Speciale v. Colvin

Filing 20


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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 DON R. SPECIALE, Plaintiff, 8 v. 9 10 NANCY A. BERRYHILL, Defendant. United States District Court Northern District of California 11 12 Plaintiff Don R. Speciale appeals a final decision of Defendant Nancy A. Berryhill, Acting 14 16 17 18 19 20 Commissioner of Social Security, denying his application for a period of disability and disability benefits under Title II and Title XVI of the Social Security Act. Upon consideration of the briefing1 and for the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART Plaintiff’s motion for summary judgment, GRANTS IN PART AND DENIES IN PART Defendant’s cross motion for summary judgment, and Remands the case to the Agency for further proceedings I. 21 24 25 26 27 28 BACKGROUND Speciale, a U.S. citizen, was born on August 8, 1951. Admin R. (“AR”) 11, 27, 115. 22 23 ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT; GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION FOR SUMMARY JUDGMENT; AND REMANDING TO THE AGENCY [Re: ECF 11, 16] 13 15 Case No. 16-cv-01659-BLF Speciale has a high school degree and completed one year of college. AR 40, 146. Over the past 15 years, Speciale has worked in the construction industry. AR 146. From March 1994 through June 2003, he worked as a Regional Manager. Id. From December 2005 through July 2008, Speciale worked as a Construction Manager. Id. Most recently, Speciale worked as a Regional Construction Manager, from July 2008 through November 2009. Id. Speciale claims that he 1 This matter was submitted without oral argument pursuant to Civil Local Rule 16-5. 1 worked at least 10 hours per day, 6 days a week in each of these positions. Id. 2 On September 18, 2012, Speciale filed an application for a period of disability and 3 disability insurance benefits, alleging disability beginning November 13, 2009. AR 11. Speciale 4 also filed an application for supplemental social security income on September 18, 2012, alleging 5 the same disability start date. Id. Speciale claims disability due to back pain and depression. Id. Speciale was denied benefits initially and upon reconsideration. AR 11. He requested and 6 received a hearing before an administrative law judge (“ALJ”) on June 16, 2014. Id. at 11, 74. 8 Speciale appeared and testified at the hearing. Id. at 11. An impartial vocational expert (“VE”), 9 Victoria Rei, also testified at the hearing. Id. On September 22, 2014, ALJ Brenton L. Rogozen 10 issued a written decision finding Speciale not disabled and thus not entitled to benefits. Id. at 11– 11 United States District Court Northern District of California 7 18. The ALJ’s decision was affirmed by the Appeals Counsel on March 1, 2016, making the 12 ALJ’s decision the final decision of the Commissioner of Social Security. Id. at 1–6. Speciale 13 now seeks judicial review of the denial of benefits. 14 15 16 II. LEGAL STANDARD A. Standard of Review District courts “have power to enter, upon the pleadings and transcript of the record, a 17 judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, 18 with or without remanding the cause for a rehearing.” 42 USC § 405(g). However, “a federal 19 court’s review of Social Security determinations is quite limited.” Brown-Hunter v. Colvin, 806 20 F.3d 487, 492 (9th Cir. 2015). Federal courts “‘leave it to the ALJ to determine credibility, 21 resolve conflicts in the testimony, and resolve ambiguities in the record.’” Id. (quoting Treichler 22 v. Comm’r Soc. Sec., 775 F.3d 1090, 1098 (9th Cir. 2014)). 23 A court “will disturb the Commissioner’s decision to deny benefits only if it is not 24 supported by substantial evidence or is based on legal error.” Brown-Hunter, 806 F.3d at 492 25 (internal quotation marks and citation omitted). “Substantial evidence is such relevant evidence as 26 a reasonable mind might accept as adequate to support a conclusion, and must be more than a 27 mere scintilla, but may be less than a preponderance.” Rounds v. Comm’r Soc. Sec., 807 F.3d 996, 28 1002 (9th Cir. 2015) (internal quotation marks and citations omitted). A court “must consider the 2 1 evidence as a whole, weighing both the evidence that supports and the evidence that detracts from 2 the Commissioner’s conclusion.” Id. (internal quotation marks and citation omitted). If the 3 evidence is susceptible to more than one rational interpretation, the ALJ’s findings must be upheld 4 if supported by reasonable inferences drawn from the record. Id. 