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.

REPORT AND RECOMMENDATION

Page - 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

JOHN W. HOLLAND,

Plaintiff,

v.

JO ANNE B. BARNHART, Commissioner of 

Social Security,

Defendant.

CASE NO. C05-5812RBL-KLS

REPORT AND

RECOMMENDATION

Noted for August 11, 2006

Plaintiff, John W. Holland, has brought this matter for judicial review of the denial of his

applications for disability insurance and supplemental security income (“SSI”) benefits. This matter has

been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local

Magistrates Rule MJR 4(a)(4) and as authorized by Mathews, Secretary of H.E.W. v. Weber, 423 U.S. 261

(1976). After reviewing the parties’ briefs and the remaining record, the undersigned submits the following

Report and Recommendation for the Honorable Ronald B. Leighton’s review.

FACTUAL AND PROCEDURAL HISTORY

Plaintiff currently is forty-seven years old.1 Tr. 29. He has a high school education, training in

asbestos removal, and past work experience as a driver, a laborer, a janitor, a custodian, a housekeeping

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 2

worker, and an asbestos removal laborer. Tr. 20, 69, 100, 105. 

On February 20, 2002, plaintiff filed applications for disability insurance and SSI benefits, alleging

disability as of December 12, 2001, due to a hand injury, headaches, asthma, and a number of mental health

problems, including depression, anxiety, and low average intellectual functioning. Tr. 19-20, 63, 99, 367. 

His applications were denied initially and on reconsideration. Tr. 29-31, 41, 371-73. A hearing was held

before an administrative law judge (“ALJ”) on August 3, 2004, at which plaintiff, represented by counsel,

appeared and testified, as did a lay witness and a vocational expert. Tr. 385-453. 

On December 17, 2004, 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 his alleged onset date of disability; 

(2) at step two, plaintiff had “severe” impairments consisting of right wrist pain,

depression, low average intellectual functioning, and asthma; 

(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 a limited

range of light work, which precluded him from performing his 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, 27-28. Plaintiff’s request for review was denied by the Appeals Council on November 18, 2005,

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

On December 19, 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 an

award of benefits or, in the alternative, for further administrative proceedings, because: 

(a) the ALJ erred in evaluating the medical evidence in the record;

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

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

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

(e) the ALJ erred in finding plaintiff capable of performing other work existing in

significant numbers in the national economy. 

The undersigned agrees that the ALJ erred in determining plaintiff to be not disabled, but, for the reasons

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 3

set forth below, recommends that the ALJ’s decision be reversed and that this matter be remanded 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 Evidence in the Record

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

“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

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 4

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 non-examining 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. 

A. Dr. Chalstrom and Dr. Neims

Plaintiff was evaluated by Dan Neims, Psy.D., in early March 2002. Dr. Neims diagnosed plaintiff

with a number of mental health impairments, including: a moderate to marked recurrent major depressive

episode without psychotic features; an anxiety disorder with features of posttraumatic stress disorder,

generalized anxiety, panic and agoraphobia; borderline intellectual functioning; learning disorders with

respect to reading and spelling; and a personality disorder. Tr. 176. Dr. Neims further found him to have a

global assessment of functioning (“GAF”) score of 50. Id. 

As a result, Dr. Neims concluded plaintiff was markedly limited in his ability to: exercise judgment

and make decisions; relate appropriately to co-workers and supervisors; interact appropriately in public

contacts; respond appropriately to and tolerate the pressures and expectations of a normal work setting;

control his physical or motor movements; and maintain appropriate behavior. Tr. 167. Dr. Neims further

found him to be moderately limited in his ability to: understand, remember and follow simple and complex

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

2

Plaintiff further references an additional evaluation performed by Dr. Neims in late March 2005, that once more

contained substantially similar findings. Tr. 378. That evaluation, however, was submitted for the first time to the Appeals

Council, and thus could not have been considered by the ALJ. It is not clear though that the Court has the authority to review

such newly submitted evidence without a showing of “good cause for having failed to produce that evidence earlier.” See Mayes

v. Massanari, 276 F.3d 453, 461-63 (9th Cir. 2001) (question of whether good cause is required has not been decided in Ninth

Circuit). In any event, regardless of wether good cause is required, to justify remand based on Dr. Neims most recent evaluation,

plaintiff also must show it is both “new” and “material” to determining disability. Id. at 462. 

