Schwarz v. Commissioner of Social Security

Filing 22

ORDER Accepting without modification 21 Report and Recommendation. The Commissioner's determination that Schwarz was not disabled is reversed and this case is remanded to the Commissioner for further proceedings consistent with this order and the Report and Recommendation. Judgment Shall enter in favor of the plaintiff and against the defendant. Signed by Chief Judge Leonard T Strand on 7/18/2018. (mml)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
EASTERN DIVISION
DANIEL SCHWARZ,
Plaintiff,

No. C17-2030-LTS

vs.

ORDER

NANCY A. BERRYHILL, Acting
Commissioner of Social Security, 1
Defendant.
____________________
I.

INTRODUCTION

This case is before me on a Report & Recommendation (R&R) by the Honorable
C.J. Williams, Chief United States Magistrate Judge. Doc. No. 21. Judge Williams
recommends that I reverse the decision of the Commissioner of Social Security and
remand this case with instructions pursuant to sentence four of 42 U.S.C. § 405(g).
Neither party has objected to the R&R. The deadline for such objections has expired.
II.
A.

APPLICABLE STANDARDS

Judicial Review of the Commissioner’s Decision
The Commissioner’s decision must be affirmed “if it is supported by substantial

evidence on the record as a whole.” Pelkey v. Barnhart, 433 F.3d 575, 577 (8th Cir.
2006); see 42 U.S.C. § 405(g) (“The findings of the Commissioner . . . as to any fact,

1

On March 6, 2018, the Government Accountability Office stated that as of November 17, 2017,
Nancy Berryhill’s status as Acting Commissioner violated the Federal Vacancies Reform Act (5
U.S.C. § 3346(a)(1)), which limits the time a position can be filled by an acting official. As of
that date, therefore, she was not authorized to continue serving using the title of Acting
Commissioner. As of November 17, 2017, Berryhill has been leading the agency from her
position of record, Deputy Commissioner of Operations. For simplicity, I will continue to refer
to the defendant as “the Commissioner” throughout this order.

if supported by substantial evidence, shall be conclusive . . . .”). “Substantial evidence
is less than a preponderance, but enough that a reasonable mind might accept as adequate
to support a conclusion.” Lewis v. Barnhart, 353 F.3d 642, 645 (8th Cir. 2003). The
Eighth Circuit explains the standard as “something less than the weight of the evidence
and [that] allows for the possibility of drawing two inconsistent conclusions, thus it
embodies a zone of choice within which the [Commissioner] may decide to grant or deny
benefits without being subject to reversal on appeal.” Culbertson v. Shalala, 30 F.3d
934, 939 (8th Cir. 1994).
To determine whether the Commissioner’s decision meets this standard, the court
considers “all of the evidence that was before the ALJ, but it [does] not re-weigh the
evidence.” Vester v. Barnhart, 416 F.3d 886, 889 (8th Cir. 2005). The court considers
both evidence which supports the Commissioner’s decision and evidence that detracts
from it. Kluesner v. Astrue, 607 F.3d 533, 536 (8th Cir. 2010). The court “must search
the record for evidence contradicting the [Commissioner’s] decision and give that
evidence appropriate weight when determining whether the overall evidence in support
is substantial.”

Baldwin v. Barnhart, 349 F.3d 549, 555 (8th Cir. 2003) (citation

omitted).
To evaluate the evidence in an appeal of a denial of benefits, the court must apply
a balancing test to assess any contradictory evidence. Sobania v. Sec’y of Health &
Human Servs., 879 F.2d 441, 444 (8th Cir. 1989). The court, however, does not
“reweigh the evidence presented to the ALJ,” Baldwin, 349 F.3d at 555 (citation
omitted), or “review the factual record de novo.” Roe v. Chater, 92 F.3d 672, 675 (8th
Cir. 1996) (citation omitted). Instead, if, after reviewing the evidence, the court “find[s]
it possible to draw two inconsistent positions from the evidence and one of those positions
represents the Commissioner’s findings, [the court] must affirm the [Commissioner’s]
denial of benefits.” Kluesner, 607 F.3d at 536 (quoting Finch v. Astrue, 547 F.3d 933,
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935 (8th Cir. 2008)). This is true even if the court “might have weighed the evidence
differently.” Culbertson, 30 F.3d at 939 (citation omitted). The court may not reverse
the Commissioner’s decision “merely because substantial evidence would have supported
an opposite decision.” Baker v. Heckler, 730 F.2d 1147, 1150 (8th Cir. 1984); see also
Goff v. Barnhart, 421 F.3d 785, 789 (8th Cir. 2005) (“[A]n administrative decision is
not subject to reversal simply because some evidence may support the opposite
conclusion.”).
B.

