Garabet Alexan Daniel v. Michael J. Astrue, No. 2:2010cv04825 - Document 25 (C.D. Cal. 2011)

Court Description: MEMORANDUM OPINION AND ORDER REVERSING DECISION OF THE COMMISSIONER OF SOCIAL SECURITY AND REMANDING FOR FURTHER PROCEEDINGS by Magistrate Judge John E. McDermott. See attached order for details. (es)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 9 10 11 GARABET ALEXAN DANIEL, 12 Plaintiff, 13 v. 14 MICHAEL J. ASTRUE, 15 Commissioner of Social Security, 16 Defendant. ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 10-4825-JEM MEMORANDUM OPINION AND ORDER REVERSING DECISION OF THE COMMISSIONER OF SOCIAL SECURITY AND REMANDING FOR FURTHER PROCEEDINGS 17 18 19 PROCEEDINGS On July 7, 2010, Garabet Alexan Daniel ( Plaintiff or Claimant or Daniel ) filed a 20 complaint seeking review of the decision by the Commissioner of the Social Security 21 Administration ( Commissioner ) denying Plaintiff s applications for Social Security Disability 22 Insurance and Supplemental Security Income benefits. The Commissioner filed an Answer 23 to the Complaint on January 13, 2011. On July 21, 2011, the parties filed a Joint Stipulation 24 ( JS ). 25 Pursuant to 28 U.S.C. § 636(c), both parties consented to proceed before the 26 undersigned Magistrate Judge. After reviewing the pleadings, transcripts, and administrative 27 record ( AR ), the Court concludes that the Commissioner s decision should be reversed and 28 1 remanded for further proceedings in accordance with this Memorandum Opinion and Order 2 and with law. BACKGROUND 3 4 Plaintiff Daniel is a 48 year old male who filed applications for Social Security 5 Disability Insurance and Supplemental Security Income benefits on November 27, 2006, 6 alleging disability beginning December 20, 2005. (AR 11.) Plaintiff has not engaged in 7 substantial gainful activity since that date. (AR 13.) 8 Plaintiff s claims were denied initially on March 29, 2007. (AR 11.) Plaintiff filed a 9 timely request for a hearing, which was held on August 26, 2008, in Pasadena, California, 10 before Administrative Law Judge ( ALJ ) James D. Goodman. (AR 11-21.) Plaintiff 11 appeared and testified. (AR 11.) Plaintiff was represented by counsel. (AR 11.) The ALJ 12 issued a decision denying benefits on September 25, 2008. (AR 11-21.) 13 Subsequent to the ALJ s decision, Plaintiff was found disabled as of October 31, 14 2008, the date of a subsequent application. (AR 2.) Plaintiff then requested review of the 15 September 25, 2008, decision on his first application. (AR 7.) The Appeals Council, 16 however, denied Plaintiff s request for review on April 27, 2010. (AR 1-3.) The Appeals 17 Council stated that it had considered the October 31, 2008, grant of benefits on the second 18 application but found that it did not warrant a change in the September 25, 2008, ALJ 19 decision on the first application. (AR 2.) DISPUTED ISSUES 20 21 As reflected in the Joint Stipulation, the issues Plaintiff raises as grounds for reversal 22 and remand are as follows: 23 1. Whether remand is warranted for consideration of onset pursuant to Social 24 Security Ruling 83-20. 25 2. Whether remand is warranted for the ALJ s failure to properly consider the severity 26 of Plaintiff s mental impairment. 27 28 2 STANDARD OF REVIEW 1 2 Under 42 U.S.C. § 405(g), this Court reviews the ALJ s decision to determine whether 3 the ALJ s findings are supported by substantial evidence and free of legal error. Smolen v. 4 Chater, 80 F.3d 1273, 1279 (9th Cir. 1996); see also DeLorme v. Sullivan, 924 F.2d 841, 846 5 (9th Cir. 1991) (ALJ s disability determination must be supported by substantial evidence and 6 based on the proper legal standards). 7 Substantial evidence means more than a mere scintilla, but less than a 8 preponderance. Saelee v. Chater, 94 F.3d 520, 521-22 (9th Cir. 1996) (quoting Richardson 9 v. Perales, 402 U.S. 389, 401 (1971)). Substantial evidence is such relevant evidence as a 10 reasonable mind might accept as adequate to support a conclusion. Richardson, 402 U.S. 11 at 401 (internal quotation marks and citation omitted). 12 This Court must review the record as a whole and consider adverse as well as 13 supporting evidence. Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006). 