Robert Buzenes v. Carolyn W Colvin, No. 2:2012cv09046 - Document 20 (C.D. Cal. 2013)

Court Description: MEMORANDUM OPINION AND ORDER by Magistrate Judge Jean P. Rosenbluth Reversing Commissioner and Remanding for Further Proceedings. IT IS ORDERED that judgment be entered reversing the decision of the Commissioner and remanding for further proceedings consistent with the Memorandum Opinion and Order. (nbo)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 ROBERT BUZENES, 10 Plaintiff, 11 vs. 12 13 CAROLYN W. COLVIN, Acting Commissioner of Social Security,1 14 Defendant. 15 ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 12-9046-JPR MEMORANDUM OPINION AND ORDER REVERSING COMMISSIONER AND REMANDING FOR FURTHER PROCEEDINGS 16 17 I. PROCEEDINGS 18 Plaintiff seeks review of the Commissioner s final decision 19 denying his application for Social Security Supplemental Security 20 Income benefits ( SSI ). The parties consented to the 21 jurisdiction of the undersigned U.S. Magistrate Judge pursuant to 22 28 U.S.C. § 636(c). This matter is before the Court on the 23 parties Joint Stipulation, filed July 26, 2013, which the Court 24 has taken under submission without oral argument. For the 25 26 1 On February 14, 2013, Colvin became the Acting Commissioner 27 of Social Security. Pursuant to Federal Rule of Civil Procedure 25(d), the Court therefore substitutes Colvin for Michael J. 28 Astrue as the proper Respondent. 1 1 reasons stated below, the Commissioner s decision is reversed and 2 this action is remanded for the ALJ to consider in the first 3 instance whether res judicata should not apply because it results 4 in a manifest injustice. 5 II. BACKGROUND 6 Plaintiff was born on February 8, 1949. (Administrative 7 Record ( AR ) 259.) He worked part-time periodically from 1999 8 to 2009 as a janitor and then a home caregiver for his mother, 9 but he never earned more than $7500 in a given year. (Id. at 10 185-87, 195.) 11 On August 23, 2006, an Administrative Law Judge denied an 12 earlier application by Plaintiff for SSI, finding that although 13 the above-referenced work during the relevant period did not 14 amount to substantial gainful activity, it nonetheless was 15 past relevant work that Plaintiff could perform.2 (Id. at 85.) 16 He thus found Plaintiff not disabled. Although (Id. at 86.) 17 Plaintiff was represented by counsel in that case (id. at 83), he 18 did not appeal the ALJ s ruling (id. at 191). 19 Plaintiff applied for SSI again on February 11, 2009, 20 claiming disability since 1998. (Id. at 176.) The Commissioner 21 initially determined that res judicata prevented an award of 22 benefits based on the final decision of the ALJ in 2006. 23 188.) Plaintiff requested review by an ALJ. (Id. at (Id. at 98-99.) 24 25 26 27 28 2 As will be discussed further, Defendant does not appear to dispute that this ruling was erroneous because only substantial gainful activity can be past relevant work. See 20 C.F.R. §§ 416.960(b)(1), 416.965(a). Even though the 2006 ruling was apparently wrong as a matter of law, it may not be reopened because more than two years have passed since it was rendered. See § 416.1488(b). 2 1 After holding three hearings, spanning June 2010 to February 2011 2 (id. at 23-81), that ALJ found in a written decision issued March 3 17, 2011, that the earlier ALJ s finding that Plaintiff was not 4 disabled must be given res judicata effect because Plaintiff had 5 not presented any material new evidence or changed circumstances 6 to rebut the presumption created by it (id. at 18). The Appeals 7 Council denied Plaintiff s request for review of the ALJ s 8 decision. (Id. at 1.) 9 III. STANDARD OF REVIEW 10 Pursuant to 42 U.S.C. § 405(g), a district court may review 11 the Commissioner s decision to deny benefits. The ALJ s findings 12 and decision should be upheld if they are free of legal error and 13 supported by substantial evidence based on the record as a whole. 