Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00651/USCOURTS-casd-3_19-cv-00651-0/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:0405ww Review of HHS Decision (DIWW)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

KATHLEEN S.,

Plaintiff,

v.

ANDREW SAUL, Commissioner of 

Social Security,1

Defendant.

Case No.: 3:19-cv-00651-JLS-RNB

REPORT AND 

RECOMMENDATION REGARDING 

CROSS-MOTIONS FOR SUMMARY 

JUDGMENT 

(ECF Nos. 12, 13)

This Report and Recommendation is submitted to the Honorable Janis L. 

Sammartino, United States District Judge, pursuant to 28 U.S.C. § 636(b)(1) and Civil 

Local Rule 72.1(c) of the United States District Court for the Southern District of 

California.

On April 8, 2019, plaintiff filed a Complaint pursuant to 42 U.S.C. § 405(g) seeking 

judicial review of a decision by the Commissioner of Social Security denying her

application for a period of disability and disability insurance benefits. (See ECF No. 1.) 

Now pending before the Court and ready for decision are the parties’ cross-motions for 

 

1 Andrew Saul is hereby substituted as the defendant in this case per Fed. R. Civ. P. 

25(d).

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summary judgment. For the reasons set forth herein, the Court RECOMMENDS that 

plaintiff’s motion for summary judgment be GRANTED, that the Commissioner’s crossmotion for summary judgment be DENIED, and that Judgment be entered reversing the 

decision of the Commissioner and remanding this matter for further administrative 

proceedings.

PROCEDURAL BACKGROUND

On May 28, 2013, plaintiff filed an application for a period of disability and 

disability insurance benefits, alleging disability commencing March 2, 2012. (Certified 

Administrative Record [“AR”]) 332-34.) Her application was denied initially and upon 

reconsideration. (AR 177-81, 187-91.) 

On February 14, 2014, plaintiff requested a hearing before an administrative law 

judge (“ALJ”). (AR 193-94.) The hearing was held on April 19, 2016. Plaintiff appeared 

with counsel, and testimony was taken from her and a vocational expert (“VE”). (See AR

78-95.) The ALJ issued a decision on July 19, 2016, finding that plaintiff was not disabled

for purposes of her benefits application. (AR 159-68.) Thereafter, plaintiff requested a 

review of the decision by the Appeals Council. (AR 243.) On October 21, 2016, the 

Appeals Council granted review, vacated the ALJ’s decision, and remanded for further 

proceedings. (AR 174-75.)

Pursuant to the order of remand, another administrative hearing was held by a 

different ALJ on November 14, 2017. Plaintiff appeared with different counsel, and 

testimony was taken from a medical expert (“ME”) telephonically, as well as from plaintiff 

and a different VE. (See AR 41-77.) The ALJ issued a decision on May 4, 2018, finding 

that plaintiff was not disabled for purposes of her benefits application. (AR 16-28.) 

Thereafter, on May 29, 2018, plaintiff through counsel requested a review of the decision 

by the Appeals Council. (AR 329-31.) Plaintiff’s counsel submitted a single-page letter 

brief on June 13, 2018 (AR 487) and submitted additional medical evidence on August 6, 

2018 (AR 97-133). The ALJ’s decision became the final decision of the Commissioner on 

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February 13, 2019, when the Appeals Council denied plaintiff’s request for review. (AR 

1-6.) This timely civil action followed.

SUMMARY OF THE ALJ’S FINDINGS

In rendering his decision, the ALJ initially determined that plaintiff last met the 

insured status requirements of the Social Security Act on June 30, 2014. (AR 19.) The 

ALJ proceeded to follow the Commissioner’s five-step sequential evaluation process. See

20 C.F.R. § 404.1520.2 

At step one, the ALJ found that plaintiff had engaged in substantial gainful activity 

in 2014. However, the ALJ found that there had been a continuous 12-month period during 

which plaintiff did not engage in substantial gainful activity. (AR 19.)

At step two, the ALJ found that plaintiff had the following severe impairments

through the date last insured: chronic obstructive pulmonary disease (“COPD”), hearing 

loss, residuals of a fractured right foot with cysts, hypertension, a cyst on her liver, and 

obesity. (AR 20.) As part of his step two determination, the ALJ further found that 

plaintiff’s medically determinable impairments of hypothyroidism, hyperlipidemia, and 

Bell’s palsy were nonsevere. (Id.) Likewise, the ALJ found that plaintiff’s medically 

determinable mental impairments of depression with anxiety were nonsevere. (See AR 20-

22.)

At step three, the ALJ found that, through the date last insured, plaintiff did not have 

an impairment or combination of impairments that met or medically equaled the severity 

of one of the impairments listed in the Commissioner’s Listing of Impairments. (AR 23.)

Next, the ALJ determined that, through the date last insured, plaintiff had the 

residual functional capacity (“RFC”) to perform light work as defined in 20 C.F.R. § 

404.1567(b), “except that she can stand, walk, or sit for six hours in an eight-hour workday; 

 

2 Unless otherwise indicated, all references herein to the Commissioner’s regulations 

are to the regulations in effect at the time of the ALJ’s decision.

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can do frequent climbing stairs, stooping, kneeling, crouching, and crawling; and must 

avoid concentrated exposure to pulmonary irritants or extreme temperatures.” (AR 24.)

For purposes of his step four determination, the ALJ adduced and accepted the VE’s 

testimony that a hypothetical person with plaintiff’s vocational profile and RFC would be 

able to perform the requirements of plaintiff’s past relevant work as a waitress (as actually 

or generally performed). (AR 27-28.)

Accordingly, the ALJ concluded that plaintiff was not disabled through June 30, 

2014, the date last insured. (AR 28.)

PLAINTIFF’S CLAIMS OF ERROR

1. The Appeals Council was required to grant plaintiff’s request for review 

pursuant to Social Security Ruling (“SSR”) 19-1p. (See ECF No. 12-1 at 9-10.)

2. The ALJ was not properly appointed under the Constitution and therefore 

lacked legal authority to hear and decide plaintiff’s case. (See ECF No. 12-1 at 10-16.)

3. The ALJ violated Agency policy by having the medical expert testify at the 

beginning of the administrative hearing. (See ECF No. 12-1 at 16-17.)

