Opinion
4:21-CV-00033-M
02-01-2022
Melody Marie Dixon, Plaintiff, v. Kilolo Kijakazi, Acting Commissioner of Social Security, Defendant.
MEMORANDUM & RECOMMENDATION
ROBERT T. NUMBERS, II UNITED STATES MAGISTRATE JUDGE
Plaintiff Melody Dixon challenges Administrative Law Judge (“ALJ”) Robert Rideout's denial of her application for social security income. Dixon claims that ALJ Rideout erred in considering the severity of her visual impairment and identifying other work she could perform. Dixon also challenges the constitutionality of the Social Security Administration's structure. Both Dixon and Defendant Kilolo Kijakazi, Acting Commissioner of Social Security, have moved for a judgment on the pleadings in their favor. D.E. 16, 18.
After reviewing the parties' arguments, the court has determined that ALJ Rideout reached the appropriate determination. ALJ Rideout committed no error in concluding that Dixon had no severe vision impairment. At step five, there is no unresolved conflict between the testimony of the Vocational Expert (VE) and the Dictionary of Occupational Titles (DOT). And Dixon has not stated a viable constitutional challenge to the Administration's organization. So the undersigned recommends that the court deny Dixon's motion, grant the Acting Commissioner's motion, and affirm the Commissioner's determination.
The court has referred this matter to the undersigned for entry of a Memorandum and Recommendation. 28 U.S.C. § 636(b).
I. Background
In June 2016, Dixon applied for disability benefits and supplemental security income. In both applications, she alleged a disability that began in October 2015. After the Social Security Administration denied her claim at the initial level and upon reconsideration, Dixon appeared before ALJ Rideout for a hearing and a supplemental hearing to determine whether she was entitled to benefits. ALJ Rideout determined Dixon had no right to benefits because she was not disabled. Tr. at 18-37.
ALJ Rideout found that Dixon's systemic lupus erythematosus, hemolytic anemia, obesity, affective disorder, and anxiety disorder were severe impairments. Tr. at 21. ALJ Rideout also found that Dixon's impairments, either alone or in combination, did not meet or equal a Listing impairment. Id.
ALJ Rideout then determined that Dixon had the residual functional capacity (“RFC”) to perform light work with other limitations. Tr. at 24. She can occasionally operate foot controls bilaterally. Id. Dixon can frequently reach, including overhead. Id. She can frequently handle, finger, and feel. Id. Dixon can occasionally climb stairs and ramps but she can never climb ladders, ropes, and scaffolds. Id. And she can occasionally balance, stoop, kneel, crouch, and crawl. Id.
Dixon cannot work at unprotected heights. Id. She can frequently operate a motor vehicle and occasionally work around moving, mechanical parts. Id. And she can work in weather, humidity, and wetness frequently. Id. But Dixon can only occasionally work in extreme heat, extreme cold, or in an environment where she would be exposed to vibration. Id.
Dixon can understand, remember, and carry out instructions sufficient to perform simple, routine, repetitive tasks. Id. But she cannot work at a production pace such as assembly line work. Id. Dixon can use judgment to make simple, work-related decisions. Id. She can occasionally interact with coworkers and supervisors but she cannot interact with the public. Id.
ALJ Rideout concluded that Dixon could not perform her past work as a customer service representative/manager, distribution support specialist, sales representative, or account manager/senior account manager. Tr. at 35. But considering her age, education, work experience, and RFC, ALJ Rideout found that jobs existed in significant numbers in the national economy that Dixon could perform. Tr. at 35-36. These include marker, shipping/receiving weigher, mailroom clerk, office helper, photocopy machine operator, and file clerk. Id. Thus, ALJ Rideout found that Dixon was not disabled. Tr. at 37.
After unsuccessfully seeking review by the Appeals Council, Dixon began this action in March 2021. D.E. 6.
