Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-05060/USCOURTS-cand-3_04-cv-05060-0/pdf.json

Parties Involved:
Jo Anne B. Barnhart
Defendant
Steven L. McCarty
Plaintiff

Document Text:

U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

UNIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of CaliforniaUNIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

STEVEN L. McCARTY,

Plaintiff,

v.

JO ANNE B. BARNHART,

Commissioner of Social Security

Defendant.

_____________________________________/

No. C 04-05060 MHP

MEMORANDUM & ORDER

Re: Cross-Motions for Summary

Judgment

Claimant Steven L. McCarty brought this action pursuant to 42 U.S.C. section 405(g)

seeking judicial review of a final decision of the Social Security Appeals Council (“Appeals

Council”). The Appeals Council granted claimant’s request for disability insurance benefits

beginning March 21, 2002, but denied his claim for the period beginning December 31, 1998 and

ending March 20, 2002. Now before the court are the parties’ cross-motions for summary judgment. 

Having considered the arguments presented and for the reasons stated below, the court enters the

following memorandum and order. 

BACKGROUND

I. Factual Background

Claimant is a fifty-six-year-old man with a high school education and additional training in

automotive repair and bartending. Certified Administrative Transcript (“Tr.”) at 175. Prior to

ceasing work in December 1998, and for the preceding fifteen years, claimant was employed as a

bartender. Id. at 170. Claimant alleges that a number of physical and psychological conditions have

rendered him unable to work since December 31, 1998. Specifically, claimant claims, or at one time

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 1 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

2

has claimed, to suffer from degenerative back problems, rheumatoid arthritis, scoliosis,

gastroesophageal reflux disease (“GERD”), Raynaud’s Syndrome,1 hepatitis B, hearing problems,

and depression. Of these, the parties’ arguments focus on claimant’s back problems, Raynaud’s

Syndrome, and depression. The court’s review of the facts will focus on each of these three

impairments in turn, and will also address the other symptoms and impairments that appear in the

record. 

Claimant has attributed his disabling injuries to a history of chronic back pain, exacerbated

by a fall on an icy driveway in approximately December 1998 which caused a herniated disc in the

lower lumbar area. Id. at 19, 169. Over the years, claimant has seen a number of doctors for

treatment and evaluation of his back problems. In addition, claimant’s back condition has been

assessed by the Disability Determination Service (“DDS”), a state agency, on multiple occasions. 

The reports of these doctors reflect a chronic, degenerative condition. See, e.g., id. at 302 (treating

physician Betat’s February 9, 1999 diagnosis of “chronic lumbago with recent exacerbation”); id. at

278 (chiropractor Daley’s 1999 diagnosis of “chronic lumbar strain/sprain, gradual onset; lumbar

and sacroiliac subluxations; cervical and thoracic subluxations”); id. at 275–76 (Dr. Bodor’s mid2000 diagnosis of low back pain, L4-5 mild central stenosis, L5-S1 disk degeneration, and possibly

mild bilateral S1 radiculitis); id. at 283 (DDS evaluating physician Bellomo’s November 2000

diagnosis of “chronic lower back pain with apparent scoliosis”); id. at 309–16 (Dr. Dipsia’s April

30, 2001 residual functional capacity assessment with a primary diagnosis of chronic disc disease);

id. at 321 (an imaging report from November 28, 2001 stating that since February 1998, claimant

had “a few millimeters more anterior degenerative spondylolisthesis of L4 on L5 and has somewhat

more destruction of the L4-L5 disk space”); id. at 667 (an October 21, 2002 imaging report stating

that there is scoliosis of the cervical spine and “significant degenerative change, disc space

narrowing and neural foramina narrowing at C5-6 and, to a lesser degree, at C3-4 and C6-7”); id. at

544–53 (Dr. Bradley’s 2002 diagnosis of spondylolisthesis of L4-5, disk degeneration with spinal

stenosis of L4-5 and L5-S1, and cervical disk degeneration with narrowing from C3 through C6); id.

at 665 (a March 23, 2003 imaging report finding “[f]airly advanced degenerative disk disease,

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 2 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

3

cervical spine, without evidence of fracture”); id. at 507 (a July 1, 2003 “Disability Determination

and Transmittal” form completed based on Dr. Nguyen’s assessment, stating that the primary

diagnosis was discogenic and degenerative disorders of the back); id. at 523–25 (Dr. Deviren’s

August 25, 2003 recommendation for surgery in the near future to address claimant’s lumbar spine

stenosis); id. at 511–18 (Dr. Thornburg’s October 9, 2003 residual functional capacity assessment

recommending a residual functional capacity of “sedentary” in consideration of documented

degenerative disk disease and spinal stenosis). 