4. The ALJ erred (a) in finding that plaintiff’s mental impairments were 

nonsevere and (b) in not including mental limitations he found credible in his RFC 

determination or hypothetical to the VE. (See ECF No. 12-1 at 17-21.)

5. The ALJ erred in his RFC determination by failing to adopt functional 

limitations related to plaintiff’s right arm lymphedema, hearing loss, and obesity. (See

ECF No. 12-1 at 21-24.)

STANDARD OF REVIEW

Under 42 U.S.C. § 405(g), this Court reviews the Commissioner’s decision to 

determine whether the Commissioner’s findings are supported by substantial evidence and 

whether the proper legal standards were applied. DeLorme v. Sullivan, 924 F.2d 841, 846 

(9th Cir. 1991). Substantial evidence means “more than a mere scintilla” but less than a 

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preponderance. Richardson v. Perales, 402 U.S. 389, 401 (1971); Desrosiers v. Sec’y of 

Health & Human Servs., 846 F.2d 573, 575-76 (9th Cir. 1988). Substantial evidence is 

“such relevant evidence as a reasonable mind might accept as adequate to support a 

conclusion.” Richardson, 402 U.S. at 401. The Court must review the record as a whole 

and consider adverse as well as supporting evidence. Green v. Heckler, 803 F.2d 528, 529-

30 (9th Cir. 1986). Where evidence is susceptible of more than one rational interpretation, 

the Commissioner’s decision must be upheld. Gallant v. Heckler, 753 F.2d 1450, 1452 

(9th Cir. 1984).

DISCUSSION

A. Plaintiff’s first and second claims of error fail because she did not timely raise 

the Appointments Clause issue during the administrative proceedings.

Plaintiff’s first claim of error is premised on SSR 19-1p, which was promulgated in 

light of the Supreme Court’s decision in Lucia v. Securities and Exchange Commission, 

138 S. Ct. 2044 (2018) and which provides in pertinent part:

The Appeals Council will grant the claimant’s request for review in cases 

where the claimant: (1) Timely requests Appeals Council review of an ALJ’s 

decision or dismissal issued before July 16, 2018; and (2) raises before us 

(either at the Appeals Council level, or previously had raised at the ALJ level) 

a challenge under the Appointments Clause to the authority of the ALJ who 

issued the decision or dismissal in the case.

Here, the ALJ’s decision was issued before July 16, 2018 (i.e., on May 4, 2018) and 

plaintiff did timely request review of that decision on May 29, 2018. However, the first 

time plaintiff raised a challenge under the Appointments Clause to the authority of the ALJ 

was on February 26, 2019, nearly two weeks after the Appeals Council had issued its final 

decision declining further review. (See AR 39-40.) The Court concurs with the 

Commissioner that, by then, the window for raising any such challenge and triggering the 

application of SSR 19-1p was closed. Indeed, the Court deems plaintiff’s failure to reply 

to the Commissioner’s contention regarding the inapplicability of SSR 19-1p as a 

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concession to the correctness of the Commissioner’s position on plaintiff’s first claim of 

error.

Plaintiff’s second claim of error is a straight Appointments Clause claim premised 

on the Supreme Court’s decision in Lucia. There, the Supreme Court held that ALJs of the 

Securities and Exchange Commission (“SEC”) are “Officers of the United States,” and 

therefore subject to the Appointments Clause of the Constitution. Lucia, 138 S. Ct. at 2055. 

The Court stated that “‘one who makes a timely challenge to the constitutional validity of 

the appointment of an officer who adjudicates his case’ is entitled to relief.” Id. (quoting 

Ryder v. United States, 515 U.S. 177, 182-83 (1995)). The Supreme Court reasoned that 

Lucia was entitled to a new hearing before a different constitutionally-appointed SEC ALJ 

because he had made a “timely challenge to the constitutional validity of the appointment 

of [the] officer who adjudicate[d] his case.” Id. The Court determined that Lucia’s 

challenge was timely because he had “contested the validity of [the ALJ’s] appointment 

before the Commission, and continued pressing that claim in the Court of Appeals and this 

Court.” Id.

The consensus of the Circuit Courts, including the Ninth Circuit, is that 

Appointments Clause challenges are nonjurisdictional and may be waived or forfeited if 

not timely asserted during the administrative proceedings. See, e.g., Turner Bros., Inc. v. 

Conley, 757 F. App’x 697, 700 (10th Cir. 2018); Kabani & Co., Inc. v. SEC, 733 F. App’x 

918, 919 (9th Cir. 2018); Jones Bros., Inc. v. Sec’y of Labor, 898 F.3d 669, 678 (6th Cir. 

2018); N.L.R.B. v. RELCO Locomotives, Inc., 734 F.3d 764, 798 (8th Cir. 2013); see also 

Intercollegiate Broad. Sys. v. Copyright Royalty Bd., 574 F.3d 748, 755-56 (D.C. Cir. 

2009) (declining to address Appointments Clause challenge to the Copyright Royalty 

Board members raised in supplemental briefing because it was “untimely”).

Notwithstanding the foregoing authority, plaintiff disputes that her failure to timely 

raise the Appointments Clause issue at the Appeals Council level results in forfeiture of 

that issue. Plaintiff bases this position on the Supreme Court’s holding regarding issue 

exhaustion in Sims v. Apfel, 530 U.S. 130 (2000). (See ECF No. 12-1 at 12-14.)

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In Meanel v. Apfel, 172 F.3d 1111 (9th Cir. 1999), a decision pre-dating Sims, the 

Ninth Circuit held that a claimant “must raise all issues and evidence at their 

administrative hearings in order to preserve them on appeal.” Id. at 1115 (emphasis 

added). In Sims, the Supreme Court held that claimants need not “exhaust issues in a 

request for review by the Appeals Council in order to preserve judicial review of those 

issues.” Sims, 530 U.S. at 111. However, earlier in the decision, the Supreme Court 

explicitly noted that “[w]hether a claimant must exhaust issues before the ALJ is not before 

us.” See id. at 107. In Shaibi v. Berryhill, 883 F.3d 1102 (9th Cir. 2017), a case decided 

after Sims, the Ninth Circuit stated that “[i]n light of the Court’s express limitation on its 

holding in Sims, we cannot say that that holding is ‘clearly irreconcilable’ with our decision 

in Meanel, and Meanel therefore remains binding on this court with respect to 

proceedings before an ALJ.” Id. at 1109 (emphasis added). 

