Opinion
CV-22-00476-TUC-RM (JR)
08-31-2023
Stephanie Ochoa, Plaintiff, v. Commissioner of Social Security Administration, Defendant.
REPORT AND RECOMMENDATION
Honorable Jacqueline M. Rateau United States Magistrate Judge
Plaintiff Stephanie Ochoa (“Ochoa”) brings this action pursuant to 42 U.S.C. §§ 405(g) and 1383(c)(3), seeking judicial review of a final decision by the Commissioner of the Social Security Administration (“Commissioner”). The matter was referred to the undersigned for report and recommendation. (Doc. 9, 17.) The matter is fully briefed. (Doc. 18, 20-21.) Based on the pleadings and the administrative record (“AR”) submitted to the Court, this Court recommends that the district court reverse the decision of the ALJ and remand to the Commissioner for the immediate calculation and payment of benefits.
PROCEDURAL BACKGROUND
In September 2013, Ochoa applied for Disability Insurance Benefits (“DIB”) under Title II of the Social Security Act (the “Act”), 42 U.S.C. §§ 416(i), 423(d), and Supplemental Security Income (“SSI”) under Title XVI of the Act, 42 U.S.C. §§ 1382, 1382c(a), alleging a disability onset date of March 30, 2010. (AR 244, 246, 253, 260.) Her applications were denied initially and on reconsideration. (AR 174-78, 179-82, 184-86, 187-90.) On April 24, 2016, Ochoa appeared with counsel at an administrative hearing before an Administrative Law Judge (“ALJ”). (AR 42-75.) A vocational expert (“ VE”) also testified. Id. In a decision dated November 29, 2016, the ALJ determined that Ochoa was not disabled. (AR 18-35.) After the ALJ's decision became the Commissioner's final decision Ochoa initiated her first civil action. (AR 1, 1204-07.) See also, Ochoav. Comm'r of Soc. Sec. Admin., No. 4:18-cv-00314-LAB. On May 22, 2019, Magistrate Judge Leslie A. Bowman granted the parties' stipulated motion to reverse the Commissioner's decision and remand for a rehearing. (AR 1209-12.) On July 7, 2019, the Appeals Council remanded the matter to a different ALJ. (AR 1217-21.) On March 11, 2020, Ochoa appeared with counsel and testified at a second administrative hearing. (AR 1115-42.) A different VE also testified at the second administrative hearing. Id.
BRIEF FACTUAL BACKGROUND
Born in 1985, Ochoa was 24 years old on her alleged onset date. (AR 246, 260.) She completed high school after taking special education classes. (AR 949.) In June 2004, psychologist Andrew F. Mosko, Ph.D., measured Ochoa's educational attainment and generally evaluated her mental condition. (AR 949-59.) The Wide Range Achievement Test-Revised showed that Ochoa read at the fourth-grade level, spelled at the third-grade level, and did arithmetic at the fifth-grade level. (AR 954.) Dr. Mosko diagnosed Ochoa with, inter alia, a reading disorder and a written expression disorder. (AR 957.)
Ochoa obtained a certified nursing assistant (“CAN”) certificate with the assistance of a vocational rehabilitation tutor. (AR 49.) The tutor read questions to her that she could not read herself, and she took the examination taking extra-time and using a tape recorder to listen to, not read, the test questions. Id. She had to retake the test. (AR 48.)
Ochoa worked part-time as a recreational aide from about 2002 until 2008. (AR 50, 348, 370-71.) She then worked as a CNA and home health aide. (AR 50-51, 348, 370, 37273.) After her March 30, 2010 alleged onset date she worked part-time with earnings records after 2010 showing variable annual earnings ranging from $1,732 to $5,906. (AR 1120, 1332.) As of her April 2016 hearing, Ochoa was working 14 hours per week at a training program. (AR 52.) As of her March 2020 hearing, she was working as a CNA for 12 hours per week taking care of one client. (AR 1122-23.) The ALJ found Ochoa's work activity after her March 30, 2010 alleged onset date was not substantial gainful activity. (AR 1091-92.)
THE ALJ'S DECISION
In a decision dated April 8, 2020, at step one, the ALJ determined that Ochoa had not engaged in substantial gainful activity since March 30, 2010, her alleged onset date. (AR 1091.) At step two, the ALJ found Ochoa has as severe impairments obesity, bilateralknee degenerative joint disease, lumbago, cataplexy with syncope, asthma, anxiety and depression. (AR 1092.) At step three, the ALJ determined that Ochoa does not have an impairment or combination of impairments that meets or medically equals the severity of a listed impairment. (AR 1092-95.) After step three but before step four, the ALJ determined that Ochoa has:
the residual functional capacity to perform light work as defined in 20 CFR 404.1567(b) and 416.967(b)
except: [she] cannot ever climb ladders. [She] also cannot ever be exposed to heights, or moving machinery. [She] can sustain only occasional exposure to dust, fumes, and smoke. She can understand, remember, and carry out simple job instructions. [She] can have only occasional interaction with coworkers and the public. [She] also cannot work in a fast-paced work setting.(AR 1095.) At step four, the ALJ determined that Ochoa is unable to perform any past relevant work. (AR 1103.) At set five, the ALJ determined that Ochoa can perform the jobs of mail clerk, small parts assembler and merchandise marker. (AR 1104.)
ISSUES ON REVIEW
Ochoa raises four issues for review. (Doc. 18 at 1.) First, she urges the ALJ failed to provide legally sufficient reasons for rejecting portions of examining psychologist MaryAnne Belton, Ph. D.'s, 2016 opinion. Id. at 11-19. Second, she urges the ALJ failed to provide legally sufficient reasons for rejecting treating psychiatrist Larry Onate, M.D.'s 2020 opinion. Id. at 19-21. Third, Ochoa urges the ALJ failed to fully consider the limitations caused by her cataplexy. Id. at 21-24. Fourth, she claims the ALJ failed to properly evaluate the lay witness statements. Id. at 24-26. The Commissioner argues against all of Ochoa's claims of error. (Doc. 20.) As more fully explained below, this Court agrees with Ochoa on her first, second, and fourth claims of error. This Court addresses Ochoa's second issue first, followed by her first and fourth issues.
