Powell v. Commissioner Social Security Administration

Filing 21

Opinion and Order - The Commissioner's decision that Powell is not disabled is REVERSED and REMANDED for further proceedings consistent with this Opinion. Signed on 2/22/2016 by Judge Michael H. Simon. (mja)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

DEBORAH M. POWELL,
Plaintiff,

Case No. 6:14-cv-01900-SI
OPINION AND ORDER

v.
CAROLYN W. COLVIN, Acting
Commissioner of Social Security,
Defendant.
Kathryn Tassinari and Robert A. Baron, HARDER, WELLS, BARON & MANNING, P.C., 474
Willamette, Suite 200, Eugene, OR 97401. Of Attorneys for Plaintiff.
Billy J. Williams, Acting United States Attorney, and Janice E. Herbert, Assistant United States
Attorney, U.S. Attorney’s Office, 1000 SW Third Avenue, Suite 600, Portland, OR 97204; L.
Jamala Edwards, Special Assistant United States Attorney, Office of the General Counsel, Social
Security Administration, 701 Fifth Avenue, Suite 2900 Mailstop 221A, Seattle, WA 98104. Of
Attorneys for Defendant.
Michael H. Simon, District Judge.
Deborah M. Powell (“Powell” or “Plaintiff”) seeks judicial review of the final decision of
the Commissioner of the Social Security Administration (“Commissioner”) denying Plaintiff’s
application for disability insurance benefits (“DIB”) under Title II of the Social Security Act. For

PAGE 1 – OPINION AND ORDER

the following reasons, the Court REVERSES the Commissioner’s decision and REMANDS for
further proceedings.
STANDARD OF REVIEW
The district court must affirm the Commissioner’s decision if it is based on the proper
legal standards and the findings are supported by substantial evidence. 42 U.S.C. § 405(g); see
also Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989). “Substantial evidence” means
“more than a mere scintilla but less than a preponderance.” Bray v. Comm’r of Soc. Sec. Admin.,
554 F.3d 1219, 1222 (9th Cir. 2009) (quoting Andrews v. Shalala, 53 F.3d 1035, 1039 (9th
Cir. 1995)). It means “such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.” Id. (quoting Andrews, 53 F.3d at 1039).
Where the evidence is susceptible to more than one rational interpretation, the
Commissioner’s conclusion must be upheld. Burch v. Barnhart, 400 F.3d 676, 679 (9th
Cir. 2005). Variable interpretations of the evidence are insignificant if the Commissioner’s
interpretation is a rational reading of the record, and the Court may not substitute its judgment
for that of the Commissioner. See Batson v. Comm’r of Soc. Sec. Admin., 359 F.3d 1190, 1193,
1196 (9th Cir. 2004). “[A] reviewing court must consider the entire record as a whole and may
not affirm simply by isolating a specific quantum of supporting evidence.” Orn v. Astrue, 495
F.3d 625, 630 (9th Cir. 2007) (quoting Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th
Cir. 2006) (quotation marks omitted)). A reviewing court, however, may not affirm the
Commissioner on a ground upon which the Commissioner did not rely. Id.; see also Bray, 554
F.3d at 1226.

