1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RYAN B., Case No. 23-cv-03644-SI

8 Plaintiff, ORDER REMANDING ACTION FOR 9 v. FURTHER PROCEEDINGS

10 MARTIN O’MALLEY,1 Re: Dkt. Nos. 15, 21 11 Defendant.

12 13 Pursuant to

(g), plaintiff Ryan B. filed this lawsuit for judicial review of the 14 final decision by the Commissioner of Social Security (“Commissioner”) denying his disability benefits claim. Plaintiff moves for summary judgment. Dkt. No. 15 (“Pl.’s Mot.”). In response, 15 the government agrees that remand is appropriate but argues that remand should be for further 16 administrative proceedings rather than for immediate payment of benefits. See Dkt. No. 21 (“Def.’s 17 Mot.”). In his reply brief, plaintiff reiterates that he seeks immediate payment of benefits. Dkt. No. 18 23 (“Reply”). Accordingly, the sole issue on appeal before this Court is the appropriate remedy 19 upon remand. 20

21 BACKGROUND 22 On June 29, 2015, plaintiff protectively filed an application for Disability Insurance Benefits 23 (“DIB”) and Supplemental Security Income (“SSI”) under Titles II and XVI of the Social Security 24 Act. Administrative Record (“AR”) 14, 63, 73. Plaintiff alleged an onset date of May 1, 2004. AR 25 2127. His date last insured is December 31, 2018. AR 15, 2246. His applications were denied 26

27 1 In the case caption, the Court substitutes Martin O’Malley, the current Commissioner of 1 initially and upon reconsideration. AR 14, 88-92, 97-101. Following a November 3, 2017 hearing 2 before Administrative Law Judge (“ALJ”) David LaBarre, plaintiff received an unfavorable 3 decision dated June 6, 2018. AR 11-29. After the Appeals Council denied plaintiff’s review request, 4 plaintiff filed for judicial review. AR 5-10, 2223-2224; see also Ryan B. v. Saul, No. 19-cv-03862- 5 DMR (N.D. Cal. June 25, 2019). In the meantime, on May 21, 2019, plaintiff filed a new application 6 for Title II and Title XVI benefits. AR 2232-2233. 7 In the district court action, the parties stipulated to a voluntary remand, which Judge Ryu 8 approved on January 29, 2020. AR 2280-2284. On April 29, 2020, the Appeals Council issued an 9 order remanding the case to an ALJ and consolidating plaintiff’s claims files. AR 2285-2290. The 10 remand order specified:

11 On remand, the Appeals Council will assign this case to an administrative law judge (ALJ) for a new decision. The Appeals 12 Council will instruct the ALJ to evaluate Plaintiff’s testimony regarding his symptoms in accordance with the requirements of 20

. It will also instruct the ALJ to take further action, as warranted, to complete the administrative record. 14 AR 2281. 15 On March 7, 2023, ALJ LaBarre held a remand hearing. AR 2126, 2159-2194. On April 16 27, 2023, the ALJ issued an unfavorable decision after finding that plaintiff’s “substance use 17 disorder is a contributing factor material to the determination of disability . . . .” AR 2149. Although 18 the ALJ found that plaintiff would be disabled when taking into account his substance abuse 19 disorder, AR 2136, the ALJ went on to find that, if plaintiff stopped the substance use, he would not 20 be disabled.2 AR 2148-2149. Plaintiff therefore was found not entitled to disability benefits under 21 the Social Security Act. This appeal followed. 22

23

24

25 2 The Social Security Act provides that a claimant “shall not be considered to be disabled . . . if alcoholism or drug addiction would . . . be a contributing factor material to the . . . 26 determination that the individual is disabled.”

(d)(2)(C). In determining whether claimant’s drug addiction and alcoholism (“DAA”) is material, the test is whether an individual 27 would still be found disabled if he or she stopped using drugs or alcohol. See 20 C.F.R. 1 LEGAL STANDARD 2 The Social Security Act authorizes an Article III court to review final decisions of the 3 Commissioner.

(g). This Court may enter a judgment affirming, modifying, or 4 reversing the decision of the Commissioner, with or without remanding the case for a rehearing.