Claimant has been diagnosed with Raynaud’s Syndrome, a condition affecting the circulation

in his right third finger. Raynaud’s Syndrome was first diagnosed on March 21, 2002 and resulted

in claimant’s hospitalization from March 21 through March 24, 2002. See id. at 410. In June 2002,

claimant’s finger developed “an ischemic type episode” and became gangrenous in appearance. Id.

at 596–98. To treat the Raynaud’s Syndrome, claimant was given an anti-coagulant medicine, wore

a splint to protect the finger, wore gloves, and avoided cold temperatures. Id. 

A number of medical professionals have also, over the years, diagnosed claimant with

depression and mood disorder. See, e.g., id. at 303 (Physician’s Assistant Deaton listing depression

among claimant’s conditions in November 1998); id. at 302 (Dr. Betat’s February 1999 notation that

claimant suffered from “some mild reactive depression due to his circumstance”); id. at 319 (Dr.

Baron’s consultative diagnosis for the DDS in January 2002 of mild to moderate mood disorder due

to medical conditions); id. at 583–88 (Dr. Pick’s consultative evaluation for the DDS including a

DSM-IV diagnosis for Axis I of mood disorder secondary to a general medical condition); id. at

567–80 (Dr. Tyl’s “Psychiatric Review Technique” form concluding that claimant has mood

disorder, leading to mild limitations in his activities of daily living, social functioning, and

concentration). Other doctors have noted the possibility of additional psychological problems. See

id. at 583–88 (Dr. Pick’s consultative evaluation for the DDS noting that further psychiatric

investigation should be undertaken to determine if there is “questionable bipolar disorder as was

perhaps mentioned by [claimant’s] psychiatrist”2).

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 3 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

4

Although the bulk of the documentation surrounding claimant’s medical conditions relates to

his back condition, Raynaud’s Syndrome, and depression, several other conditions appear within the

record. Claimant’s treating physicians noted a hepatitis B infection in 1998 and 1999. Id. at

302–03. GERD also appears in claimant’s medical history. See, e.g., id. at 20. The record

additionally reflects that claimant suffers from rheumatoid arthritis and scoliosis. See id. at 302, 275

(arthritis); 283, 310 (scoliosis). Finally, there are references to a sudden hearing loss in May 2002. 

See, e.g., id. at 21. 

II. Procedural Background

On August 4, 2000, claimant filed an application for Disability Insurance Benefits under

Title II of the Social Security Act (“the Act”), 42 U.S.C. section 423 et seq., and Supplemental

Security Income under Title XVI of the Act, 42 U.S.C. sections 401–433, alleging a disability onset

date of December 31, 1998. Tr. at 168–77. Both claimant’s original application and a subsequent

application for reconsideration were denied. Id. at 92, 97. In July 2001 claimant requested an

evidentiary hearing on his application, and a hearing was held before an Administrative Law Judge

(“ALJ”) on August 5, 2002. 

At the hearing, the ALJ considered the available medical evidence, claimant’s testimony, the

arguments of claimant’s former attorney Mr. Wall, and the testimony of vocational expert Robert

Raschke. In a decision dated January 22, 2003, the ALJ found that claimant had the “severe

impairments” of degenerative disk disease of the lumbar spine, hepatitis B, rheumatoid arthritis, and

GERD. Id. at 23. The ALJ further found that claimant’s Raynaud’s Syndrome, depression, and

hearing problems did not represent severe impairments. Id. The ALJ concluded that claimant’s

“severe impairments” did not meet or equal any listed impairment in the Social Security regulations,

and thus that claimant had the residual functional capacity to perform a range of work at the “light”

exertional level, provided that the job included a sit-stand option and did not involve working

around temperature extremes. Id. Using this residual functional capacity and the testimony of

vocational expert Raschke, the ALJ also concluded that there were three possible jobs claimant

could perform: leather goods folder, etching operator, and cashier. Id. at 24. Based on these

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 4 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

5

findings, the ALJ decided that claimant had not been disabled within the meaning of the Social

Security Act and regulations. Id. at 24.

