Remand for Further Proceedings in Esparza v. Colvin

The little trinkets of gold filter down in unpublished opinions.  Esparza v. Colvin provides insight into the court's thinking and assumptions that will prove dangerous.

Esparza remands for further proceedings because the ALJ did not give good reasons for rejecting the claimant's testimony or the opinions of the treating physician.  Pretty pedestrian stuff, the issues that permeate Social Security cases on a daily basis.  The federal courts decide those issues every day.

But a battle wages on in the Ninth Circuit over the remand versus pay issue.  The agency lawyers and the court have yet to address the elephant in the room -- the statute clearly permits the courts to find that the claimant deserves to be paid without a remand for further proceedings.  42 USC sec. 405(g) and (i).  More on that another day.

Esparza remands for further proceedings as a useful exercise to further develop the record.  Fair enough, the court has discretion under the statute and the cases tip the hat in that direction without giving fair account to the statute.  The next sentence has a bomb waiting to explode:

If she deems it appropriate, the ALJ should reopen the hearing to receive additional evidence.  

Whoa Nellie.  We just spent six pages analyzing how the ALJ abused her discretion in weighing evidence and now the court wants to inject another round of unfettered discretion into the process.  Bad politics.

 The closed remand also violates agency policy.  When the ALJ makes a decision on remand by the court,

The ALJ will generally decide the remanded issues through the date of the new hearing  decision, or in title II cases involving an expired date last insured, through the date of last insured status.

HALLEX I-2-8-18.  How will the ALJ adjudicate through the date of the new decision without taking new evidence of recent education, recent work attempts/activity, and medical treatment.

When the ALJ makes an unfavorable decision, the Appeals Council will get around to the request for review in about 18 months.  The district court will take at least another year to decide the case at that leve.  And the court of appeals, Betty hold the door because that level of review will take two years.  We know that because the Ninth Circuit case number is 13-16522.  The "13" -- that means the appellant filed a notice of appeal in 2013.  The District Court case number is 2:12-cv-00733-SPL.  The "12" -- that means that the claimant for benefits filed a complaint in that court in 2012.

The case is likely five years stale from the date of original ALJ decision.  Discretion to receive additional evidence is misguided if not simply wrong.  It is only palatable if the ALJ will just award benefits to a claimant that probably applied for disability in 2008 (my guess).  Thomas Alvarez Esparza has endured a probable seven-year wait and won't get a decision from SSA until mid- to late-2016.

Sheridan v. Colvin ... another unpublished opinion

The Ninth Circuit reversed and remanded by a 2-1 vote on November 17, 2015.  Judges Fletcher and Berzon found that the ALJ did not give clear and convincing reasons to reject the testimony of Sheridan about her migraine headaches.  Judge Bea disagreed.

The majority found pedestrian errors.  Sheridan qualified the statement about activities with statements that she did so when she had a good day or depending on how she felt.  The Ninth Circuit needs to adopt a confrontation requirement so that the ALJ cannot just lurk with a perceived inconsistency and spring it at the time of decision.  The hearings do not last long enough to permit responsible representatives to ask about everything in the record.  The ALJ has a duty to develop the record.  Soto-Olate v. Holder imposes that obligation in the immigration context.

The court faults the ALJ for comparing statements in 2007 to 2008 as different.  The court finds it plausible that different times might have different symptoms and responses.  That is called commonsense.  The ALJ never asked.  See Soto-Olarte.

The court found insubstantial the comparison of onset in 2008 to the cessation of work in 2008.  Again, just a silly statement by an ALJ.  Life is progressive and erosive.  I was fine five years ago does not mean that I am fine today.  The ALJ never asked.  See Soto-Olarte.

The court found that the ALJ engage in conflation for simple migraines with migraines with aura.  If the ALJ does not understand the distinction, the ALJ has a solution, ask.  The ALJ never asked.  See Soto-Olarte.

Now the reason for writing.  The dissent would excuse bad decision-making and leave it to the ALJ to just speculate wildly about perceived inconsistencies without ever asking.  Judge Bea writes that doing laundrm, cooking dinner, cleaing the yard, shopping once or twice a week, caring for two pet dogs, .going to the track to watch her son race, and entertaining visitors would take hours of sitting, standing, and walking.  The italics - those are the judge's.  Sure they do, if Sheridan did them all consecutively or all in the same day.  But the ALJ didn't say that and Judge Bea doesn't report that.  The ALJ just combined them and said, well if you can accumulate hours of activity in a week, then you must be able to work.  The ALJ could have asked about the number of hours of activity in any particular day.  The ALJ never asked.  See Soto-Olarte.

