Eckermann v. Astrue

Filing 28

MEMORANDUM DECISION AND ORDER granting 1 Petition for Review filed by Arthur Eckermann. This action shall be REMANDED to the Commissioner for further proceedings consistent with this opinion. This Remand shall be considered a sentence four remand, consistent with 42 U.S.C. § 405(g) and Akopyan v. Barnhart, 296 F.3d 852, 854 (9th Cir. 2002).. Signed by Judge Candy W Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by dks)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

ARTHUR ECKERMANN,
Petitioner,

Case No. 3:10-cv-00388-CWD

v.

MEMORANDUM DECISION AND
ORDER

MICHAEL J. ASTRUE,
Commissioner of Social Security
Administration,
Respondent.

INTRODUCTION
Arthur Eckermann (“Petitioner”) seeks review of the Commissioner of the Social
Security Administration’s final decision partially denying Petitioner’s application for
Supplemental Security Income disability benefits under Title XVI of the Social Security
Act. (Dkt. 1.) The Court has reviewed the Petition for Review and the Answer, the
parties’ memoranda, and the administrative record (“AR”), and for the reasons that
follow, will remand to the Social Security Administration for further proceedings
consistent with this Memorandum Decision and Order.

MEMORANDUM DECISION AND ORDER - 1

PROCEDURAL AND FACTUAL HISTORY
Petitioner filed an application for Supplemental Security Income disability benefits
on May 5, 2005, alleging that he had been disabled and unable to work since January 1,
2000, due to back injuries and mental impairments (bipolar disorder and attention deficit
hyperactivity disorder). (AR 49.) Because an applicant cannot receive Supplemental
Security Income benefits for the period of time prior to the date on which the application
is filed, Petitioner amended his onset of disability date to May 5, 2005. (AR 729.) The
application was denied initially and on reconsideration, and Petitioner filed a timely
written request for a hearing before an Administrative Law Judge. Two hearings were
held before Administrative Law Judge (“ALJ”) R. J. Payne – the first on April 14, 2008,
and the second on June 27, 2008.
On August 7, 2008, ALJ Payne issued a partially favorable decision finding
Petitioner disabled, due to a bulging disc in his back, beginning May 1, 2006, and
extending through May 31, 2007. (AR 39.) The ALJ found that Petitioner was not
disabled within the meaning of the Social Security Act prior to May 1, 2006, or after May
31, 2007. (AR 40.) Petitioner timely requested review by the Appeals Council, which
denied Petitioner’s request for review on June 4, 2010, and the ALJ’s decision became the
final decision of the Commissioner. Petitioner timely filed an appeal of the
Commissioner’s final decision to the Court on August 4, 2010. (Dkt. 1.) The Court has
jurisdiction to review the ALJ’s decision pursuant to 42 U.S.C. § 405(g).

MEMORANDUM DECISION AND ORDER - 2

At the April 14, 2008 hearing, medical experts Margaret Moore, Ph.D. and Henry
Hamilton, M.D. offered testimony concerning Petitioner’s mental and physical
impairments. Petitioner testified at the second hearing, held on June 27, 2008, and was
represented by counsel throughout the administrative process. Based largely on the
opinions of consulting psychological expert Dr. Moore – a non-treating, non-examining
medical source – the ALJ discounted the Mental Residual Functional Capacity
Assessments submitted by examining psychologist Dr. James Phillips and nurse
practitioner Lynn-Marie Peashka – both of whom indicated Petitioner had several
“marked” and “severe” mental limitations.
Ultimately, the ALJ found Petitioner’s testimony related to the severity of his
impairments not credible, and found that Petitioner could perform sedentary work as
defined in 20 C.F.R. § 416.967(b). (AR 40-44.) The ALJ did not recruit the services of a
vocational expert to offer an opinion concerning the effects of Petitioner’s non-exertional
limitations on his residual functional capacity, and instead employed the MedicalVocational Rules as a basis for finding Petitioner not disabled. (AR 45-46.)
Petitioner was born on July 26, 1961, and was 43 years of age at the time of his
application for disability benefits. Petitioner left high school in the twelfth grade, but
obtained a GED while in prison. Petitioner’s prior work experience is limited, but
includes the following: work at a recycling plant from December of 2002 to July of 2003;
approximately one month of construction work in 2002; and work as a carpenter between
December of 1998 and November of 1999. (AR 293.)
MEMORANDUM DECISION AND ORDER - 3

SEQUENTIAL PROCESS
The Commissioner follows a five-step sequential evaluation for determining
whether a claimant is disabled. See 20 C.F.R. § 416.920. At step one, it must be
determined whether the claimant is engaged in substantial gainful activity. The ALJ
found Petitioner had not engaged in substantial gainful activity since 2003. (AR 37.) At
step two, it must be determined whether the claimant suffers from a severe impairment.
The ALJ found the following impairments severe within the meaning of the regulations:
status post/history of two separate lumbar decompression surgeries; history of attention
deficit hyperactivity disorder, combined type; and antisocial personality disorder. (Id.)
Step three asks whether a claimant’s impairments meet or equal a listed
impairment. The ALJ found that Petitioner’s impairments did not meet or equal the
criteria for the listed impairments. If a claimant’s impairments do not meet or equal a
listing, the Commissioner must assess the claimant’s residual functional capacity (“RFC”)
and determine at step four whether the claimant has demonstrated an inability to perform
past relevant work. The ALJ found that, beginning May 1, 2006, and extending through
May 31, 2007, Petitioner’s RFC was less than sedentary, and concluded under step four
that Petitioner was not able to perform past relevant work.
If a claimant demonstrates an inability to perform past relevant work, the burden
shifts to the Commissioner to demonstrate at step five – taking into consideration the
claimant’s RFC, age, education and work experience – that the claimant retains the
capacity to make an adjustment to other work that exists in significant levels in the
MEMORANDUM DECISION AND ORDER - 4

