Kathleen Kutz v. Michael J Astrue, No. 5:2012cv01794 - Document 14 (C.D. Cal. 2013)

Court Description: MEMORANDUM OPINION AND ORDER by Magistrate Judge Paul L. Abrams. IT IS HEREBY ORDERED that: (1) plaintiff's request for remand is granted; (2) the decision of the Commissioner is reversed; and (3) this action is remanded to defendant for further proceedings consistent with this Memorandum Opinion. ***See attached Order for details.*** (es)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 EASTERN DIVISION 11 12 KATHLEEN KUTZ, 13 Plaintiff, 14 15 16 v. CAROLYN W. COLVIN, ACTING COMMISSIONER OF SOCIAL SECURITY ADMINISTRATION, 17 Defendant. ) ) ) ) ) ) ) ) ) ) ) ) No. ED CV 12-1794-PLA MEMORANDUM OPINION AND ORDER 18 19 I. 20 PROCEEDINGS 21 Plaintiff filed this action on October 23, 2012, seeking review of the Commissioner s denial 22 of her application for Supplemental Security Income payments. The parties filed Consents to 23 proceed before the undersigned Magistrate Judge on November 5, 2012, and December 4, 2012. 24 Pursuant to the Court s Order, the parties filed a Joint Stipulation on June 17, 2013, that 25 addresses their positions concerning the disputed issues in the case. The Court has taken the 26 Joint Stipulation under submission without oral argument. 27 / 28 / 1 II. 2 BACKGROUND 3 Plaintiff was born on October 24, 1959. [Administrative Record ( AR ) at 63.] She 4 completed one year of college [AR at 140], and has past relevant work experience as a substance 5 abuse prevention specialist and a youth advocate. [AR at 136, 150-57.] 6 On February 4, 2009, plaintiff filed an application for Supplemental Security Income 7 payments, alleging that she has been unable to work since January 29, 2009, due to cirrhosis of 8 the liver, chronic obstructive pulmonary disease, and hepatitis C. [AR at 63-64, 122-26, 134-41.] 9 After her application was denied initially and on reconsideration, plaintiff requested a hearing 10 before an Administrative Law Judge ( ALJ ). [AR at 65-79.] A hearing was held on July 28, 2010, 11 at which time plaintiff appeared with counsel and testified on her own behalf. [AR at 47-60.] On 12 September 22, 2010, the ALJ determined that plaintiff was not disabled. [AR at 33-38.] On 13 August 20, 2012, the Appeals Council granted plaintiff s request for review, but then affirmed the 14 ALJ s conclusion that plaintiff was not disabled. [AR at 6-12, 28.] This action followed. 15 16 III. 17 STANDARD OF REVIEW 18 Pursuant to 42 U.S.C. § 405(g), this Court has authority to review the Commissioner s 19 decision to deny benefits. The decision will be disturbed only if it is not supported by substantial 20 evidence or if it is based upon the application of improper legal standards. Moncada v. Chater, 21 60 F.3d 521, 523 (9th Cir. 1995); Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992). 22 In this context, the term substantial evidence means more than a mere scintilla but less 23 than a preponderance -- it is such relevant evidence that a reasonable mind might accept as 24 adequate to support the conclusion. Moncada, 60 F.3d at 523; see also Drouin, 966 F.2d at 25 1257. When determining whether substantial evidence exists to support the Commissioner s 26 decision, the Court examines the administrative record as a whole, considering both adverse and 27 supporting evidence. Drouin, 966 F.2d at 1257; Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 28 2 1 1989). Where the evidence is susceptible to more than one rational interpretation, the Court must 2 defer to the decision of the Commissioner. Moncada, 60 F.3d at 523; Andrews v. Shalala, 53 F.3d 3 1035, 1039-40 (9th Cir. 1995); Drouin, 966 F.2d at 1258. 4 5 IV. 6 THE EVALUATION OF DISABILITY 7 Persons are disabled for purposes of receiving Social Security benefits if they are unable 8 to engage in any substantial gainful activity owing to a physical or mental impairment that is 9 expected to result in death or which has lasted, or is expected to last, for a continuous period of 10 at least twelve months. 42 U.S.C. § 423(d)(1)(A); Drouin, 966 F.2d at 1257. 11 12 A. THE FIVE-STEP EVALUATION PROCESS 13 The Commissioner (or ALJ) follows a five-step sequential evaluation process in assessing 14 whether a claimant is disabled. 