Opinion
For Napoleon Pedraza, Plaintiff: Bill LaTour, LEAD ATTORNEY, Bill LaTour Law Offices, Colton, CA.
For Carolyn W Colvin, Acting Commissioner of Social Security, Defendant: Assistant U.S. Attorney LA-SSA, LEAD ATTORNEY, Office of the General Counsel for Social Security Adm., San Francisco, CA; Assistant U.S. Attorney SA-CV, LEAD ATTORNEY, AUSA - Office of U.S. Attorney, Santa Ana, CA; Michael K Marriott, LEAD ATTORNEY, SAUSA - Social Security Administration, Office of the General Counsel Region IX, San Francisco, CA.
DECISION AND ORDER
CARLA M. WOEHRLE, United States Magistrate Judge.
PROCEEDINGS
On August 28, 2013, Napoleon Pedraza (" Plaintiff") filed a Complaint seeking review of the Commissioner's denial of his applications for disability insurance benefits and supplemental security income. Thereafter, the parties filed a Consent to Proceed Before United States Magistrate Judge Carla Woehrle. On May 30, 2014, defendant filed an Answer to the Complaint. On August 1, 2014, the parties filed their Joint Stipulation (" Joint Stip.").
As discussed below, the Court finds that the Commissioner's decision should be reversed and this matter remanded for further proceedings.
BACKGROUND
On October 22, 2010, Plaintiff protectively filed applications for disability insurance benefits and supplemental security income. (Administrative Record [" AR" ] at 12, 229-38.) Plaintiff alleged that, beginning on February 8, 2005, he was disabled because of right knee problems, diabetes, hypertension, thyroid problems, depression, anxiety, edema, neuropathy, and kidney problems. (AR at 122.) The Commissioner denied Plaintiff's application initially and on reconsideration. (AR at 122-31, 136-42.) Plaintiff requested an administrative hearing before an Administrative Law Judge (" ALJ"). (AR at 143-45.) The ALJ held an initial hearing on May 21, 2012, and a continued hearing on September 18, 2012. (AR at 26, 47.) Plaintiff appeared at the continued hearing with counsel, and the ALJ heard testimony from Plaintiff and a vocational expert. (AR at 27.)
The ALJ issued an unfavorable decision on October 10, 2012. (AR at 12-21.) In the decision, the ALJ found that Plaintiff had not engaged in substantial gainful activity since his alleged disability onset date; that Plaintiff's severe impairments were diabetes mellitus, essential hypertension, obesity, degenerative disc disease of the cervical spine, degenerative changes in the right knee, and chronic lumbar strain; and that Plaintiff did not have an impairment or combination of impairments that met or equaled the requirements of a listed impairment. (AR at 14, 16.) The ALJ also found that Plaintiff had a residual functional capacity for less than a full range of light work, which precluded Plaintiff from returning to his past relevant work as a construction worker, propane truck driver, and hearse driver. (AR at 16, 19-20.) However, the ALJ found that Plaintiff could perform other work in the national economy, specifically, the occupations of hand packager and small products assembler. (AR at 21.) The ALJ therefore concluded that Plaintiff was not disabled as defined by the Social Security Act. (Id.)
On October 23, 2012, Plaintiff requested review of the ALJ's decision by the Appeals Council and submitted additional medical evidence. (AR at 7-8, 560-94.) On September 25, 2013, the Appeals Council received the additional evidence and made it part of the record. (AR at 4-5.) On the same date, the Appeals Council found that the additional evidence provided no basis to change the ALJ's decision and denied Plaintiff's request for review. (AR at 1-3.)
PLAINTIFF'S CONTENTIONS
The parties' Joint Stipulation sets out the following disputed issues:
1. Whether the Commissioner properly considered the treating physician's opinion, which was submitted for the first time to the Appeals Council;
2. Whether the ALJ rendered a proper adverse credibility determination; and
3. Whether the ALJ properly considered the lay witness's statement.
The Court finds that Issue One is dispositive.
STANDARD OF REVIEW
Under 42 U.S.C. § 405(g), this Court reviews the ALJ's decision to determine whether the ALJ's findings are supported by substantial evidence and whether the proper legal standards were applied. DeLorme v. Sullivan, 924 F.2d 841, 846 (9th Cir. 1991). Substantial evidence means " more than a mere scintilla" but less than a preponderance. Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971); Desrosiers v. Secretary of Health & Human Servs., 846 F.2d 573, 575-76 (9th Cir. 1988). In other words, it is " such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson, 402 U.S. at 401.
In determining whether substantial evidence supports the ALJ's findings, the Court must review the record as a whole and consider " both the evidence that supports and the evidence that detracts from the Commissioner's conclusion[s]." Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1998). " If the evidence can reasonably support either affirming or reversing, " the Court " may not substitute its judgment" for that of the ALJ, and the ALJ's decision must be upheld. Id. at 720-21; see also Gallant v. Heckler, 753 F.2d 1450, 1452 (9th Cir. 1984).
