United States District Court, D. Arizona
G. Campbell United States District Judge
Kelly Lloyd seeks review under 42 U.S.C. § 405(g) of the
final decision of the Commissioner of Social Security which
denied her disability insurance benefits under §§
216(i), 223(d), and 1614(a)(3)(A) of the Social Security Act.
Because the decision of the Administrative Law Judge
(“ALJ”) is based on reversible legal error, the
Court will vacate the Commissioner's decision and remand
for further proceedings.
the second occasion that a judge of this Court has considered
a Commissioner's decision in Plaintiff's case.
Plaintiff is a 41 year-old female who previously worked as a
customer service representative for the Arizona Bureau of
Economic Security. A.R. 196. In August 2011, Plaintiff
applied for disability insurance benefits, alleging
disability beginning on September 16, 2007. A.R. 13. After a
hearing, the ALJ issued a decision on September 6, 2013, that
Plaintiff was not disabled within the meaning of the Social
Security Act. A.R. 13-23. This became the Commissioner's
final decision when the Appeals Council denied review. A.R.
1. Plaintiff subsequently sought review in this Court (A.R.
788-90), but before a decision was made, the parties filed a
stipulated motion to remand the case to the Commissioner to
correct several specific deficiencies (A.R. 807-08). The ALJ
held another hearing in March 2016, and issued a decision six
months later finding Plaintiff not disabled. A.R. 696-716.
This became the Commissioner's final decision when
Plaintiff did not file exceptions. Doc. 1 ¶ 4.
district court reviews only those issues raised by the party
challenging the ALJ's decision. See Lewis v.
Apfel, 236 F.3d 503, 517 n.13 (9th Cir. 2001). The court
may set aside the Commissioner's disability determination
only if the determination is not supported by substantial
evidence or is based on legal error. Orn v. Astrue,
495 F.3d 625, 630 (9th Cir. 2007). Substantial evidence is
more than a scintilla, less than a preponderance, and
relevant evidence that a reasonable person might accept as
adequate to support a conclusion considering the record as a
whole. Id. In determining whether substantial
evidence supports a decision, the court must consider the
record as a whole and may not affirm simply by isolating a
“specific quantum of supporting evidence.”
Id. (internal citations and quotation marks
omitted). As a general rule, “[w]here the evidence is
susceptible to more than one rational interpretation, one of
which supports the ALJ's decision, the ALJ's
conclusion must be upheld.” Thomas v.
Barnhart, 278 F.3d 947, 954 (9th Cir. 2002) (citations
is responsible for resolving conflicts in medical testimony,
determining credibility, and resolving ambiguities.
Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir.
1995). In reviewing the ALJ's reasoning, the Court is
“not deprived of [its] faculties for drawing specific
and legitimate inferences from the ALJ's opinion.”
Magallanes v. Bowen, 881 F.2d 747, 755 (9th Cir.
The ALJ's Five-Step Evaluation Process.
determine whether a claimant is disabled for purposes of the
Social Security Act, the ALJ follows a five-step process. 20
C.F.R. § 404.1520(a). The claimant bears the burden of
proof on the first four steps, and the burden shifts to the
Commissioner at step five. Tackett v. Apfel, 180
F.3d 1094, 1098 (9th Cir. 1999). To establish disability, the
claimant must show that (1) he is not currently working, (2)
he has a severe impairment, and (3) this impairment meets or
equals a listed impairment or (4) his residual functional
capacity (“RFC”) prevents his performance of any
past relevant work. If the claimant meets his burden through
step three, the Commissioner must find him disabled. If the
inquiry proceeds to step four and the claimant shows that he
is incapable of performing past relevant work, the
Commissioner must show in the fifth step that the claimant
nonetheless is capable of other work suitable for his RFC,
age, education, and work experience. 20 C.F.R. §
one, the ALJ found that Plaintiff meets the insured status
requirements of the Social Security Act through June 30,
2011, and that she has not engaged in substantial gainful
activity since September 16, 2007. A.R. 699. At step two, the
ALJ found that Plaintiff has the following severe
impairments: lumbar spondylosis, obesity, right sacroiliac
joint arthritis, and hip bursitis. A.R. 699. Although the ALJ
acknowledged that the record contains evidence of diabetes,
polysubstance dependence, bipolar disorder, and anxiety
disorder, she found them to be non-severe. A.R. 699-707. At
step three, the ALJ determined that Plaintiff has no
impairments that meet or equal a listed impairment. A.R. 707.
At step four, the ALJ found that Plaintiff has the RFC to
perform light work with certain restrictions. A.R. 709. The
ALJ then concluded, considering Plaintiff's age,
education, work experience, and RFC, that she is able to
perform the requirements of occupations like housekeeper,
cashier, or merchandise marker. A.R. 715.
argues that the ALJ's decision is based on reversible
legal error. Doc. 19. Specifically, Plaintiff argues that the
ALJ (1) erred in finding her mental impairments non-severe at
step two, (2) failed to consider her mental impairments in
the RFC inquiry, (3) relied too heavily on two medical
opinions, and (4) improperly discredited an examining
physician's medical opinion. Id.
Step Two Analysis.
two is “a de minimis screening device [used] to dispose
of groundless claims, ” Smolen v. Chater, 80
F.3d 1273, 1290 (9th Cir. 1996), and an ALJ may find that a
claimant lacks a medically severe impairment or combination
of impairments only when his conclusion is “clearly
established by medical evidence.” S.S.R. 85-28 (1985).
Impairments are considered “not severe” when
“the evidence establishes a ...