David Joel Orenstein v. Carolyn W. Colvin

Filing 23

MEMORANDUM OPINION AND ORDER REVERSING DECISION OF THE COMMISSIONER OF SOCIAL SECURITY by Magistrate Judge John E. McDermott. IT IS HEREBY ORDERED that Judgment be entered reversing the decision of the Commissioner of Social Security and remanding this case for further proceedings in accordance with this Memorandum Opinion and Order and with law. [See Order for details.] (san)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 9 10 11 12 DAVID JOEL ORENSTEIN, Plaintiff, 13 v. 14 NANCY A. BERRYHILL, 15 Acting Commissioner of Social Security, 16 Defendant. 17 18 19 ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 16-01946-JEM MEMORANDUM OPINION AND ORDER REVERSING DECISION OF THE COMMISSIONER OF SOCIAL SECURITY PROCEEDINGS On March 22, 2016, David Joel Orenstein (“Plaintiff” or “Claimant”) filed a complaint 20 seeking review of the decision by the Commissioner of Social Security (“Commissioner”) 21 denying Plaintiff’s application for Social Security Disability Insurance benefits. The 22 Commissioner filed an Answer on July 13, 2016. On February 28, 2017, the parties filed a 23 Joint Stipulation (“JS”). The matter is now ready for decision. 24 Pursuant to 28 U.S.C. § 636(c), both parties consented to proceed bef ore this 25 Magistrate Judge. After reviewing the pleadings, transcripts, and administrative record (“AR”), 26 the Court concludes that the Commissioner’s decision must be reversed and this case 27 remanded for further proceedings in accordance with this Memorandum Opinion and Order and 28 with law. 1 BACKGROUND 2 Plaintiff is a 54-year-old male who applied for Social Security Disability Insurance 1 3 benefits on October 3, 2012, alleging disability beginning November 1, 2010. (AR 32.) The 4 ALJ determined that Plaintiff had not engaged in substantial gainful activity since November 1, 5 2010. (AR 33, 41.) Plaintiff filed a previous application that was finally denied in July 2008 (AR 32), and the 6 7 Administrative Law Judge (“ALJ”) found no material change in status from the alleged onset 8 date through the present. (AR 33.) Plaintiff filed a timely request for hearing, which was held 9 before ALJ Evelyn M. Gunn on January 24, 2014, in West Los Angeles, California. (AR 32.) 10 Plaintiff appeared and testified at the hearing and was represented by counsel. (AR 32.) 11 Susan Bendavid Klaparda also testified on the Claimant’s behalf. (AR 32.) Medical expert 12 (“ME”) Lynne Jahnke, M.D., testified (by telephone) and vocational expert (“VE”) Gregory Jones 13 also testified at the hearing. (AR 32.) The ALJ issued an unfavorable decision on March 25, 2014. (AR 32-42.) The Appeals 14 15 Council denied review on January 27, 2016. (AR 1-3.) 16 DISPUTED ISSUES 17 As reflected in the Joint Stipulation, Plaintiff raises the following disputed issues as 18 grounds for reversal and remand: 1. 19 Whether the Appeals Council erred by failing to review and incorporate evidence submitted on appeal. 20 21 2. Whether the ALJ erred in evaluation of the opinions of the examining physicians. 22 3. Whether the ALJ erred in determining Plaintiff’s credibility. 23 4. Whether the ALJ erred in the formulation of the RFC. 24 5. Whether the ALJ erred in the evaluation of lay witness testimony and statements. 25 6. Whether the ALJ erred at step 5. 26 27 28 1 Claimant met the disability insured status requirements on his alleged onset date, but last met them on September 30, 2012. (AR 32.) Accordingly, to secure entitlement, the Claimant must establish a “disability” onset date of September 30, 2012, or earlier. (AR 32, 41.) The ALJ, however, determined Plaintiff’s status through the date of the hearing. (AR 32-33.) 2 STANDARD OF REVIEW 1 2 Under 42 U.S.C. § 405(g), this Court reviews the ALJ’s decision to determine whether 3 the ALJ’s findings are supported by substantial evidence and free of legal error. Smolen v. 4 Chater, 80 F.3d 1273 , 1279 (9th Cir. 1996); see also DeLorm e v. Sullivan, 924 F.2d 841, 846 5 (9th Cir. 1991) (ALJ’s disability determination must be supported by substantial evidence and 6 based on the proper legal standards). 