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Kroeger v. Saul

United States District Court, N.D. California

September 17, 2019

ANDREW SAUL, [1]Defendant.



         This case is now before the Court for a second time, after having been remanded to the Social Security Administration (“SSA”) in May 2015. Plaintiff Michael Kroeger now seeks review of the January 2017 decision the administrative law judge (“ALJ”) issued after remand, in which the ALJ denied disability insurance benefits (“DIB”). In his motion for summary judgment, plaintiff asks the Court to reverse the denial of DIB and award him benefits or, in the alternative, to remand the case for further proceedings. Dkt. No. 24. The Commissioner of Social Security has filed a cross-motion to affirm the denial of DIB. Dkt. No. 27.

         Having considered the parties' papers and the administrative record, the Court hereby GRANTS plaintiff's motion for summary judgment and DENIES defendant's cross-motion for summary judgment. The matter is REMANDED for immediate payment of benefits.


         I. Procedural Background

         In January of 2010, plaintiff filed an application for DIB under Title II of the Social Security Act. Administrative Record (“AR”) at 14, 1619. In July 2010, plaintiff filed an application for supplemental security income (“SSI”) under Title XVI of the Social Security Act. Id. at 14. The applications were denied initially and on reconsideration. Id. at 40, 45. Plaintiff requested a hearing, which ALJ Phillip C. Lyman conducted on May 25, 2012. Id. at 1323. At the hearing, plaintiff, who was represented by counsel, argued for a disability onset date of June 29, 2011.[2] Id. at 14. At the time, plaintiff's counsel believed that his Date Last Insured was March 31, 1998, and that a claim for DIB would be futile, although the ALJ informed plaintiff at the hearing that the correct Date Last Insured was December 31, 2010.[3] See Id. at 30, 1333. Counsel thus waived plaintiff's claim to Title II benefits (DIB). Id. at 1334. After the hearing, plaintiff's counsel realized the error in the calculation of the Date Last Insured and sought to rescind plaintiff's waiver of his claim to DIB; plaintiff then amended the alleged onset date to December 31, 2010, in order to pursue his DIB claim. Id. at 14, 30.

         On June 14, 2012, the ALJ issued a decision. The ALJ's decision acknowledged that plaintiff amended the alleged onset date to December 31, 2010. Id. at 14. The ALJ granted plaintiff's SSI application, finding he had been disabled since June 29, 2011. Id. at 26. However, the ALJ denied the DIB application based on a finding that plaintiff was not disabled prior to or on December 31, 2010, the last date he was insured. Id. The Appeals Council denied review, id. at 4, and plaintiff filed an appeal in the district court that was assigned to the undersigned Judge. See Kroeger v. Colvin, No. 13-cv-05254-SI (filed Nov. 12, 2013). In the appeal, plaintiff argued that he was disabled on December 31, 2010, the last date he was insured, thereby making him eligible for DIB.

         On May 19, 2015, this Court issued a decision reversing and remanding the case for further proceedings. Kroeger v. Colvin, No. 13-cv-05254-SI, Dkt. No. 23 (“Prior Order”). The Court ordered that on remand:

The ALJ should determine the severity of plaintiff's symptoms on December 31, 2010, without attempting to separate out the symptoms related to plaintiff's substance use. If the ALJ finds that plaintiff's symptoms are severe enough to be disabling after completing the five-step disability [inquiry], then the ALJ should assess the materiality of plaintiff's substance use on December 31, 2010. If the ALJ finds that plaintiff's substance use was material to a finding of disability on December 31, 2010, then plaintiff was not disabled as of December 31, 2010, the last date insured, and does not qualify for DIB. If the ALJ determines that plaintiff's mental impairments as of December 31, 2010 would remain disabling if plaintiff stopped his substance use, then plaintiff will be found to have been disabled on December 31, 2010, thereby qualifying for DIB.

Id. at 20. The Court further explained that, in determining whether plaintiff's substance use was material to a finding of disability on December 31, 2010:

[t]he ALJ should evaluate the opinions of Dr. Bilik and Dr. Anderson in light of plaintiff's ongoing disabling mental impairments despite maintaining sobriety on June 29, 2011. The ALJ should also evaluate the plaintiff's treatment records between December 2010 and June 29, 2011, including the medical records during plaintiff's inpatient stay at the VA from January to February 2011 and treatment records from plaintiff's clinical social worker Omar Geray, to determine whether plaintiff's mental impairments would have remained in the absence of his substance use. As the “materiality” determination is critical to whether December 31, 2010 was the onset date, if the record seems ambiguous as to whether plaintiff's substance use was material to a finding of disability on December 31, 2010, then the ALJ should consult a medical expert to make the determination.