II. Analysis
A. Standard for Review of the Commissioner's Final Decision
When a social security claimant appeals a final decision of the Commissioner, the district court's review is limited to determining whether, based on the entire administrative record, there is substantial evidence to support the Commissioner's findings. 42 U.S.C. § 405(g); Richardson v. Perales, 402 U.S. 389, 401 (1971). Substantial evidence is defined as “evidence which a reasoning mind would accept as sufficient to support a particular conclusion.” Shively v. Heckler, 739 F.2d 987, 989 (4th Cir. 1984) (quoting Laws v. Celebrezze, 368 F.2d 640, 642 (4th Cir. 1966)). The court must affirm the Commissioner's decision if it is supported by substantial evidence. Smith v. Chater, 99 F.3d 635, 638 (4th Cir. 1996).
B. Standard for Evaluating Disability
In making a disability determination, the ALJ engages in a five-step evaluation process. 20 C.F.R. § 404.1520; see Johnson v. Barnhart, 434 F.3d 650 (4th Cir. 2005). The ALJ must consider the factors in order. At step one, if the claimant is engaged in substantial gainful activity, the claim is denied. At step two, the claim is denied if the claimant does not have a severe impairment or combination of impairments significantly limiting him or her from performing basic work activities. At step three, the claimant's impairment is compared to those in the Listing of Impairments. See 20 C.F.R. Part 404, Subpart P, App. 1. If the impairment is listed in the Listing of Impairments or if it is equivalent to a listed impairment, disability is presumed. But if the claimant's impairment does not meet or equal a listed impairment, the ALJ assesses the claimant's RFC to determine, at step four, whether he can perform his past work despite his impairments. If the claimant cannot perform past relevant work, the analysis moves on to step five: establishing whether the claimant, based on his age, work experience, and RFC can perform other substantial gainful work. The burden of proof is on the claimant for the first four steps of this inquiry but shifts to the Commissioner at the fifth step. Pass v. Chater, 65 F.3d 1200, 1203 (4th Cir. 1995).
The undersigned limits the review of Dixon's medical history to those conditions and symptoms relevant to the issues she raises.
In 2016, Dixon sought treatment at Presbyterian Medical Services for depression. Tr. at 27. Id. Her depression symptoms were mild and controlled with medication. Id.
In May 2016, Dixon returned to PMS complaining of vision changes and depression, amongst other things. Id. But her examination was normal. Id.
Two months later, Dr. Gary Bachara performed a consultative examination. Id. Dixon described her depression as mostly feeling sad. Id. She used the internet, played games with her grandchildren, cooked a little, and shopped occasionally. Tr. at 27-28. Her remote memory was fairly good. Tr. at 28.
Dr. Bachara stated that Dixon could understand, retain, and follow instructions sufficient to perform simple, routine, repetitive tasks. Tr. at 33. And she could make simple, work-related decisions and interact appropriately with coworkers and supervisors. Id. Dr. Bachara noted some visual limitations because of Dixon's visual acuity of 20/40 in her right eye and 20/200 in her left eye. Id.
But Dr. Bachara did not evaluate Dixon's vision. Tr. at 919.
Records from UNC Healthcare in October 2016 reflect that a mental status examination yielded normal results, aside from some limited affect. Tr. at 28.
In December 2016, Dixon sought follow-up care for her depression at Horizon Family Medicine. Id. Her symptoms were improved and stable with medication, and she denied any side effects. Id.
In follow-up examinations, Dixon replied “not at all” to behavioral health screening questions posed to gauge depression. Tr. at 29.
Mental status examinations remained unremarkable in May and August 2018. Follow-up examinations through 2019 noted some slight anxiety. Id.
In October 2018, Dixon appeared slightly anxious, but her mood and affect were normal. Tr. at 30.
Dixon testified that she lives with her daughter and two grandchildren. Tr. at 25. She does not drive because of vision and back issues, but she is trying to get her license back. Id. Although Dixon hoped her condition would go into remission, it had worsened over the last three years. Id. She has constant pain, memory trouble, and fatigue. Id.
Most of Dixon's pain is in her shoulders, but she also experiences pain in her hands, hips, and knees. Id. She has trouble gripping and picking things up. Id. Writing is difficult. Id. Dixon's pain is constant but fluctuates in intensity. Id. With medication, it is four or five out of ten, but without medication is is seven or eight out of ten. Id.
Her pain prevents Dixon from cooking or watching her granddaughter ride a bike because she cannot stand for long. Id. She estimated she could stand for less than 10 minutes, walk for 20 minutes, and cannot sit longer. Id. She is always fatigued, lies down for 70% of the day, and elevates her feet to relieve lower extremity pressure. Id.
