Brewes v. Comm'r of Soc. Sec. Admin.

• Decision Date: 14 June 2012
• Docket Number: No. 11–35216.,11–35216.
• Citation: 12 Cal. Daily Op. Serv. 6508,682 F.3d 1157,2012 Daily Journal D.A.R. 7898,180 Soc.Sec.Rep.Serv. 46
• Parties: Mindy BREWES, Plaintiff–Appellant, v. COMMISSIONER OF SOCIAL SECURITY ADMINISTRATION, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

682 F.3d 1157

180 Soc.Sec.Rep.Serv. 46

12 Cal. Daily Op. Serv. 6508

2012 Daily Journal D.A.R. 7898

Mindy BREWES, Plaintiff–Appellant,

v.COMMISSIONER OF SOCIAL SECURITY ADMINISTRATION, Defendant–Appellee.

No. 11–35216.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 9, 2012.

Filed June 14, 2012.

Jeffrey H. Baird (argued), Seattle, WA; Alan Stuart Graf (argued), Summertown, TN, for the appellant.

Dwight C. Holton, United States Attorney; Kelly A. Zusman, Assistant United States Attorney; David Morado, Regional Chief Counsel, Seattle Region X; Jordan D. Goddard (argued), Assistant Regional Counsel, Seattle, WA, for the appellee.

Appeal from the United States District Court for the District of Oregon, Michael R. Hogan, District Judge, Presiding. D.C. No. 6:09–cv–00748–HO.

Before: WILLIAM A. FLETCHER, RAYMOND C. FISHER and JAY S. BYBEE, Circuit Judges.

OPINION

FISHER, Circuit Judge:

Mindy Brewes appeals an order of the district court affirming the Commissioner of Social Security's final decision denying her disability benefits under Title II of the Social Security Act. See42 U.S.C. §§ 401–434. We must decide, among other things, whether the district court should have considered evidence Brewes did not submit to the Administrative Law Judge (ALJ) but submitted for the first time to the Appeals Council, which accepted and considered the new evidence but declined to review the ALJ's decision.

The Commissioner contends that when the Appeals Council denies review of an ALJ's decision, evidence that was not before the ALJ is not part of the administrative record before the district court, even if that evidence was submitted to and accepted by the Appeals Council. We disagree. We hold that when a claimant submits evidence for the first time to the Appeals Council, which considers that evidence in denying review of the ALJ's decision, the new evidence is part of the administrativerecord, which the district court must consider in determining whether the Commissioner's decision is supported by substantial evidence. Considering the record as a whole, including the evidence Brewes submitted to the Appeals Council, we conclude that the Commissioner's decision is not supported by substantial evidence. We reverse and remand for an immediate award of benefits.

Background

Brewes applied for disability benefits in June 2005. She claims that she has been disabled since February 2004 as a result of depression, bipolar disorder, anxiety and agoraphobia.¹

The record before the ALJ catalogued Brewes' medical history from 2002 to 2007. During this period, multiple mental health specialists diagnosed Brewes with some combination of major depressive or bipolar disorder, anxiety disorder, and panic disorder with agoraphobia. In addition to her regular therapy appointments, Brewes' doctors treated her with a battery of psychopharmacological medications. Unfortunately, these regimens were of limited success. Brewes' providers' treatment notes show that she suffered from persistent and severe symptoms that significantly curtailed her daily activities. Brewes often slept 12 hours a day, experienced frequent panic attacks, could not accomplish household chores and rarely left the house because doing so exacerbated her anxiety and panic attacks. When she did go out, she was almost always with her husband. Over the years, Brewes' doctors assigned her Global Assessment of Function (GAF) scores that ranged from a low of 40—indicating major functional impairment in several areas, such as work, family relations, judgment or thinking—to a high of 60, indicating moderate difficulty in social or occupational functioning. See Diagnostic and Statistical Manual of Mental Disorders 34 (rev. 4th ed. 2000).²

Brewes' hearing testimony, in February 2007, was largely consistent with the medical record. Describing her symptoms, Brewes testified,

I have a very hard time with anxiety, constant panic attacks. When it switches from anxiety to depression, I have no will to do anything. I cry all the time. I don't even take care of myself. It's hard to even get up and just take a shower. And when I'm anxious, all I want to do is lay in a ball and try not to freak out.

Brewes explained that she relied on her husband to handle most of the household chores because she became too overwhelmed just thinking about doing them herself. Her day consisted primarily of lying in bed with the television going in the background; she also took her medication, ate and went to doctors appointments. She testified that she rarely left the house, and almost never on her own.