14 Where evidence is susceptible to more than one rational interpretation, the ALJ s decision 15 must be upheld. Morgan v. Comm r of the Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 16 1999). However, a reviewing court must consider the entire record as a whole and may not 17 affirm simply by isolating a specific quantum of supporting evidence. Robbins, 466 F.3d at 18 882 (quoting Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989)); see also Orn v. Astrue, 19 495 F.3d 625, 630 (9th Cir. 2007). 20 21 THE SEQUENTIAL EVALUATION The Social Security Act defines disability as the inability to engage in any substantial 22 gainful activity by reason of any medically determinable physical or mental impairment which 23 can be expected to result in death or . . . can be expected to last for a continuous period of 24 not less than 12 months. 42 U.S.C. §§ 423(d) (1)(A), 1382c(a)(3)(A). The Commissioner 25 has established a five-step sequential process to determine whether a claimant is disabled. 26 20 C.F.R. §§ 404.1520, 416.920. 27 28 3 1 The first step is to determine whether the claimant is presently engaging in substantial 2 gainful activity. Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). If the claimant is 3 engaging in substantial gainful activity, disability benefits will be denied. Bowen v. Yuckert, 4 482 U.S. 137, 140 (1987). Second, the ALJ must determine whether the claimant has a 5 severe impairment or combination of impairments. Parra, 481 F.3d at 746. An impairment is 6 not severe if it does not significantly limit the claimant s ability to work. Smolen, 80 F.3d 7 1273, 1290 (9th Cir. 1996). Third, the ALJ must determine whether the impairment is listed, 8 or equivalent to an impairment listed, in 20 C.F.R. Pt. 404, Subpt. P, Appendix I of the 9 regulations. Parra, 481 F.3d at 746. If the impediment meets or equals one of the listed 10 impairments, the claimant is presumptively disabled. Bowen v. Yuckert, 482 U.S. at 141. 11 Fourth, the ALJ must determine whether the impairment prevents the claimant from doing 12 past relevant work. Pinto v. Massanari, 249 F.3d 840, 844-45 (9th Cir. 2001). 13 Before making the step four determination, the ALJ first must determine the claimant s 14 residual functional capacity ( RFC ). 20 C.F.R. §§ 416.920(e). RFC is what one can still do 15 despite [his or her] limitations and represents an assessment based on all the relevant 16 evidence. 20 C.F.R. §§ 404.1545(a)(1), 416.945(a)(1). The RFC must account for all of the 17 claimant s impairments, including those that are not severe. 20 C.F.R. §§ 416.920(e), 18 416.945(a)(2); Social Security Ruling ( SSR ) 96-8p. 19 If the claimant cannot perform his or her past relevant work or has no past relevant 20 work, the ALJ proceeds to the fifth step and must determine whether the impairment 21 prevents the claimant from performing any other substantial gainful activity. Moore v. Apfel, 22 216 F.3d 864, 869 (9th Cir. 2000). The claimant bears the burden of proving steps one 23 through four, consistent with the general rule that at all times the burden is on the claimant to 24 establish his or her entitlement to benefits. Parra, 481 F.3d at 746. Once this prima facie 25 case is established by the claimant, the burden shifts to the Commissioner to show that the 26 claimant may perform other gainful activity. Lounsburry v. Barnhart, 468 F.3d 1111, 1114 27 28 4 1 (9th Cir. 2006). If the Commissioner cannot meet this burden, then the claimant is disabled 2 and entitled to benefits. Id. THE ALJ DECISION 3 4 In this case, the ALJ determined at step one of the sequential process that Plaintiff 5 has not engaged in substantial gainful activity since December 20, 2005, the alleged onset 6 date. (AR 13.) 7 At step two, the ALJ found that Plaintiff has the medically determinable severe 8 impairments of hypertension, diabetes and obesity. (AR 13.) At step three, however, the 9 ALJ determined that Claimant does not have an impairment or combination of impairments 10 that meets or medically equals the listed impairments in 20 C.F.R. Pt. 404, Subpt. P, 11 Appendix 1. (Ar 17.) 12 The ALJ then found that Claimant had the residual functional capacity to perform the 13 full range of medium work. (AR 18.) 14 At step four, the ALJ found that Claimant is capable of performing his past relevant 15 work as a diamond setter. (AR 20.) 16 Hence, the ALJ concluded that Plaintiff is not disabled within the meaning of the 17 Social Security Act. (AR 20.) 