N.Z. v. Kijakazi

Background

N.Z. sought judicial review of the Commissioner of Social Security’s final decision denying her applications for disability insurance benefits and supplemental security income. She alleged disability beginning January 27, 2017, based on depression and anxiety. The administrative law judge (ALJ) found severe depressive, anxiety, and alcohol-abuse disorders, but determined that N.Z. was not disabled because she could perform other jobs existing in significant numbers in the national economy.

The ALJ held a hearing on February 4, 2019. N.Z. did not attend, although her representative did. N.Z. later submitted a statement explaining that her phone and personal belongings had been stolen, that she was distracted while trying to replace them, and that she forgot the hearing’s time, place, and her attorney’s contact information. She requested a supplemental hearing so she could testify. Her attorney made additional requests for a supplemental hearing.

The Appeals Council previously remanded the case, directing the ALJ to address whether N.Z. had constructively waived her right to appear. On remand, the ALJ found that she had constructively waived that right based on the hearing notice and agency contact procedures, but did not address her explanation for missing the hearing or her requests for a supplemental hearing. The ALJ again denied benefits. N.Z. then submitted more than 300 pages of treatment records to the Appeals Council, including records from before and after the ALJ’s decision. The Appeals Council declined to consider the evidence, stating that the earlier records would not reasonably change the outcome and that the later records concerned a different period.

Constructive Waiver of the Right to Testify

The court relied on the Social Security agency’s internal hearings manual, known as HALLEX, as persuasive guidance. Under the relevant procedure, when a claimant’s representative appears without the claimant, the ALJ may find a constructive waiver only under specified circumstances, or may send the claimant a request to explain the failure to appear and whether a supplemental hearing should be held. The claimant’s absence alone does not waive the right to appear.

The ALJ proceeded with the hearing rather than immediately making a constructive-waiver finding. The Commissioner conceded that the ALJ therefore should have sent N.Z. a request to show cause for her absence. The court also found that the ALJ failed to evaluate whether N.Z.’s explanation—including the effects of the theft, distraction, and memory problems—established good cause. The ALJ likewise appears to have ignored N.Z.’s requests for a supplemental hearing. The court concluded that these errors raised due-process concerns because N.Z. was not given a meaningful opportunity to be heard.

Additional Evidence Submitted to the Appeals Council

The court held that the pre-decision treatment records were material. They documented diagnoses, treatment, and limitations involving interaction with others, concentration, persistence, pace, adaptation, and self-management. The ALJ had found the opinions of two consultative psychologists unpersuasive because they were inconsistent with the longitudinal record, but the ALJ did not have these additional records when making that assessment. The records could have changed the evaluation of those opinions.

The court also concluded that the post-decision records should have been evaluated. Although they were made after the ALJ’s decision, they were created shortly afterward and concerned the same types of mental disorders and symptoms, including anxiety, post-traumatic stress disorder, depression, concentration problems, and decreased energy. The court did not decide exactly how much weight those records should receive; it held that they should have been considered for their possible relationship to the period before the ALJ’s decision.

Disposition

The court remanded the case for further administrative proceedings. On remand, the ALJ must hold a supplemental hearing at which N.Z. has the opportunity to testify and must consider whether she is entitled to benefits in light of the additional evidence submitted to the Appeals Council. The court granted N.Z.’s motion for summary judgment, denied the Commissioner’s motion for summary judgment, directed the clerk to enter judgment, and closed the file.