20 C.F.R. § 416.920; Lester v. Chater, 81 F.3d 821, 828 n.5 (9th 15 Cir. 1995, as amended April 9, 1996). In the first step, the Commissioner must determine whether 16 the claimant is currently engaged in substantial gainful activity; if so, the claimant is not disabled 17 and the claim is denied. Id. If the claimant is not currently engaged in substantial gainful activity, 18 the second step requires the Commissioner to determine whether the claimant has a severe 19 impairment or combination of impairments significantly limiting her ability to do basic work 20 activities; if not, a finding of nondisability is made and the claim is denied. Id. If the claimant has 21 a severe impairment or combination of impairments, the third step requires the Commissioner 22 to determine whether the impairment or combination of impairments meets or equals an 23 impairment in the Listing of Impairments ( Listing ) set forth at 20 C.F.R., Part 404, Subpart P, 24 Appendix 1; if so, disability is conclusively presumed and benefits are awarded. Id. If the 25 claimant s impairment or combination of impairments does not meet or equal an impairment in the 26 Listing, the fourth step requires the Commissioner to determine whether the claimant has sufficient 27 residual functional capacity to perform her past work; if so, the claimant is not disabled and the 28 3 1 claim is denied. Id. The claimant has the burden of proving that she is unable to perform past 2 relevant work. Drouin, 966 F.2d at 1257. If the claimant meets this burden, a prima facie case 3 of disability is established. The Commissioner then bears the burden of establishing that the 4 claimant is not disabled, because she can perform other substantial gainful work available in the 5 national economy. The determination of this issue comprises the fifth and final step in the 6 sequential analysis. 20 C.F.R. § 416.920; Lester, 81 F.3d at 828 n.5; Drouin, 966 F.2d at 1257. 7 8 B. THE ALJ S APPLICATION OF THE FIVE-STEP PROCESS 9 In this case, at step one, the ALJ determined that plaintiff had not engaged in any 10 substantial gainful activity since the application date, February 4, 2009. [AR at 35.] At step two, 11 the ALJ concluded that plaintiff has the following severe impairments: gastrointestinal disorder; 12 renal disorder; and disorder of the endocrine system. [Id.] At step three, the ALJ determined that 13 plaintiff s impairments do not meet or medically equal any of the impairments in the Listing. [Id.] 14 The ALJ further determined that plaintiff retained the residual functional capacity ( RFC )1 to 15 perform medium work as defined in 20 C.F.R. § 416.967(c),2 except that she is restricted from 16 extremes of temperature, moisture, fumes or dust particles along with working with heavy and 17 moving machineries. [Id.] At step four, the ALJ concluded that plaintiff can perform her past 18 relevant work as a youth advocate. [AR at 38.] Accordingly, the ALJ determined that plaintiff has 19 not been under a disability from February 4, 2009, to September 22, 2010, the date of the 20 decision. [Id.] 21 22 C. THE APPEALS COUNCIL S DECISION 23 After granting plaintiff s request for review of the ALJ s decision, the Appeals Council 24 adopted the ALJ s findings at steps one, two, and three of the sequential evaluation process, 25 1 26 27 28 RFC is what a claimant can do despite existing exertional and nonexertional limitations. See Cooper v. Sullivan, 880 F.2d 1152, 1155 n.5 (9th Cir. 1989). 2 20 C.F.R. § 416.967(c) defines medium work as work that involves lifting no more than 50 pounds at a time with frequent lifting or carrying of objects weighing up to 25 pounds. 4 1 except that it also found plaintiff s obesity to be a severe impairment at step two. [AR at 9-10.] 2 The Appeals Council then found that plaintiff retained the RFC to lift and/or carry 50 pounds 3 occasionally and 25 pounds frequently as well as stand, walk or sit for six hours in an eight-hour 4 workday. [AR at 9-10.] It added: She also was precluded from concentrated exposure to 5 extreme temperatures, moisture, and pulmonary irritants. Additionally, she was unable to be 6 exposed to unprotected heights or moving machinery. Furthermore, she was restricted to frequent 7 climbing of ramps and stairs, bending, kneeling, stooping, crawling, and crouching[;] and was 8 limited to occasional climbing of ladders, ropes, and scaffolds. [AR at 10.] At step four, the 9 Appeals Council adopted the ALJ s determination that plaintiff can perform her past relevant work 10 as a youth advocate. [AR at 10-11.] The Appeals Council therefore concluded that plaintiff was 11 not under a disability from February 4, 2009, to September 22, 2010. [AR at 10-11.] 