Fletcher v. Social Security Administration, Commissioner of

Filing 13

MEMORANDUM AND ORDER - The Commissioner's final decision shall be REVERSED and that the case shall be REMANDED pursuant to the sixth sentence of 42 U.S.C. § 405(g) for the new and material evidence to be taken and considered. See Order for additional details. This case is ADMINISTRATIVELY CLOSED until the Court lifts the stay. Signed by District Judge Kathryn H. Vratil on 8/9/2019. (heo)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
PAUL ELTON FLETCHER,

)
)
Plaintiff,
)
)
v.
)
)
ANDREW M. SAUL,*
)
Commissioner of Social Security,
)
)
Defendant.
)
____________________________________________)

CIVIL ACTION
No. 18-2085-KHV

MEMORANDUM AND ORDER
Paul Elton Fletcher appeals the final decision of the Commissioner of Social Security to
deny disability and supplemental security income benefits under Titles II and XVI of the Social
Security Act (“SSA”), 42 U.S.C. §§ 401-434. For reasons stated below, the Court reverses the
Commissioner’s decision and remands the case for further proceedings consistent with this order.
Procedural Background
On May 28, 2014, plaintiff protectively filed a Title II application for a period of disability
and disability insurance benefits, and a Title XVI application for supplemental security income.
He alleged disability beginning on September 10, 2010. Transcript Of Administrative Record
(“Tr.”), attached to Answer (Doc. #8) filed June 1, 2018 at 26. Initially and upon reconsideration,
the agency denied plaintiff’s application. At plaintiff’s request, an administrative law judge
(“ALJ”) held a hearing on December 8, 2016. Tr. 26. On February 9, 2017, the ALJ determined
that plaintiff was not disabled within the meaning of the SSA. On March 3, 2017, plaintiff

*
On June 4, 2019, Andrew M. Saul was confirmed as Commissioner of the Social
Security Administration. Pursuant to Rule 25(d) of the Federal Rules of Civil Procedure, Andrew
M. Saul is substituted for former Commissioner Nancy A. Berryhill as defendant in this suit.

