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 1

Plaintiff’s date of birth has been redacted in accordance with the General Order of the Court regarding Public Access

to Electronic Case Files, pursuant to the official policy on privacy adopted by the Judicial Conference of the United States.

ORDER

Page - 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

RENEE HATCH,

Plaintiff,

v.

JO ANNE B. BARNHART, Commissioner of 

Social Security,

Defendant.

CASE NO. C05-5748KLS

ORDER REVERSING THE

COMMISSIONER’S DECISION

TO DENY BENEFITS AND

REMANDING FOR FURTHER

PROCEEDINGS

Plaintiff, Renee Hatch, has brought this matter for judicial review of the denial of her applications

for disability insurance and supplemental security income (“SSI”) benefits. The parties have consented to

have this matter be heard by the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(c), Federal

Rule of Civil Procedure 73 and Local Magistrates Rule 13. After reviewing the parties’ briefs and the

remaining record, the undersigned hereby finds and ORDERS as follows:

FACTUAL AND PROCEDURAL HISTORY

Plaintiff currently is forty-two years old.1 Tr. 26. She has a high school education, vocational

training as a medical office assistant and past work experience as a cashier, stocker, dog butler, motel maid,

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 1 of 16
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

ORDER

Page - 2

sales associate, laundry attendant, certified nurse assistant, and fast food worker. Tr. 18, 74, 79, 82, 140,

145, 185, 190. 

On November 28, 2000, plaintiff filed applications for disability insurance and SSI benefits, alleging

disability as of April 4, 2000, due to anxiety attacks, depression, post traumatic stress syndrome (“PTSD”),

and lower jaw problems. Tr. 56, 73, 360. Her applications were denied initially and on reconsideration. Tr.

17, 26, 29, 364. It appears plaintiff did not seek further administrative review of these applications. 

Plaintiff filed two more applications for disability insurance and SSI benefits on May 30, 2002, and

April 30, 2002, respectively, alleging disability as of January 5, 2002, due to anxiety, depression and

problems with her knees, feet, jaw and back. Tr. 17-18, 61, 134, 184, 366. She later amended her alleged

onset date of disability to December 27, 2001. Tr. 64. Those applications again were denied initially and on

reconsideration. Tr. 17, 27-28, 33, 41, 370-72. A hearing was held before an administrative law judge

(“ALJ”) on October 21, 2004, at which plaintiff, represented by counsel, appeared and testified, as did a lay

witness and a vocational expert. Tr. 379-432. 

On February 22, 2005, the ALJ issued a decision, determining plaintiff to be not disabled, finding

specifically in relevant part:

(1) at step one of the disability evaluation process, plaintiff had not engaged in

substantial gainful activity since her alleged onset date of disability; 

(2) at step two, plaintiff had “severe” impairments consisting of chronic low back

pain, degenerative joint disease, chondromalacia of the left knee, personality

disorders, and affective disorders; 

(3) at step three, none of plaintiff’s impairments met or equaled the criteria of any of

those listed in 20 C.F.R. Part 404, Subpart P, Appendix 1;

(4) at step four, plaintiff had the residual functional capacity to perform sedentary

work with certain additional non-exertional limitations, which precluded her

from performing her past relevant work; and

(5) at step five, plaintiff was capable of performing other jobs existing in significant

numbers in the national economy. 

Tr. 24-25. Plaintiff’s request for review was denied by the Appeals Council on October 12, 2005, making

the ALJ’s decision the Commissioner’s final decision. Tr. 6; 20 C.F.R. § 404.981, § 416.1481. 

On November 18, 2005, plaintiff filed a complaint in this Court seeking review of the ALJ’s

decision. (Dkt. #1-#3). Specifically, plaintiff argues that decision should be reversed and remanded for

further administrative proceedings for the following reasons: 

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 2 of 16
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

ORDER

Page - 3

(a) the ALJ erred in evaluating the medical source opinion evidence in the record

concerning plaintiff’s mental functional limitations;

(b) the ALJ erred in finding plaintiff’s headaches, anxiety and Morton’s neuroma to

be not severe;

(c) the ALJ erred in assessing plaintiff’s credibility;

(d) the ALJ erred in evaluating the lay witness evidence in the record;

(e) the ALJ erred in assessing plaintiff’s residual functional capacity; and

(f) the ALJ failed to pose a proper hypothetical question and ignored vocational

expert testimony at step five of the disability evaluation process. 

For the reasons set forth below, the Court finds the ALJ erred in determining plaintiff to be not disabled,

and remands this matter to the Commissioner for further administrative proceedings. 

DISCUSSION

This Court must uphold the Commissioner’s determination that plaintiff is not disabled if the

Commissioner applied the proper legal standard and there is substantial evidence in the record as a whole to

support the decision. Hoffman v. Heckler, 785 F.2d 1423, 1425 (9th Cir. 1986). Substantial evidence is

such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Richardson

v. Perales, 402 U.S. 389, 401 (1971); Fife v. Heckler, 767 F.2d 1427, 1429 (9th Cir. 1985). It is more than

a scintilla but less than a preponderance. Sorenson v. Weinberger, 514 F.2d 1112, 1119 n.10 (9th Cir.

