Opinion
CASE NO. 3:17-CV-05916-JLR-JRC
10-01-2018
DONALD L., Plaintiff, v. NANCY A. BERRYHILL, Deputy Commissioner of Social Security for Operations, Defendant.
REPORT AND RECOMMENDATION ON PLAINTIFF'S COMPLAINT NOTING DATE: October 15, 2018
This matter has been referred to United States Magistrate Judge J. Richard Creatura pursuant to 28 U.S.C. § 636(b)(1) and Local Magistrate Judge Rule MJR 4(a)(4), and as authorized by Mathews, Secretary of H.E.W. v. Weber, 423 U.S. 261, 271-72 (1976). This matter has been fully briefed. Dkt. 10, 16, 17.
After considering and reviewing the record, the Court concludes that the Administrative Law Judge ("ALJ") erred by giving significant weight to opinions of state agency psychological consultants, Edward Beaty, Ph.D. and Eugene Kester, M.D, but ignoring portions of their opinions related to plaintiff's adaption limitations. As the ultimate disability decision may have changed, the ALJ's error is not harmless.
The undersigned recommends that this matter be reversed and remanded pursuant to sentence four of 42 U.S.C. § 405(g) to the Acting Commissioner of Social Security ("Commissioner") for further proceedings consistent with this Order. Because the ALJ's error affects the entire proceedings and plaintiff will be able to present new evidence and new testimony on remand, and the ALJ must re-evaluate all of the medical evidence, the residual functional capacity ("RFC"), and the findings at steps four and five, if necessary.
BACKGROUND
Plaintiff was born in 1953 and was 59 years old on the alleged date of disability onset of October 10, 2013. See AR. 195-96. Plaintiff completed three years of college. AR. 60-61. Plaintiff has work experience as an insurance claims adjuster and customer service representative. AR 56-70, 223-34.
According to the ALJ, plaintiff has at least the severe impairments of "cervical degenerative disc disease; diabetes mellitus, type 2; peripheral neuropathy; dyslipidemia, history of transient ischemic attach (TIA), resolved; hypertension, chronic obstructive pulmonary disease (COPD); status post myocardial infarction March 2016; and depression (20 CFR 404.1520(c))." AR. 22.
PROCEDURAL HISTORY
Plaintiff's application for disability insurance ("DIB") benefits pursuant to 42 U.S.C. § 423 (Title II) of the Social Security Act was denied initially and following reconsideration. AR. 104-16, 117-31. Plaintiff's requested hearing was held before ALJ Richard Geib ("the ALJ") on April 6, 2016. AR. 51-102. On June 24, 2016, the ALJ issued a written decision in which the ALJ concluded that plaintiff was not disabled pursuant to the Social Security Act. AR. 17-40.
On September 5, 2017, the Appeals Council denied plaintiff's request for review, making the written decision by the ALJ the final agency decision subject to judicial review. AR. 1-6. See 20 C.F.R. § 404.981. Plaintiff filed a complaint in this Court seeking judicial review of the ALJ's written decision in November 2017. Dkt. 4. Defendant filed the sealed administrative record regarding this matter ("AR.") on February 12, 2018. Dkt. 8.
In plaintiff's Opening Brief, plaintiff raises the following issue: whether the ALJ erred in excluding limitations recommended by state agency psychological consultants, Edward Beaty, Ph.D. and Eugene Kester, M.D. Dkt. 10 at 1.
STANDARD OF REVIEW
Pursuant to 42 U.S.C. § 405(g), this Court may set aside the Commissioner's denial of social security benefits if the ALJ's findings are based on legal error or not supported by substantial evidence in the record as a whole. Bayliss v. Barnhart, 427 F.3d 1211, 1214 n.1 (9th Cir. 2005) (citing Tidwell v. Apfel, 161 F.3d 599, 601 (9th Cir. 1999)).
DISCUSSION
I. Whether the ALJ erred in excluding limitations recommended by the state agency psychological consultants.
Plaintiff argues that the ALJ erred by improperly excluding social and adaption limitations found by state agency psychological consultants, Edward Beaty, Ph.D. and Eugene Kester, M.D. Dkt. 10 at 3-6. Specifically, plaintiff contends that the ALJ erred in his consideration of the social limitations related to public contact and failed to consider the adaption limitations found by Drs. Beaty and Kester. Id.