Here, plaintiff did not raise her Appointments Clause objection/challenge in front of 

the ALJ and, as discussed above, she did not timely raise the issue before the Appeals 

Council. The Court therefore will follow the reasoning of other district courts in this 

Circuit which have rejected Appointments Clause claims post Sims when the challenge was 

not timely made at the administrative level. See, e.g., Samuels v. Comm’r of Soc. Sec., 

2019 WL 4479534, at *5 (N.D. Cal. Sept. 18, 2019); Camilli v. Berryhill, 2019 WL 

3412921, at *13 (N.D. Cal. July 29, 2019); Morrow v. Berryhill, 2019 WL 2009303, at *3-

*4 (N.D. Cal. May 7, 2019); Allen v. Berryhill, 2019 WL 1438845, at *13 (N.D. Cal. Mar. 

31, 2019); Delores A v. Berryhill, 2019 WL 1330314, at *10 (C.D. Cal. Mar. 25, 2019);

Dierker v. Berryhill, 2019 WL 246429, at *3-*4 (S.D. Cal. Jan. 16, 2019), Report and 

Recommendation adopted by 2019 WL 446231 (S.D. Cal. Feb. 5, 2019); Hugues v. 

Berryhill, 2018 WL 3239835, at *2 n.2 (C.D. Cal. July 2, 2018).

//

//

//

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B. Reversal is not warranted based on the ALJ’s finding that plaintiff’s mental 

impairments were nonsevere.

As part of her fourth claim of error, plaintiff is challenging the ALJ’s finding at step 

two of the sequential evaluation process that plaintiff’s depression and anxiety were 

nonsevere.3

Step two of the Commissioner’s sequential evaluation process requires the ALJ to 

determine the medical severity of the claimant’s medically determinable impairments. See

20 C.F.R. § 404.1520(a)(4)(ii). The Social Security Regulations and Rulings, as well as 

case law applying them, discuss the step two severity determination in terms of what is 

“not severe.” Under the Commissioner’s regulations, an impairment is not severe “if it 

does not significantly limit [the claimant’s] physical or mental ability to do basic work 

activities.” See 20 C.F.R. § 404.1522(a). SSR 85-28 clarified that this means “an 

impairment is not severe if it has no more than a minimal effect on an individual’s physical 

or mental ability(ies) to do basic work activities.” See also Webb v. Barnhart, 433 F.3d 

683, 686 (9th Cir. 2005). Basic work activities are “the abilities and aptitudes necessary 

to do most jobs,” including mental activities such as understanding, carrying out, and 

remembering simple instructions; use of judgment; responding appropriately to 

supervision, co-workers, and usual work situations; and dealing with changes in a routine 

work setting. See 20 C.F.R. § 404.1522(b); see also SSR 85-28. 

The Ninth Circuit has described step two as “a de minimis screening device to 

dispose of groundless claims.” See Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996); 

see also Webb, 433 F.3d at 687.

The fallacy of plaintiff’s claim that the ALJ erred in his nonseverity finding is that 

plaintiff is not focusing on the actual basis for the ALJ’s finding. Under the 

 

3

In her fourth claim of error, plaintiff also contends that the ALJ erred in not including 

mental limitations he found credible in his RFC determination or hypothetical to the VE. 

The Court will address this separate contention in Section D below.

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Commissioner’s regulations, to determine whether a claimant has a severe mental

impairment at step two, an ALJ must follow a “special technique.” See 20 C.F.R. §

404.1520a(a).4 This entails the following steps: determining whether the claimant has any

medically determinable mental impairments; rating the degree of functional limitation 

resulting from the mental impairment(s) in four broad functional areas; determining the 

severity of the mental impairment(s); and then, if any of the mental impairments is severe, 

proceeding to step three of the sequential evaluation process. See 20 C.F.R. § 

404.1520a(b)-(d). 

The four broad functional areas are: understand, remember, or apply information; 

interact with others; concentrate, persist, or maintain pace; and adapt or manage oneself. 

See 20 C.F.R. § 404.1520a(c)(3). In rating the degree of limitation in these areas, the 

following five-point scale is utilized: None, mild, moderate, marked, and extreme. See 20

C.F.R. § 404.1520a(c)(4). Under the Commissioner’s regulations, if the degrees of 

limitation are rated as “none” or “mild,” the impairment generally is considered not severe, 

“unless the evidence otherwise indicates that there is more than a minimal limitation in 

your ability to do basic work activities.” See 20 C.F.R. § 404.1520a(d)(1).

Here, the ALJ’s decision reflects that he followed the “special technique.” He 

acknowledged that plaintiff had been diagnosed with major depressive disorder and been 

treated with medications, including medications for anxiety. (See AR 20.) The ALJ then 

proceeded to rate the degree of functional limitation resulting from plaintiff’s mental 

impairments in the four broad functional areas. 

 

4 The Court notes that the Social Security Agency revised the medical criteria used to 

evaluate claims involving mental disorders in a revised version of 20 C.F.R. § 404.1520a 

effective January 17, 2017. The revised version applies to ALJ decisions issued after that 

date. See 81 Fed. Reg. 66138-01, at 66138 n.1 (Sept. 26, 2016). Since the ALJ decision 

here was issued on May 4, 2018, all references herein to 20 C.F.R. § 404.1520a will refer 

to the revised version.

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With respect to the first broad functional area (i.e., understanding, remembering or 

applying information), the ALJ found that plaintiff had no limitations. In support of this 

finding, the ALJ noted that the record did not include any evidence of an intellectual 

disability and that plaintiff had completed high school, obtained a cosmetology license, 

and owned her own business. Additionally, the ALJ noted that, on mental status 

examination, plaintiff’s thought process, insight, judgment, and memory had been intact. 

(AR 21.)

With respect to the second broad functional area (i.e., interacting with others), the 

ALJ found that plaintiff had mild limitations. In support of this finding, the ALJ noted 

that, on mental status examination, plaintiff had retained a normal eye contact, and had 

been cooperative, demonstrating ability to relate to others. The ALJ also noted that the 

record included no clinical findings that would demonstrate any difficulties getting along 

with others. However, in a functional report to social security, plaintiff had reported 

isolating herself, doing no social activities, and not getting along with family. The ALJ 

reconciled the clinical findings with plaintiff’s report by finding mild limitations in this 

area of functioning. (AR 21-22.)

