1

 Plaintiff had a second appeal pending before this Court, which arose from the

fact that she inadvertently took two judicial appeals from the same administrative

decision. See Baker v. Barnhart, 1:04cv377 (W.D. Pa.). By order dated October 14,

2005, this Court granted Plaintiff’s motion to consolidate the two appeals at the abovereferenced docket number. However, on October 24, 2005 this Court granted Plaintiff’s

oral motion to de-consolidate the cases and dismiss the appeal pending at 1:04cv377.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

DEBRA K. BAKER, )

)

Plaintiff, ) 1:05cv96

v. )

)

JO ANNE B. BARNHART, )

Commissioner of Social Security, )

)

Defendant. )

MEMORANDUM OPINION

McLaughlin, Sean J., District J.,

In this case, Plaintiff Debra K. Baker seeks judicial review, pursuant to 42 U.S.C.

§§ 405(g) and 1383(c)(3), of the final decision of the Commissioner of Social Security

denying her claim for supplemental security income benefits (“SSI”) under Title XVI of

the Social Security Act, 42 U.S.C. §§ 1381 et seq.1 Plaintiff filed the instant SSI

application on December 16, 2002. After her claim was initially denied, Plaintiff sought

and received a hearing before an Administrative Law Judge. In a decision dated July 6,

2004, the ALJ denied Plaintiff’s application for benefits. This decision became the final

decision of the Commissioner for appeal purposes after the Appeals Council declined to

review the matter further. 

Now pending before this Court are cross-motions for summary judgment filed by

Plaintiff and the Commissioner. For the reasons that follow, both motions will be denied

and the matter will be remanded for further administrative proceedings.

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2

I. BACKGROUND

Plaintiff was forty-six years old at the time of the ALJ’s adverse decision in this

case, making her a “younger person” under the Commissioner’s regulations. See 20

C.F.R. § 416.963. She has a tenth grade education and no relevant prior work

experience. (R. 95, 100.) Her last employment was in high school, when she briefly

worked in a pizza shop. (R. 156-57.) She quit this job because she did not like being

around people. (R. 148.) She and her husband of over 25 years live alone and have

no children.

While Plaintiff originally alleged that she became disabled as of January 1, 1975,

she later amended her alleged disability onset date to March 14, 2003. Her medical

records reflect a history of anxiety and depression, osteoarthritis, bursitis, and

Meniere’s Disease.

In March 2003 Plaintiff was consultatively examined by Kreig Spahn, D.O., at

which time she presented as depressed. She related a history of depression since

school age when she was hospitalized for about 6 and 1⁄2 months due to malnutrition

and thereafter placed in a series of foster homes. Plaintiff informed Dr. Spahn that she

could not sleep or get out of bed, she cries a lot, she does not do anything for pleasure,

and she does not like to go out or be around people, preferring instead to be by herself. 

She and her husband share in the housework. They have no children because “she did

not want to have the same thing happened [sic] to her children as what happened to

her when she was growing up.” (R. 147-48.) Though she reported a history of prior

psychiatric treatment, she had recently decided to seek medication through her primary

care physician. (R. 146-48.) 

In terms of physical problems, Plaintiff complained to Dr. Spahn of arthritis pain

in most every area discussed but particularly in her lumbar region. Dr. Spahn noted

that an MRI of Plaintiff’s lumbar region conducted in August of 2002 showed very mild

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3

inferior degenerative changes. (R. 147, 138.) On physical examination, Plaintiff

exhibited no radicular symptoms or sensory, motor or reflex changes and her active

range of motion was thought to be inconsistent with grip strength. Her gait was

somewhat antalgic on the left, and she could heel walk but not toe walk. (R. 149-50.) 

Dr. Spahn’s assessment was: “1. Multiple aches and pains and subjective weakness

with inconsistent findings on exam. 2. Depression.” (R. 150.) He suspected that many

of her problems were related more to depression than to any definite physical findings,

but he felt that more testing would be needed to confirm this suspicion. Based on his

examination, Dr. Spahn opined that Plaintiff has the physical capacity of meeting

exertional demands at the sedentary-light level.

Plaintiff was consultatively examined by Michael Mercatoris, Ph.D., on March 14,

2003. Dr. Mercatoris noted Plaintiff’s history of psychiatric treatment between the ages

of 7 and 17, her hospitalization for malnutrition as a child, and her placement in foster

homes until the age of 15. He felt that Plaintiff’s subjective history was reasonably

reliable. 

Upon mental status exam, Plaintiff exhibited no unusual behavior or

psychomotor activity and no unusual characteristics of speech. When asked about her

mood, she responded that she had not wanted to get out of bed that morning. She

reported depressive symptomatology, indicating, “A lot of times I cry for nothing. My

husband will be talking to me and the next thing I know I’ll be crying.” (R. 157.) She

reported difficulty sleeping but maintained a decent appetite. She denied suicidal

thoughts but reported symptoms of panic attacks, stating: “It’s like I can’t breathe. Like

I’m suffocating. Then I start shaking all over. Then I start crying. I’m scared to go out

on the roads. ... I feel most safe at home.” (Id.) Dr. Mercatoris’ exam revealed no

perceptual disturbances. Plaintiff’s stream of thought was fluent and goal-directed. Her

thought content was essentially normal, but she expressed fear of being taken away

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4

from her husband, just as she had been taken away to foster homes as a child. (R.

