1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 WILLIAM M., ) Case No. ED CV 18-1364-SP ) 12 Plaintiff, ) ) 13 v. ) MEMORANDUM OPINION AND ) ORDER 14 ) ANDREW M. SAUL, Commissioner of ) 15 Social Security Administration, ) ) 16 Defendant. ) ) 17 ) 18 I. 19 INTRODUCTION 20 On June 26, 2018, plaintiff William M. filed a complaint against defendant, 21 the Commissioner of the Social Security Administration (“Commissioner”), 22 seeking a review of a denial of a period of disability and disability insurance 23 benefits (“DIB”). The parties have fully briefed the matters in dispute, and the 24 court deems the matter suitable for adjudication without oral argument. 25 Plaintiff presents three disputed issues for decision: (1) whether the 26 Administrative Law Judge (“ALJ”) erred at step two; (2) whether the ALJ properly 27 considered the opinion of a treating physician; and (3) whether the ALJ properly 28 1 considered the opinion of a medical expert. Memorandum in Support of Plaintiff’s 2 Complaint (“P. Mem.”) at 4-22; see Memorandum in Support of Defendant’s 3 Answer (“D. Mem.”) at 3-7. 4 Having carefully studied the parties’ memoranda on the issues in dispute, the 5 Administrative Record (“AR”), and the decision of the ALJ, the court concludes 6 that, as detailed herein, the ALJ properly considered the opinion of the treating 7 physician, but the ALJ erred at step two and erred in considering the medical 8 expert’s opinion. The court therefore remands this matter to the Commissioner in 9 accordance with the principles and instructions enunciated herein. 10 II. 11 FACTUAL AND PROCEDURAL BACKGROUND 12 Plaintiff, who was 59 years old on the alleged disability onset date, has a law 13 degree. AR at 48, 101. Plaintiff has past relevant work as a lawyer. Id. at 58. 14 On January 21, 2014, plaintiff filed an application for a period of disability 15 and DIB, alleging an onset date of January 15, 2013 due to toxic encephalopathy, 16 arthritis, neuropathy, and gluten sensitivity. Id. at 101. The Commissioner denied 17 plaintiff’s application initially and upon reconsideration, after which he filed a 18 request for a hearing. Id. at 125-28, 133-37. 19 On August 4, 2016, plaintiff appeared without counsel and testified at a 20 hearing before the ALJ. Id. at 42-70. The ALJ also heard testimony from Sonya 21 Peterson, a vocational expert. Id. at 58-61. The ALJ held a supplemental hearing 22 on March 9, 2017, at which plaintiff, then represented by counsel, appeared and 23 testified. Id. at 71-100. The ALJ also heard testimony from Dr. John David 24 Sabow, a medical expert. Id at 78-98. On April 5, 2017, the ALJ denied plaintiff’s 25 claim for benefits. Id. at 22-35. 26 Applying the well-known five-step sequential evaluation process, the ALJ 27 found, at step one, that plaintiff had not engaged in substantial gainful activity 28 1 since January 15, 2013, the alleged disability onset date. Id. at 24. 2 At step two, the ALJ found plaintiff suffered from the following severe 3 impairments: brain atrophy secondary to multiple chemical sensitivity and 4 encephalopathy; degenerative disc disease of the cervical spine; degenerative disc 5 disease of the lumbar spine; and osteoarthritis of the bilateral knees. Id. 6 At step three, the ALJ found plaintiff’s impairments, whether individually or 7 in combination, did not meet or medically equal one of the listed impairments set 8 forth in 20 C.F.R. part 404, Subpart P, Appendix 1 (the “Listings”). Id. at 29. 9 The ALJ then assessed plaintiff’s residual functional capacity (“RFC”),1 and 10 determined he had the RFC to perform a medium work with the limitations that 11 plaintiff could: lift, carry, push, and pull 50 pounds occasionally and 25 pounds 12 frequently; stand and walk for six hours out of an eight-hour workday; sit for six 13 hours out of an eight-hour workday; frequently climb ramps and stairs, balance, 14 stoop, kneel, crouch, and crawl; and occasionally climb ladders, ropes, or 15 scaffolds. Id. at 30. The ALJ prohibited plaintiff from concentrated exposure to 16 fumes, odors, dusts, gases, poor ventilation, and hazards such as machinery and 17 heights. Id. 18 The ALJ found, at step four, that plaintiff was capable of performing his past 19 relevant work as a lawyer.2 Id. at 35. Consequently, the ALJ concluded plaintiff 20 21 1 Residual functional capacity is what a claimant can do despite existing 22 exertional and nonexertional limitations. Cooper v. Sullivan, 880 F.2d 1152, 1155- 56 n.5-7 (9th Cir. 1989). “Between steps three and four of the five-step evaluation, 23 the ALJ must proceed to an intermediate step in which the ALJ assesses the 24 claimant’s residual functional capacity.” Massachi v. Astrue, 486 F.3d 1149, 1151 n.2 (9th Cir. 2007). 25 26 2 The ALJ’s decision contains a typographical error. Despite clearly stating plaintiff is capable of performing his past relevant work and finding him not 27 disabled, the ALJ wrote “[i]n comparing the claimant’s [RFC] with the physical 28 and mental demands of the claimant’s past relevant work, . . . , the undersigned has 1 did not suffer from a disability as defined by the Social Security Act. Id. 2 Plaintiff filed a timely request for review of the ALJ’s decision, which was 3 denied by the Appeals Council. Id. at 1-3. The ALJ’s decision stands as the final 4 decision of the Commissioner. 