With respect to the third broad functional area (i.e., concentrating, persisting, or 

maintaining pace), the ALJ found that plaintiff had mild limitations. In support of this 

finding, the ALJ noted that plaintiff had reported being able to pay attention for a couple 

of hours, feeling overwhelmed, and not being able to perform tasks like she used to. 

However, on mental status examination, she had been noted as having no difficulties with 

concentrating or focus and the record did not include any other clinical findings showing 

difficulty in completing tasks. Plaintiff also had reported watching television daily. The 

ALJ reconciled plaintiff’s allegations with the clinical evidence by finding mild limitations 

in this area of functioning. (AR 22.)

With respect to the fourth broad functional area (i.e., adapting or managing oneself), 

the ALJ found that plaintiff had mild limitations. In support of this finding, the ALJ noted 

that he considered a claimant’s ability to regulate emotions, control behavior, and maintain 

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well-being in work settings in this area of functioning. He noted that evidence indicated 

that plaintiff had presented as well groomed at appointments, demonstrating ability to 

maintain personal hygiene and attire appropriate to a work setting. Plaintiff also had 

reported independently doing her laundry, preparing her meals, shopping, and watering 

outdoor plants. However, because she had reported anxiety with panic attacks and had had 

a suicidal incident, the ALJ found mild limitations in this area of functioning. (AR 22.)

Because they caused no more than “mild” limitations in the four broad functional 

areas, the ALJ found that plaintiff’s medically determinable mental impairments were 

nonsevere. (See AR 22.)

Nowhere in the section of plaintiff’s summary judgment motion challenging this 

nonseverity finding does plaintiff address the ALJ’s findings with respect to the four broad 

functional areas or the ALJ’s reasoning in support of those findings. (See ECF No. 12-1 at 

17-20.) The Court finds that the ALJ’s findings with respect to the four broad functional 

areas are based on a rational interpretation of the evidence. The Court further finds that 

this is not an instance where the medical evidence otherwise indicates that there is more 

than a minimal limitation in plaintiff’s ability to do basic mental work activities. While 

plaintiff was prescribed a medication for anxiety, multiple examinations by plaintiff’s 

treating medical providers during the period subsequent to the alleged onset date reflect 

normal psychiatric findings. Indeed, plaintiff more than once denied experiencing any 

psychiatric symptoms. (See, e.g., AR 516, 720, 745, 801, 803, 812, 816, 925.) 

Accordingly, the Court has no basis for finding that the ALJ erred in finding that plaintiff’s 

medically determinable mental impairments were nonsevere.

C. Reversal is not warranted based on the ALJ having the ME testify at the 

beginning of the administrative hearing.

Plaintiff’s third claim of error is that the ALJ violated Agency policy by having the 

ME testify at the beginning of the administrative hearing, before plaintiff testified. This 

claim is based on the Social Security Agency’s internal policy manual, the Hearings, 

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Appeals, and Litigation Manual (“HALLEX”), and specifically § I-2-6-70(b) which 

provides in pertinent part:

The ME may attend the entire hearing, but this is not required. If the ME was 

not present to hear pertinent testimony, such as testimony regarding the 

claimant's current medications or sources and types of treatment, the ALJ will 

summarize the testimony for the ME on the record. If additional medical 

evidence is received at the hearing, the ALJ will provide it to the ME for 

review before the ME testifies.

In his cross-motion, the Commissioner does not dispute that the ME’s testimony at 

the administrative hearing preceded plaintiff’s testimony and thus the ME was unaware of 

plaintiff’s testimony when he rendered his opinions. Rather, the Commissioner contends 

that reversal is not warranted based on this alleged error because the Ninth Circuit has held 

that HALLEX does not give rise to any legally enforceable rights. (See ECF No. 13-1 at 

17, citing Roberts v. Comm’r of Soc. Sec. Admin., 644 F.3d 931, 933 (9th Cir. 2011) and

Lockwood v. Comm’r Soc. Sec., 616 F.3d 1068, 1072 (9th Cir. 2010).)

Plaintiff maintains in her reply brief that the Commissioner’s reliance on Roberts

and Lockwood is misplaced because those decisions pre-date the promulgation of SSR 13-

2p in 2013. According to plaintiff, SSR 13-2p made the HALLEX binding on ALJs as a 

matter of explicit agency policy. (See ECF No. 14 at 7-8.)

The Court notes that, even after the promulgation of SSR 13-2p on February 20, 

2013, the Ninth Circuit has continued to cite Roberts and Lockwood for the proposition 

that the Agency’s internal policy manuals such as HALLEX do not give rise to any legally 

enforceable rights. See, e.g., Wilson v. Berryhill, 732 F. App’x 504, 507 (9th Cir. 2018);

Withrow v. Colvin, 672 F. App’x 748, 749 (9th Cir. 2017); Whitten v. Colvin, 642 F. App’x 

710, 713 (9th Cir. 2016); Durden v. Colvin, 546 F. App’x 690, 690-91 (9th Cir. 2013). 

Moreover, the contention that SSR 13-2p overrides the holdings of Roberts and Lockwood

has been rejected by other district courts in this Circuit, including another court in this 

district. See Elias v. Comm’r of Soc. Sec. Admin., 2019 WL 4296779, at *3 (D. Ariz. Sept. 

11, 2019); Hanh L. v. Comm’r, Soc. Sec. Admin., 2019 WL 5858187, at *5 (D. Or. July 23, 

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2019), Report and Recommendation Adopted by 2019 WL 5858182 (D. Or. Sept. 3, 2019);

Hollen v. Comm’r of Soc. Sec., 2017 WL 1075194, at *8-*9 (S.D. Cal. Mar. 22, 2017); 

Martinez v. Colvin, 2016 WL 270911, at *5 (D. Or. Jan. 20, 2016). 

Indeed, in Hollen, 2017 WL 1075194, at *8-*9, the Southern District of California 

case, the plaintiff likewise was arguing that the ALJ had erred by failing to follow a 

HALLEX procedure for procuring testimony from a medical expert and that Lockwood no 

longer was binding as it was decided prior to SSR 13-2p. In rejecting the plaintiff’s 

position, the district judge reasoned as follows:

“HALLEX does not impose judicially enforceable duties on either the 

ALJ or this court.” Lockwood, 616 F.3d at 1072. No authority has ever found 

the Ninth Circuit’s position on HALLEX was overturned, and Plaintiff’s 

assertion that SSR 13-2P mandates that ALJs follow HALLEX procedures is 

erroneous.

