The Dangers and :Pitfalls of Forney Appeals -- Leon v. Berryhill

Forney v. Apfel makes clear that a prevailing plaintiff in a Social Security case may appeal the unfavorable parts of a remand order of the district court to expand the relief provided.  This could take the form in expanding the number of issues for consideration on remand or more likely in the Ninth Circuit to get the payment of benefits in federal court rather than waiting for the result from an ALJ on remand.

Forney appeals are dangerous.  Even absent a cross-appeal from the Commissioner, the parts of the district court decision subject to the appeal are up for grabs.  Such is the case with the decision in Leon v. Berryhill.  To understand the dangers and pitfalls, we start with the district court decision

Leon v Colvin, the district court held that improperly credited testimony must be credited as true.  The USDC remanded because it could not assess whether unscheduled breaks without absenteeism would require a finding of inability to engage in substantial gainful activity.  The court entered its order on the docket on December 18, 2014.  Leon files an appeal on the credit-as-true rule, wanting the payment of benefits rather than a straight remand to answer that question -- can a person engage in work with unscheduled breaks.

The Ninth Circuit held that a court could credit-as-true and remand.  But the court clarified that before the credit takes hold, the district court must determine whether other issues require further development.  That concept looks to conflicts, ambiguities, or gaps.  Leon lost the credit and now proceeds to the remand without it.  But the Ninth Circuit wasn't done yet -- it ordered a remand on an open record and limited Leon's cross-examination of agency consultants on the issue of fatigue.

It took 35 months for the Ninth Circuit to decide the appeal.  While SSA has problems, it doesn't take 35 months to hear and decide a remand from the district court.  Leon lost those 35 months and lost his credit-as-true fatigue testimony.  A Forney appeal in this case turned a winner on remand into a probable loser.  That is the danger and the pitfall of taking Forney appeals.

Turning Down the Heat on the "Remand for the Payment of Benefits"

I wrote about Dominguez v. Colvin last month.  The discussion focused on the intra-circuit battle over the Credit-as-True doctrine and the remand for the payment of benefits.  The Ninth Circuit issued an amended opinion in Dominguez.  The Court removed:

 "Only when all factual issues in the record have been resolved,
overwhelming evidence establishes that the claimant is disabled, and the government points to no evidence to the contrary, have we held a district court abused its discretion in failing to remand for benefits. See Garrison, 759 F.3d at 1022." 

That wasn't an accurate statement of the law and warranted removal from the decision.  The panel turned down the heat in the warring panels.

Dominguez v. Colvin -- the CAT and Award of Benefits

Ninth Circuit decided Dominguez v. Colvin on December 15, 2015.  This is the latest development in the Credit-as-True (CAT) jurisprudence in the Social Security cases decided within the circuit.  The CAT has fermented within the circuit since at least 1988.

In Varney v. Secretary of HHS, the Court clarified the scope of judicial power under the Social Security Act as including the power to credit the testimony is true and to remand for the payment of benefits.  Varney establishes a three-part test for a remand for the payment of benefits.  First, the record was fully developed and further administrative proceedings would serve no useful purpose.  Second, the ALJ failed to provide legally sufficient reasons for rejecting the evidence, whether a medical opinion or the claimant's testimony.  Third, if the improperly discredited evidence were credited as true, the ALJ would be acquired to find the claimant disabled on remand, then the court would reverse an award benefits.  Judge Stephen Reinhardt is the author of Varney.

Judge Reinhardt turned up the heat in Garrison v. Colvin, decided in July 2014.  Garrison made the three-part test sound mandatory with one caveat.  Garrison allows for the remand if the record as a whole creates serious doubt that the claimant does in fact suffer from a disability.

Burrell v. Colvin pulled back on the reins.  Burrell rejected the government's position that the court can never credit evidence as true and remand for the payment of benefits.  Burrell rejected the claimant's position that Garrison established a requirement to remand for the award of benefits.  In a decision authored by Judge Susan Graber, the court held that even if the facts met the Garrison elements, the court retains the flexibility in determining the appropriate remedy.  Burrell found serious doubt and remanded.  Judge Mary Schroeder dissented and would have applied Garrison to award benefits.

Judge Sandra Ikuta entered the fray in Treichler v. Comm'r of SSA.  Treichler resurrected the discretionary component of the CAT, pointed to the review of a District Court decision to remand rather than award benefits as falling under the abuse of discretion standard, and other cases describing the power to award benefits as used in rare circumstances.  Treichler stands for the proposition that in assessing the exercise of the power to award benefits as opposed to a remand for further proceedings, that the court reviews the record as a whole including evidence and theories never espoused by the ALJ as a basis for rejecting the claim for disability benefits.  Judge Wallace Tashima dissented and would have applied Garrison to award benefits.

Judge Ikuta uses Dominguez as the platform to swing the pendulum back to the other side.  While Garrison made the credit-as-true doctrine as appearing mandatory in many circumstances, Dominguez makes the CAT appear exceedingly rare.  Dominguez holds that the District Court must find that administrative proceedings would serve no useful purpose.

And therein lies the rub.  The no useful purpose element of the CAT requires a tempered consideration of not only the fairness of additional administrative proceedings to the claimant but also the preservation of scarce resources.  Where the result is obvious, the court should reverse an award benefits.  It isn't so much that additional administrative proceedings would serve no useful purpose, but more that the utility gained from a remand are unlikely to provide a basis for a different result other than the payment of benefits.

The representatives that handle claims will complain among themselves about vindictive ALJs that will change factual findings on remand to avoid the payment of benefits. That arises because the ALJ corps sees its function not as adjudicating the eligibility for benefits and whether a claimant meets specific legal requirements to obtain relief promised by the Social Security Act, but instead to determine whether an individual claimant deserves to receive disability benefits.  Some ALJs look for legal and proper bases to award benefits.  Some ALJs look for legal and proper bases to deny benefits.  That is why we have a decisional scatter where some ALJs pay 85% of the claims and other ALJs pay 15% of the claims.  This creates a nightmare for claimants and their representatives.  We can accurately predict the results in only 30% of all claims.  We know that in 15% of the cases, no ALJ will pay the case; we know that in 15% of the cases, every ALJ will pay the case.  That leaves 70% of the cases in the middle where no one can tell whether a claimant will receive a favorable or unfavorable decision until we know one the irrelevant fact — the identity of the ALJ.  That lottery-affect represents a horrible way to dispense administrative justice in the largest adjudicative body in the world.

The courts play an important role in evening out the dispensation of administrative justice.  When the court pays benefits on a fact pattern, the soft precedential effect of that decision permeates through the system and creates a floor to push up the bottom towards the middle.  When the court denies relief on a fact pattern, that soft precedential effect pushes the top down towards the middle.  Political pressure and bad press on disability claimants in general serve to push all of the decision-makers down, driving up the incidence of denied benefits for people who truly cannot work and to also meet the strict legal requirements of the Social Security Act.  When the pendulum swings from Varney to Garrison to Burrell to Treichler and now to Dominguez, the lack of stability and percolation of the issues within the circuit does something that the law should never do — add a layer of and certainty and doubt.

The panels in Burrell and Treichler asked the parties to comment on whether the Ninth Circuit should hear the CAT en banc with an 11 judge panel.  The government declined the invitation, probably because SSA got what it wanted in the form of a remand to preserve its jurisdictional turf to make decisions.  The claimants in Burrell and Treichler declined, satisfied that they got some relief.  In the near future, the court will need to take the CAT en banc and resolve the tension of the Varney legacy and to provide some formulaic consistency to the question of when a district court should reverse an award benefits and when the district court should remand for further proceedings.

JMHO, YMMV.