Because of vision problems, Dixon uses a 150% screen size when using a compute. Tr. at 25-26. And her granddaughter reads to her. Tr. at 26.
D. Severity of Visual Impairment
Dixon contends that ALJ Rideout erred in evaluating the severity of her visual impairment. The Acting Commissioner asserts that there is no error because Dixon has no medically-determinable visual impairment. The undersigned agrees and finds that the ALJ Rideout committed no error in considering this condition.
At step two, the ALJ considers the severity of the claimant's “medically determinable” impairments. §§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). To constitute a “medically determinable” impairment, the claimant's alleged impairment “must be established by objective medical evidence from an acceptable medical source.” §§ 404.1521, 416.921. “[O]bjective medical evidence” means “laboratory findings” or “abnormalities that can be observed, apart from your statements (symptoms).” §§ 404.1502(f) & (g), 416.902(f) & (g). The ALJ “will not use [a claimant's] statement of symptoms, a diagnosis, or a medical opinion to establish the existence of an impairment(s).” §§ 404.1521, 416.921.
If an impairment is medically determinable, the ALJ then determines whether such impairment is “severe.” Id. To be severe, an impairment must “significantly limit[] [the claimant's] physical or mental ability to do basic work activities.” §§ 404.1520(c), 416.920(c), 404.1522(a), 416.922(a). And a claimant's impairment must meet the durational requirement to be considered “severe.” §§ 404.1509, 416.909, 404.1520(a)(4)(ii), 416.920(a)(4)(ii).
ALJ Rideout did not find that Dixon had a severe impairment related to her vision at step two. Tr. at 21. And the RFC included no limitations to reflect diminished visual acuity. Tr. at 24.
But ALJ Rideout did not discount this issue, and the decision notes the vision issues that Dixon alleged. Dixon did not drive because of her vision. Tr. at 25. She enlarged her screen when using the computer and had her granddaughter read to her because her vision was blurry. Tr. at 25-26. ALJ Rideout also recounted that Dixon reported vision changes to providers in May 2016. Tr. at 27.
ALJ Rideout committed no error in failing to find that Dixon's reduced visual acuity was a medically determinable impairment. To be “medically determinable, ” an impairment must be established by objective medical evidence, such as laboratory findings or medical observations. §§ 404.1521, 416.921, 404.1502(f) & (g), 416.902(f) & (g). Dixon has identified no objective medical evidence to confirm her diminished vision. No. provider assessed a visual impairment or assessed visual limitations.
Dr. Morris noted Dixon's reduced visual acuity without glasses. Tr. at 33, 913. He did not assess a vision impairment but “estimated she has some visual limitations[.]” Tr. at 914. Importantly, Dr. Morris's examination did not undertake an evaluation of Dixon's vision. Tr. at 919. And he assessed no specific visual limitations related to the presence of a vision impairment such as reading small or ordinary print, viewing a computer screen, differentiating the shape and color of small objects, or avoiding ordinary hazards. Id.
So Dr. Morris's consultative examination does not establish that Dixon's visual acuity was a medically-determinable impairment. And Dixon cannot rely on her own testimony to show that her vision difficulty was a medically determinable impairment under the Regulations. See § 404.1521 (claimant's “statement of symptoms, a diagnosis, or a medical opinion” will not be used to establish a medically determinable impairment). Thus ALJ Rideout did not err in failing to find that Dixon had a medically determinable vision impairment.
Dixon requested a consultative vision examination shortly before her supplemental hearing, noting her medication-related vision difficulty. Tr. at 528, 550. But the Agency did not grant her request.
An ALJ may order a consultative examination to resolve an inconsistency in the evidence or when the evidence is insufficient to make a disability determination. 20 C.F.R. § 416.919a(b). The decision to order a consultative examination is within the discretion of the ALJ. See Bishop v. Barnhart, 78 Fed.Appx. 265, 268 (4th Cir. 2003) (citing 20 C.F.R. § 404.1519a).
