Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-00425/USCOURTS-azd-2_14-cv-00425-0/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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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Louis Mondelli, 

Plaintiff, 

v. 

Carolyn W. Colvin, 

Defendant.

No. CV-14-00425-PHX-JAT

ORDER 

 Louis Mondelli (“Plaintiff”) appeals the Acting Commissioner of Social Security’s 

(“Commissioner”) denial of disability benefits. (Doc. 17.) The Court now rules on that 

appeal. 

I. BACKGROUND

 A. PROCEDURAL BACKGROUND

 On March 3, 2010, Plaintiff filed a Title II application for a period of disability 

and disability insurance benefits. (R. at 167, 197-203.) Plaintiff also filed a Title XVI 

application for supplemental social security income on March 8, 2010. (R. at 204-12.) In 

both applications, Plaintiff alleged a disability onset date of February 17, 2009. (R. at 

197, 204.) The Commissioner denied Plaintiff’s application on July 19, 2010. (R. at 80.) 

The Commissioner also denied Plaintiff’s application upon reconsideration on October 

28, 2010. (R. at 105.) 

 On March 5, 2012, the Administrative Law Judge (“ALJ”) held a hearing on 

Plaintiff’s claims. (R. at 22.) The ALJ found Plaintiff was not disabled. (R. at 33.) 

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Plaintiff appealed to the Appeals Council, which denied Plaintiff’s request for review. (R. 

at 1-4.) Plaintiff filed an appeal with this Court on March 4, 2014. (Doc. 1.) 

 Plaintiff claims that the ALJ erroneously (1) discredited the opinions of Plaintiff’s 

treating physicians, (2) discredited Plaintiff’s testimony, and (3) discredited third-party 

reports. (Doc. 17 at 11-27.) 

B. MEDICAL BACKGROUND

 The Court will briefly summarize Plaintiff’s medical history, which is thoroughly 

recounted in the administrative record. Plaintiff’s medical history dates back to his 

shattered right heel and left knee surgery resulting from a car accident in 1982. (R. at 

351, 426, 536.) On April 2, 2009, Plaintiff was admitted to Wickenburg Community 

Hospital following an ATV accident. (R. at 337.) Plaintiff was discharged after CT 

scans, x-rays, and MRIs were all negative for acute injury; however, these tests revealed 

mild levoscoliosis and mild multilevel degenerative disc disease. (R. at 330, 336.) 

Plaintiff began seeing Dr. Melde, a primary care physician, on April 16, 2009. (R. at 

406.) In October 2009, x-rays of Plaintiff’s right heel and left knee indicated 

posttraumatic osteoarthropathy in both. (R. at 426-27.) Plaintiff was prescribed Percocet 

to help with the pain. (R. at 397). In November 2009, Dr. Melde noted Plaintiff 

complained of nausea, throwing up blood, and was drinking heavily. (R. at 396.) 

 In November 2009, Dr. Melde referred Plaintiff to Dr. Elison, a podiatrist. (R. at 

345.) Dr. Elison diagnosed Plaintiff with degenerative joint disease of the ankle, nerve 

pain, neuropathy, and a foot sprain. (Id.) Dr. Melde also referred Plaintiff to Dr. Cercek, 

an orthopedic surgeon. (R. at 351.) Dr. Cercek noted that Plaintiff had progressively 

worsening knee swelling and pain since a 1980 car accident and diagnosed Plaintiff with 

severe posttraumatic arthritis of the left knee. (Id.) 

In February 2010, Dr. Melde completed a medical assessment of Plaintiff’s ability 

to do work-related activities. (R. at 347-48.) In the questionnaire, Dr. Melde opined that 

Plaintiff could not work full-time on a regular and consistent basis due to knee and hip 

pain. (R. at 347.) Dr. Melde opined that Plaintiff could sit for six hours in an eight-hour 

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workday and stand or walk for less than two hours in an eight-hour workday. (R. at 347.) 

 Dr. Cercek performed a left knee replacement on Plaintiff May 14, 2010. (R. at 

443.) Following surgery, Plaintiff made “very good progress” in physical therapy. (R. at 

453-54.) Plaintiff, however, did not reach his therapy goal of regaining full left knee 

strength and stability. (Id.) Plaintiff had continued post-surgery knee pain and required 

the use of a cane because he had an uneven gait. (R. at 502.) 

