## Facts

- William M. Ludwig applied for Social Security disability benefits in May 2006, alleging inability to work due to epilepsy and multiple mental-health conditions, later emphasizing musculoskeletal pain and limitations.
- An Administrative Law Judge (ALJ) held an evidentiary hearing, found Ludwig’s impairments did not meet or equal a listed impairment, and concluded he retained the residual functional capacity for medium work.
- The medical record reflected chronic knee and back complaints but also contained reports suggesting relatively mild objective findings and activities inconsistent with Ludwig’s alleged degree of limitation.
- Ludwig had a history of bipolar disorder that improved with medication when he avoided alcohol.
- After the hearing and before issuing a decision, the ALJ received an unsolicited ex parte communication from an FBI agent asserting Ludwig was “faking his disability.”
- The ALJ notified Ludwig’s counsel of the contact, stated he gave the information no “significant weight,” and declined to either disregard it entirely or convene a supplemental hearing for confrontation or rebuttal.
- The district court affirmed the Commissioner’s denial of benefits, and Ludwig appealed.

## Issues

1. Whether the ALJ committed legal error by receiving and giving some weight to an ex parte merits communication and denying a supplemental hearing to address it.
2. If error occurred, whether it was harmless because Ludwig failed to show the error affected his substantial rights by creating a substantial likelihood of prejudice.

## Decision

- The Ninth Circuit held the ALJ erred by considering the ex parte communication and denying a supplemental hearing to address it.
- The court held the error was harmless because Ludwig did not demonstrate a substantial likelihood that the decision would have changed absent the ex parte contact.
- The court affirmed the district court’s judgment and the denial of benefits.

## Legal Principles

- Social Security disability decisions must be based on evidence adduced at the hearing, not on private ex parte communications going to the merits.
- Notice and an opportunity to be heard are core procedural due process requirements; when an adjudicator receives material ex parte information, the claimant must be given a meaningful chance to respond.
- Procedural error warrants reversal only if it affects substantial rights; the claimant must show at least a substantial likelihood of prejudice, not merely a procedural violation.
- Harmless-error review may apply where the adjudicator’s outcome is supported by the hearing record independent of the improper ex parte information.

## Conclusion

The Ninth Circuit ruled that an ALJ’s consideration of an unsolicited ex parte accusation about a claimant’s credibility, coupled with denial of a supplemental hearing, violates the hearing-based record requirement, but affirmed because the claimant failed to show a substantial likelihood that the improper contact changed the benefits determination.


Ludwig v. Astrue, 681 F.3d 1047 (9th Cir. 2012)