Id. at 19. The Court did not disturb that portion of the ALJ's decision finding plaintiff entitled to SSI benefits.

         The Appeals Council vacated the prior decision of the ALJ and remanded the case to the ALJ. AR at 1524. On remand, plaintiff amended his alleged disability onset date to January 7, 2010. Id. at 1356. On October 17, 2016, ALJ Lyman held a new administrative hearing that lasted three hours. Plaintiff appeared and testified, as did plaintiff's wife, Mary Kroeger. Richard Cohen, MD, testified as an impartial medical expert, and Ronald Morrell testified as an impartial vocational expert. Id.

         On January 19, 2017, the ALJ issued a partially favorable decision, again finding that plaintiff was disabled beginning on June 29, 2011, and was therefore eligible for SSI, which is not dependent on a claimant's insured status, but was ineligible for DIB, which requires a claimant to have been disabled on or before the Date Last Insured. See Id. at 3057-58.[4] After the timeframe had passed within which to submit exceptions to the ALJ's decision, plaintiff, through his counsel, offered exceptions to the Appeals Council. Id. at 1343. On May 25, 2017, the Appeals Council notified plaintiff of the untimeliness of the submission and requested plaintiff provide evidence that he had timely submitted the exceptions. Id. After plaintiff did not respond, on November 13, 2017, the ALJ's decision became the final decision of the Commissioner after remand. Id.

         On January 17, 2018, plaintiff filed this action for judicial review pursuant to 42 U.S.C. § 405(g). Dkt. No.1. Plaintiff moved for summary judgment, and defendant opposed and cross-moved for summary judgment. Dkt. Nos. 24 (“Pl.'s Mot.”), 27 (“Def.'s Cross-Mot.”). Plaintiff also filed a reply brief. Dkt. No. 28 (“Pl.'s Reply”).

         II. Medical History

         At the time of the most recent administrative hearing on October 17, 2016, plaintiff was a fifty-five-year-old veteran with a long history of bipolar disorder, mood disorder, episodic anxiety, depression, and substance abuse.[5] See AR at 14, 142, 2888. After dropping out of high school, plaintiff enlisted in the Navy and served in aviation maintenance. Id. at 142. Plaintiff left the service in 1985 and worked as a carpenter. Id. During the early 1990s, plaintiff's mental health declined, and at some point plaintiff began self-medicating with drugs. Id. Due to his worsening psychiatric symptoms, plaintiff was unable to work in 1994 and has not worked since. Id. Plaintiff has also suffered from various physical ailments such as foot deformities, a broken leg in April 2010, diagnosis of Hepatitis C in 2010, and prostate cancer in 2011, but he does not make these the focus of his appeal. See Id. at 143-44, 274, 367, 926, 1258. Plaintiff previously received SSI, but on a continuing disability review, the SSA terminated his benefits after finding that he was no longer disabled as of August 2007. Id. at 68.

         In 2008 and 2009, plaintiff was treated at Kaiser Permanente for his bipolar and mood disorders and for his substance dependency. Id. at 152-201. On January 7, 2010, plaintiff was voluntarily hospitalized through the Veterans' Administration (“VA”) medical system and treated for bipolar disorder, depression, anxiety, suicidal ideation, opioid dependence, and amphetamine abuse. Id. at 433-481. After being discharged on January 26, 2010, plaintiff sought outpatient treatment for his mental health symptoms and substance dependency. Id. at 419. Throughout March and April of 2010, plaintiff received therapy and medication for his depression and anxiety (id. at 368, 371, 376, 378, 381, 387), and plaintiff was also admitted to the VA emergency room in between psychiatric appointments due to his increasing anxiety (id. at 364, 366, 385).

         Sometime in mid-2010, plaintiff relapsed into methamphetamine and opiate use and was not treated at the VA for several months. Id. at 361-64. On November 5, 2010, plaintiff was seen at the VA by psychiatrist Dr. Rukhsana Khan, MD, and was assessed with having “[p]olysubstance abuse and dependence [and] [m]ood disorder secondary to active substance abuse.” Id. at 362-63. On the same day, plaintiff began seeing a mental health clinical social worker Omar Geray, LCSW, and expressed interest in the VA's detoxification and rehabilitation programs. Id. at 360-61. On December 20, 2010, while waiting for an opening in one of the VA's residential treatment programs, plaintiff was seen by psychiatrist Dr. Vanessa de la Cruz, MD, and was diagnosed with amphetamine abuse, opioid dependence, mood disorder, and substance-induced bipolar with rapid cycling. Id. at 356-58. December 31, 2010, was the last date plaintiff was insured. Id. at 99.

