Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-1_18-cv-00752/USCOURTS-cand-1_18-cv-00752-0/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)

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

EUREKA DIVISION

KING LUTHER MARTIN,

Plaintiff,

v.

NANCY A. BERRYHILL,

Defendant.

Case No. 18-cv-00752-RMI 

ORDER ON MOTIONS FOR 

SUMMARY JUDGMENT

Re: Dkt. No. 19, 22

Plaintiff, King L. Martin, seeks judicial review of an administrative law judge (“ALJ”) 

decision denying his application for disability insurance benefits under Title II, and for 

supplemental security benefits under Title XVI, of the Social Security Act. Plaintiff’s request for 

review of the ALJ’s unfavorable decision was denied by the Appeals Council, thus, the ALJ’s 

decision is the “final decision” of the Commissioner of Social Security, which this court may 

review. See 42 U.S.C. §§ 405(g), 1383(c)(3). Both parties have consented to the jurisdiction of a 

magistrate judge (dkts. 7 & 9), and both parties have moved for summary judgment (dkts. 19 

& 22). For the reasons stated below, the court will grant Plaintiff’s motion for summary judgment, 

and will deny Defendant’s motion for summary judgment.

LEGAL STANDARDS

The Commissioner’s findings “as to any fact, if supported by substantial evidence, shall be 

conclusive.” 42 U.S.C. § 405(g). A district court has a limited scope of review and can only set 

aside a denial of benefits if it is not supported by substantial evidence or if it is based on legal

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

evidence is “more than a mere scintilla but less than a preponderance; it is such relevant evidence 

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 1 of 7
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

as a reasonable mind might accept as adequate to support a conclusion.” Sandgathe v. Chater, 108 

F.3d 978, 979 (9th Cir. 1997). “In determining whether the Commissioner’s findings are supported 

by substantial evidence,” a district court must review the administrative record as a whole, 

considering “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). The 

Commissioner’s conclusion is upheld where evidence is susceptible to more than one rational 

interpretation. Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005).

PROCEDURAL HISTORY

On July 3, 2013, Plaintiff filed an application for a period of disability and disability

insurance benefits under Title II. See Administrative Record (“AR”) (dkt. 15) at 47. On the same 

day, Plaintiff filed an application for supplemental security income under Title XVI. See id. 

Plaintiff alleged disability beginning December 1, 2010 in both applications. Id. The ALJ denied 

the applications on August 2, 2016. Id. at 44-65. The Appeals Council denied Plaintiff’s request 

for review of the applications on December 7, 2017. Id. at 1-7.

SUMMARY OF THE RELEVANT EVIDENCE

Plaintiff has alleged that he suffers from the following impairments: auditory 

hallucinations, depression, physical impairments and pain from cumulative traumatic injuries, 

posttraumatic stress disorder, human immunodeficiency virus (“HIV”), and liver problems. See

Pl.’s Mot. (dkt. 19) at 5, 7. The ALJ determined that Plaintiff’s HIV, back disorder, affective 

disorder, anxiety disorder, psychotic disorder, and polysubstance abuse in reported remission were 

severe impairments. AR (dkt. 15) at 50. The ALJ found Plaintiff’s liver impairment to be nonsevere and noted that the record did not contain “sufficient objective medical evidence to 

substantiate this medical condition” and that the alleged problems “do not produce significant 

limitations in the claimant’s ability to perform basic work activities.” Id. By way of a submission 

to the Commissioner, namely, information provided on an agency-prepared form (entitled, 

“Disability Report – Adult – Form SSA-3368”), Plaintiff stated that his liver problems and his 

depression limited his ability to work. See id. at 261.

A review of the hearing transcript reveals that the ALJ did not develop the record 

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 2 of 7
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

regarding Plaintiff’s liver impairment. See id. at 66-93. In fact, the ALJ never asked Plaintiff 

anything about his liver and instead focused on his mental health issues. Plaintiff testified that he

started hearing voices when he was 24 (he is now 47). Id. at 72-73. The voices talk to Plaintiff 

every day, telling him to use drugs, to kill himself, and that he is worthless. Id. at 74. He cannot 

concentrate or focus “[c]ause the voices are loud.” Id. at 75. Plaintiff was homeless for over six 

months, during which time his symptoms worsened, and he was in several fights. Id. at 77. On an 

average day, Plaintiff takes medication, watches television, and eats a microwavable meal (all his 

meals are microwavable). Id. at 78, 82. The bulk of the remaining testimony was from the 

vocational expert, with additional inquiries into Plaintiff’s depression. Id. at 83-93. 

Evidence Pertaining to Liver Problems:

On November 23, 2012, Plaintiff visited the emergency department of Alameda Health 

System’s Highland Hospital with a chest contusion. See id. at 391-408. Although Plaintiff

“denie[d] any liver problems,” (id. at 396), his doctors concluded otherwise. Sandra Mun, M.D., 

Georgina Calderon, M.D., and Charlotte Wills, M.D., each documented liver problems. Dr. Mun 

diagnosed Plaintiff with “Liver Disorder (Not Otherwise Specified)” (id. at 408), and described 

Plaintiff’s liver as “fatty” (id. at 406-07). Dr. Calderon confirmed that Plaintiff’s “liver is fatty.” 