“Social Security Rulings ‘represent ... statements of policy and 

interpretations ... [but] do not carry the ‘force of law.”’ Bray, 554 F.3d at 

1224. Rather, they are only binding as far as the interpretation is applicable 

to the facts underlying an ALJ’s decision. Id.

Despite Plaintiff’s arguments to the contrary, SSR 13-2P carries no 

substantive policy interpretations applicable to the facts of her case. Rather, 

SSR 13-2P is a policy ruling clarifying how the Agency determines ‘whether 

drug addiction is a contributing factor material to the determination of 

disability.’ 78 Fed. Reg. 11939, 11941 (Mar. 22, 2013). As Plaintiff does not 

claim the ALJ improperly applied the Plaintiff’s drug or alcohol dependence 

in his disability determination, SSR 13-2p is not binding. See Martinez v. 

Colvin, Case No. 14cv1703-MC, 2016 WL 1054497, at *5 (D. Or. Jan. 20, 

2016) (“Plaintiff made no claims that there were misinterpretations of policies 

relating to drug addiction and alcoholism in this case. Therefore, SSR 13-2P 

is inapplicable here and does not change this Court's application of 

Lockwood.”).

Accordingly, as SSR 13-2P does not mandate the ALJ follow HALLEX 

procedures, the ALJ did not err by refusing to summarize Plaintiff’s subjective 

testimony for the ME.

The Court concurs with the foregoing reasoning. Accordingly, the Court finds that 

reversal is not warranted based on the ALJ’s alleged error in having the ME testify at the 

beginning of the administrative hearing, before plaintiff testified.

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D. The Court is unable to affirm the ALJ’s RFC determination because (a) the 

ALJ failed to properly consider the limiting effects of plaintiff’s mental 

impairments in his determination of plaintiff’s RFC; (b) the ALJ failed to 

consider whether plaintiff had any physical functional limitations as a result of 

her right arm lymphedema based on his erroneous finding that plaintiff’s right 

arm lymphedema was not a medically determinable impairment; (c) the ALJ 

should have developed the record further with respect to plaintiff’s obesity; and 

(d) the ALJ should have developed the record further with respect to plaintiff’s 

hearing loss.

For the following four reasons, the Court is unable to affirm the ALJ’s RFC 

determination. It follows that the Court also is unable to affirm the ALJ’s vocational 

determination at step four of the sequential evaluation process.

1. The ALJ failed to properly consider the limiting effects of plaintiff’s mental 

impairments in his determination of plaintiff’s RFC.

As part of her fourth claim of error, plaintiff contends that the ALJ erred in not 

including the mild mental limitations he found credible at step two of the sequential 

evaluation process in his RFC determination or his hypothetical questions to the VE. (See

ECF No. 12-1 at 20-21.) 

In assessing a claimant’s RFC, an ALJ must consider the limiting effect of all 

impairments, including those that are nonsevere. See 20 C.F.R. § 404.1545(a)(2). In 

Hutton v. Astrue, 491 F. App’x 850 (9th Cir. 2012), the ALJ determined at step two that 

the claimant’s PTSD caused mild limitations in concentration, persistence or pace, but was 

nonsevere. Hutton, 491 F. App’x at 850. The ALJ later explicitly excluded consideration 

of the claimant’s PTSD in making his determination of the claimant’s RFC because he 

found that the claimant lacked credibility. In holding that the ALJ had erred, the Ninth 

Circuit reasoned: “[W]hile the ALJ was free to reject Hutton's testimony as not credible, 

there was no reason for the ALJ to disregard his own finding that Hutton's nonsevere PTSD 

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caused some “mild” limitations in the areas of concentration, persistence, or pace.” Hutton, 

491 F. App’x at 851.

Numerous courts in this Circuit have followed Hutton and found reversible error 

where the ALJ failed to include mild mental limitations in the assessment of the claimant’s

RFC. See, e.g., Carlson v. Berryhill, 2019 WL 1116241, at *17-*18 (N.D. Cal. Mar. 10, 

2019); Barrera v. Berryhill, 2018 WL 4216693, at *4-*5 (C.D. Cal. Sept. 5, 2018); Gates 

v. Berryhill, 2017 WL 2174401, at *2 (C.D. Cal. May 16, 2017); Smith v. Colvin, 2015 WL 

9023486, at *8-*9 (N.D. Cal. Dec. 16, 2015); Kramer v. Astrue, 2013 WL 256790, at *2-

3 (C.D. Cal. Jan. 22, 2013). Other courts have found Hutton to be inapplicable where the 

record demonstrates that the ALJ did consider a claimant’s nonsevere mental impairments 

before concluding that they did not cause any significant limitation necessitating inclusion 

in the RFC. See, e.g., Thompson v. Saul, 2019 WL 3302471, at *7 (E.D. Cal. July 23, 

2019); George A. v. Berryhill, 2019 WL 1875523, at *3-*5 (C.D. Cal. Apr. 24, 2019); 

Lindsay v. Berryhill, 2018 WL 3487167, at *6 (C.D. Cal. July 18, 2018); Aranda v. 

Berryhill, 2017 WL 3399999, at *5-*6 (C.D. Cal. Aug. 8, 2017).

In the Court’s view, this case falls squarely under Hutton. The ALJ here found mild 

limitations in three of the four broad functional areas: interacting with others; 

concentrating, persisting, or maintaining pace; and adapting or managing oneself. Based 

on these findings and his finding of no limitation in the other broad functional area, the 

ALJ determined that plaintiff’s medically determinable mental impairments were 

nonsevere. However, the ALJ acknowledged that the mental RFC assessment used at steps 

four and five of the sequential evaluation process “requires a more detailed assessment by 

itemizing various functions contained in the broad categories found in paragraph B of the 

adult mental disorders listings.” (See AR 22, citing SSR 96-8p.) Notwithstanding this 

acknowledgement, the ALJ discussed plaintiff’s mental impairments only in connection 

with Finding No. 4 (severity) of his decision. (See AR 20-23.) The decision does not 

contain any discussion or reflect any reasoned consideration of the mild limitations caused 

by plaintiff’s mental impairments in connection with Finding No. 6 (RFC). (See AR 24-

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27.) Nor does the decision contain any discussion or reflect any reasoned consideration of 

the mild limitations caused by plaintiff’s mental impairments in connection with Finding

No. 7 (past relevant work). (See AR 27-28.) The ALJ’s boilerplate assertion in connection 

with Finding No. 4 that his RFC assessment “reflects the degree of limitation I have found 

in the ‘paragraph B’ mental function analysis” was not sufficient. See Delia v. Saul, 2019 

WL 4601834, at *8 (D. Idaho Sept. 23, 2019); Gates, 2017 WL 2174401, at *3 (rejecting

the Commissioner’s argument that one can “infer” that the ALJ considered plaintiff’s mild 

mental limitations as inconsistent with Hutton); cf. Curtis v. Comm’r of Soc. Sec., 584 F. 

