Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-06-06123/USCOURTS-ca10-06-06123-0/pdf.json

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

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Pursuant to Fed. R. App. P. 43(c)(2), Michael J. Astrue is substituted for *

Jo Anne B. Barnhart as appellee in this action.

After examining the briefs and appellate record, this panel has determined **

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument. This order and judgment is not binding

precedent, except under the doctrines of law of the case, res judicata, and

collateral estoppel. It may be cited, however, for its persuasive value consistent

with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

The Honorable Wesley E. Brown, Senior District Judge, District of Kansas, ***

sitting by designation.

FILED

United States Court of Appeals

Tenth Circuit

September 12, 2007

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

JAMES L. KANELAKOS,

 Plaintiff-Appellant,

 v.

MICHAEL J. ASTRUE,*

Commissioner of the Social Security

Administration,

 Defendant-Appellee.

No. 06-6123

(D.C. No. 04-CV-1579-M)

(W.D. Okla.)

ORDER AND JUDGMENT

**

Before O’BRIEN, Circuit Judge, BRORBY, Senior Circuit Judge, and

BROWN, District Judge. ***

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Plaintiff-appellant James Kanelakos applied for disability insurance

benefits alleging numerous mental and physical impairments. After initial

denials, Mr. Kanelakos and his representative appeared at a hearing on June 10,

2004, before an administrative law judge (ALJ). The ALJ determined that Mr.

Kanelakos was not disabled within the meaning of the Social Security Act, in that

he was physically capable of performing his past relevant work of probation

officer and computer sales representative. The Appeals Council denied review

and plaintiff appealed to the district court, which affirmed the decision of the

Commissioner. 

Mr. Kanelakos now appeals to this court. We have jurisdiction under

42 U.S.C. § 405(g) and 28 U.S.C. § 1291. In reviewing the ALJ’s decision, we

“determine whether the factual findings are supported by substantial evidence in

the record and whether the correct legal standards were applied.” Doyal v.

Barnhart, 331 F.3d 758, 760 (10th Cir. 2003). We reverse and remand with

instructions to remand to the Commissioner. 

Mental Impairments

Three of Mr. Kanelakos’ appellate arguments relate primarily to the ALJ’s

evaluation of his mental impairments. Mr. Kanelakos, a 60-year-old Vietnam-era

veteran, was diagnosed with depression in October 2000. In the following months

and years, he received treatment (including multiple psychotropic medications) for

depression, post-traumatic stress syndrome, panic attacks, and anxiety disorder,

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often from mental-health providers at a medical center operated by the Department

of Veterans Affairs (VA). A physicians’ assistant at the VA medical center 

monitored Mr. Kanelakos’ mental health using the Global Assessment of

Functioning (GAF) numeric scale. In December 2002, she rated his GAF score at

47-50, indicating “serious impairment in social, occupational, or school

functioning (e.g., no friends, unable to keep a job).” Diagnostic and Statistical

Manual of Mental Disorders 30 (Text Revision 4th ed. 2000) (emphasis omitted).

Mr. Kanelakos applied for disability compensation from the VA benefits

administration on March 6, 2002. In October of that year, the VA determined that

he had a 70% disability attributable to the mental impairment of post-traumatic

stress disorder with depression and a 100% combined rating when his physical

impairments and unemployability were taken into consideration. This evaluation

was reached after a review of Mr. Kanelakos’ medical records. One month later,

Mr. Kanelakos officially left his employment as a juvenile probation officer. 

From December 2002 through March 2003, the medical records depict

Mr. Kanelakos as stable with few complaints about his social or mental

functioning. The VA physicians’ assistant continued assessing Mr. Kanelakos’

GAF. In December 2003, she noted that his GAF score had increased to 60,

suggesting “[m]oderate symptoms (e.g., flat affect and circumstantial speech,

occasional panic attacks) or moderate difficulty in social, occupational, or school

functioning (e.g., few friends, conflicts with peers or co-workers).” Id. (emphasis

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omitted). By March 2004, the physicians’ assistant determined that

Mr. Kanelakos’ GAF score had improved to 65, indicative of “mild symptoms” or

“some difficulty in social, occupational, or school functioning (but generally

functioning pretty well).” Id. (emphasis omitted).

Meanwhile, Mr. Kanelakos’ social security case was proceeding. Two

non-examining psychologists performed a review of the medical record. The first

psychologist completed a psychiatric review technique form (PRT) categorizing

Mr. Kanelakos’ mental impairment as nonsevere, situational depression as of

February 2003. A second psychologist concurred in June 2003. The ALJ held a

hearing on June 10, 2004, at which Mr. Kanelakos testified to depression, anxiety,

intense mood swings, apprehension in crowds, and difficulties with authority

figures (particularly his former supervisor in the probation department).

In the decision denying benefits, the ALJ acknowledged Mr. Kanelakos’

entitlement to VA disability benefits, but noted only that “[t]he VA disability

program differs from the Social Security Administration’s standard of review and

determination for disability determination purposes.” Aplt. App., Vol. II at 18. 

The ALJ also briefly discussed some of the evidence concerning mental

impairments, and found that Mr. Kanelakos’ depression, post-traumatic stress

syndrome, and anxiety were controlled with medication, as evidenced by the 2004

GAF score of 65. In the ALJ’s view, Mr. Kanalekos’ testimony concerning his

difficulty in social functioning was not fully consistent or credible. At step two of

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the sequential process, the ALJ determined that Mr. Kanalekos had shown some

severe physical impairments, but not a severe mental impairment.