5 Factual findings of the Commissioner are conclusive if supported by substantial evidence. 6 Batson v. Comm’r of Soc. Sec. Admin.,

, 1193 (9th Cir. 2001). The Court may set 7 aside the Commissioner’s final decision when that decision is based on legal error or where the 8 findings of fact are not supported by substantial evidence in the record taken as a whole. Tackett v. 9 Apfel,

(9th Cir. 1999). Substantial evidence is “more than a mere scintilla 10 but less than a preponderance.”

. “Substantial evidence means such relevant evidence 11 as a reasonable mind might accept as adequate to support a conclusion.” Molina v. Astrue,

(9th Cir. 2012) (internal quotation marks omitted). To determine whether substantial 13 evidence exists, the Court must consider the record as a whole, weighing both evidence that supports 14 and evidence that detracts from the Commissioner’s conclusion. Tackett,

. “Where 15 evidence is susceptible to more than one rational interpretation,” the ALJ’s decision should be 16 upheld. Burch v. Barnhart,

(9th Cir. 2005). 17 18 DISCUSSION 19 Plaintiff has, among other conditions, severe depression and anxiety, post-traumatic stress 20 disorder, a seizure disorder, leg and back pain, and some cognitive impairment. See, e.g., AR 3196- 21 3197. His treating psychiatrist has diagnosed him at various times with psychotic disorder NOS and 22 depressive disorder NOS. AR 2118, 2890, 2901. When plaintiff was around ten years old, his 23 mother died of a drug overdose. Around that same time, plaintiff was hit by a car and knocked 24 unconscious, with a fractured femur that has left him with leg and back pain. AR 2904, 2912. After 25 this incident, plaintiff began hearing voices, and the voices have continued through the date of his 26 most recent assessment. AR 2904 (report in February 2021 that the voices started after the car 27 accident at age 10), 3191 (reporting in February 2023 that the voices began at age 16 or 17 and that 1 age 15, plaintiff began having seizures. AR 2912. He became homeless around age 18. Around 2 age 21, he began taking prescribed psychotropic medications, which seemed to help, though for 3 various reasons he was not consistent about taking his medication or attending his psychiatric 4 appointments. Plaintiff has been hospitalized on 5150 holds and has a history of possible suicidal 5 ideation. See, e.g., AR 1361 (5150 hold in August 2013), 2246 (possible suicide attempt in February 6 2017). In March 2017, he was stabbed in the abdomen. AR 1677, 3155.3 7 Plaintiff has some work history, working as a home health aide for his godmother for several 8 years around 2010 to 2013, and working for several months for a temp agency in 2022, picking up 9 trash, digging holes, and doing other general labor. AR 36-37, 44-45, 2166, 2168-2169, 2172, 2438- 10 2443, 3155. The temp job ended because the agency did not need more workers and plaintiff had 11 difficulty getting to certain job sites, though plaintiff indicated at the hearing that he would have 12 taken another job if they had offered one close by. AR 2170-2171. Plaintiff also described being 13 let go from a job because he didn’t understand instructions from his supervisor and getting frustrated 14 and walking off a job site because he couldn’t cope with certain supervisors. AR 2171-2173. 15 The record reflects that plaintiff used to drink alcohol regularly and that the alcohol use 16 contributed to his seizures, though at his administrative hearings in November 2017 and again in 17 March 2023 he reported that he had not had alcohol for several years prior. AR 50, 2177. Plaintiff 18 regularly used cannabis throughout the claimed disability period, often reporting that he used it to 19 “self-medicate” and to help him eat, and the record shows no period of sustained abstinence from 20 cannabis use. 21 The record includes medical opinions from: Robert Streett, M.D., plaintiff’s treating 22 psychiatrist, who completed mental impairment questionnaires and short-form evaluations for 23 mental disorders in October 2017, September 2019, January 2020, and April 2020; examining 24 consultant Farah M. Rana, M.D., who conducted an internal medicine evaluation and authored a 25 physical medical source statement in February 2021; examining consultant Aparna Dixit, Psy.D., 26