5 III. 6 STANDARD OF REVIEW 7 This court is empowered to review decisions by the Commissioner to deny 8 benefits. 42 U.S.C. § 405(g). The findings and decision of the Social Security 9 Administration must be upheld if they are free of legal error and supported by 10 substantial evidence. Mayes v. Massanari, 276 F.3d 453, 458-59 (9th Cir. 2001) 11 (as amended). But if the court determines that the ALJ’s findings are based on 12 legal error or are not supported by substantial evidence in the record, the court may 13 reject the findings and set aside the decision to deny benefits. Aukland v. 14 Massanari, 257 F.3d 1033, 1035 (9th Cir. 2001); Tonapetyan v. Halter, 242 F.3d 15 1144, 1147 (9th Cir. 2001). 16 “Substantial evidence is more than a mere scintilla, but less than a 17 preponderance.” Aukland, 257 F.3d at 1035. Substantial evidence is such 18 “relevant evidence which a reasonable person might accept as adequate to support 19 a conclusion.” Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1998); Mayes, 276 20 F.3d at 459. To determine whether substantial evidence supports the ALJ’s 21 finding, the reviewing court must review the administrative record as a whole, 22 “weighing both the evidence that supports and the evidence that detracts from the 23 ALJ’s conclusion.” Mayes, 276 F.3d at 459. The ALJ’s decision “‘cannot be 24 affirmed simply by isolating a specific quantum of supporting evidence.’” 25 Aukland, 257 F.3d at 1035 (quoting Sousa v. Callahan, 143 F.3d 1240, 1243 (9th 26 27 determined the claimant is not able to perform this past relevant work as actually or 28 generally performed.” AR at 35 (emphasis added). 1 Cir. 1998)). If the evidence can reasonably support either affirming or reversing 2 the ALJ’s decision, the reviewing court “‘may not substitute its judgment for that 3 of the ALJ.’” Id. (quoting Matney v. Sullivan, 981 F.2d 1016, 1018 (9th Cir. 4 1992)). 5 IV.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 WILLIAM M., ) Case No. ED CV 18-1364-SP ) 12 Plaintiff, ) ) 13 v. ) MEMORANDUM OPINION AND ) ORDER 14 ) ANDREW M. SAUL, Commissioner of ) 15 Social Security Administration, ) ) 16 Defendant. ) ) 17 ) 18 I. 19 INTRODUCTION 20 On June 26, 2018, plaintiff William M. filed a complaint against defendant, 21 the Commissioner of the Social Security Administration (“Commissioner”), 22 seeking a review of a denial of a period of disability and disability insurance 23 benefits (“DIB”). The parties have fully briefed the matters in dispute, and the 24 court deems the matter suitable for adjudication without oral argument. 25 Plaintiff presents three disputed issues for decision: (1) whether the 26 Administrative Law Judge (“ALJ”) erred at step two; (2) whether the ALJ properly 27 considered the opinion of a treating physician; and (3) whether the ALJ properly 28 1 considered the opinion of a medical expert. Memorandum in Support of Plaintiff’s 2 Complaint (“P. Mem.”) at 4-22; see Memorandum in Support of Defendant’s 3 Answer (“D. Mem.”) at 3-7. 4 Having carefully studied the parties’ memoranda on the issues in dispute, the 5 Administrative Record (“AR”), and the decision of the ALJ, the court concludes 6 that, as detailed herein, the ALJ properly considered the opinion of the treating 7 physician, but the ALJ erred at step two and erred in considering the medical 8 expert’s opinion. The court therefore remands this matter to the Commissioner in 9 accordance with the principles and instructions enunciated herein. 10 II. 11 FACTUAL AND PROCEDURAL BACKGROUND 12 Plaintiff, who was 59 years old on the alleged disability onset date, has a law 13 degree. AR at 48, 101. Plaintiff has past relevant work as a lawyer. Id. at 58. 14 On January 21, 2014, plaintiff filed an application for a period of disability 15 and DIB, alleging an onset date of January 15, 2013 due to toxic encephalopathy, 16 arthritis, neuropathy, and gluten sensitivity. Id. at 101. The Commissioner denied 17 plaintiff’s application initially and upon reconsideration, after which he filed a 18 request for a hearing. Id. at 125-28, 133-37. 19 On August 4, 2016, plaintiff appeared without counsel and testified at a 20 hearing before the ALJ. Id. at 42-70. The ALJ also heard testimony from Sonya 21 Peterson, a vocational expert. Id. at 58-61. The ALJ held a supplemental hearing 22 on March 9, 2017, at which plaintiff, then represented by counsel, appeared and 23 testified. Id. at 71-100. The ALJ also heard testimony from Dr. John David 24 Sabow, a medical expert. Id at 78-98. On April 5, 2017, the ALJ denied plaintiff’s 25 claim for benefits. Id. at 22-35. 26 Applying the well-known five-step sequential evaluation process, the ALJ 27 found, at step one, that plaintiff had not engaged in substantial gainful activity 28 1 since January 15, 2013, the alleged disability onset date. Id. at 24. 