The record contains sufficient evidence and no inconsistency about Dixon's impairments. So she has not shown that a visual examination was necessary. Fuller v. Saul, No. 3:19-CV-174, 2020 WL 597596, at * 6-7 (S.D. W.Va. Jan. 13, 2020) (ALJ did not err in declining to order examination where claimant failed to carry her burden to produce evidence of a medically-determinable impairment).
A claimant, not the Commissioner, bears the burden of establishing a medically determinable impairment. Evans v. Comm'r, Soc. Sec., No. CCB-17-250, 2018 WL 3585206, at * 1 (D. Md. July 26, 2018); Clay v. Astrue, No. 2:08-CV-25, 2009 WL 62261, at * 15 (N.D. W.Va. Jan. 9, 2009). By requesting a consultative visual examination, Dixon effectively sought to shift the burden to prove her disability to the Commissioner. See Lichlyter v. Astrue, No. 6:11-CV-00597, 2012 WL 4378142, at *2 (S.D. W.Va. Sept. 25, 2012) (“[T]he ALJ's duty to develop the record does not excuse the claimant from proving her disability.”). But an “ALJ is under no obligation to supplement an adequate record to correct deficiencies in a plaintiff's case.” Lehman v. Astrue, 931 F.Supp.2d 682, 693 (D. Md. 2013) (citation omitted).
In sum, Dixon has not carried her burden on showing a medically determinable vision impairment. And she has established no basis to warrant a consultative vision examination. Finding no error in ALJ Rideout's consideration of this issue, the court should deny Dixon's claim.
E. Step Five
Dixon argues that ALJ Rideout's step five finding is flawed. For other jobs she can perform, Dixon contends there is an apparent conflict between the testimony of the VE and the DOT. Because ALJ Rideout failed to resolve a discrepancy between her RFC and the jobs identified by the VE, Dixon asserts that remand is warranted. The Acting Commissioner contends that there is no conflict or error in ALJ Rideout's step five determination. The undersigned agrees.
As noted above, while a claimant has the burden at steps one through four, it is the Commissioner's burden at step five to show that work the claimant can perform is available. Pass, 65 F.3d at 1203 (citing Hunter v. Sullivan, 993 F.2d 21, 35 (4th Cir. 1992)). “The Commissioner may meet this burden by relying on the Medical-Vocational Guidelines (Grids) or by calling a vocational expert to testify.” Aistrop v. Barnhart, 36 Fed.Appx. 145, 146 (4th Cir. 2002) (citing 20 C.F.R. § 404.1566). The Grids are published tables that take administrative notice of the number of unskilled jobs at each exertional level in the national economy. 20 C.F.R. Pt. 404, Subpt. P, App. 2 § 200.00(a).
When a claimant suffers solely from exertional impairments, the Grids may satisfy the Commissioner's burden of coming forward with evidence on the availability of jobs the claimant can perform. Grant v. Schweiker, 699 F.2d 189, 192 (4th Cir. 1983). When a claimant: (1) suffers from a non-exertional impairment that restricts his ability to perform work of which he is exertionally capable, or (2) suffers an exertional impairment which restricts him from performing the full range of activity covered by a work category, the ALJ may not rely on the Grids and must produce specific vocational evidence showing that the national economy offers employment opportunities to the claimant. See Walker v. Bowen, 889 F.2d 47, 49 (4th Cir. 1989); Hammond v. Heckler, 765 F.2d 424, 425-26 (4th Cir. 1985); Cook v. Chater, 901 F.Supp. 971 (D. Md. 1995); 20 C.F.R. Pt. 404, Subpt. P, App. 2, § 201.00(h).
The Regulations permit testimony from a VE to determine “whether [a claimant's] work skills can be used in other work and the specific occupations in which they can be used[.]” 20 C.F.R. §§ 404.1566(e), 416.966(e). For a VE's testimony to be relevant, an ALJ's hypothetical question must represent all of a claimant's substantial impairments. Walker, 889 F.2d at 50; Burnette v. Astrue, No. 2:08-CV-0009-FL, 2009 WL 863372, at *4 (E.D. N.C. Mar. 24, 2009) (relevant hypothetical question should adequately reflect claimant's RFC and fairly set out a claimant's limitations). If limitations are omitted, the VE's testimony is of limited value, and may not constitute substantial evidence. See Johnson, 434 F.3d at 659 (citing Walker, 889 F.2d at 50).
