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Deshawn Smith v. Michael J. Astrue

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA EASTERN DIVISION


September 8, 2011

DESHAWN SMITH, PLAINTIFF,
v.
MICHAEL J. ASTRUE, COMMISSIONER OF SOCIAL SECURITY ADMINISTRATION, DEFENDANT.

The opinion of the court was delivered by: Paul L. Abrams United States Magistrate Judge

MEMORANDUM OPINION AND ORDER

I.

PROCEEDINGS

Plaintiff filed this action on May 10, 2010, seeking review of the Commissioner's denial of her application for Supplemental Security Income payments. The parties filed Consents to proceed before the undersigned Magistrate Judge on May 20, 2010, and May 21, 2010. Pursuant to the Court's Order, the parties filed a Joint Stipulation on March 9, 2011, that addresses their positions concerning the disputed issues in the case. The Court has taken the Joint Stipulation under submission without oral argument.

II.

BACKGROUND

Plaintiff was born on April 24, 1970. [Administrative Record ("AR") at 73, 93.] She has a tenth grade education [AR at 10, 12-13, 84], and past relevant work experience as a caretaker, phone operator, babysitter, warehouse laborer, telemarketer, and cleaner. [AR at 78-80, 357-64.]

On November 23, 2005, plaintiff protectively filed her application for Supplemental Security Income payments, alleging that she has been unable to work since September 1, 2002, due to depression, back problems, and joint problems. [AR at 31-32, 77-106, 124-26, 342-48.] After her application was denied initially and on reconsideration, plaintiff requested a hearing before an Administrative Law Judge ("ALJ"). [AR at 45-57.] A hearing was held on August 31, 2007, at which time plaintiff appeared with counsel and testified on her own behalf. [AR at 5-30.] A vocational expert ("VE") also testified. [AR at 28-29.] The ALJ determined that plaintiff was not disabled. [AR at 36-43.] On July 25, 2008, the Appeals Council denied plaintiff's request for review. [AR at 1-3.] On August 29, 2008, plaintiff filed a complaint in this Court in Case No. ED CV 08-1131-PLA. [See AR at 297.] On June 10, 2009, the Court entered judgment for plaintiff and remanded the case back to the ALJ for further proceedings. [AR at 275, 297-311.] On remand, the ALJ held another hearing on December 2, 2009, at which time plaintiff appeared with counsel and again testified on her own behalf. A medical expert and a VE also testified. [AR at 568-610.] On February 10, 2010, the ALJ issued an opinion again finding plaintiff not disabled. [AR at 275-86.] This action followed.

III.

STANDARD OF REVIEW

Pursuant to 42 U.S.C. § 405(g), this Court has authority to review the Commissioner's decision to deny benefits. The decision will be disturbed only if it is not supported by substantial evidence or if it is based upon the application of improper legal standards. Moncada v. Chater, 60 F.3d 521, 523 (9th Cir. 1995); Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992).

In this context, the term "substantial evidence" means "more than a mere scintilla but less than a preponderance -- it is such relevant evidence that a reasonable mind might accept as adequate to support the conclusion." Moncada, 60 F.3d at 523; see also Drouin, 966 F.2d at 1257. When determining whether substantial evidence exists to support the Commissioner's decision, the Court examines the administrative record as a whole, considering adverse as well as supporting evidence. Drouin, 966 F.2d at 1257; Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989). Where the evidence is susceptible to more than one rational interpretation, the Court must defer to the decision of the Commissioner. Moncada, 60 F.3d at 523; Andrews v. Shalala, 53 F.3d 1035, 1039-40 (9th Cir. 1995); Drouin, 966 F.2d at 1258.

IV.

THE EVALUATION OF DISABILITY

Persons are "disabled" for purposes of receiving Social Security benefits if they are unable to engage in any substantial gainful activity owing to a physical or mental impairment that is expected to result in death or which has lasted or is expected to last for a continuous period of at least twelve months. 42 U.S.C. § 423(d)(1)(A); Drouin, 966 F.2d at 1257.

A. THE FIVE-STEP EVALUATION PROCESS

The Commissioner (or ALJ) follows a five-step sequential evaluation process in assessing whether a claimant is disabled. 20 C.F.R. §§ 404.1520, 416.920; Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 1995, as amended April 9, 1996). In the first step, the Commissioner must determine whether the claimant is currently engaged in substantial gainful activity; if so, the claimant is not disabled and the claim is denied. Id. If the claimant is not currently engaged in substantial gainful activity, the second step requires the Commissioner to determine whether the claimant has a "severe" impairment or combination of impairments significantly limiting her ability to do basic work activities; if not, a finding of non-disability is made and the claim is denied. Id. If the claimant has a "severe" impairment or combination of impairments, the third step requires the Commissioner to determine whether the impairment or combination of impairments meets or equals an impairment in the Listing of Impairments ("Listing") set forth at 20 C.F.R., Part 404, Subpart P, Appendix 1; if so, disability is conclusively presumed and benefits are awarded. Id. If the claimant's impairment or combination of impairments does not meet or equal an impairment in the Listing, the fourth step requires the Commissioner to determine whether the claimant has sufficient "residual functional capacity" to perform her past work; if so, the claimant is not disabled and the claim is denied. Id. The claimant has the burden of proving that she is unable to perform past relevant work. Drouin, 966 F.2d at 1257. If the claimant meets this burden, a prima facie case of disability is established. The Commissioner then bears the burden of establishing that the claimant is not disabled, because she can perform other substantial gainful work available in the national economy. The determination of this issue comprises the fifth and final step in the sequential analysis. 20 C.F.R. §§ 404.1520, 416.920; Lester, 81 F.3d at 828 n.5; Drouin, 966 F.2d at 1257.