Claimant filed a request for review of the decision with the Appeals Council, and on May 6,

2003, the Appeals Council denied the request for review. Id. at 6–9. On May 22, 2003, in a

separate action, claimant appealed the Appeals Council’s decision to this court. 

On March 31, 2003, while the appeal on his first application was still pending, claimant filed

a second application for disability benefits and supplemental security income. Id. at 498–500. On

July 1, 2003, claimant’s second application was denied. Id. at 501–04. After claimant filed for

reconsideration, his second application was granted on November 3, 2003. Under the November 3,

2003 grant, claimant was found disabled as of January 23, 2003, the day after the ALJ’s unfavorable

decision on the first application. See Stipulation and Order of Remand, Civil No. 03-02425 MHP;

see also Social Security Administration, Emergency Message 99-147 (1999). The November 3,

2003 grant is not part of the record before the court, but the basis for the favorable determination can

be inferred from the Disability Determination Rationale (“DDR”) form completed on October 10,

2003, which provides that claimant’s allegations were neck pain, back pain, and depression, and

concludes as follows:

DR THORNBURG PHYSICAL MC GIVES CLMT A SEDENTARY RFC W/ NO

STOOPING. PER THE MEDICAL VOCATIONAL RULES, RESTRICTIONS TO NEVER 

ON [sic] STOOPING USUALLY RESULTS [sic] IN A MED-VOCAT’L GRANT. 

THEREFORE, CLMT’S JOB BASE IS SIGNIFICANTLY ERODED BELOW THAT OF

SEDENTARY WORK AND HE IS CONSIDERED AN ALLOWANCE. 

Tr. at 671. Dr. Thornburg’s residual functional capacity assessment of claimant at the sedentary

level was based solely on claimant’s degenerative disk disease and spinal stenosis. Id. at 511–18. 

 When claimant’s second application was granted, both parties to the appeal regarding the

first application agreed to stipulate to a remand in order for the Commissioner of Social Security

(“Commissioner”) to reevaluate the denial of the first application in light of the approval of the

second. Thus, the matter was remanded to the Appeals Council on November 21, 2003 with

instructions to “reconcile the subsequent allowance of benefits with the Administrative Law Judge’s

previous denial.” Stipulation and Order of Remand, Civil No. 03-02425 MHP. 

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 5 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

6

In order to perform the reconciliation, the Appeals Council solicited the opinion of a member

of its medical staff, Dr. Michael Dennis. In his report Dr. Dennis stated that he had “reviewed the

medical evidence submitted in the claimant’s case,” summarized claimant’s history of back pain

from 1998 and Raynaud’s Syndrome from early 2002, and concluded that “for all purposes the

claimant should be viewed as totally functionally impaired” based on the combination of

degenerative changes with stenosis coupled with Raynaud’s Syndrome with an onset date of March

21, 2002, the date claimant was diagnosed with Raynaud’s Syndrome. Id. at 5G–H. Dr. Dennis did

not explicitly discuss the DDR for the second grant or determine the point in time at which

claimant’s back problems, standing alone, became completely disabling. The Appeals Council

adopted Dr. Dennis’s opinion, and on September 30, 2004 issued a decision granting claimant

disability insurance benefits beginning March 21, 2002 “based on the combination of claimant’s

degenerative changes with stenosis coupled with Raynaud’s disease requiring anti-coagulation.” Id.

at 5B–C. 

On December 2, 2004, claimant filed the instant complaint before this court, asserting that

the Appeals Council’s decision denying benefits prior to March 21, 2002 was erroneous, and on

June 30, 2005 he moved for summary judgment. Defendant filed a cross-motion for summary

judgment and in opposition to plaintiff’s motion for summary judgment on August 30, 2005. 