PAGE 2 – OPINION AND ORDER

BACKGROUND
A. Plaintiff’s Application
Powell protectively filed an application for DIB on October 17, 2010, alleging disability
beginning April 30, 2009. AR 18, 82. She was 33 years old at the alleged disability onset date.
AR 82. She alleges disability due to the following medical conditions: depression, diabetes,
fibromyalgia, arthritis and posttraumatic stress disorder (“PTSD”). AR 82, 96. The
Commissioner denied her application initially on January 14, 2011 and upon reconsideration on
June 17, 2011. AR 16, 110, 119. Powell requested a hearing before an Administrative Law Judge
(“ALJ”). AR 18, 122. Powell appeared for a hearing April 10, 2013, and was represented by
counsel. AR 18. At the hearing, the ALJ heard testimony from Powell and vocational expert
(“VE”) Caroline Kay Wise. AR 43-81. After considering all the evidence in the record, the ALJ
concluded that Powell is not disabled under the Social Security Act. AR 18-29.
Powell petitioned the Appeals Council for review of the ALJ’s decision. AR 8. Powell
submitted post-decision evidence to the Appeals Council. AR 2. The evidence consisted of a
psychological evaluation report dated September 19, 2013, from Dr. David R. Truhn, Psy.D.
AR 2. On October 1, 2014, the Appeals council denied the request for review, rendering the
ALJ’s decision the final decision of the Commissioner. AR 1-3. The Appeals Council further
found that Dr. Truhn’s medical evidence related to the period after the ALJ’s decision on
May 30, 2013, and thus that those records did not affect the ALJ’s decision. AR 2. The Appeals
Council declined to consider this new evidence. AR 2. Powell now seeks review of the ALJ’s
decision.
B. The Sequential Analysis
A claimant is disabled if he or she is unable to “engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which . . . has lasted or
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can be expected to last for a continuous period of not less than 12 months[.]” 42 U.S.C.
§ 423(d)(1)(A). “Social Security Regulations set out a five-step sequential process for
determining whether an applicant is disabled within the meaning of the Social Security Act.”
Keyser v. Comm’r Soc. Sec. Admin., 648 F.3d 721, 724 (9th Cir. 2011); see also 20 C.F.R.
§§ 404.1520 (DIB), 416.920 (SSI); Bowen v. Yuckert, 482 U.S. 137, 140 (1987). Each step is
potentially dispositive. 20 C.F.R. §§ 404.1520(a)(4), 416.920(a)(4). The five-step sequential
process asks the following series of questions:
1.

Is the claimant performing “substantial gainful activity?” 20 C.F.R.
§§ 404.1520(a)(4)(i), 416.920(a)(4)(i). This activity is work involving
significant mental or physical duties done or intended to be done for pay
or profit. 20 C.F.R. §§ 404.1510, 416.910. If the claimant is performing
such work, she is not disabled within the meaning of the Act. 20 C.F.R.
§§ 404.1520(a)(4)(i), 416.920(a)(4)(i). If the claimant is not performing
substantial gainful activity, the analysis proceeds to step two.

2.

Is the claimant’s impairment “severe” under the Commissioner’s
regulations? 20 C.F.R. §§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). An
impairment or combination of impairments is “severe” if it significantly
limits the claimant’s physical or mental ability to do basic work activities.
20 C.F.R. §§ 404.1521(a), 416.921(a). Unless expected to result in death,
this impairment must have lasted or be expected to last for a continuous
period of at least 12 months. 20 C.F.R. §§ 404.1509, 416.909. If the
claimant does not have a severe impairment, the analysis ends. 20 C.F.R.
§§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). If the claimant has a severe
impairment, the analysis proceeds to step three.

3.

Does the claimant’s severe impairment “meet or equal” one or more of the
impairments listed in 20 C.F.R. Part 404, Subpart P, Appendix 1? If so,
then the claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4)(iii),
416.920(a)(4)(iii). If the impairment does not meet or equal one or more of
the listed impairments, the analysis continues. At that point, the ALJ must
evaluate medical and other relevant evidence to assess and determine the
claimant’s “residual functional capacity” (“RFC”). This is an assessment
of work-related activities that the claimant may still perform on a regular
and continuing basis, despite any limitations imposed by his or her
impairments. 20 C.F.R. §§ 404.1520(e), 404.1545(b)-(c), 416.920(e),

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416.945(b)-(c). After the ALJ determines the claimant’s RFC, the analysis
proceeds to step four.
4.

Can the claimant perform his or her “past relevant work” with this RFC
assessment? If so, then the claimant is not disabled. 20 C.F.R.
§§ 404.1520(a)(4)(iv), 416.920(a)(4)(iv). If the claimant cannot perform
his or her past relevant work, the analysis proceeds to step five.

5.

Considering the claimant’s RFC and age, education, and work experience,
is the claimant able to make an adjustment to other work that exists in
significant numbers in the national economy? If so, then the claimant is
not disabled. 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v),
404.1560(c), 416.960(c). If the claimant cannot perform such work, he or
she is disabled. Id.