national economy. Based on the ALJ’s finding that Petitioner’s RFC was less than
sedentary, the ALJ concluded that between May 1, 2006 and May 31, 2007, “there were
no jobs that existed in significant numbers in the national economy that the claimant
could have performed.” (AR 45.)
After finding Petitioner disabled for the time period between May 1, 2006 and
May 31, 2007, the ALJ evaluated whether Petitioner was entitled to benefits for the time
period after May 31, 2007, and applied the seven step analysis contemplated by 20 C.F.R.
§ 416.994(b)(5), which requires the Social Security Administration to periodically review
whether a claimant remains entitled to benefits after a finding of disability. Neither party
challenges the ALJ’s implementation of the seven step process and the Court will not
address whether its application was appropriate in this case. The seven step process, as it
was applied by the ALJ, is set forth below.
At step one, the Commissioner must determine whether the claimant has an
impairment or combination of impairments which meets or medically equals the criteria
of a listed impairment. 20 C.F.R. § 416.994(b)(5)(i). The ALJ maintained the conclusion
from the initial five-step analysis that Petitioner’s impairments did not meet or equal a
listed impairment.
At step two, the Commissioner must determine whether medical improvement has
occurred. 20 C.F.R. § 416.994(b)(5)(ii). Medical improvement is any decrease in medical
severity of the impairment or impairments as established by improvement in symptoms,
signs and laboratory findings. 20 C.F.R. § 416.994(b)(1)(i). If medical improvement has
MEMORANDUM DECISION AND ORDER - 5

occurred, the analysis proceeds to the third step. At step three, the Commissioner must
determine whether the medical improvement is related to the claimant’s ability to work.
20 C.F.R. § 416.994(b)(5)(iii). Medical improvement is related to the ability to work if it
results in an increase in the claimant’s capacity to perform basic work activities. If it
does, the analysis proceeds to the fifth step. At steps two and three, the ALJ found
medical improvement occurred related to Petitioner’s ability to work. (AR 46.)
Specifically, the ALJ stated that:
In comparing [Petitioner’s] residual functional
capacities, the undersigned finds that the claimant’s functional
capacity for basic work activities has increased. Here, the
undersigned notes [that,] as with [Petitioner’s back surgery in]
September 2003, after his January 2007 back surgery, the
claimant again did not require, seek or undergo any further
medical treatment and treatment records for April 2007,
indicated he had been fairly active including chopping wood,
cleaning brushes and other heavy physical activities.
Similarly, he has also reported a history of attention
deficit-hyperactivity disorder and bipolar disorder, but his
mental health treatment has been minimal and his complaints
and symptoms have generally been situational. More
importantly, he reported significant improvement and
admitted that medication kept his symptomatology under
control/stable.
(AR 46.)
At step five, the Commissioner must determine whether all of the claimant’s
current impairments in combination are severe. 20 C.F.R. 416.994(b)(5)(v). If all current
impairments in combination do not significantly limit the claimant’s ability to perform
basic work activities, the claimant is no longer disabled. If they do, the analysis proceeds
MEMORANDUM DECISION AND ORDER - 6

to the next step. The ALJ found that “[a]t all times relevant to this decision,” the
Petitioner suffered from severe physical and mental impairments. (AR 37.)
At step six, the Commissioner must assess the claimant’s RFC based on the current
impairments and determine if he can perform past relevant work. 20 C.F.R. §
416.994(b)(5)(vi). If the claimant has the capacity to perform past relevant work, his
disability has ended. If not, the analysis proceeds to the final step. At the last step, the
Commissioner must determine whether other work exists that the claimant can perform,
given his RFC and considering his age, education, and past work experience. 20 C.F.R. §
416.994(b)(5)(vii). If the claimant can perform other work, he is no longer disabled. If
the claimant cannot perform other work, his disability continues. To support a finding
that an individual is not disabled at this step, the Social Security Administration is
responsible for providing evidence that demonstrates other work exists in significant
numbers in the national economy that the claimant can perform, given the claimant’s
RFC, age, education, and work experience.
At the last two steps, the ALJ found that, from May of 2005 until May 2006, and
from July 31, 2007 until the issuance of the decision, Petitioner retained a residual
functional capacity to perform sedentary work, and that Petitioner’s non-exertional
limitations had “little or no effect on the occupational base of unskilled sedentary work.”
(AR 46) (emphasis omitted). Based on these findings, the ALJ concluded that Petitioner
was not able to perform his past relevant work in construction, as a carpenter, or as a
forklift operator. (AR 44-45.)
MEMORANDUM DECISION AND ORDER - 7

At the final step, the ALJ applied the Medical Vocational Guideline Rules, and
found Petitioner not disabled. (AR 46.) Specifically, the ALJ stated:
Prior to May 2006, and beginning July 31, 2007, with a
residual functional capacity for sedentary, considering the
claimant’s age, education, and work experience, a finding of
“not disabled” would be directed by Medical-Vocational
Rules 201.27-29. Since the additionally noted nonexertional/mental limitations have little or no effect on the
occupational base of unskilled sedentary work, a finding of
“not disabled” is appropriate under the framework of this rule.
Additionally, the undersigned also takes judicial notice
that vocational experts have historically and routinely testified
in prior hearings that[,] given an individual with the same age,
education and work experience as the claimant in this case,
and the type of non-exertional limitation (which the medical
expert indicated were more mild than moderate), which is
present in the case at hand, would not significantly erode the
occupational/job base of all unskilled sedentary work.
(AR 46) (emphasis in original).
Petitioner seeks review of the ALJ’s denial of benefits for the time period prior to
May 1, 2006 and after July 31, 2007.
STANDARD OF REVIEW
Petitioner bears the burden of showing that disability benefits are proper because
of the inability “to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which . . . has lasted or can be expected to
last for a continuous period of not less than 12 months.” 42 U.S.C. § 423(d)(1)(A); see
also 42 U.S.C. § 1382c(a)(3)(A); Rhinehart v. Fitch, 438 F.2d 920, 921 (9th Cir. 1971).
An individual will be determined to be disabled only if his physical or mental
MEMORANDUM DECISION AND ORDER - 8

