Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-02357/USCOURTS-azd-2_04-cv-02357-0/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 42:405 Review of HHS Decision (SSID)

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1 The full title of Plaintiff's motion is Motion for Summary Judgment on

Complaint for Judicial Review of Administrative Determination on Claim

for Supplemental Security Income Based on Disability. (Doc.11).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Barbara A. Campbell, 

Plaintiff, 

vs.

JoAnne Barnhart, Commissioner of

the Social Security Administration, 

Defendant. 

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No. Civ. 04-2357-PHX-MS

ORDER

This social security disability benefits case comes before the Court on

Plaintiff's Motion for Summary Judgment1

 (Doc. 11) and Defendant's opposing

Motion for Summary Judgment (Doc. 18). The Court now grants Plaintiff's motion

in part, denies Defendant's motion, and remands this matter for further proceedings.

I. Procedural Background

Plaintiff applied for Supplemental Security Income benefits in July, 2002,

alleging a disability onset date of November 1, 1997. [Doc. 13 at 1; Doc. 4A at 56].

Her claims were denied initially and on reconsideration. [Doc. 13 at 1]. Plaintiff

obtained a hearing before an Administrative Law Judge ("ALJ"), who issued an

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unfavorable decision on February 26, 2004. [Id.; Doc. 4A at 16-25]. On September

1, 2004, the Appeals Council denied Plaintiff’s request for review, and the ALJ’s

decision became the final decision of the Social Security Commissioner for purposes

of judicial review. [Id.; Doc. 4A at 7, 13, 280-81]. 

Plaintiff filed a Complaint in this Court on November 18, 2002. [Doc. 1], and

a Motion for Summary Judgment on October 29, 2004. [Doc. 11]. Defendant

opposed the motion and filed its Motion for Summary Judgment on May 16, 2005.

[Doc. 18]. 

II. Legal Framework

A. Standard of Review

Because the Social Security Act confines the scope of judicial review to

evidence within the administrative record, the Court will treat Plaintiff’s Motion for

Summary Judgment as a motion for reversal of the Commissioner’s decision and

Defendant's motion as a motion to affirm. 42 U.S.C. § 405(g); Higgins v. Shalala,

876 F. Supp. 1224, 1226 (D. Utah 1994)(collecting cases and discussing the

appropriate treatment of summary judgment motions requesting review of

administrative decisions). The appropriate standard of review is whether the ALJ’s

findings of fact are supported by substantial evidence and whether the denial of

benefits was free from legal error. Smolen v. Chater, 80 F.3d 1273, 1279 (9th Cir.

1996); Flaten v. Sec’y of Health & Human Servs., 44 F.3d 1453, 1457 (9th Cir. 1995).

Substantial evidence is “relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.” Smolen, 80 F.3d at 1279 (quoting Richardson

v. Perales, 402 U.S. 389, 401 (1971)); accord Magallanes v. Bowen, 881 F.2d 747,

750 (9th Cir. 1989). To determine whether substantial evidence exists to support an

administrative decision, the Court must “review the administrative record as a whole,

weighing both the evidence that supports and detracts from the [ALJ]’s conclusion.”

Magallanes, 881 F.2d at 750. If the evidence can support either affirming or

reversing the ALJ’s decision, the Court must uphold the decision. Moncada v.

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Chater, 60 F.3d 521, 523 (9th Cir. 1995). However, reviewing courts cannot accept

post hoc rationalizations for agency action. See, e.g., NLRB v. Metro. Life Ins. Co.,

380 U.S. 438, 444 (1965); Pinto v. Massanari, 249 F.3d 840, 847 (9th Cir. 2001).

Thus, the ALJ's decision must be upheld, if at all, on the grounds articulated in the

order by the ALJ. Pinto, 249 F.3d at 847.

B. Regulatory Disability Standards

To qualify for disability benefits under the Social Security Act, a claimant must

show that: (1) she suffers from a medically determinable physical or mental

impairment that can be expected to result in death or that has lasted or can be

expected to last for a continuous period of not less than twelve months; and (2) the

impairment renders the claimant incapable of performing work previously performed

and incapable of performing any other substantial gainful employment that exists in

the national economy. 42 U.S.C. §§ 423(d)(1)(A), 423(d)(2)(A); Tackett v. Apfel, 180

F.3d 1094, 1098 (9th Cir. 1999). The Social Security Regulations set forth a five-step

sequential process for evaluating disability claims. See 20 C.F.R. § 404.1520. A

claimant’s claim of disability can be rejected at any stage of the sequential process.

