Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_08-cv-01482/USCOURTS-caed-2_08-cv-01482-1/pdf.json

Parties Involved:
Commissioner of Social Security
Defendant
Antonio Figueroa
Plaintiff

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ANTONIO FIGUEROA, 

Plaintiff, No. CIV S-08-1482 MCE EFB

vs.

MICHAEL J. ASTRUE,

Commissioner of Social Security,

Defendant. FINDINGS AND RECOMMENDATIONS

 /

Plaintiff seeks judicial review of a final decision of the Commissioner of Social Security

(“Commissioner”) terminating his social security disability benefits under the Social Security

Act. Since Patti v. Schweiker, 669 F.2d 582 (9th Cir. 1982) and Lopez v. Heckler, 713 F.2d 1432

(9th Cir.), partial stay granted, 463 U.S. 1328 (1983), emergency application to vacate stay

denied, 464 U.S. 879, the law of this circuit has been well established that Social Security and

Supplemental Security Income disability benefits cannot be terminated without evidence of

medical improvement. The Commissioner’s regulations set out a multiple step process for

determining whether, under this controlling standard, disability has ended. Those regulations,

however, include certain exceptions to the requirement that the Commissioner show medical

improvement to terminate benefits. The termination of benefits here was based on the

retroactive application of a medical improvement “exception” and a finding that the earlier

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1

 Plaintiff was initially found disabled as of July 1, 1998. 

2

 Disability Insurance Benefits are paid to disabled persons who have contributed to the

Social Security program, 42 U.S.C. §§ 401 et seq. Supplemental Security Income is paid to

disabled persons with low income. 42 U.S.C. §§ 1382 et seq. Both provisions define disability,

in part, as an “inability to engage in any substantial gainful activity” due to “a medically

determinable physical or mental impairment . . . .” 42 U.S.C. § 1382c(a)(3)(A). 

2

decisions1 finding the plaintiff to be disabled were in error. Thus, the Commissioner concluded

that plaintiff’s disability had ended as of June 1, 2002.

For the reasons discussed below, the court recommends that plaintiff’s motion be granted

and this action be remanded for further proceedings.

I. BACKGROUND

On December 10, 1998, plaintiff was found to be disabled as of July 1, 1998. 

Administrative Record (“AR”) 18. Plaintiff thereafter received Supplemental Security Income

(“SSI”) benefits until his disability was found to have ceased on June 1, 2002. AR 18, 33. The

cessation finding was upheld upon reconsideration, and plaintiff requested an administrative

hearing. AR 33-34, 48-61. On February 25, 2004, a hearing was held before administrative law

judge (“ALJ”) Laura Speck Havens. AR 535-50. Plaintiff was represented by counsel and

testified at the hearing. Id. On May 11, 2004, the ALJ issued a decision, finding that plaintiff’s

eligibility for SSI ended effective August 30, 2002, the end of the second calendar month in

which his disability ceased (June 2002).2 AR 38-44.

Plaintiff appealed the termination of benefits to the Appeals Council which remanded

his case on November 18, 2005. AR 93. Pursuant to the remand order, a second hearing was

held on June 8, 2006, again before ALJ Havens. AR 551-71. Plaintiff was represented by

counsel at the hearing, and testified at the hearing, along with vocational expert Stephen

Schmidt. Id. On October 19, 2006, the ALJ issued a decision, finding that an exception to

medical improvement applied and that the original finding of disability in 1998 was in error, and

that plaintiff’s disability ended as of June 1, 2002. AR 20-21, 28.

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Plaintiff requested administrative review, and on May 15, 2008, the Appeals Council

denied plaintiff’s request, making the ALJ’s decision the final decision of the Commissioner. 

AR 13, 7-9.

II. ISSUES PRESENTED

Plaintiff contends the Commissioner erred by (1) improperly applying the medical

improvement regulations and concluding that an exception to medical improvement applied

retroactively to June 1, 2002; (2) failing to consider plaintiff’s diabetes as a medically severe

condition and failing to analyze the impact of the condition on his functioning; and (3) failing to

comply with the required regulatory analysis for evaluating mental impairments. Dckt. No. 18 at

4.