14 § 405(g); Richardson v. Perales, 402 U.S. 389, 401, 91 S. Ct. 15 1420, 1427, 28 L. Ed. 2d 842 (1971); Parra v. Astrue, 481 F.3d 16 742, 746 (9th Cir. 2007). 17 IV. THE EVALUATION OF DISABILITY 18 People are disabled for purposes of receiving Social 19 Security benefits if they are unable to engage in any substantial 20 gainful activity owing to a physical or mental impairment that is 21 expected to result in death or which has lasted, or is expected 22 to last, for a continuous period of at least 12 months. 42 23 U.S.C. § 423(d)(1)(A); Drouin v. Sullivan, 966 F.2d 1255, 1257 24 (9th Cir. 1992). When a previous ALJ has found a claimant not 25 disabled, an ALJ considering a subsequent claim will apply a 26 presumption of continuing nondisability and determine that the 27 claimant is not disabled unless the claimant rebuts the 28 presumption. SSAR 97-4(9), 1997 WL 742758, at *3 (Dec. 3, 1997); 3 1 see also Chavez v. Bowen, 844 F.2d 691, 693 (9th Cir. 1988) ( The 2 principles of res judicata apply to administrative decisions, 3 although the doctrine is applied less rigidly to administrative 4 proceedings than to judicial proceedings. ). A claimant may 5 rebut the presumption of nondisability by showing changed 6 circumstances. Chavez, 844 F.3d at 693 (internal quotation 7 marks omitted). As discussed further below, res judicata does 8 not apply if the result would be a manifest injustice. 9 10 A. The Five-Step Evaluation Process The ALJ follows a five-step sequential evaluation process in 11 assessing whether a claimant is disabled. 20 C.F.R. 12 § 416.920(a)(4); Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 13 1995) (as amended Apr. 9, 1996). In the first step, the 14 Commissioner must determine whether the claimant is currently 15 engaged in substantial gainful activity; if so, the claimant is 16 not disabled and the claim must be denied. § 416.920(a)(4)(i). 17 If the claimant is not engaged in substantial gainful activity, 18 the second step requires the Commissioner to determine whether 19 the claimant has a severe impairment or combination of 20 impairments significantly limiting his ability to do basic work 21 activities; if not, a finding of not disabled is made and the 22 claim must be denied. § 416.920(a)(4)(ii). If the claimant has 23 a severe impairment or combination of impairments, the third 24 step requires the Commissioner to determine whether the 25 impairment or combination of impairments meets or equals an 26 impairment in the Listing of Impairments ( Listing ) set forth at 27 20 C.F.R., Part 404, Subpart P, Appendix 1; if so, disability is 28 conclusively presumed and benefits are awarded. 4 1 § 416.920(a)(4)(iii). If the claimant s impairment or 2 combination of impairments does not meet or equal an impairment 3 in the Listing, the fourth step requires the Commissioner to 4 determine whether the claimant has sufficient residual functional 5 capacity ( RFC )3 to perform his past work; if so, the claimant 6 is not disabled and the claim must be denied. 7 § 416.920(a)(4)(iv). The claimant has the burden of proving that 8 he is unable to perform past relevant work. 9 1257. Drouin, 966 F.2d at If the claimant meets that burden, a prima facie case of 10 disability is established. Id. If that happens or if the 11 claimant has no past relevant work, the Commissioner then bears 12 the burden of establishing that the claimant is not disabled 13 because he can perform other substantial gainful work available 14 in the national economy. § 416.920(a)(4)(v). That determination 15 comprises the fifth and final step in the sequential analysis. 16 § 416.920; Lester, 81 F.3d at 828 n.5; Drouin, 966 F.2d at 1257. 