Ochoa also raised as an issue, “What is the Commissioner's ‘final decision' subject to review?” (Doc. 18 at 1.) The parties agree that the final decision subject to review is the Commissioner's decision dated April 8, 2020, and this Court also agrees. (Doc. 18 at 11; Doc. 20 at 3.)
Because this Court agrees with Ochoa on her first, second and fourth claims of error this Court does not reach Ochoa's third claim of error which, even if successful, would not provide her with any additional relief.
LEGAL STANDARDS
“The ALJ is responsible for determining credibility, resolving conflicts in medical testimony, and for resolving ambiguities.” Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995) (citing Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989)). The findings of the Commissioner are meant to be conclusive if supported by substantial evidence. 42 U.S.C. § 405(g). Substantial evidence is “more than a mere scintilla but less than a preponderance.” Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999) (quoting Matney v. Sullivan, 981 F.2d 1016, 1018 (9th Cir. 1992)). A district court may overturn the decision to deny benefits only “when the ALJ's findings are based on legal error or are not supported by substantial evidence in the record as a whole.” Aukland v. Massanari, 257 F.3d 1033, 1035 (9th Cir. 2001). This is so because the ALJ and “not the reviewing court must resolve conflicts in the evidence, and if the evidence can support either outcome, the court may not substitute its judgment for that of the ALJ.” Matney, 981 F.2d at 1019 (quoting Richardson v. Perales, 402 U.S. 389, 400 (1971)); Batson v. Comm'r of Soc. Sec. Admin., 359 F.3d 1190, 1198 (9th Cir. 2004). The Commissioner's decision, however, “cannot be affirmed simply by isolating a specific quantum of supporting evidence.” Sousa v. Callahan, 143 F.3d 1240, 1243 (9th Cir. 1998) (citing Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989)). Reviewing courts must consider the evidence that supports as well as detracts from the Commissioner's conclusion. Day v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 1975).
ANALYSIS
Treating Physician Larry Onate, M.D.
Brief Summary of Medical Evidence Regarding Dr. Onate: Dr. Onate began treating Ochoa in February 2012. (AR 1605.) On February 27, 2020, Dr. Onate provided a Medical Source Assessment (Mental) opining that Ochoa would have, for 11 to 20% percent of the workday, noticeable difficulty in several areas including understanding, remembering, and carrying out detailed instructions, maintaining concentration and attention for extended periods of time, completing a normal workday and workweek without interruptions from psychologically-based symptoms and performing at a consistent pace without an unreasonable number and length of rest periods, accepting instructions and responding appropriately to criticism, responding to changes in the work setting, being aware of normal hazards and taking appropriate precautions, traveling in unfamiliar places or using public transportation, and setting realistic goals and making plans independently of others. (AR 1172-73.)
Dr. Onate's treatment records are contained in the AR as follows: AR 857 (December 18, 2013 progress note; AR 862 (May 1, 2014 progress note); AR 961 (December 16, 2015 progress note); AR 964 (September 17, 2015 progress note); AR 967 (May 21, 2015 progress note); AR 970 (February 19, 2015 progress note); AR 973 (December 17, 2014 progress note); AR 976 (October 21, 2014 progress note); AR 978 (September 11, 2014 progress note); AR 1357 (March 22, 2016 progress note); Ar 1360 (May 25, 2016 progress note); AR 1362 (August 2, 2016 progress note); AR 1364 (December 20, 2016 progress note); AR 1366 (March 22, 2017 progress note); AR 1371 (December 20, 2017 progress note); AR 1374 (April 18, 2018 progress note); AR 1375 (June 12, 2018 progress note); AR 1378 (October 17, 2018 progress note); AR 1381 (March 20, 2019 progress note) AR 1384 (August 21, 2019 progress note); AR 1600 (January 15, 2020 progress note); AR 1603 (September 16, 2019 progress note).
Defined on the Medical Source Assessment as a “level-3” impairment. (AR 1772.)
Legal Standard: Under the pre-2017 regulations that apply to Ochoa's claim, an ALJ is required to give greater weight to certain medical opinions. See Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1995), as amended (Apr. 9, 1996), superseded on other grounds by regulation, Revisions to Rules Regarding the Evaluation of Medical Evidence, 82 Fed.Reg. 5844, 5852 (Jan. 18, 2017) (codified at 20 C.F.R. pts. 404 & 416), as recognized in Woods v. Kijakazi, 32 F.4th 785, 789-90 (9th Cir. 2022). “Generally, the opinion of a treating physician must be given more weight than the opinion of an examining physician, and the opinion of an examining physician must be afforded more weight than the opinion of a reviewing physician.” Ghanim v. Colvin, 763 F.3d 1154, 1160 (9th Cir. 2014) (citing Holohan v. Massanari, 246 F.3d 1195, 1202 (9th Cir. 2001); 20 C.F.R. § 404.1527(c)). “If a treating physician's opinion is well-supported by medically acceptable clinical and laboratory diagnostics and is not inconsistent with the other substantial evidence in [the] case record, [it will be given] controlling weight.” Ghanim, 763 F.3d at 1160 (quoting Orn v. Astrue, 495 F.3d 625, 631 (9th Cir. 2007).
“[I]f a treating physician's opinion is contradicted, the ALJ may not simply disregard it.” Ghanim, 763 F.3d at 1161. An ALJ is required to consider the factors set forth in 20 C.F.R. § 404.1527(c)(2)-(6) in determining how much weight to afford the treating physician's medical opinion. Id. (citing Orn, 495 F.3d at 631; 20 C.F.R. § 404.1527(c)(2)). “In many cases a treating source's medical opinion will be entitled to the greatest weight and should be adopted, even if it does not meet the test for controlling weight.” Ghanim, 763 F.3d at 1161 (quoting Orn, 495 F.3d at 631). “An ALJ may only reject a treating physician's contradicted opinions by providing ‘specific and legitimate reasons that are supported by substantial evidence.'” Ghanim, 763 F.3d at 1161 (quoting Ryan v. Comm'r of Soc. Sec., 528 F.3d 1194, 1198 (9th Cir. 2008)) (additional citation omitted).
