NOT FOR PUBLICATION

FILED

UNITED STATES COURT OF APPEALS

JUN 15 2023

FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

KASEY JAMES VELLA, No. 22-35222

Plaintiff-Appellant, D.C. No. 3:20-cv-06153-RAJ

v.

MEMORANDUM*

KILOLO KIJAKAZI, Acting Commissioner of Social Security,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Washington Richard A. Jones, District Judge, Presiding

Argued and Submitted May 10, 2023 Seattle, Washington

Before: HAWKINS, W. FLETCHER, and IKUTA, Circuit Judges. Dissent by Judge Ikuta.

Kasey Vella appeals from the district court’s order affirming the

Commissioner of Social Security’s denial of his application for disability benefits.

Vella contends, inter alia, that the Administrative Law Judge (“ALJ”) erred in: (1)

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. finding that his employment at Nourish Sequim was substantial gainful activity; (2)

discounting his subjective testimony about the severity of his symptoms; (3)

discounting his mother’s lay witness testimony; and (4) discounting the medical

opinions of examining physicians Dr. Kanters and Dr. Peterson. Vella seeks

disability benefits for a closed period between October 9, 2010, to December 31,

2016. Vella suffers from Asperger’s Syndrome, autism, ADHD, depression,

obesity, and back and knee pain.

We have jurisdiction pursuant to 28 U.S.C. § 1291. We “review the district

court’s order affirming the ALJ’s denial of social security benefits de novo and

will disturb the denial of benefits only if the decision contains legal error or is not

supported by substantial evidence.” Lambert v. Saul, 980 F.3d 1266, 1270 (9th

Cir. 2020) (quoting Tommasetti v. Astrue, 533 F.3d 1035, 1038 (9th Cir. 2008)).

The ALJ erred in finding that Vella engaged in substantial gainful activity

when he worked for his father’s restaurant, Nourish Sequim, as a dishwasher from

June 2014 to November 2015. See 20 C.F.R. § 404.1572. “[T]here is a

presumption of substantial gainful employment if the [claimant] earns over the

amount specified in the guidelines.” Keyes v. Sullivan, 894 F.2d 1053, 1056 (9th

Cir. 1990). However, the claimant “may rebut a presumption based on earnings

with evidence of his inability to be self-employed or to perform the job well,

2 without special assistance, or for only brief periods of time.” Id. Although Vella

earned over the guideline amount from June 2014 to November 2015, he

successfully rebutted the presumption of substantial gainful activity by

demonstrating that he received special accommodations at Nourish Sequim

because his father was a business partner and the executive chef.

The ALJ improperly discounted Vella’s subjective testimony about the

severity of his symptoms. Where, as here, an ALJ finds that the claimant’s

medical impairments “could reasonably be expected to cause his alleged

symptoms,” “the ALJ can reject the claimant’s testimony about the severity of [his]

symptoms only by offering specific, clear, and convincing reasons for doing so.”

Ahearn v. Saul, 988 F.3d 1111, 1116 (9th Cir. 2021) (quotation omitted). The ALJ

failed to do so here. The ALJ found Vella’s testimony to be inconsistent with his

positive treatment history. However, Vella sought treatment only for his

depression during the closed period. The free clinic Vella visited during the closed

period did not diagnose or treat his Asperger’s Syndrome and autism.

Additionally, the ALJ discredited Vella’s testimony because he has a history of

“gainful employment.” However, Vella was fired from almost every job he had.

The reasons for his termination are consistent with his described symptoms.

3 We reverse and remand. We direct the district court to remand to the

Commissioner for an award of benefits for the closed period from October 9, 2010,

to December 31, 2016.

REVERSED and REMANDED.

4

FILED

Vella v. Kijakazi, No. 22-35222

JUN 15 2023

IKUTA, Circuit Judge, dissenting: MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

I respectfully dissent. The Administrative Law Judge (ALJ) “is responsible

for determining credibility, resolving conflicts in medical testimony, and for

resolving ambiguities.” Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995).

“If the evidence can reasonably support either affirming or reversing the

[Commissioner of Social Security]’s conclusion, the court may not substitute its

judgment for that of the [Commissioner].” Flaten v. Sec’y of HHS, 44 F.3d 1453,

1457 (9th Cir. 1995). Here, the ALJ’s determination that Vella’s statements

concerning the intensity, persistence, and limiting effects of his symptoms were not

credible, was supported by substantial evidence, and we cannot “engage in second-

guessing.” Tommasetti v. Astrue, 533 F.3d 1035, 1039 (9th Cir. 2008) (citing

Thomas v. Barnhart, 278 F.3d 947, 959 (9th Cir. 2002) (internal quotation marks

omitted)).