1975); Carr v. Sullivan, 772 F. Supp. 522, 524-25 (E.D. Wash. 1991). If the evidence admits of more than

one rational interpretation, the Court must uphold the Commissioner's decision. Allen v. Heckler, 749 F.2d

577, 579 (9th Cir. 1984). 

I. The ALJ Erred in Evaluating the Medical Source Opinion Evidence in the Record Concerning

Plaintiff’s Mental Functional Limitations

The ALJ is responsible for determining credibility and resolving ambiguities and conflicts in the

medical evidence. Reddick v. Chater, 157 F.3d 715, 722 (9th Cir. 1998). Where the medical evidence in the

record is not conclusive, “questions of credibility and resolution of conflicts” are solely the functions of the

ALJ. Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982). In such cases, “the ALJ’s conclusion must

be upheld.” Morgan v. Commissioner of the Social Security Administration, 169 F.3d 595, 601 (9th Cir.

1999). Determining whether inconsistencies in the medical evidence “are material (or are in fact

inconsistencies at all) and whether certain factors are relevant to discount” the opinions of medical experts

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 3 of 16
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

ORDER

Page - 4

“falls within this responsibility.” Id. at 603. 

In resolving questions of credibility and conflicts in the evidence, an ALJ’s findings “must be

supported by specific, cogent reasons.” Reddick, 157 F.3d at 725. The ALJ can do this “by setting out a

detailed and thorough summary of the facts and conflicting clinical evidence, stating his interpretation

thereof, and making findings.” Id. The ALJ also may draw inferences “logically flowing from the evidence.”

Sample, 694 F.2d at 642. Further, the Court itself may draw “specific and legitimate inferences from the

ALJ’s opinion.” Magallanes v. Bowen, 881 F.2d 747, 755, (9th Cir. 1989). 

The ALJ must provide “clear and convincing” reasons for rejecting the uncontradicted opinion of

either a treating or examining physician. Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1996). Even when a

treating or examining physician’s opinion is contradicted, that opinion “can only be rejected for specific and

legitimate reasons that are supported by substantial evidence in the record.” Id. at 830-31. However, the

ALJ “need not discuss all evidence presented” to him or her. Vincent on Behalf of Vincent v. Heckler, 739

F.3d 1393, 1394-95 (9th Cir. 1984) (citation omitted) (emphasis in the original). The ALJ must only explain

why “significant probative evidence has been rejected.” Id.; see also Cotter v. Harris, 642 F.2d 700, 706-07

(3d Cir. 1981); Garfield v. Schweiker, 732 F.2d 605, 610 (7th Cir. 1984). 

In general, more weight is given to a treating physician’s opinion than to the opinions of those who

do not treat the claimant. Lester, 81 F.3d at 830. On the other hand, an ALJ need not accept the opinion of

a treating physician, “if that opinion is brief, conclusory, and inadequately supported by clinical findings” or

“by the record as a whole.” Batson v. Commissioner of Social Security Administration, 359 F.3d 1190,

1195 (9th Cir.,2004); Thomas v. Barnhart, 278 F.3d 947, 957 (9th Cir. 2002); Tonapetyan v. Halter, 242

F.3d 1144, 1149 (9th Cir. 2001). An examining physician’s opinion is “entitled to greater weight than the

opinion of a nonexamining physician.” Lester, 81 F.3d at 830-31. A nonexamining physician’s opinion may

constitute substantial evidence if “it is consistent with other independent evidence in the record.” Id. at 830-

31; Tonapetyan, 242 F.3d at 1149. 

John Robinson, Ph.D., and Anita Peterson, Ph.D., two non-examining consulting psychologists who

reviewed the medical evidence in the record in early August 2002, found plaintiff to be moderately limited in

her ability to work in coordination with or proximity to others without being distracted by them, accept

instructions and respond appropriately to criticism from supervisors, and get along with co-workers or

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 4 of 16
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

ORDER

Page - 5

peers without distracting them or exhibiting behavioral extremes. Tr. 295. Plaintiff argues the ALJ erred by

failing to consider any of these mental functional limitations. The Court agrees. 

The only mention the ALJ made of the review conducted by Dr. Robinson and Dr. Peterson was to

state that they found plaintiff’s “mental impairment was not sufficiently severe to meet or equal any” of the

impairments listed in 20 C.F.R. Part 404, Subpart P, Appendix 1. Tr. 19. Defendant argues the ALJ used

their review, along with other medical source evidence in the record, “to fashion reasonable mental work

limitations to simple, routine, repetitive work, with no public contact.” Defendant’s Brief, p. 6. Defendant

asserts the ALJ “has no obligation to use magic words so long as the weight of the evidence supports [the]

limitations and choices set and made.” Id. 

