Unpublished Disposition, 855 F.2d 860 (9th Cir. 1985)

MEMORANDUM^* 

Leon Blakely appeals the district court's grant of summary judgment to the Secretary of Health and Human Services (Secretary) affirming the denial of Blakely's application for disability insurance benefits and supplemental security income benefits for the period between May 1982 and January 4, 1985. Blakely contends that the Administrative Law Judge (ALJ) erred in discrediting subjective complaints of pain and other nonexertional impairments, and that this error led the ALJ to misapply the medical vocational guidelines ("the grids") set forth at 20 C.F.R. Sec. 404 Subpt. P, App. 2 (1987).

We review the district court's grant of summary judgment de novo. Miller v. Heckler, 770 F.2d 845, 847 (9th Cir. 1985). We must affirm the denial of the disability claim if the Secretary's findings of fact are supported by substantial evidence, 42 U.S.C. § 405(g) (1982), and the Secretary applied the proper legal standards. Gallant v. Heckler, 753 F.2d 1450, 1452 (9th Cir. 1984). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison v. NLRB, 305 U.S. 197, 229 (1938)). It is more than a scintilla, but less than a preponderance. Sorenson v. Weinberger, 514 F.2d 1112, 1119, n. 10 (9th Cir. 1975).

It is undisputed that Blakely made a prima facie case of disability by establishing that his impairments prevented him from doing his previous job. Gallant v. Heckler, 753 F.2d 1450, 1452 (9th Cir. 1984). In evaluating the claim of disability as required by 20 C.F.R. Sec. 404.1520 and 20 C.F.R. Sec. 416.920, the ALJ found that Blakely had not been engaged in substantial gainful activity since May 1982; that his heart problem was severe, while his other physical exertional impairments were not severe; that his heart impairment did not "meet or equal" the level of severity of any impairment listed at 20 C.F.R. Sec. 404 Subpt P. App. 1; and that Blakely did not retain the residual functional capacity to perform his past relevant work as a truck driver and warehouseman. Administrative Transcript (AT) at 21-22. These findings were all supported by substantial evidence. Id.

The burden of proof then shifted to the Secretary to show that Blakely could do other substantial gainful activity considering his residual functional capacity, age, education, and past work experience. 20 C.F.R. Sec. 404.1520(f); Gallant, 753 F.2d at 1456. In carrying this burden, the Secretary may use the grids so long as they accurately describe the claimant's abilities and limitations. Fife v. Heckler, 767 F.2d 1427 (9th Cir. 1985). If the grids do not correctly categorize the claimant, the Secretary cannot rely on them alone to prove the availability of other jobs for the claimant. Under these circumstances, the Secretary must present other evidence, such as the testimony of a vocational expert. Perminter v. Heckler, 765 F.2d 870, 872 (9th Cir. 1985). Nonexertional limitations such as pain, nausea, dizziness and fainting, can preclude sole reliance on the grids, Perminter, 765 F.2d at 872, unless substantial evidence supports the conclusion that the limitations do not impair the claimant's exertional capabilities. Bellamy v. Secretary of Health and Human Servs., 755 F.2d 1380, 1383 (9th Cir. 1985); see also Desrosiers v. Secretary of Health and Human Servs., 846 F.2d 573, 577 (9th Cir. 1988) (holding that the grids are inapplicable only if a non-exertional impairment is sufficiently severe to "limit the claimant's functional capacity in ways not contemplated by the guidelines.")

In making a disability determination, the Secretary must consider a claimant's reports of debilitating pain only if the pain is associated with medical impairments that "could reasonably be expected to produce the claimed pain." Cotton v. Bowen, 799 F.2d 1403, 1407 (9th Cir. 1986). When medical evidence establishes impairments which normally produce some pain, but the claimant testifies he experiences a higher level of pain (a phenomenon we have termed "excess pain"), the Secretary may disbelieve the testimony entirely. However, he must justify this disbelief by making specific findings, Varney v. Secretary of Health and Human Servs., 846 F.2d 581, 584 (9th Cir. 1988), such as indicating "what medical evidence suggested that [claimant's] claim of pain was not credible." Gamer v. Secretary of Health and Human Servs., 815 F.2d 1275, 1279 (9th Cir. 1987). We have held that "it is improper as a matter of law for an ALJ to discredit excess pain testimony solely on the ground that it is not fully corroborated by objective medical findings." Cotton, 799 F.2d at 1407; see also Varney, 846 F.2d at 584; Gamer, 815 F.2d at 1279.

