that he often consumed twenty-four beers in a three-day
period and became intoxicated at least weekly. The ALJ also
heard testimony from Dr. Jerome Marmorstein, a medical
expert who reviewed Parra’s medical history. Dr. Marmor-
stein testified that Parra’s medical records showed severe
complications due to cirrhosis from July 1999 forward,
although the disease had undoubtedly “come on over many
years” and could have been “moderately well advanced” or
“moderately severe” before Parra’s insurance lapsed in 1995.
Following Dr. Marmorstein’s testimony, the ALJ stated orally
that the evidence clearly indicated that Parra was disabled due
to alcohol-induced cirrhosis by 1995, and that the operative
question was whether the disease would have resolved itself
had he quit drinking before his insurance lapsed.
The ALJ issued his final decision on April 4, 2003. He
rejected Parra’s bursitis claim because the medical evidence
1The ALJ found Parra disabled from July 1, 1999 until his death, but
because he died without a surviving spouse, the ALJ dismissed the claim
for SSI benefits. See 20 C.F.R. §§ 416.1457(c)(4), 416.542(b).
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failed to show a severe physical impairment prior to Decem-
ber 31, 1995. Turning to the substance abuse claim, the ALJ
found that “by the summer of 1994 the claimant was disabled
primarily due to heavy alcohol consumption and intoxication”
and also had “moderately severe but curable cirrhosis of the
liver.” But he further found that prior to July 1999, it was
likely that Parra would have recovered had he quit drinking.
Therefore Parra’s cirrhosis was irreversible only after that
date. The ALJ also explicitly ruled that the claimant bore the
burden of proving that his alcoholism was not a contributing
factor material to his disability. Because his disability likely
would have resolved had Parra ceased using alcohol during
his insured period, the ALJ found him ineligible for disability
benefits under 42 U.S.C. § 423(d)(2)(C). The district court
affirmed this ruling.
II. Standards of Review
We review de novo a district court’s affirmance of an
ALJ’s decision. Tackett v. Apfel, 180 F.3d 1094, 1097 (9th
Cir. 1999). We may set aside the ALJ’s denial of benefits
only “when the ALJ’s findings are based on legal error or are
not supported by substantial evidence in the record as a
whole.” Id. Substantial evidence is such relevant evidence as
a reasonable mind might accept as adequate to support a con-
clusion. Flaten v. Sec’y of Health & Human Servs., 44 F.3d
1453, 1457 (9th Cir. 1995). Where the evidence can reason-
ably support either affirming or reversing the decision, we
may not substitute our judgment for that of the Commissioner.
Id.
III. Discussion
Cathleen Parra appeals the ALJ’s 2003 decision on three
grounds. She alleges that (1) the ALJ erred by failing to per-
form the full five-step analysis to determine Parra’s disability,
(2) the ALJ erred in finding that alcoholism was material to
Parra’s disability, and (3) the ALJ improperly discredited
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Joseph and Cathleen Parra’s testimony. We address each
claim in turn.
A. The Five-Step Analysis
[1] A claimant is disabled under Title II of the Social
Security Act if he is unable “to engage in any substantial
gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to
result in death or . . . can be expected to last for a continuous
period of not less than 12 months.” 42 U.S.C. § 423(d)(1)(A).
To determine whether a claimant meets this definition, the
ALJ conducts a five-step sequential evaluation that asks (1)
whether the claimant is presently engaging in substantially
gainful activity; (2) whether the claimant has a severe impair-
ment; (3) whether the impairment is listed, or equivalent to an
impairment listed, in Appendix I of the regulations; (4)
whether the impairment prevents the claimant from doing past
relevant work; and (5) whether the impairment prevents the
claimant from performing any other substantially gainful
activity. 20 C.F.R. § 404.1520(a)(4). The claimant bears the
burden of proving steps one through four, consistent with the
general rule that “[a]t all times, the burden is on the claimant
to establish [his] entitlement to disability insurance benefits.”
Tidwell v. Apfel, 161 F.3d 599, 601 (9th Cir. 1998). Once this
prima facie case is established, the burden shifts to the Com-
missioner at the fifth step to show that the claimant may per-
form other gainful activity. See Tackett, 180 F.3d at 1098.
