Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_04-cv-00244/USCOURTS-azd-4_04-cv-00244-0/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:405 Review of HHS Decision (DIWW)

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UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Carol Graham, )

) No. CIV 04-244-TUC-RCC (JM)

Plaintiff, )

)

v. ) REPORT AND

) RECOMMENDATION

JoAnne B. Barnhart, Commissioner of Social )

Security, )

)

Defendant. )

_______________________________________)

Plaintiff Carol Graham brought this action pursuant to 42 U.S.C. § 405(g), seeking

judicial review of a final decision by the Commissioner of Social Security. This Social

Security Appeal has been referred to the United States Magistrate Judge pursuant to Local

Rule – Civil 72.2(a)(10) of the Rules of Practice of this Court. Based on the pleadings of the

parties and the record submitted to the Court, the Magistrate Judge recommends that the

District Court, after its independent review, grant Plaintiff's Motion for Summary Judgment

[Doc. No. 8] and deny Defendant's Cross-Motion for Summary Judgment [Doc. No. 9].

I. Procedural Background 

On March 12, 2002, Plaintiff concurrently filed an Application for Disability

Insurance Benefits under Title II and an Application for Supplemental Security Income

Benefits under Title XVII, with at protective filing date of July 12, 2001. (Tr. 75-77, 131,

253-255). Her claims were denied initially (Tr. 36, 64-68 (Disability Insurance Benefits) &

37, 248-252 (SSI Benefits)), and upon reconsideration (Tr. 34, 58-61 & 35, 240-243).

Plaintiff then requested a hearing before an administrative law judge ("ALJ"). (Tr. 68). The

hearing was held on April 16, 2003, and her claims were denied in a decision by the ALJ

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dated May 22, 2003. (Tr. 18-23). She subsequently requested review of the hearing decision

by the Appeals Council. (Tr. 10-11). On February 6, 2004, Plaintiff submitted legal

argument and additional evidence for consideration by the Appeals Council. (Tr. 256-271).

On March 5, 2004, the Appeals Council denied Plaintiff's request for review. (Tr. 3-5).

Accordingly, the ALJ's decision became the final decision of the Commissioner of Social

Security. (Tr. 3). Plaintiff subsequently filed a complaint in this Court on May 7, 2004,

seeking judicial review of the ALJ's decision. 

II. Record on Appeal

A. Plaintiff's Testimony

At the hearing before the ALJ, Plaintiff represented herself and was questioned by the

ALJ. Plaintiff testified that she was born on December 22, 1955, is approximately 5'4" tall,

and weighs 130 pounds. (Tr. 276). She lives in an apartment with her 13 year-old daughter.

(Tr. 277-278). She has a high school diploma, two years of college, and five years of trade

school, with training in plumbing, heating and air conditioning. (Tr. 277).

Plaintiff previously worked as an apprentice plumber, but did not continue in that

work due to stress related to the job, including problems with job foremen. (Tr. 280-282).

She explained that she did not seek other employment in the plumbing field after being

treated unfairly by the apprenticeship coordinator employed by the union who would not give

her job assignments to which she was entitled. (Tr. 281). 

Plaintiff also previously worked doing telephone surveys. (Tr. 282). She left that line

of work due to "personal differences" with the owner, who was taking advantage of

employees by forcing them to work unpaid overtime. (Tr. 282). She worked briefly as a

bank teller, but was terminated for miscounting money and accumulating "more mishaps of

the small things." (Tr. 283). Plaintiff also worked in childcare, but could not handle being

taken advantage of by her co-workers. (Tr. 285). She also tried to work alone at a job

cleaning Tucson Medical Center, but found that "technically, you actually don't really work

alone." (Tr. 286). Plaintiff last worked part-time in October 2002 as a laborer and full-time

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from September 2001 through January 2002 as a cab driver. (Tr. 279-280). She explained

that she would have a difficult time physically performing most jobs because she suffers from

osteopenia, "a continuous back cramp," and arthritis. (Tr. 286-87). She also suffers from

depression and experiences auditory hallucinations. (Tr. 290-91). 