Before relying on a VE's testimony an ALJ must “[i]dentify and obtain a reasonable explanation for any conflicts between occupational evidence provided by VEs . . . and information in the Dictionary of Occupational Titles (DOT), . . . and [e]xplain in the determination or decision how any conflict that has been identified was resolved.” SSR 00-4p, 2000 WL 1898704 (Dec. 4, 2000). “Occupational evidence provided by a VE . . . generally should be consistent with the occupational information supplied by the DOT.” Id. “When there is an apparent unresolved conflict between VE . . . and the DOT, the adjudicator must elicit a reasonable explanation for the conflict before relying on the VE . . . to support a determination or decision about whether the claimant is disabled.” Id. “At the hearings level, as part of the adjudicator's duty to fully develop the record, the adjudicator will inquire, on the record, as to whether or not there is such consistency.” Id.
The Fourth Circuit has interpreted SSR 00-4p as placing an “affirmative duty” on the ALJ to independently “identify conflicts between the [VE's] testimony and the [DOT].” Pearson v. Colvin, 810 F.3d 204, 208-09 (4th Cir. 2015). “An ALJ has not fully developed the record if it contains an unresolved conflict between the [VE's] testimony and the [DOT].” Id. at 210.
Three of the six positions the VE identified at step five as suitable for Dixon's RFC- marker, office helper, and photocopy machine operator-have a Reasoning Level of 2. The other three positions-shipping/receiving weigher, mail clerk, and file clerk-have a Reasoning Level of Three. Dixon contends that this work exceeds her abilities because the RFC limits her to jobs involving simple, routine, repetitive tasks and and simple, work-related decisions. Tr. at 24.
The DOT Reasoning Level functions are part of the General Educational Development (“GED”), which range from Level 1 (lowest reasoning ability) to Level 6 (highest reasoning ability). Reasoning level 1 involves “[a]pply[ing] commonsense understanding to carry out simple one- or two-step instructions.” A reasoning level of 2 suggests that the job requires the person to be able to, “[a]pply commonsense understanding to carry out detailed but uninvolved written or oral instructions. Deal with problems involving a few concrete variables in or from standardized situations.”
Reasoning Level 3 jobs require one to “[a]pply commonsense understanding to carry out instructions furnished in written, oral, or diagrammatic form. Deal with problems involving several concrete variables in or from standardized situations.”
The Court of Appeals has found that an apparent conflict exists between an RFC limitation to “short, simple instructions” and a need to carry out “detailed but involved . . . instructions” as found in jobs requiring a reasoning level of two. Thomas v. Berryhill, 916 F.3d 307, 313 (4th Cir. 2019), as amended (Feb. 22, 2019).
But in Lawrence v. Saul, the Court of Appeals found no apparent conflict between a limitation to “simple, routine, repetitive tasks” and reasoning level two occupations. 941 F.3d 140, 144 (4th Cir. 2019). Under Lawrence, a hypothetical question limiting one to simple, instructions, tasks, or decisions does not create an apparent conflict with jobs the DOT classifies as reasoning level two. Id.
A limitation to short instructions would contradict work that involves detailed instructions that reasoning level two work contemplates. Id. But ALJ Rideout's RFC did not contain such a restriction. Tr. at 24. Dixon's limitation to simple, routine, repetitive tasks, and simple, work-related decisions, is materially different from similarly restricting a claimant to short tasks, instructions, or decisions. Lawrence, 941 F.3d at 143; Ilioff v. Saul, No. 1:19-CV-1226, 2021 WL 848204, at *8 (M.D. N.C. Mar. 5, 2021) (RFC's limitation to simple, short instructions apparently conflicts with the jobs that require reasoning level of two); Dunivant v. Saul, No. 1:19-CV-923, 2021 WL 620711, at * 4 (W.D. N.C. Feb. 17, 2021) (Lawrence clarified that the conflict stems from “short” instructions rather than the simplicity of them).