[2] “A finding of ‘disabled’ under the five-step inquiry
does not automatically qualify a claimant for disability bene-
fits.” Bustamante v. Massanari, 262 F.3d 949, 954 (9th Cir.
2001). Under 42 U.S.C. § 423(d)(2)(C), a claimant cannot
receive disability benefits “if alcoholism or drug addiction
would . . . be a contributing factor material to the Commis-
sioner’s determination that the individual is disabled.” Con-
gress adopted this amendment in 1996 as part of the Contract
with America Advancement Act (“CAAA”), Public Law 104-
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121. As we have previously explained, the purpose of the
CAAA was “to discourage alcohol and drug abuse, or at least
not to encourage it with a permanent government subsidy.”
Ball v. Massanari, 254 F.3d 817, 824 (9th Cir. 2001). Under
the implementing regulations, the ALJ must conduct a drug
abuse and alcoholism analysis (“DAA Analysis”) by deter-
mining which of the claimant’s disabling limitations would
remain if the claimant stopped using drugs or alcohol. 20
C.F.R. § 404.1535(b). If the remaining limitations would still
be disabling, then the claimant’s drug addiction or alcoholism
is not a contributing factor material to his disability. If the
remaining limitations would not be disabling, then the claim-
ant’s substance abuse is material and benefits must be denied.
Id.
Appellant asserts that the ALJ erred by failing to conduct
the full five-step analysis to determine that Parra’s cirrhosis
was disabling before conducting the DAA Analysis to deter-
mine if Parra’s alcoholism was material. See Bustamante, 262
F.3d at 955 (holding ALJ must identify disability under five-
step procedure before conducting DAA Analysis to determine
whether substance abuse was material to disability). We agree
with appellant that the ALJ’s findings regarding Parra’s cir-
rhosis are ambiguous. In his decision, the ALJ initially states
that “the claimant did not have a severe physical impairment
prior to the date last insured of December 31, 1995.” Later,
however, the ALJ finds that “by the summer of 1994 the
claimant was disabled primarily due to heavy alcohol con-
sumption and intoxication” and also had “moderately severe
but curable cirrhosis of the liver.” After engaging in the DAA
Analysis to examine the effects of Parra’s alcoholism on his
cirrhosis, the ALJ concludes that “[s]ince July 1, 1999, the
medical evidence establishes the claimant had hepatitis, cir-
rhosis of the liver, hepatocellular carcinoma and alcoholism.
He did not have an impairment or combination of impair-
ments listed in or medically equal to one listed in Appendix
1, Subpart P, Regulations No. 4. Prior to July 1, 1999 the
claimant’s primary impairment was alcoholism.”
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[3] Nonetheless, while the ALJ’s five-step analysis is not
completely clear, we find any error in this regard to be harm-
less. See Curry v. Sullivan, 925 F.2d 1127, 1131 (9th Cir.
1990) (finding ALJ error harmless because it did not affect
the result). Although the decision does not explicitly label
Parra’s cirrhosis as disabling, the ALJ gave Parra the benefit
of the doubt: the DAA Analysis assumed that Parra’s cirrhosis
was disabling and focused correctly upon whether abstinence
would have cured this disability before his insurance lapsed.2
Because the DAA Analysis assumed Parra’s cirrhosis was dis-
abling, any error in arriving at that initial conclusion would
not affect the ALJ’s ultimate decision that Parra’s alcoholism
was material to his cirrhosis. We therefore reject this prof-
fered ground for reversal.
B. The DAA Analysis
Appellant next argues that the ALJ erred in finding Parra
ineligible for benefits because his alcoholism was a contribut-
ing factor material to his disability under 42 U.S.C.