It is true, as noted above, that the ALJ “need not discuss all evidence presented” to him or her, or

recite “magic words” in his decision, as “it serves no purpose to require every step of each decisional

process to be enunciated with precise words and phrases drawn from relevant disability regulations.”

Vincent, 739 F.3d at 1394-95 (citation omitted) (emphasis in the original); Magallanes v. Bowen, 881 F.2d

747, 755, (9th Cir. 1989); Renner v. Heckler, 786 F.2d 1421, 1424 (9th Cir. 1986). Here, however, the

review provided by Drs. Robinson and Peterson constitutes “significant probative evidence,” which the ALJ

must consider, but failed to properly do so in this case. Id.; Cotter, 642 F.2d at 706-07; Garfield, 732 F.2d

at 610. Indeed, the ALJ’s decision contains little in the way of substantive analysis of the medical evidence

in the record with respect to plaintiff’s mental functional limitations. 

Plaintiff further argues the ALJ failed to provide specific and legitimate reasons for disregarding the

opinions of Daniel M. Neims, Psy.D., and Dana B. Hanford, Ph.D., who evaluated plaintiff in midNovember 1997, and early June 1998, respectively. Again, the Court agrees. Dr. Neims found plaintiff to

be moderately limited in her ability to respond appropriately to and tolerate the pressures and expectations

of a normal work setting. Tr. 245. Dr. Hanford opined that plaintiff was markedly limited in that area, as

well as in her ability to relate appropriately to co-workers and supervisors. Tr. 250. 

The ALJ did not even mention Dr. Neims opinion in his decision. With respect to the opinion of Dr.

Hanford, the ALJ found in relevant part as follows:

The undersigned took into consideration Dr. Hanford’s assessment that the claimant

makes poor decisions, can’t keep jobs, debilitating physical ailments, and domestic abuse

(Exhibit 11F). However, he saw the claimant on referral -- one time. His review was

based solely on claimant’s representation (Exhibit 12F). 

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 5 of 16
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

ORDER

Page - 6

Tr. 21. While it may be true that Dr. Hanford saw plaintiff on referral only one time, this is generally true

with regard to all examining medical source opinions. Further, the ALJ does not state what other medical

source opinion he found to be more reliable than Dr. Hanford’s. As such, it appears the ALJ improperly

substituted his own lay opinion for that of an acceptable medical source. See Gonzalez Perez v. Secretary of

Health and Human Services, 812 F.2d 747, 749 (1st Cir. 1987) (ALJ may not substitute own opinion for

findings and opinion of physician); McBrayer v. Secretary of Health and Human Services, 712 F.2d 795,

799 (2nd Cir. 1983) (ALJ cannot arbitrarily substitute own judgment for competent medical opinion); Gober

v. Mathews, 574 F.2d 772, 777 (3rd Cir. 1978) (ALJ not free to set own expertise against that of physician

who testified before him). 

The ALJ’s statement that Dr. Hanford’s review was based solely on plaintiff’s representation also

was not a legitimate reason for rejecting her opinion in this case. The diagnoses and observations of

psychiatrists and psychologists constitute competent evidence when mental illness is the basis of a disability

claim:

Courts have recognized that a psychiatric impairment is not as readily amenable to

substantiation by objective laboratory testing as is a medical impairment and that

consequently, the diagnostic techniques employed in the field of psychiatry may be

somewhat less tangible than those in the field of medicine. In general, mental

disorders cannot be ascertained and verified as are most physical illnesses, for the

mind cannot be probed by mechanical devices in order to obtain objective clinical

manifestations of mental illness.... [W]hen mental illness is the basis of a disability

claim, clinical and laboratory data may consist of the diagnoses and observations of

professionals trained in the field of psychopathology. The report of a psychiatrist

should not be rejected simply because of the relative imprecision of the psychiatric

methodology or the absence of substantial documentation, unless there are other

reasons to question the diagnostic technique.

Sanchez v. Apfel, 85 F. Supp.2d 986, 992 (C.D. Cal. 2000) (quoting Christensen v. Bowen, 633 F.Supp.

1214, 1220-21 (N.D.Cal.1986)) (emphasis added); see also Sprague v. Bowen, 812 F.2d 1226, 1232 (9th

Cir. 1987 (opinion that is based on clinical observations supporting diagnosis of depression is competent

evidence). Thus, it is not appropriate to reject the opinion of Dr. Hanford merely because it may have been

based primarily on a mental status interview of plaintiff rather than on any formal psychological testing

findings. In any event, in addition to plaintiff’s self-report, Dr. Hanford’s evaluation did include formal

psychological testing. See Tr. 253. 

Defendant argues the opinions of Dr. Neims and Dr. Hanford are not relevant to the period of time

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 6 of 16
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

In her reply brief, plaintiff argues the ALJ de facto re-opened her prior applications by considering Dr. Hanford’s

opinion and stating that her alleged onset date of disability was April 4, 2000. Plaintiff’s Reply Brief, p. 2. A de facto re-opening

of a prior administrative decision occurs, and that decision will be subject to judicial review, “where the Commissioner considers

‘on the merits’ the issue of the claimant’s disability during the already-adjudicated period.” Lester, 81 F.3d at 827; Lewis v. Apfel,

236 F.3d 503, 510 (9th Cir. 2001). However, “where the discussion of the merits is followed by a specific conclusion that the claim

is denied on res judicata grounds, the decision should not be interpreted as re-opening the claim and is therefore not reviewable.”

