Opinion
3:23-cv-01138-RBM-AHG
08-02-2024
MICHAEL M., Plaintiff, v. MARTIN O'MALLEY, Commissioner of Social Security, Defendant.
REPORT AND RECOMMENDATION RESOLVING JOINT MOTION FOR JUDICIAL REVIEW OF FINAL DECISION OF THE COMMISSIONER OF SOCIAL SECURITY
[ECF NO. 12]
HONORABLE ALLISON H. GODDARD, UNITED STATES MAGISTRATE JUDGE
Plaintiff Michael M. (“Plaintiff”) filed this action on June 20, 2023, seeking review of the Commissioner of Social Security's (“Commissioner”) denial of his application for disability insurance benefits. ECF No. 1. Pursuant to the Court's Scheduling Order, the parties filed a Joint Motion for Judicial Review on February 9, 2024, stating their positions on the disputed issues in the case. ECF No. 12.
After a thorough review of the parties' submissions, the administrative record, and applicable law, the undersigned RECOMMENDS that the Court resolve the Joint Motion in Plaintiff's favor, REVERSE the Commissioner's final decision, and REMAND this action for further proceedings.
I. BACKGROUND
Plaintiff filed an application for disability insurance benefits pursuant to Title II of the Social Security Act on October 2, 2020, alleging a disability onset date of June 1, 2016. Certified Administrative Record (“AR”) AR 17. Plaintiff filed a related application for supplemental security income benefits pursuant to Title XVI of the Social Security Act on October 5, 2020. AR 17. The Commissioner denied Plaintiff's claims for benefits upon initial review on November 25, 2020, and again upon reconsideration on June 4, 2021. AR 17. Plaintiff requested a hearing before an Administrative Law Judge (“ALJ”), which took place telephonically on February 11, 2022. AR 17, 40-82.
On August 9, 2022, the ALJ issued an unfavorable decision denying Plaintiff's current application, finding that although Plaintiff could not perform his past relevant work, he could perform work that exists in significant numbers in the national economy, and had thus not been disabled from his alleged disability onset date through the date of the ALJ's decision. AR 17-35.
Plaintiff requested review of the ALJ's decision by the Appeals Council. AR 1. When the Appeals Council denied Plaintiff's request for review on June 6, 2023, the ALJ's decision became the final decision of the Commissioner. AR 1; 42 U.S.C. § 405(h). Plaintiff timely appealed the denial to this Court for federal judicial review on June 20, 2023. ECF No. 1; 42 U.S.C. § 405(g).
II. STANDARD OF REVIEW
Pursuant to 42 U.S.C. § 405(g), this Court has authority to review the Commissioner's decision to deny benefits. The Commissioner's decision will be disturbed only if it is not supported by substantial evidence or if it is based upon the application of improper legal standards. Berry v. Astrue, 622 F.3d 1228, 1231 (9th Cir. 2010).
Substantial evidence means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Biestek v. Berryhill, 139 S.Ct. 1148, 1154 (2019) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). The standard requires “more than a mere scintilla” of evidence, “but less than a preponderance.” Revels v. Berryhill, 874 F.3d 648, 654 (9th Cir. 2017) (citation omitted). The standard is “highly deferential.” Valentine v. Comm'r Soc. Sec. Admin., 574 F.3d 685, 690 (9th Cir. 2009). Thus, “‘[w]here evidence is susceptible to more than one rational interpretation,' the ALJ's decision should be upheld.” Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007) (quoting Burch v. Barnhart, 400 F.3d at 676, 679 (9th Cir. 2005)). However, the Court “must consider the entire record as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner's conclusion, and may not affirm simply by isolating a specific quantum of supporting evidence.” Garrison v. Colvin, 759 F.3d 995, 1009 (9th Cir. 2014) (internal quotation marks omitted)). The ALJ is responsible for determining credibility and resolving conflicts in medical testimony and is also responsible for resolving any ambiguities in the record. Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989). The Court will “review only the reasons provided by the ALJ in the disability determination and may not affirm the ALJ on a ground upon which he did not rely.” Id.; see also SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.”).
The Court may also overturn the Commissioner's denial of benefits if the denial is based on legal error. Garcia v. Comm'r of Soc. Sec., 768 F.3d 925, 929 (9th Cir. 2014). However, even if the Court finds the decision was based on legal error, a court may not reverse an ALJ's decision if the error is harmless, “which exists when it is clear from the record that the ALJ's error was inconsequential to the ultimate nondisability determination.” Id. at 932 (internal quotations and citation omitted); see also Burch, 400 F.3d at 679 (citation omitted).
III. SUMMARY OF ALJ'S FINDINGS
A. The Five-Step Evaluation Process
The ALJ follows a five-step sequential evaluation process in assessing whether a claimant is disabled. 20 C.F.R. § 404.1520; Tackett v. Apfel, 180 F.3d 1094, 1098-99 (9th Cir. 1999). In the first step, the Commissioner must determine whether the claimant is currently engaged in substantial gainful activity; if so, the claimant is not disabled, and the claim is denied. Lounsburry v. Barnhart, 468 F.3d 1111, 1114 (9th Cir. 2006).
Unless otherwise noted, all references to the agency regulations herein are to the regulations in effect at the time of the ALJ's decision. See, e.g., SSR 16-3, 2016 SSR LEXIS 4 n.27 (S.S.A. 2016) (“When a Federal court reviews our final decision in a claim, we expect the court will review the final decision using the rules that were in effect at the time we issued the decision under review.”); Anne B. v. Comm'r, Soc. Sec. Admin., No. 1:18-CV-02146-HZ, 2019 WL 6976034, at *8 (D. Or. Dec. 20, 2019) (collecting cases for the proposition that “[t]he applicable regulations are those in effect at the time the ALJ issued his decision”). Additionally, the regulations governing Title II disability insurance benefits (“DIB”) are located in 20 C.F.R. § § 404.1 et seq., while the regulations governing Title XVI supplemental security income (“SSI”) are located in 20 C.F.R. § § 416.101 et seq. The regulations governing both type of benefits are otherwise identical. Because Plaintiff has applied for both DIB and SSI, the Court will cite herein only to the DIB regulations for ease of reference.
If the claimant is not currently engaged in substantial gainful activity, the second step requires the ALJ to determine whether the claimant has a “severe” impairment or combination of impairments significantly limiting his ability to do basic work activities, and which has lasted or is expected to last for a continuous period of at least 12 months; if not, a finding of nondisability is made and the claim is denied. Id. See also 20 C.F.R. § 404.1509 (setting forth the 12-month duration requirement). If the claimant has a “severe” impairment or combination of impairments, the third step requires the ALJ to determine whether the impairment or combination of impairments meets or equals an impairment in the Listing of Impairments (“Listing”) set forth at 20 C.F.R. § 404, subpart P, appendix 1; if so, disability is conclusively presumed, and benefits are awarded. Lounsburry, 468 F.3d at 1114.
