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Marx v. Colvin

United States District Court, E.D. Washington

December 27, 2017

WILLIAM F. MARX, Plaintiff,


          Fred Van Sickle, Senior United States District Judge.

         BEFORE THE COURT are the parties' cross motions for summary judgment. ECF Nos. 16, 17. This matter was submitted for consideration without oral argument. The plaintiff is represented by Attorney Joseph M. Linehan. The defendant is represented by Special Assistant United States Attorney Michael Tunick. The Court has reviewed the administrative record and the parties' completed briefing and is fully informed. For the reasons discussed below, the Court GRANTS Plaintiff's Motion for Summary Judgment, ECF No. 16, and DENIES Defendant's Motion for Summary Judgment, ECF No. 17.


         Plaintiff William F. Marx protectively filed for disability insurance benefits on May 13, 2014, alleging an onset date of April 23, 2012. Tr. 359. On August 4, 2014, Plaintiff was awarded a closed period of benefits from April 23, 2012 to June 12, 2103, which was affirmed on reconsideration. Tr. 137-38. On October 22, 2014, Plaintiff filed a request for reconsideration claiming he continued to be disabled after the closed period, which was denied. Tr. 177, 181-83. Plaintiff requested a hearing before an administrative law judge (“ALJ”), which was held before ALJ R.J. Payne on April 24, 2015. Tr. 41-124. The ALJ denied benefits on August 27, 2015. Tr. 152-71. On March 18, 2016, the Appeals Council vacated the decision and remanded the matter to ALJ Payne to clarify the relevant period at issue at the hearing level, and “apply the sequential evaluation process to determine whether claimant was disabled during the period at issue.” Tr. 173-74. A second hearing was held before ALJ Payne on April 25, 2016. Tr. 1291-1337. Plaintiff was represented by counsel and testified at the hearing. Id. Medical expert Reuben Beezy, M.D. testified that Plaintiff met the listing through October 2015, and after that he “would be sedentary.” Tr. 1296-1319. On May 5, 2016, ALJ Payne found Plaintiff was under a disability from April 23, 2012 through February 1, 2015; but found medical improvement occurred February 2, 2015 and Plaintiff's disability ended as of that date. Tr. 16-38. The Appeals Council denied review on June 11, 2016. Tr. 1. The matter is now before this court pursuant to 42 U.S.C. § 405(g).


         The facts of the case are set forth in the administrative hearing and transcripts, the ALJ's decision, and the briefs of Plaintiff and the Commissioner, and will therefore only the most pertinent facts are summarized here.

         William F. Marx (“Plaintiff”) was 35 years old at the alleged onset date. Tr. 52. Plaintiff completed twelfth grade and two years of college. Tr. 1319-1320. He was diagnosed aplastic anemia in February 2012, and underwent an allogenic stem cell transplant on June 12, 2012. Tr. 24, 942. After the transplant, in November 2012, Plaintiff was diagnosed with Graft Versus Host Disease (“GVHD”). See Tr. 646, 661. In January 2015, Plaintiff had a diagnosed “flare” of GVHD, which was treated, and improved in February 2015. Tr. 1226-1240, 1258-1261. Then, in October 2015, medical records show a “possible flare” of GVHD. Tr. 1280-1289. The record before the ALJ, and this Court, does not include evidence of treatment after October 2015. See Tr. 28.

         At the second hearing, Plaintiff testified that since October 2015, if he does not take a nap every day, it “takes a minimum of three days to recover;” and he only sleeps through the night twice in a two week period. Tr. 1322-1323. He testified that he could walk around a three block loop at the furthest; could stand for five minutes at a time, and longer if he has a counter to lean on for balance; could sit for an hour and a half; and has three to four “good days” in an average week. Tr. 1329-1332. Plaintiff testified that he has joint pain and “burning skin;” and has had “mild flares” of GVHD since October 2015, which often happens when he starts to taper off of Prednisone. Tr. 1333-1335.


