Opinion
Case No. 3:16-cv-00793-SB
07-12-2017
DOUGLAS SANDS, Plaintiff, v. NANCY A. BERRYHILL, Acting Commissioner of Social Security Administration, Defendant.
FINDINGS AND RECOMMENDATION
BECKERMAN, Magistrate Judge.
Douglas Sands ("Sands") seeks judicial review of the final decision by the Social Security Commissioner ("Commissioner") denying his application for Disability Insurance Benefits ("DIB") under Title II of the Social Security Act ("SSA"). This Court has jurisdiction to review the Commissioner's decision pursuant to 42 U.S.C. § 405(g). For the reasons explained below, the district judge should REVERSE AND REMAND the Commissioner's decision.
I. FACTS AND PROCEDURAL HISTORY
Sands initially filed applications for Supplemental Security Income ("SSI") and DIB on February 25, 2004. (Tr. 66). Following a hearing, an Administrative Law Judge ("ALJ") denied the applications in a written decision. (Tr. 66-74.) Sands appealed the ALJ's decision to the U.S. District Court, and the Court entered a stipulated order of remand. (Tr. 157-61.) However, Sands (then unrepresented) failed to appear at his remand hearing, and the Commissioner entered an order of dismissal on May 19, 2010. (Tr. 152-56.) The order of dismissal noted that the original determination denying Sands' applications remained the Commissioner's final decision. (Id.)
On September 6, 2011, Sands again filed applications for DIB and SSI. (Tr. 241-53.) On November 22, 2012, the Commissioner approved Sands' SSI application (Tr. 184-96), but denied his DIB application initially and upon reconsideration. (Tr. 167-70, 178-80.) Sands requested a hearing, and testified before an ALJ on March 14, 2014. (Tr. 34-62.)
On June 26, 2014, the ALJ concluded that Sands was disabled from June 2002 through October 2006 because he met the level of severity required by Section 12.04C of the Listings of Impairments, but that he did not qualify for a "period of disability" or benefits for that time period because Sands could not reopen his 2004 application. (Tr. 16-27.) The ALJ also found that Sands' condition improved and that he was no longer disabled from October 2006 through his date last insured of June 30, 2007. (Id.) The Appeals Council denied Sands' request for review on March 3, 2016, making the ALJ's decision the final decision of the Commissioner. (Tr. 1-6.) This appeal followed.
II. THE FIVE-STEP SEQUENTIAL PROCESS
A. Legal Standard
A claimant is considered disabled if he or she is unable to "engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which . . . has lasted or can be expected to last for a continuous period of not less than 12 months[.]" 42 U.S.C. § 423(d)(1)(A). "Social Security Regulations set out a five-step sequential process for determining whether an applicant is disabled within the meaning of the Social Security Act." Keyser v. Comm'r Soc. Sec. Admin., 648 F.3d 721, 724 (9th Cir. 2011). Those five steps are as follows:
(1) Is the claimant presently working in a substantially gainful activity? (2) Is the claimant's impairment severe? (3) Does the impairment meet or equal [one of the listed impairments]? (4) Is the claimant able to perform any work that he or she has done in the past? and (5) Are there significant numbers of jobs in the national economy that the claimant can perform?Id. at 724-25. The claimant bears the burden of proof for the first four steps in the process. Bustamante v. Massanari, 262 F.3d 949, 953-54 (9th Cir. 2001). If the claimant fails to meet the burden at any of the first four steps, the claimant is not disabled. Id.; Bowen v. Yuckert, 482 U.S. 137, 140-41 (1987).
The Commissioner bears the burden of proof at step five of the process, where the Commissioner must show the claimant can perform other work that exists in significant numbers in the national economy, "taking into consideration the claimant's residual functional capacity, age, education, and work experience." Tackett v. Apfel, 180 F.3d 1094, 1100 (9th Cir. 1999). If the Commissioner fails to meet this burden, the claimant is disabled. Bustamante, 262 F.3d at 954 (citations omitted).