5 Finally, even when the ALJ commits legal error, the ALJ’s decision will be upheld so long 6 as the error is harmless. Brown-Hunter, 806 F.3d at 492. However, “[a] reviewing court may not 7 make independent findings based on the evidence before the ALJ to conclude that the ALJ’s error 8 was harmless.” Id. The court is “constrained to review the reasons the ALJ asserts.” Id. 9 B. Standard for Determining Disability Disability benefits are available under Title II of the Social Security Act when an eligible 10 United States District Court Northern District of California 11 claimant is unable “to engage in any substantial gainful activity by reason of any medically 12 determinable physical or mental impairment which can be expected to result in death or which has 13 lasted or can be expected to last for a continuous period of not less than 12 months.” 42 U.S.C. § 14 423(d)(1)(A). “To determine whether a claimant is disabled, an ALJ is required to employ a five-step 15 16 sequential analysis, determining: (1) whether the claimant is doing substantial gainful activity; (2) 17 whether the claimant has a severe medically determinable physical or mental impairment or 18 combination of impairments that has lasted for more than 12 months; (3) whether the impairment 19 meets or equals one of the listings in the regulations; (4) whether, given the claimant’s residual 20 functional capacity, the claimant can still do his or her past relevant work; and (5) whether the 21 claimant can make an adjustment to other work.” Ghanim v. Colvin, 763 F.3d 1154, 1160 (9th 22 Cir. 2014) (internal quotation marks and citations omitted). The residual functional capacity 23 (“RFC”) referenced at step four is what a claimant can still do despite his or her limitations. Id. at 24 1160 n.5. “The burden of proof is on the claimant at steps one through four, but shifts to the 25 Commissioner at step five.” Bray v. Comm’r Soc. Sec., 554 F.3d 1219, 1222 (9th Cir. 2009). 26 III. DISCUSSION 27 The ALJ determined that Speciale had acquired sufficient quarters of coverage to remain 28 insured through December 31, 2014. AR 13. At step one, the ALJ determined that Speciale had 3 1 not engaged in substantial gainful activity since his alleged onset date of November 13, 2009. Id. 2 At step two, the ALJ found that Speciale had one severe impairment, “degenerative disc disease.” 3 Id. The ALJ stated that although the records showed treatment for various other physical 4 conditions, including hepatitis and a sleep-related breathing disorder, those conditions had not 5 resulted in significant limitations and were therefore non-severe. Id. The ALJ also concluded that 6 Speciale’s medically determinable mental impairment of depression “does not cause more than 7 minimal limitation in [his] ability to perform basic mental work activities and is therefore non- 8 severe.” Id. at 14. At step three, the ALJ concluded that Speciale did not have an impairment or combination 9 of impairments that meets or medically equals the severity of one of the listed impairments in 20 11 United States District Court Northern District of California 10 C.F.R., Part 404, Subpart P, Appendix 1 (20 C.F.R. 404.1520(d), 404.1525, 404.1526, 416.920(d), 12 416.925, and 416.926). AR 15. Between steps three and four, the ALJ found that Speciale had 13 the RFC to perform the full range of sedentary work as defined in 20 C.F.R. 404.1567(a) and 14 416.967(a). AR 15. At step four, the ALJ found that Speciale was capable of performing past 15 relevant work (“PRW”) as a project manager, and that this work does not require the performance 16 of work-related activities precluded by his RFC. Id. at 18. Thus, the ALJ determined that 17 Speciale had not been under a disability, as defined in the Social Security Act, from November 13, 18 2009, through the date of the decision. Id. at18. Speciale challenges the ALJ’s step two and step four determinations, asserting that the ALJ 19 20 erred by misclassifying his PRW, failing to provide sufficient basis for rejecting the finding and 21 opinions of his treating physicians, failing to properly consider the demonstrated diagnoses of 22 depressive disorder and medication side effects, and failing to consider and assign sufficient 23 weight to the Department of Veterans Affairs’ (“VA”) disability rating. The Court addresses each 24 alleged deficiency in turn. 25 A. Classification of Past Relevant Work 26 In his opinion, the ALJ found that Speciale is capable of performing his past relevant work 27 as a project manager, which does