Id. at 397. Moreover, Dr. Wills indicated that Plaintiff “has marked increase in his L[iver] 

F[unction] T[est]’s” and elevated levels of liver enzymes. Id. at 396. Plaintiff proffered additional 

evidence of liver problems. On April 30, 2013, Plaintiff’s records indicate “AXIS III liver” 

disease. Id. at 101. On October 29, 2013, notes read: “42 year old clmt alleges liver problems.” Id. 

at 98. The liver impairment appears well-documented for almost one year.

THE FIVE STEP SEQUENTIAL ANALYSIS FOR DETERMINING DISABILITY

A person filing a claim for social security disability benefits (the “claimant”) must show 

that he has the “inability to do any substantial gainful activity by reason of any medically 

determinable physical or mental impairment” which has lasted or is expected to last for twelve or 

more months. See 20 C.F.R. §§ 416.920(a)(4)(ii), 416.909.1 The ALJ must consider all evidence in 

 

1 The regulations for supplemental security income (“SSI”) (Title XVI) and disability insurance benefits 

(Title II) are virtually identical though found in different sections of the Code of Federal Regulations. For 

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 3 of 7
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

the claimant’s case record to determine disability (see id. § 416.920(a)(3)), and must use a fivestep sequential evaluation process to determine whether the claimant is disabled (see id. 

§ 416.920). “[T]he ALJ has a special duty to fully and fairly develop the record and to assure that 

the claimant’s interests are considered.” Brown v. Heckler, 713 F.2d 441, 443 (9th Cir. 1983).

Here, the ALJ evaluated Plaintiff’s application for benefits under the required five-step 

sequential evaluation. AR (dkt. 15) at 44-65. At Step One, the claimant bears the burden of 

showing he has not been engaged in “substantial gainful activity” since the alleged date he became 

disabled. See 20 C.F.R. § 416.920(b). If the claimant has worked and it is found to be substantial 

gainful activity, the claimant will be found not disabled. See id. The ALJ found that Plaintiff had 

not engaged in substantial gainful activity since his alleged onset date. AR (dkt. 15) at 49.

At Step Two, the claimant bears the burden of showing that he has a medically severe 

impairment or combination of impairments. See 20 C.F.R. § 416.920(a)(4)(ii), (c). “An 

impairment is not severe if it is merely ‘a slight abnormality (or combination of slight 

abnormalities) that has no more than a minimal effect on the ability to do basic work activities.’” 

Webb v. Barnhart, 433 F.3d 683, 686 (9th Cir. 2005) (quoting S.S.R. No. 96–3(p) (1996)). The 

ALJ found that Plaintiff suffered from the following severe impairments: HIV, back disorder, 

affective disorder, anxiety disorder, psychotic disorder, and polysubstance abuse in reported 

remission. AR (dkt. 15) at 50. The ALJ, however, found that Plaintiff’s liver problems were not 

substantiated by “sufficient objective medical evidence” and did “not produce significant 

limitations in the claimant’s ability to perform basic work activities.” Id.

At Step Three, the ALJ compares the claimant’s impairments to the impairments listed in 

appendix 1 to subpart P of part 404. See 20 C.F.R. § 416.920(a)(4)(iii), (d). The claimant bears the 

burden of showing his impairments meet or equal an impairment in the listing. Id. If the claimant 

is successful, a disability is presumed and benefits are awarded. Id. If the claimant is unsuccessful, 

the ALJ assesses the claimant’s residual functional capacity (“RFC”) and proceeds to Step Four. 

See id. § 416.920(a)(4)(iv), (e). Here, the ALJ found that Plaintiff did not have an impairment or 

 

the sake of convenience, the court will generally cite to the SSI regulations herein unless noted otherwise. 

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 4 of 7
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

combination of impairments that met or equaled one of the listed impairments. AR (dkt. 15) at 50. 

The ALJ also determined that Plaintiff retained the RFC “to perform medium work” with several 

limitations. Id. at 52-58.

At Step Four, the ALJ determined that Plaintiff was able to perform his past relevant work 

as a laborer. Id. at 58-59. Thus, the ALJ found that Plaintiff had not been under a disability, as 

defined in the Social Security Act, from December 1, 2010 through August 2, 2016 (the date of 

the ALJ’s decision). Id. at 59.

ISSUES PRESENTED

Plaintiff presents several issues for review. The first assigns error to the ALJ’s application 

of the Step Two analysis. Pl.’s Mot. (dkt. 19) at 7. Plaintiff’s second issue assigns error to the 

ALJ’s finding that Plaintiff did not meet or equal a listed impairment. Id. at 7-13. Plaintiff’s third 

issue assigns error to the ALJ’s evaluation of the medical evidence. Id. at 13-16. Plaintiff’s fourth 

issue assigns error to the ALJ’s evaluation of the claimant’s credibility. Id. at 16-17. Plaintiff’s 

fifth issue assigns error to the Appeal Council’s determination of new and material evidence. Id. at 

17-18. Plaintiff contends that the court should grant summary judgment and remand for payment 

of benefits, or in the alternative, for further proceedings. Id. at 18-19. 