B. The ALJ's Decision
At the first step of the sequential process, the ALJ found that Sands had not engaged in substantial gainful activity during the period from his alleged onset date of June 1, 2002 through his date last insured of June 30, 2007. (Tr. 19.) At the second step, the ALJ found that Sands had the severe medically determinable impairments of bipolar disorder and substance abuse. (Id.)
At the third step, the ALJ found that Sands' combination of impairments met the level of severity required by Section 12.04C of the Listings of Impairments from the alleged onset date until October 1, 2006. (Tr. 19.) The ALJ found that Sands nevertheless did not qualify for a period of disability or disability insurance benefits because he was not disabled within twelve months of his 2011 application, and his 2004 application was "not within the reopening period." (Tr. 21.) The ALJ found that from October 2, 2006 through the date last insured of June 30, 2007, Sands' combination of impairments was not the equivalent of any of those on the Listing of Impairments. (Tr. 21.)
The ALJ then assessed Sands' RFC and found that he could perform a full range of work at all exertional levels subject to the following limitations: he can perform simple, routine, repetitive tasks consistent with unskilled work; he cannot have contact with the public and can have only occasional contact with co-workers and supervisors; he can perform low-stress work with few decisions and changes; and he can perform at a standard or ordinary pace but not at a strict production pace. (Tr. 22.)
At the fourth step, the ALJ concluded that Sands could perform his past relevant work as a pressure washer. (Tr. 25.) Alternatively, Sands could perform the requirements of a janitor or laundry worker. (Tr. 26-27.) Accordingly, the ALJ concluded that Sands was not disabled from October 1, 2006 through his date last insured of June 30, 2007. (Tr. 27.)
III. STANDARD OF REVIEW
The district court may set aside a denial of benefits only if the Commissioner's findings are "not supported by substantial evidence or [are] based on legal error." Bray v. Comm'r Soc. Sec. Admin., 554 F.3d 1219, 1222 (9th Cir. 2009) (quoting Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006)). Substantial evidence is defined as "more than a mere scintilla [of evidence] but less than a preponderance; it is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. (quoting Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995)).
IV. DISCUSSION
Sands alleges that the ALJ erred by finding that he was not eligible for a "period of disability" from June 2002 to October 2006, despite the fact that he was disabled during that time period, because the reopening period for Sands' 2004 application for benefits had expired. As explained below, the Court agrees.
A. Sands' Period of Disability
1. Applicable Law
An individual is eligible for a "period of disability" if: (1) he has a disability as defined in 20 C.F.R. § 404.1505; (2) he is insured for disability in the calendar quarter in which he became disabled or a later calendar quarter; (3) he files an application while disabled or no later than twelve months after the disability ended; and (4) at least five consecutive months go by from the month in which the period of disability begins and before the month in which it would end. 20 C.F.R. § 404.320(b).
2. Application of Law to Fact
Sands argues that the ALJ erred by finding that he was not eligible for a "period of disability" from June 2002 to October 2006, despite the fact that he was disabled during that time period. Sands acknowledges that the relevant regulations, described above, required him to file an application for benefits while disabled or no later than twelve months after his disability ended. However, he argues that the second ALJ found that he was disabled in February 2004, which is when he filed his initial application relating to the 2002 to 2006 time period. Thus, Sands argues, he filed his application for benefits while disabled.
To recap, after Sands filed his application for benefits in February 2004, the first ALJ found in 2005 that he was not disabled. On appeal, the parties stipulated that the ALJ erred, and remanded the case for further administrative proceedings, but Sands failed to appear for his remand hearing. On his subsequent 2011 application, a different ALJ (i.e., the "second ALJ") found that Sands was in fact disabled from June 2002 to October 2006. Thus, one ALJ found that Sands was not disabled when he filed his application in February 2004 (although the parties stipulated that the ALJ erred in his determination), and a second ALJ found that he was disabled in February 2004. Whether Sands qualifies for a "period of disability" from June 2002 to October 2006 turns on whether the Court may consider the second ALJ's determination.
