Notes on Finnegan-Crews v. Colvin

The Ninth Circuit made a number of pedestrian observations in the unpublished opinion of Finnegan-Crews v. Colvin.  These unpublished opinions give insight into how we can expect the court to handle similar questions in other cases.  Unpublished opinions are never precedent and may have dubious persuasive value.  Attorneys should always use caution in resorting to unpublished opinions.

The most troubling part about the court's decision is the reference to ALJ issue waiver.  It is easy to read the language contained in the decision for the proposition that this person who proceeded at least in the Ninth Circuit without the benefit of an attorney waived an issue.  The courts generally give people proceeding without benefit of counsel a break in terms of the rules.

Government counsel will likely read this decision as permitting the agency to argue that the claimant for benefit that fails to raise an issue before an ALJ may not raise it in court.  That really isn't the point of this decision nor the authority relied upon by the Ninth Circuit (Greger).  Finnegan-Crews didn't raise the hip injury issue either before the ALJ or the District Court.  Properly read and parsed, raising the issue of the disabling hip injury before either the ALJ or the District Court may have saved Finnegan-Crews from the waiver doctrine.

The Legal Kernels Derived from Finnegan-Crews

The court has jurisdiction pursuant to 28 USC § 1291.

The court reviews the District Court’s decision to novo.  Ghanim v. Colvin, 763 F.3d 1154, 1159 (9th Cir. 2014).

Finnegan-Crews waived her contention regarding a disabling hip injury by failing to raise it before the administrative law judge (“ALJ”) or the district court.  See Greger v.  Barnhart, 464 F.3d 968, 973–74 (9th Cir. 2006). 

The ALJ may reject the opinions of the treating physician for specific and legitimate reasons, supported by substantial evidence.  Ghanim v. Colvin, 763 F.3d 1154, 1160–61 (9th Cir. 2014); Batson v. Comm’r of Soc.Sec. Admin.,  359 F.3d 1190, 1195 (9th Cir. 2004). 

The ALJ must use a two-step analysis to provide specific, clear, and convincing reasons to reject testimony and to find other statements not fully credible.  Rounds v. Comm’r of Soc. Sec.Admin., 807 F.3d 996, 1006 (9th Cir. 2015) (ordinary tests of credibility and observations permitted); Treichler v.Comm’r of Soc. Sec. Admin.,  775 F.3d 1090, 1102–03 (9th Cir. 2014) (the ALJ must specifically identify the testimony he finds not credible and explain what testimony undermines that testimony); Molina v. Astrue, 674 F.3d 1104, 1113 (9th Cir. 2012) (rejecting testimony where the medical evidence showed the anxiety disorder well-controlled with medication and other self-combing measures).

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.