If the claimant's impairment or combination of impairments does not meet or equal an impairment in the Listing, the ALJ proceeds to the fourth step of the disability evaluation process. The fourth step requires the ALJ to determine whether the claimant has sufficient residual functional capacity (“RFC”) to perform his past work. Id. Therefore, the ALJ must determine the claimant's RFC before moving to step four.
An RFC is “an assessment of an individual's ability to do sustained work-related physical and mental activities in a work setting on a regular and continuing basis.” SSR 96-9p, 1996 WL 374184, at *1 (July 2, 1996). It reflects the most a claimant can do despite his limitations. 20 C.F.R. § 404.1545(a)(1); Smolen v. Chater, 80 F.3d 1273, 1291 (9th Cir. 1996). An RFC assessment must include an individual's functional limitations or restrictions as a result of all of his impairments - even those that are not severe (see 20 C.F.R. § 404.1545(a)(1)-(2), (e)) - and must assess his “work-related abilities on a function-by-function basis.” SSR 96-9p, 1996 WL 374184, at *1; see also Valentine, 574 F.3d at 690 (“an RFC that fails to take into account a claimant's limitations is defective”). An ALJ errs when he provides an incomplete RFC that ignores or discounts “significant and probative evidence” favorable to a claimant's position. Hill v. Astrue, 698 F.3d 1153, 1161-62 (9th Cir. 2012).
An RFC assessment is ultimately an administrative finding reserved to the ALJ. 20 C.F.R. § 404.1527(d)(2). However, an RFC determination must be based on all of the relevant evidence, including the diagnoses, treatment, observations, and opinions of medical sources, such as treating and examining physicians. 20 C.F.R. § 404.1545. A court must uphold an ALJ's RFC assessment when the ALJ has applied the proper legal standards and substantial evidence in the record as a whole supports the decision. See Bayliss v. Barnhart, 427 F.3d 1211, 1217 (9th Cir. 2005). At step four of the disability analysis, if the ALJ determines a claimant has sufficient RFC to perform past relevant work, the claimant is not disabled, and the claim is denied. Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992). The claimant has the burden of proving that he is unable to perform past relevant work at step four. Id. If the claimant meets this burden, a prima facie case of disability is established. Id.
At step five, the burden then shifts to the ALJ to establish that the claimant is not disabled because there is other work existing in “significant numbers” in the national or regional economy the claimant can do, taking into account the claimant's RFC, age, education, and work experience. 20 C.F.R. § 404.1560(c)(1), (c)(2); see also 20 C.F.R. § 404.1520(g)(1). The determination of this issue comprises the fifth and final step in the sequential analysis. 20 C.F.R. § 404.1520; Tackett, 180 F.3d at 1099.
B. The ALJ's Application of the Five-Step Process in This Case
At step one, the ALJ determined that Plaintiff had not engaged in substantial gainful activity since his alleged disability onset date of June 1, 2016. AR 20. At step two, the ALJ determined that Plaintiff had the severe impairments of degenerative disc disease of the lumbar spine, schizophrenia, unspecified mood disorder, bipolar disorder, and anxiety. AR 20. The ALJ determined that Plaintiff had the following non-severe medically determinable impairments: opioid use disorder and a history of heroin use. AR 20.
At step three, the ALJ determined that Plaintiff did not have an impairment or combination of impairments that met or medically equaled the severity of one of the impairments in the Listing, noting in particular that he had considered Listings 1.00, 1.15. 12,03, 12.04, and 12.06. AR 20-21. The ALJ determined that Plaintiff has mild limitations in understanding, remembering or applying information and adapting or managing himself; and moderate limitations in interacting with others, and in concentrating, persisting, or maintaining pace. AR 21-22.
Between steps three and four, the ALJ determined that Plaintiff had the residual functional capacity (“RFC”) to perform light work, as defined by 20 CFR § 404.1567(b) and § 416.967(b), with certain exertional and postural limitations. AR 23. Specifically, the ALJ determined that Plaintiff:
. . . can occasionally climb ramps and stairs, occasionally climb ladders/ropes/scaffolds, and occasional balancing, stooping, kneeling, crouching, and crawling. In addition, the individual can understand, remember, and carry out simple, routine tasks, have only occasional interaction with the general public, only occasional work-related, non-personal, non-social interaction with co-workers and supervisors, and is limited to jobs requiring only simple work-related decisions however can keep pace sufficient to complete tasks and meet quotas typically found in unskilled work.AR 23.
At step four, the ALJ concluded that Plaintiff is not capable of performing his past relevant work as a Wharf Attendant (medium exertion), Cashier II (light exertion), or Sporting Goods Salesperson (light exertion). AR 33. The ALJ reached this conclusion based on the testimony of the vocational expert, who opined during the hearing before the ALJ that Plaintiff's past relevant work would be precluded by the RFC assigned by the ALJ. AR 33. The ALJ therefore proceeded to step five.
At step five, the ALJ considered that Plaintiff was a “younger individual” as of the alleged disability onset date and Plaintiff has a high school education. AR 33-34. The vocational expert testified that Plaintiff could perform the light exertion jobs of Marker, Housekeeping Cleaner, and Routing Clerk. AR 34. Based on the vocational expert's testimony, the ALJ found that Plaintiff was “capable of making a successful adjustment to other work that exists in significant numbers in the national economy,” so therefore Plaintiff was not disabled. AR 35.
IV. DISCUSSION
Plaintiff brings four claims of error in the Joint Motion: 1) the ALJ erred at step three by failing to follow the “Psychiatric Review Technique” required by 20 C.F.R. § 404.1520a, particularly with respect to the Paragraph C criteria; 2) the ALJ failed to address the combination of Plaintiff's impairments in the RFC; 3) the ALJ failed to provide clear and convincing reasons for discrediting Plaintiff's testimony; and 4) the ALJ failed to meet its burden at step five to show that Plaintiff could perform other work. As discussed below, the undersigned recommends a finding that the ALJ committed reversible error with respect to the ALJ's analysis at step three and his evaluation of Plaintiff's testimony. Because this error affects the ALJ's decision at steps four and five and warrants remand, the undersigned does not reach the remaining assertions of error.
A. The ALJ Erred at Step Three
Plaintiff argues that the ALJ erred at step three because he did not apply the psychiatric review technique set forth in 20 C.F.R. § 404.1520a(c) properly, particularly with respect to the paragraph C criteria of Listing 12.03. Defendant counters that the ALJ properly evaluated Plaintiff's mental impairments by discussing the paragraph B and paragraph C criteria for Listing 12.03 thoroughly and supporting the reasons for his findings with substantial evidence. Defendant also argues that even if the ALJ erred, Plaintiff bears the burden of presenting some theory as to how his impairments meet the elements of Listing 12.03, and Plaintiff failed to meet that burden.