Claimant argues that the Appeals Council’s decision to deny benefits for the period between

December 31, 1998 and March 20, 2002 is deficient for four reasons. First, claimant argues that the

Appeals Council did not adequately reconcile the evidence supporting the successful second

application with the ALJ’s previous denial of the first application. Second, claimant argues that the

Appeals Council did not properly consider the combined effect of all claimant’s impairments, both

severe and non-severe. Third, claimant argues that the Appeals Council did not apply the proper

techniques or follow the proper procedure in the evaluation of claimant’s mental impairments. 

Fourth, claimant argues that the Appeals Council failed to accord proper weight to the statements of

his treating physicians. Defendant, on the other hand, argues that it adequately reconciled claimant’s

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 6 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

7

applications in compliance with the court’s previous order, that it should be presumed to have

considered the entire record, and that its consideration of claimant’s impairments was proper. 

LEGAL STANDARD

A federal district court may not disturb the final decision of the Commissioner unless it is

based on legal error or the fact findings are not supported by substantial evidence. 42 U.S.C.

§ 405(g); Sprague v. Bowen, 812 F.2d 1226, 1229 (9th Cir. 1987). “Substantial evidence,

considering the entire record, is relevant evidence which a reasonable person might accept as

adequate to support a conclusion.” Matthews v. Shalala, 10 F.3d 678, 679 (9th Cir. 1993). The

court’s review “must consider the record as a whole,” including evidence that supports the

Commissioner’s decision and evidence that detracts from it. Desrosiers v. Secretary of Health &

Human Servs., 846 F.2d 573, 576 (9th Cir. 1988). Nonetheless, where evidence is susceptible to

more than one rational interpretation, one of which supports the Commissioner’s decision, the court

must defer to the Commissioner’s decision and may not substitute its judgment for that of the

Commissioner. See Reddick v. Chater, 157 F. 3d 715, 720–21. The Commissioner’s determinations

of law, however, are reviewed de novo. See McNatt v. Apfel, 201 F.3d 1084, 1087 (9th Cir. 2000). 

Thus even if substantial evidence supports the Commissioner’s fact findings, “the decision should be

set aside if the proper legal standards were not applied in weighing the evidence and making the

decision.” Benitez v. Califano, 573 F.2d 653, 655 (9th Cir. 1978) (quoting Flake v. Gardner, 399

F.2d 532, 540 (9th Cir. 1968)). 

DISCUSSION

Claimant alleges four bases for remand. The first is a failure to comply with this court’s

order. The others are alleged failures to comply with regulations governing the disability evaluation

process itself. The court will consider each in turn. 

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 7 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

8

I. Reconciliation of the November 3, 2003 Grant of Benefits With the ALJ’s Previous Denial

Claimant first argues that the Commissioner has failed to adequately reconcile the grant of

benefits following the second application with the ALJ’s unfavorable decision on the first

application, in violation of this court’s prior order.3 The order, dated November 21, 2003, provides

in relevant part that “[t]he purpose of the remand is to reconcile the subsequent allowance of

benefits with the Administrative Law Judge’s previous denial. The file pertaining to Plaintiff’s

subsequent application for benefits will be obtained and all the evidence will be considered in

accordance with HALLEX I-5-3-17, § III.B.2.” Stipulation and Order of Remand, Civil No. 03-

02425 MHP. HALLEX I-5-3-17, section III.B.2, is an instruction found in the Social Security

Administration’s Hearings, Appeals, and Litigation Law manual (“HALLEX”), which was

referenced by the court to provide additional guidance for the defendant on remand. This HALLEX

instruction requires the Appeals Council to consider whatever “new and material evidence” led to

the grant of benefits on the second application and to determine the extent to which this evidence

relates to the prior period. HALLEX I-5-3-17, § III.B.2. In making this determination and

explaining its reasoning in a written decision, the Appeals Council “must . . . [d]iscuss the weight it

assigned to evidence in resolving conflicts in the record, stating which evidence is more persuasive

and why.” HALLEX I-3-8-3. 