App'x 390, 391 (9th Cir. 2014) (“Although the ALJ wrote that he considered ‘[a]ll 

impairments, severe and non-severe,’ in determining [the claimant’s] residual functional 

capacity (RFC), we are unable to determine on the record before us whether the ALJ 

adequately considered [the claimant’s] mental health limitations.”). 

Thus, the ALJ plainly erred. Moreover, the Court is unable to find that the error was 

“inconsequential to the ultimate nondisability determination” and therefore harmless. See

Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012). The Court cannot determine what 

the result would have been if the ALJ had properly considered plaintiff’s mild mental 

limitations when assessing her RFC. Since the ALJ did not include in any of his 

hypotheticals to the VE any functional limitations relating to plaintiff’s mild mental 

limitations (see AR 72-75), the Court also cannot determine how the VE would have 

testified had any such limitations been included in the hypotheticals posed.

2. The ALJ failed to consider whether plaintiff had any physical functional 

limitations as a result of her right arm lymphedema based on his erroneous 

finding that plaintiff’s right arm lymphedema was not a medically 

determinable impairment.

In connection with Finding No. 4 (severity) of his decision, the ALJ acknowledged 

that plaintiff had complained of lymphedema. However, the ALJ stated that he did not 

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consider lymphedema in his RFC determination because it was not a medically 

determinable impairment. (See AR 23.)

As part of her fifth claim of error, plaintiff contends that the ALJ erred in finding 

that plaintiff’s right arm lymphedema was not a medically determinable impairment and in 

failing to adopt any functional limitations related to this impairment. (See ECF No. 12-1 

at 21-22.) The Court concurs that the ALJ erred in finding that plaintiff’s right arm 

lymphedema was not a medically determinable impairment. Plaintiff’s treatment notes 

reflect a finding on physical examination of “mild lymphedema in her right arm.” (See AR 

502.)

Thus, the question becomes whether the ALJ’s error was harmless. As noted above, 

under the Commissioner’s regulations, an ALJ must consider the limiting effect of all 

impairments in assessing a claimant’s RFC, including those that the ALJ assessed as

nonsevere. Here, plaintiff testified at the administrative hearing about functional 

limitations caused by her lymphedema, such as difficulty gripping things and the inability 

to carry anything with her right arm. (See AR 61-63, 67-68.) However, the ALJ’s decision 

does not contain any discussion or reflect any reasoned consideration of that testimony or 

of plaintiff’s right arm lymphedema in connection with his RFC determination and the 

ALJ’s RFC determination did not include any functional imitations relating to plaintiff’s 

use of her right arm. (See AR 24-27.) While the ALJ’s third hypothetical to the VE did 

include functional limitations due to plaintiff’s lymphedema in her right dominant hand

(see AR 74), those limitations did not completely comport with the functional limitations 

caused by her lymphedema about which plaintiff had testified. Accordingly, the Court is 

unable to find that this error by the ALJ was harmless.

3. The ALJ should have developed the record further with respect to plaintiff’s 

obesity.

As part of her fifth claim of error, plaintiff also contends that, in light of his step two 

finding that plaintiff’s obesity constituted a severe impairment and the ME’s 

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acknowledgment at the administrative hearing that plaintiff would have postural limitations 

because of her obesity (see AR 50), the ALJ erred when he failed to adopt any postural 

limitations relating to plaintiff’s obesity. (See ECF No. 12-1 at 23-24.) In response, the 

Commissioner disputes that the ALJ failed to account for plaintiff’s obesity in his RFC 

determination. The Commissioner notes in this regard that the ALJ assessed a restrictive 

RFC that “limited [p]laintiff’s walking standing, sitting, postural, and environmental 

capacities”; and that, contrary to plaintiff’s contention, the ALJ’s RFC determination did 

include specific postural limitations. The ALJ limited plaintiff to only “frequent” climbing 

of stairs, kneeling, crouching, and crawling. This meant that plaintiff could perform these 

postural activities no more than one to two-thirds of the workday. (See ECF No. 13-1 at 

23-24, citing SSR 83-10 for the definition of “frequent.”)

In Social Security cases, the ALJ has a special, independent duty to develop the 

record fully and fairly and to assure that the claimant’s interests are considered, and this 

special duty exists even when the claimant is represented by counsel. See, e.g., Garcia v. 

Comm’r of Soc. Sec., 768 F.3d 925, 930 (9th Cir. 2014); Tonapetyan v. Halter, 242 F.3d 

1144, 1150 (9th Cir. 2001); Smolen, 80 F.3d at 1288; Brown v. Heckler, 713 F.2d 441, 443 

(9th Cir.1983). “The ALJ must develop the record when there is ambiguous evidence or 

when the record is inadequate to allow for proper evaluation of the evidence.” McLeod v. 

Astrue, 640 F.3d 881, 885 (9th Cir. 2011) (quoting Mayes v. Massanari, 276 F.3d 453, 

459-60 (9th Cir. 2001)). Moreover, “[a] specific finding of ambiguity or inadequacy of the 

record is not necessary to trigger this duty to inquire, where the record establishes 

ambiguity or inadequacy.”). McLeod, 640 F.3d at 885. 

Here, at step two of the sequential evaluation process, the ALJ found, based on the 

medical evidence of record, that one of plaintiff’s severe impairments was her obesity. As 

discussed above, under the Commissioner’s regulations, an impairment is severe only if it 

significantly limits the claimant’s physical or mental ability to do basic work activities. 