not require the performance of work-related activities precluded 28 by his RFC. AR 18. Relying on a report by VE Tom Linville, Speciale contends that the 4 1 testifying VE, and thus the ALJ, misclassified his PRW. Pl.’s Mot. Summ. J. (“Pl.’s MSJ”) 8, 2 ECF 11; Reply ISO Pl.’s MSJ 3, ECF 19. Speciale also asserts that in denying his application at 3 step four, the ALJ classified his PRW based on the least demanding function of his PRW—i.e., 4 duties he performed only 40 percent or less of his typical workday—in violation of Valencia v. 5 Heckler, 751 F.2d 1082 (9th Cir. 1985), and its progeny, including Stacy v. Colvin, 825 F.3d 563 6 (9th Cir. 2016). Pl.’s MSJ 9–10. Defendant disputes this contention, and argues that the ALJ 7 properly relied on hearing testimony and the VE’s testimony to find the project manager position 8 was past relevant work. Defendant also argues that the ALJ did not base his determination on the 9 least demanding function. Def.’s Mot. Summ. J. (“Def.’s MSJ”) 6, 8, ECF 16. 10 United States District Court Northern District of California 11 i. Misclassification Speciale first contends that the ALJ misclassified his PRW, which led to an erroneous 12 denial at step four. Pl.’s MSJ 8. To show that his PRW was misclassified, Speciale relies on VE 13 Tom Linville, whom Speciale hired after the ALJ rendered his opinion. Id. at 8; Reply ISO Pl.’s 14 MSJ 4. In his report, Linville claimed that the ALJ erred in relying on the testifying VE because 15 the two DOT job categories described by the testifying VE did not match the job that Speciale 16 actually performed. AR 226–28. Considering the materials, products, subject matter, and services 17 (“MPSMS”) codes connected with the project manager role, Linville asserts that the project 18 manager title is “ill-fitting” for Speciale. AR 227. Instead, he contends that Speciale’s PRW fits 19 more closely with the construction superintendent description in the DOT (182.167-026). Id. 20 Pursuant to this, Linville concludes that Speciale has no transferable skills to sedentary work 21 within his industry, and therefore the ALJ’s classification was incorrect. Id. at 228. 22 In considering evidence submitted for the first time to the Appeals Council, such as 23 Linville’s report, the Court is to determine whether the ALJ’s decision was supported by 24 substantial evidence, in light of the new information provided and the record as a whole. Brewes 25 v. Astrue, 682 F.3d 1157, 1162 (9th Cir. 2012). Considering the record as a whole, including the 26 evidence Speciale submitted to the Appeals Council, the Court concludes that the Commissioner’s 27 decision is not supported by substantial evidence. The ALJ’s disability determination expressly 28 relied on the testimony of the vocational expert, who testified that Speciale’s testimony and filed 5 1 documents indicated two discrete jobs: (1) project manager (DOT 189.117-030), performed at a 2 sedentary exertion level and (2) regional superintendent (DOT 182.167-026), performed at the 3 medium exertion level. See AR 18, 42–43. Relying on this testimony, the ALJ concluded that 4 Speciale could perform his PRW as it is actually and generally performed in the national economy, 5 and therefore, he was not disabled. Id. at 18. The additional evidence Speciale submitted to the 6 Appeals Council was directly responsive to the VE’s testimony, and points out deficiencies in her 7 determination that Speciale’s PRW fell into two discrete jobs. Indeed, consideration of Linville’s 8 report would create an evidentiary conflict in the record. Defendant does not engage with 9 Linville’s report in its papers. 10 Here, the Court finds that further development of the record, and subsequent consideration United States District Court Northern District of California 11 thereof, is needed in order to assess whether there is substantial evidence to support the ALJ’s 12 decision. Linville’s report raises serious questions about whether the testifying VE’s opinions are 13 substantiated. Defendant suggests that the ALJ’s reliance on the testifying VE’s opinions is 14 appropriate given the contradictions in Speciale’s descriptions of his PRW. See Def.’s MSJ 6. 15 However, it is far from clear whether this is an accurate conclusion because the ALJ failed to 16 reference these contradictions or make a determination of which description governed. 17 Accordingly, the Court remands for further development of the record, and consideration by the 18 agency thereof, consistent with the above. 