Review of Report and Recommendation
A district judge must review a magistrate judge’s R&R under the following

standards:
Within fourteen days after being served with a copy, any party may serve
and file written objections to such proposed findings and recommendations
as provided by rules of court. A judge of the court shall make a de novo
determination of those portions of the report or specified proposed findings
or recommendations to which objection is made. A judge of the court may
accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge. The judge may also
receive further evidence or recommit the matter to the magistrate judge with
instructions.
28 U.S.C. § 636(b)(1); see also Fed. R. Civ. P. 72(b). Thus, when a party objects to
any portion of an R&R, the district judge must undertake a de novo review of that portion.
Any portions of an R&R to which no objections have been made must be reviewed
under at least a “clearly erroneous” standard. See, e.g., Grinder v. Gammon, 73 F.3d
793, 795 (8th Cir. 1996) (noting that when no objections are filed “[the district court
judge] would only have to review the findings of the magistrate judge for clear error”).
As the Supreme Court has explained, “[a] finding is ‘clearly erroneous’ when although
there is evidence to support it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.” Anderson v. City of
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Bessemer City, 470 U.S. 564, 573 (1985) (quoting United States v. U.S. Gypsum Co.,
333 U.S. 364, 395 (1948)). However, a district judge may elect to review an R&R under
a more-exacting standard even if no objections are filed:
Any party that desires plenary consideration by the Article III judge of any
issue need only ask. Moreover, while the statute does not require the judge
to review an issue de novo if no objections are filed, it does not preclude
further review by the district judge, sua sponte or at the request of a party,
under a de novo or any other standard.
Thomas v. Arn, 474 U.S. 140, 150 (1985).
III.

THE R&R

Schwarz alleged disability due to degenerative disc disease, major depressive
disorder, anxiety, borderline intellectual functioning/learning disability/adult attention
deficit hyperactivity disorder (ADHD), mild carpal tunnel syndrome, asthma and left
ankle impairment. AR 24-25. The ALJ found that these impairments were severe but
did not meet or equal the Listings of Impairments. AR 26. The ALJ expressly found
that Schwarz’s severe impairments did not meet or medically equal the criteria of Listings
12.02, 12.04, and 12.06. AR 25. However, the ALJ did not consider Listings 12.05 or
12.05C. Id.
After determining Schwarz’s Residual Functional Capacity (RFC), the ALJ
determined that he was capable of performing past relevant work as a sanitation worker,
as well as capable of performing other work. AR 31-32. As a result, the ALJ found that
Schwarz was not disabled. At issue is (1) whether the ALJ erred in failing to fully and
fairly develop the record related to Schwarz’s intelligent quotient (IQ) and, therefore, to
consider Listings 12.05 and 12.05C, and (2) whether the ALJ’s RFC assessment is
supported by substantial evidence.

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A.

The Listings
Judge Williams first considered whether the ALJ erred in failing to evaluate

whether Schwarz was presumptively impaired under Listing 12.05C:
Here, the ALJ found that claimant had a verbal IQ score of 72, a
performance IQ score of 76, a full-scale IQ score of 72, and overall
borderline intellectual functioning. (AR 28). The ALJ also found that the
Department of Corrections indicated that claimant had an estimated Beta IQ
score of 78. (Id.). Claimant initially contended that the Beta IQ score was
a second IQ score that was inconsistent with claimant’s other IQ testing
results and that the ALJ should have ordered a new IQ test to reconcile the
inconsistent results. (Doc. 16, at 5). The Beta IQ score, however, was not
the result of a true IQ test, as claimant ultimately concedes. (Doc. 18, at
1). As a result, the ALJ did not err in failing to reconcile the scores. The
remaining issue, then, is whether claimant’s IQ test results, combined with
claimant’s other impairments, were such that the ALJ should have
considered claimant’s impairments within the context of Listing 12.05C. If
so, the question will then become whether the ALJ’s failure to do so was
erroneous.
This case is similar to the Eighth Circuit Court of Appeals’ decision
in Shontos v. Barnhart, 328 F.3d 418 (8th Cir. 2003). There, the Eighth
Circuit Court of Appeals found that an ALJ erred when there was “no
evidence that the ALJ considered the POMS guidelines” despite evidence
that Shontos suffered from “marked disabilities that would interfere with
her ability to work.” Shontos, 328 F.3d at 424-25, 427. Shontos had a full
scale IQ score of 72, placing her outside the range required by Listing
12.05C. Id. Nevertheless, she suffered from anxiety and depression to the
extent that her treating medical professionals determined that her ability to
perform work was severely limited. Id. at 422.
As in Shontos, the ALJ’s decision in the instant case failed to
sufficiently set forth the evidence that claimant’s mental impairments,
including his IQ, do not medically equal Listing 12.05C. Indeed, the ALJ
ignored Listing 12.05C and failed to discuss at all whether claimant’s
limitations met or functionally equaled that listed impairment. This is error.
See Hughes v. Astrue, 4:11cv1566 JSCH TCM, 2013 WL 694962, at *17
(E.D. Mo. Jan. 31, 2013) (ALJ’s failure to discuss claimant’s earlier IQ
scores, vocational counselors’ observations, and opinions was error). In
arguing that the ALJ did not err, the Commissioner argues only that
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claimant’s IQ did not result in “significantly subaverage general intellectual
functioning with deficits in adaptive functioning.” (Doc. 17, at 10-13).
The Commissioner argues that although claimant has an IQ of 72, claimant
was still able to function at a high enough level to maintain employment for
a number of years before applying for social security benefits. (Id.). The
commissioner’s argument, then, is that even though claimant’s impairments
could otherwise equal Listing 12.05C, claimant is not able to satisfy the
preliminary component of Listing 12.05, which requires a claimant to show
“deficits in adaptive functioning.”
I recognize that claimant worked as a manual laborer for nearly thirty
years. (AR 386). Such significant work history is highly probative of
whether claimant actually experiences “deficits in adaptive functioning”
due to his IQ. I, however, am not in a position to determine whether
claimant does experience “deficits in adaptive functioning,” simply because
the ALJ failed to consider the issue and, thus, failed to develop the record
as to this point. Because the ALJ entirely failed to develop the record in
this issue, I cannot find that the ALJ’s decision is supported by substantial
evidence on the record as a whole.
The parties seem to be in relative agreement as to claimant’s IQ.
Further, neither party contests whether claimant has “a physical or other
mental impairment imposing an additional and significant work-related
limitation of function,” within the meaning of Listing 12.05C. The only
issue, then, within the context of Listing 12.05 is whether claimant’s
intellectual disability causes him to experience “significantly subaverage
general intellectual functioning with deficits in adaptive functioning.”
Doc. No. 21 at 10-12. Concluding that the record was not sufficiently developed to
permit a finding as to whether Schwarz experiences significantly subaverage general
intellectual functioning or deficits in adaptive reasoning, Judge Williams recommended
remand with instructions to further develop the record. Id. at 12.

