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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

SUSAN PEARCE,

Plaintiff,

v.

MICHAEL J. ASTRUE, Commissioner

of Social Security,

Defendant.

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CASE NO. C06-1091-JCC

REPORT AND RECOMMENDATION

RE: SOCIAL SECURITY

DISABILITY APPEAL

Plaintiff Susan Pearce proceeds through counsel in her appeal of a final decision of the

Commissioner of the Social Security Administration (Commissioner). The Commissioner denied

plaintiff’s application for Disability Insurance (DI) benefits after a hearing before an Administrative

Law Judge (ALJ).

Having considered the ALJ’s decision, the administrative record (AR), and all memoranda

of record, it is recommended that this matter be REMANDED for further administrative

proceedings.

/ / /

/ / /

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1

 Plaintiff’s date of birth is redacted back to the year of birth 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 RE:

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PAGE -2

FACTS AND PROCEDURAL HISTORY

Plaintiff was born on XXXX, 1960.1 She completed high school and vocational training

to obtain a real estate license. Plaintiff previously worked as a cosmetics salesperson, cosmetic

sales representative, merchandiser, and realtor.

With a filing month of May 2003, plaintiff filed an application for DI benefits, alleging

disability since November 2, 2001. (AR 65-67.) Because her insured status for DI expired as of

December 31, 2003, she is required to show disability as of that date last insured (DLI). See 20

C.F.R. §§ 404.131, 404.321. Her application was denied at the initial level and on

reconsideration, and she timely requested a hearing.

On August 3, 2005, ALJ Arthur Joyner held a hearing, taking testimony from plaintiff,

medical expert James Haynes, M.D., and vocational expert (VE) Susan Bachelder Stewart, Ph.D.

(AR 290-348.) On December 29, 2005, ALJ Joyner issued a decision finding plaintiff not

disabled. (AR 16-27.)

Plaintiff timely appealed. The Appeals Council denied plaintiff’s request for review on July

11, 2006, making the ALJ’s decision the final decision of the Commissioner. (AR 5-8.) Plaintiff

appealed this final decision of the Commissioner to this Court.

JURISDICTION

The Court has jurisdiction to review the ALJ’s decision pursuant to 42 U.S.C. § 405(g).

/ / /

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DISCUSSION

The Commissioner follows a five-step sequential evaluation process for determining

whether a claimant is disabled. See 20 C.F.R. §§ 404.1520, 416.920 (2000). At step one, it must

be determined whether the claimant is gainfully employed. The ALJ found plaintiff had not

engaged in substantial gainful activity since her alleged onset date. At step two, it must be

determined whether a claimant suffers from a severe impairment. The ALJ found plaintiff’s

multiple sclerosis (MS) severe. Step three asks whether a claimant’s impairments meet or equal

a listed impairment. The ALJ found that plaintiff’s impairment did not meet or equal the criteria

for any listed impairment. If a claimant’s impairments do not meet or equal a listing, the

Commissioner must assess residual functional capacity (RFC) and determine at step four whether

the claimant has demonstrated an inability to perform past relevant work. The ALJ assessed

plaintiff’s RFC and found her unable to perform her past relevant work. If a claimant

demonstrates an inability to perform past relevant work, the burden shifts to the Commissioner

to demonstrate at step five that the claimant retains the capacity to make an adjustment to work

that exists in significant levels in the national economy. The ALJ found plaintiff capable of

performing other jobs, including work as a sales associate, call out operator, and night guard.

This Court’s review of the ALJ’s decision is limited to whether the decision is in

accordance with the law and the findings supported by substantial evidence in the record as a

whole. See Penny v. Sullivan, 2 F.3d 953, 956 (9th Cir. 1993). Substantial evidence means more

than a scintilla, but less than a preponderance; it means 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). If there is more than one rational interpretation, one of which supports the ALJ’s

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decision, the Court must uphold that decision. Thomas v. Barnhart, 278 F.3d 947, 954 (9th Cir.

2002).

Plaintiff argues that the ALJ erred in finding her capable of working at step five, noting

she could not perform the 8,000 semi-skilled jobs out of the 8,050 total jobs identified by the VE

and asserting that the remaining fifty jobs identified is not a significant number. She also asserts

error in the ALJ’s RFC assessment and the VE’s testimony with respect to a “sit/stand” restriction.