27 3 Dr. Catlin reported that the stabbing occurred in March 2019, when plaintiff was robbed 1 who conducted a psychological disability evaluation and authored a mental health medical source 2 statement in February 2021; examining consultant Laura Jean Catlin, Psy.D., who completed a 3 psychological disability evaluation report in May 2021; and examining consultant Katherine Wiebe, 4 Ph.D., who authored a psychological report in February 2023. 5 As noted above, because the parties have agreed that remand is appropriate, the question the 6 Court now faces is the remedy upon remand: whether to order immediate payment of benefits or to 7 remand for further proceedings. “When the ALJ denies benefits and the court finds error, the court 8 ordinarily must remand to the agency for further proceedings before directing an award of benefits.” 9 Leon v. Berryhill,

(9th Cir. 2017) (citing Treichler v. Comm’r of Soc. Sec. 10 Admin.,

(9th Cir. 2014)). However, under the credit-as-true rule, the Court 11 may order an immediate award of benefits if three conditions are met. First, the Court asks “whether 12 the ‘ALJ failed to provide legally sufficient reasons for rejecting evidence, whether claimant 13 testimony or medical opinion.’”

(quoting Garrison v. Colvin,

(9th Cir. 14 2014)). Second, the Court must “determine whether there are outstanding issues that must be 15 resolved before a disability determination can be made, . . . and whether further administrative 16 proceedings would be useful.”

(citations and internal quotation marks omitted). Third, the 17 Court then “credit[s] the discredited testimony as true for the purpose of determining whether, on 18 the record taken as a whole, there is no doubt as to disability.”

(citing Treichler,

1101). Even when all three criteria are met, whether to make a direct award of benefits or remand 20 for further proceedings is within the district court’s discretion.

(citing Treichler,

1101). In “rare instances,” all three credit-as-true factors may be met but the record as a whole still 22 leaves doubts as to whether the claimant is actually disabled. Trevizo, 871 F.3d at 683 n.11. In such 23 instances, remand for further development of the record is warranted. Id. 24 25 I. Whether the ALJ Failed to Provide Legally Sufficient Reasons for Rejecting Evidence 26 Here, plaintiff argues in his moving papers that the ALJ failed to provide legally sufficient 27 reasons for discounting the opinions of plaintiff’s treating psychiatrist Dr. Streett and examining 1 By agreeing remand is appropriate, the government implicitly agrees the ALJ’s opinion contains 2 reversible error. Having reviewed the record, including the medical opinions, hearing transcripts, 3 and hearing decisions, the Court agrees with plaintiff that the ALJ failed to provide specific and 4 legitimate reasons to discount the opinions of Drs. Catlin and Wiebe in particular. 5 For claims filed before March 27, 2017, such as plaintiff’s, where a treating or examining 6 physician’s opinion is contradicted by another physician’s opinion, an ALJ may not reject the 7 opinion without “specific and legitimate reasons that are supported by substantial evidence” in the 8 record. Garrison,

; but see Woods v. Kijakazi,

, 790 (9th Cir. 2022) 9 (“the ‘specific and legitimate’ standard is clearly irreconcilable with the 2017 regulations”). “This 10 is so because, even when contradicted, a treating or examining physician’s opinion is still owed 11 deference and will often be ‘entitled to the greatest weight . . . even if it does not meet the test for 12 controlling weight.’” Garrison,

(quoting Orn v. Astrue,

(9th 13 Cir. 2007)). 14 15 A. Examining Psychologist Dr. Catlin 16 Dr. Catlin completed a psychological evaluation report based on a telehealth evaluation 17 conducted in May 2021. AR 3154. Dr. Catlin interviewed plaintiff and conducted a battery of tests. 18 Plaintiff denied any substance use during the evaluation; however, Dr. Catlin reviewed Dr. Dixit’s 19 psychological evaluation from several months earlier in which it was stated that plaintiff “admitted 20 to using and abusing alcohol, marijuana, methamphetamine, cocaine, and hallucinogens since he 21 was a teenager. In the report he admitted to only using marijuana recently.” AR 3156. 22 Dr. Catlin listed the following diagnostic impressions: major depressive disorder, recurrent, 23 moderate; unspecified schizophrenia spectrum and other psychotic disorder; substance/medication 24 induced psychotic disorder – rule out; PTSD; unspecified neurological disorder; polysubstance use 25 disorder – rule out. AR 3159. Dr. Catlin found it was “possible that some of the claimant’s 26 psychotic symptoms are the result of his use of methamphetamine, however, this is difficult to 27 determine because severe depression and trauma can also produce auditory hallucinations and 1 functioning[,]” that plaintiff would “have great difficulty understanding, remembering and/or 2 applying information given to him[,]” and that he would “have difficulty learning new tasks, taking 3 instruction from a manager or supervisor, and difficulty applying the information given to him.”