Analysis Regarding Dr. Onate's Opinion: The ALJ assigned little weight to the 2020 opinion of treating physician Dr. Onate reasoning:
Dr. Onate again opined on the claimant's functioning in 2020 at exhibit 49F and 55F. In exhibit 49F[,] Dr. Onate said that the claimant ‘has had difficulty working full time in a competitive fast paced and stressful environment.' (49F.) In exhibit 55F, Dr. Onate said the claimant will have level-3 (“11-20 percent”) impairments in completing a normal workday without interruptions from psychological symptoms. He also said that the claimant will have level-3 limitations in accepting criticism from supervisors. (55F.) Dr[.] Onate's opinions at 49 and 55F are accorded little weight. These statements contain little narrative explanation. These documents further do not evidence consideration of the claimant's whole medical evidence of record. Exhibit 49F is further nonspecific regarding the claimant's maximal capacities. Both of the forms are further inconsistent with the medical evidence of record, including observations of the claimant maintaining normal eye contact (34F/2, 39F/1, 27; 54F/26, 22), and speaking normally (2F/5; 7F/13; 32F/2; 39F/1; 54F/45.)(AR 1100-01.)
Ochoa argues that the ALJ failed to evaluate Dr. Onate's opinion as that of a treating physician insisting that the ALJ's rationale “does not evidence the application of the . . . treating physician rule.” (Doc. 18 at 20.) She urges that the ALJ accepted that Dr. Onate had “reasonable knowledge” of her medical conditions and that, under 20 C.F.R. § 404.1527(c)(2)(ii), when a treating source has reasonable knowledge of a claimant's impairment the ALJ is required to give that source's opinion more weight that a nontreating source's opinion. Id. She also argues that the ALJ's reliance on evidence in the record that she maintains normal eye contact and speaks normally is less than a scintilla of evidence which is insufficient to reject Dr. Onate's opinion. Id. at 19. She also urges that the ALJ's general reference to “medical evidence of record” (apart from her mention of Ochoa's eye contact and speech) is likewise insufficient to reject Dr. Onate's opinion. Id. at 20.
The Commissioner argues the ALJ's properly supported her decision to reduce the weight assigned to treating physician Dr. Ornate with findings in the record that contradicted Dr. Onate's opinion. (Doc. 20 at 10.) The Commissioner insists that Ochoa is simply arguing that the ALJ should have reached a different conclusion. Id. at 11. However, the Commissioner contends, the possibility of a different outcome does not establish ALJ error. Id.
As explained below, this Court agrees with Ochoa that the Commissioner's reliance on medical records that record her as having “normal eye contact” and “speaking normally” do not rise to the level of a specific and legitimate reason for discounting treating physician Dr. Onate's opinion. As set forth above, Dr. Onate has treated Ochoa since 2012. In February 2020, Dr. Onate's opined on Ochoa's “understanding and memory,” “sustained concentration and persistence,” “social interaction,” and “adaptation” on a Medical Source Assessment in check-the-box format. (AR 1772-73.) Dr. Ornate used a narrative format to provide a “general functional capacity assessment” opinion stating:
Neuropsychological testing and work history reveal functioning in areas of verbal and visual memory tasks fell below expected range. Her verbal and non-verbal generative fluency scores revealed difficulty with word generation from phonemic categories. She struggled with complex or switching tasks. Her abstract reasoning fell within impaired ranges. The above reflects scoring on this assessment.(AR 1773.)
In assigning little weight to Dr. Onate's 2020 opinion, the ALJ relied on five records that noted Ochoa presented with good eye contact at certain visits. See AR 1101 (citing AR 1398 (October 2017 record); AR 1430 (July 2019 record); AR 1466 (December 2017 record); AR 1650 (January 2017 record); AR 1690 (July 2017 record).) The ALJ also relied on five medical records that note Ochoa spoke normally at certain visits. See AR 1101 (citing AR 455 (January 2011 record); AR 574 (June 2012 record); AR 1358 (March 2016 record); AR 1430 (July 2019 record); AR 1669 (March 2017 record).) This Court finds that the ALJ's reliance on a few medical records without an explanation of how Ochoa's ability to “speak normally” and have “good eye contact” relates to Dr. Onate's conclusions regarding, inter alia, her ability to function in a traditional employment setting, is not a specific and legitimate reason supported by substantial evidence to assign little weight to Dr. Onate's 2020 medical opinion.
The Commissioner does not address Ochoa's argument that the ALJ's reliance on medical records noting normal eye contact is not specific and legitimate evidence to reject treating physician Dr. Onate's opinion. (Doc. 20.) Considering Dr. Onate's check-the-box assessment in conjunction with his opinions expressed in narrative format, this Court finds that the limited records relied upon by the ALJ regarding Ochoa's normal eye contact and ability to speak normally are not specific and legitimate reasons supported by substantial evidence to assign little weight to Dr. Ochoa's 2020 opinion.
The ALJ also supports her decision to assign little weight to Dr. Onate's opinion finding that Exhibit 49/F is “nonspecific regarding [Ochoa's] maximal capacities.” (AR 1101.) Exhibit 49/F is a January 15, 2020 letter authored by Dr. Onate and addressed “To Whom It May Concern.” (AR 1605.) In this letter, Dr. Onate explains that he began treating Ochoa in February 2012 and states that while Ochoa is working 12 hours a week, “she has difficulty working full time in a competitive and fast past (sic) paced and stressful environment.” Id. Dr. Onate writes, “[p]lease give her every consideration for continuance of her food stamps.” Id.
This Court finds no indication that Dr. Ochoa's January 15, 2020 letter was required to contain his opinion of Ochoa's maximal capacities. The letter appears to have been written by Dr. Onate in support of an application for supplemental nutrition assistance program benefits. This Court cannot conclude that Dr. Onate's opinion is worthy of less weight because the January 15, 2020 letter did not set forth Ochoa's maximal capacities.
A harmless error analysis applies to assess the impact of an ALJ's failure to give specific and legitimate reasons that are supported by substantial evidence for rejecting a treating physician's medical opinion. Marsh v. Colvin, 792 F.3d 1170, 1172 (9th Cir. 2015). An error is harmless if it is “inconsequential to the ultimate non[-]disability determination.” Stout v. Comm'r Soc. Sec. Admin., 454 F.3d 1050, 1055 (9th Cir. 2006). “[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.” Id. at 1056.