2 At step two, the ALJ found plaintiff suffered from the following severe 3 impairments: brain atrophy secondary to multiple chemical sensitivity and 4 encephalopathy; degenerative disc disease of the cervical spine; degenerative disc 5 disease of the lumbar spine; and osteoarthritis of the bilateral knees. Id. 6 At step three, the ALJ found plaintiff’s impairments, whether individually or 7 in combination, did not meet or medically equal one of the listed impairments set 8 forth in 20 C.F.R. part 404, Subpart P, Appendix 1 (the “Listings”). Id. at 29. 9 The ALJ then assessed plaintiff’s residual functional capacity (“RFC”),1 and 10 determined he had the RFC to perform a medium work with the limitations that 11 plaintiff could: lift, carry, push, and pull 50 pounds occasionally and 25 pounds 12 frequently; stand and walk for six hours out of an eight-hour workday; sit for six 13 hours out of an eight-hour workday; frequently climb ramps and stairs, balance, 14 stoop, kneel, crouch, and crawl; and occasionally climb ladders, ropes, or 15 scaffolds. Id. at 30. The ALJ prohibited plaintiff from concentrated exposure to 16 fumes, odors, dusts, gases, poor ventilation, and hazards such as machinery and 17 heights. Id. 18 The ALJ found, at step four, that plaintiff was capable of performing his past 19 relevant work as a lawyer.2 Id. at 35. Consequently, the ALJ concluded plaintiff 20 21 1 Residual functional capacity is what a claimant can do despite existing 22 exertional and nonexertional limitations. Cooper v. Sullivan, 880 F.2d 1152, 1155- 56 n.5-7 (9th Cir. 1989). “Between steps three and four of the five-step evaluation, 23 the ALJ must proceed to an intermediate step in which the ALJ assesses the 24 claimant’s residual functional capacity.” Massachi v. Astrue, 486 F.3d 1149, 1151 n.2 (9th Cir. 2007). 25 26 2 The ALJ’s decision contains a typographical error. Despite clearly stating plaintiff is capable of performing his past relevant work and finding him not 27 disabled, the ALJ wrote “[i]n comparing the claimant’s [RFC] with the physical 28 and mental demands of the claimant’s past relevant work, . . . , the undersigned has 1 did not suffer from a disability as defined by the Social Security Act. Id. 2 Plaintiff filed a timely request for review of the ALJ’s decision, which was 3 denied by the Appeals Council. Id. at 1-3. The ALJ’s decision stands as the final 4 decision of the Commissioner. 5 III. 6 STANDARD OF REVIEW 7 This court is empowered to review decisions by the Commissioner to deny 8 benefits. 42 U.S.C. § 405(g). The findings and decision of the Social Security 9 Administration must be upheld if they are free of legal error and supported by 10 substantial evidence. Mayes v. Massanari, 276 F.3d 453, 458-59 (9th Cir. 2001) 11 (as amended). But if the court determines that the ALJ’s findings are based on 12 legal error or are not supported by substantial evidence in the record, the court may 13 reject the findings and set aside the decision to deny benefits. Aukland v. 14 Massanari, 257 F.3d 1033, 1035 (9th Cir. 2001); Tonapetyan v. Halter, 242 F.3d 15 1144, 1147 (9th Cir. 2001). 16 “Substantial evidence is more than a mere scintilla, but less than a 17 preponderance.” Aukland, 257 F.3d at 1035. Substantial evidence is such 18 “relevant evidence which a reasonable person might accept as adequate to support 19 a conclusion.” Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1998); Mayes, 276 20 F.3d at 459. To determine whether substantial evidence supports the ALJ’s 21 finding, the reviewing court must review the administrative record as a whole, 22 “weighing both the evidence that supports and the evidence that detracts from the 23 ALJ’s conclusion.” Mayes, 276 F.3d at 459. The ALJ’s decision “‘cannot be 24 affirmed simply by isolating a specific quantum of supporting evidence.’” 25 Aukland, 257 F.3d at 1035 (quoting Sousa v. Callahan, 143 F.3d 1240, 1243 (9th 26 27 determined the claimant is not able to perform this past relevant work as actually or 28 generally performed.” AR at 35 (emphasis added). 1 Cir. 1998)). If the evidence can reasonably support either affirming or reversing 2 the ALJ’s decision, the reviewing court “‘may not substitute its judgment for that 3 of the ALJ.’” Id. (quoting Matney v. Sullivan, 981 F.2d 1016, 1018 (9th Cir. 4 1992)). 5 IV. 6 DISCUSSION 7 A. The ALJ Erred at Step Two 8 Plaintiff argues the ALJ erred at step two. P. Mem. at 4-12. Specifically, 9 plaintiff contends the ALJ’s finding that he did not suffer from a severe mental 10 impairment was inconsistent with the record as a whole. Id. 11 At step two, the Commissioner considers the severity of the claimant’s 12 impairment. 20 C.F.R. § 404.1520(a)(4)(ii).3 “[T]he step-two inquiry is a de 13 minimis screening device to dispose of groundless claims. Smolen v. Chater, 80 14 F.3d 1273, 1290 (9th Cir. 1996). 15 With regard to mental impairments, the regulations provide a “special 16 technique” to evaluate their severity. 20 C.F.R. § 404.1520a(a). An ALJ first 17 evaluates the medical evidence to determine whether a claimant has a medically 18 determinable impairment. 