When asked why she feels she cannot now work, Plaintiff stated that she suffers from

depression, Post-Traumatic Stress Disorder, anxiety, panic and does not have the energy to

maintain a regular schedule. (Tr. 283). She explained that in work situations she would

"become extremely depressed and [would] withdraw quite a lot." (Tr. 284). She feels that

she cannot succeed at anything other than being a mother. (Tr. 284). 

On a typical day, Plaintiff gets out of bed at about 6:30 a.m. and has coffee while her

thirteen year-old daughter gets ready for school. (Tr. 288). After breakfast, she either reads,

watches television, solves puzzles, or does paperwork. (Tr. 288). Then she will go to any

appointments she has, mow and rake the grass, or do housecleaning. (Tr. 288). She also

does laundry and, if necessary, shops for groceries. (Tr. 288-89). Sometimes, she visits a

neighbor and once per week visits her 20 year-old daughter who lives in her own apartment.

(Tr. 289). She also makes and cleans-up after dinner. (Tr. 289). 

B. Vocational Expert 

Vocational Expert Ruth Van Vleet testified during the hearing before the ALJ and was

asked to provide an opinion about Plaintiff's ability to perform her past relevant work based

on the following hypothetical:

I'd like you to assume an individual of the claimant's age,

education, and work experience. And assume that a

hypothetical individual has no physical impairments, but has

mental limitations as follows: The person is moderately limited

in the ability to maintain attention and concentration for

extended periods. The ability to perform activities within a

schedule, maintain regular attendance, and be punctual within

customary tolerances. And moderately limited in the ability to

complete a normal workday and work week without

interruptions from psychologically-based symptoms. And to

perform at a consistent pace without an unreasonable number

and length of rest periods. There are no areas that are

considered to be where the hypothetical individual is markedly

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limited. And the individual is not significantly limited in quite

a number of areas: The ability to remember locations and worklike procedures, the ability to understand that remember very

short and simple instructions, the ability to understand and

remember detailed instructions, the ability to carry out very

short and simple instructions, the ability to carry out detailed

instruction, the ability to sustain an ordinary routine without

special supervision, the ability to work in coordination with or

proximity to others without being distracted by them, the ability

to make simple work-related decisions.

(Tr. 292-933). Based on this hypothetical, the expert opined that the described individual

was capable of performing the past relevant work performed by the Plaintiff. (Tr. 293).

Specifically, she believed that Plaintiff 

could've probably continued with those limitations to work

doing the sort of apartment maintenance. I think she also did

some repair work. The childcare job, the telephone survey job.

I think she also said that at a time she also did cleaning. And

since "moderate" in my understanding is only on an average,

[an] individual with those sort of limitations [could] work in all

those different types of areas.

(Tr. 293-94).

C. ALJ's Findings and Decision

After the hearing and after considering the entire record, the ALJ found that the

medical evidence established that the Plaintiff has these severe, medically determinable

impairments: depression and post traumatic stress disorder. (Tr. 23). However, he concluded

that these impairments were not medically equal to any listed in 20 C.F.R. § 404, Appendix

1, Subpart P. (Tr. 23). Based on the medical evidence the ALJ then found that Plaintiff

retains the functional capacity to perform work activity

regardless of the exertional level. Her mental conditions cause

moderate limitation in the ability to: maintain attention and

concentration for extended periods; perform activities within a

schedule, maintain regular attendance and be punctual within

customary tolerances; and complete a normal workday and

workweek without interruptions from psychologically based

symptoms and to perform at a consistent pace without an

unreasonable number and length of rest periods, but no other

significant limitations (20 C.F.R. 404.1545 and 416.945).

(Tr. 23). The ALJ then found that Plaintiff's impairments do not preclude performance of

her past relevant work as apartment maintenance person, child care worker, telephone survey

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taker, and janitor/cleaner, and that she "was not under a "disability," as defined in the Social

Security Act, at any time through the date of this decision (20 CFR § 404.1520(e) and

416.920(e))." (Tr. 23). 