         A district court's review of a final decision of the Commissioner of Social Security is governed by 42 U.S.C. § 405(g). The scope of review under § 405(g) is limited; the Commissioner's decision will be disturbed “only if it is not supported by substantial evidence or is based on legal error.” Hill v. Astrue, 698 F.3d 1153, 1158 (9th Cir. 2012). “Substantial evidence” means “relevant evidence that a reasonable mind might accept as adequate to support a conclusion.” Id. at 1159 (quotation and citation omitted). Stated differently, substantial evidence equates to “more than a mere scintilla[, ] but less than a preponderance.” Id. (quotation and citation omitted). In determining whether the standard has been satisfied, a reviewing court must consider the entire record as a whole rather than searching for supporting evidence in isolation. Id.

         In reviewing a denial of benefits, a district court may not substitute its judgment for that of the Commissioner. If the evidence in the record “is susceptible to more than one rational interpretation, [the court] must uphold the ALJ's findings if they are supported by inferences reasonably drawn from the record.” Molina v. Astrue, 674 F.3d 1104, 1111 (9th Cir. 2012). Further, a district court “may not reverse an ALJ's decision on account of an error that is harmless.” Id. An error is harmless “where it is inconsequential to the [ALJ's] ultimate nondisability determination.” Id. at 1115 (quotation and citation omitted). The party appealing the ALJ's decision generally bears the burden of establishing that it was harmed. Shinseki v. Sanders, 556 U.S. 396, 409-10 (2009).


         The Commissioner has established a multi-step sequential evaluation process for determining whether a person's disability continues or ends. 20 C.F.R. § 404.1594 (2012).[1] This multi-step continuing disability review process is similar to the five-step sequential evaluation process used to evaluate initial claims, with additional attention as to whether there has been medical improvement. Compare 20 C.F.R. § 404.1520 with § 404.1594(f) (2012). A claimant is disabled only if her impairment is “of such severity that [he] is not only unable to do [his] previous work[, ] but cannot, considering [his] age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy.” 42 U.S.C. § 1382c(a)(3)(B).

         Determination of whether a person's eligibility for disability benefits continues or ends involves an eight-step process. 20 C.F.R. § 404.1594(f)(1)-(8) (2012). The first step addresses whether the claimant is engaging in substantial gainful activity. 20 C.F.R. § 404.1594(f)(1) (2012). If not, step two determines whether the claimant has an impairment or combination of impairments that meets or equals the severity of an impairment listed in 20 C.F.R. pt. 404, Subpt. P, App. 1. 20 C.F.R. § 404.1594(f)(2) (2012). If the impairment does not meet or equal a listed impairment, the third step addresses whether there has been medical improvement in the claimant's condition. 20 C.F.R. § 404.1594(f)(3) (2012). Medical improvement is “any decrease in the medical severity” of the impairment that was present at the time the individual was disabled or continued to be disabled. 20 C.F.R. § 404.1594(b)(1) (2012).

         If there has been medical improvement, at step four, it is determined whether such improvement is related to the claimant's ability to do work-that is, whether there has been an increase in the individual's residual functional capacity. 20 C.F.R. § 404.1594(f)(4) (2012). If the answer to step four is yes, the Commissioner skips to step six and inquires whether all of the claimant's current impairments in combination are severe. Id. If there has been no medical improvement or medical improvement is not related to the claimant's ability to work, the evaluation proceeds to step five. Id.

         At step five, if there has been no medical improvement or the medical improvement is not related to the ability to do work, it is determined whether any of the special exceptions apply. 20 C.F.R. § 404.1594(f)(5) (2012). At step six, if medical improvement is shown to be related to the claimant's ability to work, it is determined whether the claimant's current impairments in combination are severe-that is, whether they impose more than a minimal limitation on the claimant's physical or mental ability to perform basic work activities. 20 C.F.R. § 404.1594(f)(6) (2012); see also 20 C.F.R. § 404.1521 (1985). If the step six finding is that the claimant's current impairments are not severe, the claimant is no longer considered to be disabled. 20 C.F.R. 404.1594(f)(6) (2012).