Here, the Court cannot confidently conclude that no reasonable ALJ could have reached a different disability determination if Dr. Onate's opinion had been fully credited. As set forth above, Dr. Onate opined that Ochoa would have difficulty understanding and remembering very short, simple instructions. (AR 1772.) He opined that she has a “level 3” impairment carrying out detailed instructions, maintaining attention and concentration for extended periods of time, and completing a normal workday and workweek without interruptions from psychological based symptoms. (AR 1772.) Dr. Onate also opined that Ochoa has a “level 3” impairment in accepting instructions and responding appropriately to criticism from supervisors, responding appropriately to changes in the work setting, being aware of normal hazards and taking appropriate precautions, traveling in unfamiliar places or using public transportation and setting realistic goals or making plans independently of others. (AR 1773.)
As mentioned above, a “level 3” impairment is defined as “able to perform designated task or function, but has or will have noticeable difficulty (distracted from job activity) from 11-20 percent of the workday or workweek (i.e., more than one hour per day or more than one-half day per week)[.]” (Ar 1772.)
At the second administrative hearing, the VE testified that a hypothetical individual with the limitations opined by Dr. Onate would have difficulty getting and keeping a job. (AR 1139.) The VE testified that if a hypothetical individual had moderate limitations in concentration, persistence, and pace and, as a result, is approximately 15% slower than her coworkers-limitations opined by Dr. Onate-the hypothetical individual would require a special accommodation from her employer to remain employed. (AR 1140.) The ability to work in highly structured environments-i.e., with special accommodations-is not the capacity to engage in substantial gainful activity. See, e.g., Gregory v. Bowen, 844 F.2d 664, 667 (9th Cir. 1988) (substantial evidence did not support ALJ's finding that claimant was able to engage in substantial gainful activity despite psychological impairments where psychologists who examined claimant consistently determined that she almost certainly would be unable to work unless provided with near-ideal, sheltered work environment).
In light of the foregoing, this Court finds that a reasonable ALJ could have reached a disabled determination if Dr. Onate's opinion had been fully credited. Thus, the ALJ's error in assigning little weight to Dr. Onate's opinion is not harmless.
Examining Physician MaryAnne Belton, Ph.D.
Brief Summary of Medical Evidence Regarding Dr. Belton: On September 21, 2016, Dr. Belton performed a consultative neuropsychological examination for the Agency. (AR 1037-50.) Dr. Belton administered psychometric memory testing, intelligence testing, and other instruments. (AR 1046-48.) Intelligence testing showed a Full Scale IQ of 72 and a Verbal Comprehension Index of 85. (AR 1046.) Memory testing showed an auditory memory index of 78, visual memory index of 62, an immediate memory index of 65, and a delayed memory index of 69. Id. Dr. Belton observed that Ochoa's “attentional skills were highly variable with better performance on simple tasks.” (AR 1043.) Dr. Belton diagnosed Ochoa with mild neurocognitive disorder due to multiple etiologies, unspecified depressive disorder, and unspecified anxiety disorder. (AR 1044.)
Dr. Belton provided a medical source statement describing Ochoa's mental limitations. (AR 1049-50.) Dr. Belton completed a check-the-box form in which she stated that Ochoa had at most mild limitations. Id. She also provided narrative descriptions of Ochoa's limitations. Id. She opined that Ochoa “demonstrated weakness with complex or multi-step procedures and will benefit from concrete, step-by-step directions.” (AR 1049.) She further opined that Ochoa was “likely to have difficulty with unexpected changes in her environment due to slowed encoding of novel information. Therefore, she may find it challenging to meet the demands of a work setting. Also, she might require additional time to complete tasks.” (AR 1050.)
Legal Standard: “The opinion of an examining physician is . . . entitled to greater weight than the opinion of a non[-]examining physician.” Lester, 81 F.3d at 830 (citing Pitzer v. Sullivan, 908 F.2d 502, 506 (9th Cir.1990); Gallant v. Heckler, 753 F.2d 1450 (9th Cir.1984). The Commissioner must provide “clear and convincing” reasons for rejecting the uncontradicted opinion of an examining physician. Lester, 81 F.3d at 830 (citing Pitzer, 908 F.2d at 506). Even if contradicted by another doctor, the opinion of an examining physician can only be rejected for specific and legitimate reasons that are supported by substantial evidence in the record. Lester, 81 F.3d at 830-831 (citing Andrews v. Shalala, 53 F.3d 1035, 1043 (9th Cir.1995).)
Analysis Regarding Dr. Belton's Opinion: The ALJ assigned Dr. Belton's opinion partial weight reasoning:
Maryanne Belton, Psy.D., psychological examiner (29F), opined on the claimant's residual functional capacities in September 2016. On page 13 of [E]xhibit 29F, e.g., Dr. Belton said that the claimant will have only mild limitations in understanding and remembering. Dr. Belton elsewhere, though, recommended that the claimant ‘develop a structured and predictable routine,' recommending that the claimant complete only ‘one task at a time.' (29F.) Exhibit 29F is accorded partial weight. Specifically, [Dr.] Belton's responses to questions (1) and (2) on page [13] of this exhibit (indicating only mild limitations) are afforded significant weight as generally consistent with the medical evidence of record, including observations of the claimant exhibiting intact grooming and hygiene. (12F/31, 83; 34F/2.) The remainder of the opinions in Exhibit 29F, though, are given little weight. Rendered in 2016, this opinion also does not consider much of the period in issue, or the claimant's related medical documentation. [Dr.] Belton also provides only limited narrative explanation for these conclusions. Finally, the remainder of the opinions at 29F are inconsistent with the medical evidence of record, including notations of the claimant revealing intact judgment and insight. (7F/7; 54F/52, 68, 104.)(AR 1101-02.)
Ochoa argues that the ALJ's rejection of Dr. Belton's more restrictive opinions because the opinions do not consider “much of the period at issue” is legally insufficient. (Doc. 18 at 14.) She urges that the ALJ did not dispute the relevance of Dr. Belton's opinions for the time period beginning with Ochoa's March 10, 2010 alleged onset date up to Dr. Belton's September 21, 2016 opinion. Id. Ochoa points out that the ALJ did not find that Ochoa's mental condition improved after September 2016, a finding which would have supported the ALJ's determination that Dr. Belton's opinion does not sufficiently relate to the time period after September 2016. Id.