Based on these findings, the ALJ reached the following decision: 

It is the decision of the Administrative Law Judge that, based on

the applications filed effective on July 12, 2001, the claimant is

not entitled to a period of disability or disability insurance

benefits under Sections 216(i) and 223, respectively, of the

Social Security Act, and is not eligible for supplemental security

income under sections 1602 and 1614(a)(3)(A) of the Act. 

(Tr 22-23). 

III. Standard of Review

A district court's review of a disability determination is limited, and a final

administrative decision can be revised "only if it is based on legal error or if the fact findings

are not supported by substantial evidence." Sprague v. Bowen, 812 F.2d 1226, 1230 (9th Cir.

1987) (citation and internal quotations omitted). "Substantial evidence means such relevant

evidence as a reasonable mind might accept as adequate to support a conclusion." Morgan

v. Commissioner of the Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 1999); Vertigan v.

Halter, 260 F.3d 1044, 1049 (9th Cir. 2001). It consists of "more than a mere scintilla but less

than a preponderance." Tidwell v. Apfel, 161 F.3d 599, 601 (9th Cir. 1999); Young v.

Sullivan, 911 F.2d 181, 183 (9th Cir. 1990). 

"In determining whether the Commissioner's findings are supported by substantial

evidence, [this Court] must review the administrative record as a whole, weighing both the

evidence that supports and the evidence that detracts from the Commissioner's conclusion."

Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1998); see also Aukland v. Massanari, 257

F.2d 1033, 1035 (9th Cir. 2001). However, the ALJ's decision must be upheld if the evidence

is reasonably susceptible to more than one rational interpretation, Allen v. Secretary of Health

and Human Services 726 F.2d 1470, 1473 (9th Cir. 1984), and the Court cannot substitute its

judgment for that of the Commissioner. Reddick, 157 F.3d at 720-21. 

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The claimant is "disabled" for the purpose of receiving benefits under the Act if he is

unable to engage in any substantial gainful activity due to an impairment which has lasted,

or is expected to last, for a continuous period of at least twelve months. 42 U.S.C. §

423(d)(1)(A); 20 C.F.R. § 404.1505(a). "The claimant bears the burden of establishing a

prima facie case of disability." Roberts v. Shalala, 66 F.3d 179, 182 (9th Cir. 1995), cert.

denied, 517 U.S. 1122 (1996); Smolen v. Chater, 80 F.3d 1273, 1289 (9th Cir. 1996). 

IV. Discussion

Regulations promulgated by the Commissioner establish a five-step sequential

evaluation process to be followed by the ALJ in a disability case. See 20 C.F.R. § 404.1520.

At step one of the process, the ALJ must determine whether the claimant is currently engaged

in substantial gainful activity; if so, a finding of non-disability is made and the claim is

denied. 20 C.F.R. § 404.1520(b). When the claimant is not currently engaged in substantial

gainful activity, the ALJ, in step two, must determine whether the claimant has a severe

impairment or combination of impairments significantly limiting him from performing basic

work activities; if not, a finding of non-disability is made and the claim is denied. 20 C.F.R.

§ 404.1520(c). A severe impairment or combination of impairments exists when there is

more than a minimal effect on an individual's ability to do basic work activities. 20 C.F.R.

§ 404.1521(a); Smolen, 80 F.3d at 1290. Basic work activities are "the abilities and aptitudes

necessary to do most jobs," including physical functions such as walking, standing, sitting,

lifting, pushing, pulling, reaching, carrying or handling, as well as the capacity for seeing,

hearing and speaking, understanding, remembering and carrying out simple instructions, use

of judgment, responding appropriately to supervision, co-workers and usual work situations,

and dealing with changes in a routine work setting. 20 C.F.R. § 404.1521(b). 