12 13 V. 14 THE COMMISSIONER S DECISION 15 Plaintiff contends that the ALJ: (1) improperly determined that plaintiff s cirrhosis of the liver, 16 hepatitis C, and back pain are non-severe; (2) failed to properly consider plaintiff s obesity at step 17 two and step three of the five-step evaluation process; (3) should have called a vocational expert 18 to testify; and (4) failed to properly evaluate plaintiff s credibility. [Joint Stipulation ( JS ) at 3.] As 19 set forth below, the Court agrees with plaintiff, in part, and remands the matter for further 20 proceedings. 21 22 A. PLAINTIFF S SUBJECTIVE SYMPTOM TESTIMONY 23 To determine whether a claimant s testimony regarding subjective pain or symptoms is 24 credible, an ALJ must engage in a two-step analysis. Lingenfelter v. Astrue, 504 F.3d 1028, 25 1035-36 (9th Cir. 2007). First, the ALJ must determine whether the claimant has presented 26 objective medical evidence of an underlying impairment which could reasonably be expected to 27 produce the pain or other symptoms alleged. Id. (quoting Bunnell v. Sullivan, 947 F.2d 341, 344 28 5 1 (9th Cir. 1991) (en banc)). Second, if the claimant meets the first test, the ALJ may only reject the 2 claimant s testimony about the severity of her symptoms upon (1) finding evidence affirmatively 3 suggesting that the claimant was malingering, or (2) offering specific, clear and convincing reasons 4 for doing so. See Dodrill v. Shalala, 12 F.3d 915, 918 (9th Cir. 1999); see also Lingenfelter, 504 5 F.3d at 1036; Benton v. Barnhart, 331 F.3d 1030, 1040 (9th Cir. 2003). The factors to be 6 considered in weighing a claimant s credibility include: (1) the claimant s reputation for 7 truthfulness; (2) inconsistencies either in the claimant s testimony or between the claimant s 8 testimony and her conduct; (3) the claimant s daily activities; (4) the claimant s work record; and 9 (5) testimony from physicians and third parties concerning the nature, severity, and effect of the 10 symptoms of which the claimant complains. See Thomas v. Barnhart, 278 F.3d 947, 958-59 (9th 11 Cir. 2002); see also 20 C.F.R. §§ 404.1529(c), 416.929(c). If properly supported, the ALJ s 12 credibility determination is entitled to great deference. See Green v. Heckler, 803 F.2d 528, 532 13 (9th Cir. 1986). 14 In a March 7, 2009, exertion questionnaire, plaintiff stated that she cannot sit or stand for 15 more than twenty-five to thirty minutes without experiencing swelling in her legs and ankles. [AR 16 at 158-60.] She also stated that she grow[s] short of breath just sitting still. [AR at 158.] Plaintiff 17 reported that with respect to walking, she grows tired and worn out after walking only a few 18 feet, and that walking fifty feet leaves[] [her] breathless. [Id.] She further reported that she can 19 perform chores for only fifteen minutes at a time because of her shortness of breath and the pain 20 in her back legs. [AR at 160.] 21 At her July 28, 2010, administrative hearing, plaintiff testified that she cannot sit, stand, lay, 22 walk, do anything for more than 15 to 20 minutes before [she] [has] to get up and change positions 23 or it causes [her] a lot of pain. She stated that when she last worked, these limitations were 24 causing her to miss work, so [her employer] chose to lay [her] off. [AR at 50.] When counsel 25 asked plaintiff to what condition she attributed these limitations, she testified that she attributed 26 them to her liver problems, as she had been diagnosed with hepatitis C in 2002, which had 27 advanced to cirrhosis of the liver by the time she was laid off, and was considered liver failure 28 6 1 by the time of the hearing. [AR at 50-51.] Plaintiff stated that she has never had Interferon 2 treatments for her liver because when she was initially diagnosed with liver problems in 2002, she 3 was receiving treatment for a substance abuse addiction. She stated that during her first job after 4 that time -- where she worked for two years -- [t]hey were running the tests and determining what 5 they wanted to do. [AR at 53.] Thereafter, she began working for a non-profit organization that 6 [did not] offer any medical insurance [AR 53-54] -- the same job from which she was laid off in 7 2009. [AR at 136, 150.] Plaintiff explained, So I haven t had medical insurance and any way to 8 get anything done. [AR at 54.] Plaintiff testified that at the time of the hearing, she had MIA 9 insurance (i.e., medically indigent adult insurance), and as a result was not taking anything for 10 her liver. She explained that MIA insurance [does not] do too much for [the] liver, and that she 11 was awaiting [a] referral[] from MIA to go to ... a hepatitis clinic, but had not yet received that 12 referral. [AR at 53.] She also stated that she had been waiting probably ten weeks to hear from 13 one treating physician about being put on a list for a liver transplant. [AR at 55.] Plaintiff stated 14 that she need[s] ... medical insurance [so] that [she] can get something done for [her] liver. [AR 15 at 56-57.] 