Ochoa also argues that the ALJ's determination that Dr. Belton's more restrictive opinions are inconsistent with evidence in the record evidencing Ochoa's intact judgment and insight is not logically related to Dr. Belton's opinions. (Doc. 18 at 15.) She also insists that the ALJ's rejection of Dr. Belton's more restrictive opinions as not supported by the medical evidence of record is a legally insufficient broad-brush rejection of Dr. Belton's more restrictive opinions. Id. She urges that the ALJ erroneously rejected Dr. Belton's more restrictive opinions as only supported by a limited narrative explanation. Id. She also insists that the ALJ “failed to grapple” with the objective results of Dr. Belton's psychometric test results which yielded results in the first and second percentiles. Id. at 1617.
The Commissioner argues that Dr. Belton's opinion was entitled to less weight because it was written in 2016 and insists that “[t]he extent to which a medical source is familiar with the other information in the case record” is one factor identified by 20 C.F.R. § 404.1527(c)(6) that the ALJ is entitled to consider when evaluating a medical opinion. (Doc. 20 at 6.) The Commissioner states that “this was a specific weakness with Dr. Belton's opinion.” Id. The Commissioner defends the ALJ's determination that Dr. Belton provided only a limited narrative explanation for her conclusions and insists that “[t]he amount of explanation provided is explicitly referenced in” 20 C.F.R. § 404.1527(c)(3) “as being relevant to the supportability of an opinion.” Id. Finally, the Commissioner urges that the ALJ explained that Dr. Belton's opinion was inconsistent with evidence in the record and, under 20 C.F.R. § 404.1527(c)(4), consistency is a factor the ALJ can rely on in evaluating medical opinions. Id. The Commissioner urges the district court to agree that the ALJ pointed to specific records which documented no serious mental status abnormalities and normal mental functioning. Id. These reasons, the Commissioner insists, are specific and legitimate reasons supported by substantial evidence for reducing the weight assigned to Dr. Belton's opinion. Id.
As explained below, this Court agrees with Ochoa. It is true, as the Commissioner points out, that in assigning weight to a physician's opinion, the ALJ is entitled to consider the factors set forth in 20 C.F.R. § 404.1527(c)(2)-(6). The Court also agrees with the Commissioner that included within these factors are a physician's familiarity with the record, an opinion's consistency with the evidence of record, and the amount of explanation offered. See 20 C.F.R. § 404.1527(c)(2)-(6). However, this Court finds that the ALJ erred in her application of the factors.
First, this Court finds that the ALJ erred in determining that Dr. Belton's opinion was entitled to less weight because it was inconsistent with evidence in the record. Significantly, Dr. Belton found that Ochoa's word generation with phonemic categories is severely impaired. (AR 1042.) This finding is consistent with treating physician Dr. Onate's opinion (set forth above) that Ochoa's verbal and non-verbal generative functioning revealed “difficultly with word generation from phonemic categories.” (AR 1773.)
Second, the ALJ erred finding that Dr. Belton's opinion is entitled to less weight because she did not consider the entire period at issue. While it is true that Dr. Belton's opinion was rendered in 2016, as demonstrated above one of Dr. Belton's findings is consistent with Dr. Onate's opinion that was rendered in 2020. Both Drs. Belton and Onate opined that Ochoa's word generation with phonemic categories is severely impaired. And, as pointed out by Ochoa, the ALJ failed to find that her abilities improved after September 2016. Significantly, such a finding would be contrary to treating physician Dr. Onate's 2020 opinion.
Third, the Commissioner fails to acknowledge that the ALJ was incorrect in determining that Dr. Belton only provided a limited narrative explanation for her conclusions. To the contrary, Dr. Belton provided a 13-page report in support of her two-page assessment that was presented in check-the-box format. (AR 1037-48.) Dr. Belton provided a thorough narrative explanation for her conclusions within her 13-page report stating, in part:
BEHAVIORAL OBSERVATIONS: ...
Her speech was muffled and difficult to understand at time[s]. . . . While her comprehension skills for simple, one-step tasks was intact, Ms. Ochoa struggled with multi step, complex procedures and required repetition or rephrasing of task directions. Her work habits and response time were moderate to slow. . . .(AR 1040.)
TEST RESULTS: ...
Attention & Sequencing -
Ms. Ochoa's performance on measures of attention was variable across modalities. Specifically, her auditory attention for a span of digits was moderately impaired overall (2nd percentile). She achieved a maximum span of five numbers forward, which was low average (16th percentile). Her score in the backward sequencing condition was moderately impaired with a span of two numbers (2nd percentile). When asked to reorder digit series into numerical order, her performance fell in the moderately impaired range as well with a span of three numbers (2nd percentile). Similarly, Ms. Ochoa achieved moderately impaired performance on visual analogue of the digit span task, on which she was asked to recognize the form and sequence of novel symbols (2nd percentile).
Memory Functioning -
Ms. Ochoa's memory performance revealed a lateralizing pattern with greater challenges across visual tasks and measures. . . . Specifically, her overall visual recall was severely impaired (1st percentile), and her visual working memory score was moderately impaired (2nd percentile). Her auditory recall fell in the mildly impaired range (7th percentile). Both her immediate and delayed recall across modalities was in the moderately to severely impaired range (2nd-1st percentile). . . .
Ms. Ochoa recalled 3 words correctly following the first presentation of a 16-item list, which was severely impaired (< 1st percentile). By the fifth and final learning trial, her score remained severely impaired with 7 total words recalled accurately (< 1st percentile). Single trial recall of a distractor list was mildly impaired (6th percentile). Her ability to recall the target list following that brief distraction fell in the moderately impaired range (2nd percentile). Likewise, her score with semantic cues at that interval was severely impaired (< 1st percentile).
After a 20-minute delay, Ms. Ochoa's performance was severely impaired both with and without semantic cues (each < 1st percentile). She demonstrated a high number of intrusion errors (6th percentile), but there was no evidence for an unusual amount of repetition errors (30th percentile). Her performance with yes/no recognition cures was impaired (< 1st percentile); however, she did not demonstrate a high number of false-positive responses on recognition (69th percentile). Lastly, Ms. Ochoa identified all words accurately on a forced-choice recognition task, which corroborated good level of effort on the task.