impairments are of such severity that he not only cannot perform previous work but is
unable, considering his age, education, and work experience, to engage in any other kind
of substantial gainful work which exists in the national economy. 42 U.S.C. §
423(d)(2)(A).
On review, the Court is instructed to uphold the decision of the Commissioner if
the decision is supported by substantial evidence and is not the product of legal error. 42
U.S.C. § 405(g); Universal Camera Corp. v. Nat’l Labor Relations Bd., 340 U.S. 474
(1951); Meanel v. Apfel, 172 F.3d 1111, 1113 (9th Cir. 1999) (as amended); DeLorme v.
Sullivan, 924 F.2d 841, 846 (9th Cir. 1991). Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.
Richardson v. Perales, 402 U.S. 389, 401 (1971). It is more than a scintilla but less than
a preponderance, Jamerson v Chater, 112 F.3d 1064, 1066 (9th Cir. 1997), and “does not
mean a large or considerable amount of evidence.” Pierce v. Underwood, 487 U.S. 552,
565 (1988).
If the evidence can reasonably support either affirming or reversing a decision, the
Court may not substitute its own judgment for that of the Commissioner. Robbins v. Soc.
Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006). The Court, however, “must consider the
entire record as a whole, weighing both the evidence that supports and the evidence that
detracts from the Commissioner’s conclusion, and may not affirm simply by isolating a
specific quantum of supporting evidence.” Lingenfelter v. Astrue, 504 F.3d 1028, 1035
(9th Cir. 2007) (internal quotations and citations omitted).
MEMORANDUM DECISION AND ORDER - 9

DISCUSSION
Petitioner attacks the ALJ’s decision on numerous grounds, citing eight specific
errors containing multiple subparts, and stating that the ALJ “failed to follow proper legal
standards in almost every issue decided.” (Dkt. 15 at 5.) Petitioner’s assignments of error
are summarized below.
First, Petitioner argues that the ALJ failed to properly evaluate the medical
evidence by rejecting the opinions of an examining psychologist and treating nurse
practitioner in favor of a non-treating, non-examining medical expert, and by completely
failing to address the findings of several examining physicians.
Second, Petitioner argues that the ALJ committed error by failing to address the
lay witness evidence submitted by Petitioner’s sister concerning Petitioner’s limitations.
Third, Petitioner argues that the ALJ erred by failing to provide clear and
convincing reasons for finding Petitioner’s testimony concerning the limiting effects of
his symptoms not credible.
Fourth, Petitioner argues that the ALJ’s resort to the Medical Vocational
Guidelines – instead of employing the services of a vocational expert – was improper
under the implementing regulations, given Petitioner’s non-exertional limitations.
Finally, Petitioner asserts that the ALJ committed error by taking judicial notice of
what “vocational experts have historically and routinely testified to in prior hearings”
related to whether jobs existed in the national economy that Petitioner could perform.
For the reasons discussed below, the Court finds that the ALJ committed several
MEMORANDUM DECISION AND ORDER - 10

legal errors and will remand to the Commissioner for further proceedings consistent with
this decision.
1.

Evaluation of the Medical Evidence
Petitioner argues that the ALJ’s evaluation of the medical evidence was improper

in two ways. First, Petitioner asserts that the ALJ should not have rejected the opinions
of examining psychologist James Phillips and treating nurse practitioner Lynn-Marie
Peashka in favor of consulting medical expert Margaret Moore. Second, Petitioner argues
that the ALJ erred by not addressing the medical opinions of several treating and
examining physicians. Both contentions will be addressed below.
A.

Rejection of treating and examining source opinions

Psychologist James Phillips examined Petitioner in 2002, 2003, and 2007. In an
evaluation dated October 4, 2002, Dr. Phillips diagnosed Petitioner with attention deficit
hyperactivity disorder (“ADHD”), antisocial personality features, and noted a Global
Assessment of Functioning (“GAF”) of 50, indicating serious symptoms or impairments
in social or occupational functions.1 (AR 285.) Dr. Phillips also noted “[o]ccupational
problems,” “[p]roblems related to the social environment,” and “[p]roblems related to
interaction with the legal system.” (Id.) In an evaluation dated February 14, 2003, Dr.
Phillips states that the results of a second assessment were “suggestive of a Manic

1

The Global Assessment of Functioning, or GAF, is a numeric scale used by mental
health clinicians and physicians to subjectively rate the social, occupational, and psychological
functioning of adults. The scale is presented and described in the Diagnostic and Statistical
Manual of Mental Disorders (DSM-IV-TR) published by the American Psychiatric Association.
MEMORANDUM DECISION AND ORDER - 11

episode[,]” and “[t]esting was also suggestive of problems thinking and interpersonal
problems.” (AR 289.) In an evaluation from November of 2007, Dr. Phillips diagnosed
Petitioner with bipolar disorder (most recent episode manic, severe, with psychotic
features), ADHD combined type, alcohol abuse, and antisocial personality disorder
features. (AR 243.) Dr. Phillips noted a GAF score of 42, again indicating serious
impairment in social and/or occupational functioning, but at a more severe level than as
assessed in 2002. (Id.)
Dr. Phillips also submitted a Mental Residual Functional Capacity Assessment,
(AR 667-670), and provided answers to written questions prepared by Petitioner’s
counsel. (AR 660-66.) The Mental RFC Assessment submitted by Dr. Phillips indicates
marked limitations in the following areas: to carry out detailed instructions; to sustain an
ordinary routine without special supervision; to accept instructions and respond
appropriately to criticism from supervisors; to get along with coworkers or peers without
distracting them or exhibiting behavior extremes; to maintain socially appropriate
behavior and to adhere to basic standards of neatness and cleanliness; and to set realistic
goals or make plans independently of others. (AR 668-70.) The Mental RFC Assessment
indicates severe limitations in the following areas: to maintain attention and concentration
for extended periods; to perform activities within a schedule, maintain regular attendance,
and be punctual within customary tolerances; to work in coordination with or proximity
to others without being distracted by them; to complete a normal work-day and workweek
without interruptions from psychologically based symptoms and to perform at a
MEMORANDUM DECISION AND ORDER - 12

