01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

CHARLES DEAN,

Plaintiff, 

v.

JO ANNE B. BARNHART, Commissioner

of Social Security Administration,

Defendant. ____________________________________

)

)

)

)

)

)

)

)

)

)

)

)

Case No. C05-1949-JCC-JPD

REPORT AND RECOMMENDATION 

I. INTRODUCTION AND SUMMARY CONCLUSION

Plaintiff Charles Dean appeals a final decision of the Commissioner of the Social

Security Administration (“Commissioner”), that denied his application for Disability Insurance

Benefits (“DIB”) under Title II of the Social Security Act after a hearing before an

administrative law judge (“ALJ”). The parties agree that the ALJ’s decision was not free from

legal error and that some form of remand is appropriate. For the reasons set forth below, the

Court recommends that the ALJ’s decision be reversed and remanded for further

administrative proceedings. On remand, the ALJ should update plaintiff’s medical records,

reevaluate the medical evidence, reassess plaintiff’s credibility, apply the special technique

for evaluating mental impairments described in 20 C.F.R. § 404.1520a, give proper weight to

the Veterans Administration’s disability determination, and apply all appropriate steps of the

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 1 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

1

There is conflicting information regarding plaintiff’s service dates. Although certain

Veterans Administration documents indicate plaintiff served from 1963 to 1975, others indicate it

was from May 12, 1965, to April 14, 1966. Compare AR 332 and 445. His application for DIB

indicates he served only from February 24, 1964, to February 23, 1967. AR 62.

2

Dr. Hohenegger’s notes indicate plaintiff has had as many as 60 jobs. AR 447.

REPORT AND RECOMMENDATION

PAGE -2

sequential-evaluation process necessary to determine whether plaintiff’s severe impairments

render him disabled for purposes of DIB.

II. FACTS AND PROCEDURAL HISTORY

Plaintiff is a sixty-two-year-old man with sixteen years of education, including a

Bachelor of Arts degree in Christian ministry. AR 62, 102, 478. Plaintiff served in the

United States Army and saw a significant amount of combat during the Vietnam War.1 AR

302, 445. After concluding his tour of duty, he fled to Canada in 1969 to avoid participating

in covert operations in Vietnam. AR 445. He returned to the United States in 1975 and

received an honorable discharge. Id. Aside from his military service, plaintiff’s past work

history primarily consists of telephone sales and work in the publishing industry.2 AR 97,

142.

On January 14, 2003, plaintiff filed an application for DIB. AR 62-64. Although he

alleged disability beginning on February 28, 2002, as a result of post-traumatic stress

disorder (“PTSD”) and high blood pressure, he also alleged that he had experienced

symptoms of PTSD as early as 1966. AR 96. Plaintiff’s applications were denied both

initially and upon reconsideration. AR 33-39.

Plaintiff requested a hearing and on January 19, 2005, an administrative hearing was

held before an ALJ. AR 40, 475-541. On April 8, 2005, an ALJ issued a decision finding

plaintiff not disabled. AR 19-30. In particular, the ALJ found at step two that plaintiff did

not have a severe mental or physical impairment that limited his ability to perform basic

work activities, including his past relevant work. AR 29-30. 

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 2 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -3

Plaintiff appealed the decision to the Appeals Council. AR 7-14. On appeal, Dr.

Monroe Neuman, a non-examining physician appointed by the Appeals Council, reviewed

the record and opined that plaintiff’s PTSD was severe, but that he did not satisfy a listing

and that “work would not be precluded.” AR 6A-B. The Appeals Council declined to

review plaintiff’s request for review. AR 4-6. Therefore, the ALJ’s January 19, 2005,

decision serves as the Commissioner’s final decision for purposes of judicial review. On

November 21, 2005, plaintiff filed this suit challenging the ALJ’s final decision. Dkt. No. 1.

III. JURISDICTION

The Court has jurisdiction to review the ALJ’s decision pursuant to 42 U.S.C. §

405(g) (2005).

IV. STANDARD OF REVIEW

The Court may set aside the Commissioner’s denial of social security benefits when the

ALJ’s findings are based on legal error or not supported by substantial evidence in the record

as a whole. See 42 U.S.C. § 405(g); Penny v. Sullivan, 2 F.3d 953, 956 (9th Cir. 1993);

Smolen v. Chater, 80 F.3d 1273, 1279 (9th Cir. 1996). Substantial evidence is defined as

more than a mere scintilla but less than a preponderance; “it is such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.” Magallanes v. Bowen,

881 F.2d 747, 750 (9th Cir. 1989) (internal citations and quotations omitted). The ALJ is

responsible for determining credibility, resolving conflicts in medical testimony, and resolving

ambiguities. Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995). Where the evidence is

susceptible to more than one rational interpretation, it is the Commissioner’s conclusion that

must be upheld. Thomas v. Barnhart, 278 F.3d 947, 954 (9th Cir. 2002) (internal citations

omitted).