20 C.F.R. § 404.1520a(b)(1). The ALJ then rates the 19 degree of functional limitations in four functional areas – activities of daily living; 20 social functioning; concentration, persistence, or pace; and episodes of 21 decompensation. 20 C.F.R. § 404.1520a(c)(1)-(3). For the first three functional 22 areas, the ALJ uses a five-point scale: none, mild, moderate, marked, and extreme. 23 20 C.F.R. § 404.1520a(c)(4). If the ALJ rates the degree of limitations as none or 24 mild in the first three functional areas and finds no episodes in the fourth, she or he 25 will generally conclude the impairment is not severe unless the evidence indicates 26 27 3 All citations to the Code of Federal Regulations refer to regulations 28 applicable to claims filed before March 27, 2017. 1 there is more than a minimal limitation in claimant’s ability to do work. 20 C.F.R. 2 § 404.1520(a)(d)(1). A finding of only mild functional limitations generally results 3 in the conclusion that the claimant does not suffer from a severe mental 4 impairment. See 20 C.F.R. § 404.1520a(d)(1). But “[m]oderate limitations are 5 sufficient to meet the ‘severe impairment’ standard.” Holloway v. Berryhill, 2017 6 WL 5508512, at *2 (C.D. Cal. Nov. 16, 2017); see, e.g., Cambaliza v. Colvin, 2014 7 WL 2009105, at *1 (C.D. Cal. May 15, 2014) (the regulations direct an ALJ to find 8 a mental impairment severe when a claimant has moderate functional limitations); 9 Vargas v. Astrue, 2010 WL 3418890, at *6 (C.D. Cal. Aug. 25, 2010) (findings of 10 moderate limitations may amount to more than a minimal effect on a plaintiff’s 11 ability to perform basic work activities); but see Koehler v. Astrue, 283 Fed. Appx. 12 443, 445 (9th Cir. 2008) (noting that the regulations do not mandate that a 13 diagnosis of a moderate limitation in the ability to respond to changes in the 14 workplace must result in a finding of a severe mental impairment). 15 Here, the ALJ determined plaintiff’s mental impairments caused mild 16 limitations in: understanding, remembering, or applying information; interacting 17 with others; concentrating, persisting, or maintaining pace; and adapting or 18 managing oneself.4 AR at 26. In reaching this conclusion, the ALJ considered the 19 medical evidence, gave great weight to the opinions of the State Agency 20 physicians, and gave little weight to the opinions of Dr. Gunnar Heuser, nurse 21 Sandra Bell, and Dr. Arsalan Darmal. Id. at 26-29. 22 The ALJ’s finding that plaintiff had only mild limitations in social 23 functioning is inconsistent with the record as a whole. The ALJ correctly noted 24 25 4 The ALJ here considered the four functional areas in Listing 12.00C. 26 Although the ALJ did not discuss activities of daily living in this section, later in the decision he found plaintiff had no impairments in his activities of daily living. 27 AR at 31. The ALJ also did not make a finding with regard to episodes of 28 decompensation but the record does not reflect any episodes. 1 plaintiff was often reported to be cooperative, had good eye contact, linear thought 2 content, and normal speech at many of his mental status examinations. See, e.g., 3 id. at 952, 1139, 1437, 1477. But the record is replete with examples of difficult 4 and hostile behavior, whether in person, over the telephone, or over e-mail 5 communications. See, e.g., id. at 1289-90, 1417-18, 1507, 1533-34, 1895. Given 6 the frequency and degree of hostility, the record does not support the ALJ’s finding 7 that plaintiff only had mild limitations interacting with others. 8 Although the Ninth Circuit, in an unpublished case, has found the 9 regulations do not mandate that a finding of a moderate limitation in one functional 10 area must result in a finding of a severe mental impairment (see Koehler, 283 Fed. 11 Appx. at 445), the courts have generally interpreted the regulations to direct a 12 finding of a severe impairment when a claimant has moderate limitations, as set 13 forth above. And indeed, the ALJ here determined plaintiff did not have a severe 14 mental impairment, not by finding a moderate limitation in social functioning to be 15 inconsequential, but by concluding plaintiff had no more than minimal or mild 16 limitations in any area. See AR at 26. As discussion, this was not supported by 17 substantial evidence in the record as a whole. Consequently, the ALJ erred at step 18 two. 19 A step two severity finding is a de minimis screening device and does not 20 necessarily result in functional limitations. See Lopez v. Astrue, 2011 WL 21 3206958, at *6 (N.D. Cal. Jul. 27, 2011) (“[A] severe mental health impairment 22 does not necessarily mean a severe limitation.”); Brave v. Colvin, 2013 WL 23 6490805, at *4 (W.D. Wash. Dec. 10, 2013) ([E]ven impairments deemed severe, 24 do not, as a matter of course, necessarily result in RFC limitations.”); see also Bray 25 v. Comm’r, 554 F.3d 1219, 1228-29 (9th Cir. 2009) (plaintiff offered no authority 26 to support his argument that a step two severe mental impairment finding must 27 correspond to limitations to on his ability to perform work activities). And in 28 1 many instances, error at step two is harmless where, as here, the ALJ found the 2 claimant suffered from other severe impairments. See Burch v. Barnhart, 400 F.3d 3 676, 682 (9th Cir. 2005) (any error by ALJ at step two was harmless because the 4 step was resolved in plaintiff’s favor). This is particularly true where it is apparent 5 that in assessing the RFC the ALJ properly considered the impairments that were 6 erroneously found not severe. See Social Security Ruling (“SSR”) 96-8p (“In 7 assessing RFC, the adjudicator must consider limitations and restrictions imposed 8 by all of an individual’s impairments, even those that are not ‘severe.’”). 