16 In addition to her liver problems, plaintiff testified that she has congestive heart failure, 17 which results in her heart beating really fast for no reason, dizziness, vertigo, and swelling in her 18 legs and feet. [AR at 55, 57.] Plaintiff stated that she also has kidney failure and frequent 19 diarrhea, and is not able to sleep through the night. [AR at 52, 56.] She stated that she has good 20 periods of anywhere from several days to two weeks, but then it s like [she] hit[s] a wall and 21 literally, just to get from [her] bed to [her] bathroom, which is just a few feet, it takes every ounce 22 of energy [she has]. [AR at 52.] She noted that in May of 2010, she was in a coma and 23 hospitalized for three days, and that she had lost seventy pounds since that hospitalization. [Id.] 24 Plaintiff testified that she cannot lift more than maybe five pounds because anything more than 25 that would put a real bad strain on [her] back. [AR at 56.] 26 In his decision, the ALJ discounted plaintiff s credibility for several reasons. [See AR at 36- 27 37.] In requesting review of the ALJ s decision, plaintiff requested that the Appeals Council review, 28 7 1 among other issues, the ALJ s evaluation of plaintiff s credibility. [AR at 187-90.] Nevertheless, 2 the Appeals Council did not discuss plaintiff s credibility in its decision, nor did it explicitly assign 3 any weight to plaintiff s credibility. [See AR at 9-11.] As discussed infra, to the extent that the 4 Appeals Council implicitly adopted the ALJ s findings with respect to plaintiff s credibility, that 5 adoption was improper, as the ALJ s reasons for discounting plaintiff s subjective symptom 6 testimony were not supported by substantial evidence. Further, to the extent the Appeals Council 7 did not adopt the ALJ s credibility finding, it did not specify what weight it assigned to plaintiff s 8 credibility, and this Court decline[s] to review the record to ascertain whether substantial evidence 9 might support these findings not made. See Byrnes v. Shalala, 60 F.3d 639, 641 (9th Cir. 1995) 10 (quoting Preston v. Heckler, 769 F.2d 988, 990 (4th Cir. 1985)). Under either scenario, remand 11 is warranted. 12 With respect to the first scenario, the Court notes that at step one of the two-step credibility 13 analysis, the ALJ found that plaintiff s medically determinable impairment could reasonably be 14 expected to cause the alleged symptoms. [AR at 37.] The ALJ nevertheless concluded that 15 plaintiff s statements concerning the intensity, persistence and limiting effects of these symptoms 16 are not credible to the extent they are inconsistent with the [ALJ s RFC findings for plaintiff]. [Id.] 17 Thus, at step two, as the record contains no evidence of malingering by plaintiff,3 the ALJ was 18 required to offer specific, clear and convincing reasons for rejecting her subjective symptom 19 testimony. See Lingenfelter, 504 F.3d at 1036. General findings are insufficient; rather, the ALJ 20 must identify what testimony is not credible and what evidence undermines the claimant s 21 complaints. Reddick v. Chater, 157 F.3d 715, 722 (9th Cir. 1998) (quoting Lester, 81 F.3d at 22 834); see also Dodrill, 12 F.3d at 918. 23 The ALJ rejected plaintiff s subjective symptom testimony because he found that: (1) her 24 records do not support her allegation that she is unable to perform work activity; (2) she was 25 never treated for her diagnosis of hepatitis C although she obviously has access to good medical 26 27 28 3 The ALJ made no finding that plaintiff was malingering, nor does the evidence suggest plaintiff was doing so. 8 1 care, and a treating physician recommended conservative treatment for [her] condition ; and (3) 2 her treatment providers have not opined she requires greater work restrictions for a 12 month 3 period. 4 [AR at 37.] 