Aaron v. Berryhill

Filing 24

ORDER by Judge Joseph C. Spero granting 15 Plaintiff's Motion for Summary Judgment, Denying 20 Defendant's Motion for Summary Judgment, Reversing decision of the Commissioner and remanding for further proceedings. (jcslc1S, COURT STAFF) (Filed on 9/24/2019)

1
2
3
4
5

UNITED STATES DISTRICT COURT

6

NORTHERN DISTRICT OF CALIFORNIA

7
ANTHONY AARON,

8

Plaintiff,
9
v.
10
ANDREW M. SAUL,

11

United States District Court
Northern District of California

Defendant.
12
13
14

Case No. 18-cv-03672-JCS
ORDER GRANTING PLAINTIFF’S
MOTION FOR SUMMARY
JUDGMENT, DENYING
COMMISSIONER’S MOTION FOR
SUMMARY JUDGMENT, REVERSING
DECISION OF THE COMMISSIONER
AND REMANDING FOR FURTHER
PROCEEDINGS
Re: Dkt. Nos. 15, 20

I.

INTRODUCTION
Plaintiff Anthony Aaron seeks review of the final decision of Defendant Andrew M. Saul,

15
16

Commissioner of Social Security (“the Commissioner”), denying his applications for disability

17

insurance benefits and Supplemental Security Income (“SSI”) benefits under Titles II and XVI of

18

the Social Security Act. The parties have filed cross motions for summary judgment pursuant to

19

Civil Local Rule 16-5. For the reasons stated below, the Court GRANTS Plaintiff’s Motion for

20

Summary Judgment, DENIES the Commissioner’s Motion for Summary Judgment, REVERSES

21

the decision of the Commissioner and REMANDS the case to the Social Security Administration

22

for further proceedings.1

23

II.

BACKGROUND

24

A.

25

In order to be found “disabled” under the Social Security Act, a claimant must establish

26

The Five-Step Evaluation Process

that he is unable “to engage in any substantial gainful activity by reason of any medically

27
1

28

The parties have consented to the jurisdiction of the undersigned magistrate judge pursuant to 28
U.S.C § 636(c).

1

determinable physical or mental impairment . . . which has lasted or can be expected to last for a

2

continuous period of not less than 12 months.” 42 U.S.C. § 423(d)(1)(A); see also 42 U.S.C. §

3

423(a)(1). In addition, in order to be entitled to disability benefits under Title II, a claimant must

4

establish that he was disabled on or before his date last insured. See Tidwell v. Apfel, 161 F.3d

5

599, 601 (9th Cir. 1998); Johnson v. Shalala, 60 F.3d 1428, 1432 (9th Cir. 1995).

6

The Commissioner has established a sequential, five-part evaluation process to determine

7

whether a claimant is disabled under the Act. See Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir.

8

1999) (citing 20 C.F.R. § 404.1520). The claimant bears the burden of proof at steps one through

9

four, but the burden shifts to the Commissioner at step five. Id. “If a claimant is found to be
‘disabled’ or ‘not disabled’ at any step in the sequence, there is no need to consider subsequent

11

United States District Court
Northern District of California

10

steps.” Id.

12

At Step One, the Administrative Law Judge (“ALJ”) considers whether the claimant is

13

presently engaged in “substantial gainful activity.” 20 C.F.R. § 404.1520(a)(4)(i). If he is, the

14

ALJ must find that he is not disabled. Id. If he is not engaged in substantial gainful activity, the

15

ALJ continues the analysis. See id.
At Step Two, the ALJ considers whether the claimant has “a severe medically

16
17

determinable physical or mental impairment,” or combination of such impairments, which meets

18

the regulations’ twelve-month duration requirement. 20 C.F.R. §§ 404.1509, 404.1520(a)(4)(ii).

19

An impairment or combination of impairments is severe if it “significantly limits [the claimant’s]

20

physical or mental ability to do basic work activities.” 20 C.F.R. § 404.1520(c). If the claimant

21

does not have a severe impairment, disability benefits are denied. 20 C.F.R. § 404.1520(a)(4)(ii).

22

If the ALJ determines that one or more impairments are severe, the ALJ proceeds to the next step.

23

See id.

24

At Step Three, the ALJ compares the medical severity of the claimant’s impairments to a

25

list of impairments that the Commissioner has determined are disabling (“Listings”). See 20

26

C.F.R. § 404.1520(a)(4)(iii); see also 20 C.F.R. Pt. 404, Subpt. P, App. 1. If one or a combination

27

of the claimant’s impairments meets or equals the severity of a listed impairment, he is disabled.

28

20 C.F.R. § 404.1520(a)(4)(iii). Otherwise, the analysis continues. See id.
2

At Step Four, the ALJ considers the claimant’s residual functional capacity (RFC) in light

1
2

of his impairments and whether he can perform past relevant work. 20 C.F.R. §

3

404.1520(a)(4)(iv) (citing 20 C.F.R. § 404.1560(b)). If he can perform past relevant work, he is

4

not disabled. Id. If he cannot perform past relevant work, the ALJ proceeds to the final step. See

5

id.
At Step Five, the burden shifts to the Commissioner to demonstrate that the claimant, in

6
7

light of his impairments, age, education, and work experience, can perform other jobs in the

8

national economy. Johnson v. Chater, 108 F.3d 178, 180 (8th Cir. 1997); see also 20 C.F.R. §

9

404.1520(a)(4)(v). If the Commissioner meets this burden, the claimant is not disabled. See 20
C.F.R. § 404.1520(f). Conversely, the claimant is disabled and entitled to benefits if there are not

11

United States District Court
Northern District of California

10

a significant number of jobs available in the national economy that he can perform. Id.
The Social Security Administration has supplemented the five-step general disability

12
13

evaluation process with regulations governing the evaluation of mental impairments at steps two

14

and three of the five-step process. See generally 20 C.F.R. § 404.1520a. First, the Commissioner

15

must determine whether the claimant has a medically determinable mental impairment. 20 C.F.R.