See also Bustamante v. Massanari, 262 F.3d 949, 954 (9th Cir. 2001).
The claimant bears the burden of proof at steps one through four. Id. at 953; see also
Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999); Yuckert, 482 U.S. at 140-41. The
Commissioner bears the burden of proof at step five. Tackett, 180 F.3d at 1100. At step five, the
Commissioner must show that the claimant can perform other work that exists in significant
numbers in the national economy, “taking into consideration the claimant’s residual functional
capacity, age, education, and work experience.” Id.; see also 20 C.F.R. §§ 404.1566, 416.966
(describing “work which exists in the national economy”). If the Commissioner fails to meet this
burden, the claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). If, however,
the Commissioner proves that the claimant is able to perform other work existing in significant
numbers in the national economy, the claimant is not disabled. Bustamante, 262 F.3d at 953-54;
Tackett, 180 F.3d at 1099.
C. The ALJ’s Decision
The ALJ began her opinion by noting that Powell met the insured status requirements of
the Social Security Act through June 30, 2011. AR 18, 21. The ALJ then applied the sequential
process. AR 21-29. At step one, the ALJ determined that Powell had not engaged in substantial
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gainful activity after April 30, 2009, the alleged onset date. AR 21-22. At step two, the ALJ
determined that Powell has the following severe impairments: insulin dependent diabetes
mellitus II, fibromyalgia, morbid obesity, PTSD, and depression. Id. The ALJ discussed the
records from treating nurse practitioner Michele O’Conner, FNP and Dr. Thea Petersen, M.D.,
concerning Powell’s complaints of tingling, hand pain and grip problems, and ultimately
concluded that there was insufficient evidence to support a diagnosis of neuropathy before the
last insured date. AR 22-23. The ALJ also mentioned in passing several other health complaints
claimed by Powell and concluded that in the absence of any definitive diagnoses that those
complaints were most probably attributable to Powell’s fibromyalgia. AR 23.
At step three, the ALJ found that Powell did not have an impairment or combination of
impairments that meets or medically equals the severity of one of the listed impairments in
20 C.F.R. Part 404, Subpart P, Appendix 1. AR 23-24. The ALJ next found that Powell had
the [RFC] to perform light work in that she can lift 20 pounds
occasionally and 10 pounds frequently; sit, stand and walk each 6
hours out of an 8 hour day for a combined total of 8 hours of
activity, but requires the option to sit or stand at will while still
performing essential tasks. She can occasionally climb ladders,
ropes and scaffolds, frequently climb ramps and stairs,
occasionally crouch, stoop, crawl and kneel, and frequently
balance. Ms. Powell is to avoid concentrated exposure to hazard.
She is to have no public contact and can have casual contact with
coworkers but no teamwork assignments. Ms. Powell can
understand and carry out simple instructions.
AR 24.
At step four, the ALJ found that Powell was unable to perform her past relevant work.
AR 28. At step five, based on the testimony of a VE, the ALJ concluded that Powell could
perform jobs that exist in significant numbers in the national economy including office helper,
mail sorter, clerical checker, addressing clerk, and price checking clerk. AR 28-29. Accordingly,
the ALJ found Powell was not disabled. AR 29.
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DISCUSSION
Powell argues that the Appeals Council erred in failing to consider the new evidence
from Dr. Truhn submitted by Powell in support of her request for review. She further argues that
the ALJ failed to address the opinion of her treating therapist, Valeria Mainwald, MSW, LCSW.
Finally, she argues that the ALJ erred in assessing Powell’s physical and mental impairments and
in failing to pose a hypothetical to the VE that accurately reflected her limitations.
A. Supplemental Evidence Submitted to the Appeals Council
Powell first argues that Appeals Council erred by failing to consider evidence from
Dr. Truhn that Powell submitted in support of her request for review. Powell submitted a report
by Dr. Truhn dated September 19, 2013, regarding his evaluation of Powell. Dkt. 14-1 at 1-12.
Powell also submitted a Mental Residual Functional Capacity form (“MRCF”) completed by
Dr. Truhn. Id. at 13-16.
Dr. Truhn performed a comprehensive psychological evaluation that included a clinical
interview, mental status examination, records review, and extensive psychometric testing.
Dr. Truhn’s evaluation included the Wechsler Adult Intelligence Scale–Fourth Edition,
Comprehensive Trail Making Test, Wide Range Achievement Test–4, Minnesota Multiphasic
Personality Inventory–2–RF, and Millon Clinical Multiaxial Inventory–III. Id. at 7-9. Based on
this evaluation, Dr. Truhn diagnosed Powell with posttraumatic stress disorder (chronic),
dysthymic disorder (early onset), major depressive disorder (recurrent, moderate), panic disorder
without agoraphobia, “rule out” pain disorder associated with both psychological factors and a