Id.; § 404.1520. The claimant bears the burden of proof at steps one through four

of the sequential process. 42 U.S.C. § 423(d)(5); Reddick v. Chater, 157 F.3d 715,

721 (9th Cir. 1998). The burden shifts to the Commissioner at step five. Reddick,

157 F.3d at 721. 

At step one of the sequential process, the ALJ determines whether the

claimant is currently engaged in substantial gainful activity. Tackett, 180 F.3d at

1098; § 404.1520(b). At step two, the ALJ determines, based on the medical

evidence, whether the claimant has a “severe impairment.” Id.; § 404.1520(c). If the

claimant’s impairment is not severe, then the claimant will not be considered

disabled. If the impairment is severe, the ALJ proceeds to step three and

determines whether the impairment meets or equals a specific impairment listed in

the regulations. Id.; § 404.1520(d). When the impairment “meets or equals” one of

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the specified impairments, disability will be found. When the impairment does not

meet or equal a specified impairment, the ALJ proceeds to step four and determines

whether the claimant can still perform “past relevant work.” Id.; § 404.1520(e). If the

claimant can perform such work, the claim is denied. However, if the claimant is

unable to do past relevant work, the ALJ proceeds to the fifth step and determines,

based on the claimant’s age, education, work experience and residual functional

capacity (RFC), whether the claimant can perform other work that exists in the

national economy. Id.; § 404.1520(f). If the claimant cannot, she is entitled to a

finding of disability. 

III. Discussion

A. The ALJ's Findings

At step one of the sequential evaluation process, the ALJ in this case found

that Plaintiff has not engaged in substantial gainful activity since her alleged onset

date. [Doc. 4A at 24]. At step two, he found that Plaintiff suffered from the following

"severe" impairments: Hepatitis C, polyarthralgias secondary to Hepatitis C, liver

cirrhosis, and chronic bronchitis. [Id.]. Further, the ALJ determined that although

Plaintiff was diagnosed as having panic disorder without agoraphobia, the

impairment was non-severe. [Id.] At step three, the ALJ determined that Plaintiff's

severe impairments were not severe enough to meet or medically equal one of the

impairments specified in the regulations. [Id.]. At step four, the ALJ determined that

Plaintiff's reported limitations did not prevent her from performing her past relevant

work, and that she was therefore not disabled. [Id.]. Having found Plaintiff not

disabled at step four of the sequential evaluation process, the ALJ did not reach step

five.

In connection with assessing Plaintiff's RFC, the ALJ considered the opinions

of two consultative examiners. With regard to Plaintiff's Hepatitis C, polyarthralgias

secondary to Hepatitis C, liver cirrhosis, and chronic bronchitis, the ALJ relied

primarily on the report of Malcolm McPhee, M.D., an examining consultative

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physician. [Doc. 4A at 21-22]. The ALJ determined that the medical evidence

supported a conclusion that Plaintiff suffered from each of these conditions, but did

not support a conclusion that these conditions were disabling. [Id.]. Regarding

Plaintiff's mental limitations, the ALJ considered the report of Daniel Watkins, a

consultative examining psychologist. [Doc. 4A at 22]. The ALJ noted Dr. Watkins'

diagnosis of panic disorder without agoraphobia, but observed that Plaintiff 

"appeared to retain the cognitive capacity to understand, remember and carry out

concrete instructions of simple or moderate complexity"; "appeared capable of

traveling independently, taking ordinary precautions, meeting ordinary standards of

grooming and hygiene, and asking questions and requesting assistance"; and

"appeared capable of remembering locations and procedures." [Id.] Ultimately, the

ALJ determined that Plaintiff retained the residual functional capacity to perform "a

wide/full range of light and sedentary unskilled work." [Id. at 24.]