Dixon contends that the RFC conflicts with the state agency psychological consultants' assessments, which ALJ Rideout accorded great weight. Tr. at 32-33. Drs. Alesii and Cruise found that Dixon could carry out short and simple instructions but would have moderate limitations with more detailed instructions. Tr. at 32.
But ALJ Rideout did not adopt these opinions entirely. Instead, he endorsed their conclusions that Dixon could perform simple, routine, repetitive tasks in a low stress environment, make simple, work-related decisions, and occasionally deal with supervisors and coworkers. Tr. at 33. These findings, he determined, matched the evidence showing sparse mental health treatment as well as Dixon's normal appearance, demeanor, and mental status. Id. And Dixon's own characterization of her depression as a feeling of sadness that was controlled with medication supported these findings by the state agency consultants that ALJ Rideout incorporated into the RFC. Id.
The undersigned identifies no conflict between a finding that Dixon was limited to simple, routine, repetitive tasks and simple, work-related decisions and concluding, at step five, that she could perform jobs involving detailed instructions, as required by positions with reasoning levels of two. Lawrence, 941 F.3d at 143-44; see also Buckwalter v. Acting Comm'r of Soc. Sec., 5 F.4th 1315, 1326-24 (11th Cir. 2021); Moore v. Astrue, 623 F.3d 599, 605 (8th Cir. 2010). So there was no conflict that ALJ Rideout needed to explain. He thus could rely on the VE's testimony about the availability of other work at step five.
Reasoning level three jobs present a contradiction between the RFC and DOT. See Shook v. Saul, No. 5:20-CV-122-FL, 2021 WL 3074406, at * 9 (E.D. N.C. June 7, 2021) (conflict between limitation to simple, routine, repetitive tasks and simple, work-related decisions and concluding, at step five, that claimant could perform jobs with reasoning levels of three), adopted, 2021 WL 3064294 (July 20, 2021). Yet any error in identifying reasoning level three jobs, or in failing to resolve the conflict they pose, is harmless because the reasoning level two jobs satisfy the Commissioner's step five burden.
The Acting Commissioner met her burden of identifying other work that Dixon could perform. So the undersigned recommends that the court deny her claim on this issue.
F. Social Security Administration's Structure
Dixon's final argument is that the statutory limitations on the President's ability to remove the Commissioner of Social Security violates the Constitution. She maintains that this unconstitutional removal restriction deprives the Commissioner of the authority to promulgate regulations, make a final decision about whether she is entitled to benefits, or delegate decision-making authority to ALJs and the Appeals Counsel. Dixon asks the court to remand the case to for a hearing before another ALJ.
The Acting Commissioner agrees that the limitation on the President's removal power is unconstitutional. But, even so, she says that Dixon is not entitled to relief. She provides several reasons why this is so, including that Dixon has shown no harm stemming from the Legislative Branch's encroachment on the Executive Branch's authority.
This dispute centers on the statutory language governing when the President may dismiss the Commissioner of Social Security. The relevant statute provides that instead of serving at the pleasure of the President, the chief executive may only relieve the Commissioner of his duties after making “a finding . . . of neglect of duty or malfeasance in office.” 42 U.S.C. § 902(a)(3).
Dixon says this limitation is unconstitutional under the Supreme Court's decision in Seila Law v. CFPB, 140 S.Ct. 2183 (2020). In Seila Law, the Court held that the Constitution does not allow Congress to limit the President's removal authority “when it comes to principal officers who, acting alone, wield significant executive power.” Id. at 2211. And, as noted above, the Acting Commissioner agrees with Dixon on this point.
Seila Law, however, is not the only decision relevant to this question. The court must also consider how the Supreme Court's decision in Collins v. Yellen, 141 S.Ct. 1761 (2021), applies here. Collins involved the Federal Housing Finance Agency. The FHFA was “an independent agency” responsible for regulating Fannie Mae and Freddie Mac, “two of the Nation's leading sources of mortgage financing.” Id. at 1770. The companies suffered significant losses” during the 2008 housing crisis “and many feared that their troubling financial condition would imperil the national economy.” Id. The agency was led by “a single Director, whom the President could remove only for cause.” Id. (quotation omitted).