Section 404.1520a sets forth the psychiatric review technique for evaluating the severity of mental impairments. 20 C.F.R. §§ 404.1520a. Under this technique, an ALJ “must determine whether an applicant has a medically determinable mental impairment, rate the degree of functional limitation for four functional areas, determine the severity of the mental impairment (in part based on the degree of functional limitation), and then, if the impairment is severe, proceed to step three of the disability analysis to determine if the impairment meets or equals a specific listed mental disorder.” Keyser v. Commissioner, 648 F.3d 721, 725 (9th Cir. 2011). If a claimant meets the criteria set forth in a listing, he is presumptively disabled and entitled to benefits. Esselstrom v. Chater, 67 F.3d 869, 872. (9th Cir. 1995). The ALJ's written decision must document the application of the technique and include specific findings. Keyser, 648 F.3d at 726.
Here, Plaintiff and Defendant agree that Listing 12.03, which applies to “schizophrenia spectrum and other psychotic disorders,” is the applicable listing for review. 20 C.F.R. pt. 404, subpt. P, app. 1, § 12.03. A claimant meets Listing 12.03 if he satisfies the criteria set forth in Paragraph A of Listing 12.03 and the criteria set forth in either Paragraph B or Paragraph C of Listing 12.03. Id. § 12.00A2. Paragraph A requires that there be “medical documentation of one or more of: 1) delusions or hallucinations; or 2) disorganized thinking or speech; or 3) grossly disorganized behavior or catatonia.” Id. (emphasis in original). Paragraph C states:
Your mental disorder in this listing category is “serious and persistent,” that is, you have a medically documented history of the existence of the disorder over a period of at least 2 years, and there is evidence of both:
1. Medical treatment, mental health therapy, psychosocial support(s), or a highly structured setting(s) that is ongoing and that diminishes the symptoms and signs of your mental disorder; and
2. Marginal adjustment, that is, you have minimal capacity to adapt to changes in your environment or to demands that are not already part of your daily life.Id. (emphasis in original). The first Paragraph C criterion is met if there is “a medically documented history of the existence of the mental disorder ... of at least two years,” although “periods of inconsistent treatment or lack of compliance with treatment” will be considered. Id. § 12.00G2a, b. If the evidence indicates that lapses in treatment are “a feature of your mental disorder, and it has led to an exacerbation” of symptoms, such lapses will not be used to support a finding that this first paragraph C criterion has not been met. Id. The second criterion of Paragraph C can be met by evidence that shows “that changes or increased demands have led to exacerbation of your symptoms and signs and to deterioration in your functioning; for example, you have become unable to function outside of your home or a more restrictive setting, without psychosocial supports;” or that “because of the nature of your mental disorder, episodes of deterioration” have required you to be “absent from work, making it difficult for you to sustain work activity over time.” Id.
Once objective evidence from an acceptable medical source establishes a medically determinable mental disorder, an ALJ can consider evidence from medical and non-medical sources in evaluating application of the listing. Id. § 12.00C. The regulations recognize the need for longitudinal evidence to evaluate mental disorders, as well as the reality that such evidence may not be available from a medical provider given the nature of a mental disorder:
Certain situations, such as chronic homelessness, may make it difficult for you to provide longitudinal medical evidence. If you have a severe mental disorder, you will probably have evidence of its effects on your functioning over time, even if you have not had an ongoing relationship with the medical community or are not currently receiving treatment.Id. § 12.00C5b. Family members can serve as nonmedical sources of longitudinal evidence. Id.
Here, the ALJ implicitly found that Plaintiff satisfied Paragraph A by proceeding without analysis to consider Paragraphs B and C. The ALJ's written decision includes a detailed discussion of Paragraph B criteria that is not at issue here. AR 21-22. The ALJ found that Plaintiff did not meet the Paragraph C criteria, based solely on Plaintiff's capacity to adapt to changes to his environment:
Although the ALJ's analysis of the Paragraph B criteria is not at issue here, the undersigned has concerns about the ALJ's conclusions that should be addressed on remand as further directed in this Order. In particular, the record as a whole suggests that the ALJ's finding that Plaintiff has a moderate limitation in interacting with others, and in concentrating, persisting or maintaining pace, understates the severity of Plaintiff's condition and is inconsistent with the evidence in the record of Plaintiff's paranoia, hallucinations, and lack of social relationships.
The claimant has not shown a minimal capacity to adapt to changes in his environment or to demands that are not already part of his daily life. The claimant has been able to maintain many activities of daily living. (Exhibit 4E). The claimant's functional report indicates he lives alone. (Exhibit 4E). He can take care of his personal care including dressing and bathing. He prepares his own meals and does household chores including cleaning, laundry, and staying organized. He travels by walking or using public transportation. He shops in stores. He can pay bills, count change, handle a savings account, and use a checkbook/money order. He spends time with others in person and on the phone. On a regular basis, he goes to grocery stores and bus stop. He spends time with others in person and on the phone. He does not need to be reminded to go places. He does not have any problems getting
along with family, friends, or neighbors. The claimant testified that he dresses and bathes himself. He shops. He has had no recent hospitalizations.AR 23. This analysis cites only to Exhibit 4E, which is Plaintiff's Function Report from October 2020. Plaintiff's Function Report cannot, however, constitute substantial evidence to support the ALJ's assessment of the Paragraph C criteria, particularly since other evidence in the record calls into question Plaintiff's ability to understand and recognize the limitations of his mental health condition. Plaintiff's treating psychiatrist, Dr. Dmitri Sivtsov, described Plaintiff in multiple treatment notes as “a very limited historian,” with a “disorganized, tangential thought process.” AR 413, 414, 415, 416, 509. His mother attended all of his appointments and frequently had to provide basic information to Dr. Sivtsov about Plaintiff's medications and treatment history. Id. Dr. Bagner, the consultative psychiatric examiner, also described Plaintiff as a “poor historian” and noted that he relied on Plaintiff's mother and grandmother as information sources for his evaluation. AR 512.
In addition, some of the ALJ's findings are squarely contradicted by the Function Report itself. For example, the ALJ stated that Plaintiff “spends time with others in person and on the phone,” and that Plaintiff “does not have any problems getting along with family, friends or neighbors.” AR 23. In his Function Report, however, Plaintiff described the kinds of things he does with others as “not much right now, the last 4 years have been severe.” AR 345. His mother's Function Report confirms Plaintiff's difficulties in interacting with others. Plaintiff only socializes with his parents. AR 333. Plaintiff “had friends and family, but his mood swings and behavior ruined that or it got worse. They all turned away due to his mood swings.” AR 330. Plaintiff gets paranoid, does not attend family gatherings, does not engage in past hobbies, “has no friends,” and “his sisters no longer spend time [with] him.” AR 333.
The ALJ also found that Plaintiff “does not need to be reminded to go places,” AR 23, but in his Function Report, Plaintiff acknowledged that he relies on his mother to remind him about his medicine “all the time,” his mother helps him a lot, and his condition affects his memory, concentration, understanding, and ability to complete tasks. AR 34346. His mother confirms that he needs reminders about his medication, his doctor's appointments, and performing household chores like dishes and taking out the trash. AR 331, 334.