Judge Bea implies in footnote 2 that Sheridan's response to physical therapy changed in June 2008 because she applied for benefits in March and alleged disability in February 2008.  The dust of slander is that Sheridan decided to exaggerate her disability in March and lied in June. The other alternative is that Sheridan got worse after July 2007, couldn't handle work by February, and told her doctors that therapy aggravated the headaches in June.  The ALJ never asked.  See Soto-Olarte.

I have a secret to tell the ALJs and the reviewing Article III judges.  Life is not static.  Disability is not static.  Symptoms vary for any number of reasons.  If you want to find disabled people, go to public places -- the ball game, high school gyms, the store -- go live a little life and get out the sequestered notion that the disabled live a secluded existence getting spoon fed their meals.  Just silly, no naive and puerile.

EM-13024 And Fees to Representatives that Waive Direct Payment

The Social Security Administration regulates fees that representatives can charge and receive.  The Program Operations Manual System (POMS) confirms agency policy.  The regulations carve out an exception when SSA will not involve itself in the authorization of when a representative can charge and receive a fee.  20 C.F.R. sec. 404.1720(e).  That exception concerns payment an entity or government agency will pay the representative.  The exception has two elements:  (1) the claimant will not have liability to pay fees or expenses to the representative or someone else; and (2) the representative tells SSA that he/she is waiving the fee from the claimant.  The form is SSA-1696 - the appointment of representative form.  The portion of the form provides:

I certify that my fee will be paid by a third-part entity [...] that the claimant [is] free of all liability [...]  to pay any fee or expenses to me or anyone as a result of their claim(s) or asserted rights(s).  [...] Do not check this box if a third-party individual will pay the fee.)

Now for the fun stuff.   On July 15, 2013, SSA published an Emergency Message.  EM-13024 provides guidance on what to expect when a claimant has multiple representatives and SSA approves the fee agreement (the expedited fee process).  The first and third examples reflect the waiver fees benefiting the claimant and not the representatives.  If the waving representative is a member of the firm that will receive a fee, the fee is reduced.  If the waiving representative is not a member of the firm that will receive a fee, the fee is not reduced.  I am not sure how that differentiation squares with HALLEX I-1-2-18.  When a representative waives, the other representatives should receive a percentage of the fee regardless of whether the waiving representative was a member of the firm.

The EM represents a concession that permits claimants to change representatives and permit the new representative to receive a full fee.  Many representatives won't take a claim if they can't get the fee agreement approved.  No one likes fee petitions and SSA sees a way to accommodate the interests of the claimants and the representatives as long as the waiving representative comes from a different firm from the other representative(s).

Now the hard part -- example two is wrong.  Examples one and three represent an accommodation and a sub-regulatory address of a bare bones statutory scheme.  But the second example contradicts the regulation.

The regulation permits a representative to get paid by a third party if and only if the claimant has no liability to any representative for the fees or expenses associated with the claim.  The appointment of representative form tracks the regulation.  But example two allows the representatives from firm A to receive the fees while the solo practitioner gets paid by a third-party entity. We can ignore the withdrawing representative from firm B so the redacted example is this:

The claimant appointed two representatives from Firm A, [...] and one representative who is a sole practitioner. [...] The sole practitioner waived charging and collecting a fee from the claimant or any auxiliary beneficiaries because a third party entity will be paying his or her fee. The two representatives from Firm A have an approved fee agreement that each of them signed, and SSA determines a fee of $6000. The representatives from Firm A will receive $3000 each.

The claimant in the example has a liability to the representatives from firm A.  SSA pays the fees but that payment comes from the past due benefits -- making the liability or payment indirect.

If the sole practitioner gets paid by firm A, then the representatives are paying the solo to represent the claimant without SSA authorization over the fee.  While that fits with fee splitting rules under the Rules of Professional Conduct and the Model Rules, it doesn't fit with the expedited fee process and the regulations stating that SSA will authorize not only the fees to the representatives from firm A and the payment to the solo.