See 20 C.F.R. § 405.1522(a) (emphasis added). Basic work activities include “[p]hysical 

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functions such as walking, standing, sitting, lifting, pushing, pulling, reaching, carrying, or 

handling.” See 20 C.F.R. § 404.1522(b).

The medical evidence before the ALJ did not include an opinion from any treating 

or examining physician regarding plaintiff’s work-related limitations due to her obesity. 

While the ME acknowledged at the administrative hearing that plaintiff would have 

postural limitations because of her obesity, he did not specify what those postural 

limitations would be and the ALJ did not follow up with any examination of him regarding 

that issue. (See AR 50.) The Court finds that the ALJ’s failure to either follow up with 

plaintiff’s treating doctors or the ME regarding plaintiff’s work-related limitations due to 

her obesity (or order a consultative examination that would have encompassed that issue) 

(a) constituted a violation of the ALJ’s special duty to fully and fairly develop the record,

and (b) resulted in a decision that was not supported by substantial evidence. See, e.g., 

Molina v. Berryhill, 2018 WL 6421287, at *4 (E.D. Cal. Dec. 6, 2018) (holding that ALJ’s 

RFC determination was not supported by substantial evidence when ALJ made her own 

evaluation of the functional limitations caused by the claimant’s diagnosed impairments 

without further developing the record through a consultative examination); de Lopez v. 

Astrue, 643 F. Supp. 2d 1178, 1184 (C.D. Cal. 2009) (holding that ALJ failed in his duty 

to fully and fairly develop the record where the administrative record did not contain any 

opinion by a treating or examining physician regarding the claimant’s RFC); Mendoza v. 

Barnhart, 436 F. Supp. 2d 1110, 1116 (C.D. Cal. 2006) (same); see also Banks v. Barnhart, 

434 F. Supp. 2d 800, 805 (C.D. Cal. 2006) (“[T]he ALJ’s RFC determination or finding 

must be supported by medical evidence, particularly the opinion of a treating or an 

examining physician.”). Absent medical opinion evidence, the ALJ was not qualified to 

make the determination he made. See Day v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 

1975) (recognizing that an ALJ is “not qualified as a medical expert”).

//

//

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4. The ALJ should have developed the record further with respect to plaintiff’s 

hearing loss.

As part of her fifth claim of error, plaintiff also contends that, in light of his step two 

finding that plaintiff’s hearing loss constituted a severe impairment, the ALJ erred in failing 

to adopt any functional limitations relating to that impairment. Plaintiff maintains that the 

ALJ should not have relied upon the testimony of the ME, who acknowledged that he could 

not interpret the audiograms of record. (See ECF No. 12-1 at 22-23, citing AR 51.) 

Plaintiff also contends that the ALJ erred by failing to consider the following statement by 

the Social Security interviewer in her May 28, 2013 Field Office Report (AR 388): “I could 

tell she had a hearing impairment because she asked me to repeat myself a few times and 

she was concentrating on my lips to help her understand what I was saying.” According to 

plaintiff, the ALJ’s failure to even mention the observations of the Social Security 

employee violated his duty under SSR 16-3p to “consider any statements in the record 

noted by agency personnel who previously interviewed the individual.” (See ECF No. 12-

1 at 23.) 

In response, the Commissioner contends that plaintiff’s argument that the ALJ’s 

severity finding compelled limitations in plaintiff’s RFC is incorrect under the regulations 

and Ninth Circuit precedent. (See ECF No. 13-1 at 22-23, citing Hoopai v. Astrue, 499

F.3d 1071, 1076 (9th Cir. 2007) and Bray v. Comm'r of Soc. Sec. Admin., 554 F.3d 1219, 

1228-29 (9th Cir. 2009).) Further, according to the Commissioner, “the ALJ explained 

that while [p]laintiff reported some difficulty in understanding, her hearing loss was noted 

to be ‘mild’ at her most recent examination, she testified that her hearing aids worked well, 

mental-status examinations revealed she had no difficulties in understanding or speaking, 

and the record evidenced limited treatment for hearing, with no further treatment 

recommended by her medical providers.” (ECF No. 13-1 at 23.) Finally, the 

Commissioner contends that the ALJ’s duty under SSR 16-3p to consider statements by 

agency employees did not mean that the ALJ had a duty to explicitly discuss such evidence. 

(See id.)

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The Court will address first the issue of whether reversal is warranted based on the 

ALJ’s alleged violation of his duty under SSR 16-3p. “The ALJ’s general obligation under 

SSR 16-3p to consider statements of agency personnel who interviewed the claimant does 

not impose a duty to discuss every such statement on the records no matter the probative 

value.” Ferdows v. Berryhill, 2018 WL 7501295, at *2 (C.D. Cal. Oct. 10, 2018) (citing

Vincent ex rel. Vincent v. Heckler, 739 F.2d 1393, 1394-95 (9th Cir. 1984)). Rather, the 

ALJ need only explain why “significant probative evidence has been rejected.” See

Vincent, 739 F.2d at 1395. In the Court’s view, the interviewer’s statement and observation 

were probative of whether, during the period relevant to her benefits application (i.e., 

March 2, 2012 through June 30, 2014), plaintiff’s medically determinable impairment of 

hearing loss constituted a severe impairment. And, the ALJ did so find. However, in the 

Court’s view, the interviewer’s statement and observation were not probative of whether, 

when wearing her hearing aids, plaintiff’s hearing impairment prevented her from 

performing any basic work activities or whether plaintiff had any functional limitations 

relating to her hearing impairment. For one thing, it was unclear from the Field Office 

Report whether plaintiff even was wearing hearing aids at the time of the interview. For 

another, plaintiff acknowledged at the administrative hearing that, throughout the year 

2014, which was after the Field Office interview, she had been gainfully employed at a 

diner as a waitress and cashier. (See AR 56; see also AR 374, 381.) Accordingly, the 

Court concurs with the Commissioner that reversal is not warranted based on the alleged 

violation of SSR 16-3p.

As for plaintiff’s other contentions of error relating to her hearing impairment, the 

Court finds that the Commissioner’s reliance on Hoopai and Bray is misplaced. Hoopai is 

inapposite. The issue there was whether satisfaction of the step-two threshold requirement 

that a claimant prove her limitations are severe was dispositive of the step-five 

determination of whether the non-exertional limitations were sufficiently severe such as to 

invalidate the ALJ’s exclusive use of the grids without the assistance of a vocational expert. 