         On January 5, 2011, plaintiff was admitted into the VA's Foundations of Recovery addiction treatment program. Id. at 343. His psychiatric intake evaluation lists multiple mood disorder symptoms, including suicidal ideation and depressive episodes. Id. at 313-14, 1129-39. During his hospitalization, plaintiff was treated for substance dependency, bipolar disorder, mood disorder, depression, and suicidal ideation. Id. at 1028-29, 1035-36, 1041-42, 1080, 1130. Upon his discharge on February 4, 2011, plaintiff was placed on the waitlist for the long-term inpatient Homeless Veterans Rehabilitation Program (“HVRP”). Id. at 1080. While waiting for an opening at HVRP, plaintiff continued to receive outpatient treatment through the VA for his substance dependency and his ongoing mental health symptoms, and plaintiff was prescribed Effexor for his depression. Id. at 1010-12.

         On June 29, 2011, plaintiff entered the VA's First Step Program for relapse prevention training, and on September 1, 2011, plaintiff was discharged and directly transferred to HVRP. Id. at 673, 721. During his time as an inpatient at First Step Program and HVRP, plaintiff abstained from all substances, received training for relapse prevention and life skills, and was treated for his mental health symptoms. Id. at 673, 722, 989-90, 992. Plaintiff was discharged on March 15, 2012, and received outpatient care throughout 2012. Id. at 760, 736-58.

         III. Medical Evidence

         In addition to reviewing treatment records, the ALJ considered the opinions of various non-treating mental health professionals. These include: (1) Dr. Scaramozzino, a consultative psychologist who examined plaintiff on September 4, 2010; (2) Dr. Bilik, a non-examining consultative psychologist who reviewed plaintiff's records and submitted a report on October 6, 2010; (3) Dr. Anderson, a non-examining psychiatrist who testified at plaintiff's first hearing on May 25, 2012; and (4) Dr. Cohen, a non-examining psychiatrist who testified at plaintiff's second hearing on October 17, 2016.

         A. Dr. Scaramozzino, PhD

         On September 4, 2010, examining psychologist Dr. James Scaramozzino, PhD, conducted a consultative psychiatric evaluation on behalf of the SSA. Id. at 202. Dr. Scaramozzino examined plaintiff and reviewed plaintiff's medical records from his treatment at Kaiser Permanente in 2008. Id. Dr. Scaramozzino noted that the severity of plaintiff's psychiatric symptoms was in the “moderate to severe range as regards to his ongoing use of illicit drugs” and indicated that the likelihood of the claimant's mental condition improving in the next 12 months was “poor.” Id. at 207. He also stated that “[t]he diagnosis of bipolar did not seem to be appropriate” and that “there does not appear to be any sustainable period of time where a more clear diagnosis could be made because of the ongoing consistent use of illicit drugs.” Id.

         He diagnosed plaintiff with amphetamine dependence and opined that, due to ongoing substance use, plaintiff had moderate to marked impairments in the following work-related functioning: ability to accept instructions from a supervisor and respond appropriately, ability to complete a normal workday and workweek without interruptions at a consistent pace, and ability to deal with various changes in the work setting. Id. at 207-08. He also opined that, due to ongoing substance use, plaintiff had moderate impairment in his ability to understand and remember very short and simple instructions, ability to maintain concentration and attention, and ability to interact with co-workers. Id. He stated that plaintiff would have a fair to high likelihood of emotionally deteriorating in a work environment. Id.

