The HONORABLE MICHAEL J. MELLOY, Chief Judge, United State s 1 District Court for the Northern District of Iowa, sitting by designation. United States Court of Appeals FOR THE EIGHTH CIRCUIT

_____________ No. 96-3059

_____________ Robert L. Lucy, * * Plaintiff-Appellant, * Appeal from the United States * District Court for the v. * Eastern District of Arkansas. * Shirley S. Chater, * Commissioner, Social Security * Administration, * * Defendant-Appellee. *

_____________ Submitted: February 13, 1997 Filed: May 21, 1997

_____________ Befor e HANSEN and MORRIS SHEPPARD ARNOLD, Circuit Judges, an d MELLOY, District Judge.

1

_____________ HANSEN, Circuit Judge.2

Robert L. Lucy appeals the district court's grant of summary judgment affirming the Social Security Commissioner's decision to deny his claim for suppl emental security income (SSI ) benefits. We reverse and remand with instructions for the district court to remand the case to the Commissioner for further proceedings.

I n his application for SSI benefits, Lucy alleged that he suffered from arthritis, g o ut, breathing problems, a hernia, and ulcers. At a hearing before an administrative law judge (ALJ), Lucy testified that he was 32 years old. He completed the eleventh grade i n high school with special education and obtained some special training at a vocationa l-technical school. His past relevant work experience consisted of manua l labor. Lucy testified that

he has pain in his legs, feet, lower back, knees, and stomach and that he suffers from dizziness, causing him to fall down f requently. The ALJ found that Lucy's su

bjective allegations of pain were not credible to the extent alleged. The ALJ no ted that while Lucy's activities are limited, his pain is controlled with medication. Dr. David Kauffman performed two physical assessments of Lucy and fo und that Lucy's main problem is morbid obesity. Dr. Kauffman stated t hat Lucy "should be able to engage in virtually any work activity." (R. at 20.) He was of the opinion that normal work a ctivity would be good for Lucy in an effort to reduce his weight. To th e contrary, Dr. James R. Harbin, an attending physician while Lucy was hospitalized for lesions on his legs, commented that Lucy suffered from shortness of breath an d degenerative joint disease; that Lucy was unab le to sit, stand, walk, lift carry or handle objects for any length of time; that he would be a danger to himself and others in the workplace; and that Lucy's condition will not improve. Dr. Harbin con cluded that Lucy
was per manently disabled. The ALJ specifically discredited the testimony of Dr

. Harb in as not supported by diagnostic tests and as inconsistent with the othe r substantial medical evidence.3

Charles Spellman, Ph.D., performed a psychological exam on Lucy, who attain ed
a full- scale intelligence quotient of 78 on the Wechsler Adult Intelligence Scale

Revised. Dr. Spellman indicated th at this score places Lucy in the borderline range of intellect ual ability. He concluded that Lucy displayed a good attention span, coul d follow simple directions without difficulty, could handle a no rmal amount of stress, and could re late appropriately to others. Dr. Spellman stated that overall, Lucy's reduced intellect ual ability can be expected to result in him performing at a level which i s considerably lower than other persons of the same age. In conclusion, Dr. Spellman noted"[i]t appears that his disability should be based on a medical assessment." (R. at 188.)

The ALJ determined that Lucy suffers from severe impairments of morbi d obesity, gout, hypertension, peptic ulcer disease, eosinophilic cellulitis, and borderline intelle ctual functioning, but that these impairments do not equal a listed impairment

. The ALJ noted that the gout, hypertension, and ulcers are controlled by medication and the eosinophilic cellulitis has not been recurrent. The ALJ concluded that Lucy wa s unable to return to his past relevant work but that he was capable of performing the full range of sedent ary work. Noting that the only restriction on his ability to perform the full ran ge of sedentary work is his borderline intellectual functioning, the AL J ultimately concluded that this restr iction does not substantially limit Lucy's capacity to perform the full range of sedentary work. Relying on the Medical-Vocationa l Guidelines, 20 C.F.R. pt. 404, subpt. P, app. 2, the ALJ denied Lucy's claim for SS I benefits.

The Appea ls Council denied further review, and Lucy appealed to the distric t court. Both parties filed summary judgment motions. Lucy argued, in part, that th e ALJ erred by not usin g the testimony of a vocational expert to determine the extent to whichhis nonexertional limitations may have limited his residual functional capacity to perform the full range of sedentary work. The district court concluded that the ALJ properly relied on the Guidelines because the record demonstrated that Lucy's4

border lineintellectual functioning did not prevent him from following simpl e instructions, doing assigned tasks, or relating appropri ately to others. Thus, the district court granted the Commissioner's motion for summary judgment , affirming the decision to deny Lucy's claim for benefits. Lucy appeals.

We will affirm the Commissioner's decision to deny SSI benefits unless it i s u n supported by substantial evidence in the record as a whole or based on legal error. Newton v. Chater , 92 F.3d 688, 691-92 (8th Cir. 1996).

In this case, because the ALJ determined that Lucy could not return to his past relevant wo rk, the burden shifted to the Commissioner to prove that a significan t number of jobs exist in the national economy that he was capable of perf orming. Harris
v. Shalala , 45 F.3d 1190, 1194 (8th Cir. 1995). Instead of requiring the testimony of a vocational expert to ass ess the impact of Lucy's nonexertional impairments, the ALJ relied on the Medical-Voc ational Guidelines to determine that Lucy was not disabled. Lucy conten ds that the testimony of a vocational expert was necessary for the ALJ to determine whether his nonexertional impairments re ndered him unable to engage in the full range of sedentary work.