§ 423(d)(2)(C). Once medical evidence of Parra’s alcoholism
surfaced, the ALJ placed the burden of proof upon the claim-
ant to establish that Parra’s alcoholism was not a contributing
factor material to his disability, by showing he would have
remained disabled had he stopped drinking in 1995. Appellant
asserts that this holding was erroneous. Once a claimant satis-
fies the five-step analysis, she argues, the Commissioner
should bear the burden of proving that benefits should be
denied. Appellant analogizes to cases involving termination of
benefits, wherein the Commissioner must prove that a claim-
ant previously adjudged disabled has recovered sufficiently to
2The finding that Parra had no “severe physical impairment” prior to
December 31, 1995 appears in the section of the decision addressing his
bursitis claim, before the ALJ discusses the effects of his alcoholism. In
context, this statement is better understood as merely a recognition that
Parra’s non-alcohol-related impairments did not constitute a disability—a
finding supported by the record and seemingly not challenged on appeal.
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return to work. See, e.g., Bellamy v. Sec’y of Health & Human
Servs., 755 F.2d 1380, 1381 (9th Cir. 1985).
[4] Our prior opinions have explicitly left open the issue of
which party bears the burden of proof under 42 U.S.C.
§ 423(d)(2)(C). We placed the burden upon the claimant in
Ball, 254 F.3d at 821, although a later opinion correctly
described this language as dicta. See Bustamante, 262 F.3d at
955 n.1. We note that each circuit to have considered the issue
has placed the burden squarely upon the claimant. See, e.g.,
Doughty v. Apfel, 245 F.3d 1274, 1276 (11th Cir. 2001); Mit-
tlestedt v. Apfel, 204 F.3d 847, 852 (8th Cir. 2000); Brown v.
Apfel, 192 F.3d 492, 498 (5th Cir. 1999). Our own case law
has suggested the same. See Sousa v. Callahan, 143 F.3d
1240, 1245 (9th Cir. 1998) (remanding to allow claimant “an
opportunity to present evidence as to whether claimant’s dis-
ability would have continued if she stopped using drugs or
alcohol”). This approach is consistent with the general rule
that “[a]t all times, the burden is on the claimant to establish
[his] entitlement to disability insurance benefits.” Tidwell,
161 F.3d at 601. Moreover, placing the burden on the claim-
ant is practical because the claimant “is the party best suited
to demonstrate whether [he] would still be disabled in the
absence of drug or alcohol addiction.” Brown, 192 F.3d at
498.
[5] Appellant’s reliance on cases involving the termination
of benefits is misplaced. As Bellamy makes clear, the Com-
missioner’s burden in termination cases stems from the notion
that “[o]nce a claimant has been found to be disabled [ ] a
presumption of continuing disability arises in [his] favor.”
Bellamy, 755 F.2d at 1381 (emphasis added). But the CAAA
amended the definition of “disability” under the Social Secur-
ity Act, such that an individual “shall not be considered dis-
abled” if drug or alcohol use is material to his disability. In
other words, the presumption driving Bellamy has not yet
attached when the DAA Analysis is performed because the
agency has yet to determine whether the claimant is disabled.
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“Unquestionably, proving disability is [claimant’s] burden,
and any amendment to the definition of disability logically
impacts [his] burden.” Brown, 192 F.3d at 498; see also Bel-
lamy, 755 F.2d at 1381 (“Social Security disability benefits
claimants have the burden of proving disability.”). We thus
make explicit what was intimated by our earlier cases, that the
claimant bears the burden of proving that drug or alcohol
addiction is not a contributing factor material to his disability.
[6] Appellant failed to carry this burden. The record offers
no evidence supporting the notion that the disabling effects of
Parra’s cirrhosis would have remained had he stopped drink-
ing before December 31, 1995. Dr. Marmorstein testified that
cirrhosis, caused by alcohol abuse, is generally reversible and
that the medical records support a finding that Parra’s cirrho-
sis was irreversible only after July 1, 1999. Dr. Marmorstein
explained that he had no reason to believe that Parra’s condi-
tion would not have improved had Parra quit drinking in
1995. When pressed by Parra’s counsel, he reiterated several
times that “there is no way for me to know” whether Parra’s
cirrhosis was irreversible in 1994 or 1995 because the record
was insufficient to support a conclusion either way.3
Appellant argues that Dr. Marmorstein’s testimony was
inconclusive on this point, and that inconclusive testimony is
sufficient to satisfy the claimant’s burden of proof under the
3The ALJ also cited the 1994 report of psychologist Dr. Nancy McCar-
thy. Dr. McCarthy documented many of the mental impairments later cited
by Parra and his daughter at the disability hearings. Without discussing
Parra’s liver damage, Dr. McCarthy wrote that these mental impairments
were likely caused by excessive alcohol consumption and intimated that
they would resolve if Parra stopped drinking. As appellant notes, Dr.