19 ii. Least Demanding Function 20 Speciale also argues that the ALJ classified his PRW based on duties he performed only 40 21 percent or less of his typical workday, in violation of Valencia v. Heckler, 751 F.2d 1082 (9th Cir. 22 1985), and its progeny, including Stacy v. Colvin, 825 F.3d 563 (9th Cir. 2016). Pl.’s MSJ 9–10. 23 A claimant has the burden at step four to prove that she cannot perform her past relevant 24 work. See Stacy v. Colvin, 825 F.3d 563, 567 (9th Cir. 2016) (citing Lewis v. Barnhart, 281 F.3d 25 1081, 1083 (9th Cir. 2002)). An ALJ may use either the “actually performed test” or the 26 “generally performed test” when assessing a claimant’s ability to perform past work. Id. at 569 27 (citing SSR 82-61, 1982 WL 31387 (1982)). The Social Security ruling explains the application 28 of the “generally performed test” as follows: 6 1 2 3 4 A former job performed by the claimant may have involved functional demands and job duties significantly in excess of those generally required for the job by other employers throughout the national economy. Under this test, if the claimant cannot perform the excessive functional demands and/or job duties actually required in the former job but can perform the functional demands and job duties as generally required by employers throughout the economy, the claimant should be found to be “not disabled.” 5 SSR 82-61, 1982 WL 31387 (1982). “Regardless of which test is applied at step four, the ALJ 6 may not classify a past occupation ‘according to the least demanding function.’” Stacy, 825 F.3d 7 at 569 (citing and quoting Carmickle v. Comm’r Soc. Sec., 553 F.3d 1155, 1169 (9th Cir. 2008)). 8 That is, the ALJ errs if he or she equates the “least demanding aspect” of the claimant’s past job, 9 which the claimant did less than half of the time, with a fulltime job. Id. at 569–70. Here, as Defendant properly points out, Speciale presented at least two versions of his 11 United States District Court Northern District of California 10 project manager position. See Def.’s MSJ 6. When Speciale applied for benefits, he reported 12 three jobs and listed the same three jobs on his self-authored work report. See AR 146, 163–67. 13 Those positions were Regional Manager, Construction Manager, and Regional Construction 14 Manager. AR 163. At issue here is Speciale’s work as a Regional Manager, which the VE 15 equated with a project manager job (DOT 189.117-030). AR 42. Speciale contends that the VE 16 misclassified his prior work experience because the administrative duties he performed constituted 17 40% or less of his typical workday. Pl.’s MSJ 9. However, on his work history report, Speciale 18 declared that the position required him to sit for eight hours per day in order to “manage the day to 19 day operations of a communications installations company from [his] office.” AR 166. There was 20 no indication that this position involved physical exertion. At the hearing, by contrast, Speciale 21 referred to this position as “project manager,” and testified that on a typical day, he would spend 22 four hours in the office doing clerical work and approximately six hours “on the street.” AR 29– 23 30. Speciale also stated that he had incorrectly filled out his work history report. AR 31. 24 Accordingly, the record reflects that sedentary work comprised either 100% or 40% of 25 Speciale’s project manager/regional manager position. Compare AR 166, with id. at 31; see also 26 Def.’s MSJ 9. If sedentary work comprised 100% of Speciale’s PRW, Plaintiff could not 27 plausibly contend that the ALJ or the VE misclassified his position by considering only the least 28 demanding function of his job. The same might not be true if sedentary work comprised only 40% 7 1 of Speciale’s PRW. Because the ALJ did not engage in a discussion of these contradictions, the Court cannot 2 3 determine whether his determination is based on the least demanding function. For this reason, 4 the Court remands for further development of the record, and consideration by the agency thereof, 5 consistent with the above 6 7 Treatment of Claimant’s Treating Physicians B. Speciale next contends that the ALJ failed to provide a sufficient basis, supported by the record, for rejecting the findings and opinions of his treating physicians, Dr. Darlene Jang and Dr. 9 Ronald Suarez. Pl.’s MSJ 11. Defendant disagrees, however, and argues that the ALJ properly 10 evaluated these opinions in the course of assessing Plaintiff’s RFC, and thus, did not err. Def.’s 11 United States District Court Northern District of California 8 MSJ 12. 