If the sole practitioner gets paid by someone else (an insurance carrier or a governmental entity), then a real question exists about the value of the services provided by the members of firm A or the solo or both.  If the claimant ends up with the representatives from firm A, the only reason to permit the solo to get paid by the third-party entity is a time saving device and the assumption that the third-party entity can protect its own interests.  If the claimant ends up with the solo and the paying entity is firm A, then SSA is encouraging a business model that violates the regulation and defeats the interest of the claimant.

The claimant hires firm A.  The claimant appoints one or more representatives from firm A to represent the claimant at the hearing.  SSA sets the claim for hearing.  Firm A hires the solo to appear at the hearing.  The claimant finds out about the solo the day of the hearing or some time shortly before the hearing.  The claimant does not get the continuity of representation, the representative most familiar with the claim, or someone responsible for the claim at the firm.  The arrangement violates the regulation and removes the financial supervision of the representation by the solo by SSA.

EM-13024 will sunset on January 15, 2016.  SSA should delete example 2.  It violates the regulation.

Shapiro v. Social Security Administration -- ALJ firing upheld

The Federal Circuit upheld the firing of an Administrative Law Judge for failing to meet productivity requirements.  The case is important because it documents the expectation of the Social Security Administration and the constraints that this puts on claimants seeking benefits.

In 2007, the Chief ALJ told the ALJ corps that the agency expected between 500 and 700 legally sufficient decisions each year.  So let's do the math.  An ALJ has to review the file, conduct the hearing, and give instructions to someone else to write the decision.  The ALJ has to review the decision and sign it.  We can assume that an ALJ takes about five weeks vacation per year and actually sits on the bench only every other week.  We also have holidays to address as well.  That brings us down to perhaps 23 weeks of hearings per year.

If the ALJ hears 20 cases per week, that ALJ will fall short of the productivity goal of 500 dispositions per year.  If the ALJ hears 30 cases per week, the ALJ will almost meet the upper edge of the disposition expectation announced in October 2007.  Assuming 24 hearings in a week and having hearings on four of the five weekdays, the ALJ must have six hearings per day.  That's at best an hour per hearing four days a week, 23 weeks per year to get into the range.

Some cases have relatively simple dispositions.  The ALJ calls a medical expert who testifies that the claimant meets or equals a listed impairment or has a residual functional capacity that calls for application of a favorable grid rule and the case is over in about 15 minutes.  But this does not address the cases on the bubble.

The case on the bubble requires full examination of any medical expert called by the ALJ, full examination of the claimant for benefits including a document by document explanation of any conflict that the ALJ might have perceived in terms of activities of daily living, adequacy of medical treatment, and other reasons that the ALJ might articulate later in an unfavorable decision.  The ALJ will likely have called a vocational expert to testify at the hearing.  That witness will lack any degree or training in statistical analysis and therefore have to make up numbers about the incidence of jobs in the national economy.

Realistically, a full-blown hearing for a case in the bubble where the person has an arguable disability would require a four hour process.  No consistency exists from vocational expert to vocational expert and little consistency exists from ALJ to ALJ.  Can an ALJ have that lengthy of a hearing for any one single case?  In firing ALJ Shapiro, SSA has responded that an ALJ that regularly permits a full due process hearing will likely end up on the short end of the stick.  The agency expects the ALJ to manage the docket and dispose of the cases in the same period of time as the rest of the corps.  An ALJ that wants to provide due process in an administrative hearing on a regular and continuing basis for the half of cases that require that degree of inquiry will never meet the productivity expectations of the agency and find themselves in a disciplinary proceeding.

Harshaw v. Colvin

The Ninth Circuit affirmed in an unpublished memorandum the claim for disability in Harshaw v. Colvin.  The non-precedential memo deserves note because it marks a dangerous and wrong trend.  The court imposed issue exhaustion from the ALJ level.

Harshaw relies on Meanel v. Apfel and Silveira v. Apfel to get to the point of exhaustion and the absence of waiver of the exhaustion rule.  I know a little about those cases -- I was counsel in both. . Meanel has pedestrian pedigree.  She sought to attack vocational expert testimony based on evidence from a private vendor about job numbers; evidence never presented to the agency.  Meanel says "too late."  The claimant had counsel and court is too late.