B. THE ALJ'S APPLICATION OF THE FIVE-STEP PROCESS

In this case, at step one, the ALJ found that plaintiff had not engaged in any substantial gainful activity since November 23, 2005, the date of the application. [AR at 277.] At step two, the ALJ concluded that plaintiff has the severe impairments of depressive disorder, a history of cocaine and alcohol use, and lumbar back pain. [Id.] At step three, the ALJ determined that plaintiff's impairments do not meet or equal any of the impairments in the Listing. [AR at 278.] The ALJ further found that plaintiff retained the residual functional capacity ("RFC")*fn1 to perform "light work as defined in 20 C.F.R. § 416.967(b)."*fn2 Specifically, the ALJ found that plaintiff could "lift and/or carry 10 pounds frequently and 20 pounds occasionally; she could be on her feet and/or walk for 20 minutes at a time, but she could only walk for two hours out of an eight-hour work day; she could sit for 1 hour at a time in an eight-hour work day, but she should be allowed to stand and stretch every 1 hour; [plaintiff] would miss work once or twice a month; she could occasionally stoop[,] bend, crouch, and kneel; she is limited to short, repetitive tasks involving object oriented work." [AR at 279.] At step four, the ALJ concluded that plaintiff was not capable of performing her past relevant work. [AR at 284-85.] At step five, the ALJ found, based on the vocational expert's testimony and the application of the Medical-Vocational Guidelines, that "there are jobs that exist in significant numbers in the national economy that [plaintiff] can perform." [AR at 285-86.] Accordingly, the ALJ determined that plaintiff is not disabled. [AR at 286.]

V.

THE ALJ'S DECISION

Plaintiff contends that the ALJ: (1) failed to properly consider the treating physician's opinion; (2) failed to include in the RFC determination and in the hypothetical question posed to the vocational expert thenon-examining physician's opinion that plaintiff has mild to moderate difficulties in concentration, persistence, or pace; and (3) failed to properly consider the lay witness testimony of plaintiff's friend. [Joint Stipulation ("JS") at 2-3.] As set forth below, the Court agrees with plaintiff and remands the matter for further proceedings.

A. TREATING PHYSICIAN'S OPINION

Plaintiff contends that the ALJ failed to properly consider the January 13, 2009, opinion of plaintiff's treating physician, Dr. Ochuko Diamreyan. [JS at 3-22.]

In evaluating medical opinions, the case law and regulations distinguish among the opinions of three types of physicians: (1) those who treat the claimant (treating physicians); (2) those who examine but do not treat the claimant (examining physicians); and (3) those who neither examine nor treat the claimant (non-examining physicians). See 20 C.F.R. §§ 404.1502, 404.1527, 416.902, 416.927; see also Lester, 81 F.3d at 830. Generally, the opinions of treating physicians are given greater weight than those of other physicians, because treating physicians are employed to cure and therefore have a greater opportunity to know and observe the claimant. Orn v. Astrue, 495 F.3d 625, 631 (9th Cir. 2007); Smolen v. Chater, 80 F.3d 1273, 1285 (9th Cir. 1996). Despite the presumption of special weight afforded to treating physicians' opinions, an ALJ is not bound to accept the opinion of a treating physician. Where a treating physician's opinion does not contradict other medical evidence, an ALJ must provide clear and convincing reasons to discount it. Where a treating physician's opinion conflicts with other medical evidence, an ALJ may afford it less weight only if the ALJ provides specific and legitimate reasons for discounting the opinion. See Lester, 81 F.3d at 830; see also Orn, 495 F.3d at 632-33 ("Even when contradicted by an opinion of an examining physician that constitutes substantial evidence, the treating physician's opinion is 'still entitled to deference.'") (citation omitted); Social Security Ruling*fn3 96-2p (a finding that a treating physician's opinion is not entitled to controlling weight does not mean that the opinion is rejected). Similar rules apply to an ALJ's evaluation of an examining physician's opinion. Lester, 81 F.3d at 830-31.

Dr. Diamreyan treated plaintiff for well over three years. [AR at 469.] On May 12, 2005, Dr. Diamreyan performed an initial evaluation of plaintiff. [AR at 267-70.] Dr. Diamreyan noted that plaintiff's mood was depressed, perception was paranoid, and thought process was uneven. [AR at 268-69.] Dr. Diamreyan diagnosed plaintiff with major depressive disorder, recurrent, severe with psychosis. [AR at 269.] He assessed plaintiff with a Global Assessment of Functioning ("GAF") score of 40.*fn4 [Id.] Dr. Diamreyan prescribed psychotropic medications to plaintiff and indicated that plaintiff's prognosis was "guarded." [AR at 270.] Dr. Diamreyan's treatment records from June 17, 2005, through April 19, 2007, indicate that plaintiff heard voices, had paranoid thoughts, was depressed, and was generally compliant with medication. [AR at 257-66.] On June 26, 2007, and July 24, 2007, Dr. Diamreyan performed mental status examinations of plaintiff, in which he noted the following psychiatric findings: anxiety, depression, delusion, and hallucination. [AR at 255-56.] He diagnosed plaintiff with major depressive disorder, recurrent, severe with psychotic features (296.34).*fn5 [Id.] On August 23, 2007, Dr. Diamreyan noted that "[plaintiff] is my client with a diagnosis of major depressive disorder with psychosis." [AR at 271.]

In the June 10, 2009, Memorandum Opinion and Order in Case No. ED CV 08-1131-PLA, this Court concluded that the ALJ in the first administrative decision*fn6 had failed to properly consider Dr. Diamreyan's opinions regarding plaintiff's impairments. [See AR at 297-311.] Specifically, the Court determined that the ALJ did not provide sufficiently specific reasons for rejecting Dr. Diamreyan's opinion, failed to give proper reasons for giving more weight to the consultative psychiatric evaluator's opinion than to Dr. Diamreyan's opinion, and reached an inaccurate conclusion when he asserted that Dr. Diamreyan's opinion lacked objective support. [See AR at 302-06, 309-10.] The Court also found that, by rejecting Dr. Diamreyan's findings, the ALJ had erred by selectively considering the medical evidence, and that the ALJ had failed to discharge his duty to develop the record by contacting Dr. Diamreyan to determine the basis of his opinion. [See AR at 306-09.] For these reasons, the Court remanded the case for proper consideration of Dr. Diamreyan's findings discussed above. [AR at 311.]