Krumpelman, 767 F.2d at 589 (citing McGowen v. Harris, 666 F.2d 60, 68 (4th Cir. 1981)). 

Although the ALJ in this case stated in the beginning of his decision that it was “not necessary to consider the question

of whether the unfavorable decision made with respect to the prior claimant should be reopened and revised” (Tr. 18), he then

went on to state he was accepting plaintiff’s prior alleged onset date of disability and specifically discussed Dr. Hanford’s opinion

(Tr. 18, 20-21). On the other hand, it is not clear that the Court has the authority to review the denial of plaintiff’s prior

applications. See Udd v. Massanari, 245 F.3d 1096, 1098 (9th Cir. 2001) (judicial review limited to final decision made after

hearing). It is not necessary for the Court to find the ALJ de facto re-opened those applications, however, as remand for further

proceedings is being ordered in this case in any event for the reasons set forth herein. 

ORDER

Page - 7

at issue in this case, and therefore they merited no further attention than the ALJ gave them. Specifically,

defendant asserts that because plaintiff did not appeal her first set of applications, and because her second

set of applications alleged an onset date of January 5, 2002, then by implication she admitted she was not

disabled prior to January 2002. This, however, was not a reason provided by the ALJ for disregarding or

rejecting the opinion of either Dr. Neims or Dr. Hanford. See Ceguerra v. Secretary of Health and Human

Services, 933 F.2d 735, 738 (9th Cir.1991) (“A reviewing court can evaluate an agency’s decision only on

the grounds articulated by the agency.”). In addition, the ALJ himself referred to Dr. Hanford’s opinion and

evaluation in his decision (Tr. 19, 21), and appears to have accepted plaintiff’s original alleged onset date of

disability in determining her eligibility for benefits (Tr. 18).2 

It is true, as plaintiff asserts, that where the ALJ has failed “to provide adequate reasons for

rejecting the opinion of a treating or examining physician,” that opinion generally is credited “as a matter of

law.” Lester, 81 F.3d at 834 (citation omitted). The Court, however, declines to find the ALJ was required

to adopt the opinions of either Dr. Neims or Dr. Hanford regarding plaintiff’s mental functional limitations. 

A significant portion of the medical opinion evidence in the record regarding plaintiff’s mental impairments

indicate they resulted in much less severe work-related restrictions. For example, two other examining

medical sources, and a third non-examining medical source, all found plaintiff had no mental impairment

that would prohibit her from working. Tr. 206-23, 278-83. Issues still remain, therefore, as to the nature

and severity of all of plaintiff’s mental functional limitations. 

II. The ALJ Properly Found Plaintiff’s Headaches, Anxiety and Morton’s Neuroma to Be Not Severe

To determine whether a claimant is entitled to disability benefits, the ALJ engages in a five-step

sequential evaluation process. 20 C.F.R. § 404.1520, § 416.920. At step two of that process, the ALJ must

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 7 of 16
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

Plaintiff also briefly mentions her obesity, which she implies should have been found to be severe as well. See Plaintiff’s

Opening Brief, p. 17. Again, though, there is no objective medical evidence in the record to show that plaintiff’s obesity has

caused a more than minimal effect on her ability to perform basic work-related tasks. 

ORDER

Page - 8

determine if an impairment is “severe.” Id. An impairment is “not severe” if it does not “significantly limit”

a claimant’s mental or physical abilities to do basic work activities. 20 C.F.R. § 404.1520(a)(4)(iii), (c), §

416.920(a)(4)(iii), (c); Social Security Ruling (“SSR”) 96-3p, 1996 WL 374181 *1. Basic work activities

are those “abilities and aptitudes necessary to do most jobs.” 20 C.F.R. § 404.1521(b), § 416.921(b); SSR

85- 28, 1985 WL 56856 *3. 

An impairment is not severe only if the evidence establishes a slight abnormality that has “no more

than a minimal effect on an individual[’]s ability to work.” See SSR 85-28, 1985 WL 56856 *3; Smolen v.

Chater, 80 F.3d 1273, 1290 (9th Cir. 1996); Yuckert v. Bowen, 841 F.2d 303, 306 (9th Cir.1988). Plaintiff

has the burden of proving that her “impairments or their symptoms affect her ability to perform basic work

activities.” Edlund v. Massanari, 253 F.3d 1152, 1159-60 (9th Cir. 2001); Tidwell v. Apfel, 161 F.3d 599,

601 (9th Cir. 1998). The step two inquiry described above, however, is a de minimis screening device used

to dispose of groundless claims. Smolen, 80 F.3d at 1290. 