...
Executive Functioning -
Ms. Ochoa's executive function abilities or higher order thinking skills were variable. Specifically, her word generation with phonemic categories was severely impaired (1st percentile). ...(AR 1041-42.)
SUMMARY: ...
Her performance on standardized assessment revealed variation across cognitive domains with areas of deficit in memory and executive function. Specifically, Ms. Ochoa demonstrated variable encoding of novel information which likely influenced her overall memory performance. There were (sic) no evidence for a rapid pattern of forgetting material over time; however, her scores across verbal and visual memory tasks fell below expected ranges. She seemed to benefit from retrieval support across modalities. Her attention skills were highly variable with better performance on simple tasks.
Ms. Ochoa's executive function abilities or higher order thinking skills were similar to the areas of cognitive functioning with variability observed. Specifically, her verbal and nonverbal generative fluency skills revealed difficulty with word generation from phonemic categories. Also, she struggled with inhibitory control and complex or switching tasks. Her abstract reasoning fell within impaired ranges as well. Lastly, her response to self-report assessing depression and anxiety symptoms fell above clinical relevance within the moderate to severe range.(AR 1043.) The above represents a portion of Dr. Belton's narrative assessment of Ochoa's functioning. On her check-the-box assessment Dr. Belton opined:
Ms. Ochoa's memory performance revealed an area of weakness and deficits within less structured verbal learning and memory abilities. In addition, she struggled with visual tasks as well. She demonstrated weakness with complex or multi-step procedures, and will benefit from concrete, step-by-step directions.
While Ms. Ochoa demonstrated appropriate social reciprocity and engagement skills, she is likely to have difficulty with unexpected changes in her environment
due to slowed encoding of novel information. Therefore, she may find it challenging to meet the demands of a work setting. Also, she might require additional time to complete tasks.(AR 1049-50.)
This Court finds Dr. Belton's narrative assessment and her opinion expressed on the check-the-box assessment to be a comprehensive discussion of the testing performed, the results yielded, and her assessment of Ochoa's abilities. Accordingly, this Court determines that the ALJ's finding that Dr. Belton provided only a limited narrative explanation for her conclusions is erroneous. Thus, it is not a specific and legitimate reason supported by substantial evidence to assign little weight to Dr. Belton's opinion.
This Court also agrees with Ochoa that the ALJ's rejection of Dr. Belton's more restrictive opinions as not supported by the medical evidence of record is a legally insufficient broad-brush rejection of Dr. Belton's more restrictive opinions. The ALJ relied on four medical records, which she found documented intact judgment and insight, to conclude that Dr. Belton's more restrictive opinions are inconsistent with the medical evidence. See AR 1102, citing 568 (March 21, 2012 progress note); AR 1676 (April 27, 2017 client progress note); AR 1692 (July 18, 2017 client progress note); AR 1728 (January 2, 2018 client progress note).) The March 21, 2012 record is a progress note from Dr. Onate and given its March 2012 date, is presumably one of the first treatment records from Dr. Onate. Having treated Ochoa since 2012, this Court finds that Dr. Onate's 2020 opinion-rendered after eight years of treatment-is the more persuasive record from Dr. Onate. That opinion, as discussed above, is that Ochoa would have 11 to 20% difficulty in, inter alia, understanding, remembering, and carrying out detailed instructions, maintaining concentration and attention for extended periods of time, completing a normal workday and workweek without interruptions from psychologically-based symptoms and performing at a consistent pace without an unreasonable number and length of rest periods, accepting instructions and responding appropriately to criticism, responding to changes in the work setting, and setting realistic goals and making plans independently of others. (AR 1172-73.)
The other three records relied on by the ALJ are client progress notes from a provider with “Catholic Community/Social Service” that document Ochoa's cognitive behavioral therapy sessions. It is true that each of the three records note that Ochoa's “insight and judgment were good” at the particular visit. However, without any analysis as to how “good” insight and judgment conflict with the findings reached by Dr. Belton after thorough psychological testing, this Court finds that the three Catholic Community/Social Service records do not rise to the level of a specific and legitimate reason supported by substantial evidence to reduce the weight given to Dr. Belton's opinion.
In sum, this Court finds that the ALJ's reasons for assigning little weight to the more restrictive opinions of Dr. Belton are not specific and legitimate reasons supported by substantial evidence. A harmless error analysis applies to assess the impact of an ALJ's failure to give specific and legitimate reasons that are supported by substantial evidence for rejecting an examining physician's opinion. Marsh, 792 F.3d at 1172. As mentioned above, “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.” Stout, 454 F.3d at 1056.
This Court cannot confidently conclude that no reasonable ALJ could have reached a different determination if Dr. Belton's opinion had been fully credited. At the second administrative hearing, the VE testified:
Q. Okay. And if an individual needs concrete, step-by-step instruction and additional time to complete tasks, would have difficulty with unexpected changes in the work environment due to slow encoding of novel information and may find it challenging to meet the demands of a work setting, that type of individual would really need an accommodated or sheltered employment situation, correct?
A. Or a job coach, yeah, so some sort of accommodation.(AR 1140.) The ability to work in a highly structured environment does not establish the capacity to engage in substantial gainful activity. See, e.g., Gregory, 844 F.2d at 667 (substantial evidence did not support ALJ's finding that claimant was able to engage in substantial gainful activity despite psychological impairments where psychologists who examined claimant consistently determined that she almost certainly would be unable to work unless provided with near-ideal, sheltered work environment). The ALJ's error in assigning little weight to the more restrictive portions of Dr. Belton's opinion is harmful.
Lay Witness Statements
Evidence Regarding Lay Witness Statements: The record contains statements of two lay witnesses-Ochoa's mother, Rosalie Hernandez (“Rosalie”), and Ochoa's sister, Elizabeth Hernandez (“Elizabeth”). (AR 360-69 (Elizabeth Hernandez statement); AR 414 (Rosalie Hernandez statement).) Rosalie also testified at the hearing. (AR 1131-34.)
