United States District Court, N.D. California
ORDER RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT Re: Dkt.
Nos. 24, 27
ILLSTON UNITED STATES DISTRICT JUDGE
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.
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.
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. 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. 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.
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.
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
Id. at 19. The Court did not disturb that portion of
the ALJ's decision finding plaintiff entitled to SSI
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.
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. 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.
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”).
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. 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.
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).
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.
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.
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.
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.
Dr. Scaramozzino, PhD
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.
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
Dr. Bilik, PsyD
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,  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. Id. On the basis of his review,
Dr. Bilik noted the following medically determinable
impairments: mood disorder not otherwise
specified 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.
Dr. Anderson, MD
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.
Dr. Cohen, MD
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). 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.
Standard of Review
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).
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
The Five-Step Disability Inquiry
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).
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),
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. §§
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),
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.
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
Drug Addiction and Alcoholism
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