The ALJ additionally considered Plaintiff's subjective complaints of pain, but

found that her testimony was not credible. The ALJ stated the following reasons in

support of this conclusion: (1) Plaintiff "reported on July 8, 2002, that her

polyarthralgias were relieved with medications," (2) "she reported on July 8, 2002,

that her morning hand stiffness lasted only 15 to 20 minutes and was relieved with

exercise"; (3) "a doctor at Maricopa Medical Center reported she was doing well as

of March 18, 2003, within 12 months of the filing date of her application"; (4) "despite

her allegations of panic attacks, she had had no psychiatric hospitalizations and was

not receiving psychological or psychiatric treatment"; and (5) "her activities of daily

living are not those of an individual too disabled to perform substantial gainful

activity." Id. at 22-23. With regard to Plaintiff's activities of daily living, the ALJ

observed that Plaintiff was able to engage in a variety of activities, including:

cooking, shopping, doing laundry and household chores, doing light yard work,

using the telephone, talking with friends and family, caring for her personal hygiene,

managing money, driving, and bike riding. Id. at 23.

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The ALJ did not call a vocational expert to testify. Rather, using the Dictionary

of Occupational Titles (DOT), the ALJ assessed whether Plaintiff could perform any

of her past relevant work in light of the residual functional capacity he had

determined. The ALJ concluded that Plaintiff could return to her past work as a

motel housekeeping cleaner, both as described by the claimant and as performed

in the national economy. 

B. Plaintiff's Arguments

Plaintiff now challenges the ALJ's determination on three grounds. First, she

asserts that the ALJ erred in finding her mental impairments to be non-severe.

Second, she argues that the ALJ erred by failing to call a vocational expert to

assess the effects of her mental impairments on her ability to perform work. Finally,

she asserts that the ALJ failed to provide clear and convincing reasons for

discounting the severity of her symptoms. The Court will address each of Plaintiff's

arguments separately below. 

1. Severity of Plaintiff's Mental Impairments

Plaintiff first contends that the ALJ erred by finding that Plaintiff's mental

impairments were non-severe under the social security regulations. [Doc. 12 at 3].

As stated previously, step two of the sequential evaluation process requires the ALJ

to determine whether the claimant suffers from a severe impairment or impairments.

20 C.F.R. § 404.1520(c). Section 416.921 of the Code of Federal Regulations

explains the severity requirement:

§ 416.921 What we mean by a not severe impairment(s) in an adult.

(a) Non-severe impairment(s). An impairment or combination of impairments

is not severe if it does not significantly limit your physical or mental ability to

do basic work activities.

(b) Basic work activities. When we talk about basic work activities, we mean

the abilities and aptitudes necessary to do most jobs. Examples of these

include--

(1) Physical functions such as walking, standing, sitting, lifting, pushing,

pulling, reaching, carrying, or handling;

(2) Capacities for seeing, hearing, and speaking;

(3) Understanding, carrying out, and remembering simple instructions;

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(4) Use of judgment;

(5) Responding appropriately to supervision, co-workers and usual work

situations; and

(6) Dealing with changes in a routine work setting.

20 C.F.R. § 416.921. Social Security Ruling 85-28 further explains that an

impairment will be considered "not severe" and a finding of "not disabled" made

when the impairment "has no more than a minimal effect on [the claimant's] physical

or mental ability(ies) to perform basic work activities." SSR 85-28, 1985 WL 56856,

*3 (S.S.A. 1985); accord Yuckert v. Bowen, 841 F.2d 303, 306 (9th Cir. 1988).

Plaintiff argues that the ALJ erred in finding Plaintiff's panic disorder without

agoraphobia to be non-severe because it is evident from Dr. Watkins' psychological

report that Plaintiff would be significantly limited in her ability to respond

appropriately to "usual work situations" as described in § 416.921(b)(5). Specifically,

Plaintiff contends that the ALJ improperly failed to consider the effects workplace

stress on Plaintiff and Plaintiff's ability to behave in an emotionally stable manner.

Id. at 3-8. Plaintiff maintains that had the ALJ considered the entirety of Dr. Watkins'

psychological report, it would have been clear that Plaintiff has serious limitations

and that her mental impairments are severe. Id. Defendant counters that Plaintiff

failed to satisfy her burden of proof and maintains that the ALJ's determination that

Plaintiff retained the RFC to perform unskilled work was supported by logical

inferences and substantial evidence. [Doc. 19 at 2-6]. Defendant further contends

that the ALJ could properly reject the portion of Dr. Watkins' opinion relating to

Plaintiff's alleged panic attacks because it was based on Plaintiff's self-reports, which

were found not to be credible. [Id.]

The Court agrees with Plaintiff that the ALJ's assessment of Plaintiff's mental

limitations did not account for the fully panoply of issues addressed by Dr. Watkins.

