Rivera v. Kijakazi

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 VICTOR R., Case No.: 23-CV-00501-GPC-BGS

12 Plaintiff, ORDER ADOPTING THE 13 v. MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION AND 14 MARTIN J. O’MALLEY, Commissioner VACATING AND REMANDING of Social Security, 15 FOR FURTHER PROCEEDINGS Defendants. 16 [ECF No. 15] 17 18 Victor R. (“Plaintiff”) filed this action pursuant to 42 U.S.C. § 405(g) seeking 19 judicial review of the final administrative decision of the Commissioner of the Social 20 Security Administration (“Commissioner”), which denied Plaintiff’s application for 21 disability benefits and supplemental security income under the Social Security Act. ECF 22 No. 1. Pursuant to the Magistrate Judge's scheduling order, the parties filed a joint 23 motion for judicial review. ECF Nos. 9, 15. On February 1, 2024, Magistrate Judge 24 Bernard G. Skomal issued a report and recommendation (“R&R”) recommending that the 25 final decision of the Commissioner be vacated and the case remanded. ECF No. 16 at 26 27 1 21.1 The Commissioner did not file an objection. After considering all related 2 documents, the Court ADOPTS the R&R, VACATES the Commissioner’s decision and 3 REMANDS for further proceedings consistent with this decision. 4 BACKGROUND 5 The Court adopts the underlying facts set forth in the R&R in their entirety and 6 provides only a brief overview. 7 On January 28, 2022, using the five-step evaluation process in 20 C.F.R. § 8 404.1520(a)(4), an Administrative Law Judge (“ALJ”) held that Plaintiff was not 9 disabled under the Social Security Act. AR 15-16, 25. Specifically, the ALJ concluded, 10 at step two of the sequential analysis, that Plaintiff’s history of coronary artery 11 disease/ischemic heart disease was severe, but that Plaintiff’s medically determinable 12 mental impairments of depression and posttraumatic stress disorder (PTSD) were mild 13 and therefore non-severe. AR 18-20. The ALJ did not mention Plaintiff’s anxiety. See 14 id. at 19, 549. The ALJ used the special Psychiatric Review Technique to assess 15 Plaintiff’s mental health symptoms and rated the degree of functional limitation Plaintiff 16 had in four areas: Plaintiff’s ability to understand, remember, or apply information; 17 interact with others; concentrate, persist, or maintain pace; and adapt or manage himself. 18 AR 19-20. Because the ALJ found that the depression and PTSD “caused no more than 19 ‘mild’ limitation” in each of the functional areas, it held that his mental impairments were 20 non-severe. AR 20. 21 Because the ALJ concluded that Plaintiff’s coronary artery disease was severe, the 22 ALJ moved on in the sequential analysis, but held at step four that Plaintiff was not 23 disabled because he “was capable of performing past relevant work as a sales 24

25 26 1 Page numbers reflect CM/ECF pagination except for citations to the administrative record which are cited with their original page number. 27 1 representative, data processing services and sales manager.” AR 24. This was based on 2 the Residual Functional Capacity (“RFC”) analysis, in which the ALJ emphasized the 3 limitations on Plaintiff’s physical abilities and did not address limitations caused by his 4 mental impairments―though the ALJ briefly discussed the medical opinions on 5 Plaintiff’s mental health. AR 20-24. 6 The Appeals Council denied review of the ALJ’s decision on January 23, 2023, 7 AR 1, and Plaintiff timely sought judicial review on March 20, 2023. ECF No. 1. Upon 8 the parties’ joint motion, ECF No. 15, the Magistrate Judge issued an R&R on February 9 1, 2024 recommending vacatur and remand because the ALJ’s decision was not 10 supported by substantial evidence at step two and because it failed to consider mild 11 mental limitations in the RFC analysis, ECF No. 16. No party filed objections or replies. 12 STANDARD OF REVIEW 13 The Social Security Act provides for judicial review of a final agency decision 14 denying a claim for disability benefits. 