To be considered material, that evaluation “must bear ‘directly and substantially on the matter in dispute,’” and plaintiff

must demonstrate a “reasonable possibility” it “would have changed the outcome” of the hearing Id. (citation omitted). Plaintiff,

however, has made no such showing. Nor does the Court find that an additional evaluation in which Dr. Neims provides

essentially the same findings he provided three times previously would have changed the outcome of the hearing. As such, the

Court will not consider that evidence here. 

REPORT AND RECOMMENDATION

Page - 5

instructions; learn new tasks; perform routine tasks; and care for himself. Id. Dr. Neims made substantially

similar findings in late April 2003, and again in late April 2004.2

 Tr. 242, 249. 

Plaintiff also was evaluated by William J. Chalstrom, Ph.D., in late July 2002. Dr. Chalstrom

diagnosed him with both an adjustment disorder with depressed mood and polysubstance dependence in

sustained full remission, and assessed him with a GAF score of 65. Tr. 198. Dr. Chalstrom explained his

diagnosis as follows:

I diagnosed Adjustment Disorder With Depressed Mood rather than Major Depression,

since his depressive symptoms appear to be reactions to his distress over his arm

problems, his financial status, and his inability to find a job he feels he can do. He seems

to be more angry than depressed at the present time, although he may be responding to

his antidepressant. 

Tr. 198-99. Dr. Chalstrom concluded that plaintiff’s “psychological state” did “not preclude him from

working,” noting specifically that he retained the following work-related capabilities:

Mr. Holland’s ability to reason and understand are intact. His memory and

concentration are basically intact and are at a level expected for someone with low

average intelligence. His persistence was at least adequate during the testing. He

seemed to have fairly good social interaction skills. His adaptive abilities are intact. 

Tr. 199. 

With respect to the opinions of Dr. Neims and Dr. Chalstrom, the ALJ found as follows:

With regard to the claimant’s alleged depression, I accept the opinion of consultative

examiner, Dr. Chalstrom, who more precisely tested the claimant than did Dr. Neims. 

Dr. Neims appears to have adopted a scattergun approach with no less than nine

potential diagnoses, without explanation as to their progeny. I therefore find that the

claimant instead has an adjustment disorder which does not meet listing level severity or

pose severe limitations. For example, I note that he is moderately social, having testified

that he and his girlfriend belonged to social groups in Seattle and Tacoma. Further,

according to Dr. Chalstrom, he is not vegetative. His IQ scores are at least in the mid80s, which is indicative of a low level or near-normal functioning. His activities of daily

living are unimpaired in that he admitted to performing normal daily activity, including

playing video games and surfing the internet. 

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 6

Tr. 24. Plaintiff argues that the ALJ erred in rejecting Dr. Neims’ opinion, and that there is no evidence to

support that rejection. The undersigned agrees the ALJ erred here. 

While the ALJ certainly may choose between conflicting examining physician opinions when those

opinions are based on independent clinical findings, the reasons the ALJ set forth above for choosing Dr.

Chalstrom’s opinion over those of Dr. Neims are not legitimate. See Saelee v. Chater, 94 F.3d 520, 522 (9th

Cir. 1996). First, the undersigned agrees with plaintiff that the ALJ’s reference to Dr. Neims’ “scattergun

approach” ignores the fact that Dr. Chalstrom also diagnosed plaintiff with more than one mental health

impairment. The ALJ fails to explain how the fact that an examining physician’s findings that a claimant has

many diagnoses alone is indicative of a lack of clinical validity. A review of the opinions of both Dr.