In finding that Plaintiff's mental impairments were non-severe, the ALJ relied on Dr.

Watkins' psychological report. The ALJ indicated that Plaintiff retained the cognitive

ability to engage in a variety tasks, including tasks characteristic of unskilled work.

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Significantly, however, the ALJ's discussion of Dr. Watkins' report left out a key

determination: that Plaintiff's panic attacks without agoraphobia "may seriously limit,

but not preclude, her ability to deal with stressors or to maintain emotional stability

in some situations." [Doc. 4A at 110]. In assessing Plaintiff's abilities to do workrelated activities on a questionnaire for the Arizona Department of Economic

Security, Dr. Watkins' indicated that Plaintiff's ability to deal with work stress, ability

to behave in an emotionally stable manner, and her ability to understand, remember

and carry out complex job instructions were "Fair: seriously limited but not

precluded." [Id. at 111-112]. In light of Dr. Watkins' opinion that Plaintiff suffered

these serious limitations, it cannot be said that her mental impairments had "no more

than a minimal effect" on her ability to respond appropriately to usual work

situations. The Court therefore finds that Dr. Watkins' report is facially inconsistent

with a finding that Plaintiff had no significant limitations that would interfere with

basic work activity.

A different conclusion is not required by Defendant's argument that the ALJ

reasonably rejected Dr. Watkins' assessment of Plaintiff's panic attacks and

determined that Plaintiff could perform unskilled work. The threshold determination

whether a particular mental impairment is severe involves a separate inquiry from

the determination whether the claimant can performed unskilled work. See SSR 85-

15, 1985 WL 56857, *3 (S.S.A. 1985). Moreover, there is no indication that the ALJ

found any portion of Dr. Watkins' opinion unreliable because it was based on

Plaintiff's self-reports. Indeed, the entirety of Dr. Watkins' report, including those

portions that were expressly adopted by the ALJ, was based on Plaintiff's selfreports. Defendant's arguments are unpersuasive. See also Regennitter v. Comm'r

of the Soc. Sec. Admin., 166 F.3d 1294, 1299 (9th Cir. 1999)(observing that

psychologists should not be faulted for believing a claimant's complaints where there

is no evidence of malingering).

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Based on the foregoing, the Court finds that the ALJ erred in determining that

Plaintiff's mental impairments were non-severe. Dr. Watkins' report, which was

reportedly relied on by the ALJ, clearly indicated that Plaintiff had serious limitations

that affected her ability to deal with workplace stresses and behave in an emotionally

stable manner. The Court finds that these serious limitations would affect Plaintiff's

ability to respond to usual work situations. Accordingly, Plaintiff's panic attacks

without agoraphobia cannot be considered "non-severe" under the regulations. 20

C.F.R. § 416.921(b)(5).

2. Failure to Call a Vocational Expert

Next, Plaintiff argues that the ALJ should have called a vocational expert to

assess whether Plaintiff's mental limitations precluded her from performing work

existing in significant numbers in the national economy. [Doc. 12 at 10]. Plaintiff

asserts that the ALJ's error in categorizing the severity of her panic attacks resulted

in a secondary failure to fully consider her non-exertional limitations. The failure to

consider her non-exertional limitations in turn resulted in the erroneous application

of the Medical-Vocational Guidelines and failure to call a vocational expert. [Id.].

Defendant maintains that the ALJ was not required to call a vocational expert to

support a decision made at step four of the sequential evaluation process. [Doc. 19

at 6].

The Medical-Vocational Guidelines present, in table form, a method for

assessing whether a claimant can perform work existing in the national economy.

20 C.F.R. pt. § 404, subpt. P., app. 2; Desrosiers v. Sec'y Health and Human Servs.,

180 F.3d 1094, 1101 (1988). These tables, or "grids" are designed to be used in

cases involving substantially uniform levels of impairment. Id.; Tackett, 180 F.3d at

1101. In such cases, the grids may be used in lieu of obtaining evidence from a

vocational expert. Id. However, the grids may be used only when they "accurately

and completely describe the claimants abilities and limitations." Tackett, 180 F.3d

at 1102 (quoting Jones v. Heckler, 760 F.2d 993, 990 (9th Cir. 1985); accord

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Reddick, 157 F.3d at 729. In cases where a claimant has non-exertional limitations

not contemplated by the Guidelines, the grids may be used only as a reference point

and a vocational expert must be called. Id. 