requested review by the Appeals Council and submitted as new evidence the medical source
statement of Elizabeth Garton, PMHNP, medical evidence from Devendra K. Jain, M.D., and an
appeal brief. Tr. 1-2, 205. The Appeals Council accepted and made part of the record only the
appeal brief. On January 8, 2018, the Appeals Council denied plaintiff’s request for review of the
ALJ decision, which therefore stands as the final decision of the Commissioner. See 42 U.S.C.
§§ 405(g), 1383(c). Plaintiff appeals.
Factual Background
Plaintiff was born on September 7, 1982. He has a high school education and claims
disability beginning on September 10, 2010, when he was 28 years old, because of degenerative
disc disease of the lumbar spine, right shoulder impingement, right carpal tunnel syndrome,
depression, bipolar and anxiety. Plaintiff was previously employed as a truck driver. Before
that, he was an auto mechanic and a construction worker.
The ALJ held a hearing on December 8, 2016. In his order, dated February 9, 2017, the
ALJ concluded as follows:
1. The claimant meets the insured status requirements of the Social Security Act
through December 31, 2015.
2. The claimant has not engaged in substantial gainful activity since
September 10, 2010, the alleged onset date (20 CFR 404.1571 et seq., and
416.971 et seq.).
3. The claimant has the following severe impairments: degenerative disc disease
of the lumbar spine, right shoulder impingement, right carpal tunnel syndrome
status post release, depression, and anxiety (20 CFR 404.1520(c) and
416.920(c)). * * *
4. The claimant does not have an impairment or combination of impairments that
meets or medically equals the severity of one of the listed impairments in
20 CFR Part 404, Subpart P, Appendix 1 (20 CFR 404.1520(d), 404.1525,
404.1526, 416.920(d), 416.925 and 416.926). * * *
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5. After careful consideration of the entire record, the undersigned finds that the
claimant has the residual functional capacity to perform light work as defined
in 20 CFR 404.1567(b) and 416.967(b) except the claimant can occasionally
climb ladders, ropes, or scaffolds. He can frequently climb ramps and stairs,
balance, stoop, kneel, crouch and crawl. He can frequently handle with the
right upper extremity. He is limited to occasional exposure to vibrations and
hazardous conditions. He is able to understand, remember, and carry out
simple instructions. * * *
6. The claimant is unable to perform any past relevant work (20 CFR 404.1565
and 416.965). * * *
7. The claimant was born on September 7, 1982 and was 28 years old, which is
defined as a younger individual age 18-49, on the alleged disability onset date
(20 CFR 404.1563 and 416.963).
8. The claimant has at least a high school education and is able to communicate in
English (20 CFR 404.1564 and 416.964).
9. Transferability of job skills is not material to the determination of disability
because using the Medical-Vocational Rules as a framework supports a finding
that the claimant is “not disabled,” whether or not the claimant has transferable
job skills (See SSR 82-41 and 20 CFR Part 404, Subpart P, Appendix 2).
10. Considering the claimant’s age, education, work experience, and residual
functional capacity, there are jobs that exist in significant numbers in the
national economy that the claimant can perform (20 CFR 404.1569,
404.1569(a), 416.969, and 416.969(a)). * * *
11. The claimant has not been under a disability, as defined in the Social Security
Act, from September 10, 2010, through the date of this decision (20 CFR
404.1520(g) and 416.920(g)). * * *
Tr. 28-40.
On March 3, 2017, plaintiff appealed the ALJ’s decision to the Appeals Council. Plaintiff
included in his appeal a mental residual functional capacity assessment from Elizabeth Garton,
PMNHP, who had treated plaintiff over a two-year period. Tr. 19-22. She opined that plaintiff
suffered extreme impairment in his ability to perform activities within a schedule, maintain regular
attendance, be punctual within customary tolerances, complete a normal workday/workweek
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without interruptions from psychologically based symptoms and perform at a consistent pace
without an unreasonable number or length of rest periods. Tr. 21. She stated that plaintiff
experienced marked impairment in his ability to maintain attention and concentration for extended
periods, work in coordination with or in proximity to others without being distracted by them,
accept instructions and respond appropriately to criticism from supervisors and get along with
coworkers and peers without distracting them or exhibiting behavioral extremes. Tr. 20-21.
Garton stated that plaintiff was moderately impaired in his ability to understand, remember and
carry out detailed instructions, sustain an ordinary routine without special supervision, interact
appropriately with the general public, respond appropriately to changes in work setting, travel in
unfamiliar places or use public transportation and set realistic goals or make plans independently
of others.

She noted that plaintiff suffered from flashbacks and nightmares, which caused

increased anxiety and anger episodes, and that he had bipolar disorder and cyclic moods, which
interfered with his ability to interact with others in a normal, stable way. She did not believe that
he could work full-time and sustain gainful employment. Tr. 21. She anticipated that plaintiff
would miss work more than three times a month due to his impairments and that he had functioned
at this level since approximately 2011. Tr. 22.
On January 8, 2018, the Appeals Council denied plaintiff’s request for review, stating in
part as follows:
You submitted reasons that you disagree with the decision. We considered the
reasons and exhibited them on the enclosed Order of the Appeals Council. We
found that the reasons do not provide a basis for changing the Administrative Law
Judge’s decision. * * *
We found no reason under our rules to review the Administrative Law Judge’s
decision. Therefore, we have denied your request for review. * * *

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We applied the laws, regulations and rulings in effect as of the date we took this
action.
Under our rules, we will review your case for any of the following reasons:
•

The Administrative Law Judge appears to have abused his or her discretion.

•

There is an error of law.

•

The decision is not supported by substantial evidence.

•

There is a broad policy or procedural issue that may affect the public
interest.

