Unreported / Non-Citable
Background
Benjamin W. applied for disability insurance benefits and supplemental security income in late 2022, alleging disability beginning March 1, 2019 from ADHD, PTSD, anxiety, depression, dyslexia and dysgraphia. After denials, an ALJ held a hearing in October 2024. He testified that he repeatedly lost jobs because he could not stay on task and that he relies on family for daily tasks. He also testified that marijuana helps regulate his sleep and thoughts, and that during a 90-day period of sobriety before the alleged onset date his anxiety intensified ten-fold. The record shows no sobriety after the alleged onset date.
The ALJ's February 2025 decision found severe impairments including cannabis dependence. With those impairments included, a vocational expert identified no significant jobs, so Plaintiff was disabled. The ALJ then removed the substance use disorder under 42 U.S.C. § 423(d)(2)(C), assessed a less restrictive capacity for simple instructions, no public contact and occasional workplace changes, and found Plaintiff could do light unskilled work. She concluded substance use was material and Plaintiff was not disabled. The Appeals Council declined review.
The Court’s Holding
The Commissioner conceded the ALJ erred in the materiality determination and in analyzing the medical opinions after removing the substance use disorder, and sought remand. Plaintiff sought payment of benefits and argued the Commissioner waived any defense of materiality. The court reversed and remanded for further administrative proceedings because benefits may be awarded only on a fully developed record free of conflicts and ambiguities, and the medical opinions here conflict. It rejected waiver because materiality and the post-removal analysis both turn on the medical opinions the Commissioner addressed. Whether the ALJ's reasoning had substantial evidence support was not before the court.
The court identified unresolved problems with four sources. The ALJ did not explain what in Dr. Chandler's report showed better functioning when sober, though the report recorded that Plaintiff denied any history of drug or alcohol abuse. The residual functional capacity for simple instructions over extended periods also conflicted with Dr. Chandler's view that Plaintiff would have difficulty remembering even simple instructions, and the ALJ did not explain how performance in a structured clinical setting carries over to stressful work. The ALJ did not analyze treating therapist Ms. Baumeister's questionnaire alongside her report based on more than ninety sessions. On remand, missing psychotherapy notes cannot be a reason to discount her opinion, and the ALJ may subpoena them. The ALJ did not address ambiguities in state agency consultant Dr. Posey's opinion, such as unidentified intact abilities and assumed improvement with treatment Plaintiff refuses. Dr. Genece's opinion cited no specific evidence, and the ALJ treated it as consistent with Dr. Chandler's opinion, which supported greater limitations.
Remand is limited to the errors Plaintiff appealed: materiality and the medical opinion analysis after removing the substance use disorder. The court denied the Commissioner's request for a de novo hearing under Brown v. Kijakazi, 11 F.4th 1008 (9th Cir. 2021). It left unchallenged findings favorable to Plaintiff, including the disability finding with substance use included, undisturbed. A separate judgment was to issue.
Key Takeaways
- Materiality under 42 U.S.C. § 423(d)(2)(C) must rest on a coherent analysis of the medical opinions once substance use is removed from the picture.
- Findings from a structured clinical examination do not by themselves show sustained functioning in a stressful workplace without an explanation from the ALJ.
- Under the SSA guidance the court cited, missing psychotherapy notes cannot be a reason to discount a treating therapist's opinion.
- The scope of remand follows the claimant's appeal, and the Commissioner cannot use remand to reopen findings favorable to the claimant.
Why It Matters
This is an unreported district court order, not a precedential opinion, but it applies Brown v. Kijakazi to a common remand dispute and shows how courts treat conflicting mental health opinions. It does not decide that Plaintiff is disabled. The ALJ must reassess on remand, and benefits may still be denied.
Its reasoning relied heavily on the Commissioner's concession of error, which limits its reach in contested cases. Claimants who prevail can nonetheless seek to confine remand to the issues they raised.