III. LEGAL STANDARDS

The Commissioner’s decision that a claimant is not disabled will be upheld if the findings

of fact are supported by substantial evidence in the record and the proper legal standards were

applied. Schneider v. Comm’r of the Soc. Sec. Admin., 223 F.3d 968, 973 (9th Cir. 2000);

Morgan v. Comm’r of the Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 1999); Tackett v. Apfel,

180 F.3d 1094, 1097 (9th Cir. 1999).

 The findings of the Commissioner as to any fact, if supported by substantial evidence,

are conclusive. See Miller v. Heckler, 770 F.2d 845, 847 (9th Cir. 1985). Substantial evidence is

more than a mere scintilla, but less than a preponderance. Saelee v. Chater, 94 F.3d 520, 521

(9th Cir. 1996). “‘It means such evidence as a reasonable mind might accept as adequate to

support a conclusion.’” Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol.

Edison Co. v. N.L.R.B., 305 U.S. 197, 229 (1938)). 

“The ALJ is responsible for determining credibility, resolving conflicts in medical

testimony, and resolving ambiguities.” Edlund v. Massanari, 253 F.3d 1152, 1156 (9th Cir.

2001) (citations omitted). “Where the evidence is susceptible to more than one rational 

interpretation, one of which supports the ALJ’s decision, the ALJ’s conclusion must be upheld.” 

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

With regard to the issue of medical improvement, “once a claimant has been found

disabled, he or she is entitled to a presumption that the disability still exists. The Secretary then

has the burden to come forward with evidence of improvement. This evidence must be reviewed

under the ‘substantial evidence’ standard.” Murray v. Heckler, 722 F.2d 499, 500 (9th Cir.

1983) (citing Patti v. Schweiker, 669 F.2d 582, 587 (9th Cir. 1982) (internal citations omitted)).

IV. STATUTORY AND REGULATORY FRAMEWORK

In determining whether an award of disability benefits should be terminated at some

point, Social Security regulations outline an eight-step sequential process:

Evaluation steps. To assure that disability reviews are carried out

in a uniform manner, that decisions of continuing disability can be

made in the most expeditious and administratively efficient way,

and that any decisions to stop disability benefits are made

objectively, neutrally and are fully documented, we will follow

specific steps in reviewing the question of whether your disability

continues. Our review may cease and benefits may be continued at

any point if we determine there is sufficient evidence to find that

you are still unable to engage in substantial gainful activity. The

steps are:

(1) Are you engaging in substantial gainful activity? If you are

(and any applicable trial work period has been completed), we will

find disability to have ended (see paragraph (d)(5) of this section).

(2) If you are not, do you have an impairment or combination of

impairments which meets or equals the severity of an impairment

listed in Appendix 1 of this subpart? If you do, your disability will

be found to continue.

(3) If you do not, has there been medical improvement as defined

in paragraph (b)(1) of this section? If there has been medical

improvement as shown by a decrease in medical severity, see step

(4). If there has been no decrease in medical severity, there has

been no medical improvement. (See step (5).)

(4) If there has been medical improvement, we must determine

whether it is related to your ability to do work in accordance with

paragraphs (b)(1)-(4) of this section; i.e., whether or not there has

been an increase in the residual functional capacity based on the

impairment(s) that was present at the time of the most recent

favorable medical determination. If medical improvement is not

related to your ability to do work, see step (5). If medical

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improvement is related to your ability to do work, see step (6).

(5) If we found at step (3) that there has been no medical

improvement or if we found at step (4) that the medical

improvement is not related to your ability to work, we consider

whether any of the exceptions in paragraphs (d) and (e) of this

section apply. If none of them apply, your disability will be found

to continue. If one of the first group of exceptions to medical

improvement applies, see step (6). If an exception from the second

group of exceptions to medical improvement applies, your

disability will be found to have ended. The second group of

exceptions to medical improvement may be considered at any

point in this process.