16

§ 404.1520a(b)(1). Next, the Commissioner must assess the degree of functional limitation

17

resulting from the claimant’s mental impairment with respect to four broad functional areas: (1)

18

activities of daily living; (2) social functioning; (3) concentration, persistence, or pace; and (4)

19

episodes of decompensation. 20 C.F.R. § 404.1520a(b)(2), (c). Finally, the Commissioner must

20

determine the severity of the claimant’s mental impairment and whether that severity meets or

21

equals the severity of a mental impairment listed in Appendix 1. 20 C.F.R. § 404.1520a(d). If the

22

Commissioner determines that the severity of the claimant’s mental impairment meets or equals

23

the severity of a listed mental impairment, the claimant is disabled. See 20 C.F.R. §

24

404.1520(a)(4)(iii). Otherwise, the evaluation proceeds to step four of the general disability

25

inquiry.2 See 20 C.F.R. § 404.1520a(d)(3).

26
27
28

Appendix 1 provides impairment-specific “Paragraph A” criteria for determining the
presence of various listed mental impairments, but all listed mental impairments share certain
“Paragraph B” severity criteria in common (and some have alternative “Paragraph C” severity
3
2

This evaluation process is to be used at the second and third steps of the sequential

2

evaluation discussed above. Social Security Ruling 96-8p, 1996 WL 374184, at *4 (“The

3

adjudicator must remember that the limitations identified in the ‘paragraph B’ and ‘paragraph C’

4

criteria are not an RFC assessment but are used to rate the severity of mental impairment(s) at

5

steps 2 and 3 of the sequential evaluation process.”). If the Commissioner determines that the

6

claimant has one or more severe mental impairments that neither meet nor are equal to any listing,

7

the Commissioner must assess the claimant’s residual functional capacity. 20 C.F.R. §§

8

404.1520a(d)(3). This is a “mental RFC assessment [that is] used at steps 4 and 5 of the

9

sequential process [and] requires a more detailed assessment by itemizing various functions

10

contained in the broad categories found in paragraphs B and C of the adult mental disorders

11

United States District Court
Northern District of California

1

listings in 12.00 of the Listing of Impairments. . . .” Social Security Ruling 96-8p, 1996 WL

12

374184, at *4.

13

District courts have jurisdiction to review the final decisions of the Commissioner and

14

have the power to affirm, modify, or reverse the Commissioner’s decisions, with or without

15

remanding for further hearings. 42 U.S.C. § 405(g); see also 42 U.S.C. § 1383(c)(3). When

16

reviewing the Commissioner’s decision to deny benefits, the Court “may set aside a denial of

17

benefits only if it is not supported by substantial evidence or if it is based on legal error.” Thomas

18

v. Barnhart, 278 F.3d 947, 954 (9th Cir. 2002) (quoting Jamerson v. Chater, 112 F.3d 1064, 1066

19

(9th Cir. 1997)) (quotation marks omitted). Substantial evidence must be based on the record as a

20

whole and is “such relevant evidence as a reasonable mind might accept as adequate to support a

21
22
23
24
25
26
27
28

criteria). See generally 20 C.F.R. § 404, Subpt. P, App. 1 at 12.00. Therefore, any medically
determinable mental impairment—i.e., one that satisfies the Paragraph A criteria of one or more
listed mental impairments—is sufficiently severe to render a claimant disabled if it satisfies the
general Paragraph B criteria, which require that the claimant suffers at least two of the following:
(1) marked restriction of activities of daily living; (2) marked difficulties in maintaining social
functioning; (3) marked difficulties in maintaining concentration, persistence, or pace; or (4)
repeated episodes of decompensation, each of extended duration. See id. A “marked” limitation is
one that is “more than moderate but less than extreme” and “may arise when several activities or
functions are impaired, or even when only one is impaired, as long as the degree of limitation is
such as to interfere seriously with [a claimant’s] ability to function independently, appropriately,
effectively, and on a sustained basis.” Id. at 12.00C.
4

1

conclusion.” Richardson v. Perales, 402 U.S. 389, 401 (1971). Substantial evidence “must be

2

‘more than a mere scintilla,’ but may be less than a preponderance.” Molina v. Astrue, 674 F.3d

3

1104, 1110–11 (9th Cir. 2012) (quoting Desrosiers v. Sec’y of Health and Human Servs., 846 F.2d

4

573, 576 (9th Cir. 1988)). Even if the Commissioner’s findings are supported by substantial

5

evidence, “the decision should be set aside if the proper legal standards were not applied in

6

weighing the evidence and making the decision.” Benitez v. Califano, 573 F.2d 653, 655 (9th Cir.

7

1978).

8

B.

9

Plaintiff was 54 years old at the time of his administrative hearing and had a 12th grade

Factual Background

education. AR 46. He tested at the 8.7 grade level equivalent on the Test of Adult Basic

11

United States District Court
Northern District of California

10

Education. AR 587. Plaintiff reports he experienced both physical and sexual abuse as a child. AR

12

586. Plaintiff does not have any past relevant work. AR 46.

13

In November 2004, Plaintiff was found not competent to stand trial and was admitted for

14

psychiatric treatment at Napa State Hospital, where he remained until July 26, 2006, when he was

15

found competent to stand trial and discharged to Alameda County Jail. AR 651. From 2007 to

16

2013, Plaintiff was incarcerated and received psychiatric treatment in the California state prison

17

system. AR 492-659. When Plaintiff was incarcerated, in 2007, he was evaluated and found to

18

meet the criteria for inclusion in the mental health treatment program in prison based on

19

diagnoses of Psychotic Disorder NOS, Depressive Disorder, and mental retardation. AR 495. It

20

was noted that Plaintiff “report[ed] continued depression,” had a history of suicide attempts, and

21

“admit[ted] to auditory hallucinations.” Id.

22

During his incarceration, treatment providers, including psychiatrists P. Pacifico, M.D., P.