consistent pace without an unreasonable number and length of rest periods; and to interact
appropriately with the general public. (AR 668-69.)
Lynn-Marie Peashka, a nurse practitioner who treated Petitioner, also submitted
answers to written questions provided by Petitioner’s counsel and a Mental RFC
Assessment. (AR 691-701.) Ms. Peashka diagnosed Petitioner with affective disorder,
anxiety disorder, and a personality disorder. And like Dr. Phillips, Ms. Peashka noted
several marked and severe limitations in the Mental RFC Assessment provided to the
Social Security Administration. (AR 699-701.)
Psychologist Margaret Moore, a non-treating, non-examining medical expert,
offered testimony concerning Petitioner’s mental limitations. Dr. Moore evaluated
Petitioner’s disorders under listings 12.02 Organic Mental Disorders, 12.04 Affective
Disorders, 12.06 Anxiety-Related Disorders, and 12.09 Substance Addiction Disorders.
Contrary to the opinions of Dr. Phillips and nurse practitioner Peashka, Dr. Moore found
that Petitioner had mild restrictions related to activities of daily living, moderate
difficulties maintaining social functioning, moderate difficulties maintaining
concentration, persistence or pace, and demonstrated no episodes of decompensation.
(AR 41.)
Dr. Moore disagreed with the opinions of Petitioner’s treating and examining
medical sources for several reasons. She noted that Petitioner’s mental health symptoms
seemed to be controlled with the administration of medications, and that while on
medications in prison, Petitioner seemed less anxious and reported that he was doing
MEMORANDUM DECISION AND ORDER - 13

well. (AR 741.) Dr. Moore also based her opinion heavily upon Petitioner’s substance
use and his treating and examining physicians’ failure to properly consider substance use
when rating the severity of Petitioner’s mental impairments. (AR 739, 743.) Concerning
substance use, Dr. Moore stated that “there has been some substance abuse virtually
throughout the record and . . . our ability to assess a substance free time really is limited
to the prison records when he actually seemed to do fairly well.” (AR 743.) She also
questioned the credibility of Petitioner’s reported symptoms, specifically noting that
Petitioner’s reported hallucinations of fire breathing monsters were atypical and, perhaps,
less than credible. (AR 742.) Dr. Moore ultimately opined that Dr. Phillips opinions
concerning the severity of Petitioner’s mental limitations were extreme from what Dr.
Moore saw in the record. (AR 743-44.)
Ninth Circuit cases distinguish among the opinions of three types of physicians:
(1) those who treat the claimant (treating physicians); (2) those who examine but do not
treat the claimant (examining physicians); and (3) those who neither examine nor treat the
claimant (non-examining physicians). Lester v. Chatter, 81 F.3d 821, 830 (9th Cir. 1995).
Generally, more weight is accorded to the opinion of a treating source than to nontreating physicians. Winans v. Bowen, 853 F.2d 643, 647 (9th Cir. 1987). If the treating
physician’s opinion is not contradicted by another doctor, it may be rejected only for
“clear and convincing” reasons. Baxter v. Sullivan, 923 F.2d 1391, 1396 (9th Cir. 1991).
If the treating doctor’s opinion is contradicted by another doctor, the Commissioner may
not reject the treating physician’s opinion without providing “specific and legitimate
MEMORANDUM DECISION AND ORDER - 14

reasons” supported by substantial evidence in the record for so doing. Murray v. Heckler,
722 F.2d 499, 502 (9th Cir. 1983). In turn, an examining physician’s opinion is entitled
to greater weight than the opinion of a non-examining physician. Pitzer v. Sullivan, 908
F.2d 502, 506 (9th Cir. 1990); Gallant v. Heckler, 753 F.2d 1450 (9th Cir. 1984).
Under Section 423 of the Social Security Act, the Commissioner of Social Security
is required to consider all of the evidence available in a claimant’s case record, including
evidence from medical sources. 42 U.S.C. § 423(d)(5)(B); see also 20 CFR § 404.1527(d)
(“Regardless of its source, we will evaluate every medical opinion we receive.”). The
term medical sources refers to both acceptable medical sources and other health care
providers who are not acceptable medical sources. See 20 CFR § 416.902. The
regulations provide that “[i]n addition to evidence from the acceptable medical sources”
evidence from other sources should be used to “show the severity of [a claimant’s]
impairment(s) and how it affects [the claimant’s] ability to work.” 20 CFR § 404.1513(d).
This includes evidence from nurse practitioners such as Ms. Peashka. 20 CFR §
404.1513(d)(1).
Social Security Ruling (“SSR”) 06-03p provides that non-acceptable medical
sources should be evaluated under the same factors as all other medical opinions set forth
in 20 CFR 404.1527(d) and 416.927(d).2 See SSR 06-03p (“These factors represent basic

2

Social Security Rulings do not have the force of law but must be given some deference
as long as they are consistent with the Social Security Act and regulations. Ukolov v. Barnhart,
420 F.3d 1002, n.2 (9th Cir. 2005). In Ukolov, the Ninth Circuit found that SSR 96-4p was
consistent with the purposes of Titles II and XVI of the Social Security Act. Id.
MEMORANDUM DECISION AND ORDER - 15

principles that apply to the consideration of all opinions from medical sources who are
not ‘acceptable medical sources’ as well as from ‘other sources,’ such as teachers and
school counselors, who have seen the individual in their professional capacity.”) These
factors include: (1) how long the source has known and how frequently the source has
seen the individual; (2) how consistent the opinion is with other evidence; (3) the degree
to which the source presents relevant evidence to support an opinion; (4) how well the
source explains the opinion; (5) whether the source has a specialty or area of expertise
related to the individual’s impairments; and (6) any other factors that tend to support or
refute the opinion. SSR 06-03p.
Relevant for purposes of this case, SSR 06-03p provides the following: “The fact
that a medical opinion is from an ‘acceptable medical source’ is a factor that may justify
giving that opinion greater weight than an opinion from a medical source who is not an
‘acceptable medical source.’” SSR 06-03p. “However, depending on the particular facts
in a case, and after applying the factors for weighing opinion evidence, an opinion from a
medical source who is not an ‘acceptable medical source’ may outweigh the opinion of an
‘acceptable medical source.’” Id. The ruling goes so far as to say that, in certain
circumstances, it may be appropriate to give the opinion of a non-acceptable medical
source more weight than a treating source. Id. (“For example, it may be appropriate to
give more weight to the opinion of a medical source who is not an ‘acceptable medical
source’ if he or she has seen the individual more often than the treating source and has
provided better supporting evidence and a better explanation for his or her opinion.”)
MEMORANDUM DECISION AND ORDER - 16