7 Substantial evidence means “‘more than a mere scintilla,’ but less than a 8 preponderance.” Saelee v. Chater, 94 F.3d 520, 521-22 (9th Cir. 1996) (quoting Richardson v. 9 Perales, 402 U.S. 389, 401 (1971)). Substantial evidence is “such relevant evidence as a 10 reasonable mind might accept as adequate to support a conclusion.” Richardson, 402 U.S. at 11 401 (internal quotation marks and citation omitted). 12 This Court must review the record as a whole and consider adverse as well as 13 supporting evidence. Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006). W here 14 evidence is susceptible to more than one rational interpretation, the ALJ’s decision m ust be 15 upheld. Morgan v. Comm’r of the Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 1999). 16 “However, a reviewing court must consider the entire record as a whole and may not affirm 17 simply by isolating a ‘specific quantum of supporting evidence.’” Robbins, 466 F.3d at 882 18 (quoting Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989)); see also Orn v. Astrue, 495 19 F.3d 625, 630 (9th Cir. 2007). THE SEQUENTIAL EVALUATION 20 21 The Social Security Act defines disability as the “inability to engage in any substantial 22 gainful activity by reason of any medically determinable physical or mental impairment which 23 can be expected to result in death or . . . can be expected to last for a continuous period of not 24 less than 12 months.” 42 U.S.C. §§ 423(d)(1)(A), 1382c(a)(3)(A). The Commissioner has 25 established a five-step sequential process to determine whether a claimant is disabled. 20 26 C.F.R. §§ 404.1520, 416.920. 27 The first step is to determine whether the claimant is presently engaging in substantial 28 gainful activity. Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). If the claimant is engaging 3 1 in substantial gainful activity, disability benefits will be denied. Bowen v. Yuckert, 482 U.S. 137, 2 140 (1987). Second, the ALJ must determine whether the claimant has a severe impairment or 3 combination of impairments. Parra, 481 F.3d at 746. An impairment is not severe if it does not 4 significantly limit the claimant’s ability to work. Smolen, 80 F.3d at 1290. Third, the ALJ must 5 determine whether the impairment is listed, or equivalent to an impairment listed, in 20 C.F.R. 6 Pt. 404, Subpt. P, Appendix I of the regulations. Parra, 481 F.3d at 746. If the impairment 7 meets or equals one of the listed impairments, the claimant is presumptively disabled. Bowen, 8 482 U.S. at 141. Fourth, the ALJ must determine whether the impairment prevents the 9 claimant from doing past relevant work. Pinto v. Massanari, 249 F.3d 840, 844-45 (9th Cir. 10 2001). Before making the step four determination, the ALJ first must determine the claimant’s 11 residual functional capacity (“RFC”). 20 C.F.R. § 416.920(e). The RFC is “the most [one] can 12 still do despite [his or her] limitations” and represents an assessment “based on all the relevant 13 evidence.” 20 C.F.R. §§ 404.1545(a)(1), 416.945(a)(1). T he RFC must consider all of the 14 claimant’s impairments, including those that are not severe. 20 C.F.R. §§ 416.920(e), 15 416.945(a)(2); Social Security Ruling (“SSR”) 96-8p. 16 If the claimant cannot perform his or her past relevant work or has no past relevant work, 17 the ALJ proceeds to the fifth step and must determine whether the impairment prevents the 18 claimant from performing any other substantial gainful activity. Moore v. Apfel, 216 F.3d 864, 19 869 (9th Cir. 2000). The claimant bears the burden of proving steps one through four, 20 consistent with the general rule that at all times the burden is on the claimant to establish his or 21 her entitlement to benefits. Parra, 481 F.3d at 746. Once this prima facie case is established 22 by the claimant, the burden shifts to the Commissioner to show that the claimant may perform 23 other gainful activity. Lounsburry v. Barnhart, 468 F.3d 1111, 1114 (9th Cir. 2006). T o support 24 a finding that a claimant is not disabled at step five, the Commissioner must provide evidence 25 demonstrating that other work exists in significant numbers in the national economy that the 26 claimant can do, given his or her RFC, age, education, and work experience. 