Silveira had a companion case, Vargas.  Both raised the legal issue of application of the grids to individuals with semi-skilled backgrounds, no transferable skills, and illiterate in English.  Vargas did not raise the issue in the District Court.  Silveira did.  The court found that the legal issue was not waived and reversed in Vargas.

What do either of these cases have to do with Harshaw?  Not much.  Harshaw presented evidence to the ALJ that he suffered from pes planus, PTSD, and a personality disorder.  The record contained the evidence.  In Meanel, the record did not contain the job numbers evidence.  Sound different?  It is.  Expanding Meanel to include not only that the claimant present the evidence but also make a specific argument about the application of that evidence asks too much.  The evidence raises the issues and the ALJ is the inquisitor, not an adversary.  Meanel just doesn't apply, at all.

The district court had the first bite at the apple in Harshaw.  The court relied on two other USDC decisions:

Cisneros v. Colvin,No. 12-cv-0931-BAM, 2013 WL 5375490 at * 9 (E.D. Cal., Sept. 24, 2013) (finding waiver when plaintiff failed to raise the issue of improper past relevant work determination during administrative proceedings); Shaw v. Comm'r of SSA, 2008 U.S. Dist. LEXIS 30170, *20 (N.D. Cal. 2008) (Claimant waived argument challenging past relevant work when he failed to raise that objection at the hearing);

In a typical hearing, the ALJ will ask the vocational expert to characterize the claimant's past relevant work.  The VE's get it wrong because the witness does not have access to the earnings record.  The VE will miss earnings that do not qualify as substantial gainful activity or occurred too long ago to count.  But the claimant has the burden of establishing that s/he cannot perform the past relevant work.  In cases where the VE mischaracterizes the past work and the represented claimant does nothing, then Houston, we have a problem.  That isn't waiver; that is a decision that rests on substantial evidence before the agency at the time of the decision.  Coming up with new evidence or arguments about the true nature of the past work might be too late.

But those aren't the facts of Harshaw.  The claimant alleged that the ALJ missed the other impairments and that those impairments made a difference in the outcome of the case.  Waiver -- no, the evidence was there and the claimant never has a burden to argue the case, just the burden to present the evidence that supports the claim.

The Ninth Circuit memorandum ends with the caveat that the missed impairments did not cause other limitations.  Well, if that is the case, then the waiver discussion is irrelevant.  The court should have issued a one paragraph memorandum, the last paragraph.

ODAR Hasn't Vetted POMS ... So What?

I attended a bench bar meeting at the Los Angeles US Attorney's office for the federal social security practice in the Central District of California last week.   AAJ Gerald Ray spoke on behalf of SSA.  He waxed eloquent about statistics and the need for ALJ decisions to follow policy.   The latter point begs the question -- where do I locate agency policy.

So I asked the question, does the Appeals Council consider POMS to constitute agency policy?   Judge Ray answered the question directly enough;  he said "no."

Never satisfied with the response of the government,  I thought we might unpack that comment in context of Judge Ray's oration and,  what the heck,  the Act, regulations, and the rulings.

SSA receives 2.8 million claims for disability each year.   Of those eventually granted,  SSA grants 75% of those claims in initial or reconsideration stages.  ODAR receives 500,000 claims per year.   ODAR grants less than half of those making 25% of the findings of disability.   So who are the experts at disability adjudication,  the dog or the tail?

So it can't be that the part of the agency that publishes POMS doesn't know what it is talking about.  Clearly it does and directs the state agencies nationwide on how to exclusively adjudicate 2.3 million claims annually without the interference or oversight of ODAR, thank you very much.

The problem arises for claimants that shift during the claim.   They change age categories,  past work ceases to have relevancy,  or the medical evidence changes in a material way.   If the substantive rules effectuating the statute and regulations change too,  then the program is not stable and the failure to have policy apply from top to bottom enhances the lottery effect of a claim for benefits.

SSA does have a caveat on the published e-version of POMS:

Please note that this document is intended for SSA employees. It contains technical terms and instructions that will be unfamiliar to you. If you have difficulty understanding these materials, please click on this link to the Social Security Handbook, which is written in plain language for use by the public.

 Does the Handbook contain agency policy.  Not as far as anyone can tell.  SSA lists POMS as one of its Current Program Rules.  The agency lists the Handbook as one of the Social Security Program Rules but oddly not as current.  More importantly, Judge Ray listed HALLEX as binding but its status is on the same category of POMS as a current program rules set.