Plaintiff further argues that the ALJ erred in rejecting the opinions of her treating neurologist Dr.

Nancy Lellelid and in finding her and several lay witnesses not credible. Plaintiff requests remand

for an award of benefits or, alternatively, for further administrative proceedings.

Defendant concedes error, but argues that this case should be remanded for further

administrative proceedings. Defendant asserts the need for a more detailed rationale for the ALJ’s

RFC finding, stating that, as all of the medical evidence presented to the ALJ is beyond plaintiff’s

DLI, it is unclear how the ALJ established plaintiff’s RFC. This allegedly deficient RFC also

implicates the ALJ’s step five decision. Defendant concedes the step five error asserted by

plaintiff, agreeing plaintiff could not perform any of the semi-skilled work and that the remaining

fifty jobs is not significant. However, defendant argues that, because it is not clear plaintiff would

be unable to perform all unskilled jobs, an award of benefits would be premature. The

Commissioner does not address any of defendant’s other arguments, stating instead that, on

remand, the ALJ should: fully address and explain the weight assigned to the medical evidence,

especially for the time period on or before December 31, 2003; reassess plaintiff’s maximum RFC,

providing examples from the record in support of the RFC determination; and, if necessary, obtain

supplemental vocational expert evidence.

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In reply, plaintiff rejects as false the Commissioner’s contention that the record contains

no medical evidence prior to December 31, 2003 and provides citation to the relevant portion of

the record. (See AR at 126-34.) She further describes the ALJ’s reference to whether or not she

could perform “all” unskilled jobs as improper, noting that the step five test is whether she can

perform jobs existing in significant numbers.

The Court has discretion to remand for further proceedings or to award benefits. See

Marcia v. Sullivan, 900 F.2d 172, 176 (9th Cir. 1990). 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).

Such a circumstance arises 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.

It is undisputed that the ALJ failed to identify a significant number of jobs plaintiff could

perform at step five. However, either because the parties disagree, or because defendant failed

to address the issue, there remain a number of issues to resolve in determining whether this case

should be remanded for an award of benefits or for further administrative proceedings. Because

the ALJ blended his analysis and findings with respect to those issues in his decision, the relevant

portion of the ALJ’s decision is excerpted here:

The claimant’s statements concerning her impairment and its impact on her ability to

work are not entirely credible. First of all there is little medical evidence in the record

as most of the medical evidence was obtained after the hearing. However, the record

confirms that the claimant was diagnosed with relapsing/remitting multiple sclerosis

in 1999. While the claimant’s diagnosis clearly precedes her date last insured of

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December 31, 2003, there is little evidence of treatment prior to this period and no

record of exacerbations of disabling severity. Objectively, her MRI in August 2004

had not changed since her diagnoses in 1999. She has had very little active treatment

since being diagnosed, being maintained on medications without evidence of difficulty

or progression of symptoms. Although she complains that she is disabled due to pain

and fatigue, the record does not support this. In July 2004 her treating physician

opined that she had worsened but this was not confirmed on the MRIs, nor is any

worsening of signs, symptoms or functioning documented during the period prior to

the claimant’s DLI. Her examination on July 15, 2004 noted some impairment but it

appeared to be mild to moderate at worst. On September 3, 2004 her exam likewise

showed mild impairment. Her treating physician opined on July 25, 2005, that the

claimant was disabled due to fatigue, weakness, and balance, but other than her

complaints there is no objective support for the degree of severity the claimant

asserts. Moreover, this opinion was rendered over eighteen months after the

claimant’s DLI. Thus, I give little weight to the treating source’s opinions as it is not

supported by the objective evidence as a whole. Even in the period after her DLI, she

is mostly noted to ambulate normally, if somewhat slowly. Her reflexes are mildly

impaired and her neurological exams do not show any major deterioration of function.

There are no records of exacerbations – let alone frequent ones, and no record of a

slow progressive deterioration of function.

Additionally, I also note that the claimant’s record of earnings evidences that she has

not worked much since 1996 which is well before she started having symptoms. The

consultative examiners and the medical expert basically agree that there is only mild

impairment. I do not credit the claimant’s assertion of disabling fatigue, weakness and

balance as she has received little treatment in the 5+years since her diagnosis and there

has been only minimal medical attention to her impairments, far less than would be

expected if she were impaired as she says. Her medical records show she takes 6

over-the-counter medications, 1 for nausea, 2 for multiple sclerosis and 1 for pain.