4 She also noted that his “mental health symptoms will make interacting with others very difficult.” 5

Dr. Catlin found plaintiff would be absent from work four or more days per month and that he 6 would be expected to be “off task” more than 30% of the workday. AR 3163-3164. 7 In assigning plaintiff’s residual functional capacity (“RFC”) in the absence of substance use, 8 the ALJ accepted Dr. Catlin’s opinion regarding the areas in which plaintiff was “moderately” 9 limited but rejected Dr. Catlin’s opinion regarding the areas in which plaintiff’s limitations were 10 “extreme” or “marked.” See AR 2146-2147. The ALJ rejected these portions of Dr. Catlin’s report 11 “because said opinion is not as convincing as the evaluation done by Dr. Dixit (see Ex. 23F), which 12 was done in person, allowing the examiner to make observations based upon being with the claimant 13 in person.” AR 2147. 14 The ALJ went on to discount Dr. Catlin’s opinion because “the claimant denied substance 15 use” to Dr. Catlin, whereas the report from Dr. Dixit “shows that the claimant admitted to using and 16 abusing alcohol, marijuana, methamphetamine, cocaine, and hallucinogens since he was a teenager 17 . . . .”

The ALJ also observed that Dr. Catlin did not define “moderate” and “marked” limitations 18 in accordance with the agency’s definitions and found it “unpersuasive that Dr. Catlin was willing 19 to give such extreme limitations just by one visit over the telephone, especially with drug use 20 involved, as this appears to be advocacy.”

21 Thus, a major reason for rejecting Dr. Catlin’s findings in favor of Dr. Dixit’s was because 22 Dr. Dixit evaluated plaintiff in person rather than by phone. Yet elsewhere in the decision the ALJ 23 discounted Dr. Dixit’s opinion, recognizing that the “longitudinal evidence supports greater 24 limitation.” See AR 2135. Plaintiff argues that Dr. Dixit’s report is an “outlier” in the record, and 25 upon review this Court agrees. For one, as plaintiff notes, the record does not support Dr. Dixit’s 26 report of methamphetamine, cocaine, and hallucinogen use. The record is replete with evidence of 27 plaintiff’s alcohol and marijuana use, but no other assessment, treatment notes, or testimony support 1 Dr. Dixit’s statement that plaintiff has used these other drugs since he was a teenager.4 Additionally, 2 Dr. Dixit erred in reporting plaintiff’s demographics, stating that he had no children and that he 3 graduated from high school. AR 2904. Plaintiff has an eighth or ninth grade education and two 4 children. AR 46, 2164, 3183. Given the inaccuracies and questionable drug history mentioned in 5 Dr. Dixit’s report, the Court finds the fact that Dr. Dixit conducted her assessment in person is not 6 a specific and legitimate reason to discount Dr. Catlin’s findings simply because the latter were 7 based on a telephone assessment. This is particularly so where Dr. Catlin’s report shows that she 8 administered a range of tests and where the report is detailed, well-reasoned, and thorough. The 9 ALJ himself stated that “[t]he examinations and written statements by Dr. Catlin supported her 10 opinion . . . .” AR 2147. 11 Moreover, Dr. Catlin accepted Dr. Dixit’s report regarding substance use and incorporated 12 that substance use history into her own assessment. See AR 3165. For instance, Dr. Catlin opined 13 that it was difficult to determine whether plaintiff’s psychotic symptoms resulted from 14 methamphetamine use or from severe depression and trauma. AR 3161. Thus, to the extent the 15 ALJ rejected Dr. Catlin’s opinion because plaintiff reported no substance use to her, that was not a 16 specific and legitimate reason, where Dr. Catlin incorporated and accounted for the very same drug 17 use history relied on by Dr. Dixit. 18 Finally, Dr. Catlin’s functional assessment used limitation definitions that are more precise 19 than the definitions the agency assessment provides. For instance, Dr. Catlin’s report defines 20 “marked limitation” as “ability to function seriously limited (performance would be expected to be 21 precluded by more than 20%),” where the agency definition states: “There is a serious limitation in 22 this area. There is a substantial loss in the ability to effectively function.” Compare AR 3162 with 23 AR 2908. In such circumstances, the Court agrees with plaintiff that this is not a legitimate reason 24 to reject Dr. Catlin’s findings. 25 26