 Plaintiff reported back pain beginning in approximately July 2010. (R. at 499, 

517.) During his therapy sessions, Plaintiff’s reports of back pain varied from severe to 

nonexistent. (R. at 507-15.) On one occasion, Plaintiff reported that he had very little 

pain and that he would be moving appliances that day. (R. at 508.) On another occasion, 

Plaintiff reported that he had been doing painting around the house. (R. at 510.) On 

August 30, 2010, Plaintiff reported to Dr. Cercek that he did not have any pain but had 

buckling of his knee while walking and he felt that his left leg was longer than his right 

leg. (R. at 502.) In December 2010, Dr. Melde referred Plaintiff to Dr. Feldman, a pain 

management specialist. (R. at 529-30). Janet Orozco, Dr. Feldman’s physician assistant, 

diagnosed Plaintiff with a lumbar radiculopathy and degenerative disc disease with 

evidence of disc bulge and facet hypertrophy. (R. at 529.) 

 On or around April 2011, Plaintiff developed the inability to fully extend his left 

knee, and on May 4, 2011, Dr. Cercek performed surgery to repair Plaintiff’s extensor 

mechanism. (R. at 536, 539.) Three days later, Plaintiff was discharged from the hospital 

with a prescription for Oxycodone and an outpatient physical therapy plan. (R. at 539-

40.) From May 2011 through February 2012, Dr. Melde regularly prescribed Plaintiff 

Oxycodone for chronic pain Plaintiff reported in his back and left knee. (R. at 543-52.) 

In that time period, Plaintiff reported that he had trouble walking, he suffered from 

insomnia, he was sick, and he suffered from pain constantly throughout the day. (R. at 

545, 546, 548.) Plaintiff told Dr. Feldman that his back pain measured at an eight out of 

ten and that his pain could only be alleviated by lying down. (R. at 638-39.) Dr. Feldman 

recommended lumbar spine medial branch blocks to Plaintiff in attempt to help alleviate 

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Plaintiff’s pain. (R. at 638.) 

 In February 2012, Dr. Cercek completed a medical assessment of Plaintiff’s 

ability to do work-related activities. (R. at 541-42.) Dr. Cercek opined that Plaintiff was 

unable to work full time. (Id.) According to Dr. Cercek, Plaintiff had the ability to sit for 

four hours in an eight-hour workday and stand or walk for two hours in an eight-hour 

workday. (Id.) Dr. Melde completed the same medical assessment as Dr. Cercek and 

also opined that Plaintiff is unable to work full time. (R. at 553-54.) Dr. Melde, however, 

opined that Plaintiff had the ability to sit for less than two hours in an eight-hour workday 

and stand or walk for less than two hours in an eight-hour workday. (Id.) 

 In addition to Plaintiff’s treating physicians, two state agency physicians examined 

Plaintiff’s medical record. On July 19, 2010, Dr. Goerss completed a medical assessment 

of Plaintiff’s ability to work and concluded that Plaintiff is not disabled. (R. at 79.) On 

October 28, 2010, Dr. Goodrich completed the same medical assessment and also 

concluded that Plaintiff is not disabled. (R. at 118). Both doctors opined that Plaintiff 

was able to sit for about six hours in an eight-hour workday and stand or walk for about 

six hours in an eight-hour workday. (R. at 76, 115.) 

II. DISABILITY 

 A. DEFINITION OF DISABILITY 

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

show, among other things, that he is “under a disability.” 42 U.S.C. § 423(a)(1)(E). The 

Act defines “disability” as the “inability to engage in any substantial gainful activity by 

reason of any medically determinable physical or mental impairment which can be 

expected to result in death or which has lasted or can be expected to last for a continuous 

period of not less than 12 months.” 42 U.S.C. § 423(d)(1)(A). A person is: 

under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national 

economy. 

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42 U.S.C. § 423(d)(2)(A). 