In addition to regulating the companies, FHFA could “if necessary, step[] in as their conservator or receiver.” Id. And “[s]hortly after the FHFA came into existence, it placed Fannie Mae and Freddie Mac into conservatorship and negotiated agreements for the companies with the Department of Treasury.” Id. One of those agreements “which the parties refer to as the ‘third amendment' or ‘net worth sweep,' caused the companies to transfer enormous amounts of wealth to [the] Treasury [Department].” Id.
The third amendment “resulted in a slew of lawsuits[.]” Id. Among them was a suit by “[a] group of Fannie Mae's and Freddie Mac's shareholders [who] challenged the third amendment on statutory and constitutional grounds.” Id. Their constitutional challenge “argued that the FHFA's structure violates the separation of powers because the Agency is led by a single Director who may be removed by the President only for cause.” Id. (quotation omitted). The shareholders “sought declaratory and injunctive relief, including an order requiring Treasury either to return the variable dividend payments or to re-characterize those payments as a pay down on Treasury's investment.” Id. The Supreme Court agreed that the FHFA's structure violated the Constitution, noting that its “decision last Term in Seila Law is all but dispositive.” Id. at 1783.
The court then turned to the remedy for the FHFA's unconstitutional structure. The shareholders took the position “that the third amendment must be completely undone.” Id. at 1787. They argued that due to the constitutional defect, “the third amendment was adopted and implemented by officers who lacked constitutional authority and that their actions were therefore void ab initio.” Id.
The Supreme Court rejected this argument. It noted that “[a]lthough the statute unconstitutionally limited the President's authority to remove the confirmed Directors, there was no constitutional defect in the statutorily prescribed method of appointment to that office.” Id. (emphasis in original). Since the officers were properly appointed to their positions, “there is no reason to regard any of the actions taken by the FHFA in relation to the third amendment as void.” Id.
But the Court did not close off all potential sources of relief for the shareholders. It noted that “the possibility that the unconstitutional restriction on the President's power to remove a Director of the FHFA could have” harmed the shareholders “cannot be ruled out.” Id. at 1788. The Court noted that they may be able to show harm if the President had tried to remove the Director but was thwarted by a court that found there was no cause for his removal. Id. The parties could also show they were harmed by the removal provision if “the President had made a public statement expressing displeasure with actions taken by a Director and had asserted that he would remove the Director if the statute did not stand in the way.” Id. The Supreme Court remanded the case to allow the lower courts to determine if the shareholders had indeed suffered such harm. Id.
The fact that the Supreme Court remanded the case for further proceedings on this question defeats Dixon's suggestion that the court should apply a presumption that she suffered a compensable harm.
In an attempt to satisfy Collins's requirements, Dixon's reply brief sets out several different alleged harms. See Reply Br. at 9-10. But these arguments all rely on the same central premise. According to Dixon, the unconstitutional removal restriction deprived the Commissioner of the power to take any official acts, including making benefits determinations. So, Dixon argues, since he lacked the power to make a benefits determination himself, he had no decision-making authority to delegate to the ALJ or Appeal Counsel.
The Supreme Court explicitly rejected this type of argument in Collins. It explained that “the unlawfulness of the removal provision does not strip the [officer] of the power to undertake the other responsibilities of his office[.]” Collins, 141 S.Ct. at 1788 n.23. This is so because of the distinction between a challenge based on an officer's appointment and a challenge based on the President's ability to remove an officer from their position. An improperly appointed officer's acts are void ab initio because they “involve[] a Government actor's exercise of power that the actor did not lawfully possess.” Id. at 1788. But so long as “there was no constitutional defect in the statutorily prescribed method of appointment to office . . . there is no reason to regard any of the actions taken by the [actor] . . . as void.” Id. at 1787. Dixon has not challenged the Commissioner's appointment, so there is no basis for the court to find that he lacked the authority to act.
Relying on several appointment clause cases, Dixon says that the court should presume that the unconstitutional removal restriction harmed her. But given the distinction drawn by the Supreme Court between cases challenging an officer's appointment and those challenging an officers removal, this argument is unpersuasive.