20 C.F.R. 27 § 416.912(g). If the Commissioner cannot meet this burden, then the claimant is disabled and 28 entitled to benefits. Id. 4 THE ALJ DECISION 1 2 In this case, the ALJ determined at step one of the sequential process that Plaintiff has 3 not engaged in substantial gainful activity since November 1, 2010. (AR 33, 41.) 4 At step two, the ALJ determined that Plaintiff has the following medically determinable 5 severe impairments: bilateral sensorineural hearing loss, deficits in visual acuity, affective 6 mood disorder, and anxiety disorder. (AR 33, 41.) 7 At step three, the ALJ determined that Plaintiff does not have an impairment or 8 combination of impairments that meets or medically equals the severity of one of the listed 9 impairments. (AR 33, 41.) 10 The ALJ then found that Plaintiff has the RFC to perform at all exertional levels with the 11 following limitations: 12 Limited to a work environment where visual acuity is not tantamount, 13 needed or required, but with remaining ability to reads [sic] and write; can 14 only work in an office environment and needs to avoid loud noises, must 15 avoid dangerous machinery; limited to understanding and remembering 16 simple instructions to complete simple repetitive tasks. 17 (AR 34, 41.) In determining the above RFC, the ALJ made an adverse credibility 18 determination. (AR 34.) 19 At step four, the ALJ found that Plaintiff is unable to perform any past relevant work. 20 (AR 40, 41.) The ALJ, however, also found that, considering Claimant’s age, education, work 21 experience, and RFC, there are jobs that exist in significant numbers in the national economy 22 that Claimant can perform, including the jobs of routing clerk, information clerk, and sales 23 attendant. (AR 40, 41.) 24 Consequently, the ALJ found that Claimant was not disabled, within the meaning of the 25 Social Security Act. (AR 41.) 26 27 28 5 DISCUSSION 1 2 Plaintiff contends that the ALJ decision should be reversed and remanded because the 3 Appeals Council failed to review and incorporate into the record new evidence presented for 4 the first time to the Appeals Council. The Court agrees. 5 The new evidence submitted after the March 25, 2014 ALJ decision was a Functional 6 Capacity Evaluation (“Evaluation”) prepared by Jeff Bruno, a licensed occupational therapist, 7 vocational counselor, and certified functional capacity evaluator. Plaintiff contends that the 8 Evaluation would support a finding of disability. Plaintiff indicates that Bruno’s Evaluation was 9 submitted to the Appeals Council electronically on March 12, 2015. Bruno’s Evaluation was not 10 referenced by the Appeals Council in its January 27, 2016 denial of review. (AR 17.) Nor was 11 it incorporated into the Certified Administrative Record. The Commissioner questions whether 12 the Evaluation was ever submitted to the Appeals Council, indicating that its receipt was not 13 documented by the Appeals Council. The transmission receipt, however, shows that the 14 Evaluation was received by the Appeals Council and Social Security Administration. The Court 15 finds that Plaintiff did indeed transmit the Evaluation on March 12, 2015. It was not considered 16 by the Appeals Council or made part of the record. 