Rosalie testified that she drives her daughter everywhere. (AR 1132.) Ochoa cannot take the bus because of her cataplexy. Id. Ochoa gets overwhelmed easily. (AR 1132-33.) She has to be reminded when she is given a task at home to do. (AR 1133.) Rosalie testified that Ochoa has difficulty understanding what she reads as well as difficulty learning new things. She explained that she has had to work with Ochoa in learning how to do things, such as laundry. (AR 1133-34.)
Elizabeth described picking Ochoa up from work early because she fell due to her cataplexy. (AR 360.) Elizabeth explains that Ochoa has to be reminded to take her medications and “adhere to the schedule needed to be followed.” (AR 362.) Elizabeth reports that it can take Ochoa from two to four hours to complete tasks such as laundry, washing dishes, mopping, cleaning her bathroom and bedroom, caring for her dogs and picking up small items in the yard. Id. Ochoa cannot travel places by herself because of her cataplexy. (AR 363.) Elizabeth explains that Ochoa has to read written directions several times to “absorb” the information. (AR 365.) Elizabeth offers that Ochoa handles stress and changes in routine “as best she can.” (AR 366.)
Legal Standard Applicable to Lay Witness Statements: An ALJ is required to consider observations by non-medical sources as to how impairment affects a claimant's ability to work. Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir. 1993) (citing 20 C.F.R. § 404.1513(e)(2)). “Indeed, ‘lay testimony as to a claimant's symptoms or how an impairment affects ability to work is competent evidence.. .and therefore cannot be disregarded without comment.'” Stout, 454 F.3d at 1053 (quoting Nguyen v. Chater, 100 F.3d 1462, 1467 (9th Cir. 1996)). (Emphasis in original.) “Consequently, ‘[i]f the ALJ wishes to discount the testimony of lay witnesses, he must give reasons that are germane to each witness.'” Stout, 454 F.3d at 1053 (quoting Dodrill, 12 F.3d at 919).
Lay Witness Statements Analysis: The ALJ gave the lay witness statements little weight reasoning:
Th[e] statements first do not accord with the medical evidence of record, including notations of the claimant revealing an intact memory. (2F/3; 17F/16; 39F/1, 85; 54F/117; 56F/2.) These assertions are moreover necessarily colored by a natural and unavoidable desire to assist a family member. The undersigned finally cannot ignore the fact that Roselle (sic) and Elizabeth are not an acceptable medical source (as Social Security defines that term). Taking these considerations together, the undersigned affords the statement (sic) only little weight.(AR 1102.)
Ochoa argues that the ALJ erred in rejecting the lay witness statements because the lay witnesses were not acceptable medical sources. (Doc. 18 at 24.) She argues the ALJ's finding that the lay witness statements are not consistent with the medical evidence is also erroneous. Id. Finally, she argues that the ALJ improperly rejected the lay witness statements because the lay witnesses are family members and thus have an interest in Ochoa receiving benefits. Id. at 24-25. The Commissioner argues that the reasons the ALJ provided for rejecting the lay witness statements are proper. (Doc. 20 at 13-16.) As explained below, this Court agrees with Ochoa.
“Discrediting lay witness statements because the witnesses are not medical professionals or because the statements are not supported by medical evidence are not germane reasons.” Gallardo v. Comm'r of Soc. Sec. Admin., No. CV-20-00321-TUC-JGZ (JR), 2022 WL 986098, at *4 (D. Ariz. Mar. 31, 2022) (relying on Bruce v. Astrue, 557 F.3d 1113, 1116 (9th Cir. 2009), and noting that an ALJ must not “discredit [a spouse's] testimony as not supported by medical evidence in the record”); Dodrill v. Shalala, 12 F.3d 915, 918-19 (9th Cir. 1993) (holding that “friends and family members in a position to observe a claimant's symptoms and daily activities are competent to testify as to her condition.”); Stout, 454 F.3d at 1053 (recognizing that “[i]ndeed, ‘lay testimony as to a claimant's symptoms or how an impairment affects ability to work is competent evidence[.]'”)).
The Commissioner's insistence to the contrary is unpersuasive. The Commissioner urges that 20 C.F.R. § 404.1527(f) permits an ALJ to recognize that the lay witness statements “were subject to a different standard of analysis” and that the ALJ “noted that these statements were at odds with the objective medical evidence.” (Doc. 20 at 14.) It is correct that 20 C.F.R. § 404.1527(f) sets out what the Commissioner is entitled to consider in evaluating “[o]pinions from medical sources who are not acceptable medical sources and from nonmedical sources.” See 20 C.F.R. 404.1527(f). That section, however, does not permit an ALJ to discount lay witness testimony because it is not supported by the medical evidence of record. Such a conclusion would be contrary to the well-established case law set forth above. Moreover, the ALJ did not state which portion(s) of the medical evidence of record were not supportive of the lay witness statements. As a result, it is unclear whether the ALJ rejected the lay witness statements on the basis that they are actually inconsistent with the medical evidence in the record, or whether the ALJ found the general evidentiary value of the lay witness statements to be less than the evidentiary value of the objective medical evidence.
The ALJ's rejection of the lay witness statements on the grounds that they “are moreover necessarily colored by a natural and unavoidable desire to assist a family member[]” is also erroneous. In Smolen v. Chater, the Court of Appeals for the Ninth Circuit held:
The first reason the ALJ gave for doing so was that the testimony was from “family witnesses” who were therefore “understandably advocates, and biased.” This amounted to a wholesale dismissal of the testimony of all the witnesses as a group and therefore does not qualify as a reason germane to each individual who testified. Moreover, the same could be said of any family member who testified in any case. The fact that a lay witness is a family member cannot be a ground for rejecting his or her testimony. To the contrary, testimony from lay witnesses who see the claimant every day is of particular value, see Dodrill, 12 F.3d at 919 (“[a]n eyewitness can often tell whether someone is suffering or merely malingering. . . this is particularly true of witnesses who view the claimant on a daily basis . . .”); such lay witnesses will often be family members.Smolen, 80 F.3d at 1289. This Court is unpersuaded by the Commissioner's effort to convince this Court that Smolen is no longer the controlling authority by relying on Greger v. Barnhart, 464 F.3d 968, 972 (9th Cir. 2006). (Doc. 20 at 14.) In Greger, the ALJ rejected testimony from the plaintiff's girlfriend because her statements were inconsistent with the plaintiff's reports to physicians during the relevant time and she had a “close relationship” with the plaintiff and thus was possibly influenced by a desire to help him. 464 F.3d at 972. The court of appeals held “[t]he ALJ's reasons for doubting Shields' credibility are germane to her; accordingly, it was not error for the ALJ to disregard her testimony.” Id.