I note that the claimant is not taking any narcotic based pain relieving medication in

spite of the allegations of quite limiting pain.

I have reviewed the claimant’s husband’s statements at exhibits 6E and 10E as well

as the claimant’s friend at exhibit 5E and do not find them persuasive. The husband

noted the claimant tried to work but could not. But as stated previously, the

claimant’s work history reflects little work even prior to her reports of symptoms. He

indicated that her attempts were at jobs that required a lot of exertion such as standing

(Costco and Nordstrom) or walking/driving (real estate). Although I find none of

these jobs may be appropriate, she could do a modified light position. The claimant’s

friend reported significant limitations and needing assistance from others.

I am unable to credit the lay witness’s statements in this matter as probative in terms

of the ultimate issue of disability in light of the medical and other factors of this case.

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See, Smolen v. Chater, 80 F.3d 1273, 1274 (9th Cir. 1996) (concluding that ALJ may

consider observations of treating and examining physicians in making credibility

determination). One reason for which an ALJ may discount lay statements is that it

conflicts with medical evidence. Lewis v. Apfel, 236[] F.3d 503, 514 (9th Cir. 2001).

Material inconsistencies between claimant’s testimony and other evidence in the

record are “germane” to discounting lay testimony. Regennitter v. Comm’r of the

Soc. Sec. Admin., 166 F.3d 1294, 1298 (9th Cir. 1999).

I conclude the lay witness’s statements in this case cannot outweigh my analysis of the

objective clinical and laboratory evidence, and medical opinion of record, and of

claimant’s own credibility. Johnson v. Chater, 87 F.3d 1015, 1018 (8[th] Cir. 1996).

In other words, as the trier of fact in this matter, I find that the subjective elements of

proof offered in this case, even with lay corroboration of activities and behavior,

cannot carry claimant’s burden of proof of disability. See, Taylor v. Heckler, supra;

Vincent on behalf of Vincent v. Heckler, supra. Compare Monguer v. Heckler, 722

F.2d 1033, 1037 (2[d] Cir. 1983) (subjective evidence may be accorded less weight

than objective medical evidence); Strauss v. Apfel, 45 F.Supp. [2d] 1043, 1049 (D.

[Or.] 1999) (conflict of mother’s testimony with medical testimony and evidence

germane reason to find it not credible).

I also note and have considered the claimant’s obesity, she is 5 feet, 7 inches tall and

weighs 250 pounds. However, there is no record of loss of function, nor increase in

symptoms related to her weight in the record. No medical provider has opined that

she was functionally impaired or disabled because of her weight prior to her date last

insured. Nor did the claimant assert her weight as an impairment, either at the time

of hearing, or in the record prior to DLI.

Accordingly, I find that the claimant retains the residual functional capacity to lift and

carry 20 pounds occasionally and 10 pounds frequently; stand and/or walk for four

hours in an 8-hour day and sit for six hours in an 8-hour day with a sit/stand option.

She could not climb ladders but could occasionally climb stairs, balance, stoop, kneel,

crouch and crawl. She should avoid heights, hazards, and walking on uneven ground

as well as avoid temperature extremes. She is able to perform detailed tasked [sic]

but not complex tasks.

This conclusion is supported by the consultative examiners’s opinion, Dr. Bushnell.

Although I find that the claimant did not have a severe mental impairment I have

taken into consideration the effect that her diagnosed multiple sclerosis, the

consultative examiner’s comment on avoiding stress and her medications may have

on her cognition, as well as her alleged symptoms and conclude that she should avoid

performing complex tasks which is part of the residual functional capacity as outlined

above.

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(AR 21-23 (internal citations to record omitted.))

Physicians’ Opinions

In general, more weight should be given to the opinion of a treating physician than to a

non-treating physician, and more weight to the opinion of an examining physician than to a nonexamining physician. Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1996). Where not contradicted

by another physician, a treating or examining physician’s opinion may be rejected only for “‘clear

and convincing’” reasons. Id. (quoting Baxter v. Sullivan, 923 F.2d 1391, 1396 (9th Cir. 1991)).