12 “Generally, the opinion of a treating physician must be given more weight than the opinion 13 of an examining physician, and the opinion of an examining physician must be afforded more 14 weight than the opinion of a reviewing physician.” Ghanim, 763 F.3d at 1160. “If a treating 15 physician’s opinion is well-supported by medically acceptable clinical and laboratory diagnostic 16 techniques and is not inconsistent with the other substantial evidence in the case record, it will be 17 given controlling weight.” Id. (internal quotation marks, citation, and brackets omitted). 18 If the treating physician’s opinion is contradicted by the opinion of another physician, the 19 ALJ may reject the treating physician’s opinion but only based upon “specific and legitimate 20 reasons that are supported by substantial evidence.” Id. (internal quotation marks and citation 21 omitted). In determining how much weight to give a treating physician’s opinion, the ALJ must 22 consider the following factors: the length of the treatment relationship and the frequency of 23 examination by the treating physician, the nature and extent of the treatment relationship between 24 the patient and the treating physician, the supportability of the physician’s opinion with medical 25 evidence, and the consistency of the physician’s opinion with the record as a whole.” Id. (internal 26 quotation marks, citation, and brackets omitted). “An ALJ may only reject a treating physician’s 27 contradicted opinions by providing ‘specific and legitimate reasons that are supported by 28 substantial evidence.’” Id.; see also Bray, 554 F.3d at 1228 (“[T]he ALJ need not accept the 8 1 opinion of any physician, including a treating physician, if that opinion is brief, conclusory, and 2 inadequately supported by clinical findings.” (internal quotation marks, citation and alteration 3 omitted)). 4 5 iii. Dr. Darlene Jang Dr. Jang, a primary care physician, began seeing Speciale on May 27, 2010. AR 785. In 6 her medical source statement, Dr. Jang wrote that she saw Speciale “once a year.” Id. Dr. Jang 7 diagnosed Speciale with lumbar radiculopathy, with symptoms that include chronic pain and low 8 back pain that radiates to his right leg. Id. Based on his symptoms, Dr. Jang noted that Speciale’s 9 functional capacity is limited—he can walk for only one half of a block, sit for five to ten minutes at a time before needing to stand up, and can stand for five to ten minutes before needing to sit 11 United States District Court Northern District of California 10 down, among other claimed limitations. Id. 787. 12 Although the opinions of treating physicians are generally accorded greater weight than 13 those of reviewing physicians, the ALJ considers other factors in evaluating a medical opinion. 20 14 C.F.R. § 404.1527(c). Indeed, “an ALJ may discredit treating physicians’ opinions that are 15 conclusory, brief, and unsupported by the record as a whole, or by objective medical findings.” 16 Batson v. Comm’r Soc. Sec., 359 F3d 1190, 1195 (9th Cir. 2004) (citations omitted). In this case, 17 the ALJ noted that Dr. Jang’s report was “not substantiated by the objective and medical 18 21 findings.” AR 17. Specifically, the ALJ wrote, the records show significant gaps in treatment. When Mr. Speciale returned for more consistent treatment in March 2012, physical examinations were normal. In general, the claimant is found to be credible with respect to his symptoms; however, there is simply insufficient evidence to support the level of severity alleged. Dr. Jang’s statement is similarly unsupported. 22 AR 18. Accordingly, the ALJ determined that Speciale has the RFC to perform the full range of 23 sedentary work as defined in 20 C.F.R. 404.1567(a) and 416.967(a). Id. at 15. 19 20 24 The record supports the ALJ’s conclusion regarding Dr. Jang. Although Speciale alleges 25 back pain beginning in May 2009 and underwent an L1-2 discectomy for a herniated disc in 26 March 2010, the records show that his symptoms gradually improved after his surgery. Indeed, 27 Speciale did not present for any orthopedic treatment between November 2010 and March 2012. 