9 Here, plaintiff’s RFC as determined by the ALJ included no limitations 10 related to mental impairments. AR at 30. The ALJ indicated plaintiff’s complaints 11 regarding mental limitations were considered, as was evidence of cognitive issues, 12 but there is no indication the ALJ considered the evidence of plaintiff’s social 13 functioning limitations in determining plaintiff’s RFC. Id. at 31-33. Defendant 14 argues the ALJ’s discussion at step two is adequate to show no mental limitations 15 were warranted in plaintiff’s RFC (D. Mem. at 6), but again, that discussion fails to 16 account for the evidence of limitations in social functioning. As such, the court 17 cannot say the error at step two was harmless. 18 In sum, the ALJ erred at step two when he found plaintiff did not suffer from 19 a severe mental impairment. The ALJ’s finding that plaintiff only had mild 20 limitations in social functioning was inconsistent with the medical record, and this 21 error was not harmless. 22 B. The ALJ Properly Considered Dr. Heuser’s Opinion 23 Plaintiff contends the ALJ failed to properly consider the opinion of treating 24 physician Dr. Gunnar Heuser. P. Mem. at 12-18. Specifically, plaintiff argues the 25 ALJ’s reasons for discounting Dr. Heuser’s opinion were not specific and 26 legitimate and supported by substantial evidence. Id. 27 In determining whether a claimant has a medically determinable impairment, 28 1 among the evidence the ALJ considers is medical evidence. 20 C.F.R. 2 § 404.1527(b). In evaluating medical opinions, the regulations distinguish among 3 three types of physicians: (1) treating physicians; (2) examining physicians; and 4 (3) non-examining physicians. 20 C.F.R. § 404.1527(c), (e); Lester v. Chater, 81 5 F.3d 821, 830 (9th Cir. 1996) (as amended). “Generally, a treating physician’s 6 opinion carries more weight than an examining physician’s, and an examining 7 physician’s opinion carries more weight than a reviewing physician’s.” Holohan v. 8 Massanari, 246 F.3d 1195, 1202 (9th Cir. 2001); 20 C.F.R. § 404.1527(c)(1)-(2). 9 The opinion of the treating physician is generally given the greatest weight because 10 the treating physician is employed to cure and has a greater opportunity to 11 understand and observe a claimant. Smolen v. Chater, 80 F.3d 1273, 1285 (9th Cir. 12 1996) ; Magallanes v. Bowen, 881 F.2d 747, 751 (9th Cir. 1989). 13 Nevertheless, the ALJ is not bound by the opinion of the treating physician. 14 Smolen, 80 F.3d at 1285. If a treating physician’s opinion is uncontradicted, the 15 ALJ must provide clear and convincing reasons for giving it less weight. Lester, 16 81 F.3d at 830. If the treating physician’s opinion is contradicted by other 17 opinions, the ALJ must provide specific and legitimate reasons supported by 18 substantial evidence for rejecting it. Id. Likewise, the ALJ must provide specific 19 and legitimate reasons supported by substantial evidence for rejecting the 20 contradicted opinions of examining physicians. Id. at 830-31. The opinion of a 21 non-examining physician, standing alone, cannot constitute substantial evidence. 22 Widmark v. Barnhart, 454 F.3d 1063, 1066 n.2 (9th Cir. 2006); Morgan v. 23 Comm’r, 169 F.3d 595, 602 (9th cir. 1999); see also Erickson v. Shalala, 9 F.3d 24 813, 818 n.7 (9th Cir. 1993). 25 Dr. Heuser, an internist, treated plaintiff from mid-November 2002 through 26 the end of 2003. See AR at 1025, 1029, 1034. Sometime after Dr. Heuser’s 27 treating relationship ended in 2003, he disposed of plaintiff’s medical records. 28 1 Although Dr. Heuser stated he started examining plaintiff again in 2013, he did not 2 specify the frequency of the treatment or provide any treatment notes. See id. at 3 1027. Dr. Heuser submitted two letter opinions, dated July 28, 2014 and August 4 24, 2015, and a medical source statement, dated October 20, 2016, from all of 5 which it appears he may have examined plaintiff on two or three occasions.5 See 6 id. at 1029, 2866-67; see generally id. at 1025-38, 1225-34, 2866-67. 