Where contradicted, a treating or examining physician’s opinion may not be rejected without

“‘specific and legitimate reasons’ supported by substantial evidence in the record for so doing.”

Id. at 830-31 (quoting Murray v. Heckler, 722 F.2d 499, 502 (9th Cir. 1983)). Where the opinion

of the treating physician is contradicted, and the non-treating physician’s opinion is based on

independent clinical findings that differ from those of the treating physician, the opinion of the

non-treating physician may itself constitute substantial evidence. See Andrews v. Shalala, 53 F.3d

1035, 1041 (9th Cir. 1995). It is the sole province of the ALJ to resolve this conflict. Id.

“Where the Commissioner fails to provide adequate reasons for rejecting the opinion of

a treating or examining physician, [the Court credits] that opinion as ‘a matter of law.’” Lester,

81 F.3d at 830-34 (finding that, if doctors’ opinions and plaintiff’s testimony were credited as true,

plaintiff’s condition met a listing) (quoting Hammock v. Bowen, 879 F.2d 498, 502 (9th Cir.

1989)). Crediting an opinion as a matter of law is appropriate when, taking that opinion as true,

the evidence supports a finding of disability. See, e.g., Schneider v. Commissioner of Social Sec.

Admin., 223 F.3d 968, 976 (9th Cir. 2000) (“When the lay evidence that the ALJ rejected is given

the effect required by the federal regulations, it becomes clear that the severity of [plaintiff’s]

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functional limitations is sufficient to meet or equal [a listing.]”); Smolen v. Chater, 80 F.3d 1273,

1292 (9th Cir. 1996) (ALJ’s reasoning for rejecting subjective symptom testimony, physicians’

opinions, and lay testimony legally insufficient; finding record fully developed and disability finding

clearly required).

However, courts retain flexibility in applying this “‘crediting as true’ theory.” Connett v.

Barnhart, 340 F.3d 871, 876 (9th Cir. 2003) (remanding for further determinations where there

were insufficient findings as to whether plaintiff’s testimony should be credited as true). As stated

by one district court: “In some cases, automatic reversal would bestow a benefits windfall upon

an undeserving, able claimant.” Barbato v. Commissioner of Soc. Sec. Admin. , 923 F. Supp.

1273, 1278 (C.D. Cal. 1996) (remanding for further proceedings where the ALJ made a good faith

error, in that some of his stated reasons for rejecting a physician’s opinion were legally

insufficient).

Plaintiff avers that the ALJ failed to give clear and convincing reasons for rejecting the

opinions of treating physician Dr. Lellelid and that Dr. Lellelid’s opinions should be credited as

true. She notes that Dr. Lellelid first examined her in 1999 (AR 126), reviewed her condition in

2000 (AR 126), and thereafter saw her on a number of occasions in 2004 and 2005 (AR 167-70,

221, 233-40). In 2005 and 2006, Dr. Lellelid opined that plaintiff could not work on a full time

basis. (AR 221, 226-30, 277-81.) In declarations provided in those years, Dr. Lellelid attested

to, inter alia, plaintiff’s fatigue, difficulty concentrating, and the affect of her obesity in

combination with her MS. (AR 226-30, 277-81.) Dr. Lellelid also opined retrospectively that

plaintiff, “on a more probable than not basis,” would not have been able to perform full time work

since November 2001. (AR 280-81.)

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As reflected above, the ALJ gave little weight to Dr. Lellelid’s opinions upon finding them

not supported by the objective evidence as a whole. (AR 22.) He found “no objective support

for the degree of severity” asserted by plaintiff and noted that Dr. Lellelid rendered her 2005

opinion as to plaintiff’s disability over eighteen months after the claimant’s December 31, 2003

DLI.

Plaintiff argues that the ALJ’s rejection of Dr. Lellelid’s opinions ipso facto on the ground

that they postdated her DLI is contrary to law. As stated by the Ninth Circuit: “We think it is

clear that reports containing observations made after the period for disability are relevant to assess

the claimant’s disability. It is obvious that medical reports are inevitably rendered retrospectively

and should not be disregarded solely on that basis.” Smith v. Bowen, 849 F.2d 1222, 1225 (9th

Cir. 1988) (internal citations omitted). See also Social Security Ruling (SSR) 83-20 (“In some

cases, it may be possible, based on the medical evidence to reasonably infer that the onset of a

disabling impairment(s) occurred some time prior to the date of the first recorded medical

examination, e.g., the date the claimant stopped working.”) Plaintiff also describes this reasoning

as factually flawed, noting that, because the ALJ opined that her condition did not significantly

deteriorate from December 31, 2003 to August 2005 (see AR 21-22), he cannot reasonably

maintain that the later opinions did not accurately reflect her condition as of her DLI.