Here, based on the record currently before the court, the sole basis for the grant of disability

benefits on the second claim was the finding that claimant’s back condition, standing alone, was

sufficient to warrant a determination of disability beginning January 23, 2003. There was no

medical reason given for commencing benefits on this date; rather, January 23, 2003 is the earliest

possible date for the grant of benefits based on the ALJ’s unfavorable January 22, 2003 decision on

claimant’s first application. It follows, then, that claimant’s back condition was completely

debilitating at least as early as that date. At a minimum, the Appeals Council was required as part of

the reconciliation to determine the point in time when the back condition became totally debilitating,

and to explain the reasons for its conclusion. 

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 8 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

9

Instead, the Appeals Council appears to have simply evaluated the evidence that was

considered in connection with the second application de novo, without regard to the conclusion

reached on the basis of that evidence. The Appeals Council summarized and adopted the opinion of

its medical expert, Dr. Dennis, that claimant should be found disabled based on the impairments of

degenerative changes with stenosis and Raynaud’s Syndrome, beginning on the date when claimant

was diagnosed with Raynaud’s Syndrome. Id. at 5C. While Raynaud’s Syndrome may well have

contributed to claimant’s reduced residual functional capacity, and indeed must be considered, see

infra Part II, the diagnosis of Raynaud’s Syndrome appears to have nothing to do with the grant of

benefits on the second claim. Id. at 5B–C, 5G–H. 

Both the Appeals Council’s decision and Dr. Dennis’s opinion fail to discuss with any

specificity the evidence considered, other than to reference the ALJ’s January 22, 2003 decision. Id.

 Dr. Dennis’s opinion mentions no specific medical evaluations and just four dates: December 31,

1998, claimant’s alleged onset date; 1998, when claimant was diagnosed with “degenerative changes

involving the cervical and lumbar spine with evidence of early pseudo spondylolisthesis of L4-5,

secondary to degenerative changes”; 2002, when claimant started experiencing symptoms of

Raynaud’s Syndrome; and, March 21, 2002, the date claimant was noted to have significant

Raynaud’s Syndrome. Id. at 5G–H. The omission of any specific reference to reports considered

and to the status of claimant’s impairments from 1998 through 2002, as well as from 2002 through

2004, makes it impossible for the court to discern whether Dr. Dennis or the Appeals Council

genuinely engaged in efforts to reconcile the unfavorable January 22, 2003 decision of the ALJ with

evidence connected with claimant’s second successful application for benefits. The Appeals

Council’s decision and Dr. Dennis’s opinion jointly reflect, at a minimum, a failure to reconcile the

basis for the favorable determination in claimant’s second application, Dr. Thornburg’s residual

functional capacity of “sedentary” based solely on claimant’s degenerative disk disease and spinal

stenosis, with the rest of the record. See id. at 511–18. 

Additional inconsistencies further underscore the lack of meaningful analysis. Both the

Appeals Council’s decision and Dr. Dennis’s opinion note that “the stenosis alone limited the

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 9 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

10

claimant to sedentary work” but nonetheless incongruously conclude that prior to the onset of

claimant’s Raynaud’s Syndrome on March 21, 2002, “claimant had the residual functional capacity

to perform light work . . . .” Id. at 5C, 5H (emphasis added). Similarly, both the Appeals Council’s

decision and Dr. Dennis’s opinion find that the onset date of claimant’s disability should be March

21, 2002, “the time frame in which claimant was noted to have significant Raynaud’s disease,” but

still conclude that prior to the March 21, 2002 onset date of claimant’s Raynaud’s Syndrome,

claimant’s residual functional capacity should include a preclusion—based on Raynaud’s

Syndrome—from working around temperature extremes. Id. 

Defendant asserts that because there is a presumption of regularity given to administrative

decisions, it should be presumed that all the medical evidence in claimant’s case was reviewed. See

Def.’s Cross-Motion for Summary Judgment at 4 (relying on Citizens to Preserve Overton Park, Inc.

v. Volpe, 401 U.S. 402, 415 (1971), overruled on unrelated grounds by Califano v. Sanders, 430

U.S. 99, 105 (1977)). Defendant overlooks, however, the Supreme Court’s additional statement in

Overton Park that the “presumption is not to shield [the administrative] action from a thorough,

probing, in-depth review.” Overton Park, 401 U.S. at 415. Regardless of any general presumption

of regularity, the Appeals Council is not exempted from its specific responsibilities to consider the

evidence and to develop the record in accordance with this court’s previous order and its own

regulations and rules. 