The ALJ "may reject the opinion of a non-examining physician by reference to specific evidence in the medical record." Sousa v. Callahan, 143 F.3d 1240, 1244 (9th Cir. 1998) (citing Gomez v. Chater, 74 F.3d 967, 972 (9th Cir. 1996)); Andrews, 53 F.3d at 1041). However, all of the determinative findings by the ALJ must be supported by substantial evidence. See Bayliss v. Barnhart, 427 F.3d 1211, 1214 n.1 (9th Cir. 2005) (citing Tidwell, 161 F.3d at 601); see also Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989) ("Substantial evidence" is more than a scintilla, less than a preponderance, and is such "'relevant evidence as a reasonable mind might accept as adequate to support a conclusion'") (quoting Davis v. Heckler, 868 F.2d 323, 325-26 (9th Cir. 1989)).
In April 2014, Dr. Beaty reviewed plaintiff's file and opined that plaintiff had moderate social and adaption limitations. AR. 104-116. Regarding plaintiff's social limitations, Dr. Beaty opined that plaintiff had moderate limitations regarding his ability to interact appropriately with the general public. AR. 114. Dr. Beaty opined that plaintiff was able to interact with others in a limited fashion, but would do best with superficial interactions with the general public and coworkers. AR. 114. Dr. Beaty also found that plaintiff had moderate adaption limitations, and that plaintiff was moderately limited in his ability to respond appropriately to changes in the work setting and his ability to set realistic goals or make plans independently of others. AR. 114. Dr. Beaty opined that plaintiff could adapt to simple changes, but that plaintiff had a history of not accepting certain changes and blamed others for his situation. AR. 114. Dr. Beaty found that plaintiff did not have any limitations related to understanding, memory, concentration, persistence, or pace. AR. 113-14. In July 2014, Dr. Kester agreed with Dr. Beaty's findings. AR. 128.
The ALJ assigned significant weight to the opinions of Drs. Beaty and Kester. AR. 29. The ALJ reasoned that their opinions were consistent with the other evidence, supported by plaintiff's activities of daily living, and confirmed by the findings of consultative examiner, Gary Sacks, Ph.D. AR. 31. With regard to plaintiff's social limitations, the ALJ stated:
I see no reason to limit his public contact to occasional for all types of contact as determined by the State agency psychological consultants. Given his long history in working over the phone jobs and given that his anger with the public seems to relate to situational stressors, I believe he can do work that limits him to "occasional in-person public contact." Using that limitation, he can perform much of his past relevant work, as well.AR. 32. The RFC states that plaintiff could perform light work involving occasional in-person public contact, but does not describe any other social or adaption limitations. AR. 29.
The ALJ did not discuss the adaption limitations found by Drs. Beaty and Kester - that plaintiff was moderately limited in his ability to respond appropriately to changes in the work setting and his ability to set realistic goals or make plans independently of others, AR. 114, 128, and provided no reason to reject this portion of their opinions, AR. 31-32. An ALJ "may not reject 'significant probative evidence' without explanation." Flores v. Shalala, 49 F.3d 562, 570-71 (9th Cir. 1995) (quoting Vincent v. Heckler, 739 F.2d 1393, 1395 (9th Cir. 1984) (quoting Cotter v. Harris, 642 F.2d 700, 706-07 (3d Cir. 1981))). The "ALJ's written decision must state reasons for disregarding [such] evidence." Flores, 49 F.3d at 571. Here, the indication from Drs. Beaty and Kester regarding plaintiff's adaption limitations was significant probative evidence that the ALJ erred in failing to discuss. See AR. 31-32, 114, 128, SSR 96-8p (the RFC assessment must address non-exertional capacities such as mental abilities (e.g. understanding and remembering instructions and responding appropriately to supervision)).
Defendant concedes that the ALJ did not specifically discuss the adaption limitations opined by Drs. Beaty and Kester, but contends that the ALJ "implicitly" rejected the adaption limitations by relying on the opinion of Dr. Sacks and the lay witness statement and finding that plaintiff's impairments would not prevent performance of his past jobs. Dkt. 16 at 6 (citing. AR. 28, 31-32).
However, as defendant acknowledges, the ALJ did not state that he was rejecting the adaption limitation found by Drs. Beaty and Kester on these bases. See AR. 31-32. The Court may draw reasonable inferences from the ALJ's opinion, but cannot consider defendant's post hoc rationalizations about what the ALJ considered. See Magallanes v. Bowen, 881 F.2d 747, 775 (9th Cir. 1989). According to the Ninth Circuit, "[l]ong-standing principles of administrative law require us to review the ALJ's decision based on the reasoning and actual findings offered by the ALJ - - not post hoc rationalizations that attempt to intuit what the adjudicator may have been thinking." Bray v. Comm'r of SSA, 554 F.3d 1219, 1225-26 (9th Cir. 2009) (citing SEC v. Chenery Corp., 332 U.S. 194, 196 (1947) (other citation omitted)); see also Molina v. Astrue, 674 F.3d 1104, 1121 (9th Cir. 2012) ("we may not uphold an agency's decision on a ground not actually relied on by the agency") (citing Chenery Corp, 332 U.S. at 196). Nowhere in his decision did the ALJ state that he was deciding that more compelling evidence contradicted the opinions of Drs. Beaty and Kester related to plaintiff's adaption limitations. Rather, the ALJ simply failed to address the issue, and ALJ incorrected stated that the opinions of Drs. Beaty and Kester were consistent with the other evidence and "confirmed by the findings of Dr. Sacks and [Nicholas Branting, M.D.]." AR. 31.