Dixon points the court to three cases that she believes support her argument. Reply Br. at 9-10. But those cases (or at least the portions Dixon cites to) dealt with the traceability element of the test for Article III standing. See Sylvia A. v. Kijakazi, No. 5:21-CV-076, 2021 WL 4692293, at *4 (N.D. Tex. Sept. 13, 2021); Albert v. Kijakazi, No. 1:21-CV-0004, 2021 WL 3424268, at *5 (D. Alaska Aug. 5, 2021); Tafoya v. Kijakazi, No. 21-CV-00871, 2021 WL 326065, at *5 (D. Colo. July 29, 2021). To satisfy the traceability requirement, a plaintiff must show that their injury “is fairly traceable to the defendant's conduct[.]” Collins, 141 S.Ct. at 1179. But when considering standing the court is not focusing on whether the alleged injury can be traced to the allegedly unconstitutional removal restriction. See Collins, 141 S.Ct. at 1779. Instead, it looks to “whether the plaintiffs' injury can be traced to allegedly unlawful conduct of the defendant, not to the provision of law that is challenged.” Id. (quotations omitted). So cases dealing with traceability are not persuasive on the question of whether Dixon suffered a compensable harm from the unconstitutional removal restriction.
Dixon also argues that the fact that President Biden fired the Commissioner (who was appointed by a prior President) in 2021 shows that she has been harmed by the unconstitutional removal restriction. According to Dixon, the fact that the President fired the Commissioner several months into his term shows that he “wished to terminate” the Commissioner “immediately upon assuming the Presidency.” Reply Br. at 17. And, according to Dixon, the fact that the President did not do so until after Collins shows that the President “would have fired” the Commissioner “immediately upon taking office had he believed it was legal.” Id. at 18.
But Dixon's arguments about the circumstances leading up to the Commissioner's termination are simply speculation. There is nothing in the Complaint or in the administrative record that supports this conclusion.
Nor is there anything else in the Complaint or the administrative record that establishes the harm required by Collins. To begin with, neither of the examples the Court gave of circumstances that would show a compensable harm are present here. There is no indication that the President unsuccessfully tried to remove the Commissioner. And this is also not a situation where the President publicly expressed his displeasure with the Commissioner and his frustration that the removal restriction prevented the Commissioner's firing. To the contrary, the President publicly expressed his dissatisfaction with the Commissioner in the letter removing him from his position.
It does not appear that the Supreme Court intended these two examples to be the only ways a party can show compensable harm from an unconstitutional removal restriction. So the lower courts will, for the time being, need to flesh out what a party must allege or show to satisfy Collins's compensable harm standard. That showing will need to focus on the constitutional concerns underling Seila Law and Collins: ensuring the President's ability to control those who act on his behalf and ensuring the People's ability to hold the President accountable for those actions. See Seila Law, 140 S.Ct. at 2202-03.
Without attempting to catalog all the ways these interests can be implicated, it suffices to say that they are not implicated here. Dixon has not alleged that the outcome of this case contravened the President's policy preference, so the President's authority to control those who work for him is not implicated here. And, as far as this case goes, the Acting Commissioner has, like her predecessor, taken the position that Dixon is not entitled to benefits. So if the body politic is dissatisfied with the outcome here, they can elect a President with a different viewpoint on the issues involved.
The Supreme Court has rejected the argument that all actions taken by an officer serving under an unconstitutional removal restriction are void. Instead, it requires a plaintiff to show that the removal restriction resulted in an action that caused them harm. Since Dixon has neither alleged nor shown such a harm here, the District Court should reject her argument on this point.
III. Conclusion
For these reasons, the undersigned recommends that the court deny Dixon's Motion for Judgment on the Pleadings (D.E. 16), grant Kijakazi's Motion for Judgment on the Pleadings (D.E. 18), and affirm the Commissioner's determination.
The Clerk of Court must serve a copy of this Memorandum and Recommendation (“M&R”) on each party who has appeared in this action. Any party may file a written objection to the M&R within 14 days from the date the Clerk serves it on them. The objection must specifically note the portion of the M&R that the party objects to and the reasons for their objection. Any other party may respond to the objection within 14 days from the date the objecting party serves it on them. The district judge will review the objection and make their own determination about the matter that is the subject of the objection. If a party does not file a timely written objection, the party will have forfeited their ability to have the M&R (or a later decision based on the M&R) reviewed by the Court of Appeals.