Defendant is correct that an ALJ may ordinarily rely on the Guidelines and is

not required to call a vocational expert when the claimant is found disabled at step

four, rather than step five, of the sequential evaluation process. See Crane v.

Shalala, 76 F.3d 251, 254 (9th Cir. 1996)(citing 20 C.F.R. pt. § 404, subpt. P., app.

2); see also Bruton v. Massanari, 268 F.3d 824, (9th Cir. 2001)(observing that the

grids apply at step five of the evaluation process). Nonetheless, the ALJ's

determination in this case was in error because the ALJ did not adequately account

for Plaintiff's panic attacks without agoraphobia, which amount to a non-exertional

mental impairment not contemplated by the Guidelines. See, e.g., Desrosiers, 846

F.2d at 579 (Pregerson, J., concurring)(observing that mental limitations are nonexertional limitations). Had the ALJ done so, Plaintiff's non-exertional limitations

would have precluded reliance on the Guidelines alone. Tackett, 180 F.3d at 1102.

 Accordingly, the ALJ's failure to call a vocational expert was in error. See Aukland

v. Massanari, 257 F.3d 1033, 1037 (9th Cir. 2001)(finding error where ALJ's reliance

on the grids presupposed a proper assessment of the claimant's disability).

3. Severity of Plaintiff's Symptoms

Plaintiff further argues that the ALJ's purported reasons for discrediting her

testimony are insufficient. Plaintiff maintains that the ALJ failed to identify specific

testimony, focused primarily on Plaintiff's physical impairments, and provided

reasons that are legally inadequate or irrelevant. [Doc. 12 at 11-14]. Defendant

asserts that the ALJ's determinations were proper and supported by the record.

It is within the province of the ALJ to make credibility determinations. To

discredit a claimant’s testimony, and ALJ must provide specific, cogent reasons

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supported by substantial evidence. Reddick, 157 F.3d at 722. Where there is no

affirmative evidence of malingering, the ALJ's reasons for rejecting the claimant's

testimony must be clear and convincing. Reddick, 157 F.3d at 722; Lester v. Chater,

81 F.3d 821, 834 (9th Cir.1995). In determining whether allegations of pain support

a claim of disability, the ALJ may consider various factors, including: the claimant's

daily activities, effectiveness of pain medication, and relevant character evidence."

Bunnell v. Sullivan, 947 F.2d 341, 346 (9th Cir. 1991); see also 20 C.F.R. §§

404.1529(c)(3), 416.929(c)(3)(listing similar factors considered by the ALJ in

assessing a claimant's credibility). In addition, the ALJ must consider the claimant's

work record, observations of treating or examining physicians and other third parties,

precipitating and aggravating factors, and functional restrictions caused by the

claimant's symptoms. Smolen, 80 F.3d at 1284 (citing SSR 88-13); Bunnell, 947

F.2d at 346. 

 The Court agrees with Plaintiff that the ALJ erred by failing to state which

portions of her testimony were not credible. Instead, the ALJ merely listed a number

of general reasons for rejecting Plaintiff's claims. For example, the ALJ rejected

Plaintiff's testimony in part because she made reports to her doctors that the ALJ

deemed inconsistent with a finding of disability. Specifically, he noted that Plaintiff

reported on one occasion that her "polyarthralgias were relieved with medications,"

and that "her morning hand stiffness lasted only 15 to 20 minutes and was relieved

with exercise." [Doc. 4A at 22]. On another occasion, she reported to a doctor at

the Maricopa Medical Center that she was "doing well." [Id. at 22-23]. The ALJ did

not go on to explain, however, how these reports established that her testimony was

not credible or what effect these facts would have on her disability as a whole. As

Plaintiff points out, the fact that the claimant stated that she felt well on a particular

occasion does not establish that she did not suffer disabling limitations or that her

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testimony was inaccurate. See, e.g., Reddick, 157 F.3d at 724 (observing that a

person overstating her ailments would be unlikely to advise her doctors when she

was feeling better); Holohan v. Massanari, 246 F.3d 1195, 1205 (9th Cir. 2001)("That

a person who suffers from severe panic attacks, anxiety, and depression makes

some improvement does not mean that the person's impairments no longer seriously

affect her ability to function in a workplace). 

