JODY KAUFMANN v. KILOLO KIJAKAZI, Acting Commissioner of Social Security
No. 21-35344
United States Court of Appeals for the Ninth Circuit
April 27, 2022
Susan P. Graber, Carlos T. Bea, and Milan D. Smith, Jr., Circuit Judges.
D.C. No. 3:19-cv-05952-DWC; Argued and Submitted March 11, 2022, Portland, Oregon; Opinion by Judge Graber
FOR PUBLICATION
OPINION
Appeal from the United States District Court for the Western District of Washington David W. Christel, Magistrate Judge, Presiding
SUMMARY*
Social Security
The panel affirmed the district court‘s amended judgment in favor of the Commissioner of Social Security, who had denied claimant‘s request for Social Security benefits.
Claimant‘s initial claim for disability benefits was denied by an administrative law judge (“ALJ“) in October 2018 while Nancy Berryhill was the Acting Commissioner of Social Security. In July 2019, the Appeals Council denied claimant‘s appeal while Andrew Saul was Commissioner of Social Security. Claimant then filed this action, and the district court issued an initial order reversing and remanding to the agency. The Commissioner filed a motion under
Claimant challenged the constitutionality of the statute that governed the President‘s removal authority over the Commissioner, and the district court‘s grant of the Commissioner‘s Rule 59(e) motion.
Congress installed as the head of the Social Security Administration a single Commissioner of Social Security, who serves a term of six years.
* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.
Claimant argued, and the Commissioner conceded, that the removal provision violated separation of powers principles and must be severed from the statute. The panel severed the removal provision, and held that the President possessed the authority to remove the Commissioner of Social Security at will.
The final question was the appropriate remedy for claimant, whose appeal to the Appeals Council was denied while Commissioner Saul served under an unconstitutional removal provision. Claimant did not dispute that the ALJ, the members of the Appeals Council, Acting Commissioner Berryhill, and Commissioner Saul all served, at all relevant times, under valid appointments. Consequently, there was no reason to regard any of the actions taken by the agency as void. The panel held that claimant must demonstrate that the unconstitutional provision actually caused her harm. Nothing in the record suggested any link whatsoever between the removal provision and claimant‘s case. The panel disagreed with claimant‘s assertion that the unconstitutional removal provision affected the “expected value” of claimant‘s claim because the Commissioner theoretically could act in more ways than he could have without the removal restriction. The panel noted that if it had agreed with this assertion, it would have required this court to undo all disability decisions made by the Social Security Administration while the removal provision was operative. The panel rejected this. Because claimant did not show that the removal provision caused her any actual harm, the panel upheld the Commissioner‘s decision denying her application for benefits.
district court initially held that the ALJ erred by failing to explain adequately his conclusion that claimant‘s daily activities conflicted with her testimony about the extent of her limitations. Upon the Commissioner‘s filing of a Rule 59(e) motion, the district court concluded that it had clearly erred, and granted the motion. The panel held that because the district court properly concluded that it had clearly erred in its original ruling in favor of claimant, the court‘s granting of the Commissioner‘s Rule 59(e) motion fell within the court‘s considerable discretion. The panel, therefore, affirmed the amended judgment in favor of the Commissioner.
COUNSEL
Christopher H. Dellert (argued) and Jeffrey Baird (argued), Dellert Baird Law Offices PLLC, University Place, Washington; for Plaintiff-Appellant.
Christopher Brackett (argued), Special Assistant United States Attorney; Erin F. Highland, Assistant Regional Counsel; Willy Le, Acting Regional Chief Counsel, Seattle Region X; Kerry Jane Keefe, Assistant United States Attorney; Nicholas W. Brown, United States Attorney; Office of the General Counsel, Social Security Administration, Seattle, Washington; for Defendant-Appellee.
OPINION
GRABER, Circuit Judge:
Claimant Jody Kaufmann timely appeals the district court‘s amended judgment in favor of the Commissioner of Social Security, who had denied Claimant‘s request for Social Security disability benefits. We decide two important issues. First,
FACTUAL AND PROCEDURAL HISTORY
Claimant filed for disability benefits beginning in 2015. An administrative law judge (“ALJ“) presided over a hearing in May 2018. The ALJ denied benefits in a written decision issued in October 2018. The ALJ found that Claimant‘s testimony about the extent of her physical limitations was not credible. The ALJ determined, at step four of the analysis, that Claimant retained the ability to perform her past relevant work as an audit clerk and as a medical records administrator. At the time, Acting Commissioner Nancy Berryhill was the head of the agency.