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general condition,1 and dependent personality disorder (avoidant, borderline, self-defeating
features). Id. at 10.
Powell submitted Dr. Truhn’s MRFC assessment and report to the Appeals Council in
support of her request for review. AR 2. The Appeals Council denied Powell’s request for
review, stating that they had “looked at the medical report dated September 19, 2013 from
Dr. David R. Truhn,” but refused to examine it because “the [ALJ] decided your case through
June 30, 2011 [and] “[t]his new information is about a later time.” Id. The Appeals Council
therefore concluded that Dr. Truhn’s evidence “does not affect the decision about whether you
were disabled at the time you were last insured.” Id.
Powell argues that the Appeals Council was required to examine Dr. Truhn’s opinions in
determining whether to grant review of the ALJ’s decision. The Commissioner’s regulations
provide that “[i]f 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.” 20 C.F.R § 404.970(b). The Ninth Circuit has interpreted this to
include medical evaluations made after the date of the ALJ’s decision where they concern the
claimant’s condition during the time period before the ALJ’s decision. See Taylor v. Comm’r of
Soc. Sec. Admin., 659 F.3d 1228, 1232 (9th Cir. 2011).
The evidence from Dr. Truhn relates to the period of time on or before the date of the
ALJ hearing decision. Although Dr. Truhn’s MRFC and report were dated after the ALJ’s
1

In the medical context, a “rule-out” or “rule/out” diagnosis “means there is ‘evidence
that [the patient] may meet the criteria for that diagnosis, but [the doctors] need more
information to rule it out.’ In other words, there is reason to suspect the presence of a ‘rule-out’
psychotic disorder, but the doctor would not be comfortable giving such a diagnosis at that
time.” United States v. Grape, 549 F.3d 591, 593 n.2 (3d Cir. 2008) (quoting witness testimony)
(alteration in original).

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decision, Dr. Truhn indicated that he was able to infer that Powell’s mental limitations existed at
the present level dating back to April 30, 2009. Dkt. 14-1 at 16. Dr. Truhn further concluded, that
considering Powell’s mental abilities, she would be unable to work, as of the date of last insured,
“independently, appropriately, effectively and on a sustained basis, 7.5 hours per day, five days
per week, in a regular, competitive work setting” 95-percent of the time. Id. Therefore, the
Appeals Council erred in concluding Dr. Truhn’s report related to a later time period and in
refusing to examine Dr. Truhn’s findings.
The Commissioner cites to Brewes v. Astrue, 682 F.3d 1157, 1159-60 (9th Cir. 2012),
and Taylor, 659 F.3d at 1231, for the proposition that federal courts cannot review an Appeals
Council’s denial of a request to review an ALJ’s decision, because the Appeals Council’s
decisions are not final agency actions. The Commissioner misunderstands Powell’s argument.
Powell, like the plaintiff in Taylor, is not “arguing that the Appeals Council’s decision to deny
[her] request for review should be reversed.” 659 F.3d at 1231. Rather, Powell is arguing that
Dr. Truhn’s evidence was improperly rejected by the Appeals Council and Powell is asking the
Court to review Dr. Truhn’s “improperly rejected opinion in [the Court’s] overall review of the
ALJ’s final decision, not in review of the Appeals Council’s decision denying [the] request for
review.” Id. at 1232. If Powell is correct that the Appeals Council improperly rejected
Dr. Truhn’s evidence, then the Court may consider this improperly rejected opinion. Id.
This case falls squarely within the factual situation discussed in Taylor. In Taylor, the
Appeals Council did not consider a mental health evaluation that was dated after the last date
insured but related to an earlier time period. Id. at 1231-32. The Ninth Circuit noted that if the
Appeals Council rejected the medical opinion as relating to the later time period, that rejection
was improper. Id. at 1232. That is precisely what occurred in this case. In Taylor, the Ninth