7 In the July 2017 letter, Dr. Heuser summarized plaintiff’s history and 8 treatment history, and explained how he reached his diagnosis. Id. at 1025-38. In 9 2002, based on plaintiff’s reported symptoms and history, SPECT (single photon 10 emission computerized tomography) scans, and bloodwork, Dr. Heuser diagnosed 11 plaintiff with multiple chemical sensitivity (“MCS”) and toxic encephalopathy, and 12 treated him with hyperbaric oxygen therapy.6 Id. at 1026, 1029. In 2013, based on 13 additional SPECT scans, plaintiff’s reported symptoms, his girlfriend’s statements 14 about plaintiff’s volatility, and a review of plaintiff’s medical records, Dr. Heuser 15 diagnosed plaintiff with multiple chemical sensitivity, toxic encephalopathy, 16 recurrent depression, sleep apnea with insomnia, and history of multiple significant 17 allergens, and opined plaintiff had significant cognitive dysfunction and met 18 Listing 12.02, Organic Mental Disorder. Id. at 1033-36. 19 In the August 2015 letter, Dr. Heuser explained why he disagreed with the 20 War Related Injury and Illness Study Center’s (“WRIISC”) diagnosis of 21 frontotemporal dementia. See id. at 1225-34. Dr. Heuser noted that Dr. John W. 22 Ashford, head of WRIISC, advised plaintiff to avoid swimming in chlorinated 23 24 5 Given the fact plaintiff’s treating relationship ended ten years prior to Dr. Heuser’s next examination and the lack of evidence of a new treating relationship, 25 Dr. Heuser may be more properly characterized as an examining physician. 26 6 By 2013, Dr. Heuser was no longer in possession of plaintiff’s earlier 27 medical files and relied on his memory, the documents plaintiff possessed, and 28 plaintiff’s reports to reconstruct his 2002 and 2003 conclusions. See AR at 1029. 1 pools and avoid forest fires, which was an acknowledgment plaintiff suffered from 2 MCS. See id. at 1229. 3 Dr. Heuser submitted a medical source statement, dated October 20, 2016, in 4 which he opined plaintiff had all moderate and marked mental limitations. Id. at 5 2866-67. Dr. Heuser stated plaintiff’s behavioral deficits were not present in 2002 6 and 2003 and are typical of frontal and temporal lobe deterioration, which had 7 originally been diagnosed by WRIISC. Id. at 2867. Dr. Heuser therefore 8 impliedly retracted his August 2015 dismissal of WRIISC’s diagnosis. 9 The ALJ provided eight reasons for giving little weight to Dr. Heuser’s 10 opinion: (1) it failed to reference sufficient medically acceptable objective clinical 11 or diagnostic findings to support the opinion; (2) the opinion appeared to have 12 been largely based on plaintiff’s subjective complaints; (3) the assessment of 13 plaintiff’s mental health symptoms was inconsistent with the objective medical 14 evidence; (4) the opinion was inconsistent with cognitive testing; (5) the opinion 15 was inconsistent with the medical expert’s opinion; (6) the opinion was 16 inconsistent with the objective evidence; (7) the opinion was inconsistent with 17 evidence of plaintiff’s high cognitive functioning; and (8) the opinion was 18 inconsistent with plaintiff’s activities of daily living. Id. at 27. Most of the 19 reasons are specific and legitimate. 20 The ALJ’s first and sixth reasons for discounting Dr. Heuser’s opinion were 21 because it was not supported by sufficiently acceptable objective clinical or 22 diagnostic findings and actually inconsistent with the objective evidence in the 23 record. Id.; see Batson v. Comm’r, 359 F.3d 1190, 1195 (9th Cir. 2004) (holding 24 that an ALJ may discredit physicians’ opinions that are “unsupported by the record 25 as a whole . . . or by objective medical findings”). Dr. Heuser’s diagnosis relies 26 heavily on SPECT scans, but brain imaging for psychiatric diagnosis is an 27 28 1 unproven test.7 See id. at 1025-38, 1225-34. Dr. Heuser also relied on 2 “specialized blood work” but never explained what blood work was done. See id. 3 at 1029. Nor did Dr. Heuser provide the results of the SPECT scans and blood 4 work for other physicians to review. As such, the results of such scans and tests 5 were not sufficient to support Dr. Heuser’s diagnosis. 6 Plaintiff argues that this reason was not legitimate because the ALJ found 7 plaintiff suffered from MCS and encephalopathy, just as Dr. Heuser diagnosed. P. 8 Mem. at 13. But the ALJ found plaintiff suffered from encephalopathy, and not 9 toxic encephalopathy as Dr. Heuser opined. Encephalopathy is a general term for 10 disease of the brain. Further, the ALJ did not necessarily rely on Dr. Heuser’s 11 opinion to find plaintiff suffered those impairments. The July 2014 MRI reflected 12 mild diffuse volume loss and the April 2016 MRI indicated mild generalized 13 parenchymal volume loss. See AR at 1057-58, 1931. Dr. Ashford of the WRIISC 14 advised plaintiff to avoid chemicals and forest fires, which as Dr. Heuser pointed 15 out, acknowledged MCS. See id. at 1229. Thus, the fact that the ALJ found 16 plaintiff suffered from these severe impairments does not mean he had to have 17 given weight to Dr. Heuser’s diagnosis. The objective evidence in the record 18 supported the ALJ’s step two findings as to these impairments. 