Dr. Diamreyan's treatment records were further developed between the time of the 2007 and 2009 hearings. On January 13, 2009, Dr. Diamreyan completed a "Mental Disorder Questionnaire" regarding plaintiff, in which he stated that he had seen plaintiff between every two weeks to every month from May 2005 to December 2008. [AR at 465-69.] Thus, the Questionnaire encompassed over one year of additional time during which Dr. Diamreyan treated plaintiff than the treatment records presented prior to the August 31, 2007, hearing before the ALJ. In the Questionnaire, Dr. Diamreyan stated that plaintiff has had depression since 2002, and continues to have anxiety, paranoia, a depressed mood, and mood swings. [AR at 465-68.] Once again, Dr. Diamreyan diagnosed plaintiff with major depressive disorder, recurrent, severe with psychosis, alcohol abuse, and obesity, and assigned plaintiff a GAF score of 40. [AR at 469.]

The ALJ again rejected Dr. Diamreyan's findings in the February 10, 2010, administrative decision. Specifically, the ALJ cited and rejected Dr. Diamreyan's January 13, 2009, Questionnaire as including "only conclusions regarding functional limitations without any rationale for those conclusions." [AR at 282, citing AR at 465-69.] The ALJ did not, however, address Dr. Diamreyan's opinions expressed in his May 12, 2005, initial evaluation of plaintiff, his progress notes dated June 17, 2005, through July 24, 2007, or his prescription note of August 23, 2007, as ordered by this Court. [AR at 306-07, citing AR at 255-71.] In rejecting Dr. Diamreyan's findings expressed in the January 13, 2009, Questionnaire, the ALJ contended that Dr. Diamreyan had completed the questionnaire "as an accommodation to [plaintiff]"; that "there is no objective evidence indicating [plaintiff] exhibit[ed] any psychotic symptoms since 2005"; and that the medical expert's testimony supports the conclusion that "there is no objective evidence indicating [plaintiff] exhibit[ed] any psychotic symptoms since 2005." [AR at 282.] For these reasons, the ALJ gave "less weight" to Dr. Diamreyan's opinion. [Id.] As explained below, the Court concludes that the ALJ has again failed to provide specific and legitimate reasons supported by substantial evidence for rejecting Dr. Diamreyan's treating opinion.

First, the ALJ's bare assertion that Dr. Diamreyan completed the Questionnaire "as an accommodation to [plaintiff]" is an insufficient basis for rejecting his opinions, as the ALJ points to no evidence of actual impropriety on the part of Dr. Diamreyan. [AR at 282.] See Lester, 81 F.3d at 832 (quoting Ratto v. Sec'y, Dept. of Health and Human Servs., 839 F. Supp. 1415, 1426 (D. Or. 1993)) ("The Secretary may not assume that doctors routinely lie in order to help their patients collect disability benefits."); see also Nguyen v. Chater, 100 F.3d 1462, 1465 (9th Cir. 1996) (citing Saelee v. Chater, 94 F.3d 520, 523 (9th Cir. 1996), cert. denied, 519 U.S. 1113 (1997)) (the source of report is a factor that justifies rejection only if there is evidence of actual impropriety or no medical basis for opinion). The record contains no evidence that Dr. Diamreyan embellished his assessment of plaintiff's limitations in order to assist her with her benefits claim. See Reddick v. Chater, 157 F.3d 715, 725-26 (9th Cir. 1998) (ALJ erred in assuming that the treating physician's opinion was less credible because his job was to be supportive of the patient). Thus, the ALJ's rejection of Dr. Diamreyan's opinion on this ground was improper.

Second, the ALJ's conclusion that Dr. Diamreyan's January 13, 2009, Questionnaire is not supported by objective evidence is insufficient [AR at 282], as it does not reach the level of specificity required to reject the opinion of a treating physician. See Embrey v. Bowen, 849 F.2d 418, 421-23 (9th Cir. 1988) ("To say that medical opinions are not supported by sufficient objective findings or are contrary to the preponderant conclusions mandated by the objective findings does not achieve the level of specificity our prior cases have required, even when the objective factors are listed seriatim. The ALJ must do more than offer his conclusions. He must set forth his own interpretations and explain why they, rather than the [treating] doctors', are correct.") (footnote omitted). An ALJ can meet the requisite specific and legitimate standard for rejecting a treating physician's opinion deemed inconsistent with or unsupported by the medical evidence "by setting out a detailed and thorough summary of the facts and conflicting clinical evidence, stating his interpretation thereof, and making findings." Reddick, 157 F.3d at 725. Here, the ALJ's conclusory assertion that Dr. Diamreyan's opinion was not supported by objective evidence in the record [see AR at 282], without explaining how the record was inconsistent with Dr. Diamreyan's opinion and stating his interpretation thereof, does not provide the degree of specificity required to reject Dr. Diamreyan's opinion. See McAllister v. Sullivan, 888 F.2d 599, 602 (9th Cir. 1989) (finding that rejecting the treating physician's opinion on the ground that it was contrary to clinical findings in the record was "broad and vague, failing to specify why the ALJ felt the treating physician's opinion was flawed"); see also, e.g., Payne v. Astrue, 2009 WL 176071, at *6 (C.D. Cal. Jan. 23, 2009) (finding inadequate an ALJ's conclusory rejection of a treating physician's opinion as inconsistent with the medical treatment, where the ALJ did not specify how the treatment record was inconsistent with the physician's opinion and state his interpretation thereof).