28 AR 657. Moreover, on March 30, 2012, Dr. Mark Cheng, Speciale’s doctor at the Veteran’s 9 1 Administration, noted that Speciale’s radiculopathy had resolved and prescribed prescription Icy 2 Hot for residual back pain. Id. at 694. His April 2012 exam likewise found normal physical 3 function except for uneven pain in the lumbar region and hip joints. Id. at 689. Finally, although 4 a May 2012 PET scan showed degenerative disc disease, Plaintiff did not present for pain 5 treatment again until July 2013. Id. at 830–32, 887. Nevertheless, Dr. Jang wrote on May 16, 6 2013, that Speciale’s chronic pain was 6/10. Id. at 785. Because the ALJ is the final arbiter with 7 respect to resolving ambiguities in the medical record, see Andrews, 53 F.3d at 1039–40, the ALJ 8 reasonably gave less weight to Dr. Jang’s opinion. 9 10 iv. Dr. Ronald Suarez Dr. Suarez is a psychiatrist who began seeing Speciale in May 2013. AR 1027. He United States District Court Northern District of California 11 completed a mental impairment questionnaire for Speciale on May 28, 2014. Id. at 1027–32. Dr. 12 Suarez diagnosed Speciale with a mood disorder, and stated that Speciale suffers from anhedonia, 13 intense and unstable interpersonal relationships, persistent disturbances of mood or affect, and 14 generalized persistent anxiety, among other symptoms. AR 1028. 15 As the Court explained above, although the opinions of treating physicians are generally 16 accorded greater weight than those of reviewing physicians, the ALJ considers other factors in 17 evaluating a medical opinion. 20 C.F.R. § 404.1527(c). Here, the ALJ considered Dr. Suarez’s 18 findings, but discounted them after finding contradictions in the record. AR 17. The ALJ noted 19 that although Dr. Suarez reported “no more than moderate limitations in the functional areas,” Dr. 20 Suarez concluded that Speciale “is so marginally adjusted that even a minimal increase in mental 21 demands or change in environment would be predicted to cause him to decompensate.” Id. The 22 ALJ discounted this conclusion because Dr. Suarez’s notes throughout the relevant period “do not 23 document such extreme severity.” Moreover, the ALJ found that Speciale’s mental treatment has 24 been “sporadic,” and “[w]hen he did present for an evaluation, Dr. Suarez noted generally normal 25 mental status evaluations.” Id. 26 A contradiction between a medical source’s assessment of a claimant’s disability and the 27 source’s other notes and observations provides a clear and convincing reason for rejecting that source’s 28 opinion. Bayliss v. Barnhart, 427 F.3d 1211, 1216 (9th Cir. 2005). Here, the ALJ identified a number 10 1 of contradictions between Dr. Suarez’s ultimate conclusion and Speciale’s other medical records. For 2 example, on April 24, 2014, only one month before Dr. Suarez completed the aforementioned 3 questionnaire, Dr. Suarez noted that Speciale mood was “ok,” and that Speciale was “not overtly 4 anxious, dysphoric, elevated or irritable.” AR 1000, 1003. He also found Speciale “alert and 5 oriented,” cooperative with good eye contact, organized thought process, intact attention and 6 concentration, and fair insight and judgment. Id. at 1003. Additionally, at an earlier appointment in 7 November 2013, Dr. Suarez’s notes were nearly identical, but also included the comment that 8 Speciale’s ongoing symptoms had decreased as “he tries to take more of a perspective of acceptance 9 about his circumstances and limitations.” Id. at 1010, 1013. In previous mental health exams, Speciale denied depression and stated that his mood was “pretty good.” Id. at 346 (May 16, 2012), 11 United States District Court Northern District of California 10 363 (March 28, 2012). These records contradict Dr. Suarez’s opinion that Speciale would 12 decompensate upon entering the public sphere. In light of the contradictions, the Court finds that the 13 ALJ’s rejection of Dr. Suarez’s opinion is supported by more than substantial evidence and was based 14 upon a permissible determination within the ALJ’s province. 15 16 C. No Severe Mental-Health Impairment Speciale next argues that the ALJ erred by failing to properly consider the demonstrated 17 diagnoses of depressive disorder and medication side effects, and thus found that the only “severe” 18 impairment he had demonstrated was “degenerative disc disease.” Pl.’s MSJ 13. 19 “At step two of the five-step sequential inquiry, the Commissioner determines whether the 20 claimant has a medically severe impairment or combination of impairments.” Smolen v. Chater, 21 80 F.3d 1273, 1289–90 (9th Cir. 1996) (citation omitted). “The Social Security Regulations and 22 Rulings, as well as case law applying them, discuss the step two severity determination in terms of 23 what is ‘not severe.’ According to the Commissioner’s regulations, ‘an impairment is not severe if 24 it does not significantly limit [the claimant’s] physical ability to do basic work activities.’” Id. at 25 1290 (citing and quoting 20 C.F.R. §§ 404.1520(c), 404.1521(a) (1991)). At step two, “the ALJ 26 must consider the combined effect of all of the claimant’s impairments on [his or] her ability to 27 function, without regard to whether each alone was sufficiently severe . . . . Also, [the ALJ] is 28 required to consider the claimant’s subjective symptoms, such as pain or fatigue, in determining 11 1 severity.” Id. (citations omitted). “[T]he step-two inquiry is a de minimis screening device to 2 dispose of groundless claims . . . . An impairment or combination of impairments can be found 3 ‘not severe’ only if the evidence establishes a slight abnormality that has ‘no more than a minimal 4 effect on an individuals’ ability to work.’” Id. (citations omitted). The claimant bears the burden 5 of making a threshold showing of medical severity. Bowen v. Yuckert, 482 U.S. 137, 149–50 6 (1987). 7 Here, the ALJ found Speciale had a severe impairment, namely “degenerative disc 8 disease.” AR 13. Although Speciale objects the ALJ failed to consider his functioning levels with 9 respect to his memory loss, concentration deficits, and sleep disturbance (Pl.’s MSJ 14), the fact that Speciale had at least one severe impairment meant the ALJ had to consider the functional 11 United States District Court Northern District of California 10 effect of all of Speciale’s impairments, severe and non-severe. See SSR 96-8p, 1996 WL 374184 12 at *5 (July 2, 1996) (“In assessing RFC, the adjudicator must consider limitations and restrictions 13 imposed by all of an individual’s impairments, even those that are not ‘severe’”); SSR 85-28, 1985 14 WL 56856, at *3 (January 1, 1985) (“A claim may be denied at step two only if the evidence 15 shows that the individual’s impairments, when considered in combination, are not medically 16 severe, i.e., do not have more than a minimal effect on the person’s physical or mental ability(ies) 17 to perform basic work activities. If such a finding is not clearly established by medical evidence, 18 however, adjudication must continue through the sequential evaluation process”). Therefore, the 19 identification of his mental impairments as severe or non-severe was irrelevant, so long as the ALJ 20 considered all impairments as part of the sequential analysis, which he did. See, e.g., AR 17. 21 Further, “omissions at step two are often harmless error if step two is decided in plaintiff’s 22 favor.” Nicholson v. Colvin, 106 F. Supp. 3d 1190, 1195 (D. Or. 2015) (citing Burch v. Barnhart, 23 400 F.3d 676, 682 (9th Cir. 2005) (concluding that any error the ALJ committed at step two was 24 harmless because it did not alter the outcome of step two, and the step was resolved in claimant’s 25 favor); see also Lewis v. Astrue, 498 F.3d 909, 911 (9th Cir. 2007) (finding harmless an ALJ’s 26 failure to list certain impairment at step two where the ALJ fully evaluated the impairment at step 27 four); Smolen, 80 F.3d at 1290 (if one severe impairment exists, all medically determinable 28 impairments, and their combined impact on the claimant’s RFC and ability to perform work, must 12 be considered in the remaining steps of the sequential analysis) (citing 20 C.F.R. § 404.1523)). 2 Step two serves only to eliminate groundless claims of disability from claimants who have no 3 impairments or combination of impairments that sufficiently limit their functionality to constitute 4 severe impairments. Smolen, 80 F.3d at 1290 (“the step-two inquiry is a de minimis screening 5 device to dispose of groundless claims”). Thus, as the ALJ found that Plaintiff had one severe 6 impairment and completed the sequential analysis, considering all of Plaintiff’s severe and non- 7 severe impairments, any error in failing to name additional mental impairments as severe is 8 harmless. See generally AR 11–18; see Tommasetti v. Astrue, 533 F.3d 1035, 1042–43 (9th Cir. 9 2008) (error that is inconsequential to the ultimate non-disability determination is harmless error) 10 (citations and internal quotation marks omitted); Molina v. Astrue, 674 F.3d 1104, 1111 (9th Cir. 11 United States District Court Northern District of California 1 2012). Accordingly, the ALJ’s decision is not to be disturbed on this ground. 