The ALJ's statement that Plaintiff “can pay bills, count change, handle a savings account, and use a checkbook/money order,” AR 23, appears to be based largely on boxes that Plaintiff checked on his Function Report. AR 344. Plaintiff's mother reports, however, that he is not able to pay bills and she is unsure whether he could handle a savings account or use a checkbook. AR 332. She explains that Plaintiff “has no bills to pay [and] no checking or savings [accounts] at this time.” AR 332. She pays for his apartment. AR 48. Dr. Bagner concluded in his evaluation that Plaintiff “is not capable to manage his own funds.” AR 515.
The undersigned agrees that the ALJ accurately described these activities of daily living: living by himself; managing his dressing, bathing, cooking, and some household chores; using public transportation; and going shopping. But the ALJ draws no logical connection between these aspects of Plaintiff's daily living and his ability to adapt to changes in his environment, much less his ability to work. See Contreras v. Saul, 477 F.Supp.3d 1107, 1125 (S.D. Cal. 2020) (“the fact that a Plaintiff regularly engages in some activity does not disprove a disability.”). Indeed, Plaintiff's solitary existence strongly suggests the opposite. Plaintiff does not shop often. AR 344. He spends much of his time laying in peace and quiet “just trying to stay [focused] and stable.” AR 345. He does not do things with others. AR 345. His medications make him dizzy and drowsy. AR 348. Plaintiff's mother reported that Plaintiff's severe mood swings have isolated him from friends and family and make activities such as cooking and cleaning difficult. AR 330, 331. Plaintiff “likes to stay near his room.” AR 333. Dr. Sivtsov noted that Plaintiff is not able to perform basic activities of daily life “without prompting and family help.” AR 509. Therefore, the ALJ's reliance on these activities to show that Plaintiff has more than a “minimal capacity to adapt to changes in his environment or to demands that are not already part of his daily life” is not supported by substantial evidence, because the ALJ mischaracterized the record evidence on which he relied for this conclusion.
The ALJ also did not address some of the most insightful evidence in the record regarding Plaintiff's ability to adapt to change. Plaintiff experienced homelessness for four years before beginning psychiatric treatment in 2020. AR 47. Plaintiff's mother described him as “very psychotic” during that period of time. AR 329. Treatment notes from an emergency room visit in 2018 indicate that Plaintiff was irritable and refused to speak with a social worker. AR 428. Plaintiff became “progressively upset” and verbally hostile towards hospital staff during the visit. AR 436.
The ALJ discusses the evidence provided by Plaintiff's mother in his opinion, and nowhere does he indicate that he rejected her testimony or found it unpersuasive in whole or in part. See AR 24, 28. If the ALJ did not find the evidence from Plaintiff's mother credible, he was required to give some reason for rejecting it. See, e.g., Stout v. Comm'r. Soc. Sec. Admin., 454 F.3d 1050, 1053 (9th Cir. 2006) (“If the ALJ wishes to discount the testimony of lay witnesses, he must give reasons that are germane to each witness.”) (quoting Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir. 1993)). Therefore, the Court treats the testimony of Plaintiff's mother as having been accepted by the ALJ.
Although Plaintiff experienced some improvement under Dr. Sivtsov's care, Plaintiff still had a “disorganized, tangential thought process” and was “unable to focus, follow simple instructions or learn new tasks” at his last session with Dr. Sivtsov. AR 509. Plaintiff's mother reported that he becomes “very anxious” when under stress, and that “changes throw him off” because he is afraid he will end up homeless again. AR 335. Plaintiff's testimony at the hearing was often incoherent and tangential. When asked whether he was continuing to take Abilify, as prescribed by Dr. Sivtsov, Plaintiff engaged in a rambling discussion of artificial intelligence, COVID, cerebral cortex issues, and an incident ten years prior where a police officer shined a light into his eyes. AR 58-59. The ALJ had to cut Plaintiff off because he was getting “a little off-topic.” AR 59. Plaintiff experiences hallucinations and “harassing type torments.” AR 64, 65. Plaintiff experiences paranoia, and unplugs electrical devices because he believes they have been hacked.
AR 65, 67. Plaintiff's mother confirmed that Plaintiff removed the light fixtures from the ceiling of his apartment and stuffed them with cardboard, and then wrapped up the fire detector and sprinkler. AR 69. He keeps his television in the closet and covers the screen. AR 70.
The ALJ's analysis of the Paragraph C criteria is legally insufficient because it relies solely on Plaintiff's Function Report, which is not substantial evidence to support the ALJ's conclusions. In some respects, the ALJ's findings are contradicted directly by the Function Report itself. In other respects, the ALJ takes Plaintiff's statements in the Function Report out of context and does not consider other evidence from the record that provides a clearer picture of Plaintiff's condition. The ALJ also does not address or cite other parts of the record that provide critical insight on the issue of Plaintiff's adaptability to change, including Dr. Sivtsov's treatment notes, Dr. Bagner's evaluation, the hearing testimony of Plaintiff and his mother, and his mother's third party Function Report. This constitutes error. See Lewis v. Apfel, 236 F.3d 503, 512 (9th Cir. 2001) (“An ALJ must evaluate the relevant evidence before concluding that a claimant's impairments do not meet or equal a listed impairment.”); Matlock v. Barnhart, 90 Fed.Appx. 208, 211 (9th Cir. 2008) (ALJ erred by failing to consider testimony of claimant and claimant's wife, and the opinion of his treating physician in assessing whether claimant's mental health condition met or equaled Listing 12.03). This error was not harmless, because it appears that under a proper analysis, Plaintiff likely meets the requirements of Listing 12.03. Contreras, 477 F.Supp.3d at 1132 (an error is not harmless when it is consequential to the ultimate determination of nondisability). The undersigned discusses the appropriate remedy for this error below.
B. The ALJ Erred in His Evaluation of Plaintiff's Testimony
Plaintiff asserts that the ALJ erred in discounting his testimony regarding the severity of his symptoms by using standard boilerplate language that Plaintiff's statements “are not entirely consistent with the medical evidence and other evidence in the record.” AR 24. Defendant contends that the ALJ properly evaluated Plaintiff's symptom testimony based on the record evidence, and provided a sufficient explanation supported by substantial evidence for rejecting Plaintiff's testimony.