Plaintiff further argues that the ALJ unreasonably rejected Dr. Lellelid’s opinions as

unsupported by objective evidence. Plaintiff points to Dr. Lellelid’s declarations, wherein she

stated “there is no objective way of testing fatigue levels[,] . . . [that] the majority of MS patients

have fatigue out of proportion to their findings, but that fatigue is real and it limits their daily

activities[,]” and that “the idea that any physician is able to predict precisely how much fatigue an

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individual with MS should have, based on certain objective manifestations of MS, is contrary to

[her] experience treating MS patients and is unsupported in the medical literature.” (AR 227,

279.)

Plaintiff also asserts that the ALJ failed to afford sufficient weight both to Dr. Lellelid’s

expertise and the fact that she accounted for both the combined and interactive effect of plaintiff’s

impairments. See Smolen, 80 F.3d at 1285 (the opinions of specialists related to their areas of

specialization are given more weight than the opinions of non-specialists) and Lester, 81 F.3d at

833 (treating physician’s opinion as to the combined impact of a claimant’s limitations is entitled

to special weight). She contends the ALJ erred in favoring the testimony of non-examining

medical expert Dr. Haynes. Plaintiff points to Dr. Haynes’ testimony that he was not “in a position

to disagree with” Dr. Lellelid’s opinion that plaintiff could not work full time, stating that his point

was instead that it was “a subjective problem.” (AR 197.) She also notes Dr. Haynes’ failure to

testify specifically as to her precise functional limitations. (AR 295-98.)

The Court concludes that, although the ALJ should further examine Dr. Lellelid’s opinions

on remand, this physician’s opinions should not be credited as true. The ALJ did not reject Dr.

Lellelid’s opinions based solely on their retrospective nature. Further, the ALJ reasonably pointed

to this fact as one of the reasons for according Dr. Lellelid’s opinions little weight. There is very

little in the record prior to plaintiff’s DLI. As pointed to by plaintiff, there is a brief May 1, 2000

letter from Dr. Lellelid in which she states she saw plaintiff in 1999 “for possible MS[,]” noting

plaintiff “had off-and-on symptoms of neurological dysfunction for the last year or two.” (AR

126.) Dr. Lellelid goes on to state that, in 1999, plaintiff’s diagnosis was not clear, but that

another physician subsequently clarified that plaintiff “likely did have MS[.]” (Id.) The record also

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includes Dr. Lellelid’s typed consultation notes from her February 1999 examination of plaintiff,

in which she recorded the following:

. . . Actually today she says she “feels great” and has felt this way for approximately

one month. However, in 1998 she had several episodes of symptoms that would

come and go. In February she had right leg numbness, she had problems walking

because her leg just did not seem to work like it should, this went away. In March

1998 she developed photophobia and some blurred vision. She went to see an eye

doctor . . . but [by then] it was gone and her symptoms were better. In the fall of

1998 she developed significant fatigue to the point where she had to quit her job in

real estate and she has not gone back because of fatigue. She has also had blurred

vision, numbness up to her waist and difficulty walking yet again. She has had some

concentration problems from time to time and balance difficulties. When she looks

back she thinks that she had balance difficulties now for probably several years off and

on, and coordination problems in her hands.

(AR 282.) Dr. Lellelid suspected MS, but needed to review an MRI scan from the previous month

that “was read as neither diagnostic of either vascular disease or MS.” (Id.) The only other

substantive documents in the record prior to plaintiff’s DLI include some 2001 notes regarding

an incident of rectal bleeding. (AR 129-30.)