27 4 At the March 2023 hearing, the ALJ asked, “And when was the last time you did any kind 1 B. Examining Psychologist Dr. Wiebe 2 In February 2023, Katherine Wiebe, Ph.D., conducted a three-hour assessment of plaintiff 3 by phone. AR 3181-3182. Plaintiff reported that he used marijuana since age 16 and that he had 4 last used it about a week before the assessment. AR 3186. He reported abstaining from alcohol for 5 the last 12 years after learning that it caused seizures.

He denied use of any other substances 6 and specifically denied a history of using the substances mentioned by Dr. Dixit: cocaine, 7 methamphetamine, and hallucinogens.

He reported that he still hears voices about every other 8 day. AR 3191. Dr. Wiebe’s report is a detailed, 20-page report in which she chronicles plaintiff’s 9 history, summarizes the reports of prior doctors and examiners, and discusses the results of the 10 numerous tests she administered. 11 Based on Dr. Wiebe’s testing, she found moderate cognitive impairment, severe impairment 12 of memory, moderate to severe impairment in executive functioning, severe impairment in language, 13 and mild to moderate impairment in sensory/motor abilities. AR 3188-3189. Test results indicated 14 severe depression and severe anxiety. AR 3189. Dr. Wiebe found plaintiff’s “MCMI-IV diagnostic 15 profile indicates that he has psychotic disorder symptoms, with severe recurrent depression, severe 16 anxiety, and dysphoria; Posttraumatic Stress Disorder; and possible mood and somatic symptoms. 17 Results also indicate long-term Personality Disorder patterns including Paranoid Personality 18 Disorder, and Schizoid Personality Disorder, with Melancholic and Negativistic Personality Traits.” 19 AR 3196. Among her many diagnostic impressions was rule-out polysubstance use disorder by 20 history. AR 3198. 21 As with Dr. Catlin, the ALJ gave “great weight” to all moderate limitations that Dr. Wiebe 22 assigned but discounted Dr. Wiebe’s opinion where she found that plaintiff would have marked 23 limitations. See AR 2147. In explaining why he was discounting Dr. Wiebe’s findings, the ALJ 24 erroneously stated that “the claimant denied using any other substances other than alcohol.” See

25 This statement is belied by the Wiebe report itself, which notes: “[Plaintiff] reported that first [sic] 26 used marijuana when he was about 16 years old and last used marijuana about one week before this 27 assessment. He said he uses it ‘not often,’ to help with depression and appetite. He reported that 1 which contains other errors—is the only report to state that plaintiff used cocaine, 2 methamphetamine, and hallucinogens. Thus, plaintiff’s denial to Dr. Wiebe that he used any of 3 these substances is consistent with the extensive medical records that lack reference to these drugs. 4 Accordingly, the ALJ’s reason for discounting Dr. Wiebe’s opinion is based on a mis-reading of Dr. 5 Wiebe’s report and is not supported by substantial evidence in the record. 6 The ALJ gave a second reason for assigning only partial weight to some of Dr. Wiebe’s 7 findings: “Dr. Wiebe abruptly diagnosed the claimant, based upon one evaluation, with an 8 unspecified personality disorder, which is unpersuasive because this diagnosis is usually diagnosed 9 over a longer treatment period.” AR 2147. But as plaintiff notes, Dr. Wiebe reviewed numerous 10 other medical opinions and test results reported by treating and examining doctors and herself 11 administered a range of tests and procedures. The Court finds that the ALJ’s assessment that Dr. 12 Wiebe gave an incorrect and “abrupt” diagnosis was an impermissible substitution of his own 13 judgment for that of a doctor. See Nelsen v. Barnhart, No. C 00-2986 MMC,