12 D. Evaluation of VA Disability Rating 13 Speciale’s final argument is that the ALJ erred by failing to consider the VA rating 14 determination. Pl.’s MSJ 15; see AR 131–32. Defendant appears to concede that the ALJ did not 15 consider the VA’s finding in reaching his decision. Def.’s MSJ 16. Nevertheless, Defendant 16 argues that this omission was harmless because the ALJ considered both the VA physical and 17 medical source opinions at length in his opinion. Id. The VA found Speciale 70 percent disabled, 18 50 percent of which came from his alleged mental impairment. AR 132. “Although a VA rating of disability does not necessarily compel the SSA to reach an 19 20 identical result, 20 C.F.R. § 404.1504, the ALJ must consider the VA’s finding in reaching his 21 decision, and the ALJ must ordinarily give great weight to a VA determination of disability.” 22 McLeod v. Astrue, 640 F.3d 881, 886 (9th Cir. 2011) (quoting McCartey v. Massanari, 298 F.3d 23 1072, 1076 (9th Cir. 2002)). “Because the VA and SSA criteria for determining disability are not 24 identical, however, the ALJ may give less weight to a VA disability rating if he gives persuasive, 25 specific, valid reasons for doing so that are supported by the record.” McCartey, 298 F.3d at 26 1076. 27 Contrary to what Defendant argues, although the ALJ did consider the opinions of 28 Speciale’s doctors at the VA, he did not provide a reason for rejecting the VA’s disability 13 determination. AR 16. In light of clear Ninth Circuit precedent, this is plainly insufficient. Cf. 2 Allen v. Astrue, No. CV 11-2807, 2012 WL 234629, at *3–4 (C.D. Cal. Jan. 23, 2012) (ALJ’s 3 statement that she was not bound by the VA’s disability finding is not a persuasive, specific, and 4 valid reason for rejecting the VA’s finding of disability). Defendant’s reliance on Cahudhry v. 5 Astrue, 688 F.3d 661 (9th Cir. 2012), is misplaced because there, “the ALJ directly addressed the 6 [VA’s finding of disability] in the record.” 688 F.3d at 669; see see Def.’s MSJ 16. Here, by 7 contrast, the ALJ did not mention the VA’s disability rating once. Cf. Hanes v. Colvin, No. 8 13cv2625, 2015 WL 5177763, at*3 (S.D. Cal. Mar. 16, 2015) (finding Chaudhry distinguishable 9 because, in Chaudhry, “the issue was whether the ALJ committed reversible error by not obtaining 10 Chaudhry’s disability determination from the VA,” whereas in the present case “the ALJ failed to 11 United States District Court Northern District of California 1 consider the VA determination of disability in his decision”). Thus, the Court cannot agree that the ALJ’s failure to consider the VA’s disability rating 12 13 was harmless error. Accordingly, remand is required for the ALJ to set forth legally sufficient 14 reasons for rejecting the determination of the VA, if the ALJ determines that rejection is 15 warranted. 16 E. Remand is Warranted 17 The decision whether to remand for further proceedings or order an immediate award of 18 benefits is within the district court’s discretion. Harman v. Apfel, 211 F.3d 1172, 1175–78 (9th 19 Cir. 2000). Where no useful purpose would be served by further administrative proceedings, or 20 where the record has been fully developed, it is appropriate to exercise this discretion to direct an 21 immediate award of benefits. Id. at 1179 (“[T]he decision of whether to remand for further 22 proceedings turns upon the likely utility of such proceedings.”). However, where, as here, the 23 circumstances of the case suggest that further administrative review could remedy the 24 Commissioner’s errors, remand is appropriate. McLeod, 640 F.3d at 888. 25 Since the ALJ possibly misclassified Speciale’s past relevant work and failed to address 26 the Department of Veterans Affairs’ disability determination, remand is appropriate. Because 27 outstanding issues must be resolved before a determination of disability can be made, and “when 28 the record as a whole creates serious doubt as to whether the [Plaintiff] is, in fact, disabled within 14 1 the meaning of Social Security Act,” further administrative proceedings would serve a useful 2 purpose and remedy defects. Burrell v. Colvin, 775 F.3d 1133, 1141 (9th Cir. 2014) (citations 3 omitted). Accordingly, the Court will remand this action to the agency for further consideration 4 IV. 5 ORDER For the foregoing reasons, IT IS HEREBY ORDERED that the decision of the 6 Commissioner is reversed, and the matter is remanded for further proceedings. On remand, the 7 ALJ should make sure the record is fully developed according to this Court’s ruling. 8 9 10 United States District Court Northern District of California 11 Dated: April 28, 2017 ______________________________________ BETH LABSON FREEMAN United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15

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