•

We receive additional evidence that you show is new, material, and relates
to the period on or before the date of the hearing decision. You must also
show there is a reasonable probability that the additional evidence would
change the outcome of the decision. You must show good cause for why
you missed informing us about or submitting it earlier. * * *

You submitted Medical Source Statement - Mental from Elizabeth Garton, PMNHP
dated March 21, 2017 (5 pages); and Medical Evidence of Record from Devendra
K. Jain, M.D. dated June 12, 2013 (1 page). We find this evidence does not show
a reasonable probability that it would change the outcome of the decision. We did
not consider and exhibit this evidence.
Tr. 1-2. The Appeals Council did not make Dr. Garton’s opinion part of the administrative record.
See Tr. 4, AC Exhibits List (listing only Exhibit 12B, Request for Review of Hearing Decision
from Roger Driskill received on March 3, 2017).
Standard Of Review
The Court reviews the Commissioner’s decision to determine whether it is “free from legal
error and supported by substantial evidence.” Wall v. Astrue, 561 F.3d 1048, 1052 (10th Cir.
2009); see 42 U.S.C. § 405(g). Substantial evidence is “such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.” Wall, 561 F.3d at 1052 (quoting Lax v.
Astrue, 489 F.3d 1080, 1084 (10th Cir. 2007)). It requires “more than a scintilla, but less than a
preponderance.” Id. (quoting Lax, 489 F.3d at 1084). Whether substantial evidence supports the
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Commissioner’s decision is based on the record taken as a whole. Washington v. Shalala, 37 F.3d
1437, 1439 (10th Cir. 1994). Evidence is not substantial if it is “overwhelmed by other evidence
in the record or constitutes mere conclusion.” Grogan v. Barnhart, 399 F.3d 1257, 1261-62 (10th
Cir. 2005). To determine if substantial evidence supports the decision, the Court will not reweigh
the evidence or retry the case, but will meticulously examine the record as a whole, including
anything that may undercut or detract from the Commissioner’s findings. Flaherty v. Astrue, 515
F.3d 1067, 1070 (10th Cir. 2007).
Analysis
Plaintiff bears the burden of proving disability under the SSA. Wall, 561 F.3d at 1062.
Plaintiff is disabled if he has a severe physical or mental impairment which prevents him from
engaging in any substantial gainful activity, and which is expected to result in death or to last for
a continuous period of at least 12 months. Thompson v. Sullivan, 987 F.2d 1482, 1486 (10th Cir.
1993); see 42 U.S.C. § 423(d)(1)(A). The Commissioner uses a five-step sequential process to
evaluate disability. 20 C.F.R § 404.1520; Wilson v. Astrue, 602 F.3d 1136, 1139 (10th Cir. 2010).
In the first three steps, the Commissioner determines whether (1) plaintiff has engaged in
substantial gainful activity since the alleged onset, (2) plaintiff has a severe impairment or
combination of impairments and (3) the severity of any impairment is equivalent to one of the
listed impairments that are so severe as to preclude substantial gainful activity. 20 C.F.R.
§ 404.1520(a)(4)(i)-(iii); see Williams v. Bowen, 844 F.2d 748, 750-51 (10th Cir. 1988). If
plaintiff satisfies steps one, two and three, the Commissioner will automatically find him disabled.
If plaintiff satisfies steps one and two but not three, the analysis proceeds to step four.
At step four, the ALJ must make specific factual findings regarding plaintiff’s abilities in
three phases. See Winfrey v. Chater, 92 F.3d 1017, 1023-25 (10th Cir. 1996). First, the ALJ
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determines plaintiff’s physical and mental residual functional capacity (“RFC”). Id. at 1023.
Second, the ALJ determines the physical and mental demands of plaintiff’s past relevant work.
Id. Third, the ALJ determines whether despite the mental and/or physical limitations found in
phase one, plaintiff has the ability to meet the job demands found in phase two. Id.; Henrie v.
U.S. Dep’t of HHS, 13 F.3d 359, 361 (10th Cir. 1993). If plaintiff satisfies step four, i.e. if
plaintiff shows that he is not capable of performing past relevant work, the burden shifts to the
Commissioner to establish at step five that plaintiff can perform other work in the economy.
Williams, 844 F.2d at 751.
Plaintiff asserts that the Commissioner erred by not considering the opinion of Elizabeth
Garton, PMHNP, which he submitted to the Appeals Council on March 21, 2017. See Tr. 19-22.
He asserts that the Appeals Council failed to consider this new and material evidence which
contradicted the ALJ’s RFC determination and that the Court should require the Commissioner to
weigh and consider it. Plaintiff’s Initial Brief (Doc. #9) filed July 16, 2018 at 27; Plaintiff’s Reply
Brief (Doc. #11) filed August 29, 2018 at 5. Plaintiff asserts that under 20 C.F.R. 404.970(b),
“[t]he Appeals Council shall evaluate the entire record including the new and material evidence
submitted if it relates to the period on or before the date of the administrative law judge hearing
decision.” Plaintiff’s Reply Brief (Doc. #11) at 5 (quoting 20 C.F.R. § 404.970(b) (2015)).
The Commissioner states that the Appeals Council found that Dr. Garton’s opinion “did
not show a reasonable probability that it would change the outcome of the ALJ’s decision.”
Commissioner’s Brief (Doc. #10) at 14 (citing current version of 20 C.F.R. § 404.970(a)(5)
(2017)). The Commissioner also asserts that this Court should give Garton’s opinion “limited
weight” and that her opinion “did not undermine the substantial evidence supporting the ALJ’s
decision—more specifically, the mental RFC.” Id. He asserts that “the Appeals Council was
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warranted in concluding that Ms. Garton’s opinion did not show a reasonable probability that it
would change the outcome of the decision, and this Court should not revisit that determination.”
Id. at 16.
Where, as here, the Appeals Council explicitly stated that it did not accept and consider the
new evidence and did not make it part of the administrative record, the Court considers whether
the Appeals Council should have considered the additional evidence. See Kiro v. Berryhill,
No. 18-89 SCY, 2019 WL 1331903, at *5 (D.N.M. Mar. 25, 2019). The Court reviews de novo
whether evidence qualifies for consideration by the Appeals Council. Id. (citing Krauser v.
Astrue, 638 F.3d 1324, 1328 (10th Cir. 2011)). The Appeals Council should consider additional
evidence if it is new, material and relates to the period on or before the date of the ALJ’s decision.
Padilla v. Colvin, 525 F. App’x. 710, 712 (10th Cir. 2013). When the Appeals Council fails to
consider qualifying evidence, the Court remands for further proceedings. Chambers v. Barnhart,
389 F.3d 1139, 1142 (10th Cir. 2004).
The parties do not dispute that Garton’s opinion is new and chronologically pertinent.
Therefore, the question before the Court is whether her opinion is material. Before the Court can
address this question, it must iron out an important wrinkle.
I.