         B. Dr. Bilik, PsyD

         On October 6, 2010, non-examining SSA consultative psychologist Dr. Harvey Bilik, PsyD, reviewed plaintiff's records from Kaiser Permanente for 2008 and 2009, records from the VA hospital, [6] and the consultative examination conducted by Dr. Scaramozzino. Id. at 209, 222. Dr. Bilik interviewed plaintiff mainly over the phone but did not examine plaintiff.[7] Id. On the basis of his review, Dr. Bilik noted the following medically determinable impairments: mood disorder not otherwise specified[8] and amphetamine abuse/dependence. Id. at 215, 218. He opined that plaintiff had mild limitations in activities of daily living and moderate limitations in maintaining social functioning and in maintaining concentration, persistence, or pace. Id. at 220. He also noted moderate limitations in workplace functioning in areas related to sustained concentration and persistence, social interaction, and adaptation. Id. at 223-24. Then, he determined that plaintiff only had moderate functional limitations in any domain, including limitations related to substance use, and that if plaintiff manifested any ongoing marked functional limitations, then “[plaintiff's substance use] would likely be seen as a primary factor.” Id. at 225.

         C. Dr. Anderson, MD

         Dr. David Anderson, MD, a non-examining psychiatrist, reviewed plaintiff's records and testified as the medical expert at plaintiff's hearing on May 25, 2012. Id. at 1328, 1332, 1335. Because at the time of the hearing plaintiff was alleging a disability onset date of June 29, 2011, Dr. Anderson was only asked to consider plaintiff's condition as of that date. Id. at 1335-38. Dr. Anderson testified that beginning on June 29, 2011, the day that plaintiff entered long-term treatment at the VA, plaintiff suffered ongoing mental health symptoms despite maintaining sustained sobriety. Based on this fact, Dr. Anderson opined that there was “compelling evidence” that plaintiff's underlying mental conditions, independent of plaintiff's substance use, met or equaled one of the listings of severe impairments (listings 12.02 and 12.04) beginning on June 29, 2011. Id. at 1336-37. However, he testified that “from 2008 through 2010, it was clear . . . that [plaintiff's] methamphetamine use was highly material” and that plaintiff's mental conditions were not disabling independent of plaintiff's substance use. Id. at 1337.

         D. Dr. Cohen, MD

         Dr. Richard W. Cohen, MD, was a non-examining psychiatrist who testified as an impartial medical expert at plaintiff's second administrative hearing, held on October 17, 2016. The ALJ presented Dr. Cohen with four different hypotheticals, and Dr. Cohen opined that under each one the hypotheticals, claimant would have restrictions ranging from mild to moderate for the “B” criteria of Listing 12.09 (substance addiction disorder).[9] Id. at 2895-2907. Dr. Cohen also opined about whether the claimant's drug use was present and material under each hypothetical and whether the claimant could perform simple, detailed, or complex work. See id.


         I. Standard of Review

         The Social Security Act authorizes judicial review of final decisions made by the Commissioner. 42 U.S.C. § 405(g). A court's review of a disability determination is limited, and a final administrative decision may be altered “only if it is based on legal error or if the fact findings are not supported by substantial evidence.” Sprague v. Bowen, 812 F.2d 1226, 1229 (9th Cir. 1987). Substantial evidence is the relevant evidence in the entire record “which a reasonable person might accept as adequate to support a conclusion.” Vertigan v. Halter, 260 F.3d 1044, 1049 (9th Cir. 2001). Substantial evidence consists of “more than a mere scintilla but less than a preponderance.” Young v. Sullivan, 911 F.2d 181, 183 (9th Cir. 1990). Courts “must consider the entire record as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner's conclusion, and may not affirm simply by isolating a specific quantum of supporting evidence.” Garrison v. Colvin, 759 F.3d 995, 1009 (9th Cir. 2014) (quoting Lingenfelter v. Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007)). “Where evidence is susceptible to more than one rational interpretation, ” the ALJ's decision should be upheld. Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005). The substantial evidence standard is a deferential standard of review. See Biestek v. Berryhill, 139 S.Ct. 1148, 1154 (2019).

         A district court may enter a judgment affirming, modifying, or reversing the decision of the Commissioner, with or without remanding the cause for a rehearing. 42 U.S.C. § 405(g). If additional proceedings can remedy defects in the original administrative proceedings, a Social Security case should be remanded. See Lewin v. Schweiker, 654 F.2d 631, 635 (9th Cir. 1981). A decision of the ALJ will not be reversed for errors that are harmless. Burch, 400 F.3d at 679 (citing Curry v. Sullivan, 925 F.2d 1127, 1131 (9th Cir. 1991)).

         II. The Five-Step Disability Inquiry

         A claimant is “disabled” under the Social Security Act if: (1) the claimant “is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months, ” and (2) the impairment is “of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy.” 42 U.S.C. § 1382c(a)(3)(A)-(B). The SSA regulations provide a five-step sequential evaluation process for determining whether a claimant is disabled. 20 C.F.R. § 416.920(a)(4). The claimant has the burden of proof for steps one through four and the Commissioner has the burden of proof for step five. Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999).