1. Legal Standard
An ALJ evaluating a claimant's testimony regarding the extent of his symptoms and impairments must follow a two-step inquiry. Ghanim v. Colvin, 763 F.3d 1154, 1163 (9th Cir. 2014). First, an ALJ must assess whether there is objective medical evidence to support the testimony. Id. If that is the case, and there is no evidence of malingering, “the ALJ can only reject the claimant's testimony about the severity of the symptoms if he gives ‘specific, clear and convincing reasons' for the rejection.” Id. (quoting Vasquez v. Astrue, 572 F.3d 586, 591 (9th Cir. 2009)). An ALJ must “specifically identify the testimony she or he finds not to be credible ... and explain what evidence undermines that testimony.” Lambert v. Saul, 980 F.3d 1266, 1277 (9th Cir. 2020) (quoting Treichler v. Comm'r of Soc. Sec. Admin., 775 F.3d 1090, 1102 (9th Cir. 2014)). An ALJ's decision must be “sufficiently specific to allow a reviewing court to conclude the adjudicator rejected the claimant's testimony on permissible grounds and did not ‘arbitrarily discredit a claimant's testimony.'” Bunnell v. Sullivan, 947 F.2d 341, 345-46 (9th Cir. 1991) “[A]n ALJ may not reject a claimant's subjective complaints based solely on a lack of medical evidence to fully corroborate the alleged severity of pain.” Burch v. Barnhart, 400 F.3d 676, 680 (9th Cir. 2005).
On March 28, 2016, the Social Security Administration issued new guidance regarding how to evaluate a claimant's subjective symptom testimony. See SSR 16-3p, 2016 WL 1119029 (Mar. 16, 2016); 2017 WL 5180304 (Oct. 25, 2017) (clarifying SSR 16-3p). Additionally, effective March 27, 2017, the Social Security Administration updated the relevant agency regulations regarding how a claimant's symptoms are evaluated. See 20 C.F.R. § 416.929. Although the ALJ's opinion was issued after these changes, the jurisprudence governing the applicable two-step inquiry remains good law. See, e.g., Campbell v. Saul, 848 Fed.Appx. 718, 721 (9th Cir. 2021) (applying the two-step inquiry in a recent case appealing an ALJ's decision from 2018, in which the newer regulations were applied); Vooge v. Saul, 840 Fed.Appx. 253, 254 (9th Cir. 2021) (same, in case involving an ALJ's opinion issued in January 2019). See also Trevizo v. Berryhill, 871 F.3d 664, 678 n.5 (9th Cir. 2017) (noting SSR 16-3p is consistent with existing Ninth Circuit precedent regarding the ALJ's assessments of an individual's testimony).
If the ALJ fails to meet these requirements for specificity, the Court is not free to fill in the gaps. Lambert, 980 F.3d at 1278. It is solely within the ALJ's province to assess the credibility of the claimant's testimony. Id. A court is therefore “constrained to review the reasons the ALJ asserts.” Id. (quoting Brown-Hunter v. Colvin, 806 F.3d 487, 494 (9th Cir. 2015)); Burrell v. Colvin, 775 F.3d 1133, 1138 (9th Cir. 2014).
2. Plaintiff's Testimony
In a Function Report dated October 20, 2020, Plaintiff stated that he was diagnosed with schizophrenia and bipolar disorder by a psychiatrist who was helping him understand his condition. AR 341. Plaintiff described having “severe distractions” and “severe mood disorders.” AR 341. Although he stated that medication helps, “there are some side effects which come with the territory.” AR 341. He described experiencing “minor thoughts and voices that I'm not sure what to make of and then trying to have someone give me work instructions was hard to do.” AR 341. He needed frequent reminders from his mother to take his medication. AR 343. He used public transportation and did not have a driver's license. AR 344. He did shop for groceries but not often. AR 344. He claimed he did not have problems handling money, and said he could pay bills, count change, handle a savings account, and use a checkbook. AR 344. He stated that he did not do much with others, although his mother helps him a lot. AR 345. He stated that his condition affects his memory, concentration, ability to complete tasks, understanding, and following instructions. AR 346. He reported the following side effects from his medication: dizziness, tiredness, and severe constipation from propranolol; blurred vision and extreme tiredness from Abilify; and drowsiness and dizziness from methadone. AR 348.
Some of Plaintiff's responses in the Function Report are ambiguous. For example, he stated that he is “ok with written instructions,” but indicated he needed to “read them over and over and over.” AR 346. He rated his ability to follow spoken instructions as “good but 50/50.” AR 346. He stated he had been fired or laid off because of problems getting along with other people but did not offer specific examples. AR 346. When asked how well he handled stress, he responded “the best I can.” AR 437. He stated that he handles changes in routine “at first not so well then I get a hang of things.” AR 437. He answered both yes and no to the question: “Have you noticed any unusual behavior or fears?” AR 347.
At a telephonic hearing on February 11, 2022, Plaintiff provided further testimony about his mental health. AR 42. Although Plaintiff recalled being homeschooled during his high school years, he could not remember whether he received a diploma or formally graduated. AR 46. Plaintiff was living in a studio apartment paid for by his mother for the past year. AR 47-48. Prior to that, Plaintiff was homeless for four years. AR 47. Plaintiff last worked in 2015 assisting with boat rentals. AR 48. He also worked as a cashier at a car wash and at retail stores. AR 50. Plaintiff stopped working in 2015 because he “went through some tough times.” AR 51. He described it as “like the carpet got ripped out from underneath” him. AR 52.
When asked how he feels day to day with respect to mental health, Plaintiff responded: “I have some real emotional ups and downs like bipolar disorder. So, I - it's kind of like I don't really, you know, focus - staying focused and you know having auditory type of like distractions I would call them.” AR 55-56. Although Plaintiff has not used heroin for many years, he acknowledged that he uses methampetamine from time to time. AR 57. Plaintiff stated he sees a counselor regularly at the clinic where he gets methadone, but it is not clear that he has been getting any psychiatric help at that clinic. AR 58. The records from that clinic only reflect drug testing and no counseling notes. AR 530-601. When asked why he stopped taking Abilify, which had been prescribed to him by a treating psychiatrist, Dr. Sivtsov, in 2020 and 2021, Plaintiff's answer was incoherent and tangential. AR 58-59. Among other things, he stated that the medication was causing a cracking sensation when he turned his head due to dilation in his eyes “via probably artificial intelligence ... or some sort of mesh of whatever has been going on with all of this COVID additional cerebral cortex issues.” AR 58-59. Plaintiff claimed to have cerebral nerve damage because 10 years prior, “two police officers shine[d] my eyes with a red light and time went on about six or seven years and then all of this stuff sort of boiled over ... .” AR 59. The ALJ interrupted his answer because Plaintiff was getting “a little off-topic.” AR 59. Plaintiff stated that he was taking Abilify “off and on” with the leftover supply from his treatment with Dr. Sivtsov. AR 59-60. Plaintiff claimed to be “pretty good” with his memory. AR 60.
Plaintiff reported taking the bus daily during the week to travel to the methadone clinic. AR 60-61. Although Plaintiff stated he “usually” does not have problems interacting with people, he noted that the last four years were an exception. AR 61. Plaintiff stated that his ability to concentrate and focus is “absolutely impaired.” AR 61. Plaintiff maintains his personal hygiene. AR 61. He purchases food with an EBT card because “that's all I have for food money.” AR 62. Plaintiff does not exercise regularly and is “pretty much bedridden” because he has a “hard time coping with just the cars driving around . .” AR 62. During the day he takes naps or lays in bed. AR 62. He does not watch TV because of problems maintaining focus. AR 63.