Amendment To Section 404.970
On December 16, 2016 (i.e., after plaintiff’s hearing but before the ALJ decision, plaintiff’s

appeal and the Appeals Council decision), the Social Security Administration updated its
regulations regarding review by the Appeals Council. See Ensuring Program Uniformity at the
Hearing and Appeals Council Levels of the Administrative Review Process, 81 Fed. Reg. 90,987
(Dec. 16, 2016). The new regulations became final on January 17, 2017, but the Administration
did not require compliance with the new regulations until May 1, 2017. Id.
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Previously, the relevant portion of the regulations, titled “Cases the Appeals Council will
review,” stated as follows:
(b) If new and material evidence is submitted, the Appeals Council shall consider
the additional evidence only where it relates to the period on or before the date of
the administrative law judge hearing decision. The Appeals Council shall evaluate
the entire record including the new and material evidence submitted if it relates to
the period on or before the date of the administrative law judge hearing decision.
It will then review the case if it finds that the administrative law judge’s action,
findings, or conclusion is contrary to the weight of the evidence currently of record.
20 C.F.R. § 404.970 (2015) (emphasis added). Effective January 17, 2017, the relevant portion
states as follows:
(a) The Appeals Council will review a case if— * * *
(5) Subject to paragraph (b) of this section, the Appeals Council receives
additional evidence that is new, material, and relates to the period on or
before the date of the hearing decision, and there is a reasonable probability
that the additional evidence would change the outcome of the decision.
(b) The Appeals Council will only consider additional evidence under
paragraph (a)(5) of this section if you show good cause for not informing us about
or submitting the evidence. . . * * *
20 C.F.R. § 404.970 (2017) (emphasis added).
Under the older version of 20 C.F.R. § 404.970, the Tenth Circuit held that evidence is
material “if there is a reasonable possibility that it would have changed the outcome.” Threet v.
Barnhart, 353 F.3d 1185, 1191 (10th Cir. 2003). The amendment to Section 404.970 changed the
materiality standard to one of “reasonable probability,” 20 C.F.R. § 404.970(a)(5) (emphasis
added). In addition, the amendment separates from the materiality requirement the obligation to
show a reasonable probability of a different outcome.1 See Jones v. Berryhill, No. 17-703, 2018