Chalstrom and Dr. Neims, furthermore, fails to reveal that Dr. Chalstrom provided a substantially better

explanation for his diagnoses than did Dr. Neims. See Tr. 176-77. 

The ALJ states that plaintiff was moderately social and that he belonged to social groups with his

girlfriend. However, the substantial evidence in the record largely shows that plaintiff’s reported social

activities were fairly minimal. See Tr. 173-74, 197, 419-20. For example, plaintiff told Dr. Chalstrom that

he had “no friends other than his significant other,” went to a dance with his significant other “once a

month,” and saw his two younger children “once in a while.” Tr. 197. He told Dr. Neims that he enjoyed

“limited friendships and generally” kept to himself, and that he had “limited activities and contact with

others.” Tr. 173-74. More than one medical source in the record, furthemore, found him to be moderately

to markedly limited in his ability to function socially. Tr. 167, 210-11, 223, 242, 249. 

While it is true that Dr. Chalstrom did not find plaintiff to be “vegetative,” one need not reach that

extent of mental incapacity in order to be eligible for disability benefits. Indeed, one can suffer from very

real and significant mental functional limitations without being in a vegetative state. The same is true with

respect to plaintiff’s IQ scores. Those scores merely bear on plaintiff’s intellectual capacity, and do not

necessarily reveal the impact of his other alleged mental functional limitations, such has his restrictions in

social functioning discussed above. Finally, although plaintiff may have admitted to spending some time

playing video games and on the internet, it is far from clear he is as “unimpaired” in his ability to perform

activities of daily living as the ALJ makes him out to be. See Tr. 174, 197, 223, 418-19. 

On the other hand, it also is far from clear that the ALJ was required to adopt the opinions of Dr.

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 7

Neims regarding plaintiff’s mental functional limitations. While Dr. Chalstrom’s diagnosis of adjustment

disorder may have differed from other medical sources who assessed plaintiff with depression, the mental

functional limitations Dr. Chalstrom found are consistent with other medical opinion source evidence in the

record regarding plaintiff’s ability to work. See Tr. 180-81, 209-12, 223. Although it may be that Dr.

Chalstrom’s evaluation was focused on “the present time,” so to, however, were each of the opinions of Dr.

Neims, as are most examining medical source opinions. Further, the fact that plaintiff has been prescribed

antidepressant medication alone does not mean his alleged mental limitations are disabling. Finally, while

the number of times a medical source has evaluated a claimant is one factor to be considered in evaluating

medical opinions, it is only one of many factors bearing on opinion credibility. 

B. Dr. Jackson

Plaintiff was examined by Melvin Jackson, D.O., in early June 2002. Dr. Jackson opined that

plaintiff “could be expected to lift/carry 20 pounds occasionally or 10 pounds frequently with the left hand

and to lift/carry ten pounds occasionally and five pounds frequently with the right hand.” Tr. 206. Plaintiff

argues the ALJ ignored Dr. Jackson’s findings regarding his right hand lifting/carrying limitations, which

preclude him from being able to perform light work as found by the ALJ. In addition, plaintiff asserts the

ALJ erred in limiting him to “repetitive use” of his right hand, when Dr. Jackson found him to be able to

reach, handle, feel, grasp and finger only “occasionally.” Tr. 24, 206. 

With respect to plaintiff’s first argument, the undersigned agrees the ALJ erred in failing to state

why he did not adopt Dr. Jackson’s limitations on his ability to lift/carry with his right hand. It is true that

much of the medical evidence in the record regarding plaintiff’s hand grip and upper extremity strength,

including those of Dr. Jackson, is largely unremarkable. See Tr. 152-53, 160, 165, 186-88, 190-91. The

ALJ, however, did not state this as a reason for not adopting Dr. Jackson’s more restrictive limitations on

plaintiff’s ability to lift/carry with his right hand. Indeed, the ALJ provided no reasons as to why he was not

adopting those limitations. As such, the ALJ erred. 