42 U.S.C. § 405(g). The reviewing court may 15 enter a judgment affirming, modifying, reversing, or remanding the Commissioner’s 16 decision for further proceedings. Id. The Court upholds the final agency action unless it 17 is “based on legal error or not supported by substantial evidence in the record.” Trevizo 18 v. Berryhill, 871 F.3d 664, 674 (9th Cir. 2017) (citation omitted). “Substantial evidence” 19 means more than “a mere scintilla,” but is no more than “such relevant evidence as a 20 reasonable mind might accept as adequate to support a conclusion.” Biestek v. Berryhill, 21 139 S. Ct. 1148, 1154 (2019). Although this is a highly deferential standard of review, 22 the Court must consider the entire record, weighing both the evidence that supports and 23 detracts from the Commissioner’s conclusion. Garrison v. Colvin, 759 F.3d 995, 1009 24 (9th Cir. 2014). 25 The district court “may accept, reject, or modify, in whole or in part, the findings 26 and recommendations made by the magistrate.” 28 U.S.C. § 636(b). It need not review 27 1 de novo those portions of an R&R to which neither party objects. United States v. Reyna- 2 Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc). When no objections to an R&R 3 are made, the district court may assume the correctness of the magistrate judge’s findings 4 of fact and decide the motion on the applicable law. Campbell v. U.S. Dist. Ct. for the N. 5 Dist. of Cal., 501 F.2d 196, 206 (9th Cir. 1974). No objections were made to this R&R. 6 DISCUSSION 7 Plaintiff asserts that remand is appropriate because: (1) the ALJ failed to consider 8 credible mental limitations in the RFC assessment and in the dispositive hypothetical 9 question; and (2) the ALJ did not correctly apply the applicable de minimis standard in 10 finding that Plaintiff’s mental impairments were not severe. ECF No. 15 at 3, 21. The 11 R&R agrees on both grounds. See generally ECF No. 16. The Court will address the 12 issues in the reverse order; that is, in the order in which they arise in the sequential 13 analysis. 14 I. Substantial evidence does not support the ALJ’s decision that Plaintiff’s mental impairments were non-severe. 15

The Court adopts the Magistrate Judge’s determination that “substantial evidence 16 does not support the ALJ’s conclusion that the PTSD and depression were non-severe” at 17 step two of the five-step evaluation process. ECF No. 16 at 20. 18 At step two of the sequential process, the ALJ must determine whether an 19 impairment is severe or not. 20 C.F.R. § 416.920(a)(4)(2). This analysis entails: 20 determining whether the claimant has any medically determinable mental impairments; 21 rating the degree of functional limitation resulting from the mental impairment(s) in four 22 broad functional areas; determining the severity of the mental impairment(s); and then if 23 any of the impairments is severe, proceeding in the sequential evaluation process. 20 24 C.F.R. § 416.920a(b)-(d); Keyser v. Comm’r Soc. Sec. Admin., 648 F.3d 721, 725 (9th 25 Cir. 2011). The four functional areas are a claimant’s ability to understand, remember, or 26 apply information; interact with others; concentrate, persist, or maintain pace; and adapt 27 1 or manage themselves. 20 C.F.R. § 404, Subpt. P, App. 1 at 12.00(A)(2)(b). In rating the 2 degree of limitation, the following scale is utilized: none, mild, moderate, marked, and 3 extreme. 20 C.F.R. § 416.920a(c)(4). If the degrees of limitation are rated as “none” or 4 “mild,” the impairment generally is considered not severe “unless the evidence otherwise 5 indicates that there is more than a minimal limitation in [Plaintiff’s] ability to do basic 6 work activities.” Id. § 416.920a(d)(1). 7 Agency regulation specifies that impairments are non-severe if the claimant does 8 “not have any impairment or combination of impairments which significantly limits 9 [their] physical or mental ability to do basic work activities.” Id. § 416.920(c). Although 10 the regulation states that the impairment must “significantly limit” the claimant’s 11 abilities, later agency and Ninth Circuit decisions have clarified that “[a]n impairment or 12 combination of impairments may be found not severe only if the evidence establishes a 13 slight abnormality that has no more than a minimal effect on an individual’s ability to 14 work.” Webb v. Barnhart, 433 F.3d 683, 686 (9th Cir. 2005); Med. Impairments That 15 Are Not Severe, SSR 85-28, 1985 WL 56856 (S.S.A. 1985). In other words, “the step- 16 two inquiry is a de minimis screening device to dispose of groundless claims.” Smolen v. 17 Chater, 80 F.3d 1273, 1290 (9th Cir. 1996). 