23

Shamasundara, M.D., and K. Kumar, M.D., diagnosed Plaintiff with “schizophrenia disorder,”

24

“schizoaffective disorder” and “schizophrenia paranoid.” AR 431, 447, 454510, 511, 512, 516.

25

Prison records also contain numerous references to symptoms of psychosis – for which Plaintiff

26

was prescribed Risperdal – and depression – for which Plaintiff was prescribed Paxil. AR 428,

27

436-437, 447, 454, 487, 490, 512-516, 525. Prison treatment records are also replete with reports

28

that Plaintiff experienced auditory hallucinations. See, e.g., AR 429 (“voices and other symptoms
5

1

are manageable”), 431 (“reports still hear[ing] voices”), 432 (“voices are stable”), 454 (“when he

2

wakes up the voices take over”), 511 (“the voices are always there especially when mind is not

3

preoccupied”).

4

Upon release from prison in 2013, Plaintiff began receiving psychiatric treatment with

5

Gregory Girtman, PsyD, of the Parole Outpatient Clinic, and Erica Conners, PhD, of the Sharper

6

Future program. AR 578, 663; see also AR 75-76, 577-590, 660-751. He saw Dr. Girtman

7

monthly and Dr. Conners weekly. AR 577-590, 660-751. Dr. Girtman diagnosed Plaintiff with

8

schizoaffective disorder. AR 585. He noted that Plaintiff “still experiences auditory hallucinations

9

and feelings of paranoia.” AR 587. In a Function Report-Adult-Third Party completed on October
3, 2013, Dr. Girtman reported that Plaintiff had poor sleep, required reminders to take his

11

United States District Court
Northern District of California

10

medication and attend appointments, had difficulty getting along with others, had an extremely

12

limited attention span (less than 5 minutes), did not finish what he started, had difficulty following

13

instructions, and exhibited paranoia around people. AR 373-74, 376-78. He further noted that

14

Plaintiff handled stress and changes to his routine poorly. AR 378.

15

Dr. Conners supplied treatment notes for her weekly sessions with Plaintiff, all of which

16

used the same standardized template carrying the header “Progress Notes: Oakland – HRSO State

17

Parole.” AR 663-751. The form did not include a subheading or check-box area to list the

18

patient’s diagnosis and none was listed on these treatment notes, but the notes describe symptoms

19

of hallucinations, high distractibility, mood elevations, decline in basic functioning when stressed,

20

anxiety, fear of people, and inattentiveness. Id. In an October 7, 2015 letter submitted to the

21

Social Security Administration in support of Plaintiff’s disability application, Dr. Conners wrote

22

that these symptoms would “impair [Plaintiff’s] ability to engage in basic activities without

23

individualized support” and that “[d]espite being consistent with his medication regimen he

24

experiences a significant decline in basic functioning that results in crying spells, cognitive

25

distortions and at times passive suicidal ideation.” AR 660. She further opined that “[b]ased on

26

these challenges it would be very difficult for him to maintain employment and support himself

27

financially if he is reliant on his ability through a work day.” Id.

28

In addition, the record contains a form that Dr. Conners completed for Plaintiff in order
6

to receive accommodations at community college, dated August 26, 2014. AR 86. In that form,

2

Dr. Conners wrote under “description of disability” “auditory hallucinations, high distractability,

3

paranoia.” Id. She listed Plaintiff’s diagnosis as DSM IV code as 295.4, which corresponds to

4

schizophreniform disorder. See Diagnostic and Statistical Manual of Mental Disorders, 4th Ed.

5

Text Revision (“DSM-IV-TR”) at pp. 317-318. She described the impact of Plaintiff’s condition

6

on his ability to function in an academic setting as follows: “Client requires a very structured

7

setting, tutorial support and positive reinforcement to support his desire to learn. Extremely

8

crowded rooms and having minimal support in the classroom cause him to be agitated and highly

9

distracted.” Id. She further wrote that Plaintiff’s medications “sometimes make him sleepy.” Id.

10

Also beginning in 2013, Plaintiff received general medical treatment and psychiatric

11

United States District Court
Northern District of California

1

medications from Save a Life Wellness Center. AR 594-616. Treatment providers there observed

12

that Plaintiff suffered from anxiety and psychosis and reported that he was hearing voices and

13

feeling anxious. AR 595. Over the course of his treatment at Save a Life Wellness Center, Plaintiff

14

was prescribed Risperidone, Paxil, and Vistiral for his psychiatric symptoms. AR 594, 596, 599-

15

605. He was repeatedly noted to carry a diagnosis of Schizophrenia. AR 594, 597, 603-07. He

16

was also sometimes noted to have diagnoses of Anxiety (AR 594-95, 605-07) and Depression (AR

17

596).

18

In July and October 2013, non-examining State agency medical consultants Barry

19

Rudnick, M.D. and L. Colsky, M.D. provided medical opinions to the Social Security

20

Administration based on review of Plaintiff’s record. AR 87-98, 109-20. Both found Plaintiff to

21

have a primary impairment of “Schizophrenic, Paranoid and Other Functional Psychotic

22

Disorders,” which they found to be “severe.” AR 92, 115. Drs. Rudnick and Colsky also both

23

opined that Plaintiff was limited to unskilled work and would have moderate impairments in his

24

ability to carry out detailed instructions, maintain attention and concentration for extended periods,

25

work in coordination or proximity to others without being distracted by them, interact

26

appropriately with the general public, accept instructions and respond appropriately to criticism

27

from supervisors, respond appropriately to changes in the work setting. AR 95-97, 117-19.

28

Plaintiff has a history of substance use but the record shows no substance induced
7

1

diagnoses and drug and alcohol abuse (“DAA”) was not found to be an issue in his case. AR 97,

2

105, 119.

3

C.