(6) If medical improvement is shown to be related to your ability

to do work or if one of the first group of exceptions to medical

improvement applies, we will determine whether all your current

impairments in combination are severe (see § 404.1521). This

determination will consider all your current impairments and the

impact of the combination of those impairments on your ability to

function. If the residual functional capacity assessment in step (4)

above shows significant limitation of your ability to do basic work

activities, see step (7). When the evidence shows that all your

current impairments in combination do not significantly limit your

physical or mental abilities to do basic work activities, these

impairments will not be considered severe in nature. If so, you will

no longer be considered to be disabled.

(7) If your impairment(s) is severe, we will assess your current

ability to engage in substantial gainful activity in accordance with

§ 404.1561. That is, we will assess your residual functional

capacity based on all your current impairments and consider

whether you can still do work you have done in the past. If you can

do such work, disability will be found to have ended.

(8) If you are not able to do work you have done in the past, we

will consider one final step. Given the residual functional capacity

assessment and considering your age, education and past work

experience, can you do other work? If you can, disability will be

found to have ended. If you cannot, disability will be found to

continue.

20 C.F.R. § 404.1594(f).

Here, in her October 19, 2006 decision, the ALJ made the following specific findings:

1. The most recent favorable medical decision finding that the

claimant was disabled is the determination dated December 10,

1998. This is known as the “comparison point decision” or CPD.

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2. At the time of the CPD, the claimant had the following

medically determinable impairment: coronary artery disease. This

impairment was found to meet section(s) 4.04C of 20 CFR Part

404, Subpart P, Appendix 1 (20 CFR 416.920(d)).

3. The medical evidence establishes that, as of June 1, 2002, the

claimant had the following medically determinable impairments:

coronary artery disease, hepatitis C, chronic fatigue, and

depression.

4. As of June 1, 2002, the claimant did not have an impairment or

combination of impairments which met or medically equaled the

severity of an impairment listed in 20 CFR Part 404, Subpart P,

Appendix 1 (20 CFR 416.925 and 416.926).

***

5. An exception to a finding of medical improvement applies (20

CFR 416.994(b)(3)(iv)). 

According to 20 CFR 416.994(b)(3)(iv), SSA will apply the

exception to medical improvement based on error if substantial

evidence (which may be evidence on the record at the time any

prior determination of the entitlement to benefits based on

disability was made, or newly obtained evidence which relates to

that determination) demonstrates that a prior determination was in

error.

***

On September 1, 1998, Steven LaViola, M.D., stated that the

claimant’s EKG stress test was stopped as the claimant had

achieved an adequate work load and achieved a maximum [heart]

rate of 172 and a maximum systolic blood pressure of 178. Dr.

LaViola stated that the EKG stress test showed no ischemic EKG

changes. The claimant did not have symptoms.

The severity of the claimant’s coronary artery disease did not meet

the requirements of listing 4.04C, as the claimant was able to

complete an exercise stress test.

There is an exception to the finding of medical improvement.

6. As of June 1, 2002, the claimant continued to have a severe

impairment or combination of impairments (20 CFR

416.994(b)(5)(v)).

The claimant’s impairments of chronic fatigue, hepatitis C, and

coronary artery disease present as of June 1, 2002 caused more

than minimal limitation in the claimant’s ability to perform basic

work activities. 

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The claimant has not met his burden of proving that any mental

impairment significantly limited his ability to perform workrelated activities for a continuous period of 12 months, or was

reasonably expected to significantly limit his ability to perform

work-related activities for a continuous period of 12 months, at any

time through June 1, 2002. Therefore, it was not a severe

impairment.