At the third step, the ALJ must compare the claimant's impairment to those in the

Listing of Impairments, 20 C.F.R. § 404, Subpart P, App. 1; if the impairment meets or

equals an impairment in the Listing, disability is conclusively presumed and benefits

awarded. 20 C.F.R. § 404.1520(d). When the claimant's impairment does not meet or equal

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an impairment in the Listing, in the fourth step, the ALJ must determine whether the claimant

has sufficient "residual functional capacity" despite the impairment or various limitations to

perform her past work; if so, a finding of non-disability is made and the claim is denied. 20

C.F.R. § 404.1520(e). When the claimant shows an inability to perform past relevant work,

a prima facie case of disability is established and, in step five, "the burden shifts to the

Commissioner to show that the claimant can perform some other work that exists in

'significant numbers' in the national economy, taking into consideration the claimant's

residual functional capacity, age, education, and work experience." 20 C.F.R. § 404.1520(f).

In this case, at step two of the inquiry, the ALJ found that Plaintiff's depression and

post-traumatic stress disorder constituted severe and medically determinable impairments;

however, under step three analysis, he found that these impairments did not meet or equal

one of the medical impairments listed in Appendix 1, Subpart P, Regulations No. 4. (Tr. 23).

Therefore, no presumption of disability arose under step three. (Tr. 19). Under step four of

the inquiry, the ALJ determined that Plaintiff's medically determinable impairments did not

prevent her from performing her past relevant work as an apartment maintenance person,

child care worker, telephone survey taker, and janitor/cleaner. (Tr. 26). 

Plaintiff raises two main objections to the ALJ's decision. First, she argues that the

ALJ improperly rejected the opinion of her treating psychiatrist, Dr. S. Arnold Nelson.

Specifically, she alleges that in rejecting Dr. Nelson's opinion, the ALJ mistakenly relied on

the absence of treatment records which in fact existed. Second, Plaintiff argues that the ALJ

did not fully develop the testimony of the vocational expert and as a result, erred in

determining that she could perform her past relevant work. 

A. ALJ's Rejection of the Opinion of Dr. Nelson 

Plaintiff argues that the ALJ wrongly rejected the opinion of Dr. Nelson, her treating

physician, based on the absence of treatment records. Dr. Nelson's opinion, which is dated

April 9, 2003, is that due to major depression and PTSD, Plaintiff is totally unable to work

and that the disability was then expected to exist for one year or longer. (Tr. 136). In

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Compare 42 U.S.C. § 405(g) (a "final decision of the Commissioner of Social

Security" may be reviewed in the district court) with Matthews v. Apfel, 239 F.3d 589,

594 (3rd Cir. 2001) (court has no jurisdiction to review the Appeals Council decision

to deny review because it is not a final decision) and Mackey v. Shalala, 47 F.3d 951,

953 (9th Cir. 1995) (same).

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rejecting this opinion, the ALJ specifically noted a "gap in treatment records from October

2000 to December 2001," and also stated that the opinion "is not accompanied by any

contemporaneous treating notes demonstrating the basis for the opinion . . . ." (Tr. 19).

Motion for Summary Judgment ("Motion"), p. 7. Plaintiff explains that the ALJ "was

partially accurate" in that no records were provided at the hearing, but explains that they were

later provided to the Appeals Council. Motion, p. 7. Plaintiff characterizes these records as

"newly found," and asserts that they provide the contemporaneous support for Dr. Nelson's

opinion which the ALJ found to be lacking. Id., pp. 7-8.

In response, the Commissioner argues that the Appeals Council's denial of Plaintiff's

request for review was a discretionary administrative action that does not constitute a "final

decision" subject to judicial review. Defendant's Cross-Motion for Summary Judgment

("Cross-Motion"), at p. 3. Even if subject to review, the Commissioner asserts that Plaintiff

failed to establish that this evidence is "new and material" as required by the regulations, and

even if it were, it does not contain the objective medical support needed to validate Dr.

Nelson's opinion. Id., p. 4-6. 

1. The Ruling is Subject to Judicial Review.

The threshold question is whether the Appeals Council's ruling is subject to judicial

review. This issue is particularly important here because Plaintiff submitted only to the

Appeals Council the evidence upon which she relies to challenge the ALJ's adverse ruling.