In July 2019, the Appeals Council denied Claimant‘s appeal without elaboration. At the time, Commissioner Andrew Saul was the head of the agency.
Claimant then filed this action. Claimant challenged, among other rulings, the ALJ‘s analysis of her testimony. Claimant did not assert any constitutional challenges to the district court.
The district court issued an initial order reversing and remanding to the agency. The court held in relevant part that the ALJ had failed to provide an adequate
The Commissioner filed a motion pursuant to
STANDARDS OF REVIEW
“We review de novo the constitutionality of a statute.” United States v. Hansen, 25 F.4th 1103, 1106 (9th Cir. 2022) (quoting United States v. Mohamud, 843 F.3d 420, 432 (9th Cir. 2016)). We review for abuse of discretion the district court‘s ruling on a Rule 59(e) motion. McQuillion v. Duncan, 342 F.3d 1012, 1014 (9th Cir. 2003). We review de novo the district court‘s assessment of the agency‘s determination. Smith v. Kijakazi, 14 F.4th 1108, 1111 (9thCir. 2021). We review for substantial evidence the Commissioner‘s factual findings. Id.
DISCUSSION
Claimant challenges (A) the constitutionality of the statute that governs the President‘s removal authority over the Commissioner and (B) the district court‘s grant of the Commissioner‘s Rule 59(e) motion.
A. The Removal Statute
Title
Claimant forfeited this constitutional argument by failing to raise it to the district court. See Bolker v. Comm‘r, 760 F.2d 1039, 1042 (9th Cir. 1985) (“As a general rule, we will not consider an issue raised for the first time on appeal[.]“); see also United States v. Depue, 912 F.3d 1227, 1232-34 (9th Cir. 2019) (en banc) (explaining the difference between waiver and forfeiture). But we exercise our discretion to reach the issue, which presents a question of law that the parties have fully briefed and argued on appeal. See Bolker, 760 F.2d at 1042 (describing circumstances in which we have reached an issue raised for the first time on appeal); see also Phillips v. E.I. DuPont de Nemours & Co. (In re Hanford Nuclear Rsrv. Litig.), 534 F.3d 986, 1007 (9thCir. 2008) (“We have discretion, however, to overlook any [forfeiture].“).
In Seila Law, 140 S. Ct. 2183, the Court considered the statutory removal provision for the single-member head of the Consumer Financial Protection Bureau (“CFPB“). The statute allowed the President to remove the Director of the CFPB only “for inefficiency, neglect of duty, or malfeasance in office.”
an agency has no basis in history and no place in our constitutional structure.” Id.; see id. at 2201-07 (analyzing in detail historical, structural, and other arguments). Finally, the Court held that the removal provision was severable from the statute. Id. at 2211 (opinion of Roberts, C.J., joined by Alito and Kavanaugh, JJ.); id. at 2245 (Kagan, J., concurring in the judgment with respect to severability and dissenting in part, joined by Ginsburg, Breyer, and Sotomayor, JJ.).
In Collins v. Yellen, 141 S. Ct. 1761 (2021), the Supreme Court considered the similar structure of the Federal Housing Finance Agency (“FHFA“). Congress installed a single Director as the head of the FHFA, and Congress provided that the President may remove the Director only “for cause.”
A straightforward application of our reasoning in Seila Law dictates the result here. The FHFA (like the CFPB) is an agency led by a single Director, and the Recovery Act (like the Dodd-Frank Act) restricts the President‘s removal power.
Collins, 141 S. Ct. at 1784. The Court rejected, as unpersuasive, several proffered distinctions between the agencies; “the Constitution prohibits even ‘modest restrictions’ on the President‘s power to remove the head of an agency with a single top officer.” Id. at 1787 (quoting Seila Law, 140 S. Ct. at 2205).
With that background in mind, we turn to Claimant‘s constitutional challenge. Congress installed as the head of the Social Security Administration a single Commissioner of Social Security, who serves a term of six years.
the President may remove the Commissioner during the six-year term only for “neglect of duty or malfeasance in office.”