Significantly, the ALJ in Greger provided two reasons for discounting the lay witness testimony and Greger cannot fairly be interpreted as holding that potential financial interest alone is a sufficient reason to reject lay witness testimony. Courts in this district have consistently determined that Greger cannot be interpreted as such. See, e.g., Torrez v. Astrue, No. CV-09-00210-TUC-CRP, 2012 WL 359303, at *7 (D. Ariz. Feb. 3, 2012) (finding that “[t]he witness's testimony in Greger . . . was rejected in part because it was inconsistent with the claimant's presentations to treating physicians . . . and the [witness's close] relationship was not the sole reason for rejecting the witness's testimony.”); Baker v. Comm'r of Soc. Sec. Admin., No. CV-17-00116-PHX-DGC, 2018 WL 2119167, at *8 (D. Ariz. May 8, 2018) (recognizing that in Greger, the court found that the ALJ properly rejected testimony from the plaintiff's girlfriend because her statements were inconsistent with the plaintiff's reports to physicians during the relevant time and she had a close relationship with the plaintiff and was possibly influenced by a desire to help him.).
Additionally, the ALJ did not articulate a reason that was germane to each witness- Ochoa's sister and, separately, Ochoa's mother. To the contrary, the ALJ grouped the two lay witnesses together as family members and drew the conclusion that their statements were “necessarily colored by a natural and unavoidable desire to assist a family member.” (AR 1102.) This is erroneous. See, e.g., Valentine v. Comm'r Soc. Sec. Admin., 574 F.3d 685, 694 (9th Cir. 2009) (holding, inter alia, the fact that the lay witness wife was an interested party is not a germane reason because this is a characteristic “common to all spouses”).
Lastly, the Commissioner urges that because the ALJ properly discounted Ochoa's symptom allegations and the lay witnesses gave similar testimony to that of Ochoa it follows that the ALJ also gave germane reasons for rejecting the lay witness's testimony. (Doc. 20 at 13-14.) The Commissioner relies on Valentine, 574 F.3d at 694. This Court finds the Commissioner's argument misplaced. While it could be said that Valentine supports the proposition that where a lay witness's testimony is “similar to [the claimant's] own subjective complaints,” and the ALJ has “provided clear and convincing reasons for rejecting [the claimant's] own subjective complaints,” and “the ALJ rejected [the lay witness] evidence based, at least in part, on ‘the same reasons [she] discounted [the claimant's] allegations,' ” then “the ALJ also gave germane reasons for rejecting [the lay witness] testimony.” See Valentine, 574 F.3d at 694. However, in this case, the ALJ did not reject the lay witness statements for the same reasons that she discounted Ochoa's credibility. As set forth above, the ALJ discounted the lay witness testimony because the lay witnesses are both family members and the because the lay witness statements purportedly did not “comport with the medical evidence of record.” (AR 1102.)
For the reasons stated above, this Court finds that the ALJ erred in failing to provide reasons germane to each witness in assigning little weight to the lay witness statements. “[W]here the ALJ's error lies in a failure to properly discuss competent lay testimony favorable to the claimant, a reviewing court cannot consider the error harmless unless it can confidently conclude that no reasonable ALJ, when fully crediting the testimony, could have reached a different disability determination.” Stout, 454 F.3d at 1056.
Here, Rosalie testified that Ochoa cannot ride public transportation, drive a motor vehicle, that she has a poor memory and a learning disability. Ochoa's sister provided similar statements albeit to a lesser extent regarding Ochoa's memory. This Court cannot confidently conclude that no reasonable ALJ, when fully crediting the statements of Rosalie and Elizabeth, could reach a different disability conclusion.
REMEDY
Ochoa asks the district court to apply the credit-as-true rule and remand for the calculation and award of benefits. (Doc. 18 at 25.) With error established, the district court has the discretion to remand or reverse and award benefits. McAllister v. Sullivan, 888 F.2d 599, 603 (9th Cir. 1989). A case may be remanded under the credit-as-true rule for an award of benefits where:
(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 improperly discredited evidence were credited as true, the ALJ would be required to find the claimant disabled on remand.Garrison, 759 F.3d at 1020. Even where all the conditions for the credit-as-true rule are met, the district court retains “flexibility to remand for further proceedings when the record as a whole creates serious doubt as to whether the claimant is, in fact, disabled within the meaning of the Social Security Act.” Id. at 1021.
This Court recommends that the district court apply the credit-as-true rule. First, the record is fully developed. The record contains multiple medical opinions, sufficient medical evidence, testimony from Ochoa, lay witness statements, a neuropsychological report, and VE testimony. As discussed above, this Court finds that it was error for the ALJ to assign little weight to the opinion of treating provider Dr. Onate. This Court also finds that it was error for the ALJ to assign little weight to Dr. Belton's opinions and to properly account for lay witness testimony. Crediting as true the foregoing would result in a determination that Ochoa is disabled. On this record, the Court finds that the failure to remand to the ALJ with instructions to immediately calculate and award benefits would constitute an abuse of discretion. See Garrison, 750 F.3d at 1023 (reversing for abuse of discretion the district court's decision to remand the case to the ALJ for further proceedings instead of remanding to the ALJ for the calculation and award of appropriate benefits).
RECOMMENDATION
It is recommended that the district court, after an independent review, reverse the decision of the ALJ and remand to the Commissioner for the immediate calculation and payment of benefits. Pursuant to Federal Rule of Civil Procedure 72(b)(2), any party may serve and file written objections within fourteen days of being served with a copy of the Report and Recommendation. A party may respond to the other party's objections within fourteen days. No reply brief shall be filed on objections unless leave is granted by the district court. If objections are not timely filed, they may be deemed waived. If objections are filed, the parties should use the following case number: 4:22-cv-476-RM.