Moreover, the ALJ's assertion that there is no objective evidence supporting Dr. Diamreyan's conclusions regarding plaintiff's functional limitations is not wholly accurate. [AR at 282.] It is improper to reject a treating physician's opinion where he provided at least some objective observations and testing in addition to subjective opinions. See Embrey, 849 F.2d at 421; see also 20 C.F.R. §§ 404.1527, 416.927 (The proper weight that an ALJ should give to a treating physician's opinion depends on whether sufficient data supports the opinion and whether the opinion comports with other evidence in the record.); Sprague v. Bowen, 812 F.2d 1226, 1232 (9th Cir. 1987) (when the treating physician diagnosed the claimant with depression, set forth clinical observations supporting the diagnosis, and prescribed psychotherapeutic drugs, the ALJ erred in finding that the claimant had not set forth sufficient evidence to substantiate the mental impairment). Here, on May 12, 2005, Dr. Diamreyan performed an initial mental status examination and found that plaintiff had a depressed mood, paranoid perception, and an uneven thought process. [AR at 268-69.] Dr. Diamreyan diagnosed plaintiff with major depressive disorder, recurrent, severe with psychosis, assessed plaintiff with a GAF score of 40, and prescribed psychotropic medications. [AR at 269-70.] Thereafter, Dr. Diamreyan treated plaintiff for an extended period, conducted examinations of plaintiff, and prescribed medications to plaintiff, as evidenced by the progress notes contained in the record. [AR at 255-71.] Indeed, during the course of plaintiff's treatment, Dr. Diamreyan performed further mental status examinations of plaintiff, in which he noted depression, anxiety, delusion, hallucination, paranoia, bad thoughts, and mood swings. [AR at 255-56, 260-66.] Based on his treatment of plaintiff, Dr. Diamreyan continued to diagnose plaintiff with major depressive disorder, recurrent, severe with psychotic features. [AR at 255-56, 263, 265-66, 271.] Moreover, numerous medical examination records from the Inland Behavioral and Health Services Health Care Clinic, where plaintiff sought medical treatment from October 2007 to July 2009 [see AR at 388-418, 542-67], also note that plaintiff suffered from anxiety. [AR at 394-96, 402, 404, 561-62.] Thus, Dr. Diamreyan's opinion in the January 13, 2009, Questionnaire is supported by his own treatment records, as well as by the larger body of plaintiff's medical treatment records. Given that there are objective medical findings that lend support to Dr. Diamreyan's opinion that plaintiff suffered from major depressive disorder, recurrent, severe with psychosis, and had a GAF score of 40,*fn7 the ALJ's rejection of Dr. Diamreyan's opinion as unsupported by objective evidence itself lacks substantiation.

In addition, it was improper for the ALJ to selectively rely on Dr. Diamreyan's January 13, 2009, Questionnaire to reject his opinion. An ALJ must consider all of the relevant evidence in the record and may not point to only those portions of the records that bolster his findings. See Reddick, 157 F.3d at 722-23 (It is impermissible for the ALJ to develop an evidentiary basis by "not fully accounting for the context of materials or all parts of the testimony and reports."); see also Fiorello v. Heckler, 725 F.2d 174, 176 (2d Cir. 1983) (While the ALJ is not obligated to "reconcile explicitly every conflicting shred of medical testimony," he cannot simply selectively choose evidence in the record that supports his conclusions.); Robinson v. Barnhart, 366 F.3d 1078, 1083 (10th Cir. 2004) (citing Switzer v. Heckler, 742 F.2d 382, 385-86 (7th Cir. 1984)) ("The ALJ is not entitled to pick and choose from a medical opinion, using only those parts that are favorable to a finding of non-disability."); Gallant v. Heckler, 753 F.2d 1450, 1456 (9th Cir. 1984) (error for an ALJ to ignore or misstate the competent evidence in the record in order to justify her conclusion); Day v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 1975) (An ALJ is not permitted to reach a conclusion "simply by isolating a specific quantum of supporting evidence."); Whitney v. Schweiker, 695 F.2d 784, 788 (7th Cir. 1982) ("[A]n ALJ must weigh all the evidence and may not ignore evidence that suggests an opposite conclusion.") (citation omitted). Here, the ALJ only discussed Dr. Diamreyan's January 13, 2009, Questionnaire, without any mention of Dr. Diamreyan's May 12, 2005, initial evaluation of plaintiff, his progress notes dated June 17, 2005, through July 24, 2007, or his prescription note of August 23, 2007, all of which lend support to Dr. Diamreyan's opinion.

[AR at 255-71.] Thus, the ALJ erred by failing to consider Dr. Diamreyan's opinion as a whole and not giving proper reasons to reject it.*fn8

Finally, an ALJ may not properly reject a treating physician's opinion by merely referencing the contrary findings of another physician. Even when contradicted, a treating physician's opinion is still entitled to deference, and the ALJ must provide specific and legitimate reasons supported by substantial evidence for rejecting it. See Orn, 495 F.3d at 632-33; see also Rollins v. Massanari, 261 F.3d 853, 856 (9th Cir. 2001) ("The ALJ may not reject the opinion of a treating physician, even if it is contradicted by the opinions of other doctors, without providing 'specific and legitimate reasons' supported by substantial evidence in the record.") (citation omitted); Hostrawser v. Astrue, 364 Fed. Appx. 373, 376-77 (9th Cir. 2010) (citable for its persuasive value pursuant to Ninth Circuit Rule 36-3) (ALJ erred in affording nontreating physicians' opinions controlling weight over the treating physicians' opinions, where the ALJ did not provide a thorough summary of the conflicting clinical evidence and his interpretations thereof with an explanation as to why his interpretations of the evidence, rather than those of the treating physicians, were correct); SSR 96-2p. Specifically, the opinion of a non-examining physician may only serve as a basis to reject the opinion of a treating physician where the non-examining physician's opinion is consistent with other independent evidence in the record. See Ryan v. Comm'r of Soc. Sec. Admin., 528 F.3d 1194, 1202 (9th Cir. 2008) (quoting Lester, 81 F.3d at 831 (emphasis in original)) ("The opinion of a nonexamining physician cannot by itself constitute substantial evidence that justifies the rejection of the opinion of either an examining physician or a treating physician."). In contrast, "[a] report of a non-examining, non-treating physician should be discounted and is not substantial evidence when contradicted by all other evidence in the record." See Gallant v. Heckler, 753 F.2d 1450, 1454 (9th Cir. 1984) (quoting Millner v. Schweiker, 725 F.2d 243, 245 (4th Cir. 1984)). More weight is generally given to the opinions of treating physicians because they "are likely to be the medical professionals most able to provide a detailed, longitudinal picture of [the claimant's] medical impairment(s) and may bring a unique perspective to the medical evidence that cannot be obtained from the objective medical findings alone or from reports of individual examinations, such as consultative examinations or brief hospitalizations." See 20 C.F.R. §§ 404.1527(d)(2), 416.927(d)(2).

