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Lena J. v. Commissioner of Social Security

United States District Court, W.D. Washington, Seattle

July 1, 2019

LENA J., Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

          REPORT AND RECOMMENDATION

          BRIAN A. TSUCHIDA CHIEF UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Lena J. seeks review of the denial of her Supplemental Security Income and Disability Insurance Benefits applications. She argues that the ALJ and the Appeals Council erred by failing to admit probative evidence, and that the ALJ improperly rejected the medical expert's opinion. Dkt. 10. The Court recommends the case be REVERSED and REMANDED for further administrative proceedings under sentence four of 42 U.S.C. § 405(g).

         BACKGROUND

         Plaintiff is currently 54 years old, has a high school education, and has worked as a pastry cook and waitress. Tr. 59, 97, 293. In October 2015, she applied for benefits, alleging disability as of August 2015. Tr. 293, 300. After her applications were denied initially and on reconsideration, the ALJ conducted a hearing on January 30, 2018, and a supplemental hearing on June 7, 2018. Tr. 15. On October 4, 2018, the ALJ issued a decision finding plaintiff not disabled. Tr. 15-28. The Appeals Council denied plaintiff's request for review, making the ALJ's decision the Commissioner's final decision. Tr. 1.

         THE ALJ'S DECISION

         Utilizing the five-step disability evaluation process, [1] the ALJ found that plaintiff had not engaged in substantial gainful activity since the alleged onset date; she had the following severe impairments: degenerative disc disease, methamphetamine abuse in current remission, and mental health disorders variously diagnosed as depressive, anxiety, and panic disorders; and these impairments did not meet or equal the requirements of a listed impairment.[2] Tr. 17-19. The ALJ found that plaintiff had the residual functional capacity to perform light work with postural, reaching, and environmental limitations, she can understand, remember, and carry out short and simple instructions, and she should not have transactional work with the general public. Tr. 20. The ALJ found that plaintiff could not perform her past relevant work, but, as there were jobs that exist in significant numbers in the national economy that plaintiff could perform, she was not disabled. Tr. 26-28.

         DISCUSSION

         A. Evidence submitted after deadline

         Plaintiff argues that the ALJ erred by declining to admit evidence she submitted after the deadline for notifying the ALJ of the existence of evidence. Dkt. 10 at 3. She argues in the alternative that, because the Appeals Council considered the evidence, the court should review it as new and material evidence submitted to the Appeals Council. Id. at 6. The court finds that because the Appeals Council made the evidence part of the record and considered it in evaluating plaintiff's request for review, the court should evaluate it as new evidence submitted to the Appeals Council. Under that evaluation, the court finds that the ALJ's decision is no longer supported by substantial evidence when the new evidence is considered.

         Social Security regulations provide that a claimant must inform the ALJ about or submit any written evidence no later than 5 business days before the date of the hearing (the “five-day rule”). 20 C.F.R. §§ 404.935(a), 416.935(a). If a claimant does not comply with this requirement, the ALJ “may decline to consider or obtain the evidence, ” unless certain exceptions apply. Id. Those exceptions include an “unusual, unexpected, or unavoidable circumstance beyond your control” that prevented the claimant from informing the ALJ about or submitting the evidence earlier. 20 C.F.R. §§ 404.935(b)(3), 416.1435(b)(3). One example of such a circumstance is where the claimant has “actively and diligently sought evidence from a source and the evidence was not received or was received less than 5 business days prior to the hearing.” 20 C.F.R. §§ 404.935(b)(3)(iv), 416.1435(b)(3)(iv). If the claimant has missed the deadline because of one of the listed exceptions, the ALJ “will accept the evidence” if he or she has not yet issued the decision. 20 C.F.R. §§ 404.935(b), 416.1435(b).

         The Appeals Council will review a case if, among other reasons, it receives additional evidence that is new and material and that relates to the period on or before the date of the ALJ decision, and there is a reasonable probability that the additional evidence would change the outcome of the case. 20 C.F.R. §§ 404.970(a)(5), 416.1470(a)(5). However, the Appeals Council will consider additional evidence when deciding whether to review a case only if the claimant shows good cause for not meeting the five-day rule because of one of the reasons described in 20 C.F.R. §§ 404.935(b) and 416.1435(b), including that the claimant actively and diligently sought evidence from a source and the evidence was not received or was received less than 5 business days prior to the hearing. 20 C.F.R. §§ 404.970(b), 416.1470(b). If the claimant submits new evidence and the Appeals Council does not find that the claimant had good cause for not meeting the five-day rule, the Appeals Council will send the claimant a notice that explains why it did not accept the additional evidence. 20 C.F.R. §§404.970(c), 416.1470(c).

         When the Appeals Council considers new evidence in declining review, that evidence becomes part of the administrative record, which this court must consider in determining whether the ALJ's decision is supported by substantial evidence. Brewes v. Comm'r of Soc. Sec. Admin., 682 F.3d 1157, 1159-60 (9th Cir. 2012).

         Plaintiff underwent a psychological examination with David Morgan, Ph.D., on May 28, 2018, at the direction of the Washington State Department of Social and Health Services. Tr. 35-46. Dr. Morgan opined that plaintiff had marked limitations in numerous functional areas, including the ability to perform activities within a schedule, maintain regular attendance, learn new tasks, adapt to changes in a routine work setting, make simple work-related decisions, and maintain appropriate behavior in a work setting; he rated her overall level of impairment as marked. Tr. 38-39. He opined that plaintiff's impairments were not primarily the result of a substance use disorder, and noted that plaintiff reported a long history of methamphetamine abuse but she had been clean and sober for over one year. Tr. 37, 39.

         As noted, plaintiff underwent this examination on May 28, 2018. Three days later, on May 31, 2018, plaintiff's counsel submitted to the ALJ a list of outstanding evidence that had been requested but not received; this list did not include Dr. Morgan's report.[3] Tr. 441. Counsel submitted Dr. Morgan's report to the ALJ on June 5, 2018, two days before the June 7, 2018 supplemental hearing. Tr. 45. At the hearing, the ALJ acknowledged receipt of Dr. Morgan's report but declined to admit it as untimely under the five-day rule. Tr. 84-85. In the decision, ...


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