4 With respect to the first reason, once a claimant has produced objective medical evidence 5 of an impairment or impairments, she need not produce objective medical evidence of the pain 6 or fatigue itself, or the severity thereof. Smolen v. Chater, 80 F.3d 1273, 1282 (9th Cir. 1996); 7 see Johnson v. Shalala, 60 F.3d 1428, 1433 (9th Cir. 1995) ( once an impairment is medically 8 established, the ALJ cannot require medical support to prove the severity of the pain ). The case 9 law holding that [a] claimant need not produce objective medical evidence of the pain or fatigue 10 itself, or the severity thereof, reflects the rationale that pain testimony may establish greater 11 limitations than can medical evidence alone. Smolen, 80 F.3d at 1282 (internal citations omitted); 12 Burch v. Barnhart, 400 F.3d 676, 680 (9th Cir. 2005) (citing Social Security Ruling5 96-7p). The 13 Ninth Circuit has noted that the nature of pain and other such symptoms is highly subjective and 14 idiosyncratic such that [t]he amount of pain [or fatigue] caused by a given physical impairment 15 can vary greatly from individual to individual. Smolen, 80 F.3d at 1282 (internal citations omitted). 16 Thus, while an ALJ may consider whether a lack of objective medical evidence supports the 17 degree of limitation, this cannot form the sole basis for discounting pain testimony. Burch, 400 18 F.3d at 681. Accordingly, even if the ALJ s characterization of the medical evidence were 19 supported by substantial evidence, he can only rely upon this rationale to discount plaintiff s 20 21 22 23 24 25 26 27 28 4 While the ALJ also stated that plaintiff s records do not establish an inability to perform work activity for any twelve month period of time, the ALJ did not identify any gap in plaintiff s medical records, or state that her records established an inability to work for a period of less than twelve months. Thus, it does not appear from the ALJ s decision that he rejected her subjective symptom testimony on the principal basis that her records did not support the duration of her alleged disability. 5 Social Security Rulings ( SSR ) do not have the force of law. Nevertheless, they constitute Social Security Administration interpretations of the statute it administers and of its own regulations, and are given deference unless they are plainly erroneous or inconsistent with the Act or regulations. Han v. Bowen, 882 F.2d 1453, 1457 (9th Cir. 1989). 9 1 subjective symptom testimony if either of his other reasons are proper. As discussed infra, they 2 are not. 3 Second, it appears that the ALJ rejected plaintiff s pain testimony because she was never 4 treated for her diagnosis of hepatitis C although she obviously has access to good medical care, 5 and because during a hospitalization in April, 2010, a treating physician -- Dr. Menon A. 6 Moothedath -- recommended conservative treatment for [plaintiff s] condition. [AR at 37.] Neither 7 of these statements by the ALJ is a convincing reason to discount plaintiff s credibility on the basis 8 of conservative treatment, however. 9 With respect to her hepatitis C, plaintiff testified that she has not received treatment 10 because she has only had medical insurance that would provide such treatment during her first 11 job -- which she held from December 2003 to December 2005 [AR at 136] -- and during that period 12 the doctors were running the tests and determining what they wanted to do. She further testified 13 that from December 2005 to January 2009 -- i.e., during her second job -- she did not have 14 medical insurance at all. Finally, although at the time of the hearing she had what she referred 15 to as MIA insurance, she also stated that that coverage had not do[ne] too much for her liver. 16 She testified that as of the time of the hearing, she was awaiting referral to a hepatitis clinic, as 17 well as possible placement on an eligibility list to receive a liver transplant. The ALJ did not 18 acknowledge any of this testimony in concluding that plaintiff was never treated for her diagnosis 19 of hepatitis C although she obviously has access to good medical care. Thus, that statement by 20 the ALJ was a mischaracterization of the evidence contained in the record concerning plaintiff s 21 treatment for her hepatitis C, which was error. See Gallant v. Heckler, 753 F.2d 1450, 1456 (9th 22 Cir. 1984) (error for an ALJ to ignore or misstate the competent evidence in the record in order 23 to justify her conclusion); see also Reddick, 157 F.3d at 722-23 (it is impermissible for the ALJ to 24 develop an evidentiary basis by not fully accounting for the context of materials or all parts of the 25 testimony and reports ); Day v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 1975) (an ALJ is not 26 permitted to reach a conclusion simply by isolating a specific quantum of supporting evidence ). 