As discussed above, Dr. Diamreyan saw plaintiff between every two weeks and every month for well over three years, performed mental status examinations of plaintiff, and prescribed psychotropic medications to her. See 20 C.F.R. §§ 404.1527(d)(2)(i), (ii), 416.927(d)(2)(i), (ii) (weight accorded to a treating physician's opinion dependent on length of the treatment relationship, frequency of visits, and nature and extent of treatment received). Based on the length of the treatment relationship and Dr. Diamreyan's experience with plaintiff, Dr. Diamreyan had the broadest range of knowledge regarding plaintiff's mental condition, which is supported by the treatment records. See 20 C.F.R. §§ 404.1527(d)(2), 416.927(d)(2); see also Lester, 81 F.3d at 833 ("The treating physician's continuing relationship with the claimant makes him especially qualified to evaluate reports from examining doctors, to integrate the medical information they provide, and to form an overall conclusion as to functional capacities and limitations, as well as to prescribe or approve the overall course of treatment."). In rejecting Dr. Diamreyan's opinion in the January 13, 2009, Questionnaire, the ALJ concluded that "as supported by the medical expert's testimony[,] which is discussed in more detail[] below, there is no objective evidence indicating [plaintiff] exhibit[ed] any psychotic symptoms since 2005" [AR at 282], and also concluded that the non-examining physician's testimony was "reasonable and consistent with the medical evidence." [AR at 283.] To support this conclusion, the ALJ summarized the testimony of the non-examining physician, Dr. Michael Kania, but failed to point out any independent evidence in the record comprising specific and legitimate reasons for rejecting Dr. Diamreyan's opinion. [See AR at 283.] Thus, the ALJ's rejection of Dr. Diamreyan's opinion was improper.

Moreover, Dr. Kania's conclusion that the record contained no evidence that plaintiff experienced psychotic symptoms from November 2005 until at least December 2008 [see AR at 581-90] is not entirely accurate. In reaching his conclusion, Dr. Kania stated that there was no evidence in the record that plaintiff heard voices after 2005 [AR at 585, 589], but Dr. Diamreyan's progress notes dated between November 2005 and July 2007 document several instances in which plaintiff reported hearing voices [see AR at 255-56, 265] or fewer voices [see AR at 259-60, 262]. In addition, Dr. Diamreyan's progress notes dated June 26, 2007, and July 24, 2007, noted findings of hallucination and delusion. [AR at 255-56.] Thus, Dr. Kania incorrectly stated that his testimony was consistent with all of Dr. Diamreyan's treatment notes between November 2005 and January 13, 2009 [AR at 586], and the ALJ erred in assigning greater weight to Dr. Kania's opinion than that of Dr. Diamreyan [see AR at 284]. The ALJ's summary of the non-examining physician's findings does not justify his rejection of the treating physician's opinion. Rather, the ALJ's rejection of Dr. Diamreyan's opinion without expressly setting forth specific and legitimate reasons for doing so was improper.

Since the ALJ again failed in the 2010 decision to provide sufficient reasons for rejecting Dr. Diamreyan's opinions regarding plaintiff's mental impairments (even after this Court remanded the ALJ's first decision for proper consideration of Dr. Diamreyan's findings), the Court now credits Dr. Diamreyan's opinions as true. See Benecke v. Barnhart, 379 F.3d 587, 594 (9th Cir. 2004) (citing Harman v. Apfel, 211 F.3d 1172, 1179 (9th Cir. 2000) ("Because the ALJ failed to provide legally sufficient reasons for rejecting ... [the] treating physicians' opinions, we credit the evidence as true."); see also Smolen, 80 F.3d at 1285-88, 1292; Varney v. Sec'y of Heath and Human Servs., 859 F.2d 1396,1398 (9th Cir. 1988)). When a court reverses an ALJ's decision denying social security benefits, "the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation." Moisa v. Barnhart, 367 F.3d 882, 886 (9th Cir. 2004) (quoting INS v. Ventura, 537 U.S. 12, 16, 123 S. Ct. 353, 154 L.Ed.2d 272 (2002) (per curiam)). Here, the Court concludes that remand is necessary for the ALJ to assess plaintiff's RFC and disability status, after crediting as true Dr. Diamreyan's assessments of plaintiff's mental impairments.

B. RFC DETERMINATION AND VOCATIONAL EXPERT HYPOTHETICAL

Next, plaintiff contends that the ALJ erred in reaching the RFC determination and posing an incomplete hypothetical question to the vocational expert. [JS at 34-35.] Specifically, plaintiff argues that the ALJ erred in excluding from the RFC and the hypothetical question posed to the vocational expert Dr. Kania's findings that plaintiff had mild to moderate difficulties in concentration, persistence, or pace. [Id.]

As an initial matter, the Court notes that, as the ALJ based his questions to the vocational expert on his consideration of the medical evidence, new vocational expert testimony will be necessary now that the Court has ordered the ALJ to credit Dr. Diamreyan's findings as true. The Court will address plaintiff's argument, however, to provide guidance for this issue on remand.