Plaintiff argues the ALJ erred in finding her headaches, anxiety and Morton’s neuroma were not

severe impairments. Specifically, plaintiff asserts that her testimony and own reports to the treating and

examining medical sources in the record show that these impairments were not slight abnormalities. As

discussed below, however, the ALJ did not err in discounting plaintiff’s credibility. Accordingly, the ALJ

was not required to rely on the statements plaintiff made to her medical providers or the testimony she gave

at the hearing in determining the severity of her alleged impairments. 

In addition, plaintiff has pointed to no objective medical evidence in the record, nor can the Court

find any, showing that any of the above alleged impairments resulted in more than a minimal effect on her

ability to work. Plaintiff argues that her headaches, anxiety and Morton’s neuroma could adversely impact

her ability to remain competitive for full-time work. This, however, is not the proper test for determining

the severity of a mental or physical impairment. In other words, the mere possibility that an impairment

could cause significant work-related limitations is insufficient to meet the burden of proof plaintiff has at

this step of the disability evaluation process.3 

III. The ALJ Did Not Err in Assessing Plaintiff’s Credibility

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 8 of 16
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

ORDER

Page - 9

Questions of credibility are solely within the control of the ALJ. Sample v. Schweiker, 694 F.2d

639, 642 (9th Cir. 1982). The court should not “second-guess” this credibility determination. Allen, 749

F.2d at 580. In addition, the court may not reverse a credibility determination where that determination is

based on contradictory or ambiguous evidence. Id. at 579. That some of the reasons for discrediting a

claimant’s testimony should properly be discounted does not render the ALJ’s determination invalid, as long

as that determination is supported by substantial evidence. Tonapetyan v. Halter, 242 F.3d 1144, 1148 (9th

Cir. 2001). 

To reject a claimant’s subjective complaints, the ALJ must provide “specific, cogent reasons for the

disbelief.” Lester v. Chater, 81 F.3d 821, 834 (9th Cir. 1996) (citation omitted). The ALJ “must identify

what testimony is not credible and what evidence undermines the claimant’s complaints.” Id.; Dodrill v.

Shalala, 12 F.3d 915, 918 (9th Cir. 1993). Unless affirmative evidence shows the claimant is malingering,

the ALJ’s reasons for rejecting the claimant’s testimony must be “clear and convincing.” Lester, 81 F.2d at

834. The evidence as a whole must support a finding of malingering. O’Donnell v. Barnhart, 318 F.3d 811,

818 (8th Cir. 2003). 

In determining a claimant’s credibility, the ALJ may consider “ordinary techniques of credibility

evaluation,” such as reputation for lying, prior inconsistent statements concerning symptoms, and other

testimony that “appears less than candid.” Smolen v. Chater, 80 F.3d 1273, 1284 (9th Cir. 1996). The ALJ

also may consider a claimant’s work record and observations of physicians and other third parties regarding

the nature, onset, duration, and frequency of symptoms. Id. 

The ALJ made the following findings concerning plaintiff’s credibility:

The claimant’s statements concerning her impairments and their impact on her ability to

work are not entirely credible in light of [the] claimant’s own description of her activities

and life style, the degree of medical treatment required, discrepancies between the

claimant’s assertions and information contained in the documentary reports, the reports

of the treating and examining practitioners, the medical history, the findings made on

examination, and the claimant’s assertions concerning her ability to work. 

The claimant alleged inability to work due to low back pain, knee problems, muscle

disorders, and depression that are aggravated by any physical activity, including sitting,

standing, and walking for prolonged periods, are not fully credible. They are inconsistent

with the objective medical evidence, the absence of more aggressive treatment, and the

claimant’s ordinary activities. The claimant undoubtedly experiences physical pain and

emotional stress, but has not required hospitalizations for any physical or mental

difficulties, no surgical intervention or other aggressive treatments have been prescribed,

and she obtains good, if not total, relief from her prescribed medications when she takes

them as instructed. Clinical and laboratory findings have been mostly negative and any

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 9 of 16
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

ORDER

Page - 10

abnormalities have been only mild or minimal (see Exhibits 13F/3&5, 15F/2). The

claimant is able to care for her personal needs and perform some household chores such

as cooking, sweeping, washing dishes, doing laundry, and shopping with some help

(Exhibit 17F/2). There has been no showing of significant neurological deficits or that

the claimant is unable to effectively use her upper and lower extremities (see Exhibit

17F). The claimant alleged that she also suffers with hand and thyroid problems. The

record contains no clinical laboratory evidence to support a disabling impairment in this

area. There is no indication of any psychological or physiological abnormalities which

would preclude all work activities. . . . the claimant was able to work successfully for

years. Overall, the Administrative Law Judge is not convinced that the claimant’s

subjective complaints are credible to the degree that she would be precluded from

performing a range of sedentary work. 

Tr. 21. 