17 B. 18 At step one, the ALJ found that Plaintiff had not engaged in The ALJ s Application of the Five-Step Process 19 disqualifying substantial gainful activity since February 2009, 20 when he filed his application. (AR 14.) At step two, the ALJ 21 concluded that Plaintiff had the severe impairment of a learning 22 disorder with average range of intellectual functioning. (Id.) 23 He further found that Plaintiff had no physical limitations, 24 noting that there was no evidence of a material change of 25 circumstance in this regard from the 2006 nondisability 26 27 28 3 RFC is what a claimant can do despite existing exertional and nonexertional limitations. 20 C.F.R. § 416.945; see Cooper v. Sullivan, 880 F.2d 1152, 1155 n.5 (9th Cir. 1989). 5 1 determination, which also found no physical impairments. 2 15; see also id. at 16 (referring to id. at 85).) (Id. at At step three, 3 the ALJ determined that Plaintiff s impairments did not meet or 4 equal any of the impairments in the Listing. (Id. at 15.) At 5 step four, the ALJ found that Plaintiff 6 has no physical limitations. 7 capacity to perform simple routine mental tasks. 8 claimant has no other significant limitations. 9 (Id. at 16.) Mentally, he retains the The Finally, the ALJ concluded, based on the earlier 10 ALJ s finding, that Plaintiff remain[ed] capable of performing 11 past relevant work as a home care worker and thus was not 12 disabled. (Id. at 18.) The ALJ found that Plaintiff s age 13 change since the 2006 denial did not represent a material 14 change of circumstance, as required to negate res judicata s 15 reach. (Id.) In the alternative, however, the ALJ held that 16 even if res judicata did not apply and Plaintiff had no relevant 17 past work, Plaintiff was not disabled because other jobs existed 18 in the national economy that he could perform. (Id. at 19.) 19 V. DISCUSSION 20 Plaintiff argues that the ALJ erred in applying res judicata 21 and therefore finding that Plaintiff was not disabled. He does 22 not contend that changed circumstances existed to overcome the 23 presumption of nondisability.4 Rather, he urges that an 24 exception to res judicata exists when a manifest injustice 25 26 27 28 4 Plaintiff has not renewed in this Court his argument before the ALJ that his change in age category from advanced age (55 or older) to closely approaching retirement age (60 or over) (see AR 18) constituted a change in circumstances so as to bar res judicata. 6 1 would result from its application and argues that such is the 2 case here. (J. Stip. at 6.) He also claims that the governing 3 Ninth Circuit case, Chavez, is dead under the circuit s 4 subsequent decision in Garfias-Rodriguez v. Holder, 702 F.3d 504, 5 512-13 (9th Cir. 2012) (en banc) (citing Nat l Cable & Tele. 6 Ass n v. Brand X Internet Servs., 545 U.S. 967, 125 S. Ct. 2688, 7 162 L. Ed. 2d 820 (2005)), and therefore does not control the 8 outcome here. 9 (J. Stip. at 6-7.) Defendant concedes that absent the res judicata effect of 10 the 2006 finding that Plaintiff had past relevant work, he would 11 be disabled under 20 C.F.R. § 416.962(b) (stating that those over 12 55 years old with a severe impairment, less than a high school 13 education, and no past relevant work are disabled). 14 12.) (J. Stip. at Thus, the ALJ clearly erred when he found that even if res 15 judicata did not apply, Plaintiff was not entitled to SSI because 16 other jobs existed that he could perform. 17 For the reasons stated below, the Court finds that Chavez is 18 still good law but that an exception to res judicata continues to 19 exist to prevent manifest injustice. Because the ALJ mistakenly 20 believed that he was bound by res judicata and did not consider 21 whether that principle resulted in manifest injustice to 22 Plaintiff, Plaintiff is entitled to a remand for the limited 23 purpose of allowing the ALJ to do so.5 24 25 26 27 28 5 Defendant argues that if the Court finds that res judicata does not apply, it should remand to the ALJ to allow him to reconsider the issue of past relevant work. (J. Stip. at 13.) But the law is clear and Defendant has not even bothered to argue otherwise that past relevant work must be substantial gainful activity, see 20 C.F.R. § 416.960(b)(1), and that Plaintiff s income never met the threshold for substantial 7 1 In Chavez, the Ninth Circuit held that an ALJ erred in not 2 giving preclusive effect to an earlier ALJ s determinations 3 concerning the claimant s RFC, education level, and prior work 4 experience. See 844 F.2d at 694. The Court cited Lyle v. Sec y 5 of Health & Human Servs., 700 F.2d 566, 568 n.2 (9th Cir. 1983), 6 for the proposition that res judicata applies in administrative 7 settings, albeit less rigidly than in judicial proceedings. 