B. FIVE-STEP EVALUATION PROCESS

The Social Security regulations set forth a five-step sequential process for 

evaluating disability claims. 20 C.F.R. § 404.1520(a)(4); see also Reddick v. Chater, 157 

F.3d 715, 721 (9th Cir. 1998). A finding of “not disabled” at any step in the sequential 

process will end the inquiry. 20 C.F.R. § 404.1520(a)(4). The claimant bears the burden 

of proof at the first four steps, but the burden shifts to the Commissioner at the final step. 

Reddick, 157 F.3d at 721. The five steps are as follows: 

 1. First, the ALJ determines whether the claimant is “doing substantial gainful 

activity.” 20 C.F.R. § 404.1520(a)(4)(i). If so, the claimant is not disabled. 

 2. If the claimant is not gainfully employed, the ALJ next determines whether 

the claimant has a “severe medically determinable physical or mental impairment.” 20 

C.F.R. § 404.1520(a)(4)(ii). To be considered severe, the impairment must “significantly 

limit[] [the claimant’s] physical or mental ability to do basic work activities.” 20 C.F.R. § 

404.1520(c). Basic work activities are the “abilities and aptitudes to do most jobs,” such 

as lifting, carrying, reaching, understanding, carrying out and remembering simple 

instructions, responding appropriately to co-workers, and dealing with changes in routine. 

20 C.F.R. § 404.1521(b). Further, the impairment must either have lasted for “a 

continuous period of at least twelve months,” be expected to last for such a period, or be 

expected “to result in death.” 20 C.F.R. § 404.1509 (incorporated by reference in 20 

C.F.R. § 404.1520(a)(4)(ii)). The “step-two inquiry is a de minimis screening device to 

dispose of groundless claims.” Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996). If 

the claimant does not have a severe impairment, then the claimant is not disabled. 

 3. Having found a severe impairment, the ALJ next determines whether the 

impairment “meets or equals” one of the impairments listed in the regulations. 20 C.F.R. 

§ 404.1520(a)(4)(iii). If so, the claimant is found disabled without further inquiry. If not, 

before proceeding to the next step, the ALJ makes a finding regarding the claimant’s 

“residual functional capacity based on the relevant medical and other evidence in [the] 

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case record.” 20 C.F.R. § 404.1520(e). A claimant’s “residual functional capacity” is the 

most he can still do despite all of his impairments, including those that are not severe, and 

any related symptoms. 20 C.F.R. § 404.1545(a)(1). 

 4. At step four, the ALJ determines whether, despite the impairments, the 

claimant can still perform “past relevant work.” 20 C.F.R. § 404.1520(a)(4)(iv). To make 

this determination, the ALJ compares his “residual functional capacity assessment . . . 

with the physical and mental demands of [the claimant’s] past relevant work.” 20 C.F.R. 

§ 404.1520(f). If the claimant can still perform the kind of work he previously did, then 

the claimant is not disabled. Otherwise, the ALJ proceeds to the final step. 

 5. At the final step, the ALJ determines whether the claimant “can make an 

adjustment to other work” that exists in the national economy. 20 C.F.R. § 

404.1520(a)(4)(1). In making this determination, the ALJ considers a claimant’s “residual 

functional capacity” and his “age, education, and work experience.” 20 C.F.R. § 

404.1520(g)(1). If the claimant can perform other work, he is not disabled. If the claimant 

cannot perform other work, he will be found disabled. As previously noted, the 

Commissioner has the burden of proving that the claimant can perform other work. 

Reddick, 157 F.3d at 721. 

 In evaluating a claimant’s disability under this five-step process, the ALJ must 

consider all evidence in the case record. 20 C.F.R. § 404.1520(a)(3); 20 C.F.R. § 

404.1520b. This includes medical opinions, records, self-reported symptoms, and thirdparty reporting. 20 C.F.R. § 404.1527; 20 C.F.R. § 404.1529; SSR 06-3p, 2006 WL 

2329939, at *3–4 (Aug. 9, 2006). 