McCarthy’s report does not state that Parra’s cirrhosis would have
resolved with abstinence. But it does constitute substantial evidence to
support a finding that his disabling mental limitations, which Dr. Marmor-
stein testified may have been caused by cirrhosis, would have resolved
with abstinence. See Tackett, 180 F.3d at 1097 (court reviews whether
ALJ’s conclusions are “supported by substantial evidence in the record as
a whole” (emphasis added)).
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statute. To support this claim, she relies upon two internal
agency documents, HALLEX I-5-3-14A4 and Emergency
Teletype No. EM-96-94.5 These documents, she argues, pre-
clude a finding of materiality unless the medical evidence
affirmatively shows that a disability will resolve with absti-
nence. We reject this argument, which effectively shifts the
burden to the Commissioner to prove materiality. Assuming
without deciding that the HALLEX and Teletype provisions
apply to this situation, we have previously explained that
internal agency documents such as these do not carry the
force of law and are not binding upon the agency. See, e.g.,
Lowry v. Barnhart, 329 F.3d 1019, 1023 (9th Cir. 2003);
Moore v. Apfel, 216 F.3d 864, 868-69 (9th Cir. 2000). There-
fore, they do not create judicially enforceable duties, and we
will not review allegations of noncompliance with their provi-
sions. See Moore, 216 F.3d at 869.
At most, these sources may represent the agency’s unpro-
mulgated interpretation of the statute’s phrase “contributing
factor material to the determination of disability.” Such an
interpretation is “ ‘entitled to respect’ ” but only to the extent
that it has the “ ‘power to persuade.’ ” Christensen v. Harris
County, 529 U.S. 576, 587 (2000) (quoting Skidmore v. Swift
4HALLEX is the Hearing, Appeals, and Litigation Law Manual, an
internal agency guidebook. HALLEX I-5-3-14A states that a finding that
DAA is material is appropriate “only when . . . there is sufficient and
appropriate medical evidence to establish . . . the individual would not be
considered to be disabled if he/she stopped using drugs and/or alcohol.”
5On August 30, 1996, the SSA’s Office of Disability sent this teletype
to all hearing offices, responding to initial questions posed by the adoption
of the CAAA. The relevant portion of the teletype explains that “a finding
that DAA is material will be made only when the evidence establishes that
the individual would not be disabled if he/she stopped using drugs/
alcohol.” Therefore in “cases in which the evidence demonstrates multiple
impairments, especially cases involving multiple mental impairments,
where the MC/PC cannot project what limitations would remain if the
individuals stopped using drugs/alcohol,” the MC/PC “should record his/
her findings to that effect” and “the DE will find that DAA is not a con-
tributing material factor to the determination of disability.”
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& Co., 323 U.S. 134, 140 (1944)). In this case, such an inter-
pretation is unpersuasive because it contradicts the purpose of
the statute. As noted above, Congress sought through the
CAAA “to discourage alcohol and drug abuse, or at least not
to encourage it with a permanent government subsidy.” Ball,
254 F.3d at 824.6 Appellant’s proposed rule provides the
opposite incentive. An alcoholic claimant who presents incon-
clusive evidence of materiality has no incentive to stop drink-
ing, because abstinence may resolve his disabling limitations
and cause his claim to be rejected or his benefits terminated.