This is a question that has not been directly addressed by the Ninth Circuit.1

 The

Commissioner contends that under Califano v. Sanders, 430 U.S. 99 (1977) and Matlock v.

Sullivan, 908 F.2d 492 (9th Cir. 1990), the District Court does not have jurisdiction to review

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the Appeals Council's denial of Plaintiff's request for review. In Califano, the issue the

Supreme Court addressed was whether the Administrative Procedures Act or the Social

Security Act authorized district courts to exercise subject matter jurisdiction to review a final

decision of the Commissioner denying a request to reopen the plaintiff's claims for social

security benefits. 430 U.S. at 985-986. Califano is not helpful to the Commissioner in this

case because it is undisputed that the Plaintiff's appeals were timely and a request to reopen

was neither necessary nor appropriate. 

Matlock is equally unhelpful. That case also raised the issue of whether the district

court has jurisdiction to review the Appeals Council's discretionary refusal to consider an

untimely request for review. 908 F.2d at 493. Again, the petition here was not untimely and

thus did not present circumstances appropriate for the discretionary refusal to reopen the

case. As stated in the Notice of Appeals Council Action, the Council denied Plaintiff's

request for review not her request to reopen. (Tr. 3). Califano and Matlock do not address

the question of jurisdiction over the Appeals Council's denial of a plaintiff's request for

review.

Two cases which are helpful to the resolution of jurisdiction in this case are Ramirez

v. Shalala, 8 F.3d 1449 (9th Cir. 1993), and Bates v. Sullivan, 894 F.2d 1059 (9th Cir. 1990).

Despite the Commissioner's attempts to distinguish Ramirez, the case addresses

circumstances that mirror those of the instant case. After noting that their opinion constituted

a de novo review of the district court's judgment, the Ninth Circuit in Ramirez indicated that

in conducting the review, "we consider the rulings of both the ALJ and the Appeals Council."

Id. at 1451. This was significant because, as is the case in the instant matter, the plaintiff

in Ramirez had submitted an additional report to the Appeals Council after the ALJ's decision

had been rendered. Id. at 1451-52. The court found this review approach appropriate

because the Appeals Council, although it "declined to review" the decision of the ALJ, 

reached [its] ruling after considering the case on the merits;

examining the entire record, including the additional material;

and concluding that the ALJ's decision was proper and that the

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additional material failed to "provide a basis for changing the

hearing decision." 

Id. at 1452. 

The circumstances are similar here. The Appeals Council reviewed Plaintiff's

additional evidence and cited progress notes contained in the record as a basis for denying

review. (Tr. 3). As was the case in Ramirez, the Council concluded that the new records and

the material cited from the existing record, "does not provide a basis for changing the

Administrative Law Judge's decision." (Tr. 4). This Court finds the salient point in Ramirez

equally applicable here and that review of the entire record, including those records

submitted only to the Appeals Council, subject to review. See also, Bates v. Sullivan, 894

F.2d 1059 (9th Cir. 1990) (reviewing de novo the Appeals Council's refusal to review the

decision of the ALJ where the claimant presented new material to the Appeals Council after

the hearing before the ALJ), overruled in part on other grounds by, Bunnell v. Sullivan, 947

F.2d 341 (1991).

2. The New Evidence is Part of the Administrative Record.

Despite the holding in Ramirez, the Commissioner argues that the additional evidence

the Plaintiff submitted to the Appeals Council was not "new and material" and should not be

considered. This argument conflates the requirements of 42 U.S.C. § 405(g), which

addresses the consideration of new evidence by the district court, and 20 C.F.R. §§

404.970(b)(4) and 416.1470(b)(4), which address the consideration of new evidence by the

Appeals Council. While both code section 405(g) and regulations sections 404.970(b)(4) and

416.1470(b)(4) use the term "new and material," the standards for applying these provisions

differ. Under section 405(g), a plaintiff must establish good cause and materiality before the

evidence will be considered by the district court. Booz v. Secretary of Health and Human