C. ALJ’S EVALUATION UNDER THE FIVE-STEP PROCESS

 The ALJ applied the five-step sequential evaluation process using Plaintiff’s 

alleged onset date of February 17, 2009. (R. at 22). At step one of the sequential 

evaluation process, the ALJ found that Plaintiff had not engaged in substantial gainful 

activity since his alleged onset date of February 17, 2009. (R. at 24). The ALJ then found 

Plaintiff has the following severe impairments: 

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obesity; hypertension (stable); status post left total knee 

replacement (5/2010) and repair of extensor mechanism 

(5/2011); lumbar degenerative disc disease; and status post 

shattered heel (1982), with resulting degenerative joint 

disease of the right foot (20 C.F.R. 404.1520(c) and 

416.920(c)). 

(Id.) At step three, the ALJ noted that none of these impairments, whether considered 

individually or in the aggregate, met or medically equaled one of the listed impairments 

that would result in a finding of disability. (R. at 25.) The ALJ determined that Plaintiff’s 

residual functional capacity was the ability to: 

. . . perform sedentary work . . . except for the following 

limitations: the claimant is capable occasionally pushing and 

pulling with the right foot; and occasionally operating foot 

controls with the right foot. He is capable of frequently 

climbing ramps and stairs and balancing with the use of a 

hand held assistive device; occasionally crouching, kneeling, 

and crawling; and precluded from climbing ladders, ropes, 

and/or scaffolds. The claimant is capable of jobs which can 

be performed while using a hand held assistive device 

required for uneven terrain or prolonged ambulation, and at 

all times when standing. The claimant is to avoid 

concentrated exposure to extreme cold, wetness and humidity, 

use of moving machinery, and exposure to unprotected 

heights. 

(R. at 25-26). Under step four, the ALJ determined that Plaintiff was not capable of 

performing his past relevant work as an auto mechanic. (R. at 31.) Under step five, the 

ALJ determined that “there are jobs that exist in significant numbers in the national 

economy that the claimant can perform.” (R. at 32.) The ALJ concluded that Plaintiff 

was not disabled. (R. at 33.) 

D. STANDARD OF REVIEW 

 A district court: 

may set aside a denial of disability benefits only if it is not 

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supported by substantial evidence or if it is based on legal error. Substantial evidence means more than a mere scintilla 

but less than a preponderance. Substantial evidence is 

relevant evidence, which considering the record as a whole, a reasonable person might accept as adequate to support a 

conclusion. Where the evidence is susceptible to more than one rational interpretation, one of which supports the ALJ’s decision, the ALJ’s decision must be upheld. 

Thomas v. Barnhart, 278 F.3d 947, 954 (9th Cir. 2002) (internal citation and quotation 

marks omitted). This is because “[t]he trier of fact and not the reviewing court must 

resolve conflicts in the evidence, and if the evidence can support either outcome, the 

court may not substitute its judgment for that of the ALJ.” Matney v. Sullivan, 981 F.2d 

1016, 1019 (9th Cir. 1992). Under this standard, the Court will uphold the ALJ’s 

findings if supported by inferences reasonably drawn from the record. Batson v. Comm’r 

of the Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2003). However, the Court must 

consider the entire record as a whole and cannot affirm simply by isolating a “specific 

quantum of supporting evidence.” Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007) 

(internal quotation omitted). 

III. ANALYSIS

 Plaintiff appeals the ALJ’s decision for three reasons. Plaintiff argues that the 

ALJ erroneously (1) discredited the opinions of Plaintiff’s treating physicians Dr. Melde 

and Dr. Cercek, (2) discredited Plaintiff’s testimony, and (3) discredited third-party 

reports. (Doc. 17 at 11-27). 

A. THE OPINIONS OF DR. MELDE AND DR. CERCEK

 1. LEGAL STANDARD 

“The ALJ is responsible for resolving conflicts in the medical record.” Carmickle 

v. Comm’r, Soc. Sec. Admin., 533 F.3d 1155, 1164 (9th Cir. 2008). Such conflicts may 

arise between a treating physician’s medical opinion and other evidence in the claimant’s 

record. A treating physician’s opinion is entitled to controlling weight when it is “wellsupported by medically accepted clinical and laboratory diagnostic techniques and is not 

inconsistent with the other substantial evidence in [the claimant’s] case record.” 20 

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C.F.R. § 404.1527(d)(2); see also Orn, 495 F.3d at 631. On the other hand, if a treating 

physician’s opinion “is not well-supported” or “is inconsistent with other substantial 

evidence in the record,” then it should not be given controlling weight. Orn, 495 F.3d at 

631. 

 a. SUBSTANTIAL EVIDENCE 

Substantial evidence that contradicts a treating physician’s opinion may be either 

(1) an examining physician’s opinion or (2) a nonexamining physician’s opinion 

combined with other evidence. Lester v. Chater, 81 F.3d 821, 830-31 (9th Cir. 1995). 