On the other hand, the undersigned finds the ALJ did not err in limiting plaintiff to “no repetitive

use” of his right hand, as opposed to stating plaintiff could do so only “occasionally.” As pointed out by

plaintiff, Dr. Jackson expanded on his opinion, by going on to state that plaintiff “should avoid frequent or

prolonged activity with the right hand.” Tr. 206. This qualifying statement appears to be fairly consistent

with the ALJ’s “no repetitive use” limitation. The ALJ’s wording also is consistent with the opinion of Dr.

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 8

Peter V. Ciani, another examining physician, who stated plaintiff was “probably not suited for strenuous,

repetitive use of the right arm,” but could “probably function in a light to medium category so long as it did

not involve significant right arm repetitive function.” Tr. 165. 

Finally, while Dr. David L. Deutsch, a non-examining physician, also used the term “occasional” to

describe plaintiff’s manipulative limitations, it appears that this term is used when the terms “constant” or

“frequent” are inapplicable. See Tr. 230. That is, even if it could be said that the medical evidence in the

record shows ALJ erred in not using the term “occasional” to describe plaintiff’s right hand limitations, that

error was harmless, as a limitation to only “occasional” use appears to be substantially the same as a

limitation on “no repetitive use.” See Batson v. Commissioner of the Social Security Administration, 359

F.3d 1190, 1197 (9th Cir. 2004) (applying harmless error standard); Curry v. Sullivan, 925 F.2d 1127, 1131

(9th Cir. 1990) (holding ALJ committed harmless error). 

II. The ALJ Properly Assessed Plaintiff’s Credibility

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

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 9

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 with respect to plaintiff’s credibility:

I find the claimant not wholly credible due to discrepancies in the record and his

testimony. He maintained to the consultative examiners that he had quite drug use years

previously and drank only limited amounts, which is inconsistent with admissions to

treating physicians. He maintained that he did not socialize and did not leave the house

and then testified to membership in social groups and/or clubs. He spoke in general

about an inability to use his hands, but there is no suggestion of any pathology in the left

hand and only relatively little limitation in the right hand given his ongoing ability to play

video games and surf the internet, and engage in manipulative activities as demonstrated

to Dr. Jackson. In addition, he described nearly a full range of ability to grasp, use

pliers, scissors and so forth as detailed above. 

Tr. 25. The undersigned finds the ALJ’s findings here to be supported by substantial evidence. 

Plaintiff first argues the ALJ erred in discounting his credibility due to the discrepancies in the record

and his testimony, in light of the fact that no examining or treating physician found or suggested he was

malingering. The fact that plaintiff has not been found to be malingering, however, does not mean the ALJ

is prohibited from considering inconsistencies between his testimony and the other evidence in the record in

determining his ultimate credibility. See Smolen, 80 F.3d at 1284 (ALJ may consider ordinary techniques of

credibility evaluation, such as reputation for lying, prior inconsistent statements, and other testimony that

appears less than candid). 

Plaintiff asserts his inconsistencies about his alleged substance abuse should not taint his credibility

on other issues. However, plaintiff misses the point. The fact that he has provided inconsistent statements

regarding his use of illegal drugs calls into question his credibility in general. That is, such inconsistencies

constitute testimony that appeared “less than candid,” and therefore the ALJ was not remiss in relying on

that testimony to discount plaintiff’s credibility. The ALJ pointed out further inconsistencies in plaintiff’s

statements, in that while plaintiff had alleged an inability to use his hands, there is little to no evidence in the

record showing he had any problem with his left hand. See Tr. 152-53, 160, 165, 186-88, 190-91, 204, 206,

228, 230. 

In addition, while the record certainly evidences some problems with use of his right hand, plaintiff

himself told Dr. Jackson that he “had no difficulty using his hands for must usual purposes.” Tr. 201. 