On appeal, Mr. Kanalekos disputes this aspect of the ALJ’s decision. He 

argues that the ALJ erred in (1) failing to give appropriate consideration to the VA

disability rating; (2) deciding that his mental impairments were not severe; and

(3) failing to develop the record on his mental impairments. Mr. Kanalekos’

arguments are legitimate.

With regard to the VA’s disability determination, the general rule is that it

is not binding on the Social Security Administration (SSA). 20 C.F.R. § 404.1504. 

Nevertheless, “it is evidence that the ALJ must consider and explain why he did

not find it persuasive.” Grogan v. Barnhart, 399 F.3d 1257, 1262 (10th Cir.

2005). In his decision, the ALJ mentioned the VA rating and appropriately stated

that the SSA and VA standards differ. But he completely “fail[ed] to discuss the

significance of the VA’s disability evaluation.” Id. at 1263. This is a clear

violation of the Grogan holding and compels a remand to allow the ALJ to explain

his reasons for rejecting the VA’s view of the medical evidence.

This fundamental Grogan error is compounded by the ALJ’s determination

that Mr. Kanelakos had not shown that his diagnosed mental impairments were

severe at step two of the evaluation process. At step two, a claimant bears the

burden of making “a threshold showing that his medically determinable

impairment or combination of impairments significantly limits his ability to do

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Mr. Kanelakos also asserts error in that reports of two examinations 1

conducted in connection with the VA disability decision (one specifically

psychiatric in nature) are missing from the social-security record. We do not

consider this argument, which was made for the first time on appeal. See Jantzen

v. Hawkins, 188 F.3d 1247, 1257 (10th Cir. 1999). On remand, however, the ALJ

may wish to obtain these records to fully develop the record. See Carter v.

Chater, 73 F.3d 1019, 1022 (10th Cir. 1996). 

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basic work activities.” Williams v. Bowen, 844 F.2d 748, 751 (10th Cir. 1988). 

“[T]his is a de minimus showing.” Grogan, 399 F.3d at 1263 (quotation omitted). 

Here, as in Grogan, “the ALJ’s failure to discuss the significance of the VA’s

disability evaluation in concluding that [claimant] had not met the ‘de minimus’

required showing of a severe impairment at step two was reversible error.” Id. 

Mr. Kanelakos also contends that the ALJ should have ordered a

consultative mental examination to supply a medical opinion on the specific issue

of whether his mental impairments affect his functional capacities. Such an

examination is necessary when the “evidence in the record establishes a reasonable

possibility of the existence of a disability and the result of the consultative exam

could reasonably be expected to be of material assistance in resolving the issue of

disability.” Hawkins v. Chater, 113 F.3d 1162, 1169 (10th Cir. 1997). We leave

the decision whether to order a consultative exam up to the ALJ on remand. 

Compare Hawkins, 113 F.3d at 1166 (“[T]he Secretary has broad latitude in

ordering consultative examinations.”); with 20 C.F.R. § 404.1519a(b) (situations

requiring a consultative examination).1

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Physical Impairments

Mr. Kanelakos asserts error in the ALJ’s consideration of his physical

impairments. In 1997, Mr. Kanelakos underwent a surgical repair of a right wrist

fracture; in 2000, he had a discectomy and fusion to relieve cervical spondylotic

radiculopathy. Post-surgery, he reported symptom relief and returned to work. In

April 2002, after a job transfer required a 70-mile commute, he again began

complaining of neck soreness, spasms, and stiffness. Mr. Kanelakos has been

treated for sleep apnea, restless leg syndrome, non-insulin dependent diabetes

mellitus, chronic sinusitis, tendonitis or rotator cuff injury to the right shoulder,

peripheral neuropathy, and chronic pulmonary obstructive disease.

Against this medical background, the VA rated Mr. Kanelakos’ physical

disability as 20% for type-two diabetes, 20% for diabetic neuropathy in his upper

extremities, 10% for diabetic neuropathy in his lower extremities, and 20% for

urinary frequency. Similarly, the ALJ found that many of these physical

impairments were severe at step two of the evaluation process. The ALJ

determined at step four, however, that Mr. Kanelakos was not disabled because he

retained the residual functional capacity (RFC) to perform a wide range of light

work, including his past relevant work of computer sales representative and

probation officer. 

Mr. Kanelakos contends that the ALJ should have provided a full discussion

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of the VA disability rating in the context of his physical impairments. In

connection with Mr. Kanelakos’ mental impairments, we have already decided the 

ALJ’s treatment of the VA determination was inadequate. We see no reason to

depart from that conclusion. Any change in the step-two determination on mental

impairments would inevitably result in a combination of impairments altering the

ALJ’s step-four analysis. See Grogan, 399 F.3d at 1261 (“[A]t step four,” the

claimant must show “that the impairment or combination of impairments prevents

him from performing his past work.”) (emphasis added, quotation omitted). The

physical impairment issue must also be remanded for the ALJ’s further

consideration.

Conclusion

The ALJ’s summary treatment of the VA rating decision is inadequate under

the standard announced in Grogan v. Barnhart, 399 F.3d at 1262-63. This failure

to comply with our case law affected the disability analysis as a whole. As a

consequence, we do not address the other issues Mr. Kanelakos raises on appeal

and we reach no conclusions on the evidentiary merits of his case. The decision of

the district court is REVERSED and the case is REMANDED with instructions to

remand the case to the Commissioner for further proceedings. 

Entered for the Court

Terrence L. O’Brien

Circuit Judge

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