4

Plaintiff filed a claim for disability insurance and SSI benefits on April 3, 2013, with an

Procedural History

5

alleged onset date of January 1, 2002. Administrative Record (“AR”) 269-77. He alleges that he

6

is disabled on the basis of paranoid schizophrenia. Id. at 132-345.3 The claims were denied

7

initially on July 25, 2013 and upon reconsideration on November 8, 2013. Plaintiff then filed a

8

written request for a hearing before an administrative law judge (“ALJ”). AR 38. A hearing was

9

held before ALJ Richard Laverdure on May 13, 2015 and was continued to develop the record.
AR 54-63. Another hearing was held on September 30, 2015, at which Plaintiff appeared and

11

United States District Court
Northern District of California

10

testified. AR 64-85. Vocational Expert (“VE”) Joel Greenberg also appeared at the hearing but

12

offered no testimony. Id. ALJ Laverdure issued an unfavorable decision on November 12, 2015

13

finding Plaintiff was not disabled. AR 35-53. Plaintiff filed a request for review of that decision to

14

the Appeals Council and that request was denied on March 3, 2018. AR 1-7. On June 20, 2018,

15

Plaintiff commenced this action for judicial review pursuant to 42 U.S.C. §§ 405(g) and

16

1383(c)(3).
The ALJ’s Decision

17

D.

18

The ALJ applied the five-step analysis discussed above to determine whether Plaintiff

19

qualified for benefits under Titles II or VI. At Step One, he found that Plaintiff has not engaged

20

in substantial gainful activity since his alleged onset date of January 1, 2002. AR 40.
At Step Two, the ALJ found that Plaintiff’s date last insured (“DLI”) is June 30, 2004. AR

21
22

133. He concluded that as of that date Plaintiff had no severe impairments and therefore was not

23

eligible for benefits under Title II. AR 41. The ALJ relied on medical records from Napa State

24
25
26
27
28

According to the Commissioner, Plaintiff’s original application is not in the administrative
record. See Commissioner’s Motion for Summary Judgment at 1 n. 1. An undated Disability
Report that summarizes Plaintiff’s application lists paranoid schizophrenia, bipolar disorder and
post-traumatic stress disorder as the conditions that render him disabled. AR 345. However, a
document that appears to have been completed by the Social Security Administration at the
reconsideration stage lists only “Schizophrenic, Paranoid & Other Functnl, Psychotc. Dsrd” as
Plaintiff’s primary diagnosis. In Plaintiff’s Motion for Summary Judgment, he addresses only the
diagnosis of schizophrenia as the basis for claims for disability benefits and SSI.
8
3

1

Hospital, where Plaintiff was admitted on November 9, 2004 after being found incompetent to

2

stand trial. AR 41, 651-652. He was released approximately one and a half years later when he

3

was found competent. AR 651.

4

With respect to Plaintiff’s claim for SSI benefits under Title XVI, the ALJ found at Step

5

Two that Plaintiff had the following severe impairments: depression, anxiety, and polysubstance

6

dependence in uncertain remission. AR 42. The ALJ noted that Plaintiff also claimed to be

7

disabled due to paranoid schizophrenia, bipolar disorder and post-traumatic stress disorder but that

8

there did “not appear to be any actual independent diagnosis of any of these disorders in the

9

record.” Id. He states further, “[w]hile ‘psychotic disorder’ and schizophrenia appear in the
claimant’s mental history in Exhibit 12F, there is no evidence that that is based on any provider’s

11

United States District Court
Northern District of California

10

independent evaluation; rather it appears to be based on the claimant’s self-report.” Id.

12

At Step Three, the ALJ applied the special rules that apply to mental impairments and

13

found that none of Aaron’s impairments, alone or in combination, met or equaled a Listing. Id.

14

He states that he considered Listings 12.03, 12.04, 12.06 and 12.09. In reaching this conclusion,

15

the ALJ found that Plaintiff had mild restrictions in activities of daily living, citing evidence that

16

Plaintiff has “no problems with personal care,” “uses public transportation,” “attends community

17

college” and “attends church regularly.” Id. The ALJ found that Plaintiff has moderate

18

difficulties with social functioning, relying on evidence that Plaintiff is “able to shop in stores and

19

takes public transportation,” that he “volunteered with the homeless, attends community college

20

classes and attends church regularly.” AR 43. The ALJ found that Plaintiff has mild difficulties

21

with concentration, persistence and pace, again noting that Plaintiff “is able to take public

22

transportation and shop[,] . . . attends community college classes . . . [and] is independent in

23

personal care.” Id. The ALJ also found that Plaintiff had experienced no episodes of

24

decompensation each of extended duration. Id.

25

At Step Four, the ALJ found that Plaintiff “has the residual functional capacity to perform

26

a full range of work at all exertional levels but with the following nonexertional limitations: he is

27

limited to performing non-public, simple, repetitive, tasks. Id. In support of this conclusion, the

28

ALJ cited records from Napa State Hospital and treatment records from when Plaintiff was in
9

1

prison, from 2006 to 2013. Id. He rejected the opinions of Dr. Erica Connors, who treated

2

Plaintiff starting in 2013, and of state agency doctors who reviewed the record (Dr. Barry Rudnick

3

and Dr. L. Colsky). He did not address the opinions of psychologist Gregory Girtman, who also

4

treated Plaintiff starting in October 2013.

5

Finally, at Step Five the ALJ relied on the Medical-Vocational Guidelines (the “Grids”) to

6

find that Plaintiff was not disabled. The ALJ noted that he used the Grids as a framework for

7

determining disability in light of Plaintiff’s nonexertional limitations, finding that the

8

nonexertional limitations in Plaintiff’s RFC “have little or no effect on the occupational base of

9

unskilled work at all exertional levels.” AR 47.
Plaintiff’s Contentions In His Summary Judgment Motion

E.