At his hearing before the ALJ, Blakely testified that he experienced arm pain, occasional to frequent anginal pain which forced him to stop any physical activity, and medication side effects such as dizziness, sickness, weakness, tiredness, nausea, fatigue, and chest pains. AT at 22. While concluding that Blakely's "complaints of exercise-induced angina were substantiated by clinical signs and findings," id., the ALJ discredited Blakely's excess pain testimony on the grounds that " [t]he claimant's hearing testimony seemed sincere but was not entirely credible in view of the objective medical evidence which failed to support his entire alleged symptomatology." AT at 22. The ALJ failed to specify what medical evidence indicated that Blakely's claim of pain was not believable. Under our holding in Cotton and its progeny, the ALJ's findings were insufficient as a matter of law. Varney, 846 F.2d at 584; Gamer, 815 F.2d at 1279; Cotton, 799 F.2d at 1407.

By disregarding Blakely's excess pain testimony, the ALJ did not consider whether nonexertional limitations precluded sole reliance on the grids in making a disability determination. The Secretary presented no other evidence, such as the testimony of a vocational expert, to prove that Blakely could engage in gainful activity. Blakely's vocational expert, on the other hand, reported that he "was unable to find any job that matched Mr. Blakely's REP [Residual Employability Profile] in the Dictionary of Occupational Titles." AT at 157. Because the ALJ relied solely on the grids in determining that Blakely had the residual functional capacity to perform the full range of sedentary work, AT at 24, his finding cannot stand.

Blakely also contends that the district court erred by refusing to consider new evidence as additional medical reports and the Secretary's subsequent award of disability benefits. We agree. This court may remand a case to the Secretary for consideration of new evidence where: (1) the new evidence is material, and (2) good cause exists for the claimant's failure to incorporate the evidence in a prior proceeding. Cotton v. Bowen, 799 F.2d 1403, 1409 (9th Cir. 1986); 42 U.S.C. § 405(g). To be material, the new evidence must bear directly and substantially on the matter in issue. Cotton, 799 F.2d at 1409. Also, there must be a reasonable possibility that the new evidence would have changed the outcome if it had been before the Secretary. Id. To show good cause, the claimant must establish that he could not have obtained the evidence at the time of the administrative hearing. Id.

The new evidence is material. The evidence consisted of additional medical reports concerning the progress of Blakely's condition and his treatment, as well as the Secretary's finding that Blakely was disabled and that his second application for disability benefits had been granted. Where a claimant's condition is progressively deteriorating, the most recent medical report is the most probative. Stone v. Heckler, 761 F.2d 530, 532 (9th Cir. 1985). By the Secretary's own statements, this more recent evidence would have changed the outcome had it been before the Secretary. At the time of awarding Blakely's second application for disability benefits, the Secretary stated that an earlier onset date for Blakely's disability could have been established on the basis of the new evidence.

Blakely has also established that good cause existed for the failure to introduce the evidence at the administrative proceeding, because the additional evidence included the physician's notes of Blakely's progress, subsequent to the hearing, and the Secretary's findings upon Blakely's second application for benefits. The evidence did not exist at the time of the administrative hearing. The district court erred by failing to consider the additional evidence presented.

Because the ALJ decided this case two years before we clarified the correct approach for discrediting excess pain testimony in Cotton v. Bowen, the ALJ should have the opportunity to reconsider the evidence in light of current case law. Therefore, we reverse the district court's grant of summary judgment, and remand the case to the Secretary to make appropriate findings in accordance with this opinion.

REVERSED and REMANDED.