The regulations list POMS as other written guidelines that instruct, interpret, clarify, or administrate. 20 CFR sec. 404.1602.   The state agency "will" comply with other written guidelines.  Sec. 404.1603.  SSA can find that the state agency failed to meet the applicable standards if it does not follow POMS.  Sec. 404.1671.

SSR 00-4p states that the agency cannot accept evidence from a vocational expert of specialist that conflicts with agency policy.  SSR 13-2p states that the agency requires all adjudicators at all levels of review to follow agency policy and specifically lists POMS right alongside HALLEX.  And other rulings contain cross-references to POMS -- as in, for more information on this topic, see also POMS.
Okay, ODAR doesn't want the lowly technical people to tell its legally trained staff how to adjudicate claims.  I get that.  But the statute and the issue of disability are medically and vocationally technical, not legally technical.  Using legal techniques and a quasi-judicial format can unwrap the issue of disability, but it remains a mixed medical and vocational issue.

I wrote about the transferable skills analysis back in May.  Judge Ray told me off the podium and privately -- but not confidentially -- that ODAR has vocational experts and no need for POMS dissertation on a transferable skills analysis.  I responded that the agency did not pay VE witnesses enough and that we get what we pay for in life.  He conceded that existence of a problem.  The question in this complex question of medicine and the ability to work is whether we have standards (POMS unless contrary to the regulations or the statute) or just let the ALJ corps, medical experts, and vocational experts do and say whatever their own heuristic and biased view of the world tells them is the right result for this case.

One last point: after 30 years, I have a pretty good handle on this stuff.  I can understand the technical writing in POMS.  I don't need the dumbed down version in the Handbook.  But if POMS is not interpretative of ambiguous regulations and it doesn't matter, then delete it.  The whole thing.  To leave it up and when I cite say - "psych, just kidding.  We don't follow POMS" - well that is just a lie published on the internet and available at the District Office and ODAR says it is worthless.  As I said to Judge Ray during the open session, "we'll see."

Almost 3 million claims deserve better than a lottery.  Public confidence in a system of administrative jurisprudence that touches everyone requires a government tell it the straight substantive and procedural rules.  If ODAR hasn't bothered to consider an issue, then it should follow POMS and vet something else later if ever.

The agency obviously differs and uses POMS only when it likes POMS or the result pushed by POMS.  Inconsistent and intellectually dishonest.

Phillips v. Colvin/Commissioner

The Ninth Circuit decided Phillips v. Commissioner on August 18, 2015.  I only occasionally write about unpublished opinions but this was my case and I have unique insight into what happened at the District Court level and before the Ninth Circuit.

The court found that Social Security Ruling 13-2p applied the case despite the fact that the Commissioner published the ruling after the ALJ issued the final decision in this case.  The lawyers for the Commissioner conceded at oral argument that the ruling did not represent a change in the law.

SSR 13-2p overrules Parra v. Astrue.   The claimant for benefits need not prove that absence will leave the drug addict or alcoholic still disabled.  The claimant for benefits just needs to prove that it is unclear whether abstinence will lead to recovery or leave the person in a disabled state.

In Phillips v. Astrue, the Commissioner argued that addiction to prescription medication was no different than addiction to street drugs or alcohol.  The District Court in the Eastern District of Fresno bought that argument.  Twice the District Court stated that Phillips was mistaken about the law, because the Commissioner did not concede what she conceded at the Ninth Circuit Court of Appeals, that addiction to prescription medication is fundamentally different than addiction to non-prescribed street drugs or alcohol.

Taking the representations at oral argument before the Ninth Circuit at face value, the representations made before the District Court had no legal support.  The position taken that SSR 13-2p did not change the law makes the argument at the District Court disingenuous.  The government cannot have it both ways.

But that is the role of the government lawyers in federal court defending Administrative Law Judge decisions denying benefits.  The government lawyers do not defend agency policy, the regulations, the rulings, HALLEX, or POMS.   Instead, the government lawyers defend the discretion of the ALJ to do whatever the ALJ wants to do with a particular set of facts.  The agency defense discretion over everything.  Only when the ALJ makes egregious omissions from a decision will the agency seek remand.  But misconstrue the facts and the law, Phillips v. Astrue and the litigation before the Ninth Circuit tells us that the agency defends that.