Steffes v. Commissioner of Social Security Administration

          ORDER

          Douglas L. Rayes United States District Judge

         At issue is the denial of Plaintiff Jason Steffes's Applications for Disability Insurance Benefits and Supplemental Security Income by the Social Security Administration (“SSA”) under the Social Security Act (“the Act”). Plaintiff filed a Complaint (Doc. 1) with this Court seeking judicial review of that denial, and the Court now addresses Plaintiff's Opening Brief (Doc. 11, “Pl.'s Br.”), Defendant Social Security Administration Commissioner's Opposition (Doc. 12, “Def.'s Br.”), and Plaintiff's Reply (Doc. 13, “Reply”). The Court has reviewed the briefs and Administrative Record (Doc. 10, R.) and now reverses the Administrative Law Judge's decision (R. at 42-50) as upheld by the Appeals Council (R. at 1-3).

         I. BACKGROUND

         Plaintiff filed applications for Disability Insurance Benefits and Supplemental Security Income on August 20, 2014, for a period of disability beginning April 1, 2014. (R. at 42.) Plaintiff's claims were denied initially on January 12, 2015 (R. at 42), and on reconsideration on May 6, 2015 (R. at 42). Plaintiff then testified at a hearing held before an Administrative Law Judge (“ALJ”) on February 21, 2017. (R. at 42.) On June 26, 2017, the ALJ denied Plaintiff's Applications. (R. at 50.) On May 8, 2018, the Appeals Council denied a request for review of the ALJ's decision. (R. at 1-3.) On June 27, 2018, Plaintiff filed this action seeking judicial review of the denial.

         The Court has reviewed the medical evidence in its entirety and finds it unnecessary to provide a complete summary here. The pertinent medical evidence will be discussed in addressing the issues raised by the parties. In short, upon considering the medical records and opinions, the ALJ evaluated Plaintiff's disability based on the following alleged impairments: type 1 diabetes; chronic pancreatitis; and right shoulder rotator cuff impingement. (R. at 45.) Ultimately, the ALJ determined that these impairments were not severe because “they present[ed] only slight abnormalities and [did] not have more than a minimal effect on . . . [Plaintiff's] ability to do basic physical or mental work.” (R. at 50.)

         II. LEGAL STANDARD

         In determining whether to reverse an ALJ's decision, the district court reviews only those issues raised by the party challenging the 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, but less than a preponderance; it is relevant evidence that a reasonable person might accept as adequate to support a conclusion considering the record as a whole. Id. To determine 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. 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).

         To determine whether a claimant is disabled for purposes of the 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, but the burden shifts to the Commissioner at step five. Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999). At the first step, the ALJ determines whether the claimant is presently engaging in substantial gainful activity. 20 C.F.R. § 404.1520(a)(4)(i). If so, the claimant is not disabled and the inquiry ends. Id. At step two, the ALJ determines whether the claimant has a “severe” medically determinable physical or mental impairment. 20 C.F.R. § 404.1520(a)(4)(ii). If not, the claimant is not disabled and the inquiry ends. Id. Steps three through five “require the ALJ to evaluate whether the claimant's impairment satisfies certain statutory requirements entitling him to a disability finding.” Webb v. Barnhart, 433 F.3d 683, 686 (9th Cir. 2005). “If the impairment does not, the ALJ must assess whether the claimant remains capable of doing his prior work or engaging in alternative employment.” Id.

         III. ANALYSIS

         Plaintiff raises two arguments for the Court's consideration: (1) the ALJ erred in finding Plaintiff's chronic pancreatitis, diabetes, and joint pain were not severe impairments; and (2) in doing so, the ALJ erred in discrediting Plaintiff's symptom testimony. (Pl.'s Br. at 1.)

         A. The ALJ Erred in Finding Plaintiff's Pancreatitis Was Not a Severe Impairment

         An ALJ may find an impairment or combination of impairments is not severe “only if the evidence establishes a slight abnormality that has no more than a minimal effect on an individual's ability to work.” Webb v. Barnhart, 433 F.3d 683, 686 (9th Cir. 2005) (alteration in original) (quoting Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996)). Step two's “de minimis” standard is intended to “dispose of groundless claims.” Smolen, 80 F.3d at 1290 (citing Bowen v. Yuckert, 482 U.S. 137, 153-54 (1987)). An ALJ's conclusion that a Plaintiff lacks a medically severe impairment or combination of impairments must be “clearly established by medical evidence.” Id. at 687 (quoting S.S.R. No. 85-28 (1985)). Put another way, the question is whether “the ALJ had substantial evidence to find that the medical evidence clearly established that [Plaintiff] did not have a medically severe impairment or combination of impairments.” Webb, 433 F.3d at 687 (9th Cir. 2005) (citation omitted); see also SSR 85-28, Titles II and XVI: Medical Impairments That Are Not Severe (1985) (“Great care should be exercised in applying the not severe impairment concept. If an adjudicator is unable to determine clearly the effect of an impairment or combination of impairments on the individual's ability to do basic work activities, the sequential evaluation process should not end with the not severe evaluation step.”)

         Here, the ALJ found Plaintiff suffered from three medically determinable impairments-pancreatitis, diabetes, and a rotator cuff impingement in his right shoulder (R. at 45)-but concluded these impairments were not severe, either individually or in combination, because they presented only slight abnormalities and did not have more than a minimal effect on Plaintiff's ability to do basic physical or mental work activities. (R. at 50.) Given the de-minimis standard of the step-two inquiry, the ALJ erred in concluding Plaintiff's pancreatitis was not severe.

         The medical evidence does not clearly establish that Plaintiff's pancreatitis is a non-severe impairment under step two. “The record demonstrates [Plaintiff] has a long history of pancreatitis.” (R. at 47.) Plaintiff, 38 years old at the time of his hearing (R. at 285), was first diagnosed with pancreatitis when he was 17 (R. at 285), and in June 2016, a computerized tomography (“CT”) scan of Plaintiff's abdomen revealed “peripancreatic edema adjacent to the head of the pancreas compatible with acute pancreatitis.” (R. at 1079.) As the ALJ concluded, Plaintiff's pancreatitis “could reasonably be expected to produce” the nausea, vomiting, and abdominal pain that Plaintiff alleged. (R. at 47.) Nevertheless, the ALJ determined that Plaintiff's pancreatitis was not a severe impairment, citing discrepancies in Plaintiff's testimony, inconsistent test results, “normal” findings during physical examinations, conservative treatment, and work history. (R. at 47-50.) Although these factors may undermine Plaintiff's ...