19 The ALJ’s second reason for discounting Dr. Heuser’s opinion was it was 20 based largely on plaintiff’s subjective complaints. An ALJ may reject medical 21 opinions based on a claimant’s subjective complaints where his credibility has 22 been properly discounted. Schultz v. Astrue, 362 Fed. Appx. 634, 636 (9th Cir. 23 2010); Tonapetyan v. Halter, 242 F.3d 1144, 1149 (9th Cir. 2001). Here, the ALJ 24 found plaintiff’s testimony to not be entirely credible and plaintiff did not dispute 25 26 7 See https://journalofethics.ama-assn.org/article/diagnostic-brain-imaging-psychiatry-cu 27 rrent-uses-and-future-prospects/2012-06 and 28 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3597411/ 1 this finding. See AR at 31-34. 2 The ALJ’s third reason for giving little weight to Dr. Heuser’s opinion was 3 that his assessment of plaintiff’s symptoms was inconsistent with the objective 4 evidence. Id. at 27. Here, the ALJ cited the frequent normal mental status 5 examination findings, including normal grooming and appearance, cooperative 6 normal speech, good eye contact, and linear thought process. See, e.g., id. at 952, 7 1139, 1437, 1477. The ALJ correctly noted these clinical findings were 8 inconsistent with Dr. Heuser’s opinion that plaintiff had all marked and moderate 9 limitations. Nevertheless, there were also findings of social functioning limitations 10 and impaired or inconsistent memory, which may support some of the limitations. 11 See, e.g., id. at 1143, 1289-90, 1417-18, 1507. 12 In reasons four and seven, the ALJ discounted Dr. Heuser’s opinion plaintiff 13 suffered from significant cognitive dysfunction because it was inconsistent with 14 cognitive testing and plaintiff’s high cognitive functioning. See id. at 27. 15 Specifically, the ALJ noted plaintiff had a high IQ score, average attention score, 16 high average concentration score, average memory score, and was able to write a 17 letter to his attorney which clearly reflected high cognitive abilities. See id.; see 18 also id. at 953-54, 1509-12, 2868-72. The ALJ’s reasons were supported by the 19 record. 20 The ALJ’s fifth reason for giving little weight to Dr. Heuser’s opinion was it 21 was inconsistent with the medical expert’s opinion. Id. at 27; see Thomas v. 22 Barnhart, 278 F.3d 947, 957 (9th Cir. 2002) (the opinions of a non-examining 23 physician “may [] serve as substantial evidence when the opinions are consistent 24 with independent clinical findings or other evidence in the record”). Dr. Sabow 25 testified that he did not feel plaintiff required any mental functional limitations 26 based on the record he reviewed. See AR at 86-87. Dr. Sabow opined the imaging 27 did not show organic brain damage or fronto-temporal dementia and plaintiff’s 28 1 letter reflected superior cognitive abilities. See id. Nonetheless, the ALJ expressly 2 gave little weight to Dr. Sabow’s opinion. See id. at 34. Thus, it appears this 3 reason to discount Dr. Heuser’s opinion was not specific and legitimate. It may 4 well be that the ALJ only discounted Dr. Sabow’s opinion concerning plaintiff’s 5 physical RFC and not his opinion concerning plaintiff’s mental RFC, but absent 6 greater clarity on this point, the ALJ’s reason was not specific and legitimate. See 7 id. 8 Finally, the ALJ discounted Dr. Heuser’s opinion because it was inconsistent 9 with plaintiff’s activities of daily living. See id. at 27. As the ALJ noted, plaintiff 10 was able to perform all activities of living without difficulty. See id. at 31. Some 11 of these activities included social interactions necessary for obtaining and 12 maintaining employment. See id. In addition, plaintiff was able to travel and surf. 13 None of these activities indicate plaintiff was as limited as Dr. Heuser opined. 14 In short, the ALJ provided multiple specific and legitimate reasons 15 supported by substantial evidence for discounting Dr. Heuser’s opinion. 16 C. The ALJ Failed to Properly Consider Dr. Sabow’s Opinion 17 Plaintiff argues the ALJ failed to properly consider Dr. Sabow’s opinion. P. 18 Mem. at 18-22. Specifically, plaintiff contends the ALJ failed to provide specific 19 and legitimate reasons for rejecting Dr. Sabow’s opinion that plaintiff was capable 20 of performing light work. Id.; see also AR at 92. 21 At the hearing, Dr. Sabow began his testimony by opining that plaintiff did 22 not meet any Listing. AR at 85-86. When asked about plaintiff’s RFC, he said he 23 saw “no impact on any residual functional capacity.” Id. at 86. But then he 24 elaborated by expressing his disagreement with Dr. Heuser over plaintiff’s mental 25 limitations, and did not address plaintiff’s physical limitations until prompted. Id. 26 at 86-87. In particular, when questioned by plaintiff’s counsel as to whether 27 plaintiff could lift 100 pounds, Dr. Sabow testified that would be inadvisable 28 1 because it would aggravate his degenerative cervical arthritis. Id. at 91. When 2 asked whether it would be advisable for plaintiff to lift 50 pounds, Dr. Sabow said 3 that given plaintiff’s neck and back problems, he would advise against plaintiff 4 even lifting 50 pounds up to a third of the workday. Id. at 91-92. Dr. Sabow 5 testified plaintiff could perform light work. Id. at 92. 