 In the case of an examining physician, “[w]hen an examining physician relies on 

the same clinical findings as a treating physician, but differs only in his or her 

conclusions, the conclusions of the examining physician are not substantial evidence.” 

Orn, 495 F.3d at 632 (citing Murray v. Heckler, 722 F.2d 499, 501-02 (9th Cir. 1984)). 

To constitute substantial evidence, the examining physician must provide “independent 

clinical findings that differ from the findings of the treating physician.” Id. (citing Miller 

v. Heckler, 770 F.2d 845, 849 (9th Cir. 1985)). Independent clinical findings can be 

either “diagnoses that differ from those offered by another physician and that are 

supported by substantial evidence, . . . or findings based on objective medical tests that 

the treating physician has not herself considered.” Id. (citing Allen v. Heckler, 749 F.2d 

577, 579 (9th Cir. 1984); Andrews v. Shalala, 53 F.3d 1035, 1041 (9th Cir. 1995)). 

 “The opinion of a nonexamining physician cannot by itself constitute substantial 

evidence that justifies the rejection of the opinion of either an examining physician or a 

treating physician.” Lester, 81 F.3d at 831. Such an opinion is only substantial evidence 

if supported by “substantial record evidence.” Id. 

 b. TREATING PHYSICIAN’S OPINION 

 If the ALJ determines that a treating physician’s opinion is inconsistent with 

substantial evidence and is not to be given controlling weight, the opinion remains 

entitled to deference and should be weighed according to the factors provided in 20 

C.F.R. § 404.1527(c). Orn, 495 F.3d at 631; SSR 96-2p at 4. These factors include (1) 

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the length of the relationship and the frequency of examination; (2) the nature and extent 

of the treatment relationship; (3) the extent to which the opinion is supported by relevant 

medical evidence; (4) the opinion’s consistency with the record as a whole; and (5) 

whether the physician is a specialist giving an opinion with his specialty. 20 C.F.R. § 

404.1527(c). 

 If a treating physician’s opinion is not contradicted by the opinion of another 

physician, then the ALJ may discount the treating physician’s opinion only for “clear and 

convincing” reasons. Carmickle, 533 F.3d at 1164 (quoting Lester, 81 F.3d at 830). If a 

treating physician’s opinion is contradicted by another physician’s opinion, then the ALJ 

may reject the treating physician’s opinion if there are “specific and legitimate reasons 

that are supported by substantial evidence in the record.” Id. (quoting Lester, 81 F.3d at 

830). Alternatively, “[t]he ALJ need not accept the opinion of any physician, including a 

treating physician, if that opinion is brief, conclusory, and inadequately supported by 

clinical findings.” Bray v. Comm’r of Soc. Sec. Admin., 554 F.3d 1219, 1228 (9th Cir. 

2009) (citing Thomas, 278 F.3d at 957). 

 c. OPINION ON DISABILITY 

 Finally, “[a]lthough a treating physician’s opinion is generally afforded the 

greatest weight in disability cases, it is not binding on an ALJ with respect to the 

existence of an impairment or the ultimate determination of disability.” Tonapetyan v. 

Halter, 242 F.3d 1144, 1148 (9th Cir. 2001). This is because the determination as to 

whether a claimant is disabled is an issue reserved to the Commissioner. 20 C.F.R. § 

404.1527(d)(1). Thus, even if a treating physician’s opinion is controlling, it does not 

necessarily lead to a finding of disability. See Magallanes v. Bowen, 881 F.2d 747, 753 

(9th Cir. 1989) (rejecting a treating physician’s opinion of disability). 