7. Based on the impairments present as of June 1, 2002, the

claimant had the residual functional capacity to perform the

physical exertion and nonexertional requirements of work, except: 

he could lift and carry up to twenty pounds occasionally and ten

pounds frequently; he could stand up to two hours in an eight-hour

workday; he could walk up to two hours in an eight-hour workday;

he could sit up to six hours in an eight-hour workday; he could

push and pull occasionally; he could climb, kneel, crouch, and

crawl occasionally; he had to limit exposure to dust, fumes, smoke,

temperature extremes, and vibrations. 

***

8. The claimant has no past relevant work (20 CFR 416.965).

***

9. On June 1, 2002, the claimant is a younger individual age 18-44

(20 CFR 416.963).

***

10. The claimant has at least a high school education and is able to

communicate in English (20 CFR 416.964).

11. Transferability of job skills is not an issue because the

claimant does not have past relevant work (20 CFR 416.968).

12. As of June 1, 2002, considering the claimant’s age, education,

work experience, and residual functional capacity based on the

impairments present as of June 1, 2002, the claimant was able to

perform a significant number of jobs in the national economy (20

CFR 416.960(c) and 416.966).

***

13. The claimant’s disability ended as of June 1, 2002 (20 CFR

416.994(b)(5)(vii)).

AR 19-28.

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V. ANALYSIS

Plaintiff contends, inter alia, that the ALJ erred by improperly applying the medical

improvement regulations. Dckt. No. 18 at 10. Specifically, plaintiff contends that, in addition to

making a “complete about-face in the second hearing decision” by concluding for the first time

that a medical improvement exception existed, the ALJ erroneously skipped step three of the

eight-step sequential process and therefore never determined that a medical improvement

occurred; made her determination as to the medical improvement exception with an incomplete

record and without substantial evidence in the record to support the decision; erroneously

applied the medical improvement exception retroactively in violation of the regulations

governing the application of the exception; and incorrectly assumed that she was only

considering the time period through the date of the cessation in 2002, as opposed to the date of

the decision in 2006. Id. at 10-16. Defendant counters that substantial evidence supported the

ALJ’s conclusion that an exception to a finding of medical improvement applied, and that the

ALJ’s decision was therefore proper. Dckt. No. 25 at 4-6.

The record clearly demonstrates that the ALJ’s analysis went straight from step two

(determining that plaintiff did not have an impairment or combination of impairments which met

or medically equaled the severity of an impairment listed in 20 C.F.R. Pt. 404, Subpt. P, Appx.

1) to step four (determining that an exception to a finding of medical improvement applies),

without ever considering whether there had been a medical improvement, as required by step

three. AR 19-28. Defendant does not dispute that the ALJ committed this legal error. See

generally Dckt. No. 25 at 4-6. As noted above, the Commissioner’s decision that a claimant is

not disabled will only be upheld if the findings of fact are supported by substantial evidence in

the record and the proper legal standards were applied. Schneider, 223 F.3d at 973. 

Additionally, with regard to the issue of medical improvement, “once a claimant has been found

disabled, he or she is entitled to a presumption that the disability still exists. The Secretary then

has the burden to come forward with evidence of improvement.” Murray, 722 F.2d at 500. The

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ALJ’s failure to follow the eight-step sequential process for terminating an award of disability

benefits, and failure to consider or determine that a medical improvement occurred, require

remand.

Moreover, although the ALJ determined that a medical improvement exception existed

because “[t]he severity of the claimant’s coronary artery disease did not meet the requirements of

listing 4.04C, as the claimant was able to complete an exercise stress test,” there is no indication

that the ALJ weighed that evidence against any of the other medical evidence in the record or

even that the ALJ had all of plaintiff’s medical evidence before her. Pursuant to 20 C.F.R. 

§ 416.994(b)(3)(iv), an exception to medical improvement will be applied “if substantial

evidence (which may be evidence on the record at the time any prior determination of the

entitlement to benefits based on disability was made, or newly obtained evidence which relates

to that determination) demonstrates that a prior determination was in error.”