18 Applying the standard of review, the question before the Court is “whether the ALJ 19 had substantial evidence to find that the medical evidence clearly established that 20 [Plaintiff] did not have a medically severe impairment or combination of impairments.” 21 Webb, 433 F.3d at 687; cf. Yuckert v. Bowen, 841 F.2d 303, 306 (9th Cir. 1988) (“Despite 22 the deference usually accorded to the Secretary’s application of regulations, numerous 23 appellate courts have imposed a narrow construction upon the severity regulation applied 24 here.”). 25 Substantial medical evidence in the record does not “clearly establish” that 26 Plaintiff’s mental impairments had “no more than a minimal effect” on Plaintiff’s ability 27 1 to do basic work activities. Webb, 433 F.3d at 686-87. In late December 2020, a 2 psychotherapist, Dr. Clark, found that according to a diagnostic screening mechanism, 3 Plaintiff had “very severe depression.” AR 549. Dr. Clark also noted that another 4 diagnostic screener indicated that Plaintiff had anxiety and an ACE score, which assesses 5 adverse childhood experiences, in the top 1% of the male population. Id.; ECF No. 15 at 6 23 n.8. The medical record includes notes from weekly therapy sessions with Dr. Clark 7 from December 2020 to March 2021, AR 541-61, and Plaintiff testified at the hearing 8 that he had been seeing Dr. Clark regularly since 2017, AR 43.2 Plaintiff explained that 9 he stopped seeing Dr. Clark because she stopped accepting Medi-Cal insurance. AR 42- 10 43. 11 In finding only non-severe limitations, the ALJ noted that Plaintiff denied memory 12 loss, AR 19, 796, and focused heavily on a “Function Report” from the Social Security 13 Administration in which Plaintiff stated that he drives, meditates, walks the dog, and 14 cleans the house, and is able to manage money and his bank accounts, follow a recipe, 15 and prepare meals, AR 19-20, 230-33. The ALJ relied on statements from the same 16 report to support the finding that Plaintiff had only mild limitations interacting with 17 others because he “interacted with his daughter and indicated that he had no difficulty 18 getting along with authority figures.” AR 19, 231, 235. 19 While the “Function Report” states that Plaintiff gets along well with authority 20 figures, it also notes that he has been fired or laid off because of problems getting along 21 with his boss. AR 235. Further, the only reference to his daughter is that she will remind 22 him to do household chores if he forgets, which, without more detail, indicates nothing 23

24 25 2 Q: How many times have you seen Dr. Mar[y] Clark in the last two or three years? A: Oh, I saw her quiet often because I was seeing her once a week. 26 Q: When was that, sir? 27 A: . . . . it had to be ’17, ’18, ’19, and then the ’20 and the early part of ’21. 1 about his ability to get along with others. AR 231. Other parts of the same report not 2 noted by the ALJ suggest that the Plaintiff has severe mental impairments. Plaintiff 3 spends no time with others, sometimes forgets to pay bills on time, and can only follow 4 directions if they are not too complicated. AR 233-34. 5 Although the ALJ points out that notes from a therapy appointment on February 8, 6 2021 showed that Plaintiff was in a “good mood,” AR 19, 555, it fails to mention that the 7 notes from an appointment the following week list Plaintiff’s mood as depressive, AR 8 556. Dr. Clark’s intake with Plaintiff also shows that he feels depressed “almost always,” 9 sometimes feels apart from people, sometimes has trouble concentrating, and often 10 uncontrollably worries. AR 542. And in response to a question about mental health 11 issues, Plaintiff testified that “there are times when it’s lack of concentration, a will to get 12 up and do anything. I know for a fact that after I had the sixth stent put in, I literally 13 came into bed and stayed in bed for three days. I couldn’t get up. I was unmotivated. 