 2. DISCUSSION 

 Plaintiff argues that the ALJ committed legal error in discrediting the opinions of 

Dr. Melde and Dr. Cercek, two of Plaintiff’s treating physicians. (Doc. 17 at 23-24.) 

Specifically, Plaintiff argues that the ALJ erroneously discredited Plaintiff’s treating 

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physicians’ opinions that Plaintiff “could not work full-time due to increasing physician 

limitations, particularly in his ability to sit/stand/walk.” (R. at 347-48, 541-42, 553-54.) 

Plaintiff asserts that the opinions of Dr. Melde and Dr. Cercek should be given 

controlling weight. (Doc. 17 at 24.) In this case, the ALJ did not give significant weight 

to the opinions of Dr. Melde and Dr. Cercek because: (1) both doctors relied heavily 

upon Plaintiff’s subjective complaints, (2) both doctors’ conclusions were inconsistent 

with their physical examinations, and (3) neither opinions were supported by the majority 

of the record. (R. at 30-31.) 

 Neither Dr. Melde nor Dr. Cercek included any additional information or made 

any notes explaining their conclusions on the medical assessments of Plaintiff’s ability to 

do work related activities. (R. at 347-48, 541-42, 553-54.) Dr. Melde and Dr. Cercek 

both relied heavily upon Plaintiff’s subjective complaints in diagnosing and treating 

Plaintiff. (R. at 502, 531, 533, 546, 550-52, 626.) The ALJ determined that Plaintiff’s 

subjective complaints were not entirely credible. (R. at 28-29.) Thus, it was reasonable 

for the ALJ to discredit the opinions of Dr. Melde and Dr. Cercek that were based on 

Plaintiff’s subjective complaints. See Bray, 554 F.3d at 1228. 

 Additionally, a discrepancy between treatment notes and a medical opinion is “a 

clear and convincing reason for not relying on the doctor’s opinion regarding” a 

claimant’s limitations. Bayliss v. Barnhart, 427 F.3d 1211, 1216 (9th Cir. 2005). The 

ALJ also discounted the opinions of Dr. Melde and Dr. Cercek because they were 

inconsistent with their own physical examinations. (R. at 30) (citing R. at 541-52). The 

ALJ noted that Dr. Melde failed to define a “moderately severe” restriction and most of 

the visits were for chronic pain management rather than acute problems. (R. at 30) (citing 

R. at 543-52).

Furthermore, the ALJ noted that neither Dr. Melde nor Dr. Cercek’s opinions were 

supported by the majority of the record. (R. at 30-31.) The ALJ explained that Dr. 

Melde’s conclusions contradict his own treatment notes. (R. at 30) (citing R. at 543-52). 

The ALJ noted that Dr. Melde’s conclusions would “render the claimant bedridden and 

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with significant muscle atrophy, which are not supported by the medical evidence of the 

record.” (R. at 30.) The ALJ explained that Dr. Cercek’s conclusions contradict both his 

own treatment notes, and the overall record. (R. at 31) (citing R. at 350-57, 501-02, 527-

35, 626-37). Within the notes cited by the ALJ, Dr. Cercek noted things like Plaintiff’s 

“[n]eck has full, stable, painfree range of motion.” (R. at 626.) Accordingly, the ALJ 

provided sufficient reasons for her conclusion and did not commit legal error in 

discounting the opinions of Dr. Melde and Dr. Cercek. 

B. PLAINTIFF’S TESTIMONY

Plaintiff argues that the ALJ failed to provide specific findings showing clear and 

convincing reasons for discrediting Plaintiff’s testimony. (Doc. 17 at 11.) Specifically, 

Plaintiff argues that the ALJ erroneously discredited Plaintiff’s left knee, right foot, and 

back symptoms and limitations. (Id.) (citing R. at 26-29). The ALJ gave the following 

reasons for discrediting Plaintiff’s testimony: (1) Plaintiff’s alleged symptoms and 

reported daily activities are not supported by the medical record, (2) Plaintiff was “let go” 

from his previous job for non-medical reasons, and (3) Plaintiff applied for and received 

unemployment benefits, certifying that he is capable of sustaining full-time employment. 

(R. at 28-29.) 