The ALJ denied Brewes' application for disability benefits. He found that she suffered from major depressive disorder, panic disorder with agoraphobia, mixed personality disorder and a history of opioid dependence, all of which qualified as “severe impairments,” but concluded that Brewes' statements concerning the intensity,persistence and limiting effects of her symptoms were “not entirely credible.” He found that Brewes retained the residual functional capacity to perform “simple one-, two-, three-step work with limited interaction with co-workers and no public interaction.” Relying on the testimony of a vocational expert, the ALJ found that such work was available in the national economy for a person of Brewes' age, education and experience. He thus concluded that Brewes was not disabled and denied her application for disability benefits.

Brewes sought Appeals Council review of the ALJ's decision. She submitted additional evidence, which the Appeals Council received and made part of the record. In April 2009, the Council denied Brewes' request for review. It noted that it “considered the additional evidence [and] found that this information [did] not provide a basis for changing the Administrative Law Judge's decision.” Notice of Appeals Council Action 1–2 (Apr. 27, 2009).

Brewes appealed to the district court, which affirmed the denial of benefits. Citing a concurring opinion in an unpublished decision of this court, the district court refused to consider the additional evidence that was before the Appeals Council but not before the ALJ. Brewes timely appealed. We have jurisdiction pursuant to 42 U.S.C. § 405(g) and 28 U.S.C. § 1291.

Standard of Review

We review de novo the district court's judgment upholding the Commissioner's denial of social security benefits. See Vernoff v. Astrue, 568 F.3d 1102, 1105 (9th Cir.2009). We must “independently determine whether the Commissioner's decision (1) is free of legal error and (2) is supported by substantial evidence.” Smolen v. Chater, 80 F.3d 1273, 1279 (9th Cir.1996).

Discussion

I.

To begin, we address whether the district court should have considered the evidence that Brewes submitted for the first time to the Appeals Council. Brewes contends that although this evidence was not before the ALJ, it was properly before the district court because the Appeals Council incorporated it into the administrative record and considered it in deciding not to review the ALJ's decision. The Commissioner, in contrast, argues that the new evidence is not part of the administrative record and that the district court could consider it only if Brewes showed (1) that the evidence was material and (2) that she had good cause for failing to raise it before the ALJ. This question has split the circuits. See Higginbotham v. Barnhart, 405 F.3d 332, 335–36 (5th Cir.2005) (discussing the circuit split).

The Social Security Act provides for federal court review of final decisions of the Commissioner. In such a proceeding, “the Commissioner ... shall file a certified copy of the transcript of the record including the evidence upon which the findings and decision complained of are based.” 42 U.S.C. § 405(g). Based on “the pleadings and transcript of the record,” the court hearing the case may enter “a judgment affirming, modifying, or reversing the decision of the Commissioner ... with or without remanding the cause for a rehearing.” Id.

We have held that we do not have jurisdiction to review a decision of the Appeals Council denying a request for review of an ALJ's decision, because the Appeals Council decision is a non-final agency action. See Taylor v. Comm'r of Soc. Sec. Admin., 659 F.3d 1228, 1231 (9th Cir.2011). When the Appeals Council declines review, “the ALJ's decision becomes the final decision of the Commissioner,” id., and the district court reviews that decision for substantial evidence, based on the record as a whole, see Tackett v. Apfel, 180 F.3d 1094, 1097 (9th Cir.1999). The question, then, “is whether the ‘whole’ record includes ... evidence submitted to the Appeals Council, or just ... evidence that was before the ALJ.” O'Dell v. Shalala, 44 F.3d 855, 858 (10th Cir.1994).

We are persuaded that the administrative record includes evidence submitted to and considered by the Appeals Council. The Commissioner's regulations permit claimants to submit new and material evidence to the Appeals Council and require the Council to consider that evidence in determining whether to review the ALJ's decision, so long as the evidence relates to the period on or before the ALJ's decision. See20 C.F.R. § 404.970(b). ³ Claimants need not show “good cause” before submitting new evidence to the Appeals Council. See id.; see also O'Dell, 44 F.3d at 858. The Council will grant the request for review “if it finds that the administrative law judge's action, findings, or conclusion is contrary to the weight of the evidence currently of record.” 20 C.F.R. § 404.970(b) (emphasis added). “Because the regulations require the Appeals Council to review the new evidence, this new evidence must be treated as part of the administrative record.” Perez v. Chater, 77 F.3d 41, 45 (2d Cir.1996).

In addition, the Commissioner's decision is not final until the Appeals Council denies review or, if it accepts a case for review, issues its own findings on the merits. See20 C.F.R. §§...