Holly v. Commissioner Social Security Administration
Opinion and Order: The Commissioner's decision is Reversed and Remanded for an immediate award of benefits. Signed on 3/30/2017 by Judge Michael J. McShane. (cp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
JAMIE M. HOLLY,
Civ. No. 6:15-cv-02266-MC
OPINION AND ORDER
CAROLYN W. COLVIN,
Acting Commissioner of the Social Security
Plaintiff Jamie Michele Holly brings this action for judicial review of a final decision of
the Commissioner of Social Security denying her application for disability insurance benefits
(DIB) under Title II of the Social Security Act and Supplemental Security Income (SSI). The
Court has jurisdiction under 42 U.S.C. §§ 405(g) and 1383(c)(3). For the reasons stated below,
the Commissioner’s decision is REVERSED and REMANDED for an immediate award of
1 - OPINION AND ORDER
PROCEDURAL AND FACTUAL BACKGROUND
Plaintiff filed an application for disability insurance benefits, alleging disability as of
December 15, 2008. Tr. 195-200. The claim was denied initially and on reconsideration. Tr. 144160. A hearing was held before an ALJ on March 21, 2014. Tr. 28. After the hearing, Plaintiff
amended her alleged onset date to March 3, 2009, the date of her surgery. Tr. 10, 212. On April
11, 2014, the ALJ issued a decision denying Plaintiff’s claim. Tr. 7-27. Plaintiff requested
review of the hearing decision which was denied by the Appeals Council on September 30, 2015
making the ALJ’s decision the final decision of the Commissioner. Tr. 1-6. This appeal followed.
STANDARD OF REVIEW
The reviewing court shall affirm the Commissioner’s decision if the decision is based on
proper legal standards and the legal findings are supported by substantial evidence on the record.
42 U.S.C. § 405(g); Batson v. Comm’r for Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir.
2004). “Substantial evidence is ‘more than a mere scintilla but less than a preponderance; it is
such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’”
Hill v. Astrue, 698 F.3d 1153, 1159 (9th Cir. 2012) (quoting Sandgathe v. Chater, 108 F.3d 978,
980 (9th Cir. 1997)). To determine whether substantial evidence exists, this Court reviews the
administrative record as a whole, weighing both the evidence that supports and that which
detracts from the ALJ’s conclusion. Martinez v. Heckler, 807 F.2d 771, 772 (9th Cir. 1986).
The Commissioner's findings are upheld if supported by inferences reasonably drawn
from the record; if evidence exists to support more than one rational interpretation, the court
must defer to the Commissioner's decision. Batson, 359 F.3d at 1193; Aukland v. Massanari, 257
F.3d 1033, 1034-35 (9th Cir. 2000) (when evidence can rationally be interpreted in more than
one way, the court must uphold the Commissioner's decision). A reviewing court, however,
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“cannot affirm the Commissioner's decision on a ground that the Administration did not invoke
in making its decision.” Stout v. Comm’r Soc. Sec. Admin., 454 F.3d 1050, 1054 (9th Cir. 2006)
(citation omitted). A court may not reverse an ALJ's decision on account of an error that is
harmless. Id. at 1055–56. “[T]he burden of showing that an error is harmful normally falls upon
the party attacking the agency's determination.” Shinseki v. Sanders, 556 U.S. 396, 409 (2009).
I. ALJ’s Decision
The Social Security Administration uses a five step sequential evaluation to determine
whether a claimant is disabled. 20 C.F.R. §§ 404.1520; 416.920. The initial burden of proof rests
upon the claimant to meet the first four steps. If claimant satisfies his or her burden with respect
to the first four steps, the burden shifts to the Commissioner at step five. 20 C.F.R. § 404.1520.
At step five, the Commissioner’s burden is to demonstrate the claimant is capable of making an
adjustment to other work after considering the claimant’s residual functional capacity, age,
education, and work experience. Id.