In determining a claimant's disability status, an ALJ has the responsibility to determine the claimant's RFC after considering "all of the relevant medical and other evidence" in the record.

20 C.F.R. §§ 404.1545(a)(3), 404.1546(c), 416.945(a)(3), 416.946(c). "Thus, an RFC that fails to take into account a claimant's limitations is defective." Valentine v. Comm'r of Social Sec. Admin., 574 F.3d 685, 690 (9th Cir. 2009). Similarly, "[t]he hypothetical an ALJ poses to a vocational expert, which derives from the RFC, 'must set out all the limitations and restrictions of the particular claimant.'" Id. (citing Embrey, 849 F.2d at 422 (emphasis in original)). See also Nguyen, 100 F.3d at 1466 n.3 ("Because the hypothetical was incomplete, it does not constitute competent evidence to support a finding that claimant could do jobs set forth by the vocational expert.").

On February 8, 2006, non-examining State Agency psychiatrist Nasra S. Haroun completed a "Psychiatric Review Technique" form ("PRTF") for plaintiff, in which she noted that plaintiff had mild difficulties in maintaining concentration, persistence, or pace. [AR at 134-47.] At the December 2, 2009, hearing before the ALJ, Dr. Kania testified that plaintiff's "difficulties in maintaining concentration, persistence or pace would be mild to moderate," and that plaintiff "would be capable of simple, repetitive tasks." [AR at 582.] In posing a hypothetical to the vocational expert concerning plaintiff's work capacity, the ALJ included Dr. Kania's finding that plaintiff would be capable of simple, repetitive tasks, but did not include Dr. Kania's finding that plaintiff would have "mild to moderate ... difficulties in maintaining concentration, persistence, or pace." [See AR at 608.] Similarly, in the 2010 RFC determination, the ALJ found that plaintiff "is limited to short, repetitive tasks," but did not include any limitations in maintaining concentration, persistence, or pace. [See AR at 279.]

The phrase "simple, repetitive work" does not encompass difficulties with concentration, persistence, or pace where there is evidence of such difficulties. See Brink v. Comm'r of Social Sec. Admin., 343 Fed. Appx. 211, 212 (9th Cir. 2009) (citable for its persuasive value pursuant to Ninth Circuit Rule 36-3) (where medical evidence established difficulties with concentration, persistence, or pace, "the ALJ's initial hypothetical question to the vocational expert referenc[ing] only 'simple, repetitive work,' without including limitations on concentration, persistence or pace" was error). Where an ALJ accepts medical evidence of a plaintiff's limitations in maintaining concentration, persistence, or pace, the hypothetical question posed to the vocational expert must include those limitations. See Betancourt v. Astrue, 2010 WL 4916604, at *3-4 (C.D. Cal. Nov. 27, 2010) (where the ALJ accepted medical evidence of plaintiff's limitations in maintaining concentration, persistence, or pace, a hypothetical question to the VE including plaintiff's restriction to "simple, repetitive work" but excluding plaintiff's difficulties with concentration, persistence, or pace resulted in a VE's conclusion that was "based on an incomplete hypothetical question and unsupported by substantial evidence."); see also Abrego v. Comm'r of Social Sec. Admin., 2000 WL 682671, at *3 (D. Or. May 25, 2000) (remand was appropriate where "the hypothetical the ALJ posed to the VE failed to fully or accurately state plaintiff's deficiencies in concentration, persistence, or pace, as stated by the ALJ on the PRTF attached to his decision."); Newton v. Chater, 92 F.3d 688, 695 (8th Cir. 1996) (where plaintiff's frequent deficiencies in concentration, persistence, or pace "were not included in the hypothetical question, the [vocational] expert did not base his opinion on the full extent of [plaintiff's] limitations and his testimony could not have constituted substantial evidence to support the Commissioner's decision."). Similarly, an ALJ's RFC assessment must include limitations in maintaining concentration, persistence, or pace. See Melton v. Astrue, 2010 WL 3853195, at *8 (D. Or. Sept. 28, 2010), aff'd., 2011 WL 2727869 (9th Cir. July 14, 2011) (ALJ erred in her assessment of plaintiff's RFC where the assessment included plaintiff's restriction to simple, repetitive tasks, but did not include plaintiff's mild-to-moderate limitations in maintaining concentration, persistence, or pace); see also Berjettej v. Astrue, 2010 WL 3056799, at *8 (D. Or. July 30, 2010) (ALJ erred when he failed to include the reviewing psychologist's opinion concerning plaintiff's moderate difficulties in maintaining concentration, persistence, or pace in plaintiff's RFC). Here, both the State Agency psychiatrist's February 8, 2006, PRTF and Dr. Kania's testimony indicated that plaintiff has at least mild difficulties in maintaining concentration, persistence, or pace, but the ALJ did not include these difficulties in either the RFC assessment or the hypothetical question posed to the vocational expert. The ALJ's failure to do so was error. On remand, all of plaintiff's limitations and restrictions should be set out in the RFC assessment and included in any hypothetical posed to the VE.

C. LAY WITNESS TESTIMONY

Plaintiff argues that the ALJ improperly rejected lay witness testimony. [JS at 36-43.] Specifically, plaintiff argues that the ALJ failed to provide germane reasons for rejecting a third party function report submitted by Marcus Criner. [Id.; AR at 349-56.]