In order to satisfactorily reconcile the subsequent allowance of benefits with the ALJ’s

previous denial, on remand the Appeals Council must consider the fact that under the second

application claimant was determined to be fully disabled based solely on a residual functional

capacity assessment of “sedentary” formed in consideration of degenerative disk disease and spinal

stenosis, and must make an express finding as to when claimant’s back condition limited his residual

functional capacity to the point at which he could no longer work. In so doing, the Appeals Council

must consider all material evidence associated with both claims, and must discuss the weight it

assigns to evidence, stating which evidence is more persuasive and why. See HALLEX I-5-3-17,

§ III.B.2; see also HALLEX I-3-8-3. Furthermore, the Appeals Council’s analysis must comport

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 10 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

11

with the Social Security Administration regulations found in 20 C.F.R. sections 404.1520 and

404.1520a, as discussed below. 

II. Consideration of All of Claimant’s Medically Determinable Impairments

Claimant further contends that in making its disability determination in this case the Appeals

Council failed to properly consider the combined effect of all claimant’s impairments, both severe

and non-severe. To determine whether a claimant is disabled within the meaning of the Act the

Social Security Administration follows a five-step sequential evaluation process. 20 C.F.R.

§ 404.1520. In the fourth step of this process, the adjudicator assesses the claimant’s residual

functional capacity. 20 C.F.R. § 404.1520(a)(iv). This assessment must be based on all relevant

evidence in the record, and the adjudicator

must consider limitations and restrictions imposed by all of an individual’s impairments,

even those that are not ‘severe.’ While a ‘not severe’ impairment(s) standing alone may not

significantly limit an individual’s ability to do basic work activities, it may—when

considered with limitations or restrictions due to other impairments—be critical to the

outcome of a claim. For example, in combination with limitations imposed by an individual’s

other impairments, the limitations due to such a ‘not severe’ impairment may prevent an

individual from performing past relevant work or may narrow the range of other work that

the individual may still be able to do. 

S.S.R. 96-8P (Cum. Ed. 1996). 

Here, the ALJ identified four severe impairments and three non-severe impairments:

“claimant has the severe impairments of degenerative disk disease of the lumbar spine, hepatitis B,

rheumatoid arthritis and GERD”; and “[c]laimant’s Raynaud’s phenomena effecting the long middle

finger of his right hand, depression and hearing problem do not represent severe impairments.” Tr. at

23. The ALJ’s original decision does not make clear which of claimant’s severe and non-severe

impairments were considered in establishing the residual functional capacity. The transcript of the

hearing does, however, seem to indicate that the ALJ considered claimant’s “orthopedic injury” and

the condition of claimant’s hand due to Raynaud’s Syndrome. See id. at 74. There is no evidence

that the ALJ considered all of claimant’s impairments, whether severe or non-severe, including 

claimant’s hepatitis B, rheumatoid arthritis, scoliosis, GERD, and depression, in establishing the

residual functional capacity.

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 11 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

12

On remand, the Appeals Council specifically stated that it did not adopt the ALJ’s findings or

conclusions—among which were the statements about claimant’s severe and non-severe impairments,

as well as claimant’s residual functional capacity—regarding whether the claimant is disabled for the

period prior to March 21, 2002. Tr. at 23, 5B. However, the Appeals Council’s discussion of

claimant’s impairments is limited to the same two impairments considered by the

ALJ—“degenerative changes with stenosis coupled with Raynaud’s disease requiring anticoagulation”—and its residual functional capacity for the period prior to March 21, 2002 mirrors the

ALJ’s—“to perform light work not around temperature extremes with a sit/stand option.” Id. at 5C. 