Specifically, plaintiff reported that he could “grip and hold onto dishes, tools and other small objects, use a

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 10

pair of pliers or scissors or hammer as needed,” and that he could “put together a jigsaw puzzle or play

bingo.” Id. The only thing plaintiff said he had difficulty with was writing a letter. Id. 

Although, as discussed above, it is not clear that the evidence in the record regarding plaintiff’s

social functioning indicates that he has been active in social groups and/or clubs as the ALJ implied, the

mere fact that one of the reasons for discounting plaintiff’s credibility may be improper, 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. As such, the undersigned overall finds the

ALJ did not err in discounting plaintiff’s credibility for the reasons stated in his decision. 

III. The ALJ’s Evaluation of the Lay Witness Evidence in the Record Was Inadequate

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’s significant other testified as a lay witness at the hearing. With respect to that testimony,

the ALJ found as follows:

[C]laimant’s significant other also testified, essentially confirming the claimant’s

complaints concerning a lack of social interaction and his hand limitations. She also

confirmed their participation in social groups, noting that such participation had ceased a

couple years ago. In general, her testimony seems reasonably credible, however did

little to establish the claimant’s disability in view of the lack of objective medical findings

and claimant’s inconsistent behavior. 

Tr. 25. Plaintiff first asserts that lay witness testimony cannot be rejected simply because the claimant is

found to be not credible, and, as such, the ALJ’s above findings were improper, citing to Dodrill v. Shalala,

12 F.3d 915, 919 (9th Cir. 1993). 

Plaintiff’s reliance on Dodrill, however, is misplaced. In Dodrill, the Ninth Circuit did reverse the

ALJ’s decision to discount the credibility of the lay witness statements in the record based on his finding

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 11

that the claimant also was not credible. Id. This was because the ALJ “may have been under the mistaken

impression that lay witnesses can never make independent observations of the claimant’s pain and other

symptoms.” Id. The Court of Appeals specifically noted though, that such a determination may be proper

with respect to those lay witnesses whose statements do “not fully explain sufficiently when and to what

extent they had the opportunity to observe” the claimant. Id. at 918. 

Nevertheless, it is not clear from the ALJ’s findings that his reason for rejecting the lay witness

testimony based on plaintiff’s inconsistent behavior, was because her testimony did “not fully explain

sufficiently when and to what extent” she “had the opportunity to observe” plaintiff. Id. Plaintiff further

challenges the ALJ’s findings due to “the lack of objective medical findings,” asserting that her testimony

was consistent with the findings of Dr. Chalstrom and Dr. Jackson. As noted above, inconsistencies with

medical evidence in the record is a proper basis for rejecting lay witness testimony. Here again, however,

the ALJ fails to explain what evidence is inconsistent with the witness’ testimony. Although the ALJ need

not provide “specific and legitimate” reasons for disregarding lay witness testimony, the Court must have

some a guidance as to the particular evidence on which the ALJ relies. 

IV. 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.” Social Security Ruling 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

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

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 12

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

[T]he claimant retains the residual functional capacity for a limited range of light work. 

The limitations below light include standing and walking for 30 minutes at a time, up to

4-5 hours total in a workday secondary to his perception of hip problems, no limits on

sitting or range of motion. Given the difficulties with his right hand, I further limited

him to no repetitive use of this hand, with slightly reduced grip (not manipulation per his

testimony). Based on his limited intellectual functioning, I limited him to simple,

repetitive structured work with no complex written instructions or schematics. Finally,

given his pulmonary difficulties, I included a limitation to a clean air environment

without exposure to airborne irritants. 

Tr. 24. 