Notwithstanding the above discussion, an ALJ is not required to accept an opinion
of a treating physician, or any other medical source, if it is conclusory and not supported
by clinical findings. Matney v. Sullivan, 981 F.2d 1016, 1019 (9th Cir. 1992).
Additionally, an ALJ is not bound to a medical source’s opinion concerning a claimant’s
limitations on the ultimate issue of disability. Magallanes v. Bowen, 881 F.2d 747, 751
(9th Cir. 1989). If the record as a whole does not support the medical source’s opinion,
the ALJ may reject that opinion. Batson v. Comm’r of Soc. Sec. Admin., 359 F.3d 1190,
1195 (9th Cir. 2004). Items in the record that may not support the physician’s opinion
include clinical findings from examinations, conflicting medical opinions, conflicting
physician’s treatment notes, and the claimant’s daily activities. Id.; Bayliss v. Barnhart,
427 F.3d 1211 (9th Cir. 2005); Connett v. Barnhart, 340 F.3d 871 (9th Cir. 2003);
Morgan v. Comm’r of Soc. Sec. Admin., 169 F.3d 595 (9th Cir. 1999).
Here, the ALJ expressly rejected the opinions of Dr. Phillips and nurse practitioner
Peashka, stating that “the undersigned finds James Phillips’, Ph.D., and Lynn Marie
Peashka’s, APRN, assessments of numerous ‘marked’ and ‘severe’ mental capacity
limitations, to be unsupported by the evidence . . . [and] as pointed out by Dr. Moore,
there was disagreement among severe [sic] examiners of his diagnosis, and there was an
underlying complication of his chronic on-going polysubstance abuses, with admitted use
as late as 2006 and 2007.” (AR 44.)
Petitioner argues that the ALJ did not provide clear and convincing reasons for
rejecting the opinions of his treating and examining medical sources. This is not the
MEMORANDUM DECISION AND ORDER - 17

correct legal standard. When there is conflicting medical evidence in the record, as exists
in this case, the ALJ must provide “specific and legitimate” reasons for rejecting the
opinion of a treating or examining medical source. See Murray, 722 F.2d at 502.
As a preliminary matter, the ALJ did not analyze the medical source opinion
evidence in this case under all the factors set forth in the implementing regulations and
SSR 06-03p. For instance, the ALJ failed to note the length, nature, extent, and frequency
of examinations or treatment when evaluating the opinions of Dr. Phillips and nurse
practitioner Peashka. See 20 C.F.R. 416.927(d).
In rejecting Dr. Phillips’ opinion, the ALJ referred extensively to the testimony of
medical expert Dr. Moore. (AR 41-42.) This, standing alone, is not sufficient to reject an
examining doctor’s opinion. Pitzer v. Sullivan, 908 F.2d 502 (9th Cir. 1990). However,
in rejecting Dr. Phillips’ opinion, the ALJ did indicate that Petitioner “reported significant
improvement and admitted that medication kept his symptomatology under
control/stable.” (AR 44.) The ALJ also noted that Petitioner’s daily activities, including
doing dishes, cooking meals, vacuuming, watching television, reading, fishing, chopping
wood, cleaning brushes, and doing house work for his mother, did not support the
severity of limitation indicated by Dr. Phillips and Ms. Peashka. (AR 43-44.) These are
specific and legitimate reasons for rejecting a medical source’s opinion. See Morgan, 169
F.3d at 601-602. Similarly, the ALJ noted that an evaluation from February 2003
“indicated that [Petitioner’s symptoms] did not merit a diagnosis for bipolar disorder,”
and “a global assessment of functioning score of 70 was indicated, which denotes only
MEMORANDUM DECISION AND ORDER - 18

mild transient symptomatology with no significant impairment in social or occupational
functioning.” (AR 38.) This evidence in the record contradicts the opinions of Dr. Phillips
and Ms. Peashka, and represents the type of specific and legitimate reasons that have been
found appropriate to reject a treating source’s opinion. See Morgan, 169 F.3d at 601-02.
Petitioner claims, and the Court agrees, that the ALJ’s repeated reference to
Petitioner’s substance use as a reason for rejecting the opinions of Petitioner’s treating
and examining medical sources constituted legal error in this case. The implementing
regulations contemplate that the ALJ will make an initial disability determination without
regard to substance abuse. If the claimant is found disabled and evidence of substance
abuse exists in the record, as it does in this case, the ALJ then is required to evaluate
whether the claimant’s disability would continue in the absence of substance abuse; that
is, the ALJ must determine whether substance abuse is a material contributing factor to
the claimant’s disability. 20 C.F.R. §§ 404.1535 and 416.935. In this case, the ALJ did
not conduct the necessary analysis. Rather, the ALJ concluded “that virtually all medical
health assessments and opinions of records were unwittingly influenced by continuing
substance abuse.” (AR 43.) The inference is that the medical sources either did not know
of the substance abuse, or did not properly take it into consideration in forming their
opinions. Neither conclusion is supported by the record. Dr. Phillips specifically notes
Petitioner’s substance abuse in the evaluation from November of 2007. (AR 243.) And, as
Petitioner points out, the documents submitted by Dr. Phillips specifically instructed the
doctor to “disregard any impairment caused by drug and/or alcohol abuse.” (AR 660.)
MEMORANDUM DECISION AND ORDER - 19

There is no evidence in the record, other than the speculative statements provided by Dr.
Moore and the ALJ during the hearing, that Dr. Phillips ignored this instruction.
Based upon the above analysis, the Court finds that the ALJ did not consider all of
the appropriate factors under the regulations and did not properly address Petitioner’s
substance use. However, because the ALJ provided appropriate specific and legitimate
reasons for rejecting the opinions of Dr. Phillips and nurse practitioner Peashka, the Court
cannot conclude that the ALJ improperly rejected these opinions as a matter of law. This
does not mean, however, that the ALJ properly attributed controlling weight to the nonexamining medical experts. As discussed below, the ALJ committed several legal errors
requiring remand, including the failure to properly evaluate all of the relevant medical
evidence and lay witness testimony. On remand, the ALJ will be required to re-evaluate
all of the medical opinion evidence, explaining the weight given to each medical opinion,
and evaluating the opinion evidence under the factors set forth in 20 C.F.R. § 416.927(d).
B.

