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Lloyd v. Commissioner of Social Security Administration

United States District Court, D. Arizona

October 27, 2017

Kelly Lloyd, Plaintiff,
Commissioner of Social Security Administration, Defendant.


          David G. Campbell United States District Judge

         Plaintiff 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.

         I. Background.

         This is 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.

         II. Legal Standard.

         The 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 omitted).

         The ALJ 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. 1989).

         III. The ALJ's Five-Step Evaluation Process.

         To 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. § 404.1520(a)(4).

         At step 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.

         IV. Analysis.

         Plaintiff 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.[1]

         A. Step Two Analysis.

         Step 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 ...

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