11

United States District Court
Northern District of California

10

Plaintiff contends the ALJ committed four errors. First, he contends the ALJ erred by

12

failing to include schizophrenia as a severe impairment at Step Two on the basis that there is no

13

evidence of an independent diagnosis of that disorder in the record. Plaintiff’s Summary

14

Judgment Motion at 6. According to Plaintiff, there are “repeated diagnoses of [s]chizophrenia in

15

the record from several different providers since at least 2011, and it is the only diagnosis from

16

Plaintiff’s long-term treating providers Dr. Girtman and Dr. Connors.” Id. Plaintiff further asserts

17

that the record is replete with evidence that since at least 2011 Plaintiff has been prescribed

18

psychotropic medications specifically for schizophrenia and psychosis and that he has exhibited

19

ongoing symptoms of psychosis, “including auditory hallucinations, anxiety, social isolation,

20

difficulty maintaining attention and concentration, depression, and an inability to handle stress or

21

changes in routine.” Id. Plaintiff further asserts that the ALJ’s error is not harmless because these

22

symptoms give rise to limitations that are not accounted for in his RFC and that significantly

23

impact his ability to work. Id. at 7.

24

Second, Plaintiff asserts that the ALJ erred by failing to offer adequate reasons for

25

rejecting the opinions of treating psychologist Erica Connors and ignoring (and implicitly

26

rejecting) the opinions of treating psychologist Gregory Girtman with respect to their diagnosis of

27

schizophrenia and their observations as to Plaintiff’s symptoms associated with his schizophrenia.

28

Plaintiff also argues that the ALJ was required to offer reasons for rejecting the opinions of two
10

1

state agency consultants, Dr. Barry Rudnick and Dr. L. Colsky, who reviewed the record and

2

concluded that Plaintiff’s schizophrenia is a severe condition. Id. at 3-4, 7-12.
Third, Plaintiff argues that as a consequence of these errors, the ALJ’s RFC does not

3
4

reflect his limitations associated with schizophrenia and is not supported by substantial evidence.

5

Id. at 12-13.

6

Finally, Plaintiff argues that the ALJ erred in using the Grids as a framework to determine

7

whether he is disabled because Plaintiff has significant nonexertional limitations – even under the

8

ALJ’s RFC but especially if the other limitations that were erroneously omitted are considered –

9

that would significantly erode the occupational base of jobs Plaintiff could perform. Id. at 13-14.
Therefore, Plaintiff argues, the ALJ was required to take testimony of a vocational expert about

11

United States District Court
Northern District of California

10

the jobs available to Plaintiff in light of these nonexertional limitations. Id. at14. Plaintiff argues

12

that because the ALJ did not obtain such evidence his conclusion at Step Five is not supported by

13

substantial evidence.

14

III.

15

ANALYSIS
A.

16

The ALJ’s Weighing of the Evidence
1. Legal Standards

17

The Ninth Circuit differentiates among the opinions of three different types of physicians.

18

Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1995). The categories are as follows: “(1) those who

19

treat the claimant (treating physicians); (2) those who examine but do not treat the claimant

20

(examining physicians); and (3) those who neither examine nor treat the claimant (non-examining

21

physicians).” Id. “[T]he opinion of a treating physician is . . . entitled to greater weight than that

22

of an examining physician, [and] the opinion of an examining physician is entitled to greater

23

weight than that of a non-examining physician.” Garrison v. Colvin, 759 F.3d 995, 1012 (9th Cir.

24

2014).

25

“If a treating or examining doctor’s opinion is contradicted by another doctor’s opinion, an

26

ALJ may only reject it by providing specific and legitimate reasons that are supported by

27

substantial evidence.” Bayliss v. Barnhart, 427 F.3d 1211, 1216 (9th Cir. 2005) (citing Lester v.

28

Chater, 81 F.3d at 830-831). An ALJ can satisfy the “substantial evidence” requirement by
11

“setting out a detailed and thorough summary of the facts and conflicting clinical evidence, stating

2

his interpretation thereof, and making findings.” Reddick v. Chater, 157 F.3d 715, 725 (9th Cir.

3

1998). “The ALJ must do more than state conclusions. He must set forth his own interpretations

4

and explain why they, rather than the doctors’, are correct.” Id. (citation omitted). “Because a

5

court must give ‘specific and legitimate reasons’ for rejecting a treating doctor’s opinions, it

6

follows even more strongly that an ALJ cannot in its decision totally ignore a treating doctor and

7

his or her notes, without even mentioning them.” Marsh v. Colvin, 792 F.3d 1170, 1172–73 (9th

8

Cir. 2015). While harmless error analysis applies in the social security context, a failure to give

9

adequate reasons for discounting the opinions of treating or examining physicians is only harmless

10

if the reviewing court “‘can confidently conclude that no reasonable ALJ, when fully crediting the

11

United States District Court
Northern District of California

1

testimony, could have reached a different disability determination.’” Id. (quoting Stout v.

12

Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1056 (9th Cir. 2006)).

13

“If a treating provider’s opinions are based ‘to a large extent’ on an applicant’s self-reports

14

and not on clinical evidence, and the ALJ finds the applicant not credible, the ALJ may discount

15

the treating provider’s opinion.” Ghanim v. Colvin, 763 F.3d 1154, 1162 (9th Cir. 2014) (citing

16

Tommasetti v. Astrue, 533 F.3d 1035, 1041 (9th Cir. 2008)). “However, when an opinion is not

17

more heavily based on a patient’s self-reports than on clinical observations, there is no evidentiary

18

basis for rejecting the opinion.” Id. (citing Ryan v. Comm'r of Soc. Sec., 528 F.3d 1194, 1199-1200

19

(9th Cir. 2008)). Moreover, where a treating provider evaluates mental impairments, clinical

20

interview and mental status evaluation are “objective measures and cannot be discounted as a

21

‘self-report.’” Buck v. Berryhill, 869 F.3d 1040, 1049 (9th Cir. 2017). As the Ninth Circuit

22

explained in Buck:

23
24
25

Psychiatric evaluations may appear subjective, especially compared
to evaluation in other medical fields. Diagnoses will always depend
in part on the patient’s self-report, as well as on the clinician's
observations of the patient. But such is the nature of psychiatry.