While it is true that the ALJ noted no significant deterioration between plaintiff’s DLI and

Dr. Lellelid’s opinion of disability, it remains questionable whether there is evidence to support

an opinion of disability prior to plaintiff’s DLI. In her August 2005 declaration, Dr. Lellelid

rendered an opinion in the present tense. (AR 226-30.) It was not until her May 2006 declaration,

well after the ALJ’s December 2005 decision, that Dr. Lellelid rendered her retrospective opinion.

(AR 280-81.) While her explanation for that opinion appears well reasoned (see AR 280-81), the

ALJ should consider it on remand.

Nor does plaintiff support her contention that the ALJ erred in finding significant the lack

of objective evidence to support the alleged degree of severity of plaintiff’s condition. Plaintiff

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hinges this argument on the issue of fatigue. However, Dr. Haynes agreed there was no way to

objectively measure fatigue. (AR 296.) When asked what he would expect to see objectively to

substantiate this subjective claim, he testified: “It would take a more severe case of Multiple

Sclerosis. If it was a progressive case, she might - - and been present for 40 years, you might

gradually lose the strength in your legs, you might become clumsy with your arms, lose your

balance, end up in a wheelchair. That’s a pretty common scenario. It doesn’t seem to be the case

here.” (AR 297.) He further described another doctor’s observance of a problem with plaintiff’s

gait as only a “slight degree of progression.” (AR 298.) As a general matter, a treating

physician’s opinions are entitled to more weight than the opinions of a non-examining physician.

However, the Court concludes that the ALJ legitimately cited this issue in critiquing the opinions

of Dr. Lellelid. Moreover, while the ALJ did not specifically cite any other reasons for his

rejection of the opinions of Dr. Lellelid, he did point to other reasons for rejecting plaintiff’s

“assertion of disabling fatigue, weakness and balance[,]” including the little treatment she had

received since her diagnosis and the fact that she requires only over-the-counter medication for

her physician condition. (AR 22.)

In sum, the ALJ should further address the opinions of Dr. Lellelid on remand, particularly

as to the issue of disability prior to plaintiff’s DLI. If necessary, he should contact Dr. Lellelid for

further information or additional medical records.

Credibility and Lay Witness Testimony

Plaintiff asserts that substantial evidence does not support the ALJ’s decision to find her

statements and those of her lay witnesses not credible. She criticizes the ALJ’s heavy reliance on

his assessment of objective neurological findings in rendering his credibility decision and argues

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that his credibility finding should not be ratified.

Absent evidence of malingering, an ALJ must provide clear and convincing reasons to

reject a claimant’s testimony. See Vertigan v. Halter, 260 F.3d 1044, 1049 (9th Cir. 2001). See

also Thomas, 278 F.3d at 958-59. In finding a social security claimant’s testimony unreliable, an

ALJ must render a credibility determination with sufficiently specific findings, supported by

substantial evidence. “General findings are insufficient; rather, the ALJ must identify what

testimony is not credible and what evidence undermines the claimant’s complaints.” Lester, 81

F.3d at 834. “We require the ALJ to build an accurate and logical bridge from the evidence to her

conclusions so that we may afford the claimant meaningful review of the SSA’s ultimate findings.”

Blakes v. Barnhart, 331 F.3d 565, 569 (7th Cir. 2003). “In weighing a claimant’s credibility, the

ALJ may consider his reputation for truthfulness, inconsistencies either in his testimony or between

his testimony and his conduct, his daily activities, his work record, and testimony from physicians

and third parties concerning the nature, severity, and effect of the symptoms of which he

complains.” Light v. Social Sec. Admin., 119 F.3d 789, 792 (9th Cir. 1997).

Lay witness testimony as to a claimant’s symptoms or how an impairment affects ability

to work is competent evidence. Van Nguyen v. Chater, 100 F.3d 1462, 1467 (9th Cir. 1996). The

ALJ can reject the testimony of lay witnesses only upon giving reasons germane to each witness.

See Smolen, 80 F.3d at 1288-89 (finding rejection of testimony of family members because, inter

alia, they were “‘understandably advocates, and biased’” amounted to “wholesale dismissal of the

testimony of all the witnesses as a group and therefore [did] not qualify as a reason germane to

each individual who testified.”) (citing Dodrill v. Shalala, 12 F.3d 915, 918 (9th Cir. 1993)).