Because the Commissioner "may not reject 'significant probative evidence' without explanation," and the ALJ failed to provide a specific and legitimate reason for the failure to credit the entirety of the opinions of Drs. Beaty and Kester, the Court concludes that the ALJ erred. See Flores, 49 F.3d at 570-71; Provencio v. Astrue, 2012 WL 2344072, *9 (D. Ariz., June 20, 2012) (finding the ALJ erred by giving "great weight" to a consultative examiner's opinion, yet ignoring parts of the opinion). The Court also concludes that the error is not harmless.
The Ninth Circuit has "recognized that harmless error principles apply in the Social Security Act context." Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012) (citing Stout v. Commissioner, Social Security Administration, 454 F.3d 1050, 1054 (9th Cir. 2006) (collecting cases)). The Ninth Circuit has reaffirmed the explanation in Stout that "ALJ errors in social security are harmless if they are 'inconsequential to the ultimate nondisability determination' and that 'a reviewing court cannot consider [an] error harmless unless it can confidently conclude that no reasonable ALJ, when fully crediting the testimony, could have reached a different disability determination.'" Marsh v. Colvin, 792 F.3d 1170, 1173 (9th Cir. 2015) (citing Stout, 454 F.3d at 1055-56).
Here, the ALJ failed to fully credit the opinions of Drs. Beaty and Kester regarding plaintiff's adaption limitations. AR. 31-32, 114, 128. Fully crediting the entirety of their opinions likely would lead to a different RFC determination, if not to a finding of disability. Therefore, the Court cannot conclude with confidence "'that no reasonable ALJ, when fully crediting [the adaption limitations opined by Drs. Beaty and Kester], could have reached a different disability determination.' " Marsh, 792 F.3d at 1173 (citing Stout, 454 F.3d at 1055-56).
Plaintiff also argues that the ALJ improperly excluded the social limitations opined by Drs. Beaty and Kester that plaintiff was moderately limited in his ability to interact with the public. Dkt. 10; AR. 114, 128. Because the ALJ's decision may change, in terms of the entire decision and the ALJ's assessment of the remaining portions of the opinions of Drs. Beaty and Kester if he considers and gives weight to the adaption limitations found by Drs. Beaty and Kester that he failed to discuss, the ALJ must reconsider all of the medical evidence on remand. Plaintiff will also be able to present new evidence and new testimony on remand. See Program Operations Manual System (POMS), GN 03106.036 Court Remand Orders, https://secure.ssa.gov/poms.nsf/lnx/0203106036 (last visited September 12, 2018) ("[A] court order vacating the [ALJ's] prior decision and remanding the case to the Commissioner voids the prior decision ... and thus returns the case to the status of a claim "pending" before SSA....The ALJ processes the case in the same way as a regular hearing and issues a decision."); see also Bartlett v. Berryhill, 2017 WL 2464117, at *4 (W.D. Wash. June 7, 2017).
II. Remand instructions
Plaintiff requests that this case be remanded for further proceedings, and does not seek an award of benefits. Dkt. 10. On remand, the ALJ is instructed to (1) reconsider all of the medical and non-medical evidence and (2) re-evaluate plaintiff's RFC and findings at steps four and five, if necessary.
CONCLUSION
Based on these reasons, and the relevant record, the undersigned recommends that this matter be REVERSED and REMANDED pursuant to sentence four of 42 U.S.C. § 405(g) to the Acting Commissioner for further proceedings consistent with this Report and Recommendation. JUDGMENT should be for plaintiff and the case should be closed.
Pursuant to 28 U.S.C. § 636(b)(1) and Fed. R. Civ. P. 72(b), the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed. R. Civ. P. 6. Failure to file objections will result in a waiver of those objections for purposes of de novo review by the district judge. See 28 U.S.C. § 636(b)(1)(C). Accommodating the time limit imposed by Rule 72(b), the clerk is directed to set the matter for consideration on October 15, 2018, as noted in the caption.
Dated this 1st day of October, 2018.
/s/_________
J. Richard Creatura
United States Magistrate Judge