18 19 DISCUSSION The September 25, 2008, ALJ decision and April 27, 2010, Appeals Council decision 20 must be reversed and remanded under 42 U.S.C. § 405(g). The Court cannot determine 21 whether the September 25, 2008, ALJ decision is reconcilable with the October 28, 2008, 22 grant of benefits based on the record before the Court. The Appeals Council, in finding that 23 the subsequent grant of benefits did not warrant alteration of the September 25, 2008, denial 24 of benefits, failed to explain the basis for its finding or to provide a record sufficient for this 25 Court to evaluate the correctness of its decision. 26 27 28 5 1 A. Background 2 This case concerns Plaintiff Daniel s alleged mental impairment, which the ALJ did not 3 find severe or credible. Daniel had a successful jewelry business and owned several homes. 4 (AR 191.) When Daniel s wife announced she was divorcing him, he doused himself with 5 gasoline but did not set himself on fire. (AR 191.) His wife obtained a restraining order and, 6 when he violated it, Daniel served 10 months in jail. (AR 192.) Daniel became depressed 7 over the loss of his marriage, children and property and has received psychotropic 8 medications. (AR 13, 193-95.) 9 There were several conflicting psychiatric/psychological opinions in the record 10 regarding Daniel s mental condition. On March 14, 2007, psychiatrist Dr. William Goldsmith 11 diagnosed Daniel with major depression with psychotic features, and in need of psychiatric 12 care. (AR 14, 194-95.) He assessed Daniel with a Global Assessment of Functioning (GAF) 13 score of 48, indicative of serious symptoms. (AR 14.) On March 27, 2007, Dr. Raffi 14 Tashjian, a State reviewing psychiatrist, made the same diagnosis of major depression with 15 psychotic features. (AR 205.) She found Daniel to have moderate difficulties with social 16 functioning and limited him to simple, repetitive tasks with a minimal social contact. (AR 20517 215.) 18 The ALJ conceded that the above assessments of Plaintiff s mental condition would 19 meet the definition of severe. (AR 14.) The ALJ, however, discounted much of this evidence 20 because of concerns with Plaintiff s credibility. (AR 14-15.) Additionally, Claimant was 21 uncooperative with testing done by psychologist Dr. Lou Sherill. (AR 15.) Dr. Sherill 22 concluded that Claimant had only occupational and relational problems, not a psychiatric 23 diagnosis. (AR 15.) The ALJ was not persuaded that Daniel had legitimate psychiatric 24 symptoms. (AR 15.) 25 Dr. George Sabounjian began treating Plaintiff in January 2008. (AR 450-56.) In a 26 May 29, 2008, mental RFC, Dr. Sabounjian noted marked limitations and opined that 27 Claimant is incapable of working in any type of setting. He is unable to adapt to stresses 28 6 1 common to the work environment including attendance and schedule. (AR 368.) By this 2 assessment, Claimant s psychiatric symptoms were not only severe but listing level severe 3 and disabling. (AR 15.) The ALJ, however, rejected Dr. Sabounjian s opinion as not 4 sufficiently longitudinal and undermined by Plaintiff s lack of credibility. (AR 16.) In another 5 evaluation on December 18, 2008 (AR 458-61), after the ALJ decision, Dr. Sabounjian 6 indicated the same diagnosis of plaintiff as before (AR 460): due to his mental illness he 7 cannot maintain any job. (AR 460.) Dr. Sabounjian reported that Daniel has not responded 8 well to medication and his prognosis is poor. (AR 460-61.) This latter report was not 9 available to the ALJ but was available to the Appeals Council. 10 Other medical opinions include those of Dr. Bruce Sutkus, a psychologist who 11 evaluated Plaintiff in 2006 when he was in jail. (AR 415-17.) He found no evidence of 12 hallucinations or delusions, nor was Daniel suicidal or homicidal, but Dr. Sutkus found that 13 Daniel does have a temper problem and low frustration tolerance. (AR 417.) Dr. Sutkus 14 recommended anger management training as a condition of his probation. (AR 417.) 15 On July 23, 2007, Dr. Estelita Colica at Glendale Adventist diagnosed Daniel with 16 schizoaffective disorder versus bipolar, depressed, with psychotic features and mixed 17 personality disorder. (AR 328.) She assessed Claimant with a GAF score of 20, indicative 18 of someone who is a danger to himself and to others. In February 2008, the Los Angeles 19 County Department of Mental Health also diagnosed Daniel with major depressive disorder, 20 severe, with psychotic features and a GAF score of 35 indicative of major psychotic features. 