Accord Lewis v. Apfel, 236 F.3d 503, 511 (9th Cir. 2001) (“[L]ay testimony as to a claimant’s

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symptoms is competent evidence that an ALJ must take into account, unless he or she expressly

determines to disregard such testimony and gives reasons germane to each witness for doing so.”)

Moreover, as recently found by the Ninth Circuit: “[W]here the ALJ’s error lies in a failure to

properly discuss competent lay testimony favorable to the claimant, a reviewing court cannot

consider the error harmless unless it can confidently conclude that no reasonable ALJ, when fully

crediting the testimony, could have reached a different disability determination.” Stout v.

Commissioner, Soc. Sec. Admin., 454 F.3d 1050, 1056 (9th Cir. 2006).

In this case, plaintiff fails to demonstrate error in the ALJ’s credibility decision. First, as

required, the ALJ provided germane reasons for rejecting the testimony of plaintiff’s lay witnesses.

(AR 22-23.) Second, in finding plaintiff not entirely credible, the ALJ relied not only on a lack of

objective evidence to support plaintiff’s assertion as to the severity of her condition, but also on

the little treatment she had received, the lack of evidence as to progressive deterioration in her

functioning, the fact that the record of her earnings shows she has not worked much since 1996,

well before she started experiencing symptoms, and the fact that she requires only over-thecounter medication for her physical condition. (AR 21-22.) As such, the ALJ need only address

the credibility issue on remand if necessitated by a reexamination of other issues.

RFC

The Commissioner asserts the need for a more detailed rationale for the ALJ’s RFC

finding. The Commissioner states that, as all of the medical evidence presented to the ALJ is

beyond plaintiff’s DLI, it is unclear how the ALJ established plaintiff’s RFC. 

As discussed above, and as asserted by plaintiff, the record does contain some medical

evidence prior to plaintiff’s DLI. (See AR 126-34, 282.) Nor does it seem particularly unclear

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Court need not address plaintiff’s additional argument as to the fact that one of those jobs was not

compatible with an at-will sit/stand option.

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as to how the ALJ determined plaintiff’s RFC. However, because the Court concludes that the

ALJ should further delve into the issue of whether evidence exists to support disability prior to

plaintiff’s DLI, the ALJ’s RFC decision may be implicated and require further consideration on

remand.

Plaintiff also raises an RFC issue. She asserts that, in including merely a “sit/stand option”

in the RFC assessment, the ALJ failed to render a sufficiently specific assessment of her need to

alternate sitting and standing. See SSR 96-9p (“The RFC assessment must be specific as to the

frequency of the individual's need to alternate sitting and standing.”)

It appears that the ALJ intended the sit/stand option to indicate a need to change positions

“at will.” In giving a hypothetical to the VE, the ALJ said as such: “would need a sit/stand option,

meaning she could sit or stand at will in place at the workstation.” (AR 334.) Therefore, on

remand, the ALJ should clarify his meaning as to a sit/stand option both within his RFC assessment

and any hypotheticals to a VE.2

Step Five

As indicated above, the parties agree the ALJ erred at step five. He erred in identifying

semi-skilled jobs, where he had determined plaintiff had no transferable skills. See 20 C.F.R. §

404.1568(d); SSR 82-41. Further, the fifty local, unskilled call-out operator positions identified

is not a significant number. Cf. Thomas, 278 F.3d at 960 (1,300 jobs in Oregon and 622,000

national jobs deemed significant).

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Defendant maintains further administrative proceedings are necessary given that it is not

clear plaintiff would be unable to perform all unskilled jobs, while plaintiff clarifies that the

question at step five is only whether she can perform jobs existing in significant numbers. This

matter should be remanded for further administrative proceedings in order to determine whether

there are unskilled jobs existing in significant numbers plaintiff could perform. It is not at all clear

from the record that the VE could not identify any such jobs. (AR 334-43.) Instead, for reasons

that remain unclear, the ALJ relied primarily on semi-skilled jobs identified by the VE. On

remand, the ALJ should obtain supplemental vocational expert evidence as to unskilled jobs. This

evidence may also be required to the extent the ALJ’s RFC assessment is implicated by further

review of the opinions of Dr. Lellelid.

CONCLUSION

For the reasons set forth above, this matter should be REMANDED for further

administrative proceedings.

DATED this 12th day of March, 2007.

A

Mary Alice Theiler

United States Magistrate Judge 

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