         If the step six finding is that the claimant's current impairments are severe, at step seven, a residual functional capacity finding is made and it is determined whether the claimant can perform past relevant work. 20 C.F.R. § 404.1594(f)(7) (2012), 404.1520(e); see also S.S.R. 82-61.

         Finally, at step eight, if the claimant cannot perform past relevant work, the Commissioner must prove there is alternative work in the national economy that the claimant can perform given her age, education, work experience, and residual functional capacity. 20 C.F.R. § 404.1594(f)(8) (2012). If the claimant cannot perform a significant number of other jobs, she remains disabled despite medical improvement; if, however, she can perform a significant number of other jobs, disability ceases. Id.


         At step one, the ALJ found Plaintiff has not engaged in substantial gainful activity since April 23, 2012, the date the Plaintiff became disabled. Tr. 24. At step two, the ALJ found that from April 23, 2012 through February 1, 2015, the period during which Plaintiff was under a disability, he had the following severe impairments: aplastic anemia; and graft versus host disease. Tr. 24. The ALJ also found that from April 23, 2012 through February 1, 2015, the period during which Plaintiff was disabled, the severity of Plaintiff's impairments met the criteria of sections(s) 7.17 and 13.28 of 20 CFR Part 404, Subpart P, Appendix 1; thus, Plaintiff was under a disability, as defined by the Social Security Act, from April 23, 2012, through February 1, 2015. Tr. 24-27. At step three, the ALJ found that medical improvement occurred as of February 2, 2015, the date Plaintiff's disability ended. Tr. 27. At step four, the ALJ found that the medical improvement that has occurred is related to the ability to work because Plaintiff no longer has an impairment or combination of impairments that meets or medically equaled the severity of a listing. Tr. 27.

         Because the finding at step four indicated medical improvement, the ALJ skipped to step six and found that Plaintiff's severe impairments were the same as those present from April 23, 2012 through February 1, 2015. Tr. 27. The ALJ concluded that beginning February 2, 2015, Plaintiff has had the RFC to perform sedentary work as defined in 20 CFR 404.1567(a) except he is limited to no climbing of ladders, ropes or scaffolds; and no exposure to unprotected heights or hazardous machinery. Tr. 27. At step seven, the ALJ found Plaintiff was unable to perform past relevant work. Tr. 30. At the last step, considering Plaintiff's age, education, work experience, and RFC, the ALJ found there have been jobs that exist in significant numbers in the national economy that Plaintiff can perform. Tr. 30. On that basis, the ALJ concluded that Plaintiff's disability ended February 2, 2015. Tr. 30.


         Plaintiff seeks judicial review of the Commissioner's final decision denying her disability benefits under Title II of the Social Security Act. ECF No. 16. Plaintiff raises the following issue for this Court's review: whether Plaintiff was denied a full and fair hearing.


         Plaintiff argues he was denied a full and fair hearing.[2] ECF No. 16 at 15-16. Additionally, Plaintiff argues the ALJ failed to properly evaluate the medical evidence, improperly determined Plaintiff was not credible, erred by finding Plaintiff did not meet the listings at step three for the period after February 2, 2015, failed to support the RFC assessment with substantial evidence, and erred by failing to hear testimony from a vocational expert. ECF No. 16 at 7-16. Because the Court agrees that Plaintiff was denied due process in this case for the reasons discussed below, the case is remanded with instructions to conduct a de novo hearing as to the time period beginning February 2, 2015. Thus, the Court need not consider the additional arguments.

         “[A]pplicants for social security benefits are entitled to due process in the determination of their claims.” Holohan v. Massanari, 246 F.3d 1195, 1209 (9th Cir. 2001). “The fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976) (internal quotation marks omitted). Accordingly, under the Social Security Act, claimants shall be given reasonable notice and opportunity for a hearing with respect to a decision rendered by an ALJ, during which the ALJ may examine witnesses and receive evidence. 42 U.S.C. 405(b)(1). Hearing procedures may be informal, but they must be “fundamentally fair.” Richardson v. Perales, 402 U.S. 389, 401-02 (1971); see also Martise v. Astrue, 641 F.3d 909, 921-22 (8th Cir. 2011) (“procedural due process requires disability claimants to be afforded a full and fair hearing”); Ferriell v. Comm'r of Soc. Sec., 614 F.3d 611, 620 (6th Cir. 2010) (“In the context of a social security hearing, due process requires that the proceedings be full and fair.”). Moreover, the “ALJ in a social security case has an independent duty to fully and fairly develop the record and to assure that the claimant's interests are considered.” Tonapetyan v. Halter, 242 F.3d 1144, 1150 (9th Cir. 2001).