An ALJ's credibility findings must be sufficiently specific to allow a reviewing

court to conclude that the hearing officer rejected the testimony on permissible

grounds rather than arbitrarily discrediting it. Rollins v. Massanari, 261 F.3d 853,

856 (9th Cir. 2001). The ALJ may not reject a claimant’s testimony without specifically

identifying the portions of the testimony found not credible and explaining what

evidence contradicts or undermines the testimony. Aukland, 257 F.3d at 1036 n.1;

Rollins, 261 F.3d at 856; Reddick, 157 F.3d at 722. With respect to the foregoing

bases for rejecting Plaintiff's testimony, the ALJ failed to do so. 

The ALJ additionally discredited Plaintiff's testimony on grounds that: (1)

despite reporting panic attacks, she had no record of psychiatric or psychological

treatment, and (2) Plaintiff's activities of daily living, as reported by Plaintiff and her

daughter, were inconsistent with a finding of disability. These two reasons relate

more specifically to Plaintiff's testimony. However, for the reasons that follow, the

Court is unpersuaded that either of these reasons is a clear and convincing reason

for rejecting Plaintiff's testimony.

First, regarding Plaintiff's failure to seek psychiatric or psychological treatment,

the Court observes that it is unclear whether such specialized treatment was ever

recommended to Plaintiff. Plaintiff testified, however, that she did report her panic

attacks and anxiety in the course of her regular medical treatment, and her testimony

is corroborated by her primary care treatment notes. [See Doc. 4A at 168, 176,

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181,184, 290]. Although she testified that she was not currently taking medication

for her panic attacks, she explained that "they haven't figured out yet what I can take

because of the fact that I do have problems with my liver.... So, I do try to work

through them by myself. Sometimes I can, sometimes I can't. It depends on the

severity of it." [Doc. 4A at 22]. Plaintiff's testimony explains her treatment history,

and the ALJ's cursory dismissal of Plaintiff's panic attacks on grounds that she failed

to obtain appropriate treatment is not substantially supported. 

Defendant offers various reasons to explain why the ALJ's statements about

the Plaintiff's mental health treatment history could be deemed valid. [Doc. 19 at 3-6,

9]. Specifically, Defendant observes that it was logical for the ALJ to infer that

Plaintiff's primary care doctor did not refer her to a psychotherapist because her

problems were not sufficiently severe. [Id.]. Defendant also asserts that there is no

evidence that Plaintiff's proffered reason for failing to take medication is true. [Id.].

Finally, Defendant asserts that anxiety disorders generally respond well to treatment,

and Plaintiff's disorder would therefore be controllable if she sought further

treatment. [Id.]. Significantly, however, the ALJ did not rely on any of these reasons

in his opinion. Although an ALJ may consider a claimant's failure to seek or adhere

to treatment plan in assessing credibility, Fair v. Bowen, 885 F.2d 597, 603 (9th Cir.

1989, he has an obligation to support an adverse credibility finding with substantial

evidence and specific findings. Reddick, 157 F.3d at 722. In order to find a claimant

not-disabled for failure to follow a course of treatment without good reasons, the ALJ

must examine the claimant's medical conditions and personal factors to determine

whether the impairment is indeed remediable by such treatment and whether the

claimant could return to work if treated. See Byrnes v. Shalala, 60 F.3d 639, 641 (9th

Cir. 1995). See also Regennitter, 166 F.3d at 1299-1300 (cautioning against

"chastising one with a mental impairment for poor judgment in seeking

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rehabilitation")(quoting Nguyen v. Chater, 100 F.3d , 1462, 1465 (9th Cir. 1996). The

ALJ's determination in this case falls far short of meeting these standards, especially

in light of the fact that Plaintiff did seek treatment from her primary care physician.

Lastly, the Court finds that the ALJ's failure to recognize the severity of

Plaintiff's mental limitations appears to have impacted the ALJ's assessment of

Plaintiff's activities of daily living. The Court finds the ALJ's assessment problematic

because it does not appear that the ALJ fully considered whether Plaintiff's mental

impairments could have been consistent with her daily activities but inconsistent with

the ability to sustain work. This is exemplified by the fact that the ALJ relied primarily

on Plaintiff's ability to do a variety of physical activities such as cooking, shopping,

doing laundry and household chores, caring for personal hygiene, doing light yard

work, driving, and bike riding. The fact that Plaintiff could perform such activities

does not establish that she would be able to deal with work place stresses in an

emotionally stable manner. The remaining activities noted by the ALJ -- using the