An ALJ may consider lay witness testimony to determine the severity of a claimant's impairments and how the impairments affect her ability to work. Stout v. Comm'r of Social Sec. Admin., 454 F.3d 1050, 1053 (9th Cir. 2006); Smolen, 80 F.3d at 1288; 20 C.F.R. §§ 404.1513(d)(4), (e), 416.913(d)(4), (e). Lay witnesses include spouses, parents and other care givers, siblings, other relatives, friends, neighbors, and clergy. 20 C.F.R. §§ 404.1513(d)(4), 416.913(d)(4). Lay witness testimony by friends and family members who have the opportunity to observe a claimant on a daily basis "constitutes qualified evidence" that the ALJ must consider. See Sprague, 812 F.2d at 1231-32. Moreover, "the testimony of those who see the claimant less often [than daily] still carries some weight." Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir. 1993). The ALJ may discount the testimony of lay witnesses only for "reasons that are germane to each witness." Id.; Regennitter v. Comm'r of Social Sec. Admin., 166 F.3d 1294, 1298 (9th Cir. 1999).

In the third party function report, Mr. Criner stated that he has known plaintiff for three and a half years and spends eight hours a week with her. [AR at 349.] During those eight hours, Mr. Criner supports and participates in church activities with plaintiff. [AR at 349-50.] Mr. Criner reported that plaintiff is able to clean the house, pay bills, help her daughter with her homework, and take her daughter to school and church. [AR at 349-50, 352.] He also reported that plaintiff has arrived at church or Bible study with her blouse unevenly buttoned, her socks not matching, her hair half-combed, and "soap still on her." [AR at 350.] Mr. Criner stated that plaintiff no longer prepares home meals, that the kitchen "seems to be an unsafe work area" for her, and that plaintiff needs reminders to ensure that the stove is off. [AR at 350-51.] He also noted that plaintiff no longer goes to the movies or takes walks in the park, and only goes out with others from church "after she [is] coached." [AR at 354.] He reported that plaintiff calls on other church members several times a week to assist her with shopping. [AR at 352.] Mr. Criner also stated that plaintiff needs reminders to take her medication, and has difficulty paying attention, concentrating, and understanding instructions. [AR at 351, 354, 356.] He noted that plaintiff "can't find comfort, [her] nerves appear to be at risk," and that her medication "does not [always] work." [AR at 350.] He also reported that plaintiff does not handle stress well, and that "she has flared as thou [sic] paranoia came upon her when over[]whelmed." [AR at 355.] He stated that sitting for long periods hurts plaintiff's back, that climbing stairs hurts her back and knees, that plaintiff does not walk far due to swelling and pain, that she cannot kneel due to her knees, and that other church members will not allow her lift things or bend over due to the pain in her back and knees. [AR at 354.] Mr. Criner also reported that plaintiff uses a cane and knee braces. [AR at 355.]

The ALJ found Mr. Criner "only credible to the extent that [plaintiff] can do the work described [in the ALJ's decision]," and rejected Mr. Criner's statements concerning the severity of plaintiff's symptoms as "not credible." [AR at 281.] The ALJ rejected Mr. Criner's statements on the grounds that Mr. Criner is "a lay witness," and therefore "not competent to make a diagnosis or argue the severity of [plaintiff's] symptoms in relationship to her ability to work." [Id.] The ALJ also rejected Mr. Criner's statements because they "were not given under oath," because "[a]s [plaintiff's] friend, he has a motivation to be helpful to [plaintiff] so she can receive benefits," and because "his allegations in regards to the severity of [plaintiff's] symptoms are out of proportion to the medical evidence and are rebutted by the assessments of the medical expert, the consultative examiner, and the State agency physicians." [Id.]

The ALJ's reasons for rejecting Mr. Criner's report are not germane reasons specific to him. First, the ALJ mischaracterized Mr. Criner's statements in concluding that he is not competent to diagnose plaintiff's impairments or discuss their severity because he is not a medical professional. [AR at 281.] In the report, Mr. Criner referenced plaintiff's "arthritis," observed that plaintiff "has flared as thou [sic] paranoia came upon her when over[]whelmed," and reported that plaintiff "can't find comfort" and her "nerves appear to be at risk." [AR at 350, 352, 355.] While these particular statements are couched in medical terms, the vast majority of the report contains Mr. Criner's observations of plaintiff's activities and functional limitations on a weekly basis over a period of three and a half years [AR at 349-56], many of which the ALJ credited as true in the 2010 decision. [See AR at 281.] Second, the fact that Mr. Criner is not a medical professional is not a germane reason for rejecting his testimony. Lay witnesses, by definition, are not medical professionals, and the ALJ's reasoning would lead to a wholesale dismissal of all lay witnesses. "Disregard of this evidence violates the Secretary's regulation that he will consider observations by non-medical sources as to how an impairment affects a claimant's ability to work." Dodrill, 12 F.3d at 919 (quoting Sprague, 812 F.2d at 1232 (citing 20 C.F.R. § 404.1513(e)(2))).

Second, the ALJ's rejection of Mr. Criner's testimony on the basis that his statements were not given under oath is not a reason germane to Mr. Criner. Mr. Criner submitted his observations regarding plaintiff's activities and abilities on a "Function Report -- Adult -- Third Party," which is the Social Security Administration's own "Form SSA-3380-BK." [See AR at 349-56.] There is no indication on the form that the person completing the form must make the statements under oath in order for the statements to constitute "acceptable medical evidence" under 20 C.F.R. §§ 404.1513(d), 416.913(d), nor do the regulations themselves require that such forms be completed under oath. See 20 C.F.R. §§ 404.1513(d), 416.913(d) ("In addition to evidence from the acceptable medical sources listed in paragraph (a) of this section, we may also use evidence from other sources to show the severity of your impairment(s) and how it affects your ability to work.").

As with the previous reason, the ALJ's rejection for lack of an oath would amount to a wholesale dismissal of the statements in all such reports, and is therefore an improper reason to reject Mr. Criner's statements.