14 My doctor’s concern was that I wasn’t eating.” AR 42. 15 In addition, Dr. Shamani, Plaintiff’s primary care physician, indicated in a report 16 that Plaintiff’s symptoms were occasionally “severe enough to interfere with attention 17 and concentration needed to perform even simple work task” and that Plaintiff was only 18 capable of low stress jobs. AR 536. The ALJ held that this opinion was unpersuasive 19 because it “relied too much on the claimant’s subjective complaints of neuropathy.” AR 20 24; see Ghanim v. Colvin, 763 F.3d 1154, 1162 (9th Cir. 2014) (“If a treating provider’s 21 opinions are based to a large extent on an applicant’s self-reports and not on clinical 22 evidence, and the ALJ finds the applicant not credible, the ALJ may discount the treating 23 provider’s opinion.” (internal quotation marks and citations omitted)). However, as the 24 Magistrate Judge pointed out, the “ALJ offered no basis for his conclusion that the 25 answers provided by Dr. Shamani were merely reiterating Plaintiff’s subjective 26 27 1 complaints [and the] ALJ also failed to specifically find Plaintiff’s self-reports to be not 2 credible.” ECF No. 16 at 20. 3 In the RFC analysis, the ALJ found that the state agency medical consultants’ 4 opinions―that Plaintiff’s mental impairments were non-severe―were persuasive 5 because “there was minimal evidence of mental health treatment, and the claimant was 6 not on psychotropic medication, which was inconsistent with severe mental health 7 impairments.” AR 23. Nonetheless, as noted above, Plaintiff testified that he had been 8 seeing a therapist for years, and the only reason he stopped was because the therapist no 9 longer took his health insurance. AR 42-43. And it appears that he was on medication 10 for PTSD and anxiety in 2018, but that the prescriptions were discontinued because he 11 was “not feeling well on those medications.” AR 361, 38. The ALJ also found that some 12 of Plaintiff’s activities, including planning a trip to Peru and looking for skilled work, 13 were inconsistent with severe impairments. Id. But, as the Magistrate Judge explained, 14 the Ninth Circuit has previously observed that a “claimant does not need to be utterly 15 incapacitated in order to be disabled.” Revels v. Berryhill, 874 F.3d 648, 667 (9th Cir. 16 2017) (internal quotation marks and citation omitted). 17 On this record, “the ALJ [did not have] substantial evidence to find that the 18 medical evidence clearly established that [Plaintiff] did not have a medically severe 19 [mental] impairment or combination of impairments.” Webb, 433 F.3d at 687. At the 20 very least, this is not a groundless claim. See Smolen, 80 F.3d at 1290 (“[T]he step-two 21 inquiry is a de minimis screening device to dispose of groundless claims.”); see also 22 Ortiz v. Comm’r of Soc. Sec., 425 F. App’x 653, 655 (9th Cir. 2011) (“This is not the 23 total absence of objective evidence of severe medical impairment that would permit us to 24 affirm a finding of no disability at step two.” (internal quotation marks and citations 25 omitted)). The ALJ is not entitled to “cherry pick” evidence to support a particular 26 outcome and ignore contrary evidence. See Banuelos v. Saul, No. 1:19-CV-01652, 2021 27 1 WL 765261, at *15 (E.D. Cal. Feb. 26, 2021); Shah v. Comm’r of Soc. Sec., No. 2:19- 2 CV-1184, 2020 WL 2992121, at *3 (E.D. Cal. June 4, 2020). And here, even putting 3 aside Dr. Shamani’s medical opinion, the ALJ discounted most of the evidence 4 supporting a finding of a severe mental impairment: Plaintiff’s history of therapy with Dr. 5 Clark, Dr. Clark’s findings of severe depression, anxiety, and severe trauma, the parts of 6 Dr. Clark’s notes stating that Plaintiff was depressed, and that Plaintiff struggles to 7 follow complicated directions and spends no time with others. None of these factors are 8 mentioned in the ALJ decision. AR 19-24. 