On the one hand, the first ALJ's determination that Sands was not disabled in February 2004 is an administratively final decision, and both Sands and the second ALJ correctly acknowledge that the second ALJ cannot reopen the first ALJ's denial of benefits. See 20 C.F.R. § 404.988 (outlining the conditions for reopening an application, which do not apply here); see also Tr. 21 (the second ALJ found that whether Sands "might have been disabled from 2002 to 2006" was not relevant because Sands' application was not filed within the reopening period for the initial application). On the other hand, Sands insists that he is not seeking to reopen his prior application for benefits, but is instead merely seeking a determination as to whether he qualified for a "period of disability" from 2002 to 2006, because that determination affects his "date last insured" calculation as it applies to his 2011 application.
The question the Court must answer, therefore, is not whether the earlier decision was administratively final, but whether the doctrine of res judicata barred the second ALJ from finding that Sands was disabled from 2002 to 2006, in light of the fact that the first ALJ had already adjudged that Sands was not disabled during this time period. According to the Commissioner's own guidance, that question turns on whether "new and material evidence" was presented in connection with the second application: "where it has been found that new and material evidence exists in the present record, the restrictive doctrine of res judicata may not be applied thereto, and the claimant may now be entitled to a favorable finding on an issue previously decided against him." SSR 68-12a, available at 1968 WL 3926 (emphasis in original); see also Sims v. Astrue, No. 608-4156-MBS, 2010 WL 619239, at *14 (D.S.C. Feb. 18, 2010) (finding that "Social Security Ruling 68-12a instructs that a prior, final, determination denying benefits does not preclude a finding the claimant was disabled during the previously-adjudicated period where there is new and material evidence applicable to that period"); cf. Taylor v. Heckler, 765 F.2d 872, 876 (9th Cir. 1985) (holding that "administrative res judicata" usually bars further administrative review of a previously-denied claim for benefits).
It appears that the second ALJ considered new and material evidence that the first ALJ had not considered. The second ALJ discussed in his opinion which exhibits from the 2004 application should be included in the 2011 file, and he concluded that he need not include any additional exhibits from the 2004 file relating to the "period prior to October 2006, because there is sufficient evidence in the current file to indicate that the claimant was disabled prior to that time." (Tr. 16-17.) Thus, the ALJ did not rely on the information in the 2004 file, upon which the first ALJ had relied. The Court's finding is supported by the second ALJ's determination not only that Sands was disabled from 2002 to 2006, but that the severity of his disability met Section 12.04C of the Listings of Impairment, in contrast to the first ALJ's determination that Sands was not disabled during the same time period. Accordingly, the Court finds that res judicata did not bar the second ALJ's finding that Sands was disabled from 2002 to 2006. See SSR 68-12a, available at 1968 WL 3926.
Based on the second ALJ's determination, Sands was disabled when he filed his application for benefits in 2004. That makes him eligible for a "period of disability" from June 2002 to October 2006, the dates the second ALJ found him to be disabled. That also qualifies Sands for a disability freeze during this period of disability, which means that his date last insured is not June 30, 2007, because that date was calculated without considering the disability freeze. See 20 C.F.R. § 404.130(f) (outlining the date last insured calculation).
The Court finds that the second ALJ committed legal error by concluding that Sands was not eligible for a period of disability from June 2002 to October 2006, despite the second ALJ's finding that Sands was disabled during this time period. Further administrative proceedings are necessary to apply the disability freeze to this period of disability, calculate Sands' amended date last insured, and determine if Sands was eligible for DIB benefits at any time from the erroneous date last insured (June 30, 2007), to the amended date last insured.
V. CONCLUSION
Based on the foregoing, the district judge should REVERSE the Commissioner's decision, and REMAND for further proceedings.
VI. SCHEDULING ORDER
The Findings and Recommendation will be referred to a district judge. Objections, if any, are due fourteen (14) days from service of the Findings and Recommendation. If no objections are filed, the Findings and Recommendation will go under advisement on that date.
If objections are filed, a response is due fourteen (14) days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.
DATED this 12th day of July, 2017.
/s/_________
STACIE F. BECKERMAN
United States Magistrate Judge