See Hoopai, 499 F.3d. at 1076. Bray is distinguishable. There, the claimant was 

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contending that, after the ALJ found that her adjustment disorder was a severe impairment 

at step two, the ALJ had failed to account for that mental impairment in his final 

construction of her RFC. The Ninth Circuit did observe that Bray had “offer[ed] no 

authority to support the proposition that a severe mental impairment must correspond to 

limitations on a claimant’s ability to perform basic work activities.” See Bray, 554 F.3d at 

1228-29. However, unlike here, the ALJ’s RFC determination in Bray did include a 

functional limitation relating to the severe impairment in question. Moreover, the medical 

evidence of record in Bray included a medical opinion that the Ninth Circuit found 

supported the ALJ’s conclusions that Bray’s mental impairments prevented her from 

completing only the most complex tasks. See id. at 1229.

Here, the medical evidence of record before the ALJ did not include an opinion from 

any treating or examining physician regarding whether plaintiff had any work-related 

limitations due to her hearing loss. Moreover, the Court concurs with plaintiff that the ALJ 

could not properly rely upon the testimony of the ME regarding the severity of plaintiff’s 

hearing impairment, since the ME acknowledged that he could not interpret the audiograms 

of record. The Court also notes that, contrary to the Commissioner’s characterization, the 

ALJ did not state that plaintiff’s hearing loss was noted to be “mild” at her most recent 

examination. Rather, he stated that plaintiff “was assessed as having mild to profound 

bilateral sensorineural hearing loss, relatively symmetric with bilateral intermittent 

tinnitus.” (See AR 25, citing AR 918.) Also contrary to the Commissioner’s 

characterization, the ALJ did not mention plaintiff’s mental-status examinations in his 

discussion of plaintiff’s hearing loss. (See AR 25.) Although plaintiff did respond in the 

affirmative at the administrative hearing, when the ALJ asked if her hearing aids seemed 

to be working pretty well for her (see AR 63), plaintiff also claimed twice that she was 

having some trouble hearing what was being said (see AR 52, 67). And, finally, the fact 

that the record evidenced limited treatment for hearing with no further treatment 

recommended by her medical providers begs the question of whether plaintiff had any 

work-related limitations due to her hearing loss. 

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In the Court’s view, this is another instance of the ALJ failing in his duty to fully 

and fairly develop the record, with the result that ALJ’s RFC determination cannot be found 

to be supported by substantial evidence. 

CONCLUSION AND RECOMMENDATION

The law is well established that the decision whether to remand for further 

proceedings or simply to award benefits is within the discretion of the Court. See, e.g., 

Salvador v. Sullivan, 917 F.2d 13, 15 (9th Cir. 1990); McAllister v. Sullivan, 888 F.2d 599, 

603 (9th Cir. 1989); Lewin v. Schweiker, 654 F.2d 631, 635 (9th Cir. 1981). Remand for 

further proceedings is warranted where additional administrative proceedings could 

remedy defects in the decision. See, e.g., Kail v. Heckler, 722 F.2d 1496, 1497 (9th Cir. 

1984); Lewin, 654 F.2d at 635. Remand for the payment of benefits is appropriate where 

no useful purpose would be served by further administrative proceedings, Kornock v. 

Harris, 648 F.2d 525, 527 (9th Cir. 1980); where the record has been fully developed, 

Hoffman v. Heckler, 785 F.2d 1423, 1425 (9th Cir. 1986); or where remand would 

unnecessarily delay the receipt of benefits to which the disabled plaintiff is entitled, Bilby 

v. Schweiker, 762 F.2d 716, 719 (9th Cir. 1985).

The Court is mindful of Ninth Circuit authority for the proposition that, where an 

ALJ failed to properly consider either subjective symptom testimony or medical opinion 

evidence, it is sometimes appropriate to credit the evidence as true and remand the case for 

calculation and award of benefits. See, e.g., Garrison v. Colvin, 759 F.3d 995, 1019-21 

(9th Cir. 2014). However, in Ghanim v. Colvin, 763 F.3d 1154, 1167 (9th Cir. 2014), a 

case decided after Garrison, another Ninth Circuit panel did not apply or even 

acknowledge the “credit as true” rule where substantial evidence did not support an ALJ’s 

rejection of treating medical opinions and his adverse credibility determination; instead, 

the panel simply remanded the case for further administrative proceedings. And, in Marsh 

v. Colvin, 792 F.2d 1170, 1173 (9th Cir. 2015), the panel did not apply or even 

acknowledge the “credit as true” rule where the ALJ had failed to even mention a treating 

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source’s opinion that the claimant was “pretty much nonfunctional”; instead, the panel 

simply remanded the case to afford the ALJ the opportunity to comment on the doctor’s 

opinions.

Here, even though none of plaintiff’s claims of error is directed to the ALJ’s adverse 

credibility determination, plaintiff conclusorily asserts that the Court “should credit the 

limitations alleged by [plaintiff] as true and award the benefits sought.” (See ECF No. 15 

at 13.) In response, the Commissioner has argued that the proper remedy in the event of 

reversal is a remand for further administrative proceedings. (See ECF No. 16-1 at 14-15.) 

The Court deems plaintiff’s failure to adequately brief the issue of the appropriate remedy 

and failure to even reply to the Commissioner’s legal argument in this regard as a 

concession to the correctness of the Commissioner’s position.

For the foregoing reasons, this Court RECOMMENDS that plaintiff’s motion for 

summary judgment be GRANTED, that the Commissioner’s cross-motion for summary 

judgment be DENIED, and that Judgment be entered reversing the decision of the 

Commissioner and remanding this matter for further administrative proceedings pursuant 

to sentence four of 42 U.S.C. § 405(g).

Any party having objections to the Court’s proposed findings and recommendations 

shall serve and file specific written objections within 14 days after being served with a 

copy of this Report and Recommendation. See Fed. R. Civ. P. 72(b)(2). The objections 

should be captioned “Objections to Report and Recommendation.” A party may respond 

to the other party’s objections within 14 days after being served with a copy of the 

objections. See id.

IT IS SO ORDERED.

Dated: January 21, 2020

_____________________________

ROBERT N. BLOCK

UNITED STATES MAGISTRATE JUDGE

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