1

Although courts in this circuit have noted this change, the Tenth Circuit has not yet
addressed the difference between the two standards.
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WL 3849914, at *5 (M.D.N.C. Aug. 13, 2018). Although some courts have held that the new
regulations apply to cases that were pending before the Appeals Council after the compliance date,
see Bisbee v. Berryhill, No. 18-0731-SMV, 2019 WL 1129459, at *3 n.4 (D.N.M. Mar. 12, 2019),
one judge in the District of Kansas has held otherwise.
In Potter v. Berryhill, No. 17-4050-JWL, 2018 WL 4052205, at *5 (D. Kan. Aug. 24,
2018), the Court held that the Appeals Council should not have applied the new regulations to
deny review of an ALJ decision on May 8, 2017, i.e. after the compliance date. The Appeals
Council had denied the claimant’s request for review and declined to consider additional evidence
which the claimant had submitted. The Appeals Council had stated that “the evidence does not
show a reasonable probability that it would change the outcome of the decision.” Id. Citing
numerous regulations, the Court noted that the Commissioner had repeatedly acknowledged that
federal courts review the Commissioner’s final decisions in accordance with rules in effect at the
time of the final decision. Id. at *6. The Court further stated as follows:
The reasons for this seem evident—that the date of the final decision is the date at
which the ALJ (or the Appeals Council, if it made the final decision) applied the
law in effect on that date and determined if the claimant was disabled; that if the
claimant files a subsequent application, it can relate back only to the day after the
final decision, absent reopening of that decision; that judicial review is to consider
whether the final decision applied the correct legal standard, and whether the record
evidence supports the decision reached; and that subsequent changes to the law
should not be applied to the claimant without notice and the opportunity to meet
the requirements of the new law.
Since at least 1980, claimants have been permitted to submit new and material
evidence to the Appeals Council. 20 C.F.R. § 404.970 (1981) (“If new and
material evidence is submitted with the request for review, the Appeals Council
shall evaluate the entire record.”) (effective Aug. 5, 1980). Effective February 9,
1987, the regulation was changed to require that the Council consider the new and
material evidence submitted “only where it relates to the period on or before the
date of the administrative law judge hearing decision.” 20 C.F.R. § 404.970
(1987). That requirement did not change for thirty years until May 1, 2017, two
years after the date of the final decision in this case. 20 C.F.R. § 404.970 (2017).
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Applying the law in effect when the final decision issued in this case, the court finds
that it was error for the Appeals Council to fail to make the admittedly new and
material evidence a part of the administrative record in this case and to consider it
when deciding whether to review the ALJ’s decision.
Potter, 2018 WL 4052205, at *6 (underline in original).
Although Potter involved a more drastic time gap, the Court nevertheless finds that its
reasoning applies here. 2 In its decision to deny review dated January 8, 2018, the Appeals
Council should not have applied the new regulations and required plaintiff to show a reasonable
probability that the additional evidence would change the outcome of the ALJ decision. Plaintiff
submitted the additional evidence in March of 2017 and the ALJ issued his decision on February 9,
2017, which became the final decision of the Commissioner when the Appeals Council denied
review. Thus, plaintiff was only required to show that the evidence was new, chronologically
relevant and material (i.e., a reasonable possibility that it would have changed the outcome).
20 C.F.R. § 404.970 (2015); see Threet, 353 F.3d at 1191.
II.

Dr. Garton’s Statement
Dr. Garton’s statement is material.