6 The ALJ gave little weight to Dr. Sabow’s opinion, finding it was vague and 7 internally inconsistent because Dr. Sabow “simultaneously opined that the claimant 8 had no limitations, should be limited to medium work, and should be limited to 9 light work.” Id. at 34. This is not a fair characterization of the testimony. Dr. 10 Sabow never opined plaintiff could perform medium work; he simply answered 11 counsel’s questions as they were asked, ultimately concluding plaintiff could 12 perform light work. It is true that Dr. Sabow did initially testify plaintiff had no 13 RFC limitations, but in context this testimony seemed to be solely addressing 14 plaintiff’s mental RFC. Although the progress of Dr. Sabow’s testimony was not 15 as clear as it might have been, he ultimately clearly opined that plaintiff should be 16 limited to light work. Accordingly, the ALJ’s rejection of this opinion as vague 17 and internally inconsistent was not legitimate. 18 The ALJ also rejected Dr. Sabow’s opinion, to the extent it was inconsistent 19 with the RFC determined by the ALJ, as inconsistent with the diagnostic evidence. 20 Id. In particular, he notes MRIs of the cervical and lumbar spines show only mild 21 to moderate degenerative disc disease. Id.; see id. at 1092, 1927. But significantly, 22 Dr. Sabow did not testify plaintiff would be unable to lift 50 pounds occasionally; 23 he testified that it would be inadvisable because it could aggravate plaintiff’s 24 degenerative spine conditions. It is not apparent how the MRIs showing mild to 25 moderate degenerative disc disease undermine this opinion. Accordingly, the 26 ALJ failed to provide specific and legitimate reasons to discount Dr. Sabow’s 27 opinion. In the context of the remainder of the ALJ’s RFC determination, this 28 1 error was harmless. See Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005) (“A 2 decision of the ALJ will not be reversed for errors that are harmless.”). Dr. Sabow 3 opined plaintiff could perform light work. The ALJ determined plaintiff could 4 perform his past relevant work as a lawyer, which is categorized as sedentary work. 5 See Dictionary of Occupational Titles Code 110.107-010. Thus, even if the ALJ 6 had adopted Dr. Sabow’s RFC determination, the RFC would not have affected the 7 ALJ’s disability finding here. 8 But as discussed above, the ALJ also erred at step two, and failed to take 9 plaintiff’s social functioning limitations into account in determining plaintiff’s 10 RFC. As plaintiff argues, an RFC limited to light work with certain mental 11 limitations, even if mild, could alter the disability determination. See P. Mem. at 12 20-22; SSR 96-8p (“in combination with limitations imposed by an individual’s 13 other impairment, the limitations due to [] a ‘not severe’ impairment may prevent 14 an individual from performing past relevant work”). Accordingly, the court cannot 15 say the ALJ’s rejection of Dr. Sabow’s opinion was harmless. 16 V. 17 REMAND IS APPROPRIATE 18 The decision whether to remand for further proceedings or reverse and 19 award benefits is within the discretion of the district court. McAllister v. Sullivan, 20 888 F.2d 599, 603 (9th Cir. 1989). It is appropriate for the court to exercise this 21 discretion to direct an immediate award of benefits where: “(1) the record has been 22 fully developed and further administrative proceedings would serve no useful 23 purpose; (2) the ALJ has failed to provide legally sufficient reasons for rejecting 24 evidence, whether claimant testimony or medical opinions; and (3) if the 25 improperly discredited evidence were credited as true, the ALJ would be required 26 to find the claimant disabled on remand.” Garrison v. Colvin, 759 F.3d 995, 1020 27 (9th Cir. 2014) (setting forth three-part credit-as-true standard for remanding with 28 1 || instructions to calculate and award benefits). But where there are outstanding 2 || issues that must be resolved before a determination can be made, or it is not clear 3 || from the record that the ALJ would be required to find a plaintiff disabled if all the 4 || evidence were properly evaluated, remand for further proceedings is appropriate. 5 || See Benecke v. Barnhart, 379 F.3d 587, 595-96 (9th Cir. 2004); Harman vy. Apfel, 6 || 211 F.3d 1172, 1179-80 (9th Cir. 2000). In addition, the court must “remand for 7 || further proceedings when, even though all conditions of the credit-as-true rule are 8 || satisfied, an evaluation of the record as a whole creates serious doubt that a 9 || claimant is, in fact, disabled.” Garrison, 759 F.3d at 1021. 10 Here, remand is required to resolve outstanding issues. On remand, the ALJ 11 || shall reconsider the medical opinions and evidence, and reconsider the step two 12 || determinations. The ALJ shall then reassess plaintiff's RFC, and proceed through 13 || steps four and five to determine what work, if any, plaintiff was capable of 14 || performing. 15 VI. 16 CONCLUSION 17 IT IS THEREFORE ORDERED that Judgment shall be entered 18 || REVERSING the decision of the Commissioner denying benefits, and 19 || REMANDING the matter to the Commissioner for further administrative action 20 || consistent with this decision. 21 22 || DATED: September 30, 2019 CRep 23 24 hated States Magistrate Judge 25 26 27 28 17