telephone, talking with friends and family, and managing money– arguably have

more direct bearing on Plaintiff's ability to work despite her mental condition. Yet,

the ALJ's decision is lacking any reasoning to support a conclusion that Plaintiff's

complaints were incredible despite the full range of her limitations. Although an ALJ

may consider a claimant's abilities to engage in daily activities in determining

credibility, Fair, 885 F.2d at 603, the level of activity is only relevant if it is

inconsistent with the claimant's claimed limitations. Reddick, 157 F.3d at 722. See

also Benecke v. Barnhart, 379 F.3d 587, 594 (9th Cir. 2004); Fair, 885 F.2d at

603(recognizing that "many home activities are not easily transferable to ... the more

grueling environment of the workplace, where it might be impossible to periodically

rest or take medication"); Cooper v. Bowen, 815 F.2d 557, 561 (9th Cir. 1987)(noting

that a disability claimant need not "vegetate in a dark room" in order to be deemed

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eligible for benefits). Here, the Court finds the ALJ's opinion lacking in reasoning

that clearly and convincingly supports the ALJ's credibility determination.

For the foregoing reasons, the Court finds that the ALJ's cursory assessment

of Plaintiff's testimony was inadequate to support the rejection of Plaintiff's

testimony. 

C. Remand

Having found error, this Court must determine whether to remand for further

consideration or for the award of benefits. McCartey v. Massanari, 298 F.3d 1072,

1076-77 (9th Cir. 2002); Smolen, 80 F.3d at 1292. An award should be directed on

remand when: (1) the ALJ failed to provide legally sufficient reasons for rejecting

evidence, (2) there are no outstanding issues that must be resolved, and (3) it is

clear from the record that the ALJ would be required to find the claimant disabled

were the rejected evidence credited. Smolen, 80 F.3d at 1292; see also Benecke,

379 F.3d at 593; Harman v. Apfel, 211 F.3d 1172,1178-79 (9th Cir. 2000). However,

remand for further consideration is appropriate where issues are unresolved and

enhancement of the record is required. Id. 

The Court finds that, although the ALJ provided legally insufficient reasons for

rejecting some of the evidence, outstanding issues must be resolved. As a result of

the erroneous categorization of Plaintiff's panic attacks without agoraphobia as a

non-severe impairment, the impact of Plaintiff's non-exertional limitations on her

ability to perform work was not fully explored. As explained above, the ALJ's

erroneous determination led to the failure to call a vocational expert and a failure to

assess Plaintiff's disability based on the full extent of her limitations. The ALJ's

credibility assessment may also have been adversely affected as a result of the

ALJ's failure to give appropriate weight to the full range of Plaintiff's limitations. 

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It is not clear from the record whether Plaintiff would be entitled to a finding of

disability were her mental impairments properly considered, and further development

of the record is required. Compare Benecke, 379 F.3d at 793-96 (demonstrating

when a remand for award of benefits would be warranted). Dr. Watkins' opinion, on

which Plaintiff primarily relies, itself indicates that Plaintiff retained the ability to

perform a variety of tasks and was not entirely precluded from performing workrelated tasks despite her panic attacks, although she was more than minimally

limited in her ability to perform certain tasks. The record does not otherwise

unequivocally demonstrate disability. A remand for proper assessment of Plaintiff's

residual functional capacity based upon the fully array of her mental and physical

impairments is warranted. See, e.g., Aukland, 257 F.3d at 1037 (remanding where

Guidelines were inappropriately applied and vocational expert testimony was

required); Tackett, 180 F.3d at 1104 (same).

For the reasons set forth above, this Court will grant Plaintiff's motion to the

extent that Plaintiff seeks to have the ALJ's decision overturned, but denies Plaintiff's

motion to the extent Plaintiff asks that an award of benefits be directed. Defendant's

motion will be denied. This matter will be remanded for further proceedings

consistent with the Court's opinion,

IT IS THEREFORE ORDERED granting in part and denying in part

Plaintiff's Motion for Summary Judgment (Doc. 11).

IT IS FURTHER ORDERED denying Defendant's Cross-Motion for Summary

Judgment (Doc. 18);

/ / /

/ / /

/ / /

/ / /

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IT IS FURTHER ORDERED remanding this matter to the Social Security

Administration for further proceedings.

DATED this 10th day of November, 2005.

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