Plaintiff stated that he hears “voices, and they are usually one or two words and not like full-on conversation mode, but it seems almost like something would be trying to put a sentence together but it's all around.” AR 64. He also stated that “once in a while I would start having other weird distractions but no voices it was just more like there was just a harassing type torment, . .” AR 65. Plaintiff believes the voices are “sonar-related or cellular waves or microwaves.” AR 65. Plaintiff experiences racing thoughts. AR 66. Plaintiff also stated that he unplugs electronic devices because he believes “we have problems with our landlines, our phones. I think everything sort of got hacked at one point. Whether it's paranoia or not because I'm not really a paranoid person but at the same time it was kind of a nice thing to have because I was able to figure some of these things out at least within a discipline-type manner, you know, without just sounding like a lunatic or, you know, forgive me if I say that but you know somebody with a mental illness.” AR 67.
3. The ALJ's Reasons for Rejecting Plaintiff's Testimony
The ALJ found that Plaintiff's medically determinable impairments could reasonably be expected to cause some of his symptoms, satisfying the first step of the inquiry. AR 24. The ALJ found no evidence of malingering. The ALJ was therefore required to state “specific, clear and convincing reasons, supported by substantial evidence from the administrative record” for rejecting Plaintiff's testimony concerning the intensity, persistence, and limiting effects of his symptoms. Austin v. Saul, 840 Fed.Appx. 899, 901 (9th Cir. 2020) (quoting Marsh v. Colvin, 792 F.3d 1170, 1173 n.2 (9th Cir. 2015) (punctuation omitted)). The undersigned recommends a finding that the ALJ erred in rejecting Plaintiff's testimony because the reasons given by the ALJ for doing so did not identify specific testimony that was contradicted, and the reasons were not clear and convincing. See Trevizo, 871 F.3d at 679.
a. Failure to Identify Inconsistent Testimony
An ALJ is required to “specifically identify the testimony ... he finds not to be credible and ... explain what evidence undermines the testimony.” Holohan, 246 F.3d at 1208. Here, the ALJ made a boilerplate statement regarding Plaintiff's testimony that is commonly found in ALJ decisions:
After careful consideration of the evidence, the undersigned finds that the claimant's medically determinable impairments could reasonably be expected to cause the alleged symptoms; however, the claimant's statements concerning the intensity, persistence and limiting effects of these symptoms are not entirely consistent with the medical evidence and other evidence in the record for the reasons explained in this decision.AR 24. Courts have found this same language to be too general and boilerplate to satisfy the requirement that an ALJ identify the testimony of the claimant that should be discredited. In Lambert, for example, the Ninth Circuit found that identical boilerplate language was insufficient to meet the ALJ's burden:
The ALJ's decision does not meet the requirements set forth in our cases and does not permit meaningful review. The ALJ noted generically that “the claimant's statements concerning the intensity, persistence and limiting
effects of [her] symptoms are not entirely consistent with the objective medical and other evidence in the record for the reasons explained in the decision.” But this “boilerplate statement” by way of “introductory remark,” which is “routinely include[d]” in ALJ decisions denying benefits, did not “identify what parts of the claimant's testimony were not credible and why.”Lambert, 980 F.3d at 1277; Burrell, 775 F.3d at 1138 (general statement that testimony is “inconsistent in some unspecified way” is insufficient); Treichler, 775 F.3d at 1103 (noting that identical boilerplate statement was insufficient because the “ALJ must identify the testimony that was not credible”).
The problem with this language is that the phrase “statements concerning the intensity, persistence and limiting effects” is too general a description for the Court to understand precisely what portions of Plaintiff's testimony are claimed to be inconsistent with other evidence in the record. Isis A. v. Saul, No. 18cv01728-W-MSB, 2019 WL 3554969, at *4 (S.D. Cal. Aug. 5, 2019) (“When an ALJ fails to specify the rejected testimony and how the evidence provides clear and convincing reasons to reject it, the reviewing court cannot proceed without ‘substitut[ing its own] conclusions for the ALJs, or speculat[ing] as to the grounds for the ALJ's decision.”) (quoting Treichler, 775 F.3d at 1103). Plaintiff's testimony is that he has difficulty focusing, interacting with other people, following instructions without reviewing them repeatedly, and organizing his thoughts; he needs substantial assistance from his mother, including reminders to take medication and go to medical visits; he has paranoia and hallucinations; he has severe mood swings; and his prescribed medications make him dizzy and drowsy. These symptoms and effects of schizophrenia are different and cannot be treated as a unitary complaint. This leaves the Court to attempt to ascertain whether the evidence relied on by the ALJ is inconsistent with any, or all, of these symptoms and effects. That alone is reversible error. Lambert, 980 F.3d at 1278. Nonetheless, the Court will address the reasons provided by the ALJ to discredit Plaintiff's testimony generally.
b. Treatment Records of Treating Psychiatrist
The ALJ summarized the treatment notes from Plaintiff's treating psychiatrist, Dr. Dmitri Sivtsov. AR 26. The ALJ emphasized that these notes reflect that Plaintiff did not have any suicidal or homicidal ideations; had not been to inpatient or intensive outpatient treatment; was not experiencing delusions, paranoia, or hallucinations; and showed normal speech, a euthymic mood, and a cooperative demeanor. AR 26-27. The ALJ also stated that the notes showed that Plaintiff's condition and mood improved after he began taking Abilify. AR 26-27.
There is no indication in these records, however, that Plaintiff's condition had improved dramatically or that treatment had substantially eliminated the symptoms referred to in Plaintiff's Function Report and hearing testimony. See Garrison, 759 F.3d at 1017 (“Reports of ‘improvement' in the context of mental health issues must be interpreted with an understanding of the patient's overall well-being and the nature of her symptoms.”); Matlock, 90 Fed.Appx. at 210 (“when assessed in context, these notes indicate only that the medication helped [claimant], not that it enabled him to function well.”). The treatment notes from Plaintiff's final visit to Dr. Sivtsov are most instructive. AR 509-10. After ten months of treatment with medication, Dr. Sivtsov still described Plaintiff as a “limited historian” with a “disorganized, tangential thought process” who cannot perform activities of daily living “without prompting and family help.” AR 509. Dr. Sivtsov found that Plaintiff was “unable to focus, follow simple instructions or learn new task[s] all due to the negative symptoms of his disease.” AR 509. Plaintiff presented as “anxious, cooperative, fairly groomed.” AR 509. His mood was “below euthymic.” AR 509. Dr. Sivtsov's treatment records are not clear and convincing reasons to discount Plaintiff's testimony.