DISCUSSION
A. The Sequential Evaluation
To be eligible for disability benefits a claimant must demonstrate a medically determinable impairment which prevents the claimant from engaging in substantial gainful activity and which is expected to result in death or to last for a continuous period of at least twelve months. Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999); Reddick, 157 F.3d at 721; 42 U.S.C. § 423(d)(1)(A).
Disability claims are evaluated using a five-step test. See 20 C.F.R. § § 404.1520, 416.920. At step one, the ALJ determines if the claimant is engaging in " substantial gainful activity." 20 C.F.R. § § 404.1520(a)(4)(i), 416.920(a)(4)(i). If he is, the claimant is found not disabled. If he is not, the ALJ proceeds to step two.
At step two, the ALJ determines whether the claimant has a " severe" impairment or combination of impairments. 20 C.F.R. § § 404.1520(a)(4)(ii), 416.920(a)(4)(ii). An impairment is " severe" if it significantly limits the claimant's ability to perform basic work activities and is expected to persist for a period of twelve months or longer. See Bowen v. Yuckert, 482 U.S. 137, 141, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987). If the claimant does not have a " severe" impairment or combination of impairments, disability benefits are denied. 20 C.F.R. § § 404.1520(a)(4)(ii), 416.920(a)(4)(ii). If the impairment or combination of impairments is " severe, " the ALJ proceeds to step three.
At step three, the ALJ determines whether the claimant's impairment or combination of impairments meets or equals an impairment listed in 20 C.F.R., Part 404, Subpart P, Appendix 1. 20 C.F.R. § § 404.1520(a)(4)(iii), 416.920(a)(4)(iii). If so, the claimant is automatically determined disabled. See 20 C.F.R. § § 404.1520(d), 416.920(d). If not, the ALJ proceeds to step four.
At step four, the ALJ must assess the claimant's residual functional capacity (" RFC"). The RFC is the " most [one] can still do despite [his or her] limitations" and represents an assessment " based on all the relevant evidence." 20 C.F.R. § § 404.1545(a)(1), 416.945(a)(1). The ALJ then must determine whether the claimant's RFC is sufficient for the claimant to perform past relevant work. 20 C.F.R. § § 404.1520(a)(4)(iv), 416.920(a)(4)(iv). If the claimant is capable of performing past relevant work, the claimant is not disabled. If the claimant is no longer capable of past relevant work, the ALJ proceeds to step five. See 20 C.F.R. § § 404.1520(f), 416.920(f).
At the fifth and final step, the ALJ determines whether, considering claimant's RFC, age, education, and work experience, the claimant is able to perform other work that is available in significant numbers in the national economy. 20 C.F.R. § § 404.1520(a)(4)(v), 416.920(a)(4)(v). If he is, the claimant is not disabled. If he is not, the claimant is disabled and entitled to benefits. Id.
Claimants have the burden of proof at steps one through four, subject to the presumption that Social Security hearings are nonadversarial and to the Commissioner's affirmative duty to assist claimants in fully developing the record even if they are represented by counsel. Tackett, 180 F.3d at 1098 and n. 3; Smolen v. Chater, 80 F.3d 1273, 1288 (9th Cir. 1996). If this burden is met, a prima facie case of disability is made, and the burden shifts to the Commissioner at step five. Tackett, 180 F.3d at 1098, 1100; Reddick, 157 F.3d at 721; 20 C.F.R. § § 404.1520, 416.920.
B. Medical Opinion Evidence Submitted to the Appeals Council
In Issue One, Plaintiff contends that the Commissioner failed to properly consider the opinion of his treating physician, Dr. Molina. (Joint Stip. at 3-9.) Plaintiff submitted Dr. Molina's opinion for the first time as part of his request for review in the Appeals Council, which made the opinion a part of Plaintiff's record. (AR at 4-5, 560-62.)
" The Commissioner's regulations permit claimants to submit new and material evidence to the Appeals Council and require the Council to consider that evidence in determining whether to review the ALJ's decision, so long as the evidence relates to the period on or before the ALJ's decision." Brewes v Commissioner of Social Sec. Admin., 682 F.3d 1157, 1162 (9th Cir. 2012); see also 20 C.F.R. § § 404.970(b), 416.1470(b). Here, when the Appeals Council found that the additional evidence submitted by Plaintiff provided no basis to change the ALJ's decision and denied Plaintiff's request for review, the ALJ's decision became the final decision of the Commissioner. See Meier v. Colvin, 727 F.3d 867, 871 (9th Cir. 2013). Moreover, Dr. Molina's opinion became " part of the administrative record, which the district court must consider when reviewing the Commissioner's final decision for substantial evidence." See Brewes, 682 F.3d at 1163.
Dr. Molina's opinion related to the period on or before the ALJ's decision because Dr. Molina issued it in June 2012, before the ALJ issued his decision in October 2012. (AR at 21, 562.)