V. EVALUATING DISABILITY

As the claimant, Mr. Dean bears the burden of proving that he is disabled within the

meaning of the Social Security Act. Meanel v. Apfel, 172 F.3d 1111, 1113 (9th Cir. 1999) 

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 3 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -4

(internal citations omitted). Disability is defined as the “inability to engage in any substantial

gainful activity by reason of any medically determinable physical or mental impairment,

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

continuous period of not less than twelve months[.]” 42 U.S.C. §§ 423(d)(1)(A),

1382c(a)(3)(A). A claimant is disabled only if his impairments are of such severity that he is

not able to do his previous work, and cannot, considering his age, education, and work

experience, engage in any other substantial gainful activity existing in the national economy. 

See 42 U.S.C. §§ 423(d)(2)(A), 1382c(a)(3)(B); see also Tackett v. Apfel, 180 F.3d 1094,

1098-99 (9th Cir. 1999). 

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

determining whether a claimant is disabled within the meaning of the Social Security Act. 

See 20 C.F.R. §§ 404.1520, 416.920. At step one, the claimant must establish that he is not

engaging in any substantial gainful activity. 20 C.F.R. §§ 404.1520(b), 416.920(b). If the

claimant establishes that he has not engaged in any substantial gainful activity, the

Commissioner proceeds to step two. At step two, the claimant must establish that he has one

or more medically-severe impairments, or combination of impairments, that limit his

physical or mental ability to do basic work activities. If the claimant does not have such

impairments, he is not disabled. 20 C.F.R. §§ 404.1520(c), 416.920(c). If the claimant does

have a severe impairment, the Commissioner moves to step three to determine whether the

impairment meets or equals any of the listed impairments described in the regulations. 20

C.F.R. §§ 404.1520(d), 416.920(d). A claimant who meets or equals one of the listings for

the required twelve-month duration requirement is disabled. Id.

When the claimant’s impairment neither meets nor equals one of the impairments

listed in the regulations, the Commissioner must proceed to step four and evaluate the

claimant’s residual functional capacity (“RFC”). 20 C.F.R. §§ 404.1520(e), 416.920(e). The

Commissioner then uses the RFC to determine whether the claimant can still perform the

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 4 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -5

physical and mental demands of his past relevant work. 20 C.F.R. §§ 404.1520(f),

416.920(f). If the claimant is not able to perform his past relevant work, the burden shifts to

the Commissioner at step five to show that the claimant can perform some other work that

exists in significant numbers in the national economy, taking into consideration the

claimant’s RFC, age, education, and work experience. 20 C.F.R. §§ 404.1520(g),

416.920(g); Tackett, 180 F.3d at 1099, 1100. If the Commissioner finds the claimant is

unable to perform other work, then the claimant is found disabled and benefits may be

awarded. 

VI. DECISION BELOW

On January 19, 2005, the ALJ issued a decision finding:

1. The claimant meets the nondisability requirements for a period of

disability and Disability Insurance Benefits set forth in Section 216(i) of

the Social Security Act and is insured for benefits through the date of

the decision.

2. The claimant has not engaged in substantial gainful activity since the

alleged onset of disability.

3. The claimant’s medically determinable Post Traumatic Stress Disorder

is not “severe” since it does not significantly limit his physical or mental

ability to perform basic work activities (20 CFR § 404.1521(a)).

4. Since the claimant is able to perform basic work activities, his medically

determinable impairment does not preclude him from performing his

past relevant work in telephone sales. SSR 96-3p.

5. The claimant was not under a “disability” as defined in the Social

Security Act, at any time through the date of the decision (20 CFR §

404.1520(f).

AR 29-30.

VII. ISSUES ON APPEAL

The parties agree that the ALJ’s decision was not free from legal error and that remand

is appropriate. See Dkt. Nos. 12, 14. The only remaining issue is whether to remand for an

immediate award of benefits or for further administrative proceedings.

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 5 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -6

VIII. DISCUSSION

The Court may direct an award of benefits where “the record has been fully developed

and further administrative proceedings would serve no useful purpose.” McCartey v.

Massanari, 298 F.3d 1072, 1076 (9th Cir. 2002) (citing Smolen, 80 F.3d at 1292). The Court

may find that this occurs when: 

(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 if he

considered the claimant’s evidence.

Id. at 1076-77; see also Harman v. Apfel, 211 F.3d 1172, 1178 (9th Cir. 2000) (noting that

erroneously rejected evidence may be credited when all three prongs are met). 

A. The ALJ Committed Legal Error. 

The first step for determining whether a case should be remanded for an immediate

award of benefits or for further administrative proceedings is to assess whether the ALJ

provided legally sufficient reasons for rejecting plaintiff’s evidence. McCartey, 298 F.3d at

1076. The Commissioner has conceded that the ALJ “erroneously concluded the sequential

evaluation process at step two” and that the decision “was not free from legal error.” Dkt.