Serv., 734 F.2d 1378, 1380 (9th Cir. 1984). However, the good cause and materiality

requirements do not apply when, as is the case here, the evidence has been submitted to the

Appeals Council and made part of the record. Compare Harman v. Apfel, 211 F.3d 1172,

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1179-80 (9th Cir. 2000) (stating that where a claimant submitted additional material to the

Appeals Council in requesting review of the ALJ's decision, "[w]e may properly consider the

additional material because the Appeals Council addressed them in the context of denying

Appellant's request for review") and Ramirez, 8 F.3d at 1451-52 (Appeals Council declined

to review the decision of the ALJ after examining the entire record, including new material

and the Ninth Circuit considered both the ALJ's decision and the additional materials

submitted to the Appeals Council) with Burton v. Heckler, 724 F.2d 1415, 1417 (9th Cir.

1984) ("a remand to the Secretary to consider additional evidence not contained in the

administrative record . . . [is] provided for by [42 U.S.C. § 405(g)] where the new evidence

is material and there is good cause for the failure to incorporate such evidence in the record

in a prior proceeding.") (emphasis added). 

In contrast to section 405(g), 20 C.F.R. §§ 404.970(b)(4) and 416.1470(b)(4) are much

less demanding. Those regulations provide that, 

[i]f new and material evidence is submitted, the Appeals Council

shall consider the additional evidence only where it relates to the

period on or before the date of the administrative law judge

hearing decision. The Appeals Council shall evaluate the entire

record including the new and material evidence submitted if it

related to the period on or before the date of the administrative

law judge hearing decision. It will then review the case if it

finds that the administrative law judge's action, findings, or

conclusion is contrary to the weight of the evidence currently in

the record.

Thus, these provisions required that the Appeals Council engage in a materiality

inquiry, and if it was determined that the new evidence was material and related to the period

on or before the date of the ALJ's decision, the Appeals Council could consider the ALJ's

opinion in light of the new evidence. Here, by adding the new evidence to the administrative

record, the Appeals Council made a de facto determination that the new evidence was both

material and related to the period on or before the date of the ALJ's decision. As such, the

new evidence should not be excluded in evaluating whether the ALJ's rejection of Dr.

Nelson's opinion was appropriate.

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3. In Light of the New Evidence, Remand is Necessary.

In evaluating the opinions of treating physicians, the opinions should be given great

deference, but they are "not necessarily conclusive as to either the [claimant's] physical

condition or the ultimate issue of disability." Morgan v. Commissioner of Social Sec.

Admin., 169 F.3d 595, 600 (9th Cir. 1999). While not bound by the opinions of the claimant's

treating physicians on the ultimate issue of disability, the ALJ cannot reject the

uncontroverted opinion of a claimant's treating physician on the ultimate issue of disability

"'without presenting clear and convincing reasons for doing so.'" Reddick, 157 F.3d at 725

(quoting Matthews v. Shalala, 10 F.3d 678, 680 (9th Cir. 1993)). However, when the opinion

of another doctor contradicts the treating physician's opinion, "the Secretary can disregard

the latter only by setting forth specific, legitimate reasons for doing so that are based on

substantial evidence in the record." Ramirez v. Shalala, 8 F.3d 1449, 1453 (9th Cir. 1993)

(quoting Baxter v. Sullivan, 923 F.2d 1391, 1396 (9th Cir. 1991)) (internal quotations

omitted). In making this determination, it is the Court's duty to "review the administrative

record as a whole, weighing both the evidence that supports and the evidence that detracts

from the Commissioner’s conclusion." Reddick, 157 F.3d at 720; see also Aukland v.

Massanari, 257 F.3d 1033, 1035 (9th Cir. 2001). Here, the Magistrate Judge finds that under

either standard of review, the ALJ's determination cannot be upheld.

Initially, there is some question whether the ALJ appropriately accorded great weight

to Dr. Nelson's opinions. In fact, the ALJ noted that, in reaching his conclusion, "substantial

weight is being given to the opinions of the State Agency physicians as supported by and

consistent with the evidence of the entire record." (Tr. 22) (emphasis added). Without the

benefit of the new evidence, this approach was understandable. See, e.g., Andrews v.