Plaintiff argues the above residual functional capacity assessment is legally deficient in that the ALJ

failed to assess whether he was capable of working on a regular and continuing basis. In support of this

argument, plaintiff asserts that he suffers from pain, fatigue and mental impairments, and points to the fact

that Dr. Chalstrom noted he worked at a reduced pace. Tr. 197. Plaintiff, however, cites to no evidence in

the record, other than his own allegations, to indicate that his alleged pain and fatigue, as well as his mental

impairments, have resulted in an inability to work on a regular and continuing basis. As explained above,

furthermore, the ALJ properly discounted plaintiff’s testimony. With respect to Dr. Chalstrom’s notation,

that was a comment on his pace in completing the psychological testing, and does not in itself specifically or

necessarily bear on his ability to work full-time. 

Plaintiff’s second argument on this issue, however, has more merit. He asserts the ALJ failed to

consider all of the medical and vocational evidence in the record concerning his impairments. Specifically,

plaintiff argues the ALJ improperly ignored the findings of Dr. Jackson and Dr. Neims. With respect to Dr.

Jackson, as discussed above, the ALJ erred in considering the limitations he placed on plaintiff’s ability to

lift and/or carry with his right hand. In addition, also as discussed above, the ALJ’s reasons for rejecting the

opinions of Dr. Neims were inadequate. Plaintiff also is correct in noting the ALJ did not provide any

reasons for why he did not adopt the “moderate” to “marked” limitations in dealing with the public and

working with or in proximity to others respectively found by Janis Lewis, Ph.D. Tr. 209-10. As such, it is

not clear that the ALJ’s assessment of plaintiff’s residual functional capacity reflects all of his mental and

physical impairments and limitations. 

Plaintiff further argues the ALJ erred in ignoring his inability to compute simple math problems and

spell at the third and fourth grade levels. Although the record indicates plaintiff has had low scores in the

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 13

areas of math and spelling, no medical source in the record specifically has found plaintiff has suffered from

any work-related limitations as a result thereof. Accordingly, the ALJ was not required to include any such

limitations in his assessment of plaintiff’s residual functional capacity. In addition, plaintiff’s reliance on 20

C.F.R. § 404.1520a(e) is misplaced. The degree of mental functional limitation rating technique mandated

by that regulation applies only at step two of the disability evaluation process, and is used solely to

determine the severity of a claimants mental impairments. As such, because plaintiff has not challenged the

ALJ’s step two findings, this argument must fail. 

Lastly, plaintiff argues the ALJ failed to consider the side effects of his medication. Once more,

however, plaintiff has pointed to no evidence in the record, other than his own allegations, to show that any

such side effects have had a significant effect on his ability to perform work-related tasks. Indeed, the

Court’s own review of the record also fails to find any. In particular, the record for the most part fails to

indicate the presence of severe side effects, or that any of plaintiff’s treating or examining medical sources

found any significant work-related limitations as a result of such side effects. See Tr. 171-72, 181-83, 202,

262, 265. Accordingly, plaintiff’s argument on this issue fails as well. 

V. The ALJ Erred in Finding Plaintiff Capable of Performing Other Jobs Existing in Significant

Numbers in the National Economy

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. 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.

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 14

2001). 

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

residual functional capacity with which plaintiff was assessed. Tr. 438-39. In response, the vocational

expert testified that there were other jobs plaintiff could do. Tr. 441-42. Based on the vocational expert’s

testimony, the ALJ found plaintiff capable of performing other work existing in significant numbers in the

national economy. Tr. 26. Plaintiff argues, however, that because the ALJ’s residual functional capacity

assessment was erroneous, the hypothetical question was deficient as well. The undersigned agrees. That

is, because, as discussed above, it is not clear plaintiff’s residual functional capacity assessment included all

of his impairments and limitations, it is not clear the hypothetical question did as well. 

Plaintiff further argues that when the mental functional limitations found by Dr. Neims and the

inability to constantly use his right hand found by Dr. Jackson were posed to the vocational expert by his

counsel, the vocational expert testified that such limitations would preclude all employment. As discussed

above, however, it is not certain that the ALJ was required to adopt the mental functional limitations found

by Dr. Neims. It is true that the vocational expert did testify that if an individual “could not do any constant

movement of the wrist in any position whatsoever,” that individual would not be able to perform any of the

jobs identified. Tr. 443-44. However, the ALJ did not define the term “repetitive use,” nor is it clear from

the record that he would be required to adopt the definition used by plaintiff’s counsel and the vocational

expert at the hearing. As such, plaintiff’s argument that the record supports a finding that he is incapable of

performing any other work cannot be sustained at this time. 