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Circuit ultimately concluded that the Appeals Council had not considered the new medical
evidence at all, which the Ninth Circuit also held to be an improper rejection of the evidence. Id.
The Ninth Circuit held that: “Where the Appeals Council was required to consider additional
evidence, but failed to do so, remand to the ALJ is appropriate so that the ALJ can reconsider its
decision in light of the additional evidence.” Id. (citing 20 C.F.R. § 404.970(b)).
In denying Powell’s request for review, the Appeals Council refused to evaluate the
evidence from Dr. Truhn, stating that “[t]his new information is based on a later date. Therefore,
it does not affect the decision about whether you were disabled at the time you were last insured
for disability benefits.” AR 2. As previously discussed, although dated September 19, 2013,
Dr Truhn’s opinion concerned the time before the date last insured and the ALJ hearing decision
and thus the Appeals Council was required to consider it. Taylor, 659 F.3d at 1232; see also
Lester v. Chater, 81 F.3d 821, 832 (9th Cir. 1996) (noting that “medical evaluations made after
the expiration of a claimant’s insured status are relevant to an evaluation of the preexpiration
condition”). Because the Appeals Council improperly rejected the evidence of Dr. Truhn, the
Court remands the matter to the ALJ for consideration of this evidence. Taylor, 659 F.3d at 1233.
The Commissioner further argues that under sentence six of 42 U.S.C. § 405(g), the
Court may only remand for further proceedings if Powell has shown good cause for failing to
produce the evidence from Dr. Truhn earlier. In support of this argument the Commissioner cites
to Mayes v. Massanari, 276 F.3d 453, 462 (9th Cir. 2001), and Clem v. Sullivan, 894 F.2d 328,
332 (9th Cir. 1990). Again, the Commissioner misunderstands Powell’s argument. Powell argues
that her evidence from Dr. Truhn is not subject to the good cause requirement of 42 U.S.C.
§ 405(g) because the evidence was properly before the Appeals Council pursuant to 20 C.F.R.
§ 404.970(b). In Taylor, the court found that a remand to the ALJ was appropriate

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under 20 C.F.R. § 404.970(b) and did not discuss the good cause and materiality requirements of
a sentence six remand under 42 U.S.C. § 405(g).2 659 F.3d at 1233 (citing to Ramirez v.
Shalala, 8 F.3d 1449, 1452 (9th Cir. 1993) (holding that “[t]he Secretary’s findings must be
reversed if they are tainted by legal error”)); see also Ward v. Colvin, 2014 WL 4925274, at * 4
(E.D. Cal. September 30, 2014) (remanding under Taylor for the ALJ to consider new evidence
improperly rejected by the Appeals Council without undertaking a sentence six analysis);
Mancillas v. Colvin, 2014 WL 2918897, at *4 (N.D. Cal. June 26, 2014) (same). Thus, the Court
remands for the ALJ to consider how the evidence from Dr. Truhn could affect each step of the
sequential analysis, and any relevant credibility findings.
B. Evidence from Valeria Mainwald, MSW, LCSW
In April 2011, Powell went to South Lane Mental Health seeking treatment for her
mental health issues. AR 510-16. Valeria Mainwald, MSW, LCSW, was her treating therapist.
AR 660. Powell had a number of treatment sessions with Ms. Mainwald before her last insured
date. AR 506-09. On April 1, 2013, Ms. Mainwald wrote a letter regarding her observations of
Powell. AR 660-61. Ms. Mainwald indicated that Powell would have difficulty holding a regular
job because she would likely have issues with attendance, anxiety, flashbacks and fear. AR 661.
Powell argues that the ALJ erred by ignoring all evidence from Ms. Mainwald. The
Commissioner responds that although the ALJ did not mention Ms. Mainwald by name, the ALJ
cited to evidence from Ms. Mainwald. Additionally, argues the Commissioner, if an error was
made, it did not constitute a reversible error.
2

Even if Powell must show good cause, the Court finds that Powell has done so. Powell
has limited financial means, had requested that the ALJ supplement the record with a
comprehensive psychological evaluation, and was not aware how important such an evaluation
would be until after seeing the ALJ’s opinion and the ALJ’s failure to credit the mental health
evidence of Powell’s treating licensed clinical social worker.