         The five steps of the inquiry are:

1. Is claimant presently working in a substantially gainful activity? If so, then the claimant is not disabled within the meaning of the Social Security Act. If not, proceed to step two. See 20 C.F.R. §§ 404.1520(b), 416.920(b).
2. Is the claimant's impairment severe? If so, proceed to step three. If not, then the claimant is not disabled. See 20 C.F.R. §§ 404.1520(c), 416.920(c).
3. Does the impairment “meet or equal” one of a list of specific impairments described in 20 C.F.R. Part 220, Appendix 1? If so, then the claimant is disabled. If not, proceed to step four. See 20 C.F.R. §§ 404.1520(d), 416.920(d).
4. Is the claimant able to do any work that he or she has done in the past? If so, then the claimant is not disabled. If not, proceed to step five. See 20 C.F.R. §§ 404.1520(e), 416.920(e).
5. Is the claimant able to do any other work? If so, then the claimant is not disabled. If not, then the claimant is disabled. See 20 C.F.R. §§ 404.1520(f), 416.920(f).

Bustamante v. Massanari, 262 F.3d 949, 954 (9th Cir. 2001). The ALJ has an affirmative duty to assist the claimant in developing the record at every step of the inquiry. Tackett, 180 F.3d at 1098 n.3.

         In between the third and fourth steps, the ALJ must determine the claimant's Residual Functional Capacity (“RFC”). 20 C.F.R. §§ 404.1520(a)(4), (e), 416.945(a)(5)(1). To determine the RFC, the ALJ considers the impact of the claimant's symptoms on his or her ability to meet the physical, mental, sensory, and other requirements of work. Id. §§ 404.1545(a)(4), 416.945(e). The ALJ will evaluate all the claimant's symptoms and the extent to which these symptoms are consistent with evidence in the record. Id. The evidence can include the claimant's own statements about his or her symptoms, but such statements must be adequately supported by the record in order to establish a disability. Id. In order to determine whether the claimant's statements are adequately supported, the ALJ must first determine whether the claimant has a medical impairment that could reasonably be expected to produce his or her symptoms, and then must evaluate the intensity and persistence of the claimant's symptoms. Id. When evaluating intensity and persistence, the ALJ must consider all of the available evidence, including the claimant's medical history, objective medical evidence, and statements about how the claimant's symptoms affect him or her. Id. The ALJ cannot reject statements about the intensity and persistence of symptoms solely because no objective medical evidence substantiates the statements. Id. §§ 404.1529(c)(2), 416.929(c)(2). The ALJ must also consider factors relevant to the claimant's symptoms, such as the claimant's daily activities, the claimant's medications and treatment, any other measures the claimant uses to alleviate symptoms, precipitating and aggravating factors, and any other factors relevant to the claimant's limited capacity for work due to his or her symptoms. Id. § 416.929(c)(3)(i)-(vii). After determining the RFC, the ALJ proceeds to steps four and five of the disability inquiry.

         III. Drug Addiction and Alcoholism

         If, considering all of the claimant's medically determinable impairments, there is a determination that the claimant is disabled, and there is medical evidence showing drug addiction and alcoholism (“DAA”), then the ALJ must determine whether the DAA is “material” to the finding that the claimant is disabled. 20 C.F.R. §§ 404.1535, 416.935. The Social Security Act provides that a claimant “shall not be considered to be disabled . . . if alcoholism or drug addiction would . . . be a contributing factor material to the . . . determination that the individual is disabled.” 42 U.S.C. § 423(d)(2)(C). In determining whether a claimant's DAA is material, the test is whether an individual would still be found disabled if he or she stopped using drugs or alcohol. See 20 C.F.R. §§ 404.1535(b), 416.935(b); Parra v. Astrue, 481 F.3d 742, 746-47 (9th Cir. 2007); Sousa v. Callahan, 143 F.3d 1240, 1245 (9th Cir. 1998). The ALJ must “evaluate which of [the claimant's] current physical and mental limitations . . . would remain if [the claimant] stopped using drugs or alcohol and then determine whether any or all of [the claimant's] remaining limitations would be disabling.” 20 C.F.R. §§ 404.1535(b)(2), 416.935(b)(2). If the ALJ determines that the claimant's remaining limitations are disabling, ...

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