Defendant contends that (1) the Appeals Council's denial of review is not subject to the Court's review; and (2) Plaintiff failed to show " good cause" for failing to produce Dr. Molina's opinion earlier. (See Joint Stip. at 6-8.) Neither contention is well-taken. Plaintiff is not challenging the Appeals Council's denial of review, but is challenging the ALJ's final decision, which is subject to the Court's review. See Taylor v. Commissioner of Social Sec. Admin., 659 F.3d 1228, 1231-32 (9th Cir. 2011) (rejecting argument that Appeals Council's decision is unreviewable by courts when claimant was seeking review of ALJ's final decision, not the Appeals Council's denial of review). Moreover, Plaintiff was not required to show good cause when he submitted Dr. Molina's opinion for the first time to the Appeals Council. See Brewes, 682 F.3d at 1162 (" Claimants need not show 'good cause' before submitting new evidence to the Appeals Council.").
Based on consideration of the administrative record on the whole, including Dr. Molina's opinion, the Court finds that substantial evidence does not support the Commissioner's final decision. The ALJ's decision included a determination that Plaintiff had a residual functional capacity (" RFC") for " less than a full range of light work, " including the ability to lift or carry twenty pounds occasionally and ten pounds frequently, and the ability to sit, stand, or walk for 6 hours in an eight hour workday. (AR at 16.) The ALJ also notably found, " There is no medical source statement that suggested functional limitations more restrictive than those functional limitations included in the residual functional capacity determined herein." (AR at 19.) However, Dr. Molina's opinion went directly to the ALJ's RFC determination and related finding: Dr. Molina opined that, based on Plaintiff's congestive heart failure and rheumatoid arthritis, Plaintiff should be limited to lifting and carrying less than ten pounds, and should be limited to standing, walking, or sitting for less than two hours in an eight-hour workday. (AR at 560.)
Since Dr. Molina's opinion was directly responsive to both the ALJ's RFC determination for less than a full range of light work and the ALJ's explicit finding that no medical opinion suggested functional limitations more restrictive than those included in the RFC determination, Dr. Molina's opinion might have changed the outcome of the case. Accordingly, reversal is warranted because substantial evidence did not support the Commissioner's final non-disability determination. See Brewes, 682 F.3d at 1164 (substantial evidence did not support Commissioner's final non-disability determination where additional evidence presented to Appeals Council was " directly responsive" to adverse vocational evidence relied upon by ALJ); Borrelli v. Commissioner of Social Sec., 570 Fed.Appx. 651, 652 (9th Cir. 2014) (now citable for its persuasive value per Ninth Circuit Rule 36-3) (same where additional evidence presented to Appeals Council went directly to ALJ's explicit finding of an absence of supporting medical evidence and therefore might have changed the outcome of the case); Cantrell v. Commissioner of Social Sec. Admin., 543 Fed.Appx. 653, 654 (9th Cir. 2013) (same where additional evidence presented to Appeals Council may have had " implications for the agency's reasons for denying benefits").
C. Remand is Required to Remedy the Defects in the Commissioner's Decision
The decision whether to remand for further proceedings is within the discretion of the district court. Harman v. Apfel, 211 F.3d 1172, 1175-1178 (9th Cir. 2000). Where there are outstanding issues that must be resolved before a determination can be made, and it is not clear from the record that the ALJ would be required to find the claimant disabled if all the evidence were properly evaluated, remand is appropriate. Id. at 1179. However, where no useful purpose would be served by further proceedings, or where the record has been fully developed, it is appropriate to exercise this discretion to direct an immediate award of benefits. Id. (decision whether to remand for further proceedings turns upon their likely utility).
Here, further proceedings would be useful to provide the ALJ with an opportunity to consider Dr. Molina's opinion in the first instance. See Taylor, 659 F.3d at 1233 (remanding for further proceedings with directions that ALJ properly consider treating physician's opinion that was presented for first time to Appeals Council); Cantrell, 543 Fed.Appx. at 654 (exercising discretion to remand " for additional evidence and findings, " including consideration of evidence that was presented for first time to Appeals Council). Moreover, even if the remaining issues were decided in Plaintiff's favor, Plaintiff's entitlement to benefits would not be clear from the existing record. See Strauss v. Commissioner of Social Sec. Admin., 635 F.3d 1135, 1138 (9th Cir. 2011) (remanding for further proceedings because reversal for award of benefits is appropriate only where the record demonstrates claimant is disabled within the meaning of the Social Security Act). Accordingly, because there remain outstanding issues to be resolved, remand for further proceedings is appropriate.
ORDER
Accordingly, IT IS ORDERED that:
1. The decision of the Commissioner is REVERSED.
2. This action is REMANDED to Defendant, pursuant to Sentence Four of 42 U.S.C. § 405(g), for further proceedings as discussed above.
3. The Clerk of the Court shall serve this Decision and Order and the Judgment herein on all parties or counsel.
JUDGMENT
IT IS ADJUDGED that this action is remanded to defendant for further proceedings pursuant to Sentence Four of 42 U.S.C. § 405(g) and consistent with the accompanying Decision and Order.