9 Given that an impairment is non-severe only if the record clearly establishes that 10 the impairment had no more than a minimal effect on Plaintiff’s ability to do basic work 11 activities and that the ALJ discounted significant probative evidence supporting a finding 12 of severe mental impairments, the Court ADOPTS the R&R and holds that the ALJ’s 13 determination that Plaintiff’s mental health impairments were non-severe is not supported 14 by substantial evidence. On remand, the ALJ should properly account for all relevant 15 evidence in the record consistent with this decision. 16 II. The ALJ failed to consider credible mental limitations in his Residual Functional Capacity (“RFC”) assessment and hypothetical question to the 17 Vocational Expert. 18 The Court also adopts the Magistrate Judge’s determination that the ALJ erred in 19 failing to consider the mental limitations it found credible at step two in the RFC 20 assessment. The RFC assesses “an individual’s ability to do sustained work-related 21 physical and mental activities in a work setting on a regular and continuing basis.” 22 Assessing Residual Functional Capacity in Initial Claims, SSR 96-8P, 1996 WL 374184, 23 at *1 (S.S.A. July 2, 1996). It is the most an individual can do despite their limitations. 24 20 C.F.R. § 404.1545(a)(1). When assessing the RFC, an ALJ must consider all relevant 25 evidence, specifically “all . . . medically determinable impairments of which [the ALJ is] 26 aware, including . . . medically determinable impairments that are not ‘severe[.]’” Id. § 27 1 404.1545(a)(2)-(3). This analysis is distinct from the Psychiatric Review Technique 2 performed at step two to determine whether a claimant’s impairments are severe; non- 3 severe impairments, especially when combined, may still prevent an individual from 4 performing certain types of work. See SSR 96-8P, 1996 WL 374184, at *4-5. 5 Courts in the Ninth Circuit have made clear that the ALJ must explicitly consider 6 limitations caused by mild mental impairments in the RFC or explain why such 7 impairments are not limiting. See Hutton v. Astrue, 491 F. App’x 850, 850-51 (9th Cir. 8 2012); Patricia C. v. Saul, No. 19-CV-00636, 2020 WL 4596757, at *12 (S.D. Cal. Aug. 9 11, 2020), report and recommendation adopted sub nom. Craig v. Saul, No. 19-CV-636, 10 2020 WL 5423887 (S.D. Cal. Sept. 10, 2020) (collecting cases). Such limitations should 11 also be included in the hypothetical to the Vocational Expert unless the RFC explains 12 why they are not limiting. See Hutton, 491 F. App’x at 850; Solomon v. Comm’r of Soc. 13 Sec. Admin., 376 F. Supp. 3d 1012, 1021 (D. Ariz. 2019) (“When formulating such 14 hypotheticals, an ALJ is not free to disregard properly supported limitations.” (internal 15 quotation marks and citation omitted)). 16 Here, the ALJ failed to consider credible mental limitations in the RFC and include 17 them in the hypothetical. At step two, the ALJ held that Plaintiff had mild limitations in 18 understanding, remembering, or applying information; interacting with others; 19 concentrating, persisting or maintaining pace; and adopting or managing oneself. AR 19- 20 20. In the RFC analysis, the ALJ found that Plaintiff’s coronary impairments produced 21 functional limitations but were not disabling. AR 20-24. The ALJ did not reference the 22 mild limitations it had previously found due to Plaintiff’s PTSD and depression. See id. 23 It briefly discussed medical opinions on Plaintiff’s mental health in explaining that it 24 would not defer to “prior administrative medical findings or medical opinions.” AR 23. 25 Specifically, the ALJ stated that it found the opinions of the state agency Doctors of 26 Psychology―that Plaintiffs’ depression and PTSD were non-severe―persuasive, and the 27 1 opinion of Plaintiff’s physician―that Plaintiff was capable of only low stress jobs due to 2 his depression and anxiety interfering with his concentration―unpersuasive. AR 23-24. 