B.

The RFC
Judge Williams next considered whether the ALJ’s RFC was supported by

substantial evidence on the record as a whole. Regarding Schwarz’s physical RFC, Judge
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Williams found that the ALJ’s opinion was properly supported, despite the fact that the
record contains no treating or examining source opinion:
I am satisfied that the ALJ’s physical RFC assessment was supported
by substantial evidence on the record as a whole. Although the ALJ did
not rely on opinions from treating or examining source in formulating
claimant’s RFC, the ALJ relied on claimant’s medical records themselves
and on the opinion of a consulting physician. In this case, the medical
records themselves, in combination with the opinion of the consulting
physician (AR 563-67), are enough that a reasonable mind might accept the
ALJ’s decisions as true. See Lewis, 353 F.3d at 645. The ALJ did not rely
on the opinions of the non-treating, non-examining consultant alone. Had
he done so, perhaps my conclusions as to this issue would be different. See
Harvey, 368 F.3d at 1016. I therefore recommend that the District Court
affirm the ALJ’s physical RFC assessment.
Doc. No. 21 at 14-15.
Turning to the ALJ’s mental RFC assessment, Judge Williams concluded that the
ALJ’s failure to consider Schwarz’s “deficits in adaptive reasoning” precluded a finding
that the mental RFC was supported by substantial evidence.

Judge Williams

recommended the following instructions on remand:
[T]he ALJ [should] consider claimant’s mental RFC after considering
whether claimant experiences any “deficits in adaptive functioning.” I
recognize that should the ALJ find that claimant does not have any “deficits
in adaptive functioning,” it could be argued that if the ALJ’s original mental
RFC was supported by substantial evidence, there should be no reason for
the ALJ to reconsider claimant’s mental RFC. Here, however, the ALJ
failed entirely to consider claimant’s disability status under Listing 12.05.
In failing to do so, the ALJ did not find it necessary to probe claimant’s
intellectual capabilities to the extent necessary.
Given this unique set of circumstances, I find that the ALJ should
reconsider claimant’s mental RFC following a thorough examination of
claimant’s intellectual capabilities. By doing so, the ALJ will be afforded
the opportunity to assess any limitations found during the reexamination
process against claimant’s mental RFC, even if those limitations are not
significant enough to amount to “deficits in adaptive functioning.”
Therefore, I recommend that the Court reverse and remand with
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instructions to reconsider claimant’s mental RFC after considering whether
claimant is presumptively disabled under Listing 12.05. Of course, should
the ALJ find that claimant is presumptively disabled under Listing 12.05,
the ALJ may not wish to proceed to the next step, at which he or she would
be required to conduct an RFC assessment. My recommendations should
be construed as consistent with such findings.
Doc. No. 21 at 15-16.
IV.

ANALYSIS

Because neither party objected to the R&R, my review is for clear error. Upon
review of the record, I concur with Judge Williams’ findings and recommendations.
Specifically, I find that the ALJ erred in failing to evaluate whether Schwarz met the
criteria for Listing 12.05C and that the ALJ should reconsider Schwarz’s mental RFC in
light of that evaluation. I further agree that Schwarz’s physical RFC was supported by
substantial evidence. As such, I accept Judge Williams’ R&R in its entirety.
V.

CONCLUSION

For the reasons set forth herein:
1.

I accept the Report and Recommendation (Doc. No. 21) without

modification.
2.

The Commissioner’s determination that Schwarz was not disabled is

reversed and this case is remanded to the Commissioner for further proceedings
consistent with this order and the Report and Recommendation.
3.

Judgment shall enter in favor of the plaintiff and against the defendant.

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IT IS SO ORDERED.
DATED this 18th day of July, 2018.

__________________________
Leonard T. Strand, Chief Judge

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