Plaintiff argues her level of activity does not preclude a finding of disability. While this certainly

may be true, though the Court makes no findings in that regard, to determine whether plaintiff’s symptom

testimony is credible, the ALJ may consider the nature and extent of her daily activities. Smolen, 80 F.3d at

1284. Thus, such testimony may be rejected if a claimant “is able to spend a substantial part of his or her

day performing household chores or other activities that are transferable to a work setting.” Id. at 1284 n.7. 

On the other hand, a claimant need not be “utterly incapacitated” to be eligible for disability benefits, and

“many home activities may not be easily transferable to a work environment.” Id. 

Plaintiff makes no specific showing to refute the ALJ’s reliance on her activities of daily living for

discounting her credibility. Indeed, the evidence in the record indicates plaintiff is capable of substantial

engagement in such activities. For example, she reported in early June 1998, that she “spent much of her

time gardening and caring for” her home. Tr. 254. In late January 2000, plaintiff reported that her hobbies

included “gardening her one and a half acres and going on walks.” Tr. 263. In early May 2001, she

reported that she did not like going to the store by herself, but could when she had to do so. Tr. 207. She

also stated that she liked to cook, and that she cleaned and went grocery shopping with her husband. Tr.

209. Her activities of daily living were found to be “reasonably intact.” Tr. 210; see also Tr. 221, 308

(finding only mild restrictions in her activities of daily living). 

In late June 2002, plaintiff reported that she currently worked at a laundromat three days a week.

Tr. 279. While such work alone may not rise to the level of substantial gainful activity, it is indicative of an

ability to engage in daily activities at a level greater than that claimed by plaintiff. In mid-July 2002, she

reported that she could cook, sweep, do the dishes and laundry, and go shopping, albeit the latter only with

help. Tr. 285. In late September 2004, plaintiff reported that she was “very active” and was “studying to be

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 10 of 16
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

ORDER

Page - 11

a paralegal.” Tr. 336, 355. Accordingly, the Court finds the ALJ did not err in discounting plaintiff’s

credibility in part due to her activities of daily living. 

The only other argument plaintiff puts forth to support her allegations of error on the part of the

ALJ here is that the ALJ improperly discounted the medical evidence that weighs in her favor and the lay

witness statements that support her subjective complaints. The Court agrees the ALJ erred in discounting

plaintiff’s credibility in part based on the medical evidence in the record concerning her mental functional

limitations, as the ALJ erred in evaluating that evidence as discussed above. On the other hand, the ALJ did

not err in discounting plaintiff’s credibility because her physical complaints were inconsistent with the

objective medical evidence with respect thereto in the record. See Regennitter v. Commissioner of SSA,

166 F.3d 1294, 1297 (9th Cir. 1998) (determination that claimant’s complaints are inconsistent with clinical

observations can satisfy clear and convincing requirement). 

There is little objective medical evidence in the record to show that plaintiff suffers from disabling

physical impairments, notwithstanding her allegations and testimony to the contrary. See Tr. 226, 229-30,

234-42, 257, 259-64, 271, 273-74, 276-77, 284-91, 312-16, 318-20, 323-26, 329-33, 336, 339, 344-46,

349-50, 353, 355. In addition to plaintiff’s activities of daily living, furthermore, the ALJ discounted her

credibility in part due to “the absence of more aggressive treatment” in the record. Tr. 21; see Meanal v.

Apfel, 172 F.3d 1111, 1114 (9th Cir. 1999) (ALJ properly considered physician’s failure to prescribe, and

claimant’s failure to request serious medical treatment for supposedly excruciating pain); Johnson v.

Shalala, 60 F.3d 1428, 1434 (9th Cir. 1995) (ALJ properly found prescription for conservative treatment

only to be suggestive of lower level of pain and functional limitation). 

While, as discussed below, the ALJ did err in failing to consider the lay witness statements in the

record, plaintiff again makes no showing as to how those statements establish that the ALJ’s reasons for

discounting her credibility are invalid. Thus, the mere fact that one of the ALJ’s reasons for discounting

plaintiff’s credibility was improper (inconsistencies between plaintiff’s self-reports and testimony and the

medical evidence in the record concerning her mental impairments and limitations), does not render the

ALJ’s credibility determination invalid, as long as that determination is supported by substantial evidence in

the record, as it is in this case. Tonapetyan, 242 F.3d at 1148. 

IV. The ALJ Erred in Evaluating the Lay Witness Statements in the Record

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 11 of 16
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

ORDER

Page - 12

Lay testimony regarding a claimant’s symptoms “is competent evidence that an ALJ must take into

account,” unless the ALJ “expressly determines to disregard such testimony and gives reasons germane to

each witness for doing so.” Lewis v. Apfel, 236 F.3d, 503, 511 (9th Cir. 2001). An ALJ may discount lay

testimony if it conflicts with the medical evidence. Id.; Vincent v. Heckler, 739 F.2d 1393, 1395 (9th Cir.