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Under the applicable regulations, only licensed physicians and certain other qualified
specialists are considered “[a]cceptable medical sources.” 20 C.F.R. § 404.1513(a); see also
Social Security Ruling (“SSR”) 06–03p, available at 2006 WL 2329939 (Aug. 9, 2006) (defining
“acceptable medical sources” as licensed physicians, licensed or certified psychologists, licensed
optometrists, licensed podiatrists, and qualified speech pathologists). Other health care providers
who are not “acceptable medical sources,” such as “nurse practitioners, physician assistants,
licensed clinical social workers, naturopaths, chiropractors, audiologists, and therapists,” are still
considered “medical sources” under the regulations, and the ALJ can use these other medical
source opinions in determining the “severity of the individual’s impairment(s) and how it affects
the individual’s ability to function.” 20 C.F.R. § 404.1513(d). Because Ms. Mainwald is a
licensed clinical social worker, she is considered an “other” medical source.
To reject the competent testimony of “other” medical sources like Ms. Mainwald, the
ALJ need only give “reasons germane to each witness for doing so.” Molina v. Astrue, 674 F.3d
1104, 1111 (9th Cir. 2012) (quoting Turner v. Comm’r of Soc. Sec., 613 F.3d 1217, 1224 (9th
Cir. 2010)). In rejecting such testimony, the ALJ need not cite the specific record so long as
“arguably germane reasons” for dismissing the testimony are noted, even though the ALJ does
“not clearly link his determination to those reasons,” and substantial evidence supports the ALJ’s
decision. Lewis v. Apfel, 236 F.3d 503, 512 (9th Cir. 2001). The ALJ also may “‘draw inferences
logically flowing from the evidence.’” Tommasetti v. Astrue, 533 F.3d 1035, 1040 (9th
Cir. 2008) (quoting Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982)).
Ms. Mainwald’s statements regarding Powell’s symptoms and how her impairments
affect her ability to work constitute competent, probative evidence from an “other” medical

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source.3 The ALJ gave no reasons, germane or otherwise, for rejecting evidence from
Ms. Mainwald. The Commissioner points to a section of the ALJ’s decision that cited to medical
records from Ms. Mainwald’s treatment of Powell as proof that the ALJ addressed
Ms. Mainwald’s evidence. In Molina, the Ninth Circuit held that although such statements may
show that the ALJ considered the lay witness evidence in the record, they do not provide
germane reasons for discounting lay witness evidence. 674 F.3d at 1114-15. Molina further states
that although “[t]he ALJ gave reasons for rejecting Molina’s testimony . . . that were equally
relevant to the similar testimony of the lay witnesses, and would support a finding that the lay
witness testimony was not credible . . . lay witness testimony ‘cannot be disregarded without
comment.” Id. at 1115 (emphasis in original) (quoting Nguyen, 100 F.3d at 1467).
Here, the ALJ erred in failing to explain her reasons for disregarding Ms. Mainwald’s
testimony. The court in Molina went on to hold that the error was harmless, 674 F.3d at 1115.
Because the Court has concluded that it must remand the case for consideration of the new
evidence from Dr. Truhn concerning Powell’s mental limitations, the Court does not further
consider whether the ALJ’s error in silently disregarding Ms. Mainwald’s testimony was
harmless. Upon remand, the ALJ shall address Ms. Mainwald’s testimony.
C. Diabetic Neuropathy
Powell argues that the ALJ erred by failing to find peripheral neuropathy to be a severe
impairment at step two and failing to include it in the RFC analysis and VE hypothetical. In

3

Powell does not argue that Ms. Mainwald is an acceptable medical source. See 20
C.F.R. § 404.1513(a). Nor does Powell contend that Ms. Mainwald became an acceptable
medical source by “working closely with, and under the supervision” of another person who
constituted an acceptable medical source. Taylor, 659 F.3d at 1234.