27 28 10 1 With respect to Dr. Moothedath s recommendation, that doctor examined plaintiff on April 2 26, 2010, and found that she had end-stage liver disease as well as [c]oagulopathy, with 3 decreased platelets and abnormal coagulation, could be the factor for the perinephric hematoma, 4 which may have to be corrected. [AR at 433-34.] Dr. Moothedath recommended [c]onservative 5 treatment for the hematoma, and also stated that he would recommend transfer to a referral 6 center for transplant, even though [plaintiff] is an unlikely candidate because of her history of 7 substance abuse. He concluded his recommendations by stating that plaintiff s overall prognosis 8 [was] guarded and that he [would] recommend conservative treatment and see the response. 9 [AR at 434.] While it is not clear from this last statement for which condition or conditions Dr. 10 Moothedath stated he was recommending conservative treatment, he characterized plaintiff s liver 11 disease as end-stage, and did not discuss any treatment options other than a possible liver 12 transplant. Thus, from the context of Dr. Moothedath s overall statements, it does not appear that 13 he found only conservative treatment appropriate for plaintiff s liver problems. Indeed, he found 14 that a transplant may have been warranted. 15 As to his third reason to discount plaintiff s credibility, the ALJ stated that her treatment 16 providers have not opined she requires greater work restrictions for a 12 month period. [AR at 17 37.] However, neither did any of plaintiff s treatment providers opine that she does not require 18 greater work restrictions than those in the ALJ s RFC determination. The Court does not find the 19 fact that there is no treating opinion in the record setting forth more limited work restrictions than 20 those in the RFC -- when the record does not contain any treating opinion concerning plaintiff s 21 limitations -- to be a convincing reason to discredit plaintiff s pain testimony. See Lingenfelter, 504 22 F.3d at 1036. Moreover, the Court notes that the majority of plaintiff s treatment history in the 23 Administrative Record consists of records from her visits to the emergency room [see, e.g., AR 24 at 223-24, 237-38, 243-46, 319, 369-71, 400-05, 434], and the ALJ does not explain why he would 25 expect plaintiff s emergency treatment records to reflect any long-term work restriction opinions. 26 The ALJ failed to offer any legally adequate reasons for discounting plaintiff s credibility. 27 Accordingly, whether the Appeals Council adopted the ALJ s credibility finding or was silent on the 28 11 1 issue of what weight is due plaintiff s subjective symptom testimony, remand is warranted on this 2 issue. 3 4 B. PLAINTIFF S OBESITY AT STEP TWO AND STEP THREE 5 Next, plaintiff asserts that the ALJ failed to determine that plaintiff s obesity was a severe 6 impairment[,] nor did he properly determine the effect of [] plaintiff s obesity upon her other 7 impairments, ability to work, and general health. [JS at 8-12.] 8 A severe impairment, or combination of impairments, is defined as one that significantly 9 limits physical or mental ability to do basic work activities. 20 C.F.R. § 416.920. The Supreme 10 Court has recognized that including a severity inquiry at the second stage of the evaluation 11 process permits the [Commissioner] to identify efficiently those claimants whose impairments are 12 so slight that they are unlikely to be found disabled even if the individual s age, education, and 13 experience are considered. Corrao v. Shalala, 20 F.3d 943, 949 (9th Cir. 1994) (citing Bowen 14 v. Yuckert, 482 U.S. 137, 153, 107 S. Ct. 2287, 96 L. Ed. 2d 119 (1987)). However, an overly 15 stringent application of the severity requirement would violate the statute by denying benefits to 16 claimants who meet the statutory definition of disabled. Corrao, 20 F.3d at 949 (citing Bowen 17 v. Yuckert, 482 U.S. at 156-58). Despite use of the term severe, most circuits, including the 18 Ninth Circuit, have held that the step-two inquiry is a de minimis screening device to dispose of 19 groundless claims. Smolen, 80 F.3d at 1290 (citing Bowen v. Yuckert, 482 U.S. at 153-54); see 20 Hawkins v. Chater, 113 F.3d 1162, 1169 (10th Cir. 1997) ( [a] claimant s showing at level two that 21 he or she has a severe impairment has been described as de minimis ); see also Hudson v. 22 Bowen, 870 F.2d 1392, 1396 (8th Cir. 1989) (evaluation can stop at step two only when there is 23 no more than minimal effect on ability to work). 