c. Failure to Report Psychiatric Concerns to Primary Care Provider
The ALJ also noted in his discussion of Plaintiff's testimony that Plaintiff sought treatment by his primary care provider in January, February, and March 2021, but “offered no psychiatric complaints” during those visits. AR 27. The ALJ does not explain why he believed this to be relevant, but it appears to be an apples-to-oranges analogy that is misplaced. Plaintiff's failure to make psychiatric complaints to a primary care physician, particularly when he was under the care of a psychiatrist, does not constitute a clear and convincing reason to discount his testimony. Moreover, the treatment notes from these primary care visits support Plaintiff's testimony. AR 521 (2/25/21 telehealth appointment -“Overall he is a poor historian and history is tangential.”); AR 517 (3/4/21 appointment -“Patient remains a difficulty historian, very tangential, jumping back and forth multiple complaints.”).
d. Positive Drug Screens at Methadone Clinic
The ALJ noted in his discussion of Plaintiff's testimony that records from a methadone clinic that Plaintiff routinely visited for drug testing indicate that Plaintiff tested positive for methamphetamine in January, February, March, October, and November 2021, and March 2022. AR 28. The ALJ merely states this and does not make any connection to Plaintiff's testimony, so it cannot serve as a clear and convincing reason to reject Plaintiff's testimony.
If, by this citation, the ALJ intended to rely on evidence of drug use to support a finding that Plaintiff would not be disabled but for his substance abuse, he failed to engage in the requisite drug abuse and alcoholism analysis ("DAA analysis") needed to support such a finding. See 20 C.F.R. § 404.1535(a). The key factor in determining materiality is whether the claimant would still be found disabled if the drug use stopped. 20 C.F.R. § 404.1535(b)(1) (emphasis added). If the DAA analysis determines disabling limitations would remain if the applicant had stopped using drugs or alcohol, substance abuse is not a material contributing factor and the applicant is entitled to benefits. Parra v. Astrue, 481 F.3d 742, 744-45 (9th Cir. 2007). The Ninth Circuit has held that courts must not “fail [ ] to distinguish between substance abuse contributing to the disability and the disability remaining after the claimant stopped using drugs or alcohol.” Richey v. Colvin, No. C 124988 LB, 2013 WL 5228185, at *1 (N.D. Cal. Sept. 17, 2013) (citing Sousa v. Callahan, 143 F.3d 1240, 1245 (9th Cir. 1998)). Said differently, “[j]ust because substance abuse contributes to a disability does not mean that when the substance abuse ends, the disability will too.” Id. Therefore, to the extent the ALJ's rationale for finding nondisability relied on the implication that Plaintiff's substance abuse was a contributing factor to his symptoms, the ALJ did not provide the requisite analysis needed for the Court to review the soundness of that rationale.
e. Consultative Psychiatric Examination
The ALJ noted in his discussion of Plaintiff's testimony that Plaintiff underwent a complete psychiatric consultative examination on April 9, 2021 with Dr. Ernest Bagner. AR 28. The ALJ summarized Dr. Bagner's evaluation, but did not explain how the evaluation was inconsistent with Plaintiff's testimony. Indeed, Dr. Bagner's evaluation supports Plaintiff's testimony in many respects. Because Plaintiff was a “poor historian,” Dr. Bagner relied on Plaintiff's mother and grandmother to provide information for the evaluation. AR 512. Dr. Bagner reported that Plaintiff was paranoid during the examination. AR 512. Plaintiff described his interpersonal relationships as “poor.” AR 513. Plaintiff's mood was irritable and his affect was flat. AR 514. Plaintiff had “paranoid delusions” and “admitted to auditory hallucinations.” AR 514. Dr. Bagner rated Plaintiff's prognosis as “guarded” and found that Plaintiff “is not capable to manage his own funds.” AR 515. Dr. Bagner's evaluation is not a clear and convincing reason to reject Plaintiff's testimony.
f. Lack of Evidence of Intensive Mental Health Treatment
The ALJ found that the fact that Plaintiff had not been hospitalized for his mental health conditions, or received “a level of collateral support or mental health treatment that is usually associated with chronic or debilitating mental illness” undermined Plaintiff's testimony. AR 29. The ALJ also noted that Dr. Sivtsov's mental status examination findings showed that Plaintiff was alert, oriented, and cooperative. AR 29. Without citation to any portion of the record, the ALJ asserted that Plaintiff's “thought content was negative for delusions or paranoia. His perception was without auditory and visual hallucinations.” AR 29. The undersigned does not find that any of these assertions by the ALJ constitute clear and convincing reasons for rejecting Plaintiff's testimony. Even if Plaintiff never received inpatient treatment for his schizophrenia disorder, the fact that he was homeless for four years and could only find housing and establish a safe living environment with the substantial help of his mother supports Plaintiff's testimony. AR 47, 327-337. This four-year period of homelessness appears to be a prolonged state of decompensation. The ALJ's citations to Dr. Sivtsov's mental status examinations ignore the context in which they were made and other findings by Dr. Sivtsov during those same examinations that support Plaintiff's testimony. AR 413, 414, 415 (Plaintiff is a “very limited historian”); AR 413, 415, 416, 509 (“disorganized, tangential thought process”); AR 413, 414 (anxious, disheveled, irritable); AR 415 (“Unable to coherently comment on any symptoms improvement being very tangential and with poor insight”); AR 509 (“Unable to perform basic [activities of daily living] without prompting and family help. Unable to focus, follow simple instructions or learn new task all due to the negative symptoms of his disease”). And the ALJ's assertion that Plaintiff did not experience delusion, paranoia, or hallucinations is easily rejected by reviewing Dr. Bagner's evaluation and the hearing testimony of Plaintiff's mother. AR 514. As noted above, the ALJ gave no indication in his opinion that he rejected the lay opinion testimony of Plaintiff's mother in whole or in part, and if he found any part of it not credible, he was required to give germane reasons for so finding. Stout, 454 F.3d at 1053.
g. Activities of Daily Living
The ALJ found that Plaintiff “has shown an ability to engage in many activities of daily living ... [that] are not limited to the extent one would expect.” AR 29. These activities are not clear and convincing reasons to reject Plaintiff's testimony because the ALJ fails to draw a connection between the activities and an ability to work at a sustained pace. Bonnie B. v. Saul, No. 3:20-cv-00653-RBM, 2020 WL 7695332, at *9 (S.D. Cal. Dec. 28, 2020) (“The Court is hard pressed to find the cited daily activities - that Plaintiff can dress, bathe, and cook for herself - are inconsistent with her symptom testimony and involve functions transferable to a work setting.”).