Here, the ALJ found at step one of the sequential analysis that Plaintiff had not engaged
in substantial gainful activity (SGA) since the alleged onset date. Tr. 12. At step two, the ALJ
found Plaintiff suffered from the following severe impairments: cervical and lumbar spine
degenerative disc disease, a history of rotator cuff tear with arthroscopic surgery, bipolar
disorder, adjustment disorder with mixed anxiety and depressed mood, and borderline
intellectual functioning. Id. At step three, the ALJ found that none of Plaintiff’s impairments,
alone or in combination, met or medically equaled one of the listed impairments in 20 C.F.R.
Part 404, Subpart P, Appendix 1. Between steps three and four, the ALJ found that retains the
residual functional capacity to perform light work, but is precluded from doing any lifting,
3 - OPINION AND ORDER
reaching, pushing or pulling with the right upper extremity above shoulder level. Tr. 15. She can
perform simple, repetitive, routine tasks with no more than occasional interaction with
supervisors, coworkers, and the general public. Id. At step four, the ALJ concluded that Plaintiff
is unable to perform past work, but at step five, found plaintiff to retain the ability to work as a
sorter, assembler, or folder. Tr. 21-22.
II. Issues raised by Plaintiff
Plaintiff challenges the ALJ’s findings on five main points: (1) the ALJ erred in his
consideration of the medical opinions; (2) the ALJ failed to give clear and convincing reasons for
failing to credit Plaintiff’s testimony; (3) the ALJ erred in finding that Plaintiff’s intellectual
limitations do not meet the criteria of Listing 12.05C; (4) the ALJ erred in failing to credit the lay
evidence; and (5) the Commissioner failed to meet her burden of proving that Plaintiff retains the
ability to perform “other work” in the national economy. Because the Court finds that the ALJ
erred in failing to find Plaintiff disabled under Listing 12.05C, the Court does not address
Plaintiff’s other allegations of error.
III. Plaintiff’s intellectual limitation under the Criteria of Listing 12.05C
To establish disability under Listing 12.05C, a claimant must satisfy the diagnostic
criteria in the introductory paragraph as well as the criteria in paragraph C. Foster v. Halter, 279
F.3d 348, 354 (6th Cir. 2001). To meet Listing 12.05C, a claimant must show that they have (1) a
significantly subaverage general intellectual functioning; (2) with deficits in adaptive behavior
initially manifested during the developmental period (before age 22); (3) a valid verbal,
performance, or full scale IQ of 60 to 70 inclusive; and (4) a physical or other mental impairment
imposing additional and significant work-related limitations of function. Impairment Listings, 20
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C.F.R. Pt. 404, Subpart P, Appendix 1, § 12.05 C. Plaintiff was found to have satisfied the
criteria (1), (3) and (4), but not criteria (2).
Plaintiff challenges the ALJ’s findings that there was not sufficient evidence indicating a
deficit in adaptive functioning that initially manifested during the development period (criteria
2). Adaptive functioning refers to how effectively individuals cope with common life demands
and how well they meet the standards of personal independence expected of someone in their
particular age group, sociocultural background, and community setting. DSMIV-TR, pp. 41-42.
The ALJ relied on the following facts in finding no deficit in adaptive functioning prior to age
22: plaintiff did not receive special education services while in school; plaintiff left school in the
11th grade due to pregnancy; plaintiff later earned her GED; and plaintiff has historically
performed substantial gainful activity for many years as an offbearer, a position that requires a
specific vocational preparation (SVP) of 2. Tr. 15, 45, 69, 370, 568
Plaintiff argues that the record contains other credible circumstantial evidence that may
be used to demonstrate deficits in adaptive functioning initially manifested during the
developmental period before age 22. McGrew v. Comm’r, No. 3:13-cv-01909-SI, 2015 WL
1393291, *5 (D. Or. 2015). Relevant circumstantial evidence may generally include difficulties
with reading and writing, attendance of special education classes, and dropping out of school. Id.
(internal citations omitted). Plaintiff points out that Dr. Colistro reviewed Ms. Holly’s school
records and noted she performed marginally. Tr. 568. Plaintiff was required to repeat
kindergarten because she lacked the verbal skill and was observed to be reluctant interacting
around strangers. Id. Because of learning difficulties, she struggled throughout her primary and
secondary school years, graduating from junior high with a 1.8 GPA. Id. Plaintiff stated her poor
performance in school was due to attention problems. Tr. 372. Plaintiff points out that her utility
5 - OPINION AND ORDER
payments are handled by her mother, and that she receives significant assistance from her sister
and mother with household chores, child care, and reminders and instructions. Tr. 62-4, 66.