Failure to evaluate all of the medical evidence

Petitioner argues that the ALJ’s failure to address all of the medical evidence,
including the evaluations of examining physicians Larry Harries, M.D., and Katrina
Bentley, Ph.D., as well as the treatment notes from the State agency doctors,
compromised the ALJ’s decision and constituted error. The Court agrees.
The Commissioner argues that the ALJ did, in fact, consider all of the relevant
evidence, and notes that the ALJ specifically stated that all of the opinion evidence was
considered. (AR 40.) The mere statement that an ALJ has considered all of the opinion
MEMORANDUM DECISION AND ORDER - 20

evidence, without actually evaluating that evidence in a decision denying disability
benefits, is not sufficient. The implementing regulations require the ALJ to consider all
relevant evidence. 20 C.F.R. § 416.927(c). The regulations also make it clear that the
ALJ must evaluate every medical opinion in the record. See 20 C.F.R. § 416.927(f)(2)(ii).
Specifically, the regulations provide that, unless a treating source’s opinion is given
controlling weight, the ALJ must explain in the decision the weight given to the opinions
of other examining or non-examining sources that have evaluated the claimant. Id. (“the
administrative law judge must explain in the decision the weight given to the opinions of
a State agency medical or psychological consultant or other program physician,
psychologist, or other medical specialist, as the administrative law judge must do for any
opinions from treating sources, nontreating sources, and other nonexamining sources who
do not work for us.”)
Here, although it is clear that the ALJ accepted the opinion of consulting medical
expert Dr. Moore, the ALJ did not explain in his decision the weight given to any of the
medical opinions in the record. This, in itself, does not comply with the regulations. Dr.
Bentley, an examining psychologist, diagnosed Petitioner with Bipolar Type II and
ADHD. (AR 383.) She noted that Petitioner “isolates socially,” has occupational
problems, “[p]roblems with access to health care services [because of lack of] income and
no insurance to pay for health care,” and “[o]ther psychosocial and environmental
problems [including] significant persistent mental illness for which the patient has had no
health care.” (Id.) Dr. Bentley assessed Petitioner’s GAF at 45. Dr. Harries also
MEMORANDUM DECISION AND ORDER - 21

examined Petitioner, noting “[p]sychological problems,” and opining that Petitioner could
perform some work if allowed to move around at his convenience to accommodate
physical limitations. (AR 234.)
In June of 2005, Petitioner began treatment with the State Department of Health
and Welfare. (See AR 291.) At that time, he was diagnosed with bipolar disorder and
attention deficit disorder, and assessed at a GAF of 45. (Id.) Treatment notes from the
State agency health care providers date from June 2005 up to December 2007. (AR 291325, 377-417, 633-649.)
The ALJ did not discuss or explain the weight given to any of the above opinions
or treatment notes. It is the province of the ALJ, not this Court, to resolve conflicts that
exist in the medical records. See Morgan, 169 F.3d at 601. Here, because the ALJ failed
to discuss many of the medical records, the Court cannot determine whether the conflicts
in the record were properly resolved. Put a slightly different way, the Court cannot
conclude that the ALJ’s decision is supported by substantial evidence when the ALJ’s
decision itself does not evaluate all of the relevant medical evidence. On this ground, the
case will be remanded for proper evaluation of all the relevant medical evidence under the
factors set out in 20 C.F.R. 416.927(d).
2.

Failure to Consider Lay Witness Evidence
“In determining whether a claimant is disabled, an ALJ must consider lay witness

testimony concerning a claimant’s ability to work.” Stout v. Comm’r of Soc. Sec. Admin.,
454 F.3d 1050, 1053 (9th Cir. 2006). And the Ninth Circuit has made clear that this
MEMORANDUM DECISION AND ORDER - 22

includes testimony from friends and family members. Dodrill v. Shalala, 12 F.3d 915,
919 (9th Cir. 1993) (“friends and family members in a position to observe a claimant’s
symptoms and daily activities are competent to testify as to [a claimant’s] condition.”).
“Disregard of this evidence violates the Secretary’s regulation that he will consider
observations by non-medical sources as to how an impairment affects a claimant’s ability
to work.” Sprague v. Bowen, 812 F.2d 1226, 1232 (9th Cir. 1987). Indeed, “lay
testimony as to a claimant’s symptoms or how an impairment affects ability to work is
competent evidence . . . and therefore cannot be disregarded without comment.” Stout,
454 F.3d at 1053 (emphasis in original). “If the ALJ wishes to discount the testimony of
the lay witnesses, he must give reasons that are germane to each witness.” Dodrill, 12
F.3d at 919.
Here, the record indicates that Petitioner’s sister, Charl Spencer, was present at the
hearing on April 14, 2008, and available to testify as a witness. (AR 728.) Ms. Spencer
also submitted an affidavit, which was admitted into evidence by the ALJ. (AR203-204.)
In her affidavit, Ms. Spencer stated that she either sees or talks with the Petitioner on the
phone everyday. (AR 203.) Concerning Petitioner’s limitations, Ms. Spencer stated that:
The limitations I see most often are [Petitioner’s]
inability to stay focused; he frequently gets off track even in
short conversations or small tasks. He also changes positions
frequently i.e. sitting for a short period, then standing, then
shifting his feet. He is often laying down due to back pain.
[Petitioner] gets tired easily due to pain caused by walking or
standing. He has trouble making long trips in a vehicle.
(AR 204.) Ms. Spencer also briefly discussed the limited work Petitioner does for his
MEMORANDUM DECISION AND ORDER - 23

mother, and Petitioner’s substance use. (Id.) This is precisely the type of lay testimony
that the regulations and Ninth Circuit deem relevant, and require to be discussed by the
ALJ. Sprague, 812 F.2d at 1232; Stout, 454 F.3d at 1053. The ALJ erred by not taking
into consideration Petitioner’s sister’s affidavit.
3.