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determining that Powell’s peripheral neuropathy was not severe, the ALJ considered evidence
from Michele O’Connor, FNP, and Dr. Thea Petersen, M.D.
Ms. O’Connor’s testimony is relevant as an “other” medical source under 20 C.F.R.
§ 404.1513(d)(1), and such testimony may be discounted if the ALJ provides “reasons that are
germane to each witness.” Molina, 674 F.3d at 1111. The ALJ noted Ms. O’Connor’s diagnosis
of diabetic neuropathy, but also noted that tests performed by Ms. O’Connor showed no
objective evidence of the neuropathy. AR 22. In citing to the medical test results, which
contradicted Ms. O’Connor’s diagnosis, the ALJ provided a germane reason to discount
Ms. O’Connor’s diagnosis.
Dr. Petersen’s evidence is relevant as a treating physician under 20 C.F.R. § 404.1527.
As the ALJ noted, however, Dr. Petersen did not diagnose neuropathy before the date last
insured. AR 23. Neuropathy first appears in Dr. Petersen’s notes one and one-half years after the
last insured date, and Dr. Petersen provides no indication regarding the date of onset of the
diagnosed neuropathy. The ALJ permissibly concluded that Dr. Petersen’s records do not
provide any evidence that Powell suffered from peripheral neuropathy before the last insured
date.
The ALJ’s conclusion that Powell did not have a severe impairment resulting from
peripheral diabetic neuropathy is supported by substantial evidence in the record and is not in
error. Even if the ALJ had erred in failing to find a severe impairment as a result of diabetic
neuropathy, the error would have been harmless because the ALJ included Powell’s symptoms of
pain, including peripheral pain, in formulating the RFC and hypothetical to the VE. AR 23.
D. Mental Limitations
Powell argues that the RFC fails to address the limitations reasonably due to her mental
health issues. Powell asserts that her mental health issues impair her ability to function in a
PAGE 14 – OPINION AND ORDER

workplace. According to Powell, because the ALJ failed to account for all of Powell’s
limitations, the hypothetical relied on by the VE at step five was faulty. Because the Court has
found that this case must be remanded to consider the new evidence from Dr. Truhn, the RFC
determination may need to be reconsidered in light of that new evidence.
E. Remand
Within the Court’s discretion under 42 U.S.C. § 405(g) is the “decision whether to
remand for further proceedings or for an award of benefits.” Holohan v. Massanari, 246
F.3d 1195, 1210 (9th Cir. 2001) (citation omitted). Although a court should generally remand to
the agency for additional investigation or explanation, a court has discretion to remand for
immediate payment of benefits. Treichler v. Comm’r of Soc. Sec. Admin., 775 F.3d 1090, 10991100 (9th Cir. 2014). The issue turns on the utility of further proceedings. A remand for an
award of benefits is appropriate when no useful purpose would be served by further
administrative proceedings or when the record has been fully developed and the evidence is
insufficient to support the Commissioner’s decision. Id. at 1100. A court may not award benefits
punitively and must conduct a “credit-as-true” analysis on evidence that has been improperly
rejected by the ALJ to determine if a claimant is disabled under the Act. Strauss v. Comm’r of
the Soc. Sec. Admin., 635 F.3d 1135, 1138 (9th Cir. 2011).
In the Ninth Circuit, the “credit-as-true” doctrine is “settled” and binding on this Court.
Garrison v. Colvin, 759 F.3d 995, 999 (9th Cir. 2014). It has been described by the United States
Court of Appeals for the Ninth Circuit as follows:
[The Ninth Circuit has] devised a three-part credit-as-true standard,
each part of which must be satisfied in order for a court to remand
to an ALJ with instructions to calculate and award benefits: (1) the
record has been fully developed and further administrative
proceedings would serve no useful purpose; (2) the ALJ has failed
to provide legally sufficient reasons for rejecting evidence,
whether claimant testimony or medical opinion; and (3) if the
PAGE 15 – OPINION AND ORDER

improperly discredited evidence were credited as true, the ALJ
would be required to find the claimant disabled on remand.
Id. at 1020.
A remand for an immediate award of benefits is not warranted in this case. The record
has not been fully developed. Powell has submitted new evidence that the ALJ has not yet had a
chance to evaluate. A remand to the agency for further proceedings to fully develop the record is
the appropriate remedy.
CONCLUSION
The Commissioner’s decision that Powell is not disabled is REVERSED and
REMANDED for further proceedings consistent with this Opinion.
IT IS SO ORDERED.
DATED this 22nd day of February, 2016.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge

PAGE 16 – OPINION AND ORDER