Listing 12.05 requires that the onset of adaptive functioning deficits occur before age 22,
but the paragraph does not specifically confine the analysis only to the time period before age 22.
McGrew v. Comm’r, supra, 2015 WL 1393291, *6. In other words, a claimant must demonstrate
current deficits in adaptive functioning initially manifested before age 22. The purpose of this
prong is not to measure the deficits’ severity, but to determine if a qualifying intellectual
disability exists, a condition that is innate, rather than a condition resulting from a disease or
accident in adulthood. Id. at *5. The only remaining issue here is whether plaintiff has a deficit
that manifested before age 22. Evidence used to reach this determination may be circumstantial.
Id. at *6. Dropping out of high school prior to graduation, difficulties in reading, writing or math,
and low skilled work history are circumstantial evidence demonstrative of adaptive functioning
deficit. Pedro v. Astrue, 849 F. Supp. 2d 1006, 1011–12 (D. Or. 2011); Gomez v. Astrue, 695
F.Supp.2d 1049, 1058–59 (C.D. Cal. 2010). It is sufficient that the record contain “some
evidence” that permits “an inference that the impairment existed before age [twenty-two] and is
not of recent origin due to a traumatic event or some other changed circumstance.” Gomez, 695
F.Supp.2d at 1060 (citing Markle v. Barnhard, 324 F.3d 182, 188–89 (3rd Cir. 2003).
As a whole, the record here reflects that Plaintiff has suffered from impaired intellectual
functioning throughout her life. Her condition appears to be innate, as opposed to a condition
resulting from a disease or accident in adulthood. Evidence of mild retardation in adulthood,
without evidence of some intervening organic brain damage, is sufficient circumstantial evidence
that plaintiff carried this trait with her from childhood. Her poor performance in school and the
fact she was held back a grade as a small child further confirm this fact. Perhaps in a perfect
6 - OPINION AND ORDER
world the plaintiff would have been enrolled in special education and her school would have
charted her progress or lack of progress for the purpose of our record. But the world is not
perfect. Children with intellectual deficits are passed through despite failing grades and children
who are no longer capable of facing the increasing challenges of a learning environment will find
themselves in difficult circumstances that lead them to drop out of school. The mere fact that
plaintiff managed to get a GED, without knowing more about the circumstances of how readily
or easily it was obtained, does not lessen the fact that her educational history was one of failure.
Her bad grades and bad decisions regarding her education, coupled with evidence of early
childhood intervention, are consistent with a lifetime deficit in adaptive functioning. The
evidence in the record demonstrates that Plaintiff satisfies the criteria Listing 12.05C. Because
the Commissioner’s decision that Plaintiff does not meet Listing 12.05C is not supported by
substantial evidence, the ALJ’s finding of non-disability is reversed.
The available remedy is succinctly described by the Court in McGrew v. Colvin, supra,
No. 3:13-cv-01909-SI, 2015 WL 1393291, *5 (D. Or. 2015): 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, 1099-1100 (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.
7 - OPINION AND ORDER
The ALJ erred in concluding that Plaintiff does not satisfy the requirements of Listing
12.05C. When a claimant does suffer from impairments listed in section 12.05(C), they must be
found disabled regardless of age, education, and work experience. Fanning v. Brown, 827 F.2d
631, 634 (9th Cir. 1987). Because the ALJ accepted evidence that demonstrates that Plaintiff
meets all prongs of Listing 12.05C, the correct application of the listing would require the ALJ to
find Plaintiff disabled. A remand of further proceedings would therefore serve no useful purpose.
The Court reverses the Commissioner’s decision and remands for an immediate award of
The Commissioner’s decision is REVERSED and REMANDED for an immediate award
IT IS SO ORDERED.
DATED this 30th day of March, 2017.
______/s/Michael J. McShane_______
Michael J. McShane
United States District Judge
8 - OPINION AND ORDER
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