The ALJ’s step one finding that Vella engaged in substantial gainful activity

when he worked at Nourish Sequim was supported by substantial evidence because

Vella’s work as a dishwasher at Nourish Sequim—for six hours per day, four days

per week—meets the statutory requirements for “substantial gainful activity.” See

Keyes v. Sullivan, 894 F.2d 1053, 1056 (9th Cir. 1990) (citing 20 C.F.R. § 404.1572(a)).1 Regardless, any error in determining that Vella’s work at Nourish

Sequim qualified as substantial gainful activity is “inconsequential” to the ALJ’s

“ultimate nondisability determination,” Stout v. Comm’r, Soc. Sec. Admin., 454

F.3d 1050, 1055 (9th Cir. 2006), and therefore harmless, because the ALJ did not

stop at step one, but continued to step five, where the ALJ properly decided that

Vella “could [have] perform[ed] other work in the economy” during the relevant

period, Tommasetti, 533 F.3d at 1037, and thus was not disabled.

The ALJ gave several specific, clear and convincing reasons for determining

that Vella’s statements about the disabling effects of his symptoms were not

credible, and that determination was supported by substantial evidence. See id. at

1039. First, the ALJ conducted a detailed longitudinal review of Vella’s medical

records (including Vella’s own statements about the effectiveness of medication)

and concluded, based on the record evidence, that medication effectively controlled

his symptoms, which is a relevant factor in determining the degree of Vella’s

impairment. See 20 C.F.R. §§ 404.1529(c)(3)(iv)-(v), 416.929(c)(3)(iv)-(v).2 The

1 Vella earned more than the minimum amount necessary to establish a presumption of substantial gainful activity, 20 C.F.R. § 404.1574(b)(2), and has not explained how he has rebutted this presumption, see Keyes, 894 F.2d at 1056. 2 Vella failed to argue on appeal that his positive response to medication is not dispositive because the medication did not treat his then-undiagnosed (continued...)

2 ALJ then reasonably determined that this positive response to treatment

undermined Vella’s credibility due to inconsistent statements he made about his

symptoms when seeking state assistance. For instance, during a period in which

Vella reported being out of medication for months, he reported no change in his

condition, yet also claimed that he suffered significant symptoms during this same

period only when he underwent a psychological evaluation report to appeal the

denial of his disability application. Indeed, the ALJ noted that even the physician

seeing Vella for this evaluation expressed “some concern about the validity” of

Vella’s self-report given Vella’s endorsement of “an unusual number of negative

items.”

Second, the ALJ relied upon the fact that Vella’s long-standing symptoms

(which did not worsen during the period of his alleged disability) did not prevent

him from working before, during, and after his alleged period of disability. See

Gregory v. Bowen, 844 F.2d 664, 666–67 (9th Cir. 1988); see also Bayliss v.

Barnhart, 427 F.3d 1211, 1216 (9th Cir. 2005). The majority contends that Vella

was fired from the jobs he held and, therefore, those jobs (some of which Vella had

held for over two years) do not constitute evidence of his ability to work. But this

2 (...continued) Asperger’s Syndrome and autism. Therefore, this argument is forfeited. See Carmickle v. Comm’r, Soc. Sec. Admin., 533 F.3d 1155, 1161 n.2 (9th Cir. 2008).

3 conclusion is contrary to our case law, which establishes that holding jobs for

eleven months before being fired qualifies as substantial gainful activity. See

Tylitzki v. Shalala, 999 F.2d 1411, 1414 (9th Cir. 1993) (per curiam). Therefore,

contrary to the majority, the ALJ’s determination that Vella’s work history

undercut his symptom testimony was a specific, clear and convincing reason to

find Vella not credible. See Bray v. Comm’r of Soc. Sec. Admin., 554 F.3d 1219,

1227 (9th Cir. 2009); Bruton v. Massanari, 268 F.3d 824, 828 (9th Cir. 2001).

Because the evidence the ALJ cited constitutes substantial evidence to

support the conclusion that Vella was not credible, we may not reverse the ALJ’s

determination. See Andrews, 53 F.3d at 1039–40; Flaten, 44 F.3d at 1457. The

remainder of Vella’s arguments regarding the alleged errors that the ALJ

committed are unpersuasive, so I would affirm the ALJ’s decision. See

Tommasetti, 533 F.3d at 1040.

Finally, even if the ALJ’s adverse credibility determination were incorrect,

the majority errs in remanding this case for an immediate payment of benefits. We

have explained that only if “no outstanding issues remain and further proceedings

would not be useful,” do we have discretion to find the “relevant testimony

credible as a matter of law,” and remand for benefits. Treichler v. Comm’r of Soc.

Sec. Admin., 775 F.3d 1090, 1101 (9th Cir. 2014) (citation omitted). If the ALJ

4 erred, then inconsistencies in the record would have to be resolved on remand,

including the conflict between Vella’s current claims and the longitudinal objective

medical records, Vella’s past history of denying severe impairment, and the fact

that Vella was able to work before, during, and after the period at issue. See id. at

1104–05. Therefore, further proceedings would be necessary regardless whether

Vella’s work as a dishwasher qualified as substantial gainful activity or whether

the ALJ properly found Vella’s testimony not to be credible. See Connett v.

Barnhart, 340 F.3d 871, 874–75 (9th Cir. 2003).

5