         Here, Plaintiff argues he was denied “a fair opportunity to present evidence relevant to the issues.” Specifically, he contends that

the ALJ's written decision analyzes a RFC period that he told [Plaintiff's] attorney that he would not be using. In Finding/Conclusion #9, the ALJ considered [Plaintiff's] residual functional capacity beginning February 2, 2015. However, at the hearing, the ALJ specifically said he would not be considering [Plaintiff's] RFC after September 30, 2014, and later changed the date to January 1, 2015. The evidentiary record is unclear as to the relevant period for considering [Plaintiff's] RFC. Moreover, [Plaintiff] was denied the opportunity to fully address the RFC issue. [Plaintiff's] attorney was told to restrict evidence to a timeframe that the ALJ did not use. As noted in the Appeals Council remand decision, the contradiction in the hearing record and ALJ findings raises the issue of whether [Plaintiff] received a full and fair hearing.

         ECF No. 16 at 15-16 (citing Tr. 173). Defendant argues that Plaintiff's argument “misreads” the transcript and contends that the ALJ did not “restrict the presentation of evidence to a particular time-period or state that he would not be considering Plaintiff's RFC after a particular date.” ECF No. 17 at 16. According to Defendant, the ALJ told counsel at the April 2016 hearing that he would assess Plaintiff's RFC after January 1, 2015. ECF No. 17 at 16 (citing Tr. 1336). However, after exhaustive review of the hearing transcript, the Court finds this statement is not an entirely accurate representation of the record; nor does it address the consistent indecision expressed by the ALJ in deciding the relevant time period under consideration throughout the hearing.

         At the start of the April 2016 hearing, the ALJ accurately notes that Plaintiff has filed an application for disability benefit under Title II of the Social Security Act and has met the earnings requirement only through September 30, 2014; thus, in order “to prevail in this case, ” Plaintiff must show he became disabled on or before the date last insured, September 30, 2014. Tr. 20, 1293. The ALJ then notes that he “believes” that Plaintiff met the listing at step three for the time period of April 25, 2012 to June 12, 2013, and somewhat inexplicably asks Plaintiff's counsel if Plaintiff would be willing to amend his alleged onset date to June 13, 2012; which counsel agrees to “with the understanding that the listing was met for the year prior.” Tr. 1294. However, the written decision does not reflect an amendment of the alleged onset date.

         Next, at the hearing, the ALJ asked Plaintiff's attorney if there were any medical records outstanding that predate the date last insured (“DLI”) September 30, 2014, and noted the reason he is “talking about that particular day” is that the Appeals Council remanded “for the purpose of establishing …the date in question in this hearing.” Tr. 1295-96. In keeping with this goal, the ALJ began his examination of the medical expert (“ME”) by noting that the “determination in this case to the claimant's condition or conditions from the onset date of April 23rd, 2012 to September 30th, 2014, the date last insured, hereinafter called the relevant period.” Tr. 1297. This would seem to imply that the ALJ was considering a closed period of disability; however, after the ME opines that Plaintiff would meet the listings up to October 2015, the ALJ states that he will “need an RFC for October of 2015 onward, unless, unless, the claimant's satisfied within closed period on the meeting of listings here.” Tr. 1314. Plaintiff's counsel says “no, ” at which point the ME opines as to Plaintiff's RFC from October 2015 forward. Tr. 1315-18. Then, at the conclusion of the ME's testimony, the following exchange occurs between the ALJ and the ME:

ALJ: And the -- this RFC is for the period prior September ...

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