26

Id. The court in Buck agreed with the D.C. Circuit and the Sixth Circuit that “‘[t]he report of a

27

psychiatrist should not be rejected simply because of the relative imprecision of the psychiatric

28

methodology. . . .’” Id. (quoting Blankenship v. Bowen, 874 F.2d 1116, 1121 (6th Cir. 1989)
12

1
2
3
4
5

(quoting Poulin v. Bowen, 817 F.2d 865, 873–74 (D.C. Cir. 1987))).
“The Commissioner may reject the opinion of a non-examining physician by reference to
specific evidence in the medical record.” Sousa v. Callahan, 143 F.3d 1240, 1244 (9th Cir. 1998).
2. Discussion
The ALJ rejected Dr. Conners’ opinion that it would be “very difficult” for Plaintiff to
maintain employment on the basis that it was “not supported by any objective evidence,

7

specifically Dr. Conners’ own treatment notes, which never identify a specific treating diagnosis

8

and generally report that the claimant is doing well, is able to manage his parole requirements, and

9

attends community college.” AR 46. He also “accord[ed] little weight to the opinion of the State

10

agency psychological consultants” because he did “not find that [Plaintiff] has a severe psychotic

11

United States District Court
Northern District of California

6

disorder” even though he did find that Plaintiff had mental impairments. Id. The ALJ dismissed

12

references to Plaintiff’s schizophrenia in prison treatment records on the basis that the diagnosis

13

was based on self-reports. The ALJ did not address Dr. Gerritson’s diagnosis or treatment notes at

14

all. The Court finds that the ALJ erred in his evaluation of the medical evidence and that his

15

rejection of the schizophrenia diagnosis that was adopted by numerous doctors and treatment

16

providers is not supported by substantial evidence.

17

First, as discussed above, Plaintiff’s prison treatment records reflect that several

18

psychiatrists diagnosed him with schizophrenia, paranoid schizophrenia or psychotic disorder and

19

during the eight years he was incarcerated he was prescribed medication to address his psychosis.

20

The prison medical records also show that his treatment providers met with Plaintiff on a regular

21

basis and made objective observations with respect to Plaintiff’s mental impairment and

22

symptoms. Yet the ALJ rejected the diagnosis of these doctors who had a longstanding treatment

23

relationship with Plaintiff on the basis that there was not any “actual independent diagnosis,”

24

finding instead that Plaintiff’s diagnosis was based on claimant’s “self-report.” See AR 42. ALJ

25

Laverdure’s conclusion appears to be based on a lack of understanding of the principles set forth

26

by the Ninth Circuit in Buck, discussed above. As was made clear in that case, where a claimant

27

has a mental impairment, objective evidence includes clinical interviews and mental status

28

evaluations even if the evaluation of a mental impairment will always rely to some extent on the
13

1

patient’s self-report. Buck, 869 F.3d at 1049. The prison medical records include extensive notes

2

by clinicians who diagnosed Plaintiff with schizophrenia and who observed Plaintiff’s symptoms

3

(including auditory hallucinations and paranoia) in the course of treatment.

4

ALJ Laverdure also seemed to rely on notes by treatment providers at Napa State Hospital

5

from 2004 suggesting that Plaintiff might have been malingering to avoid trial. Based on these

6

observations, the ALJ concluded that Plaintiff was simply “fak[ing] a mental illness to avoid

7

trial.” AR 42. He offered no explanation, however, of why the observations from 2004 would be

8

probative of Plaintiff’s mental impairment in subsequent years, when he no longer had an

9

incentive to malinger to avoid trial and yet still was observed by his treatment providers to show
symptoms of psychosis, leading multiple doctors to diagnose Plaintiff with schizophrenia. Indeed,

11

United States District Court
Northern District of California

10

the persistence of the same or similar symptoms while Plaintiff was in prison casts serious doubt

12

on the speculation of some clinicians at Napa State Hospital that Plaintiff was simply faking his

13

symptoms to avoid trial. In short, the Court finds that the ALJ failed to offer specific and

14

legitimate reasons supported by substantial evidence for rejecting outright the schizophrenia

15

diagnosis of Plaintiff’s treatment providers while in prison.

16

Similarly, the Court finds that ALJ Laverdure failed to offer specific and legitimate reasons

17

supported by substantial evidence for rejecting the opinion of treating physician Dr. Conners. To

18

the extent he relies on the fact that Dr. Conners’ diagnosis was reflected in a form submitted in

19

support of Plaintiff’s request for special accommodation at community college but not in her

20

weekly progress notes, the ALJ offers no explanation as to why the omission on the latter is

21

probative of whether the diagnosis is correct. Given that the template that Dr. Conners

22

consistently used to record her progress notes did not include a place to list the patient’s diagnosis,

23

the Court concludes that this omission is not probative of whether her diagnosis is supported by

24

objective medical evidence.

25

Nor does the ALJ accurately characterize Dr. Conners’ progress notes when he states that

26

they do not support her diagnosis. These progress notes describe Dr. Conner’s medical

27

observations of Plaintiff’s symptoms, including auditory hallucinations, high distractibility, decline

28

in basic functioning during periods of stress, anxiety, fear of people, and inattentiveness. AR 663

14

1

(“expressed his fear of people” “appeared very guarded” “eyes watered as he discussed his pain”), 664

2

(“high need to be supported” “fearful of people”), 666 (“session addressed the voices that he hears in

3

his head”), 667 (“continues to report that he hears voices and they are more prevalent in the morning”),

4

669 (“triggers for anxiety were also discussed as it pertained to becoming anxious around strangers”),

5

673 (“explor[ed] strategies to assist him in managing his auditory hallucinations”), 677 (clinician

6

noted that Plaintiff looked “harshly” at another client, which he explained was because of “the voices

7

in his head”; Plaintiff “recognize[d] that his mental health symptoms make him vulnerable to having a

8

decline in functioning when he gets anxious or is required to focus for an extended period of time”),