1984) (proper for ALJ to discount lay testimony that conflicts with available medical evidence). In rejecting

lay testimony, the ALJ need not cite the specific record as long as “arguably germane reasons” for

dismissing the testimony are noted, even though the ALJ does “not clearly link his determination to those

reasons,” and substantial evidence supports the ALJ’s decision. Lewis, 236 F.3d at 512. The ALJ also may

“draw inferences logically flowing from the evidence.” Sample, 694 F.2d at 642. 

Plaintiff argues the ALJ improperly rejected and ignored the lay witness statements contained in the

record. The Court agrees. While the ALJ acknowledged the testimony of plaintiff’s sister-in-law (Tr. 21),

he gave no indication as to whether he was adopting or rejecting that testimony. Although the ALJ need

not provide the level of specificity required to reject plaintiff’s testimony, he must at the very least provide

some germane reason or reasons for not adopting lay witness testimony. Because the ALJ did not do so in

this case, he erred. 

V. The ALJ Erred in Assessing Plaintiff’s Residual Functional Capacity

If a disability determination “cannot be made on the basis of medical factors alone at step three of

the evaluation process,” the ALJ must identify the claimant’s “functional limitations and restrictions” and

assess his or her “remaining capacities for work-related activities.” SSR 96-8p, 1996 WL 374184 *2. A

claimant’s residual functional capacity assessment is used at step four to determine whether he or she can do

his or her past relevant work, and at step five to determine whether he or she can do other work. Id. It thus

is what the claimant “can still do despite his or her limitations.” Id. 

A claimant’s residual functional capacity is the maximum amount of work the claimant is able to

perform based on all of the relevant evidence in the record. Id. However, a claimant’s inability to work

must result from his or her “physical or mental impairment(s).” Id. Thus, the ALJ must consider only those

limitations and restrictions “attributable to medically determinable impairments.” Id. In assessing a

claimant’s residual functional capacity, the ALJ also is required to discuss why the claimant’s “symptomrelated functional limitations and restrictions can or cannot reasonably be accepted as consistent with the

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 12 of 16
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

While it certainly may be that in assessing residual functional capacity, the ALJ “must consider limitations and

restrictions imposed by all of an individual’s impairments, even those that are ‘not severe’” (see SSR 96-8p, 1996 WL 374184

*5), here, as discussed above, plaintiff has not shown, nor does the record indicate, that she suffers from any significant limitations

due to these alleged impairments. 

ORDER

Page - 13

medical or other evidence.” Id. at *7. 

Here, the ALJ assessed plaintiff with the following residual functional capacity:

The evidence supports a finding that she is not able to lift and carry more than ten

pounds and can sit for 1⁄2 hour and 6 total; stand and/or walk 1 hour and 6 hours total;

stand and/or walk 15 minutes maximum and 2 hours total; and can never squat, kneel,

crawl, or climb; can only occasionally balance, stoop or crouch. In addition, she is

capable of simple, routine, repetitive work that does not involve public interactions. She

should avoid working around hazards such as unprotected heights or moving machinery

(knee gives out). This is consistent with Dr. [Melvin] Jackson’s assessment dated in

July 2002 that the claimant could perform sedentary work (Exhibit 17F). 

Tr. 21-22. Plaintiff argues the ALJ erred by not considering the combined effects of her headaches, anxiety

and Morton’s neuroma in determining whether she was disabled, and thus, by implication, in assessing her

residual functional capacity. As discussed above, however, the objective medical evidence in the record

fails to establish that those impairments resulted in any functional limitations that had more than a minimal

effect on her ability to do basic work activities. Accordingly, the ALJ did not err in declining to consider

any such limitations here or in determining plaintiff’s alleged disability overall.4

 

On the other hand, the Court agrees that the above residual functional capacity assessment cannot be

upheld, in light of the ALJ’s failure to properly evaluate the medical opinion evidence in the record as

discussed above. Nevertheless, also for the reasons discussed above, the Court disagrees that the opinions

of either Dr. Neims or Dr. Hanford clearly show plaintiff is unable to perform the basic mental demands of

competitive, remunerative work, or that the ALJ was required to include in the residual functional capacity

assessment the limitations found by those two medical sources or by Drs. Peterson and Robinson. That is,

the medical evidence in the record is conflicting concerning plaintiff’s actual limitations, and thus remand is

appropriate here to determine what those limitations in fact are. 

The Court further rejects plaintiff’s contention that the ALJ did not identify her limitations on a

function-by-function basis, and merely stated that she would not be precluded from performing a range of

sedentary work. As can be seen above, the ALJ clearly gave a detailed, function-by-function, assessment of

plaintiff’s residual functional capacity. While that assessment may have been erroneous with respect to

plaintiff’s mental functional limitations, nevertheless there certainly is no validity to the accusation that the

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 13 of 16
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

ORDER

Page - 14

ALJ gave a mere “boilerplate” reference to performing sedentary work. Needless to say, however, the

Commissioner likely is well aware a sufficiently adequate function-by-function residual functional capacity

assessment again must be provided on remand. 