Likewise, although Dr. Dennis stated that he “reviewed the medical evidence submitted in the

claimant’s case,” his discussion of claimant’s impairments is limited to claimant’s back pain and

Raynaud’s Syndrome. Id. at 5G–H. There is no evidence that Dr. Dennis or the Appeals Council

considered all of claimant’s impairments, whether severe or non-severe, including claimant’s

hepatitis B, rheumatoid arthritis, scoliosis, GERD, and depression, in evaluating claimant’s condition

prior to March 21, 2002 and establishing the residual functional capacity for that period of time.

 The adjudicator is responsible for determining the effect of each of the claimant’s

impairments on his ability to perform gainful activity. See, e.g., Sprague v. Bowen, 812 F.2d 1226,

1231 (9th Cir. 1987) (emphasizing that claimant’s mental condition should have been considered);

Celaya v. Halter, 332 F.3d 1177, 1182 (9th Cir. 2003) (observing that the ALJ was “responsible for

determining the effect of Celaya’s obesity [which was not explicitly raised by Celaya as a disabling

factor] upon her other impairments, and its effect on her ability to work and general health”). 

On remand, a multiple impairments analysis considering not only claimant’s back problems and

Raynaud’s Syndrome, but also his hepatitis B, rheumatoid arthritis, scoliosis, GERD, and depression,

for the period prior to March 21, 2002, must be carried out. In order to determine whether claimant

was disabled prior to March 21, 2002, specific findings as to the onset dates of claimant’s

impairments are critical. See S.S.R. 83-20 (Cum. Ed. 1983). If the evidence is not definite and

medical inferences need to be made in order to determine the onset dates, a medical expert must

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 12 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

13

assist in the determination. See id.; see also Armstrong v. Commissioner of Social Security Admin.,

160 F.3d 587, 590 (9th Cir. 1998).4 

III. Assessment of Claimant’s Mental Impairments 

Claimant next contends that the Appeals Council did not apply the proper technique in the

evaluation of claimant’s mental impairment, as specified by 20 C.F.R. section 404.1520a. Defendant,

on the other hand, asserts that since the ALJ determined claimant’s depression was not a severe

impairment, neither the ALJ nor the Appeals Council bore any duty to apply the special technique

because it is only required when the claimant has a “medically determinable mental impairment(s).” 

See id. 

In addition to the basic procedural steps of the five-step sequential evaluation process set forth

in the regulations at 20 C.F.R. section 404.1520, the regulations provide a special technique to be

applied in evaluating the effect of a mental impairment. For purposes of this action, that technique

may be summarized in four steps. First, the adjudicator must determine whether, based on the

claimant’s symptoms, signs, and laboratory findings, the claimant has a “medically determinable

mental impairment(s).” 20 C.F.R. § 404.1520a(b)(1). If not, the special technique does not apply. 

Second, the adjudicator must rate the degree of functional limitation resulting from the impairment in

four areas: activities of daily living; social functioning; concentration, persistence, or pace; and

episodes of decompensation. 20 C.F.R. §§ 404.1520a(b)(2), 404.1520a(c). Third, if ratings are

predominantly “none” or “mild,” the impairment is determined to be not severe. 20 C.F.R. §

404.1520a(d)(1). If the mental impairment is severe, an analysis is undertaken to determine whether

it meets or is equivalent to a listed disorder, or if not, what the claimant’s residual functional capacity

is. 20 C.F.R. §§ 404.1520a(d)(2), 404.1520d(3). Fourth, the written decisions of the ALJ and the

Appeals Council must incorporate the findings based on the application of the technique, including a

specific finding for each of the functional areas listed in step two. 20 C.F.R. § 404.1520a(e)(2). 

The court turns first to defendant’s argument that the special technique for evaluating mental

impairments was not required in claimant’s case. A finding that claimant’s mental impairment is not

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 13 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

14

severe is not the same as a finding that claimant does not have a medically determinable impairment

at all. The regulations indicate that once a medically determinable mental impairment is identified,

the special technique must be applied in order to determine the degree of the claimant’s limitation. 

See 20 C.F.R. § 404.1520a(b)(1). The severity of the impairment is expressly considered at step

three, but a finding that the impairment is not severe does not obviate the need to perform the

specified analysis and documentation. 20 C.F.R. § 404.1520a(d). Thus, defendant’s argument fails.