No. 13 at 4 & n.1. Hence, the parties agree that the ALJ committed legal error and that

remand is appropriate. The first step of the remand analysis is satisfied. 

Typically, the Court will analyze which of plaintiff’s assigned errors were erroneous or

not supported by substantial evidence based upon the arguments in the parties’ briefs. 

However, the defendant has not identified the specific legal deficiencies in the ALJ’s decision,

nor seriously contested the plaintiff’s assertions of error. Rather, defendant has suggested

general points for reconsideration. See Dkt. No. 13. Given the ambiguity of the

Commissioner’s response and her recommendations for remand, the ALJ should take the

following actions on remand (1) update plaintiff’s medical records; (2) reevaluate the

medical evidence; (3) reassess plaintiff’s credibility; (4) follow the “special technique” for

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 6 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -7

evaluating mental impairments described in 20 C.F.R. § 404.1520a; (5) give weight to the

Veterans Administration’s disability determination in accordance with McCartey; and (6)

apply all appropriate steps of the sequential–evaluation process to determine whether

plaintiff’s severe impairments render him disabled for purposes of DIB.

B. Outstanding Issues Still Remain.

The second step for determining whether a case should be remanded for an immediate

award of benefits or for further administrative proceedings is to assess whether there are any

outstanding issues that must be resolved before a determination of disability can be made. 

McCartey, 298 F.3d at 1076. Here, several outstanding issues remain. 

One of the predominant issues remaining is whether plaintiff meets or equals one of

the listings at step three. Treating psychologist Scott Michael, Ph.D, opined that plaintiff

equaled Listing 12.06 for Anxiety Related Disorders. AR 459-74. Nevertheless, there are

other medical opinions that indicate plaintiff experienced only mild to moderate limitations

and that suggest he may have a greater capacity for work. See AR 149-62, 293-96. There is

also evidence that plaintiff could perform at least part-time work and that his condition would

improve with continued treatment. AR 147, 444. Additionally, as the ALJ observed, there is

evidence to suggest plaintiff copes fairly well with his impairments. AR 28-29. However,

because the ALJ found plaintiff disabled at step two, he did not proceed to step three and

analyze whether plaintiff met or equaled a listing.

Similarly, the ALJ’s failure to calculate plaintiff’s RFC is an outstanding issue that

suggests an immediate award of benefits is inappropriate at this time. Again, because the

ALJ found plaintiff not disabled at step two, he never evaluated plaintiff’s RFC. As a result,

it is impossible to determine whether plaintiff is capable of performing his past relevant

work, nor is it possible to determine whether he is able to perform other work that exists in

significant numbers in the national economy. Because there is a substantial amount of

conflicting evidence in this more than 500-page record, and because there are no substantive

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 7 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -8

findings past step two, significant questions remain regarding plaintiff’s ability to perform

various work activities. These are outstanding issues that are best resolved at the

administrative level. 

C. It Is Not Clear From the Record That the ALJ Would Be Required to

Find the Plaintiff Disabled.

The final step for determining whether a case should be remanded for an immediate

award of benefits or for further administrative proceedings requires the Court to assess

whether the ALJ would be obligated to find the claimant disabled if he considered the

erroneously-rejected evidence. McCartey, 298 F.3d at 1076-77. This prong is actually a

subcategory of the second prong. Harman, 211 F.3d at 1178. Accordingly, if there are

outstanding issues, it is unlikely that a clear finding of disability would be required.

Plaintiff argues that the Court should find him disabled and award benefits based on

Dr. Michael’s opinion that plaintiff met Listing 12.06, and upon the Veterans

Administration’s disability rating. Dkt. No 14 at 2-3. As discussed above, substantial

questions remain regarding plaintiff’s RFC and its impact on plaintiff’s ability to perform

work. The absence of any post-step-two administrative findings combined with the large and

conflicting record suggests it is premature for the Court to award benefits at this time. There

are substantial questions regarding proper interpretation of the available evidence. That is for

the ALJ to determine on remand.

IX. CONCLUSION

For the reasons discussed above, this case should be reversed and remanded for further

administrative proceedings not inconsistent with this report and recommendation. In

particular, the ALJ should update plaintiff’s medical records, reevaluate the medical

evidence, reassess plaintiff’s credibility, apply the special technique for evaluating mental

impairments, give proper weight to the Veterans Administration’s disability determination,

and apply and all appropriate steps of the sequential evaluation process to determine whether

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 8 of 9
01 

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

REPORT AND RECOMMENDATION

PAGE -9

plaintiff’s severe impairments render him disabled for purposes of DIB. A proposed order

accompanies this report and recommendation.

DATED this 14th day of June, 2006.

AJAMES P. DONOHUE

United States Magistrate Judge 

Case 2:05-cv-01949-JCC Document 15 Filed 06/14/06 Page 9 of 9