The ALJ based her determination on a September 1, 1998 EKG stress test performed by

Steven LaViola, M.D., who stated that the stress test was stopped because plaintiff “ had

achieved an adequate work load and achieved a maximum [heart] rate of 172 and a maximum

systolic blood pressure of 178,” that the “stress test showed no ischemic EKG changes,” and that

plaintiff “did not have symptoms.” AR 21. However, the ALJ did not consider, when

determining that the exception applied, the 1998 conclusion of the state agency physician that

Listing 4.04 applied, or any of the underlying records or facts supporting the reconsideration

award of benefits in 1998, since those medical documents are not contained in the record. It also

appears that the ALJ also did not consider, and did not address, any of the other evidence

supporting the December 1998 finding of disability, including the findings of the state agency in

2002 that plaintiff had a heart attack and angioplasty in May 1998; was determined in September

1998 to have reversible ischemia on the inferior wall; underwent a cardiac catherterization and

left ventriculography in September 1998 which showed multiple abnormal findings, including a

90-95% elongated lesion in the proximal portion and significant dampening of pressure upon

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cannulation of RCA; and was found to have severe proximal elongated RCA stenosis in 1998

with additional angioplasty suggested. AR 273. Although defendant contends that plaintiff’s

“re-weighing of the medical evidence is improper [since] it is the ALJ’s province to evaluate and

determine the weight of evidence,” there is no indication in the record that the ALJ actually did

weigh the evidence in reaching her decision. Moreover, although defendant contends that the

1998 EKG stress test alone amounted to “substantial evidence,” the undersigned finds otherwise,

in light of the discussion above and in light of the fact that in 1998, 2002, and 2004, based on the

very same evidence, no medical improvement exceptions were found to apply.

Further, and perhaps more significantly, 20 C.F.R. § 416.994(b)(3)(iv)(D) specifically

states that “[t]he exception for error will not be applied retroactively under the conditions set out

above unless the conditions for reopening the prior decision (see §§ 416.1488 through 416.1489)

are met.” Section 416.1488 provides that “[a] determination, revised determination, decision, or

revised decision may be reopened – (a) Within 12 months of the date of the notice of the initial

determination, for any reason; (b) Within two years of the date of the notice of the initial

determination if we find good cause, as defined in § 416.1489, to reopen the case; or (c) At any

time if it was obtained by fraud or similar fault.” Although defendant contends that the ALJ’s

decision that an exception to a finding of medical improvement applied was proper since “the

ALJ plainly found error based on substantial evidence, resulting in a misapplication of Listing

404C,” the ALJ’s decision and defendant’s summary judgment motion ignore the regulations

regarding conditions for reopening prior decisions based on error. Because the exception for

error was made eight years after the 1998 initial determination, the exception should only have

been applied retroactively if the determination “was obtained by fraud or similar fault.” There is

no evidence in the record, nor did the ALJ make any findings, that such fraud or fault existed.

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 Although plaintiff requests that the court order that upon remand, the matter “be

referred to a different ALJ to ensure impartiality in future proceedings,” Dckt. No. 18 at 21,

plaintiff has not shown that such an order is necessary. 

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In light of these failures by the ALJ, the court does not reach the remainder of plaintiff’s

arguments and recommends that this action be remanded for further proceedings consistent with

these findings and recommendations.3

VI. CONCLUSION

For the stated reasons, IT IS HEREBY RECOMMENDED that:

1. Plaintiff’s motion for summary judgment be granted; 

2. The Commissioner’s cross-motion for summary judgment be denied; 

3. This action be remanded pursuant to sentence four of 42 U.S.C. § 405(g), for further

proceedings; and,

4. The Clerk be directed to enter judgment for plaintiff in accordance with this order.

These findings and recommendations are submitted to the United States District Judge

assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen days

after being served with these findings and recommendations, any party may file written

objections with the court and serve a copy on all parties. Such a document should be captioned

“Objections to Magistrate Judge’s Findings and Recommendations.” Failure to file objections

within the specified time may waive the right to appeal the District Court’s order. Turner v.

Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

DATED: February 8, 2010.

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