His claim would be guaranteed only as long as his substance
abuse continues—a scheme that effectively subsidizes sub-
stance abuse in contravention of the statute’s purpose.7
[7] In sum, we find that Parra bore the burden of proving
that his alcoholism was not a contributing factor material to
his cirrhosis-related disability. Dr. Marmorstein testified that
abstinence generally ameliorates the effects of cirrhosis and
that the record fails to show that Parra’s cirrhosis was irre-
versible when his disability insurance lapsed. Therefore we
conclude that the ALJ’s denial of benefits under 42 U.S.C.
§ 423(d)(2)(C) was supported by substantial evidence and free
of material error.
C. Credibility Determinations
Finally, appellant asserts that the ALJ erred in finding that
the testimony of Parra and his daughter lacked credibility.
6See also H.R. Rep. No. 104-379, at 17 (1995) (explaining that the
amendment eliminates “a perverse incentive that affronts working taxpay-
ers and fails to serve the interests of addicts and alcoholics, many of whom
use their disability checks to purchase drugs and alcohol, thereby main-
taining their addictions”).
7The teletype elsewhere explains that a period of abstinence of one
month or more is useful to test whether a claimant’s substance abuse is
material to his disability. Under appellant’s interpretation of the teletype,
the claimant has no incentive to undergo this period of abstinence, as
doing so would only jeopardize his claim.
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Generally, “questions of credibility and resolution of conflicts
in the testimony are functions solely” for the agency. Sample
v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982) (internal quo-
tation marks omitted). The ALJ must provide “clear and con-
vincing” reasons to reject a claimant’s subjective testimony,
by specifically identifying “what testimony is not credible and
what evidence undermines the claimant’s complaints.” Lester
v. Chater, 81 F.3d 821, 834 (9th Cir. 1995). The ALJ may
reject a third party’s testimony upon giving a reason germane
to that witness. Crane v. Shalala, 76 F.3d 251, 254 (9th Cir.
1996).
[8] Contrary to appellant’s contentions, the ALJ did not
find that Parra lacked credibility. The ALJ found that Parra
was “generally credible with respect to his condition since
July 1999” and stated more generally that he “concur[red]
with the finding of the prior Administrative Law Judge” that
prior to July 1999 Parra’s primary impairment was alcohol-
ism, but that he was disabled from July 1999 onward. The
ALJ discounted some of Parra’s subjective testimony regard-
ing his bursitis pain. But to the extent that this constitutes a
rejection of Parra’s testimony, the ALJ provides clear and
convincing reasons for doing so. The decision pointed to spe-
cific evidence in the record, including numerous medical
reports, establishing that Parra’s ailments were not severe
impairments. For example, his subjective complaint of
bursitis-related knee pain was contradicted by numerous Vet-
erans Administration laboratory tests showing knee function
within normal limits during Parra’s insured period. These
inconsistencies constitute significant and substantial reasons
to find Parra’s testimony less than completely credible. See
Morgan v. Comm’r of Soc. Sec. Admin., 169 F.3d 595, 600
(9th Cir. 1999). The ALJ also noted that Parra’s physical ail-
ments were treated with an over-the-counter pain medication.
We have previously indicated that evidence of “conservative
treatment” is sufficient to discount a claimant’s testimony
regarding severity of an impairment. Johnson v. Shalala, 60
F.3d 1428, 1434 (9th Cir. 1995). We therefore find no error.
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[9] Similarly, the ALJ did not err in his assessment of Cath-
leen’s testimony. The ALJ found Cathleen’s testimony was
“colored by bias” because she repeatedly attempted to “dis-
count the alcoholism of the claimant” despite her own testi-
mony as to the frequency and effects of his drinking. The
incongruity between Cathleen’s objective descriptions of her
father’s drinking habits and her subjective characterization of
these habits as “occasional” and not “excessive” constitutes a
“germane” reason why her testimony was not completely per-
suasive. See Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir.
1993). Moreover, we note that the ALJ did not completely
discredit Cathleen’s testimony. He cited her testimony to sup-
port his finding that Parra was disabled from 1994 onward
due to the effects of his alcoholism. Therefore, we hold that
the ALJ did not err in finding Cathleen only partially credible,
and weighing her testimony accordingly.
IV. Conclusion
We AFFIRM the district court’s ruling that the Commis-
sioner did not err in denying Parra’s claim.
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