 In determining whether a claimant’s testimony regarding subjective pain or 

symptoms is credible, the ALJ engages in a two-step analysis. Lingenfelter v. Astrue, 504 

F.3d 1028, 1035-36 (9th Cir. 2007). 

First, as a threshold matter, “the ALJ must determine whether 

the claimant has presented objective medical evidence of an 

underlying impairment ‘which could reasonably be expected 

to produce the pain or other symptoms alleged.’” Id. at 

1036 (quoting Bunnell, 947 F.2d at 344). The claimant is not 

required to show objective medical evidence of the pain itself 

or of a causal relationship between the impairment and the 

symptom. Smolen, 80 F.3d 1273, 1282 (9th Cir. 1996). 

Instead, the claimant must only show that an objectively 

verifiable impairment “could reasonably be expected” to 

produce the claimed pain. Lingenfelter, 504 F.3d at 

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1036 (quoting Smolen, 80 F.3d at 1282); see also SSR 96–7p 

at 2; Carmickle, 533 F.3d at 1160–61 (“reasonable inference, 

not a medically proven phenomenon”). If the claimant fails 

this threshold test, then the ALJ may reject the claimant’s 

subjective complaints. See Smolen, 80 F.3d at 

1281 (citing Cotton v. Bowen, 799 F.2d 1403 (9th Cir. 1986) 

(reaffirmed in Bunnell, 947 F.2d 341)) 

 

 Second, if the claimant meets the first test, then “the 

ALJ ‘may not discredit a claimant’s testimony of pain and 

deny disability benefits solely because the degree of pain 

alleged by the claimant is not supported by objective medical 

evidence.’” Orteza v. Shalala, 50 F.3d 748, 749–750 (9th Cir. 

1995) (quoting Bunnell, 947 F.2d at 346–47). Rather, “unless 

an ALJ makes a finding of malingering based on affirmative 

evidence thereof,” the ALJ may only find the claimant not 

credible by making specific findings supported by the record 

that provide clear and convincing reasons to explain his 

credibility evaluation. Robbins, 466 F.3d at 883 

(citing Smolen, 80 F.3d at 1283–84 (“Once a claimant meets 

[step one] and there is no affirmative evidence suggesting she 

is malingering, the ALJ may reject the claimant’s testimony 

regarding the severity of her symptoms only if he makes 

specific findings stating clear and convincing reasons for 

doing so.”)); see also, e.g., Lingenfelter, 504 F.3d at 1036 (if 

the ALJ has found no evidence of malingering, then the ALJ 

may reject the claimant’s testimony “only by offering 

specific, clear and convincing reasons for doing so”). 

Trembulak v. Colvin, No. CV-12-02420-PHX-JAT, 2014 WL 523007, at *8-9 (D. Ariz. 

Feb. 10, 2014). 

 While an ALJ may not reject a claimant’s subjective complaints solely because of 

a lack of objective medical evidence to fully corroborate the alleged severity of pain, see 

Rollins v. Massanari, 261 F.3d 853, 856-57 (9th Cir. 2001), the lack of such evidence 

may support the ALJ’s finding that a claimant is not credible. See Batson, 359 F.3d at 

1197. 

 In this case, the ALJ did not make specific findings supported by the record that 

provide clear and convincing reasons explaining why Plaintiff’s testimony is not credible. 

In the ALJ’s analysis explaining why Plaintiff’s testimony is not credible, she does not 

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refer to specific findings that support her conclusion. The ALJ explains that “claimant’s 

reported activities of daily living are inconsistent with his complaints in the record,” but 

does not describe what those daily activities are. (R. at 28.) The ALJ explains that 

“[p]hyisical examination findings consistently indicated normal, nonantalgic gait” but 

does not point to any specific examinations supporting that conclusion. (R. at 29.) 

 Although the ALJ specifically cites Plaintiff’s application for unemployment 

benefits as a reason to discredit Plaintiff’s testimony, that alone is not enough to discredit 

Plaintiff’s testimony. See Carmickle, 533 F.3d at 1161-62. Although the receipt of 

unemployment benefits can undermine a claimant’s allegation that he is unable to work 

full time, the record must show that claimant made himself available for full-time work. 