Shalala, 53 F.3d 1035, 1041 (9th Cir. 1995) ("[W]hen it is an examining physician's opinion

that the ALJ has rejected in reliance on the testimony of a nonexamining advisor, reports of

the nonexamining advisor need not be discounted and may serve as substantial evidence

when they are supported by other evidence in the record and are consistent with it.")

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However, when the new evidence is considered, the ALJ's interpretation of the evidence is

of questionable reliability.

Dr. Nelson, who is identified as Plaintiff's current physician at CODAC, diagnosed

her as suffering from major depression and PTSD as a result of childhood sexual abuse. (Tr.

135-136). The doctor concluded that Plaintiff was totally unable to work due to ongoing

anxiety, depression, fears, depression and nightmares, and he expected her disability to last

one year or longer. (Tr. 136). In rejecting this opinion, the ALJ noted "a gap in treatment

records from October 2000 to December 2001." (Tr. 19). The additional evidence

submitted by the Plaintiff to the Appeals Counsel consists of nine pages of progress notes

signed by Marla Perry, Ph.D./NP that document Plaintiff's treatment at CODAC Behavioral

Health Services, Inc., between November 9, 2000 and December 10, 2001. (Tr. 256-65).

As such, the new evidence remedies the noted "gap in treatment records . . . ." 

Moreover, the new records contain information that the ALJ might find sufficient to

support a finding that Plaintiff is disabled. Reported in the records are panic attacks, anxiety,

irritability, sleep problems, decreased concentration, and decreased memory. (Id.) When

rejecting the opinion of a treating physician, an ALJ can satisfy the burden of providing

specific and legitimate reasons "by setting out a detailed and thorough summary of the facts

and conflicting clinical evidence, stating his interpretation thereof, and making findings."

Magallanes v. Bowen, 881 F.2d 747, 751 (9th Cir.1989) (quoting Cotton v. Bowen, 799 F.2d

1403, 1408 (9th Cir.1986) (internal quotation marks omitted)). Here, because the ALJ did

not have the opportunity to review, summarize and interpret the new evidence (the CODAC

records), he was unable to set-out the requisite reasons for rejecting Dr. Nelson's opinion.

If the gap in treatment notes was the sole basis for the rejection of Dr. Nelson's

opinions, the Court would be inclined to recommend that benefits be awarded. However, the

ALJ also stated that Dr. Nelson's opinion "is not accompanied by any contemporaneous

treating notes demonstrating the basis for the opinion or explaining the difference from the

GAF of record versus this statement." (Tr. 19). A review of the available CODAC treatment

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records, including the new evidence, establishes that Plaintiff was seen regularly at CODAC.

In stating his opinion, which is dated April 9, 2003, Dr. Nelson reported that Plaintiff was

first seen at CODAC on October 10, 2000. (Tr. 136). She was thereafter seen a number of

times. (Tr. 175-180 (October 10, 2000); Tr. 263 (November 9, 2000); Tr. 261 December 7,

2000; Tr. 262 (January 8, 2001); Tr. 260 (June 28, 2001); Tr. 259 (October 3, 2001); (Tr.

257 (December 10, 2001); Tr. 204 (January 15, 2002); Tr. 181-182 (February 4, 2002); Tr.

203 (March 11, 2002); Tr. 216 (Medication Record reflecting 18 appointments from October

10, 2000 through March 5, 2002); Tr. 136 (April 9, 2003). These records, however, leave

an unexplained gap in treatment from March 2002 through April of 2003. As such, the ALJ's

indication that no treatment notes contemporaneous to Dr. Nelson's opinion exist, may be a

justified conclusion even when the new evidence is considered. However, as Plaintiff was

not questioned about this gap in treatment, the ALJ on remand should also explore whether

Plaintiff sought treatment during this period.

