United States District Court, C.D. California
MEMORANDUM OPINION AND ORDER REVERSING COMMISSIONER
JEAN ROSENBLUTH, Magistrate Judge.
Plaintiff seeks review of the Commissioner's final decision denying her application for supplemental security income ("SSI"). The parties consented to the jurisdiction of the undersigned U.S. Magistrate Judge under 28 U.S.C. § 636(c). This matter is before the Court on the parties' Joint Stipulation, filed June 19, 2014, which the Court has taken under submission without oral argument. For the reasons discussed below, the Commissioner's decision is reversed and this action is remanded for further proceedings.
Plaintiff was born on March 7, 1956. (Administrative Record ("AR") 171.) She attended two years of nursing school (AR 305) and worked briefly as a baggage clerk at a supermarket, a cashier at Rite Aid, and a clerk at Walmart (AR 211).
On July 9, 2009, Plaintiff filed an application for SSI, alleging that she had been unable to work since May 15, 2007, because of diabetes, high blood pressure, and anxiety. (AR 107-08, 171-73, 189.) After her application was denied, she requested a hearing before an Administrative Law Judge. (AR 124.) A hearing was held by videoconference on November 8, 2011. (AR 70-106.) Plaintiff, who was represented by counsel, testified, as did a vocational expert. (Id.) In a written decision issued December 15, 2011, the ALJ determined that Plaintiff was not disabled. (AR 23-35.) On June 27, 2013, the Appeals Council denied Plaintiff's request for review. (AR 1-3.) This action followed.
III. STANDARD OF REVIEW
Under 42 U.S.C. § 405(g), a district court may review the Commissioner's decision to deny benefits. The ALJ's findings and decision should be upheld if they are free of legal error and supported by substantial evidence based on the record as a whole. Id .; Richardson v. Perales , 402 U.S. 389, 401 (1971); Parra v. Astrue , 481 F.3d 742, 746 (9th Cir. 2007). Substantial evidence means such evidence as a reasonable person might accept as adequate to support a conclusion. Richardson , 402 U.S. at 401; Lingenfelter v. Astrue , 504 F.3d 1028, 1035 (9th Cir. 2007). It is more than a scintilla but less than a preponderance. Lingenfelter , 504 F.3d at 1035 (citing Robbins v. Soc. Sec. Admin. , 466 F.3d 880, 882 (9th Cir. 2006)). To determine whether substantial evidence supports a finding, the reviewing court "must review the administrative record as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner's conclusion." Reddick v. Chater , 157 F.3d 715, 720 (9th Cir. 1996). "If the evidence can reasonably support either affirming or reversing, " the reviewing court "may not substitute its judgment" for that of the Commissioner. Id . at 720-21.
IV. THE EVALUATION OF DISABILITY
People 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 12 months. 42 U.S.C. § 423(d)(1)(A); Drouin v. Sullivan , 966 F.2d 1255, 1257 (9th Cir. 1992).
A. The Five-Step Evaluation Process
An ALJ follows a five-step sequential evaluation process to assess whether someone is disabled. 20 C.F.R. § 416.920(a)(4); Lester v. Chater , 81 F.3d 821, 828 n.5 (9th Cir. 1995) (as amended Apr. 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 must be denied. § 416.920(a)(4)(i). If the claimant is not 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 not disabled is made and the claim must be denied. § 416.920(a)(4)(ii). 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. § 416.920(a)(4)(iii).
If the claimant's impairment or combination of impairments does not meet or equal one in the Listing, the fourth step requires the Commissioner to determine whether the claimant has sufficient residual functional capacity ("RFC") to perform her past work; if so, she is not disabled and the claim must be denied. § 416.920(a)(4)(iv). The claimant has the burden of proving she is unable to perform past relevant work. Drouin , 966 F.2d at 1257. If the claimant meets that burden, a prima facie case of disability is established. Id . If that happens or if the claimant has no past relevant work, the Commissioner bears the burden of establishing that the claimant is not disabled because she can perform other substantial gainful work available in the national economy. § 416.920(a)(4)(v). That determination comprises the fifth and final step in the sequential analysis. § 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
At step one, the ALJ found that Plaintiff had not engaged in any substantial gainful activity since July 9, 2009, her application date. (AR 25.) At step two, she found that Plaintiff had the severe impairments of "obesity and diabetes mellitus." (Id.) She found that Plaintiff's hypertension, depression, and anxiety were not severe. (AR 27-29.) At step three, the ALJ determined that Plaintiff's impairments did not meet or equal any of the impairments in the Listing. (AR 29.) At step four, the ALJ found that Plaintiff had the RFC to perform "medium work" but "must avoid concentrated exposure to unprotected heights or hazardous machinery." (AR 29.) The ALJ then concluded that under Medical-Vocational Rules 203.14 and 203.21, see 20 C.F.R. pt. 404, subpt. P, app. 2, Rs. 203.14 & 203.21, Plaintiff was not disabled. (AR 34-35.)