Id. at 1162. Although the ALJ has cited to Plaintiff’s unemployment payments, those 

payments do not establish that Plaintiff has made himself available for full-time work. (R. 

at 29) (citing R. at 232-33). The ALJ erred in discrediting Plaintiff’s testimony without 

making specific findings supported by the record. 

 When an ALJ commits legal error, “harmless error principles apply.” Molina v. 

Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012). “An ALJ’s error is harmless where it is 

inconsequential to the ultimate nondisability determination. In other words, in each case 

we look at the record as a whole to determine whether the error alters the outcome of the 

case.” Palmer v. Colvin, No. CV-12-01786-PHX-JAT, 2013 WL 3930231, at *8 (D. Ariz. 

July 30, 2013) (citing Molina, 674 F.3d at 1115 (quotation and citations omitted)). If an 

error is not harmless, the case must be either remanded or benefits must be awarded. See 

id. 

 The ALJ’s error is not harmless. Plaintiff’s testimony is not inconsequential to the 

ultimate determination of disability. The ALJ rejected Dr. Melde’s opinion because 

much of it was determined upon Plaintiff’s subjective report of symptoms. (R. at 30.) 

Additionally, the ALJ gave little weight to Dr. Cercek’s opinion because it was also 

determined upon Plaintiff’s subjective report of symptoms. (R. at 30-31.) Plaintiff’s 

credibility affects whether Plaintiff’s testimony is discredited as well as to whether the 

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opinions of Plaintiff’s treating physicians are discredited. Because Plaintiff’s testimony 

is not inconsequential to the ultimate determination of disability, the ALJ’s error is not 

harmless. 

C. THIRD-PARTY REPORTS

 Plaintiff argues that the ALJ erroneously discredited third-party reports. (Doc. 17 

at 23.) Specifically, Plaintiff claims that the ALJ erroneously discredited lay witness 

statements made by Plaintiff’s mother, sister, and girlfriend and did not provide 

“germane” reasons for doing so. (Id.) The ALJ discredited these third-party reports 

because of their “inconsistency with the objective medical evidence of record.” (R. at 31.) 

 “Lay testimony as to a claimant’s symptoms is competent evidence which the 

Secretary must take into account, unless he expressly determines to disregard such 

testimony, in which case ‘he must give reasons that are germane to each witness.’” 

Nguyen v. Chater, 100 F.3d 1462, 1467 (9th Cir. 1996) (quoting Dodrill v. Shalala, 12 

F.3d 915, 919 (9th Cir. 1993)) (internal citations omitted). Examples of legitimate 

reasons for disregarding lay testimony include inconsistency with medical sources and 

close relationships with the claimant. Greger v. Barnhart, 464 F.3d 968, 972 (9th Cir. 

2006). 

 The ALJ cited inconsistencies between the record and the opinions of Plaintiff’s 

family members. The ALJ referred to evidence such as “pain has been well-controlled” 

earlier in her opinion that contradicts statements made by Plaintiff’s family members. (R. 

at 27.) The ALJ has showed that physical examinations by Plaintiff’s doctors differ from 

the opinions of Plaintiff’s family members. (R. at 27, 31.) These inconsistencies qualify 

as germane reasons that properly discredit the opinions of Plaintiff’s family members; 

thus, the ALJ did not erroneously discredit third-party reports. 

 Even if the ALJ committed error in discrediting the statements made by Plaintiff’s 

family members, that error was harmless. As mentioned above, a harmless error is made 

when the “ALJ would have reached the same result absent the error.” Molina, 674 F.3d at 

1115. (citation omitted). The ALJ explicitly said “these statements, even if fully credible, 

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do not persuade the undersigned that the claimant is incapable of sustained gainful 

employment.” (R. at 31.) Third-party reports were inconsequential to the ALJ’s ultimate 

determination as to whether Plaintiff was disabled. 

IV. CONCLUSION 

 Based on the foregoing, 

IT IS ORDERED that this case is reversed and remanded to the Commissioner 

for further proceedings consistent with this Order. The Clerk of the Court shall enter 

judgment. 

 Dated this 22nd day of July, 2015. 

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