24 An impairment or combination of impairments should be found to be non-severe only 25 when the evidence establishes merely a slight abnormality that has no more than a minimal effect 26 on an individual s physical or mental ability to do basic work activities. See Corrao, 20 F.3d at 27 949 (citing Yuckert v. Bowen, 841 F.2d 303, 306 (9th Cir. 1988)); see also 20 C.F.R. § 28 12 1 416.921(a). Basic work activities mean the abilities and aptitudes necessary to do most jobs, 2 including physical functions ..., [u]nderstanding, carrying out, and remembering simple 3 instructions, [u]se of judgment, [r]esponding appropriately to supervision, co-workers and usual 4 work situations, and [d]ealing with changes in a routine work setting. 20 C.F.R. § 416.921(b). 5 In determining a claimant s disability status, an ALJ has the responsibility to determine the 6 claimant s RFC after considering all of the relevant medical and other evidence in the record. 7 20 C.F.R. §§ 416.945(a)(3), 416.946(c). Thus, at step three, an RFC that fails to take into 8 account a claimant s limitations is defective. Valentine v. Comm r of Social Sec. Admin., 574 F.3d 9 685, 690 (9th Cir. 2009). 10 Defendant contends that there is no cause for remand on this issue because the Appeals 11 Council s decision is the final decision of the Commissioner, and the Appeals Council found 12 plaintiff s obesity to be a severe impairment at step two and limited her RFC accordingly at step 13 three. [JS at 12-13.] The Court agrees. 20 C.F.R. § 422.210(a) states that: A claimant may 14 obtain judicial review of a decision by an administrative law judge if the Appeals Council has 15 denied the claimant s request for review, or of a decision by the Appeals Council when that is the 16 final decision of the Commissioner. Here, the Appeals Council granted plaintiff s request for 17 review and issued its own decision, and thus the Court reviews the Appeals Council s decision as 18 the final decision of the Commissioner.6 Further, as defendant points out, the Appeals Council 19 found that plaintiff s obesity is a severe impairment and also rendered an RFC determination that 20 is more restrictive than the ALJ s RFC determination. [Compare AR at 9-10 with AR at 35.] The 21 Appeals Council stated that in reaching its conclusion concerning plaintiff s RFC, it had 22 considered the combined effects of [plaintiff s] obesity on her other impairments in accordance 23 with SSR 02-1p. [AR at 10.] As plaintiff does not challenge the obesity findings of the Appeals 24 Council at steps two and three, and as the Appeals Council found plaintiff s obesity to be severe 25 26 6 27 28 For this reason, to the extent plaintiff argues that the ALJ erred by making certain findings, the Court herein only addresses plaintiff s arguments to the extent that the Appeals Council adopted or did not explicitly disagree with any of those findings of the ALJ. 13 1 and considered its effects in rendering an RFC determination, remand is not warranted on 2 plaintiff s second contention of error.7 3 4 C. PLAINTIFF S OTHER STEP TWO CONTENTIONS 5 6 In her first contention of error, plaintiff asserts that the ALJ erred in concluding that certain other of her alleged impairments were not severe impairments at step two. 7 1. 8 Plaintiff argues that the ALJ improperly concluded that her hepatitis C and cirrhosis of the 9 liver are not severe impairments. [JS at 3-6.] The Appeals Council likewise found that plaintiff s 10 Hepatitis C and Cirrhosis of the Liver hepatitis C and cirrhosis of the liver are not severe impairments at step two. [AR at 9-10.] 11 In determining plaintiff s RFC, the Appeals Council stated that it was persuaded by the 12 physical and neurological examinations of examining physician Bryan To, as well as the opinions 13 of Dr. To, [nonexamining physician] F. Kalmar [] and [nonexamining physician] J. Ross []. [AR 14 at 10 (citing AR at 192-205, 217-18).] All three of these physicians either diagnosed plaintiff with 15 hepatitis C and cirrhosis of the liver, or acknowledged treating medical records reflecting these 16 diagnoses. [See AR at 195, 204, 218.] CT scans and ultrasounds on various occasions in 2009 17 and 2010 revealed cirrhosis of the liver. [See AR at 242, 251, 335, 343, 356, 392-93, 425.] 