DISCUSSION

In his first issue, Plaintiff contends that the ALJ erred at Step Two by finding that Plaintiff 

did not have a medically determinable liver impairment and that his impairment was non-severe. 

See id. at 7. Plaintiff argues that even a non-severe, but medically determined condition, must be 

factored into the Step Three analysis and the formulation of the RFC. Id. Defendant argues that 

“any perceived error in not identifying the liver problems as a severe impairment did not prejudice 

Plaintiff in any way,” but does not respond to Plaintiff’s contention that the ALJ should have 

found the problems medically determinable. See Def.’s Mot. (dkt. 22) at 14.

As mentioned above, at Step Two of the disability determination process, it is incumbent 

on the ALJ to determine whether the claimant has a medically severe impairment or combination 

of impairments. Step Two, is “a de minimis screening device [used] to dispose of groundless 

claims.” Webb, 433 F.3d at 687. The ALJ’s written decision must state reasons for disregarding 

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 5 of 7
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

“significant probative evidence.” Flores v. Shalala, 49 F.3d 562, 570–71 (9th Cir.1995). Here, the 

ALJ dismissed Plaintiff’s well-documented liver impairment – noted by at least three doctors over 

almost one year – by simply concluding that “[t]he medical record reflects minimal evidence of 

treatment for an alleged liver disorder.” AR (dkt. 15) at 50. The ALJ found that “a careful review 

of the record does not disclose sufficient objective medical evidence to substantiate this medical 

condition as alleged by the claimant.” Id. The court disagrees. The ALJ’s somewhat generic 

statement was not supported by substantial evidence; instead, there is ample evidence in the 

medical record of Plaintiff’s liver impairment. The record before this court does not show that the 

ALJ properly considered all the evidence documented by Drs. Mun, Calderon, Wills, and other

medical professionals in 2012-13. Thus, the ALJ erred in failing to explicitly discuss this 

significant body of probative evidence.

The court finds that the ALJ’s failure to discuss this evidence in making the Step Two 

determination was reversible error. While the ALJ is certainly able to reject evidence in the record 

when making the Step Two determination, the ALJ must, at the very least, provide reasons for 

doing so. See, e.g. Molina v. Astrue, 674 F.3d 1104, 1111 (9th Cir. 2012). Here, the ALJ’s 

explanation that the record does not substantiate Plaintiff’s alleged condition is both legally 

insufficient and contradicted by substantial evidence in the record. Although the record provides 

an incomplete overview of Plaintiff’s liver impairment, “it includes evidence of problems 

sufficient to pass the de minimis threshold of step two.” Webb, 433 F.3d at 687.

The Commissioner attempts to avoid this shortcoming in the ALJ’s decision and to focus 

the inquiry on evidence elsewhere in the record offered as support of the ALJ’s Step Two finding. 

However, it is not for this court to evaluate the ignored evidence in the first instance, assign it 

weight, and then reweigh it against the other evidence of record, or to provide a post hoc

justification or supplementation for its rejection. Instead, the court is tasked with a review of the

ALJ’s evaluation of the evidence. That is why the Commissioner “may not reject ‘significant 

probative evidence’ without explanation.” Flores, 49 F.3d at 570–71. The evidence outlined above 

is consistent with Plaintiff’s claims regarding his liver problems and should have either been 

accepted by the ALJ, or specifically rejected with an explanation. 

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 6 of 7
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

“The ALJ’s failure to address plaintiff’s [liver problems] at Step Two indicates that the 

ALJ may not have accounted for all of plaintiff's impairments during subsequent steps of the 

sequential evaluation process.” Richard v. Colvin, No. C13-6055 RBL, 2015 WL 2085610, at *4 

(W.D. Wash. May 5, 2015). Because the case is to be remanded for further proceedings for the 

reasons described above, the court declines to address Plaintiff’s remaining claims at this time 

since the calculus of the disability determination may change radically once the above-described 

error at Step Two is corrected. See Haverlock v. Colvin, No. 2:12-CV-2393-DAD, 2014 WL 

670202, at *5 (E.D. Cal. Feb. 20, 2014) (“In light of the remand required by the ALJ’s error at 

Step Two, the court need not address plaintiff’s remaining claims.”). 

CONCLUSION

For the reasons stated above, Plaintiff’s Motion for Summary Judgment (dkt. 19) is 

GRANTED, and Defendant’s Motion for Summary Judgment (dkt. 22) is DENIED. The case is 

REMANDED for further proceedings consistent with this Order.

IT IS SO ORDERED.

Dated: July 29, 2019

ROBERT M. ILLMAN

United States Magistrate Judge

Case 1:18-cv-00752-RMI Document 27 Filed 07/29/19 Page 7 of 7