21 (AR 14.) She prescribed Seroquel. (AR 14, 328.) 22 In reviewing the medical and other evidence, the ALJ determined that Plaintiff was not 23 credible. (AR 13-20.) The ALJ stated, I must conclude that more than brief situational 24 depression has not been established to a reasonable degree of medical certainty. (AR 1325 14.) The ALJ, based on inconsistencies in the record, found Plaintiff to be an individual 26 fabricating stories in an effort to obtain disability benefits. (AR 16.) 27 28 7 1 The ALJ s decision denying Plaintiff benefits on his first application is dated 2 September 25, 2008. Daniel, however, was determined to be disabled as of October 28, 3 2008, a little over a month later. The ALJ obviously did not have the benefit of the October 4 28, 2008, decision granting Plaintiff benefits but the Appeals Council did. On April 27, 2010, 5 the Appeals Council upheld the September 25, 2008, decision as follows: In looking at your case, we considered the reasons you disagree 6 7 with the decision and the additional evidence listed on the enclosed Order 8 of Appeals Council. We found that this information does not provide a 9 basis for changing the Administrative Law Judge s decision. Also, the Appeals Council considered the fact that since the date of 10 11 the Administrative Law Judge s decision, you were found to be under a 12 disability beginning October 31, 2008, based on the application(s) you 13 filed on October 31, 2008; however, the Council found that this 14 information does not warrant a change in the Administrative Law Judge s 15 decision. 16 (AR 12.) 17 Plaintiff seeks remand to consider the effect of the October 31, 2008, grant of benefits 18 on the September 28, 2008, ALJ decision. 19 B. Relevant Law 20 The Ninth Circuit recently reaffirmed the principle that remand is appropriate under 42 21 U.S.C. § 405(g) on a showing of new evidence which is material.1 Luna v. Astrue, 623 F.3d 22 1032, 1034 (9th Cir. 2010). The Court held that new evidence is material when it bears 23 directly and substantially on the matter in dispute , and if there is a reasonable possibility 24 25 26 27 28 1 On judicial review of ALJ findings, Section 405(g) provides in relevant part: The Court . . . may at any time order additional evidence to be taken before the Commissioner of Social Security, but only upon a showing that there is new evidence that is material and that there is good cause for the failure to incorporate such evidence into the record in the prior proceeding. 8 1 that the new evidence would have changed the outcome of the . . . determination, citing 2 Bruton v. Massanari, 268 F.3d 824, 827 (9th Cir. 2001), and Booz v. Sec y of Health & 3 Human Servs., 734 F.2d 1378, 1380 (9th Cir. 1984). 4 Luna, which neither party here acknowledges, specifically held that a subsequent 5 decision granting benefits was new and material evidence warranting remand of a first 6 application denial. Luna, 623 F.3d at 1034. Luna relied on two out of Circuit cases holding 7 that an award based on an onset date in immediate proximity to an earlier denial is worthy of 8 further scrutiny. Id., citing Reichard v. Barnhart, 285 F. Supp. 2d 728, 734 (S.D. W.Va. 2003) 9 (less than a week); Bradley v. Barnhart, 463 F. Supp. 2d 577, 580-81 (S.D. W.Va. 2006) 10 (one day). In Luna, the timeline was one day. Luna, 623 F.3d at 1034. The Ninth Circuit 11 commented, The reasonable possibility that the subsequent grant of benefits was based on 12 new evidence not considered by the ALJ as part of the first application indicates that further 13 consideration of the factual issues is appropriate to determine whether the outcome of the 14 first application should be different. Id. at 1034. 15 Luna also distinguishes Bruton, relied on heavily by the Commissioner here. Id. at 16 1035. Luna noted that Bruton was a case where the two decisions were easily reconciled 17 because the second, successful application involved different medical evidence, a different 18 time period, and a different age classification. Bruton, 268 F.3d at 827. That was not true in 19 Luna where the Court could not conclude based on the record before us whether the 20 decisions concerning Luna were reconcilable or consistent. Luna, 623 F.3d at 1035. Luna 21 may have presented new evidence or some other reason might explain the change; given 22 the uncertainty, the proper remedy for an inadequate record was to remand for further fact 23 finding. Id. See also Pereira v. Astrue, 2011 WL 251455, at *2 (D. Ariz. Jan. 26, 2011) 24 (adopting and following Luna). 