, at 14 *4 (N.D. Cal. Feb. 4, 2003) (“An ALJ, however, may not substitute his own view of the effects of a 15 mental impairment on a claimant for that of an examining psychologist”) (citations omitted). 16 In sum, the ALJ erred in rejecting the opinions of Dr. Catlin and Dr. Wiebe without providing 17 specific and legitimate reasons supported by substantial evidence. 18 19 II. Whether Further Administrative Proceedings Would Be Useful 20 The Court next asks whether further administrative proceedings would be useful. “In 21 evaluating this issue, we consider whether the record as a whole is free from conflicts, ambiguities, 22 or gaps, whether all factual issues have been resolved, and whether the claimant’s entitlement to 23 benefits is clear under the applicable legal rules.” Treichler,

(9th Cir. 2014) 24 (citing Moisa v. Barnhart,

(9th Cir. 2004)). The government argues there are 25 numerous inconsistencies in the record that remain to be resolved, including questions around 26 whether Dr. Streett knew of plaintiff’s drug use and whether plaintiff’s symptoms abate when the 27 drug use is stopped. 1 not a material factor contributing to his disability. See Parra, 481 F.3d at 745. Here, the Court is 2 unable to find that all factual issues have been resolved where there is no clear medical opinion in 3 the record regarding plaintiff’s limitations if he stopped the marijuana use. Although the reports by 4 Drs. Catlin and Wiebe are thorough and well supported, neither one specifically opines on how 5 plaintiff’s marijuana use impacts his limitations or whether his symptoms would persist even if he 6 stopped using marijuana. The same goes for the reports by treating psychiatrist Dr. Streett, where 7 it is unclear from the face of the reports whether Dr. Streett was aware of the marijuana use or how 8 he took that into account when forming his opinion. See AR 2118-2122, 2890-2903. 9 If any one of these doctors had made the same findings after specifying that they had taken 10 plaintiff’s marijuana use into account and that the findings would not change even if he stopped 11 using marijuana, then this Court would find the record complete and—accepting the improperly 12 discounted opinion(s) as true—the record as a whole would leave no doubt to plaintiff’s disability. 13 But without this key piece regarding whether or how plaintiff’s marijuana use impacted the doctors’ 14 opinions, the Court cannot so find. 15 The Court is less concerned with factual inconsistencies regarding alcohol and the alleged 16 use of drugs besides marijuana. Although plaintiff has inconsistently reported the precise date of 17 his abstinence from alcohol, it is clear from the record, and undisputed by the parties, that plaintiff’s 18 alcohol use triggered his seizures and that he did at some point (perhaps around late 2017, perhaps 19 later) stop using alcohol. Although the frequency of his seizures decreased, they did not stop 20 altogether. See AR 41 (reporting seizures about every 3-4 months, during a period where it appears 21 plaintiff was still using alcohol), 2176-2177 (reporting seizure a year prior, where he reports no 22 alcohol use since three years prior). Given that two administrative hearings and numerous medical 23 examinations have failed to pinpoint precisely when plaintiff stopped drinking alcohol, this Court 24 is not hopeful that a third administrative hearing would elucidate the matter. Further, as discussed 25 above, nothing in the record outside of Dr. Dixit’s report indicates long-term use of drugs besides 26 marijuana.5 27 1 Accordingly, the Court will remand this case on an open record for development of the 2 || record on the question of whether and how plaintiff's marijuana use impacts his symptoms and 3 limitations. On remand, plaintiff shall be given leave to submit a supplemental medical report from 4 || Drs. Streett, Catlin, or Wiebe, or of another medical provider as appropriate, if he wishes to do so. 5 Likewise, the agency shall be given leave, but is not required, to order a further evaluation on the 6 question of plaintiffs marijuana use. The agency may, but is not required to, conduct a further 7 administrative hearing if such a hearing would be useful. The Commissioner shall then render a 8 new decision, incorporating any newly received evidence and re-visiting the medical opinions in 9 light of the findings of error stated in this order. 10 11 CONCLUSION 12 For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART plaintiff’s 5 13 || motion for summary judgment (Dkt. No. 15) and GRANTS defendant’s cross-motion seeking 14 || remand for further proceedings (Dkt. No. 21). The decision of the Commissioner is hereby 3 15 REVERSED and the Court REMANDS this case on an open record pursuant to sentence four of 42 16 || U.S.C. § 405(g) for proceedings consistent with this order.

IT IS SO ORDERED. 19 Dated: September 17, 2024 20 SUSAN ILLSTON United States District Judge 22 23 24 25 26 27 28