B. ALJ's Treatment of Vocational Evidence

Plaintiff argues that the ALJ did not fully develop the testimony of the vocational

expert and as a result, erred in determining that she could perform her past relevant work.

This is clearly the case. In his hypothetical, the ALJ described the Plaintiff as moderately

limited in the ability to maintain attention and concentration for extended periods, to perform

activities within a schedule, to maintain regular attendance, to be punctual within customary

tolerances, and in the ability to complete a normal workday and work week without

interruptions from psychologically-based symptoms. (Tr. 292-93). In response, the VE

stated that the described individual was capable of performing the past relevant work

performed by the Plaintiff. (Tr. 293). In reaching her opinion, however, the VE stated,

"[a]nd since "moderate" in my understanding is only on an average, [an] individual with

those sort of limitations [could] work in all those different types of areas." (Tr. 293-94). As

the Plaintiff argues, the VE was incorrect in her understanding of the definition of

"moderate."

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The ALJ, in forming his hypothetical, apparently adopted the conclusions of Paul

Tangeman, Ph.D., who completed a Functional Capacity Assessment of Plaintiff. In the

Assessment, Dr. Tangeman was presented various categories of functional ability and, for

each category, rated the Plaintiff as "Not Significantly Limited," "Moderately Limited," or

"Markedly Limited." (Tr. 155). A review of the Assessment itself discloses no definitions

for the offered ratings. The Social Security regulations also do not define "moderate." Some

light is shed on the definition by Listing 12.00 of the Social Security Regulations, which

defines "markedly limited" as follows:

Where we use "marked" as a standard for measuring the degree

of limitation, it means more than moderate but less than

extreme. A marked limitation may arise when several activities

or functions are impaired, or even when only one is impaired, so

long as the degree of limitation is such as to interfere seriously

with your ability to function independently, appropriately,

effectively, and on a sustained basis. 

20 C.F.R. § 404, subpt. P, app. 1, listing 12.00C. Additionally, the Third Circuit has stated

that "moderately limited," "means that the claimant has some loss of ability in the activity

listed for up to one-third of the time." Morales v. Apfel, 225 F.3d 310, 314 n. 4 (3rd Cir. 2000).

While these definitions do not provide entirely clear or consistent definitions for the

term "moderately limited," they do make clear that the term does not equate to "average" as

the VE believed. Common sense suggests that the average worker is not moderately limited

in the ability to concentrate, maintain regular attendance, or complete a normal workday or

workweek without interruptions. (See Tr. 155-156 (describing Plaintiff's limitations). As

such, the Court recommends that this matter be remanded to the ALJ for clarification and

reconsideration of the Plaintiff's vocational abilities in light of her stated limitations. 

V. RECOMMENDATION FOR DISPOSITION BY THE DISTRICT JUDGE

Based on the foregoing and pursuant to 28 U.S.C. § 636(b) and Local Rule 1.17(d)(2),

Rules of Practice of the United States District Court, District of Arizona, the Magistrate

Judge recommends that the District Court, after an independent review of the record,

GRANT Plaintiff's Motion for Summary Judgment [Doc. No. 8] and DENY Defendant's

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Cross-Motion for Summary Judgment [Doc. No. 9], and REMAND this action for

reconsideration by the ALJ consistent with this Report and Recommendation.

This Recommendation is not an order that is immediately appealable to the Ninth

Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of

Appellate Procedure, should not be filed until entry of the District Court's judgment. 

However, the parties shall have ten (10) days from the date of service of a copy of this

recommendation within which to file specific written objections with the District Court. See

28 U.S.C. § 636(b)(1) and Rules 72(b), 6(a) and 6(e) of the Federal Rules of Civil Procedure.

Thereafter, the parties have ten (10) days within which to file a response to the objections.

If any objections are filed, this action should be designated case number: CV 04-244-TUCRCC. Failure to timely file objections to any factual or legal determination of the Magistrate

Judge may be considered a waiver of a party's right to de novo consideration of the issues.

See United States v. Reyna-Tapia 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc).

DATED this 3rd day of January, 2006.

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