Likewise, the ALJ's rejection of Mr. Criner's statements on the basis that he is plaintiff's friend, and therefore has a motive to help plaintiff receive benefits, was improper because such a basis for rejection would also result in the dismissal of testimony of any witness who is the friend of a claimant, which would undermine the assumption that lay testimony from witnesses who see a claimant regularly, albeit less frequently than every day, "still carries some weight." Dodrill, 12 F.3d at 919. The ALJ's conclusory rejection of Mr. Criner's testimony, without pointing to a specific basis for finding that Mr. Criner was improperly biased, does not qualify as a reason germane to Mr. Criner. See Smolen, 80 F.3d at 1289 (ALJ's rejection of plaintiff's family members' testimony on the grounds that they were "'understandably advocates, and biased' . . . 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"); see also Regennitter, 166 F.3d at 1298 (ALJ cannot reject lay witness testimony of plaintiff's mother on the basis of presumed bias).

Finally, the ALJ improperly rejected Mr. Criner's testimony on the basis that "his allegations in regards to the severity of [plaintiff's] symptoms are out of proportion to the medical evidence and are rebutted by the assessments of the medical expert, the consultative examiner, and the State agency physicians." While inconsistency with the medical evidence may be a reason to reject lay witness testimony, the Court finds the ALJ's rationale unpersuasive in this case for several reasons. First, as discussed above, both the ALJ's review of the medical evidence and Dr. Kania's assessment of plaintiff's impairments were improper as to plaintiff's symptoms of psychosis. Thus, insofar as the ALJ's rejection of Mr. Criner's statements was premised on his improper review of the evidentiary record or Dr. Kania's inaccurate opinion, the ALJ must also reconsider Mr. Criner's statements on remand. Moreover, in determining plaintiff's RFC, the ALJ noted that although he agreed with the assessments of the consultative examiner and the State agency physicians, his own ultimate RFC was more restrictive than those of the consultative examiner and State agency physicians because the ALJ "took into consideration" plaintiff's subjective complaints. [AR at 283.] As such, without a more specific explanation, it is unclear to the Court how any inconsistency between the consultative examiner and State agency physicians' assessments and Mr. Criner's statements is a proper basis for rejecting Mr. Criner's statements. Finally, insofar as the ALJ found Mr. Criner credible in his observations of plaintiff's activities, but otherwise not credible, the ALJ improperly discredited some of Mr. Criner's statements on the basis of their "relevance or irrelevance to medical conclusions." Bruce v. Astrue, 557 F.3d 1113, 1116 (9th Cir. 2009) (ALJ improperly discredited plaintiff's wife's lay witness testimony "on the basis of its relevance or irrelevance to medical conclusions" where ALJ found her credible in her observations of her husband's activities, but not credible "'to render opinions on how the [plaintiff's] impairments impact his overall abilities to perform basic work activities'"). The ALJ's grounds for rejecting Mr. Criner's statements, without articulating how Mr. Criner's statements are inconsistent with the medical evidence or valid assessments by Dr. Kania, the consultative examiner, or the State agency physicians, is not sufficiently specific to constitute a germane reason for rejecting Mr. Criner's statements. See Bruce, 557 F.3d at 1115 (citing Stout, 454 F.3d at 1054) ("If an ALJ disregards the testimony of a lay witness, the ALJ must provide reasons 'that are germane to each witness' . . . [and the reasons] must be specific."); see also Vista Hill Found., Inc. v. Heckler, 767 F.2d 556, 559 (9th Cir. 1985) (A reviewing court may affirm an administrative decision only on grounds articulated by the agency.).

The ALJ's failure to properly reject Mr. Criner's statements -- who spent time with plaintiff on a weekly basis and has known plaintiff for three and a half years -- was error. See Dodrill, 12 F.3d at 919 ("An eyewitness can often tell whether someone is suffering or merely malingering. While this is particularly true of witnesses who view the claimant on a daily basis, the testimony of those who see the claimant less often still carries some weight."). Moreover, the ALJ's failure in this instance does not constitute harmless error because Mr. Criner's statements may have corroborated plaintiff's testimony or provided additional information that could have impacted the ALJ's determination regarding the severity of plaintiff's impairments and how those impairments affect plaintiff's ability to work. See Booz v. Sec'y of Health and Human Servs., 734 F.2d 1378, 1381 (9th Cir. 1984) (holding that the test for determining whether an error is harmless is "whether there is a reasonable possibility that [the new evidence] would have changed the outcome of the present case"); see also Robbins v. Soc. Sec. Admin., 466 F.3d 880, 885 (9th Cir. 2006) (quoting Stout, 454 F.3d at 1055-56) (harmless error applies only when it is clear from the record that an ALJ's error is "inconsequential to the ultimate non-disability determination"). Indeed, the report completed by Mr. Criner lends some support to plaintiff's testimony regarding her inability to work. [AR at 349-56.] In the report, Mr. Criner stated that plaintiff's conditions affect her in various ways physically, emotionally, and socially. [See supra, at 18.] The Court cannot confidently conclude that no reasonable ALJ, if crediting the lay witness statements of plaintiff's friend, would have reached a different disability determination. See Robbins, 466 F.3d at 885 (quoting Stout, 454 F.3d at 1056) ("[W]here the ALJ's error lies in a failure to properly discuss competent lay testimony favorable to the [plaintiff], 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."). As the ALJ failed to provide germane reasons for rejecting Mr. Criner's statements, and as the error was not harmless, remand is warranted on this issue.

VI.

REMAND FOR FURTHER PROCEEDINGS .

As a general rule, remand is warranted where additional administrative proceedings could remedy defects in the Commissioner's decision. See Harman v. Apfel, 211 F.3d 1172, 1179 (9th Cir.), cert. denied, 531 U.S. 1038 (2000); Kail v. Heckler, 722 F.2d 1496, 1497 (9th Cir. 1984). In this case, remand is appropriate to consider plaintiff's RFC and disability status after crediting Dr. Diamreyan's findings and properly considering Mr. Criner's statements, and to include all of plaintiff's limitations in the RFC assessment and the hypothetical question posed to the VE. The ALJ is instructed to take whatever further action is deemed appropriate and consistent with this decision.

Accordingly, 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.

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.


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