8 Chavez, 844 F.2d at 693. 9 As an initial matter, even if the Court believed that 10 Garfias-Rodriguez had implicitly overruled Chavez, it would not 11 so hold given that the Ninth Circuit has continued to cite Chavez 12 as good law even after Garfias-Rodriguez. See, e.g., 13 Alekseyevets v. Colvin, 524 F. App x 341, 344 (9th Cir. 2013). 14 Any finding that Chavez has been implicitly overruled must come 15 from the circuit itself. In any event, however, Garfias- 16 Rodriguez did not undermine Chavez s holding. It concerned 17 deference to agency interpretation of an ambiguous statute in 18 light of contrary circuit authority. 702 F.3d at 512-14. Here, 19 although the Social Security Administration apparently believed 20 Chavez was wrongly decided, it has acquiesced in the ruling. 21 SSAR 97-4(a), 1997 WL 742758, at *2-3. See Thus, the Ninth Circuit 22 and the agency are now consistent in their interpretation and 23 24 25 gainful activity, see www.ssa.gov/OACT/COLA/sga.html (table 26 27 28 showing monthly substantial gainful activity amounts by year). Moreover, the ALJ expressly found that Plaintiff had not performed any disqualifying substantial gainful activity since filing the 2009 application. (AR 14.) Thus, remand for additional findings as to past relevant work would serve no purpose. 8 1 application of the relevant law.6 2 Whether a manifest injustice exception survives Chavez and 3 its progeny is a closer call, however. Plaintiff relies on 4 several cases that predate Chavez to argue that no res judicata 5 applies in agency proceedings when a manifest injustice would 6 result. (See J. Stip. at 6 (citing Lyle, 700 F.2d at 568 n.2; 7 Thompson v. Schweiker, 665 F.2d 936, 940-41 (9th Cir. 1982)).) 8 Respondent counters that since Chavez, the Ninth Circuit has 9 made clear in Stubbs-Danielson v. Astrue, 539 F.3d 1169, 1173 10 (9th Cir. 2008) (interpreting Chavez to mean that a previous 11 ALJ s findings concerning residual functional capacity, 12 education, and work experience . . . cannot be reconsidered by a 13 subsequent judge absent new information not presented to the 14 first judge ), that the only way to rebut a prior ALJ finding 15 regarding work experience is to present new and material 16 evidence. (J. Stip. at 10.) Indeed, in Lester, 81 F.3d at 827- 17 28, which was decided after Chavez, the circuit listed various 18 ways a court could find that res judicata in a Social Security 19 proceeding did not apply, and manifest injustice was not among 20 them. Apparently in neither Stubbs-Danielson nor Lester, 21 however, did the claimant attempt to invoke the exception, and 22 thus they cannot be read to mean that the exception no longer 23 exists. See Kinney v. Int l Bhd. of Elec. Workers, 939 F.2d 690, 24 692 n.3 (9th Cir. 1991) (noting that silence on issue cannot be 25 construed to be part of a holding). 26 27 28 6 Plaintiff has the law backwards when he states that [w]hen the Commissioner issues an Acquiescence Ruling, the Ninth Circuit yields. (J. Stip. at 8.) 