158.) Her abstract thinking was only fair and Dr. Mercatoris thought she appeared to be

of “low average to borderline” intellectual ability. Her concentration, orientation, and

memory appeared to be intact. However, Dr. Mercatoris felt she had only fair social

judgment and he noted that “her depression and panic disorder have a tendency to

restrict her lifestyle.” (R. 159.) Dr. Mercatoris noted that Plaintiff denied most of the

criteria for major depression, recurrent, but she showed characteristics of panic disorder

with agoraphobia. He wrote that she “may be of limited intellectual ability,” and he

assigned her a guarded prognosis. (R. 160.) 

Dr. Mercatoris also completed an assessment of Plaintiff’s psychiatric abilities

relative to: (1) carrying out activities of daily living, (2) functioning socially, (3)

maintaining concentration and task persistence, and (4) adapting to stressful

circumstances. With respect to activities of daily living, Dr. Mercatoris reported that

Plaintiff can clean around the trailer and can cook. Her husband goes with her for

shopping and pays the bills. She bathes daily and shows fair care for her dress,

grooming and hygiene. Although she does not drive, Dr. Mercatoris felt she would

probably be able to get around on a bus. In terms of social functioning, it was reported

that Plaintiff gets along very well with her husband and has the ability to communicate

clearly. She finds it hard to initiate social contacts and has no history of group activity

participation. Her social maturity was thought to be “all right.” Dr. Mercatoris felt she

should be able to get along with authority figures, co-workers, peers, and the public. In

terms of concentration and task persistence, Dr. Mercatoris noted that, when asked

“whether she would be able to do [a] job such as a bagger in a grocery store and if she

would be able to carry out instructions, work with[in] a schedule, complete [a] task from

begging to end and sustain a routine,” Plaintiff indicated, “No. Because of my hands. I

can’t lift anything heavy. My arm and hands feel numb. I have a hard time standing

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5

cause my feet hurt constantly.” (R. 160.) With respect to Plaintiff’s ability to adapt to

stressful circumstances, Dr. Mercatoris noted that Plaintiff does not like changes in her

daily routine. She is slow to react with deadlines and schedules. She would respond to

an argument with her husband by walking away and crying. Dr. Mercatoris felt she

could make independent decisions, but he doubted that she would be able to maintain

regular attendance in an employment context. (R. 161.) 

Finally, Dr. Mercatoris completed a standard form in which he assessed

Plaintiff’s ability to do mental work-related activities. He indicated that she had a “good”

ability to relate to co-workers, deal with the public, use judgment, interact with

supervisors, and understand, remember and carry out simple job instructions. (R. 162-

63.) He rated Plaintiff “fair” in her abilities to follow work rules, deal with work stresses,

function independently, maintain attention and concentration, maintain personal

appearance, behave in an emotionally stable manner, relate predicably in social

situations, demonstrate reliability, and understand, remember and carry out detailed

(but not complex) job instructions. (Id.)

The record also includes an evaluation by a state agency expert, Sharon Becker

Tarter, Ph.D., dated April 10, 2003. Dr. Becker Tarter opined that Plaintiff’s mental

impairments did not meet or equal any of those listed by the Commissioner as

presumptively disabling. However, Dr. Becker Tarter felt that Plaintiff was impaired by

major depressive disorder, limited intellectual functioning, and characteristics of panic

disorder. (R. 167-69.) Dr. Becker Tarter opined that Plaintiff has “moderate” difficulties

in her abilities to maintain social functioning and concentration, persistence and pace. 

She felt Plaintiff had only mild restrictions in her activities of daily living. (R. 174.) In

her assessment of Plaintiff’s mental residual functional capacity, Dr. Becker Tarter

indicated that Plaintiff was moderately limited in her ability to carry out detailed

instructions, maintain attention and concentration for extended periods, complete a

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6

normal workday and workweek without interruptions from psychologically based

symptoms, perform at a consistent pace without an unreasonable number and length of

rest periods, get along with coworkers or peers without distracting them or exhibiting

behavioral extremes, respond appropriately to changes in the work setting, set realistic

goals, and make plans independently of others. In all other categories of functioning,

Dr. Becker Tarter felt Plaintiff was not significantly limited. In arriving at these

conclusions, Dr. Becker Tarter wrote:

The opinion stated within the DD-164 dated 3/14/03 provided by

Dr. Michael Mercatoris, an examining source, has been considered. 