VI. The ALJ’s Step Five Analysis Was Improper

If a claimant cannot perform his or her past relevant work, at step five of the disability evaluation

process the ALJ must show there are a significant number of jobs in the national economy the claimant is

able to do. Tackett v. Apfel, 180 F.3d 1094, 1098-99 (9th Cir. 1999); 20 C.F.R. § 404.1520(d), (e), §

416.920(d), (e). The ALJ can do this through the testimony of a vocational expert or by reference to the

Commissioner’s Medical-Vocational Guidelines (the “Grids”). Tackett, 180 F.3d at 1100-1101; Osenbrock

v. Apfel, 240 F.3d 1157, 1162 (9th Cir. 2000). 

An ALJ’s findings will be upheld if the weight of the medical evidence supports the hypothetical

posed by the ALJ. Martinez v. Heckler, 807 F.2d 771, 774 (9th Cir. 1987); Gallant v. Heckler, 753 F.2d

1450, 1456 (9th Cir. 1984). The vocational expert’s testimony therefore must be reliable in light of the

medical evidence to qualify as substantial evidence. Embrey v. Bowen, 849 F.2d 418, 422 (9th Cir. 1988). 

Accordingly, the ALJ’s description of the claimant’s disability “must be accurate, detailed, and supported by

the medical record.” Embrey, 849 F.2d at 422 (citations omitted). The ALJ, however, may omit from that

description those limitations he or she finds do not exist. Rollins v. Massanari, 261 F.3d 853, 857 (9th Cir.

2001). 

Here, the ALJ posed a hypothetical question to the vocational expert that was substantially similar

to his assessment of plaintiff’s residual functional capacity. Tr. 428. In response thereto, the vocational

expert testified that there was other work plaintiff could perform. Tr. 428-29. Based on that testimony, the

ALJ found plaintiff to be capable of performing other jobs existing in significant numbers in the national

economy. Tr. 23. Plaintiff argues the ALJ erred in failing to include all of her mental functional limitations

in the hypothetical question he posed to the vocational expert. The Court agrees, but, as discussed above, it

is not at all clear exactly which such limitations the ALJ was required to include therein, and therefore that

determination shall be made by the Commissioner on remand. 

Plaintiff further argues the ALJ erred in ignoring the vocational expert’s testimony that she could

not perform work as a surveillance systems monitor if she could stand for only fifteen minutes at a time. Tr.

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 14 of 16
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

ORDER

Page - 15

429. The Court agrees. It is not clear, however, whether or not the ALJ actually intended to adopt this

limitation. As noted above, the ALJ found that plaintiff could both “stand and/or walk 1 hour and 6 hours

total” and “stand and/or walk 15 minutes maximum and 2 hours total.” Tr. 21, 24. Needless to say, these

are fairly contradictory findings. Accordingly, on remand the Commissioner shall re-determine plaintiff’s

limitations regarding her ability to stand and/or walk, and how those limitations impact her capability of

performing the job of surveillance monitor. 

VII. This Matter Should Be Remanded for Further Administrative Proceedings

The Court may remand this case “either for additional evidence and findings or to award benefits.”

Smolen, 80 F.3d at 1292. Generally, when the Court reverses an ALJ’s decision, “the proper course,

except in rare circumstances, is to remand to the agency for additional investigation or explanation.”

Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004) (citations omitted). Thus, it is “the unusual case in

which it is clear from the record that the claimant is unable to perform gainful employment in the national

economy,” that “remand for an immediate award of benefits is appropriate.” Id. 

Benefits may be awarded where “the record has been fully developed” and “further administrative

proceedings would serve no useful purpose.” Smolen, 80 F.3d at 1292; Holohan v. Massanari, 246 F.3d

1195, 1210 (9th Cir. 2001). Specifically, benefits should be awarded where:

(1) the ALJ has failed to provide legally sufficient reasons for rejecting [the claimant’s]

evidence, (2) there are no outstanding issues that must be resolved before a

determination of disability can be made, and (3) it is clear from the record that the ALJ

would be required to find the claimant disabled were such evidence credited.

Smolen, 80 F.3d 1273 at 1292; McCartey v. Massanari, 298 F.3d 1072, 1076-77 (9th Cir. 2002). Here, as

discussed above, issues remain regarding evaluation of the medical opinion source evidence in the record

concerning plaintiff’s mental impairments, the mental functional limitations that should be included in her

residual functional capacity assessment, and whether she is capable of performing other jobs existing in

significant numbers in the national economy. Thus, this matter should be remanded to the Commissioner

for further administrative proceedings. 

CONCLUSION

Based on the foregoing discussion, the court finds the ALJ improperly determined plaintiff was not

disabled. Accordingly, the ALJ’s decision is REVERSED and, for the reasons set forth above, hereby is

REMANDED to the Commissioner for further administrative proceedings in accordance with the findings

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 15 of 16
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

ORDER

Page - 16

contained herein. 

DATED this 6th day of June, 2006.

A

Karen L. Strombom

United States Magistrate Judge

Case 3:05-cv-05748-KLS Document 18 Filed 06/06/06 Page 16 of 16