VI. 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

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 15

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). 

As discussed above, plaintiff argues the ALJ erred in evaluating the opinions of Dr. Neims and Dr.

Jackson, and in assessing his credibility and that of the lay witness testimony in the record. Plaintiff thus

further asserts that because the ALJ erred in evaluating and assessing such evidence, that evidence must be

credited as true, and this matter should be reversed and remanded to the Commissioner for an award of

benefits. For the reasons set forth below, however, the undersigned finds remand for further administrative

proceedings is more appropriate here, because issues still remain as to plaintiff’s mental and physical

limitations, his residual functional capacity, and his ability to perform other jobs existing in significant

numbers in the national economy. 

It is true 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). However, where the ALJ is not required to find the claimant disabled on crediting

of evidence, this constitutes an outstanding issue that must be resolved, and thus the Smolen test will not be

found to have been met. Bunnell v. Barnhart, 336 F.3d 1112, 1116 (9th Cir. 2003). As discussed above, it

is not clear that the ALJ was required to adopt the mental functional limitations found by Dr. Neims or the

lifting/carrying limitations found by Dr. Jackson. That issue, instead, must be resolved through further

administrative proceedings on remand. 

It also is true the Ninth Circuit has held that remand for an award of benefits is required where the

ALJ’s reasons for discounting the claimant’s credibility are not legally sufficient, and “it is clear from the

record that the ALJ would be required to determine the claimant disabled if he had credited the claimant’s

testimony.” Connett v. Barnhart, 340 F.3d 871, 875 (9th Cir. 2003). Here though, as discussed above, the

ALJ did not err in discounting plaintiff’s credibility. Lastly, in some situations, improperly discredited lay

testimony may be “credited as true” as well. See Schneider v. Barnhart, 223 F.3d 968, 976 (9th Cir. 2000).

(finding that when lay evidence rejected by ALJ is given effect required by federal regulations, it became

clear claimant’s limitations were sufficient to meet or equal listed impairment). 

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 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

REPORT AND RECOMMENDATION

Page - 16

With respect to the ALJ’s treatment of the lay witness testimony in this case, however, courts do

have “some flexibility” in how they apply the “credit as true” rule. Connett, 340 F.3d at 876. Here, the

overall evidence in the record fails to clearly establish that plaintiff is as disabled as he alleges, particularly in

light of his own credibility issues. Indeed, as discussed above, the ALJ’s evaluation of the lay witness

testimony was deficient not because the reasons the ALJ set forth were improper, but rather because those

reasons were insufficiently explained. As such, the undersigned finds further administrative proceedings are

needed to resolve the outstanding issues in this case. 

CONCLUSION

Based on the foregoing discussion, the Court should find the ALJ improperly concluded plaintiff

was not disabled, and should reverse the ALJ’s decision and remand this matter to the Commissioner for

further administrative proceedings in accordance with the findings contained herein. 

Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure (“Fed. R. Civ. P.”) 72(b),

the parties shall have ten (10) days from service of this Report and Recommendation to file written

objections thereto. See also Fed. R. Civ. P. 6. Failure to file objections will result in a waiver of those

objections for purposes of appeal. Thomas v. Arn, 474 U.S. 140 (1985). Accommodating the time limit

imposed by Fed. R. Civ. P. 72(b), the clerk is directed set this matter for consideration on August 11, 2006,

as noted in the caption. 

DATED this 19th day of July, 2006.

A

Karen L. Strombom

United States Magistrate Judge

Case 3:05-cv-05812-RBL Document 17 Filed 07/19/06 Page 16 of 16