The court finds that the Commissioner, through her agents the ALJ and the Appeals Council,

committed an error of law by failing to apply the special technique in claimant’s case. Neither the

ALJ nor the Appeals Council followed the special technique found in 20 C.F.R. section 404.1520a. 

The ALJ engaged in a brief discussion of claimant’s symptoms, signs, and diagnoses, and determined

that claimant has a mental impairment, which might satisfy step one, but then disregarded the rest of

the special technique by concluding that the impairment is non-severe without providing specific

findings as to the degree of limitation in each of the functional areas. Cf. 20 C.F.R. §

404.1520a(e)(2). The Appeals Council’s decision fails to mention claimant’s symptoms, signs, and

diagnoses, or to engage in any discussion whatsoever about claimant’s mental impairment. This

failure is particularly unfortunate considering that part of the record before the Appeals Council was

the June 18, 2003, evaluation completed by Dr. Tyl, which follows the special technique set forth in

20 C.F.R. section 404.1520a to reach conclusions not inconsistent with those reached by claimant’s

treating, examining, and evaluating physicians in the past. Tr. at 567–80; see also Tr. at 303, 302,

300, 275, 202, 319, 701, 583–88. On remand, the special technique for evaluation of mental

impairments must be applied to claimant’s mental impairments and documented in the Appeals

Council’s written decision, in accordance with 20 C.F.R. section 404.1520a. 

IV. Application of the Treating Physician Rule

Claimant highlights the treating physician rule found at 20 C.F.R. section 404.1527(d)(2) and

argues that the ALJ and the Appeals Council have failed to abide by it. Claimant does not, however,

explain precisely when or how he believes the rule to have been violated. Based on the record, and

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 14 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

15

without more explanation from the claimant, the court finds that the record does not reflect that the

defendant has violated the treating physician rule. 

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 15 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

16

CONCLUSION

For the reasons stated above, the court GRANTS plaintiff’s motion for summary judgment

and DENIES defendant’s motion for summary judgment. This action is hereby REMANDED to the

Commissioner pursuant to sentence four of 42 U.S.C. section 405(g), for further proceedings

consistent with the foregoing order. The clerk shall close the file.

IT IS SO ORDERED.

Date: October 13, 2005 

MARILYN HALL PATEL

United States District Judge

Northern District of California

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 16 of 17
U

NIT

E

D

ST

A

T

ES

DIST

RIC

T

CO

U

R

T

For the Northern District of California

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

17

1. This medical condition is referred to by the parties as “Raynaud’s Syndrome,” “Raynaud’s

phenomena,” and “Raynaud’s disease.” The court will use “Raynaud’s Syndrome.”

2. Dr. Pick noted that claimant had seen a psychiatrist, a Dr. Williams, on May 14, 2003, although

the record does not otherwise reflect this visit. Id. at 583. 

3. Claimant argues that by failing to abide by the stipulation and remand order, defendant has

violated the “law of the case” doctrine. See Pl.’s Motion for Summary Judgment at 7–10. Although

claimant’s reliance on this doctrine is misplaced in the instant case, the court will address the

substance of claimant’s underlying arguments about defendant’s failure to fully reconcile the

evidence in the claims.

 Claimant also raises a new argument related to reconciliation in the opposition memorandum;

specifically, that this court should determine that claimant was disabled beginning April 6, 2000. 

See Pl.’s Opposition to Defendant’s Cross-Motion for Summary Judgment at 5–8. This argument is

not timely raised, and the court will not reach it here. 

4. Claimant argues that medical experts in the fields of orthopedics, psychiatry, and immunology

should be called. See Pl.’s Motion for Summary Judgment at 11; see also Pl.’s Opposition to

Defendant’s Cross-Motion for Summary Judgment at 8–9. The court will leave to the Commissioner

to determine what expert testimony, if any, is necessary to determine the onset dates of claimant’s

impairments and thus his disability, if any, prior to March 21, 2002.

ENDNOTES

Case 3:04-cv-05060-MHP Document 29 Filed 10/14/05 Page 17 of 17