Plaintiff contends that the ALJ erred in (1) failing to include any mental limitations in her RFC; (2) rejecting the opinions of her treating physician, Dr. Stanley Golanty; (3) discounting her credibility; and (4) evaluating her obesity. (J. Stip. at 3.)
A. The ALJ Erred in Assessing Plaintiff's Mental Limitations
Plaintiff contends that the ALJ erred by "misinterpret[ing]" the medical record and failing to include in her RFC a limitation to "simple repetitive tasks." (J. Stip. at 20.) For the reasons discussed below, the Court finds that remand is appropriate.
1. Applicable law
"RFC is an administrative assessment of the extent to which an individual's medically determinable impairment(s), including any related symptoms, such as pain, may cause physical or mental limitations or restrictions that may affect [her] capacity to do work-related physical and mental activities." SSR 96-8p, 1996 WL 374184, at *2 (July 2, 1996). A district court must uphold an ALJ's RFC assessment when the ALJ has applied the proper legal standard and substantial evidence in the record as a whole supports the decision. Bayliss v. Barnhart , 427 F.3d 1211, 1217 (9th Cir. 2005). The ALJ must consider all the medical evidence in the record and "explain in [his] decision the weight given to... [the] opinions from treating sources, nontreating sources, and other nonexamining sources." 20 C.F.R. § 416.927(e)(2)(ii); see also § 416.945(a)(1) ("We will assess your residual functional capacity based on all the relevant evidence in your case record."); SSR 96-8p, 1996 WL 374184, at *2 (RFC must be "based on all of the relevant evidence in the case record").
In making an RFC determination, the ALJ may consider those limitations for which there is support in the record and need not consider properly rejected evidence or subjective complaints. See Bayliss , 427 F.3d at 1217 (upholding ALJ's RFC determination because "the ALJ took into account those limitations for which there was record support that did not depend on [claimant's] subjective complaints"); Batson v. Comm'r of Soc. Sec. Admin. , 359 F.3d 1190, 1197 (9th Cir. 2004) (ALJ not required to incorporate into RFC evidence from treating-physician opinions that were "permissibly discounted"). Moreover, the ALJ must consider limitations imposed by all of the claimant's medically determinable impairments, even those that are not severe. § 416.945(a)(2).
On October 7, 2009, Dr. Nathan E. Lavid, a board-certified psychiatrist, performed a complete psychiatric evaluation of Plaintiff at the agency's request. (AR 304-07.) He found that Plaintiff complained of panic attacks and took the medication Ativan,  which she said was helpful. (AR 304.) Plaintiff was well dressed, had good hygiene, a normal gait, and a full range of affect. (AR 304, 306.) Her thought processes were goal directed and she was able to recall three items immediately and one item after five minutes. (AR 306.) Dr. Lavid noted that Plaintiff was "unable to perform serial 3s accurately, but was able to concentrate throughout the evaluation." (Id.) He diagnosed "Panic Disorder vs. Anxiety Disorder." (Id.) Under "functional assessment, " Dr. Lavid noted that the examination "revealed no evidence of cognitive deficits, perceptual disturbances or delusional disorders" and that Plaintiff was able to "focus her attention adequately, " "follow 1- and 2-part instructions, " and "adequately remember and complete simple tasks." (AR 307.) Dr. Lavid found that "[c]onsidering that [Plaintiff] reports a partial response to treatment and performed reasonably well during the mental status examination today, I believe that in her current mental state, she does have the ability to tolerate the stress inherent in the work environment, maintain regular attendance, and work without supervision." (Id.)
On October 28, 2009, Dr. L.O. Mallare, a psychiatrist,  reviewed Plaintiff's medical records and completed psychiatric-review-technique and mental-RFC forms. (AR 313-26.) In the PRT form, Dr. Mallare opined that Plaintiff suffered from an anxiety disorder that resulted in mild restriction of activities of daily living, mild difficulties in maintaining social functioning, and mild difficulties in maintaining concentration, persistence, or pace. (AR 317, 321.) He noted that Plaintiff was able to perform "SRT, " or simple repetitive tasks. (AR 323.) In the mental-RFC form, Dr. Mallare found that Plaintiff was "moderately limited" in her ability to understand, remember, and carry out detailed instructions but was not significantly limited in any other area, including her ability to understand, remember, and carry out very short and simple instructions. (AR 324-35.) He found that Plaintiff had "adequate mental function to perform 1-2 step instr[uctions], " was able to ...