9 1 Moreover, as discussed, Chavez, Stubbs-Danielson, and Lester 2 do all make clear that res judicata is to be applied less 3 rigidly in agency proceedings than in judicial ones. Clearly, 4 the manifest-injustice exception to the law of the case 5 doctrine, which the ALJ also invoked (see AR 18), continues to 6 apply in judicial proceedings, see, e.g., Gonzalez v. Arizona, 7 624 F.3d 1162, 1187-88 (9th Cir. 2010) (refusing to apply law of 8 the case because earlier panel s ruling was clearly erroneous 9 and thus manifest injustice would result if parties were bound by 10 it), aff d in part and rev d in part on other grounds by 677 F.3d 11 383 (9th Cir. 2012) (en banc), aff d sub. nom., Arizona v. 12 Intertribal Council of Ariz., Inc., 133 S. Ct. 2247 (2013), and 13 thus it would be anomalous to foreclose such relief in the less 14 rigid context of administrative proceedings.7 Moreover, Chavez 15 itself cited and relied on footnote two of Lyle, which 16 specifically recognized the manifest-injustice exception. See 17 844 F.2d at 693 (citing Lyle, 700 F.2d at 568 n.2 ( Appellant 18 concedes that application of administrative res judicata in this 19 case would not result in the manifest injustice of which this 20 Court warned in [Thompson]. )). Thus, Chavez can hardly be 21 22 7 The Court recognizes that in general, the law-of-the-case 23 doctrine is itself less rigid, and thus more accommodating of discretion, than the res judicata principle. See United States 24 v. Miller, 822 F.2d 828, 832 (9th Cir. 1987). Because res 25 judicata in an administrative setting is less rigid than in a 26 27 28 judicial proceeding, the former may mirror application of the law-of-the-case doctrine in a judicial setting. See Lester, 81 F.3d at 827-28 & n.4 (noting that Commissioner s authority to apply res judicata to the period subsequent to a prior determination is much more limited than authority to refuse to reopen decision as to earlier period (emphasis in original)). 10 1 interpreted to have intended to do away with the exception. 2 Accordingly, the Court finds that the manifest-injustice 3 exception to res judicata continues to apply in Social Security 4 proceedings. 5 The question remains, however, whether Plaintiff will suffer 6 a manifest injustice if res judicata bars his disability claim. 7 Unlike in Thompson, 665 F.2d at 940-41, the main case on which he 8 relies, Plaintiff here was represented by counsel in the earlier 9 proceeding (AR 83) and simply chose not to appeal (id. at 191). 10 On the other hand, the parties do not dispute that the 2006 11 finding that Plaintiff had past relevant work and therefore was 12 not disabled was clearly erroneous. Indeed, the ALJ in this 13 case noted Plaintiff s forceful argument in that regard but 14 found that he was without authority to reconsider the 2006 15 finding because it was law of the case. (Id. at 18.) It may 16 well be a manifest injustice for Plaintiff to continue to be 17 bound by a clearly erroneous ruling, cf. Gonzalez, 624 F.3d at 18 1187-88, particularly because he has already been disadvantaged 19 by not receiving benefits for the period related to his earlier 20 application even though he was likely entitled to them, see 21 § 416.962(b). But that determination is for the ALJ to make in 22 the first instance.8 23 24 25 26 27 28 8 At times, the ALJ hearing Plaintiff s 2009 application was noticeably frustrated with Plaintiff s attorney, although it is not apparent from the bare pages of the transcript why. (See, e.g., AR 42, 72-74.) The Court hopes that the proceedings upon remand will go more smoothly. 11 1 VI. CONCLUSION 2 Consistent with the foregoing, and pursuant to sentence four 3 of 42 U.S.C. § 405(g),9 IT IS ORDERED that judgment be entered 4 REVERSING the decision of the Commissioner and REMANDING for 5 further proceedings consistent with this Memorandum Opinion and 6 Order. IT IS FURTHER ORDERED that the Clerk serve copies of this 7 Order and the Judgment on counsel for both parties. 8 9 10 11 DATED: November 27, 2013 12 ______________________________ JEAN ROSENBLUTH U.S. Magistrate Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 This sentence provides: The [district] court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing. 12

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