The ALJ concluded that plaintiff is limited to

“unskilled work to accommodate his moderate limitations in remembering and applying
information such that he is able to understand, remember, and carry out simple instructions.”
Tr. 38. The basic demands of unskilled work include the abilities to, on a sustained basis,
(1) understand, carry out, and remember simple instructions; (2) make judgments that are
commensurate with the functions of unskilled work, i.e., simple work-related decisions;
(3) respond appropriately to supervision, coworkers and work situations; and (4) deal with changes

2

In Potter, the claimant had filed her claim and the ALJ had issued the decision
before the Commission had even issued a notice of proposed rulemaking regarding the new
regulations. Potter, 2018 WL 4052205, at *3.
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in a routine work setting. See Social Sec. Admin., DI § 25020.010(B)(3)(m), Program Operations
Manual System (POMS), https://secure.ssa.gov/apps10/poms.nsf/lnx/0425020010 (last visited
Aug. 5, 2019). Dr. Garton found marked impairments in plaintiff’s ability to accept instructions
and respond appropriately to criticism from supervisors and in his ability to get along with
coworkers or peers without distracting them or exhibiting behavioral extremes. Tr. 21. She also
found that he is moderately limited in his ability to respond appropriately to changes in the work
setting and that his impairments would cause him to be absent from work more than three times a
month. She further found that he had extreme impairments in two categories, that his limitations
began in approximately 2011 and that she did not believe plaintiff would be able to sustain gainful
employment. Tr. 20-21. In other words, Dr. Garton’s opinion contradicts the ALJ determination
that plaintiff can perform unskilled work. Her opinion has a reasonable possibility of changing
the outcome and is therefore material.
Conclusion
Plaintiff has shown a reasonable possibility that Dr. Garton’s opinion regarding plaintiff’s
mental RFC would have changed the outcome and thus that the Appeals Council should have
considered it in deciding whether to review the ALJ’s decision. Because this issue is dispositive,
the Court need not address the remaining errors which plaintiff alleges. 3 Plaintiff may make
arguments regarding those matters to the Commissioner on remand.

Plaintiff also asserts that the ALJ (1) failed to assess plaintiff’s RFC on a functionby-function basis before stating the exertional level; (2) erred in assessing the third-party statement
of plaintiff’s wife; (3) relied on his own medical expertise to determine plaintiff’s mental RFC; (4)
failed to account for certain limitations in his hypothetical to the vocational expert; (5) contradicted
the medical evidence; and (6) failed to properly consider the reason for plaintiff’s lapse in
treatment.
3

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IT IS THEREFORE ORDERED that the Commissioner’s final decision shall be
REVERSED and that the case shall be REMANDED pursuant to the sixth sentence of
42 U.S.C. § 405(g) for the new and material evidence to be taken and considered.
IT IS FURTHER ORDERED that the parties will comply with the requirements of D.
Kan. Rule 83.7.2.4
IT IS FURTHER ORDERED that within 120 days from the date of this order, the
Commissioner shall file with the Court additional or modified findings of fact, any amended or
modified decision and a transcript of the hearing, including all evidence and testimony. The Court
retains jurisdiction over this case while this matter is on remand to the Commissioner. This case
shall be STAYED while the matter is on remand to the Commissioner. Once the Commissioner
files in this Court the additional or modified findings of fact, any amended or modified decision
and a transcript of the hearing including all evidence and testimony taken, the Court shall lift the
stay and schedule further proceedings as necessary.
IT IS FURTHER ORDERED that this case is ADMINISTRATIVELY CLOSED until
the Court lifts the stay.

Pursuant to D. Kan. Rule 83.7.2 and 42 U.S.C. § 405(g), if the Commissioner’s
decision on remand is not fully favorable to plaintiff, the Commissioner shall file with the Court
the transcript of the proceeding upon which he based his decision. At that time, the U.S.
Attorney’s Office for the District of Kansas shall contact plaintiff to determine whether he intends
to further pursue the case. If plaintiff does not intend to further pursue the case, the parties must
file a stipulation of dismissal pursuant to Rule 41(a)(1), Fed. R. Civ. P., within 14 days of the date
on which the Commissioner files the transcript. If plaintiff intends to pursue the case following
remand, he must file an amended complaint within 14 days of the date the Commissioner files the
transcript, thereby making clear that he intends to challenge the unfavorable decision of the
Commissioner following remand. The Commissioner must then file an answer within 14 days of
the date plaintiff files his amended complaint. The Court will then set the case on a briefing
schedule. If plaintiff takes no action within 14 days of the date the Commissioner files the
transcript, the Court may schedule a conference to discuss the status of the case.
4

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Dated this 9th day of August, 2019 at Kansas City, Kansas.
s/ Kathryn H. Vratil
KATHRYN H. VRATIL
United States District Judge

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