Credibility
The ALJ is responsible for determining credibility. Reddick v. Chater, 157 F.3d

715, 722 (9th Cir. 1998). The ALJ’s findings must be supported by specific, cogent
reasons. Id. If a claimant produces objective medical evidence of an underlying
impairment, an ALJ may not reject a claimant’s subjective complaints of pain based
solely on lack of medical evidence. Burch v. Barnhart, 400 F.3d 676, 680 (9th Cir.
2005); see also Light v. Soc. Sec. Admin., 119 F.3d 789, 792 (9th Cir. 1997). Unless there
is affirmative evidence showing that the claimant is malingering, the ALJ must provide
clear and convincing reasons for rejecting pain testimony. Burch, 400 F.3d at 680.
General findings are insufficient; the ALJ must identify what testimony is not credible
and what evidence undermines the claimant’s complaints. Reddick, 157 F.3d at 722.
The reasons an ALJ gives for rejecting a claimant’s testimony must be supported
by substantial evidence in the record. Regennitter v. Comm’r of Soc. Sec. Admin., 166
F.3d 1294, 1296 (9th Cir. 1999). If there is substantial evidence in the record to support
the ALJ’s credibility finding, the Court will not engage in second-guessing. Thomas v.
Barnhart, 278 F.3d 957, 959 (9th Cir. 2002). When the evidence can support either
outcome, the court may not substitute its judgment for that of the ALJ. Tackett v. Apfel,
MEMORANDUM DECISION AND ORDER - 24

180 F.3d 1094, 1098 (9th Cir. 1999).
In this case, for the time period prior to May 1, 2006, and after May 31, 2007, the
ALJ found that Petitioner had medically determinable impairments that could reasonably
be expected to produce symptoms, but that Petitioner’s statements concerning the
intensity, persistence, and limiting effects of these symptoms were not credible. (AR 44.)
Petitioner argues that the ALJ did not provide clear and convincing reasons for rejecting
his testimony.
The ALJ cited several reasons for rejecting Petitioner’s testimony concerning the
severity of his symptoms – some were valid reasons for making an adverse credibility
finding; others were not. For instance, the ALJ noted that Petitioner “initially indicated
that he had not used drugs since March 2005, [but] then indicated that he had used four
times since his last birthday in July 2007.” (AR 42.) This was a valid reason for rejecting
Petitioner’s testimony. See Batson, 359 F.3d at 1196-97 (holding contradictions in
claimant’s testimony valid reason for making adverse credibility finding). The ALJ also
referred to Petitioner’s daily activities in rejecting Petitioner’s testimony. (AR 43, 44.)
Specifically, the ALJ noted that Petitioner testified that he washed dishes, cooked meals,
vacuumed, watched television, read, went fishing, did lawn work, and went grocery
shopping, (AR 43.) The ALJ also noted that, after recovering from back surgery in April
of 2007, Petitioner “had been fairly active[,] including chopping wood, cleaning brushes
and other heavy physical activities.” (AR 44.) Daily activities inconsistent with a
claimant’s alleged symptoms have been found to be an appropriate basis for making an
MEMORANDUM DECISION AND ORDER - 25

adverse credibility finding. See Thomas v. Barnhart, 278 F.3d 947, 958-59 (9th Cir.
2002).
The ALJ also noted that Petitioner’s “treatment has been minimal,” (AR 44), and
that “after having surgery in January 2007, [Petitioner] attended very little follow-up
care.” (AR 43.) From these statements, the ALJ inferred that Petitioner’s symptoms must
not be as severe as alleged. Looking at the entire record, however, the above inference
was impermissible. SSR 96-7p states that “the adjudicator must not draw any inferences
about an individual’s symptoms and their functional effects from a failure to seek or
pursue regular medical treatment without first considering any explanations that the
individual may provide, or other information in the case record, that may explain
infrequent or irregular medical visits or failure to seek treatment.” This is because “[t]he
individual may be unable to afford treatment and may not have access to free or low-cost
medical services.” SSR 96-7p. Here, evidence in the record indicates that Petitioner
could not afford regular treatment: he testified that he has no income (AR 763); his
mother pays his bills and provides $100 per month for medication (AR 776); and the
trailer Petitioner lives in is owned by his mother. (AR 776.) Given these facts, the ALJ’s
inference was improper.
The ALJ also found Petitioner’s allegations of disabling symptoms and limitations
generally inconsistent with the clinical and objective findings. (AR 42.) However,
because the ALJ did not discuss all of the medical evidence, as discussed more fully
above, the Court cannot say that this conclusion is supported by substantial evidence in
MEMORANDUM DECISION AND ORDER - 26

the record.
Because the Court concludes that the ALJ rejected Petitioner’s symptom testimony
on two improper grounds, the Court “must determine whether the ALJ’s reliance on such
reasons was harmless error.” Carmickle v. Comm’r of Soc. Sec. Admin., 533 F.3d 1155,
1162 (9th Cir. 2008). The Ninth Circuit has stated that the relevant inquiry “is not
whether the ALJ would have made a different decision absent any error, [citation to
dissent omitted], it is whether the ALJ’s decision remains legally valid, despite such
error.” Id. The Court finds that this inquiry does not present a close call in this case. This
is not a case where the only issue on review is an adverse credibility finding in which the
ALJ used one improper factor (out of many valid reasons) for rejecting the claimant’s
testimony. See Batson, 359 F.3d at 1197 (holding ALJ’s reliance on one improper factor
of several reasons in support of adverse credibility determination did not require remand).
Here, the Court already has determined that the case must be remanded due to the
ALJ’s failure to consider all of the relevant medical evidence and the lay witness
testimony. The ALJ’s failure to consider all of the relevant evidence, as mandated by the
regulations and Ninth Circuit precedent, had a trickle-down effect, compromising several
aspects of the ALJ’s decision, including rejection of Petitioner’s testimony concerning the
severity of his symptoms. For these reasons, the Court concludes that, under the Ninth
Circuit’s test in Carmickle v. Commissioner of Social Security Administration, 533 F.3d
155 (9th Cir. 2008), the ALJ’s decision would remain legally invalid even in the absence
of the particular errors associated with the adverse credibility determination and must be
MEMORANDUM DECISION AND ORDER - 27

remanded.
On remand, the Commission shall reevaluate Petitioner’s credibility taking into
consideration Petitioner’s limited financial resources as well as all of the medical
evidence in the record. In this regard, the Court makes no finding as to whether
Petitioner’s testimony concerning his limitations and symptoms should be found credible.
4.