Moreover, a careful review of the record demonstrates that the ALJ is wrong in asserting that Plaintiff engaged in several of the listed activities. Contrary to the ALJ's assertions, Plaintiff does not “spend time with others in person or on the phone,” and Plaintiff has significant problems getting along with other people. Plaintiff only socializes with his parents. AR 333. Plaintiff no longer has relationships with other family members or past friends because they “all turned away due to his mood swings.” AR 330. Plaintiff gets paranoid, does not attend family gatherings, does not engage in past hobbies, “has no friends,” and “his sisters no longer spend time [with] him.” AR 333. Similarly, although the ALJ states that Plaintiff “does not need to be reminded to go to places,” AR 29, the record demonstrates that Plaintiff relies on his mother to remind him about his medicine “all the time,” his mother helps him a lot, and his condition affects his memory, concentration, understanding, and ability to complete tasks. AR 343-46. Plaintiff's mother reminds him about his medication, his doctor's appointments, and performing household chores like dishes and taking out the trash. AR 331, 334.
C. The ALJ's Error Was Not Harmless
The ALJ erred by rejecting Plaintiff's testimony without providing clear and convincing reasons. If an ALJ's error is harmless, his decision will not be reversed. Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012). An ALJ's error is harmless where it is “inconsequential to the ultimate nondisability determination.” Id. at 1115 (quoting Carmickle v. Comm'r, 533 F.3d 1155, 1162 (9th Cir. 2008)). This error was not harmless, because it impacted the RFC formulated by the ALJ. AR 31. The incorporation of the mental limitations of “only occasional interaction with the general public, only occasional, work-related, non-personal, non-social interaction with co-workers and supervisors, and is limited to jobs requiring only simply work-related decisions” does not cure the error. If Plaintiff's testimony is credited fully, particularly with respect to his paranoia and hallucinations, it is highly doubtful that he could work even with those limitations.
The ALJ's error also impacted his evaluation of the medical opinions. For example, the ALJ rejected the state agency consultant's finding that Plaintiff had moderate limitations in understanding, remembering, and applying information or adapting and managing oneself based largely on the ALJ's erroneous findings regarding Plaintiff's activities of daily living. AR 31. The ALJ repeated his errors regarding his selective interpretations of Dr. Sivtsov's treatment notes in his evaluations of the opinions of Dr. Haroun, a state agency consultant on review, and Dr. Bagner. AR 32-33.
The undersigned discusses the appropriate remedy below.
V. THE APPROPRIATE REMEDY
The Court applies the “credit-as-true” rule when determining whether a case should be remanded for payment of benefits or for further proceedings. Trevizo, 871 F.3d at 682. That test requires the court to assess three factors: (1) whether “the record has been fully developed and further administrative proceedings would serve no useful purpose;” (2) whether “the ALJ has failed to provide legally sufficient reasons for rejecting evidence, whether claimant testimony or medical opinion;” and (3) whether “the ALJ would be required to find the claimant disabled on remand” if the discredited evidence were treated as true. Id. at 683 (quoting Garrison, 759 F.3d at 1020). If all three factors are present, a court can remand the case for payment of benefits. Burrell, 775 F.3d at 1141.
The Court need not look beyond the first factor to determine that the proper remedy is to remand for further proceedings. The record has not been fully developed as to whether Plaintiff meets or equals the requirements of Listing 12.03, or what Plaintiff's RFC should be if he is not presumptively disabled under that listing. The undersigned recognizes that the longitudinal record of medical treatment here, a factor under the Paragraph C criteria, is complicated by Plaintiff's period of homelessness and his resistance to treatment, which could easily be understood as “features” of his schizophrenia that would not preclude a finding that he meets the Paragraph C criteria. See 20 C.F.R. pt. 404, subpt. P, app. 1, § 12.00G2a, b; Garrison, 759 F.3d 1018 n.24 (claimants should not be punished for failure to seek treatment when that failure is a part of their underlying mental illness); Contreras, 477 F.Supp.3d at 1127 (“The Ninth Circuit counsels against discrediting Plaintiffs with mental impairments for failing to proactively seek treatment.”). Plaintiff's mother testified that she believes his resistance to treatment is due to his difficulty accepting his diagnosis. AR 70. Plaintiff's hearing testimony strongly suggests that his failure to seek psychiatric treatment is related to his mental state. AR 58-59. When asked about discontinuing treatment with Dr. Sivtsov, Plaintiff responded with an incoherent and rambling answer that involved artificial intelligence, COVID, cerebral cortex issues, and a ten-year old encounter with police, AR 58-59. The record is further complicated by the fact that Dr. Sivtsov, Plaintiff's only treating psychiatrist, “does not fill out disability forms for SSA.” AR 411.
The other medical opinions available in the record are not ideal when considering that the key issue for determining disability here is a mental impairment. The state agency consultants issued opinions without any opportunity to observe Plaintiff or the complete medical record. Although Defendant ordered a consultative psychiatric examination, it was “conducted via telehealth” with no face-to-face interactions with Plaintiff. AR 512.
On remand, Defendant should allow the record to be supplemented with updated medical records and a medical source statement from any treating mental health professionals. Defendant should also consider whether an additional consultative psychiatric examination is warranted, with a particular focus on Plaintiff's ability to stay on-task at the workplace in light of his anxiety, paranoia, and hallucinations. Although the medical record here in sparse, the testimony of Plaintiff and his mother provide a compelling picture of mental health challenges, both in the Function Reports they submitted and in the testimony they gave at the hearing. Their testimony should be fully considered on remand under the proper legal standards and in light of any newly obtained information. Further, to the extent the ALJ finds that Plaintiff's substance abuse is a contributing factor to his disability on remand, the ALJ must engage in the requisite DAA analysis.
In remanding for further proceedings, the Court is following the Ninth Circuit's guidance that the proper course, save for exceptional circumstances, is to remand. Dominguez v. Colvin, 808 F.3d 403, 407 (9th Cir. 2015); see also Treichler, 775 F.3d at 1100 (“we generally remand for an award of benefits only in ‘rare circumstances'”) (quoting Moisa v. Barnhart, 367 F.3d 882, 886 (9th Cir. 2004)). To be clear, the Court is not denying Plaintiff's request to remand for benefits because it has serious doubts about Plaintiff's disability. Cf. Burrell, 775 F.3d at 1141. The ultimate disability determination depends on a proper assessment of the applicability of Listing 12.03 and, if Plaintiff does not meet the listing, his RFC, and those determinations are for the ALJ, not the Court, to make. See Dominguez, 808 F.3d at 409 (appropriate to remand case for further proceedings because “it is up to the ALJ, not the court” to formulate a proper RFC).
VI. CONCLUSION
Based on the foregoing analysis, the undersigned recommends that the Court resolve the parties' Joint Motion for Judicial Review (ECF No. 14) in Plaintiff's favor. The undersigned recommends that the Court REVERSE the Commissioner's decision pursuant to sentence four of 42 U.S.C. § 405(g), and REMAND this action for further proceedings consistent with this order.
The Court submits this Report and Recommendation to United States District Judge Ruth Bermudez Montenegro under 28 U.S.C. § 636(b)(1). IT IS HEREBY ORDERED that any party to this action may file written objections with the Court and serve a copy on all parties no later than August 16, 2024. The document should be captioned “Objections to Report and Recommendation.”
IT IS SO ORDERED.