United States District Court, D. Oregon
OPINION AND ORDER
Honorable Paul Papak, United States Magistrate Judge.
Allen R. ("Plaintiff) filed this action on June 19,
2017, seeking judicial review of the Commissioner of Social
Security's final decision finding him not disabled and
therefore, denying his application for Supplemental Security
Income ("SSI") under Title XVI of the Social
Security Act (the "Act"). This court has
jurisdiction over Plaintiffs action pursuant to 42 U.S.C.
§§ 405(g) and 1383(c)(3).
argues that the Administrative Law Judge ("ALJ"):
(1) failed to give clear and convincing reasons for rejecting
Plaintiffs testimony; (2) failed to properly reject the lay
testimony of Plaintiffs neighbor and Plaintiffs fianc6; (3)
improperly determined that Plaintiffs carpal tunnel syndrome
and borderline intellectual functioning were not severe
impairments; (4) erroneously formulated a residual functional
capacity ("RFC") that was not supported by
substantial evidence; and (5) improperly crafted the
hypothetical to the vocational expert ("VE"). For
the reasons set forth below, the Commissioner's final
decision is reversed and remanded for the immediate payment
establish disability within the meaning of the Act, a
claimant must demonstrate an "inability to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected ... to last for a continuous period of not less than
12 months." 42 U.S.C. § 423(d)(1)(A). The
Commissioner has established a five-step sequential process
for determining whether a claimant has made the requisite
demonstration. See Bowen v. Yuckert, 482 U.S. 137,
140 (1987); see also 20 C.F.R. § 416.920(a)(4).
At the first four steps of the process, the burden of proof
is on the claimant; only at the fifth and final step does the
burden of proof shift to the Commissioner. See Tackett v.
Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999).
first step, an ALJ considers the claimant's work
activity, if any. See Bowen, 482 U.S. at 140;
see also 20 C.F.R. § 416.920(a)(4)(i). If the
ALJ finds that the claimant is engaged in substantial gainful
activity, the claimant will be found not disabled. See
Bowen, 482 U.S. at 140; see also 20 C.F.R.
§§ 416.920(a)(4)(i), 416.920(b). Otherwise, the
evaluation proceeds to the second step.
second step, the ALJ considers the medical severity of the
claimant's impairments. See Bowen, 482 U.S. at
140-41; see also 20 C.F.R. § 416.920(a)(4)(ii).
An impairment is "severe" if it significantly
limits the claimant's ability to perform basic work
activities and is expected to persist for a period of twelve
months or longer. See Bowen, 482 U.S. at 141; see
also 20 C.F.R. § 416.920(c). The ability to
perform basic work activities is defined as "the
abilities and aptitudes necessary to do most jobs." 20
C.F.R. § 416.921(b); see also Bowen, 482 U.S.
at 141. If the ALJ finds that the claimant's impairments
are not severe or do not meet the duration requirement, the
claimant will be found not disabled. See Bowen, 482
U.S. at 141;see also2O C.F.R. §§
416.920(a)(4)(ii), 416.920(c). Nevertheless, it is well
established that "the step-two inquiry is a de minimis
screening device to dispose of groundless claims."
Smolen v. Chafer, 80 F.3d 1273, 1290 (9th Cir. 1996)
(citing Bowen, 482 U.S. at 153-54). "An
impairment or combination of impairments can be found
'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.'"
Id. (quoting SSR 85-28, available at 1985
claimant's impairments are severe, the evaluation will
proceed to the third step, at which the ALJ determines
whether the claimant's impairments meet or equal
"one of a number of listed impairments that the
[Commissioner] acknowledges are so severe as to preclude
substantial gainful activity." Bowen, 482 U.S.
at 141; see also 20 C.F.R. §§
416.920(a)(4)(ii!), 416.920(d). If the claimant's
impairments are equivalent to one of the impairments
enumerated in 20 C.F.R, § 404, Subpt. P, App. 1, the
claimant will conclusively be found disabled. See
Bowen, 482 U.S. at 141; see also 20 C.F.R.
§§ 416.920(a)(4)(iii), 416.920(d).
claimant's impairments are not equivalent to one of the
enumerated impairments, the ALJ is required to assess the
claimant's RFC, based on all the relevant medical and
other evidence in the claimant's case record.
See 20 C.F.R. § 416.920(e). The RFC is an
estimate of the claimant's capacity to perform sustained,
work-related, physical and mental activities on a regular and
continuing basis, despite the limitations imposed by the
claimant's impairments. See 20 C.F.R. §
416.945(a). "A 'regular and continuing basis'
means 8 hours a day, for 5 days a week, or an equivalent work
schedule." SSR 96-8p, available at 1996 WL
fourth step, the ALJ considers the RFC in relation to the
claimant's past relevant work. See Bowen, 482
U.S. at 141; see also 20 C.F.R. §
416.920(a)(4)(iv). If, in light of the claimant's RFC,
the ALJ determines that the claimant can still perform his or
her past relevant work, the claimant will be found not
disabled. See Bowen, 482 U.S. at 141; see
also 20 C.F.R. §§ 416.920(a)(4)(iv),
416.920(f). In the event the claimant is no longer capable of
performing his or her past relevant work, the evaluation will
proceed to the fifth and final step, at which the burden of
proof is, for the first time, on the Commissioner.
fifth step, the ALJ considers the RFC in relation to the
claimant's age, education, and work experience to
determine whether the claimant can perform any jobs that
exist in significant numbers in the national economy. See
Bowen, 482 U.S. at 142; see also 20 C.F.R.