But the removal provision is severable from the remainder of the statute. “[O]ne provision of a [statute] may be invalid by reason of its not conforming to the Constitution, while all the other provisions may be subject to no constitutional infirmity.” Seila Law, 140 S. Ct. at 2208 (quoting Loeb v. Trs. of Columbia Twp., 179 U.S. 472, 490 (1900)). We “must sustain [the Act‘s] remaining provisions ‘unless it is evident that the Legislature would not have enacted those provisions independently of that which is
invalid.‘” Free Enter. Fund, 561 U.S. at 509 (quoting New York v. United States, 505 U.S. 144, 186 (1992)) (ellipsis and brackets omitted). The remaining provisions of the Act are capable of fully independent function, and nothing in the text, structure, or history of the statute makes it “evident” that Congress would have preferred, as an alternative to a Commissioner who is removable at will, no Social Security Administration at all. See id. (holding that the severability of a removability provision was “clear” because “[t]he remaining provisions are not incapable of functioning independently, and nothing in the statute‘s text or historical context makes it evident that Congress, faced with the limitations imposed by the Constitution, would have preferred no Board at all to a Board whose members are removable at will.” (citation and internal quotation marks omitted)). In sum, we sever the removal provision and hold that the President possesses the authority to remove the Commissioner of Social Security at will.
The final question, then, is the appropriate remedy for Claimant, whose appeal to the Appeals Council was denied while Commissioner Saul served under an unconstitutional removal provision. The Supreme Court held in Collins that an unconstitutional removal provision does not affect the authority of the underlying agency officials to act. 141 S. Ct. at 1787-88 & n.23. Here, Claimant does not dispute that the ALJ, the members of the Appeals Council, Acting Commissioner Berryhill, and Commissioner Saul all served, at all relevant times, under valid appointments. “As a result, there is no reason to regard any of the actions taken by the [agency] as void.” Id. at 1787.
A party challenging an agency‘s past actions must instead show how the unconstitutional removal provision actually harmed the party—for example, if the President
would have removed the agency‘s head but for the provision or, alternatively, if the agency‘s head “might have altered his behavior in a way that would have benefited” the party. Id. at 1789. Claimant therefore must “demonstrat[e] that the unconstitutional provision actually caused [her] harm.” Decker Coal Co. v. Pehringer, 8 F.4th 1123, 1137 (9th Cir. 2021) (citing Collins, 141 S. Ct. at 1788–89). “Absent a showing of harm, we refuse to unwind the decision[] below.” Id.
Claimant has presented neither evidence nor a plausible theory to show that the
During oral argument, Claimant asserted that the unconstitutional removal provision affected the “expected value” of Claimant‘s claim because the Commissioner theoretically could act in more ways than he could have without the removal restriction. That argument is not
particularized to Claimant; if we agreed, then it would require us to undo all disability decisions made by the Social Security Administration while the removal provision was operative. We reject the argument. As an initial matter, the reasoning is illogical. Even accepting the questionable premise that the Commissioner might act differently with respect to an individual claimant, the Commissioner just as readily might act in a claimant‘s favor as in a claimant‘s disfavor. So, without some evidence of how the Commissioner was inclined to exercise expanded authority with respect to the particular claimant, we fail to see how even the theoretical “expected value” of Claimant‘s case would change. In any event, the argument rests solely on speculation that the Commissioner theoretically might have acted differently. Claimant cannot meet her burden of showing actual harm with speculation alone. Cf. Munns v. Kerry, 782 F.3d 402, 411 (9th Cir. 2015) (holding that speculation cannot satisfy Article III standing requirements).
In sum, we hold that the removal provision in
B. Rule 59(e) Motion
We reject Claimant‘s argument that the district court abused its considerable discretion.1 To the contrary, the
court‘s ruling fell squarely within the Rule‘s parameters. Rule 59(e) permits, if not encourages, a district court to correct its own clear errors. Conservation of judicial resources supports a court‘s confessing error before the issue reaches us.
The district court accurately assessed the bounds of its discretion and acted well within those limits. The court correctly noted that “Rule 59(e) provides an ‘extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources.‘” (Quoting Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003)). And the court recognized that “[t]he Court may alter or amend a judgment under Rule 59(e) where the Court has committed clear error.”
We agree with the Commissioner and the court that, in its original decision, the court clearly erred by overlooking the ALJ‘s full explanation. Looking to the entire record,
substantial evidence supports the ALJ‘s conclusion that Claimant‘s testimony about the extent of her limitations conflicted with the evidence of her daily activities, such as sewing, crocheting, and vacationing, and supports the ALJ‘s finding that Claimant‘s testimony was not fully credible. See, e.g., Ghanim v. Colvin, 763 F.3d 1154, 1165 (9th Cir. 2014) (“Engaging in daily activities that are incompatible with the severity of symptoms alleged can
AFFIRMED.