18 Further, plaintiff was consistently and frequently diagnosed with both hepatitis C and cirrhosis of 19 the liver. [See, e.g., AR at 209-11, 216, 221, 223-24, 237-38, 243-46, 327, 369-71, 402-05, 434, 20 436.] 21 Moreover, as noted supra, plaintiff testified that due to her liver problems, she cannot sit, 22 stand, lay, walk, do anything for more than 15 to 20 minutes before [she] [has] to get up and 23 change positions or it causes [her] a lot of pain. [AR at 50-51.] While it does not appear that 24 plaintiff is in a position to definitively attribute these functional limitations to her liver problems, at 25 least a few of her medical records may support her testimony. [See AR at 209, 223-24.] Thus, 26 27 28 7 The Court does not hereby affirm the Appeals Council s RFC determination, since the issues for which the Court remands this case (supra and infra) may impact on that determination. 14 1 as discussed herein, to the extent the Appeals Council implicitly adopted the ALJ s legally 2 inadequate findings concerning plaintiff s credibility, the Appeals Council s conclusion -- that 3 plaintiff s hepatitis C and cirrhosis of the liver have no more than a minimal effect on her physical 4 ability to do basic work activities -- may not be supported by substantial evidence. On the other 5 hand, to the extent the Appeals Council did not adopt the ALJ s credibility finding, the Court is 6 unable to review whether the Appeals Council properly found plaintiff s hepatitis C and cirrhosis 7 of the liver non-severe in light of the medical evidence in the record and plaintiff s testimony that 8 her liver disease prevents her from sitting, standing, laying, or walking for more than fifteen to 9 twenty minutes at a time. See Byrnes, 60 F.3d at 641. Thus, remand is warranted on this portion 10 of plaintiff s first contention of error. 11 2. Back Pain 12 Plaintiff also argues that the ALJ erred in concluding that plaintiff s back pain is not a severe 13 impairment. [JS at 5-6.] Like the ALJ, the Appeals Council found at step two that plaintiff s back 14 pain was not a severe impairment. [AR at 9-10.] 15 The record reflects the following evidence of plaintiff s back problems: a February 2, 2009, 16 x-ray revealed [d]egenerative change of the spine [AR at 276]; plaintiff went to the emergency 17 room on April 1, 2010, complaining of lower back pain and was diagnosed with [l]ow [b]ack [p]ain 18 and prescribed medications [AR at 400-01]; the next day, she visited the emergency room again, 19 still complaining of lower back pain -- but this time with pain radiating down [her left] leg -- and 20 was diagnosed with lumbago and sciatica [AR at 319, 324]; and two CT scans taken on May 21, 21 2010, and May 26, 2010, revealed degenerative change in the spine. [AR at 343, 356.] 22 Plaintiff testified at the administrative hearing that she cannot lift more than maybe five 23 pounds because anything more than that would put a real bad strain on [her] back. Accordingly, 24 for the same reasons remand is warranted for the Appeals Council to reconsider whether 25 / 26 / 27 / 28 15 1 plaintiff s hepatitis C and cirrhosis of the liver are severe, remand is warranted for this portion of 2 plaintiff s first contention of error.8 See Byrnes, 60 F.3d at 641. 3 4 VI. 5 REMAND FOR FURTHER PROCEEDINGS 6 As a general rule, remand is warranted where additional administrative proceedings could 7 remedy defects in the Commissioner s decision. See Harman v. Apfel, 211 F.3d 1172, 1179 (9th 8 Cir.), cert. denied, 531 U.S. 1038 (2000); Kail v. Heckler, 722 F.2d 1496, 1497 (9th Cir. 1984). 9 In this case, remand is appropriate for the ALJ to properly evaluate plaintiff s credibility and 10 whether her impairments of hepatitis C, cirrhosis of the liver, and back pain are severe. 11 Accordingly, IT IS HEREBY ORDERED that: (1) plaintiff's request for remand is granted; 12 (2) the decision of the Commissioner is reversed; and (3) this action is remanded to defendant 13 for further proceedings consistent with this Memorandum Opinion. 14 15 This Memorandum Opinion and Order is not intended for publication, nor is it intended to be included in or submitted to any online service such as Westlaw or Lexis. 16 17 DATED: August 7, 2013 PAUL L. ABRAMS UNITED STATES MAGISTRATE JUDGE 18 19 20 21 22 23 24 25 26 27 28 8 In light of the remand of this action, the Court exercises its discretion not to address plaintiff s third contention of error. 16

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