416.920(a)(4)(v), 416.920(g), 416.960(c), 416.966. If the
Commissioner meets her burden to demonstrate that the
claimant is capable of performing jobs existing in
significant numbers in the national economy, the claimant is
conclusively found not to be disabled. See Bowen,
482 U.S. at 142;see also2O C.F.R. §§
416.920(a)(4)(v), 416.920(g), 416.960(c), 416.966. A claimant
will be found entitled to benefits if the Commissioner fails
to meet his burden at the fifth step. See id; see
also 20 C.F.R. §§ 416.920(a)(4)(v),
reviewing court must affirm an ALJ's decision if the ALJ
applied proper legal standards and his or her findings are
supported by substantial evidence in the record. See
42 U.S.C. § 405(g); see also Batson v. Comm'r
for Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir.
2004). "'Substantial evidence' means more than a
mere scintilla, but less than a preponderance; it is such
relevant evidence as a reasonable person might accept as
adequate to support a conclusion." Lingenfelter v.
Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007), citing
Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir.
court must review the record as a whole, "weighing both
the evidence that supports and the evidence that detracts
from the Commissioner's conclusion." Id., citing
Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1998).
The court may not substitute its judgment for that of the
Commissioner. See id., citing Robbins, 466 F.3d at
882; see also Edlund v. Massanari, 253 F.3d 1152,
1156 (9th Cir. 2001), If the ALJ's interpretation of the
evidence is rational, it is immaterial that the evidence may
be "susceptible [of] more than one rational
interpretation." Magallanes v. Bowen, 881 F.2d
747, 750 (9th Cir. 1989), citing Gallant v. Heckler,
753 F.2d 1450, 1453 (9th Cir. 1984).
was born in 1963, Tr. 167. Plaintiff dropped out of high
school during ninth grade and subsequently obtained his GED
after four attempts. Tr. 505-06. Prior to his claimed
disability onset date of July 2, 2009, Plaintiff had
past relevant work experience as a carpenter. Tr. 18, 73.
has been diagnosed with carpal tunnel syndrome, chronic
cervicalgia, arthritis of the neck, posttraumatic stress
disorder ("PTSD"), antisocial personality disorder,
alcohol dependence, and severe bipolar disorder. Tr. 375,
389, 407, 428, 434, 440, 508. Plaintiff experiences PTSD
resulting from an accident in which his step-father ran over
Plaintiffs three year old daughter with a lawn mower, leaving
her crippled. Tr. 503, 508. This caused Plaintiff to develop
significant social problems. Tr. 504. After that incident, he
began to have trouble holding down a job because he could not
"deal with people anymore." Id. He
explained that he has been fired from numerous jobs because
he could not get along with his co-workers. Tr. 223.
Examining physician, Dr. Reynolds concluded that Plaintiffs
"emotional problems interfere with reliable and
predictable social functioning." Tr. 509.
not formally diagnosed with borderline intellectual
functioning, Dr. Boyd indicated that Plaintiffs low IQ scores
were "solidly" in the borderline intellectual
functioning range. Tr, 226. Notably, he cannot remember his
own phone number or home address and he has been unable to
learn how to use email or "search for things on the
internet." Tr. 285-86. Qualified Mental Health
Practitioner ("QMHP") Karen Nielson noted that
Plaintiff has poor insight into problems, limited attention
span, and limited intellectual functioning. Tr. 409. Dr.
Reynolds noted a "high probability" that Plaintiff
would have difficulty functioning if he lived independently.
1990, Plaintiff underwent a cervical spine surgery. Tr. 422.
After a failed attempt to hang himself in July 2014, he began
to experience "worsening neck pain and numbness and
tingling in his hand and fingers," Id. In 2015,
he reported weakness and dropping things with his hands. Tr.
422. Dr. Cheung diagnosed carpal tunnel syndrome and
recommended "surgical decompression for the right carpal
tunnel." Tr. 428.
OF ALJ FINDINGS
first step of the five-step sequential evaluation process,
the ALJ found that Plaintiff had not engaged in substantial
gainful activity since October 17, 2014, the date of the
application. Tr. 12.
second step, the ALJ found that Plaintiff had the following
severe impairments: degenerative disc disease, polysubstance
abuse, a personality disorder, PTSD, and bipolar disorder.
third step, the ALJ found that none of Plaintiffs impairments
was the equivalent of any of the impairments enumerated in 20
C.F.R. § 404, Subpt. P, App. 1. Tr. 13. The ALJ
therefore conducted an assessment of Plaintiffs RFC.
Specifically, the ALJ found that:
[Plaintiff] has the residual functional capacity to perform
light work as defined in 20 C.F.R. 416.967(b). Specifically,
he  can lift and/or carry 20 pounds occasionally and 10
pounds frequently; he can stand and/or walk for six hours out
of a[n] eight-hour workday with regular breaks; he can sit
for six hours out of an eight-hour workday with regular
breaks, [He] is further limited to no more than frequent
climbing, and no more than occasional stooping or crouching.
[Plaintiff] is limited to no more than occasional overhead
reaching bilaterally, and to no more than  frequent
grasping, hand[l]ing and fingering on the right. [He] is also
limited to simple, repetitive, routine tasks requiring no
more than occasional interaction with supervisors and
coworkers, and no more than brief, superficial interaction
with the general public.
Tr. 14. In reaching this finding, the ALJ considered all
symptoms and the extent to which these symptoms can
reasonably be accepted as consistent with the objective
medical evidence and other evidence. Tr. 14-18. The ALJ also
considered opinion evidence. Id.
fourth step of the five-step process, the ALJ found that
Plaintiff was unable to perform ...