9

682 (Plaintiff “very anxious about the upcoming change in parole agent”; “seems to thrive with the
routine and structure provided through the relationship with the current parole agent”; “clinician

11

United States District Court
Northern District of California

10

advised the client she would follow up with the agent to express his need to have as much consistency

12

and to continue with the routine that is currently in place”), 684 (Plaintiff “is extremely distressed by

13

the recent changes in his routine that resulted from the change in parole agents”; Plaintiff “will

14

continue to be monitored for symptoms of increased decline in functioning”; Plaintiff “continues to

15

experience auditory hallucinations as well”), 685 (Plaintiff “continues to become emotionally labile

16

and experiences a decline in general functioning during periods of transition and distress”), 686

17

(“tearful at times”), 687 (“very agitated”; Plaintiff “continues to struggle with managing any change in

18

his routine to the point where he frequently becomes emotionally unregulated and labile”), 689

19

(“Plaintiff hears voices that tell him to do violent things such as verbally lashing out at someone that

20

he perceives as a threat” and “to hurt himself”), 693 (“Plaintiff was “emotionally labile”, “very

21

depressed”, has “lost interest in some of his hobbies”, “isolating from others”), 694 (“session explored

22

triggers to his anxiety and increase in auditory hallucinations”), 708 (“still reports challenges with

23

social interactions and tends to isolate himself”), 709 (“difficulty interacting with people when he is

24

not in a structured environment”), 710 (“stressed and overwhelmed”; “seemed physically fatigued”),

25

729 (“seemed fatigued”; “continued to struggle with racing thoughts at night”; “continues to isolate

26

himself and stated he would find school much more difficult if he was not taking classes . . . where he

27

received significant individualized attention and support from staff”), 730 (“distressed”; “auditory

28

hallucinations are becoming more pronounced and are of a more self-harm thematic nature”) 737

15

1

(Plaintiff has a “tendency to make inaccurate conclusions or rash decisions when he is emotionally

2

distraught”). As discussed above, such clinical observations of a patient constitute objective medical

3

evidence in the context of mental health impairments.

4

The ALJ’s reliance on the fact that Plaintiff attended community college also was not a

5

specific and legitimate reason for rejecting Dr. Conners’ opinions as he failed to address the

6

accommodations afforded to Plaintiff at community college or explain why Plaintiff’s attendance at

7

community college with those accommodations was inconsistent with Dr. Conners’ opinions regarding

8

Plaintiff’s limitations.

9

Accordingly, the Court finds that ALJ Laverdure did not provide specific and legitimate
reasons supported by substantial evidence for rejecting Dr. Conners’ opinions about Plaintiff’s

11

United States District Court
Northern District of California

10

diagnosis and symptoms.

12

Dr. Girtman also treated Plaintiff and diagnosed him with schizoaffective disorder. As

13

discussed above, he treated Plaintiff for at least two years, starting in 2013, and saw Plaintiff on a

14

monthly basis, during which time he observed symptoms of auditory hallucinations and paranoia.

15

In a Function Report, Dr. Girtman stated that Plaintiff had poor sleep, required reminders to take

16

his medication and attend appointments, had difficulty getting along with others, had an extremely

17

limited attention span (less than 5 minutes), did not finish what he started, had difficulty following

18

instructions, and exhibited paranoia around people. ALJ Laverdure did not offer any reasons for

19

rejecting Dr. Girtman’s diagnosis or for declining to include in his RFC any limitations related to

20

the symptoms described by Dr. Girtman. Because he was required to provide at least specific and

21

legitimate reasons for rejecting these opinions, the ALJ committed legal error in weighing the

22

evidence and his RFC is not supported by substantial evidence.

23

Finally, the ALJ offered no reason whatsoever for rejecting the opinions of the State

24

agency doctors who reviewed the record and found that Plaintiff’s schizophrenia was a severe

25

impairment. The “reason” that ALJ Laverdure offered – that he gave “little weight” to the

26

opinions of these doctors because he had reached a different conclusion than they had as to

27

Plaintiff’s diagnosis is not a reason at all. While the burden is not high when an ALJ rejects the

28

opinion of a non-examining physician, the ALJ was at least required to cite specific evidence in
16

1
2
3
4

the medical record in support of his conclusion. He did not do even that.
B.

Step Two Determination
1. Legal Standards

The purpose of the Step Two inquiry—requiring that the claimant demonstrate that he has
an impairment or combination of impairments that is severe—is to screen out groundless claims.

6

Smolen v. Chater, 80 F.3d at 1290. “An impairment or combination of impairments can be found

7

not severe only if the evidence establishes a slight abnormality that has no more than a minimal

8

effect on an individual’s ability to work.” Id. (citations omitted). Once a claimant prevails at step

9

two, “regardless of which condition is found to be severe, the Commissioner proceeds with the

10

sequential evaluation, considering at each step all other alleged impairments and symptoms that

11

United States District Court
Northern District of California

5

may impact her ability to work.” Angeli v. Astrue, No. CIV S-06-2592 (EFB), 2008 WL 802334,

12

at *3 (E.D. Cal. Mar. 25, 2008) (citing 42 U.S.C. § 423(d)(2)(B) (emphasis added)). Thus, failure

13

to find that an impairment is severe at step two does not necessarily constitute reversible error. Id.

14

“Rather, the question is whether the ALJ properly considered the functional limitations of all

15

medically determinable impairments at the remaining steps.” Id. (citing Smolen, 80 F.3d at 1290)

16

(holding that if one severe impairment exists, the ALJ must consider all medically determinable

17

impairments in the subsequent steps of the sequential analysis) (citing 20 C.F.R. § 404.1523); see

18

also Burch v. Barnhart, 400 F.3d 676, 682 (9th Cir. 2005) (holding that where the ALJ was

19

alleged to have erred at step two by failing to find that one of claimant’s alleged impairments was

20

severe, it could only have prejudiced the claimant “in step three (listing impairment determination)

21

or step five (RFC)”); Nicholson v. Colvin, 106 F. Supp. 3d 1190, 1195 (D. Or. 2015)

22

(“[O]missions at step two are often harmless error if step two is decided in plaintiff’s favor.”).