3 Nonetheless, there is nothing to indicate that the ALJ considered the limitations created 4 by the mental impairments that it had already found existed in step two. See 20 C.F.R. § 5 404.1545(a)(2) (requiring the ALJ to consider non-severe impairments in the RFC); AR 6 19-20 (finding mild functional limitations in step two). Moreover, the ALJ’s hypothetical 7 to the Vocational Expert did not include any mental health limitations. AR 45-46. 8 Although these facts are arguably distinct from the many cases in which the RFC 9 analysis did not even mention mental impairments, see e.g., Craig H. v. Kijakazi, No. 22- 10 CV-800, 2023 WL 4679342, at *12 (S.D. Cal. July 21, 2023), report and 11 recommendation adopted, No. 22-CV-00800, 2023 WL 5340794 (S.D. Cal. Aug. 18, 12 2023), other district courts have addressed similar circumstances and found that this type 13 of analysis is insufficient. In Carlson v. Berryhill, the ALJ’s RFC analysis included a 14 discussion of a doctor’s psychiatric opinion that the plaintiff had no mental impairment, 15 but the district court held that the ALJ “could not disregard his own finding [in step two] 16 that the plaintiff had mild mental limitations” and remanded because “the ALJ did not 17 discuss or give reasoned consideration of the plaintiff’s depression and anxiety in his 18 RFC assessment.” No. 18-CV-03107, 2019 WL 1116241, at *17 (N.D. Cal. Mar. 10, 19 2019); see also Smith v. Colvin, No. 14-CV-05082, 2015 WL 9023486, at *9 (N.D. Cal. 20 Dec. 16, 2015) (“While the ALJ was not required to include properly rejected evidence, 21 she could not disregard her own finding that Plaintiff had mild mental limitations in three 22 out of the four broad functional areas[.]”). 23 Similarly, the ALJ’s brief discussion of the psychiatric medical opinions was not 24 an examination of the limitations caused by the mild mental impairments the ALJ had 25 previously found. See AR 23. Rather, it was a reiteration of the finding that the mental 26 impairments were not severe (a finding which the Court has already explained was not 27 1 supported by substantial evidence). And the RFC requires a “more detailed discussion” 2 to determine the most Plaintiff can do despite his limitations, including those due to the 3 mild mental impairments. SSR 96-8P, 1996 WL 374184, at *4; 20 C.F.R. § 4 404.1545(a)(1)-(2). As the Magistrate Judge explained, “[a]lthough the ALJ addressed 5 medical evidence showing that Plaintiff’s depression and PTSD were non-severe, the 6 ALJ did not explain why his findings of mild limitation in the four broad functional areas 7 used to evaluate Plaintiff’s mental impairments were not included in the RFC.” ECF No. 8 16 at 8. The inclusion of boilerplate language that the “residual functional capacity 9 assessment reflects the degree of limitation” found in step two does not cure this failing. 10 See, e.g., Michele M. v. Saul, No. 19-CV-00272, 2020 WL 1450442, at *8 (S.D. Cal. 11 Mar. 25, 2020).3 12 The Court further agrees with and fully adopts the R&R’s determination that this 13 error was not harmless because, considering that Plaintiff had a history of skilled work, 14 “[a] properly formulated RFC might contain mental limitations inconsistent with 15 Plaintiff’s past relevant work that the ALJ found Plaintiff could perform.” ECF No. 16 at 16 11. 17 Accordingly, the Court ADOPTS the R&R and holds that the ALJ erred by failing 18 to include or otherwise address mental limitations in the RFC or in the hypothetical 19 question to the Vocational Expert. Because a properly construed RFC might change the 20 outcome, the Court REMANDS for the ALJ to conduct this analysis consistent with this 21 decision. 22 23 24 25 3 The Commissioner’s argument that finding mild mental limitations at step two does not 26 require finding functional limitations at step four is inapposite, ECF No. 15 at 15-17; the Court does not hold otherwise. 27 1 CONCLUSION 2 The Court ADOPTS the Magistrate Judge’s Report and Recommendation, 3 || VACATES the ALJ’s decision, and REMANDS for further proceedings consistent with 4 || this decision. 5 IT IS SO ORDERED. 6 Dated: March 25, 2024 2 sale O04 7 Hon. Gonzalo P. Curiel g United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 13 28 23-CV-00501-GPC-BGS