When a claimant suffers from exertional and non exertional impairments, and the exerti onal impairments alone do not warrant a finding of disability, the ALJ mus t consi der the extent to which the nonexertional impairments further diminish th e claimant's work capacity. Thompson v. Bowen , 850 F.2d 346, 349 (8th Cir. 1988). If the claimant's characteristics do not differ significantly from those contemplated in the Medical-Vocational Guidelines, the ALJ may re ly on the Guidelines alone to direct
a finding of disabled or not disabled. Id. That is to say, "an ALJ may use th e Guidelines even though there is a nonexertional impairment if the ALJ finds, and the record su pports the finding, that the nonexertional impairment does not diminish th e claimant's residual functional capacity to perform the full range of activities listed in the Guidelines." Id. at 349-50. We have explained as follows:5

In this context, "significant" refers to whether the claimant's nonexertional impairment or impairments preclude the claimant from engagi ng in the full range of activities listed in the Guidelines under the demands of day-today life. Under this standard isolated occurrences will not preclude the use of the Guidelines, however persistent nonexertional impairment s wh ichprevent the claimant from engaging in the full range of activitie s li sted in the Guidelines will preclude the use of the Guidelines to direc t a conclusion of disabled or not disabled.
Id. at 350.

We conclude that the ALJ inappropriately determined that Lucy could engag e in the full range of sedentary work without consulting the testimony of a vocationa l expert. T he ALJ's findings concerning Lucy's residual functional capacity are no t supported by substantial evidence because they do not consider the impact of all o f Lucy's n onexertional impairments, and they are internally inconsistent. The recor d suppor ts the ALJ's finding that Lucy suffers from borderline intellectual functioning

. Then, the ALJ found that Lucy's "residual functional capacity for the full range o f sedentar y work is reduced by his borderline intellectual functioning," (Appellant' s Adden. at AD-9 ), but later the ALJ stated that Lucy's capacity for the full range o f sede ntary work has not been significantly compromised by the nonexertiona l limitations. Both of these findings cannot be supported by substantial evidence.

We ha ve previously concluded that borderline intellectual functioning, i f supported by the record as it is here, is a significant nonexertional impairment that must be considered by a vocational expert. See Pickney v. Chater , 96 F.3d 294, 296-97 (8th Cir. 1996) (findi ng claimant had a full-scale IQ of 78, which requires the consideration of a vocational expert); Gude v. Su llivan , 956 F.2d 791, 796 n.3 (8th Cir. 1992) (noting that borderline intelligence should be considered by vocational expert); Spencer v

. Bowen , 798 F.2d 275, 278 n.2 (8th Cir. 1986) (holding claimant's intellectual6

impai rment

should be considered by a vocational expert). Thus, the ALJ erred b y relying only on the Guidelines.

Th e Commissioner contends that a vocational expert was not necessary her e because, although Lucy suffers from a borderline intelle ct, Dr. Spellman noted that Lucy couldfollow simple directions, and consequently, Lucy's impairment does not prevent him from engaging in the full range of sedentary work. The Social Security's own list of unskilled sedentary jobs, however ( see Appellant's Adden. at AD-24-33), indicates that many jobs within this r ange require more than the mental capacity to follow simple instructions. For each job described, the Di ctionary of Occupational Titles specifies the type of re asoning capabilities the job requires. 2 U.S. Dep't of Labor, Dictionary o f O c cupational Titles , 1010-11 (4th ed. 1991). For instance, a job rated reasoning level
one requires the ability to understand and carry out simple instructions, whereas a job rated reasoning level two requires the ability to understand and carry out detaile d instructions. Id. at 1011. Many of the jobs listed require level two reasoning or higher in the unskilled sedentary job category. Thus, contrary to the ALJ's conclusion, i t appears that Lucy's borderline intellectual functioning does have an impact on hi s capacity to perform the full range of sedentary work.

The Commissioner also relies on Dr. Spellman's conclusion that "[Lucy's ] disability should be based on a medical assessment," rather than a mental impairment. (R. at 188.) This argument does not alter our conclusion. While borderline intellectual functioning may not rise to the level of a disability by itself, a claimant is nevertheless entitled to have a vocational expert consider this condition along with his othe r impairments to determine how it impacts upon the claimant's residual function al capacity. See Pickney , 96 F.3d at 297.

The ALJ found morbid obesity to be Lucy's primary problem and concluded that this impairme nt limited his mobility, but not to the extent asserted. Obesity is also a nonexertional impairment which might significantly restrict a claimant's ability to7

perform the full range of sedentary work. See Evans v. Chater , 84 F.3d 1054, 1056 (8th Cir. 1996). The impact of this nonexertional limitation should be considered by a vocational expert in addition to Lucy's borderline intellectual functioning. Id.

We conclude that the ALJ's decision is not supported by substantial evidence on the who le record, because the ALJ improperly applied the Medical-Vocationa l Gu idelines to direct a conclusion that Lucy was not disabled without consulting a vocational expert

to assess Lucy's residual functional capacity in light of his significant nonexertional impairments. On rema nd, a vocational expert should be called and asked a hypothetical question which precisely sets forth all of Lucy's impairments. See id. Accordingl y, we reverse the judgment of the district court and remand with instructions for the district court to remand this case to the Commissioner for furthe r proceedings consistent with this opinion.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.