23
24

2. Discussion
The ALJ rejected outright Plaintiff’s diagnosis of schizophrenia and therefore found that it

25

was not a severe impairment at Step Two. As discussed above, the ALJ’s rejection of Plaintiff’s

26

schizophrenia diagnosis rests on the application of incorrect legal standards and improper

27

weighing of the evidence in the record. Moreover, the failure to include this impairment at Step

28

Two resulted in prejudice to Plaintiff. With respect to Plaintiff’s application for disability
17

1

insurance benefits under Title II, the ALJ did not proceed beyond Step Two because of his

2

erroneous finding, resulting in denial of the application. As to Plaintiff’s SSI application, the ALJ

3

did not address in his RFC many of the symptoms associated with this diagnosis that are described

4

by his treatment providers, including Plaintiff’s difficulty maintaining attention and concentration

5

for extended periods, working in coordination or proximity to others without being distracted by them,

6

accepting instructions, responding appropriately to supervisors, and responding appropriately to

7

changes in the work setting. Therefore, the Court finds that the ALJ erred at Step Two and that the

8

error resulted in prejudice to Plaintiff.

9
10

United States District Court
Northern District of California

11

C.

The ALJ’s Reliance on the “Grids”
1. Legal Standards

The Grids “present, in table form, a short-hand method for determining the availability and

12

numbers of suitable jobs for a claimant.” Lounsburry v. Barnhart, 468 F.3d 1111, 1114–15 (9th

13

Cir. 2006) (citing Tackett v. Apfel, 180 F.3d 1094, 1101 (9th Cir. 1999)). They consist of three

14

tables, for sedentary work, light work, and medium work, and a claimant’s place on the applicable

15

table depends on a matrix of four factors: a claimant’s age, education, previous work experience,

16

and physical ability. Id. “For each combination of these factors, [the Grids] direct a finding of

17

either ‘disabled’ or ‘not disabled’ based on the number of jobs in the national economy in that

18

category of physical-exertional requirements.” Id. However, “[t]he ALJ may rely on the grids

19

alone to show the availability of jobs for the claimant ‘only when the grids accurately and

20

completely describe the claimant’s abilities and limitations.’” Tackett, 180 F.3d at 1102 (quoting

21

Jones v. Heckler, 760 F.2d 993, 998 (9th Cir.1985)). “When the grids do not completely describe

22

the claimant’s abilities and limitations, such as when the claimant has both exertional and

23

nonexertional limitations . . . , the grids are inapplicable and the ALJ must take the testimony of a

24

VE.” Moore v. Apfel, 216 F.3d 864, 869 (9th Cir. 2000) (citation omitted).

25
26

2. Discussion
The ALJ included the following non-exertional limitations in his RFC: Plaintiff “is limited

27

to performing non-public, simple repetitive tasks.” AR 43. He nonetheless relied on the Grids to

28

find that Plaintiff is not disabled, stating that “these [nonexertional] limitations have little or no
18

1

effect on the occupational base of unskilled work at all exertional levels.” AR 47. The ALJ points

2

to no evidence in support of this conclusory statement, which is not supported by substantial

3

evidence. Rather, he should have taken testimony from the VE addressing how these limitations

4

would affect the job base available for Plaintiff. Further, had the ALJ included nonexertional

5

limitations associated with Plaintiff’s schizophrenia, those limitation would also make reliance on

6

the Grids inappropriate.

7

D.

8

Once a district court has determined that an ALJ has erred, the court must decide whether

9

Remedy

to remand for further proceedings or to remand for immediate award of benefits. Harman v. Apfel,
211 F.3d 1172, 1177–78 (9th Cir. 2000). As a general rule, reversal of the Commissioner’s

11

United States District Court
Northern District of California

10

decision results in remand for further proceedings, but a court may remand for award of benefits in

12

“‘rare circumstances,’ . . . ‘where no useful purpose would be served by further administrative

13

proceedings and the record has been thoroughly developed.’” Treichler v. Comm'r of Soc. Sec.

14

Admin., 775 F.3d 1090, 1100 (9th Cir. 2014) (quoting Moisa v. Barnhart, 367 F.3d 882, 886 (9th

15

Cir. 2004) and Hill v. Astrue, 698 F.3d 1153, 1162 (9th Cir. 2012) (internal quotation marks

16

omitted)). A court may remand for award of benefits under the credit-as true rule if all of the

17

following requirements are satisfied: “(1) the ALJ has failed to provide legally sufficient reasons

18

for rejecting such evidence, (2) there are no outstanding issues that must be resolved before a

19

determination of disability can be made, and (3) it is clear from the record that the ALJ would be

20

required to find the claimant disabled were such evidence credited.” Harman, 211 F.3d at 1178.

21

In this case, the ALJ failed to conduct a fulsome examination of the record and did not

22

conduct a meaningful analysis at Steps Two, Step Three, Step Four or Step Five. Many questions

23

remain regarding Plaintiff’s limitations at the time of his alleged onset date and more recently and

24

it is unclear if his limitations preclude him for working in either period of time, especially as there

25

has been no testimony offered by a vocational expert. Therefore, the Court finds that it is

26

appropriate to remand this case for further proceedings in which the Commissioner will determine

27

whether Plaintiff is entitled to disability insurance benefits and/or SSI benefits.

28
19

1
2

IV.

CONCLUSION
For the reasons set forth above, the Court GRANTS Plaintiff’s Motion for Summary

3

Judgment, DENIES the Commissioner’s Motion for Summary Judgment, reverses the decision of

4

the Commissioner and remands for further proceedings.

5
6
7
8

IT IS SO ORDERED.
Dated: September 24, 2019
______________________________________
JOSEPH C. SPERO
Chief Magistrate Judge

9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
20