17 A. Relevant Federal Law 18 This Court has no jurisdiction to review the decision of the Appeals Council denying 19 review. Brewes v. Comm’r, 682 F.3d 1157, 1161-62 (9th Cir. 2012). W hen the Appeals 20 Council denies review, the ALJ’s decision becomes the final decision of the Commissioner, and 21 the Court reviews that decision for substantial evidence based on the record as a whole, 22 including any new evidence submitted to and considered by the Appeals Council. Id. at 116123 63. The Ninth Circuit in Brewes specifically cited and relied on 20 C.F.R. § 404.970(b), which 24 provides: 25 If new and material evidence is submitted, the Appeals Council shall 26 consider the additional evidence only where it relates to the period on or before 27 the date of the administrative law judge’s hearing decision. The Appeals 28 Council shall evaluate the new and material evidence submitted if it relates to 6 1 the period on or before the date of the administrative law judge’s hearing 2 decision. It will then review the case if it finds that the administrative law 3 judge’s action, findings, or conclusion is contrary to the weight of the evidence 4 currently of record. 5 (Emphasis added); see also Brewes, 682 F.3d at 1161-62. New evidence relevant to the 6 period at issue must be treated as part of the administrative record. Brewes, 682 F.3d at 1162. 7 B. Analysis 8 Plaintiff contends that the Evaluation is material because it addresses the same 9 limitations in visual, auditory and mental functioning that Plaintiff alleges in his claim. The 10 Commissioner, however, contends that the Appeals Council was not obliged to consider 11 evidence that was from a time after the ALJ’s decision and thus not material. Any error in not 12 considering or incorporating Bruno’s Evaluation into the record is harmless, says the 13 Commissioner. See Molina v. Astrue, 674 F.3d 1104, 1111 (9th Cir. 2012.) 14 Plaintiff responds to the Commissioner’s argument by citing case law that medical 15 reports containing observations made after the period of disability are relevant to assess the 16 Claimant’s disability. Smith v. Bowen, 849 F.2d 1222, 1225 (9th Cir. 1988); Lingenfelter v. 17 Astrue, 504 F.3d 1028, 1033 n.3 (9th Cir. 2007); Jam es v. Colvin, 2014 WL 814144, at *4, *6 18 (C.D. Cal. Mar. 3, 2014). The Court observes that Bruno’s Evaluation relied on medical 19 records for the period between November 1, 2010, and September 30, 2012. Additionally, the 20 regulation expressly states twice that new evidence may be material if it relates to the period 21 “on or before the date of the administrative law judge’s hearing decision.” The ALJ decision 22 considered Plaintiff’s status through the date of the March 25, 2014 ALJ decision. The 23 examinations conducted by Bruno occurred on December 28 and 29, 2014, and his report is 24 dated January 12, 2015. See JS, Ex. A. Thus, the Evaluation was prepared only months after 25 the ALJ decision and the opinions expressed are based on medical records from the period of 26 disability. 27 The Court is not deciding whether the Evaluation is material. The issue is sufficiently 28 disputed that the ALJ should consider the m atter on remand. This is not a case where the 7 1 Appeals Council considered new evidence and made it part of the record, and then denied the 2 request for review after considering all the evidence. This is a case like Taylor v. 3 Commissioner of Social Sec. Adm., 659 F.3d 1228, 1232-33 (9th Cir. 2011) where the Appeals 4 Council did not consider the new evidence at all. In such instances, remand to the ALJ is 5 appropriate. Id. at 1233. The Court also will not address the other issues raised by Plaintiff at 6 this time because, if the ALJ on remand finds the Evaluation to be material, the ALJ must 7 account for it in the five step sequential analysis. Id. at 1233. 8 Again, the Court is not deciding whether the evaluation is material or, even if it is, that it 9 would require a finding of disability. The Court is remanding the case to the ALJ to determine 10 the materiality, relevance and impact on the disability determination of the Evaluation. 11 ORDER 12 IT IS HEREBY ORDERED that Judgment be entered reversing the decision of the 13 Commissioner of Social Security and remanding this case for further proceedings in 14 accordance with this Memorandum Opinion and Order and with law. 15 16 DATED: June 1, 2017 17 /s/ John E. McDermott JOHN E. MCDERMOTT UNITED STATES MAGISTRATE JUDGE 18 19 20 21 22 23 24 25 26 27 28 8

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