Use of the Medical Vocational Guidelines
Once it is determined that a claimant cannot perform past relevant work, the

burden shifts to the Commissioner to show whether the claimant can make an adjustment
to other work, taking into consideration the claimant’s RFC, age, education, and work
experience. 20 C.F.R. 416.920(a)(4)(v). In determining whether a claimant can make an
adjustment to other work, the Commissioner “must provide evidence about the existence
of work in the national economy that [the claimant] can do.” 20 C.F.R. § 416.912(g). The
Commissioner can present such evidence in two ways: (a) through the testimony of a
vocations expert, or (b) through reference to the Medical-Vocational Guidelines
(commonly referred to as “the grids”). See Tackett v. Apfel, 180 F.3d 1094, 1100-1101
(9th Cir. 1999).
The grids present, in table form, a short-hand method for determining the
availability and numbers of jobs for a claimant, given his or her limitations. “The grids
categorize jobs by their physical-exertional requirements and consist of three separate
tables – one for each category: ‘[m]aximum sustained work capacity limited to sedentary
work,’ ‘[m]aximum sustained work capacity limited to light work,’ and ‘[m]aximum
MEMORANDUM DECISION AND ORDER - 28

sustained work capacity limited to medium work.’” Tackett, 180 F.3d at 1101 (citing 20
C.F.R. pt. 404, subpt. P, app. 2, rule 200.00). “This approach allows the Commissioner to
streamline the administrative process and encourages uniform treatment of claims.” Id.
(citing Heckler v. Campbell, 461 U.S. 458, 460-62 (1983)).
The grids, however, may be employed only where they completely and accurately
represent a claimant’s limitations. Campbell, 461 U.S. at 461. “In other words, a claimant
must be able to perform the full range of jobs in a given category.” Tackett, 180 F.3d at
1101 (emphasis in original). Significant non-exertional impairments, such as pain,
postural limitations, or environmental limitations, “may make reliance on the grids
inappropriate.” Id. at 1101-02. If application of the grids is inappropriate given a
claimant’s non-exertional limitations the Commissioner should employ the services of a
vocational expert to establish the availability of suitable jobs in the national economy.
In Tackett v. Apfel, the Ninth Circuit held that an ALJ’s use of the grids constituted
error where evidence existed showing that the claimant’s non-exertional postural
limitations “required him to change positions, shift his body, walk, or stand about every
half hour.” 180 F.3d at 1101 (emphasis in original). The court held that such nonexertional limitations precluded the claimant from performing a full range of sedentary
work, which is defined as
work involv[ing] lifting no more than 10 pounds at a time and
occasionally lifting or carrying articles like docket files,
ledgers, and small tools. Although a sedentary job is defined
as one which involves sitting, a certain amount of walking and
MEMORANDUM DECISION AND ORDER - 29

standing is often necessary in carrying out job duties. Jobs
are sedentary if walking and standing are required
occasionally and other sedentary criteria are met.
Id. at 1103 (emphasis in original). The court reasoned that, “[w]hile some sedentary jobs
may require some walking and/or standing, others may not require any [and that] to be
physically able to work the full range of sedentary jobs, the worker must be able to sit
through most or all of an eight hour day.” Id. (emphasis in original). The court concluded
that the claimant’s “need to shift, stand up, or walk around every 30 minutes is a
significant nonexertional limitation not contemplated by the grids,” and remanded the
case so that the ALJ could hear testimony from a vocational expert concerning whether
jobs existed in the national economy that the claimant could perform given his
limitations. Id. at 1104.
In this case, the ALJ concluded that, for the time periods prior to May 2006, and
after July 2007, Petitioner retained the ability to perform a full range of sedentary work.
(AR 40.) Based upon this finding, the ALJ applied the grids and found that, “[p]rior to
May 2006, and beginning on July 31, 2007, with a residual functional capacity for
sedentary, considering the claimant’s age, education, and work experience, a finding of
‘not disabled’ would be directed by Medical-Vocational Rules 201.27 - 29.” (AR 46.)
Petitioner argues that, since evidence exists indicating his need to move around at
his convenience every 30 minutes, application of the grids in this case was inappropriate.
Petitioner states in his Reply brief, however, that the question of whether his non-

MEMORANDUM DECISION AND ORDER - 30

exertional limitations are sufficiently severe to preclude the use of the grids may be
premature at this point if the Court finds that the ALJ’s RFC assessment was reached
through an improper evaluation of the evidence. On this point, the Court agrees. This
case will be remanded for the ALJ to properly consider all of the relevant medical
evidence, to consider the lay witness evidence, and to reassess Petitioner’s credibility.
The reevaluation of the evidence on remand may very well effect the Commissioner’s
conclusion concerning Petitioner’s residual functional capacity. Thus, the question of
whether Petitioner’s non-exertional limitations preclude application of the grids is
premature at this time and will have to be reassessed on remand.
ORDER
NOW THEREFORE IT IS HEREBY ORDERED:
1)

Plaintiff’s Petition for Review (Dkt. 1) is GRANTED.

2)

This action shall be REMANDED to the Commissioner for further
proceedings consistent with this opinion.

3)

This Remand shall be considered a “sentence four remand,” consistent with
42 U.S.C. § 405(g) and Akopyan v. Barnhart, 296 F.3d 852, 854 (9th Cir.
2002).
DATED: September 21, 2011

Honorable Candy W. Dale
Chief United States Magistrate Judge

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