25 C. Analysis 26 The ALJ decision did not have the benefit of Dr. Sabounjian s December 2008 27 evaluation or the subsequent decision granting benefits as of October 28, 2008. The 28 9 1 Appeals Council knew of this evidence but did not believe it would warrant a change in the 2 September 25, 2008, decision. (AR 1-2.) 3 The Appeals Council, however, does not explain its decision. The decision to grant 4 benefits as of October 28, 2008, was not made part of the record, nor was the medical 5 evidence that was the basis of the grant submitted in this case. There is no record to 6 indicate on what basis benefits were awarded or whether some of the same evidence such 7 as Dr. Sabounjian s December 2008 evaluation was considered. If the successful application 8 was based on mental impairments and Dr. Sabounjian s continuing treatment, and/or a 9 different result was reached as to Daniel s credibility, then the two decisions would not be 10 easily reconciled and there is a reasonable possibility that the outcome of Plaintiff s first 11 application might be different. This case differs somewhat from Luna in that the period from 12 the denial to the first application to the onset date of the second application is 33 days, not a 13 week or a day as in Luna and the cases it cites. Nonetheless, 33 days would not preclude 14 conflict if the favorable decision is based on Plaintiff s mental impairments and credibility 15 which have been an issue since at least 2006. The salient point is that there is no record for 16 this Court to review the correctness of the Appeals Council s decision. 17 The Commissioner s reliance on Bruton is misplaced. In Bruton, apparently there was 18 a record that permitted the District Court to find that the prior benefit denial was easily 19 reconcilable with the subsequent benefit grant, based on different medical evidence, a 20 different time period and a different age classification. Bruton, 268 F.3d at 827. Here, the 21 Court has no record to enable it to reach such a conclusion, and no basis for concluding that 22 the benefit grant is reconcilable or based on different issues and medical evidence. In 23 particular, the Court thinks it reasonably possible that Dr. Sabounjian s December 2008 24 evaluation was part of the medical evidence for the second application. 25 The Commissioner argues that it was Plaintiff s burden to prove disability during the 26 relevant time period, and that Plaintiff failed to provide conclusive evidence as to the basis of 27 the benefit grant. Yet Luna makes clear that a subsequent benefit grant with an onset date 28 in close proximity to an earlier benefit denial can constitute new and material evidence 10 1 warranting remand and, more to the point here, particularly where there is uncertainty due to 2 the lack of an adequate record. Luna, 623 F.3d at 1035. The Appeals Council chose to 3 consider the benefit grant but then failed to provide any explanation or supplement the 4 record to make it possible for this Court to review the correctness of the Appeals Council s 5 discounting of the benefit grant. That plainly was error under Luna. 6 Plaintiff asserts as a second issue that the ALJ improperly rejected the opinion of 7 Dr. Sabounjian, the treating physician. The Court, however, believes that it is premature to 8 resolve this issue at this time, without first knowing whether the benefit grant decision 9 credited Dr. Sabounjian and/or reached a different conclusion about Claimant s credibility. 10 On remand, the Appeals Council and/or ALJ are instructed to address the October 28, 11 2008, benefits grant, incorporate the decision and medical evidence from that case into this 12 case, and provide reasons why the benefits grant should have no bearing on this case if that 13 is the Commissioner s continuing position. ORDER 14 15 IT IS HEREBY ORDERED that the decision of the Commissioner of Social Security is 16 REVERSED and REMANDED for further proceedings in accordance with this Memorandum 17 and Order and with law. 18 LET JUDGMENT BE ENTERED ACCORDINGLY. 19 20 DATED: August 9, 2011 21 /s/ John E. McDermott JOHN E. MCDERMOTT UNITED STATES MAGISTRATE JUDGE 22 23 24 25 26 27 28 11

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