The psychologist’s opinions are consistent with the residual

functional capacity determined in this decision. The examining

source statements in the DD-164 concerning the claimant’s abilities

in the areas of making occupational adjustments, making

performance adjustments, making personal and social adjustments

and other work related activities are well supported by the medical

evidence and non-medical evidence in file. Accordingly, the DD164 submitted by Dr. Michael Mercatoris, dated 3/14/03, is given

great weight and adopted in this assessment.” 

(R. 180.)

Plaintiff’s primary care physician, Savita Joneja, M.D., provided an assessment

of Plaintiff’s ability to do work-related activities in July of 2003. From a physical

standpoint, Dr. Joneja felt Plaintiff’s impairments did not affect her abilities to stand,

walk or sit, provided that she gets rest breaks and provided also that some postural and

environmental restrictions would apply. (R. 197-99.) Among other things, Dr. Joneja

noted that Plaintiff’s hearing was diminished in her right ear, her handling would be

compromised by numbness in her finger tips, and back pain somewhat restricted her

abilities to push and pull. (Id.) From the standpoint of Plaintiff’s mental capabilities, Dr.

Joneja felt that Plaintiff had good ability to follow work rules and demonstrate reliability.

She felt Plaintiff had only fair ability to use judgment, function independently, maintain

attention and concentration, understand, remember and carry out simple job

instructions, and maintain personal appearance. She felt Plaintiff had poor or no ability

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7

to interact with supervisors, coworkers or the public, deal with work stresses,

understand, remember, and carry out detailed or complex job instructions, behave in an

emotionally stable manner, or relate predictably in social situations. (R. 195-96.) Dr.

Joneja reported that Plaintiff’s depression hampers her abilities and she cannot tolerate

stress. According to Dr. Joneja, Plaintiff gets very anxious with any little stress and

starts crying. (R. 196.) In a November 2002 employability re-assessment form for the

Pennsylvania department of public welfare, Dr. Joneja opined that Plaintiff is

permanently disabled. (R. 214.)

Although not directly relevant to the period of disability alleged in this appeal, Dr.

Joneja’s progress notes indicate from a longitudinal perspective that Plaintiff has sought

treatment for depression and anxiety, in addition to other conditions, since early 2001. 

(R. 329-330.) In February 2001 it was noted that Paxil was not providing Plaintiff much

relief from her depression, so Dr. Joneja planned to take her off Paxil and start her on

Prozac. (R. 329.) Dr. Joneja added Welbutrin to Plaintiff’s regimen in April 2001 and

noted the following month that Plaintiff was still depressed but handling it better on

Welbutrin and Prozac. In August 2001, Dr. Joneja noted that Plaintiff was still

depressed and cries easily. She opined that Plaintiff cannot work because she cannot

handle her life or any problems. (R. 330.) Plaintiff was seen again in March of 2002,

complaining that she was feeling more depressed and nervous. She cried very easily

during the examination and reported that she had left a disability hearing due to

nausea. (R. 220.) Progress notes from February 2003 indicate that Plaintiff was still

feeling depressed and was scheduled to see a psychiatrist in Meadville. (R. 216.) 

Notes from June of 2003 indicate that Plaintiff was taking Welbutrin and Zoloft for her

nerves “which are flared up.” (Id.)

Plaintiff also has a history of Meniere’s disease and resulting hearing loss, for

which she has been treated by Marc Mazlov, M.D. Dr. Mazlov prescribed Dyazide for

Case 1:05-cv-00096-SJM Document 13 Filed 10/28/05 Page 7 of 20
8

Plaintiff’s complaints of dizziness, and this reportedly resulted in a 30 percent

improvement by October 2003. On October 16, 2003, Dr. Mazlov noted that Plaintiff’s

Meniere’s disease was now controlled, but he expressed concern about the possibility

of a different form of dizziness such as benign positional vertigo. Plaintiff underwent an

ENG on October 29, 2003 with abnormal results possibly indicating a slight positional

vertigo. (R. 352.) As of August 14, 2003, Plaintiff was complaining of a slight increase

in spinning, tinnitus and nausea. She reported experiencing some vertigo symptoms on

a daily basis, sometimes for short durations and sometimes up to 2 or 3 hours. A

comparison of Plaintiff’s audiogram taken that day with one taken three years prior

showed a reduction of hearing sensitivity for pure tones for both left and right ears. 

Nevertheless, Plaintiff declined to purchase a hearing aid because it would likely not be

covered by insurance and Plaintiff was “not interested in initiating that financial

commitment.” (R. 353.) As of May 2004, Dr. Mazlov reported that Plaintiff was doing

“extremely well” overall. (R. 345.) She was having fewer headaches and dizzy spells

since starting Elavil, her hearing was subjectively stable, and her Meniere’s Disease

and vertigo were both controlled. (Id.)

At the administrative hearing, Plaintiff testified about her symptoms, her

medications, and her physical and mental limitations. She described dropping out of

school after tenth grade because she “just couldn’t handle it,” she “just sat and cried”

and people were “getting to” her. (R. 375.) She presently takes Zoloft, Welbutrin,

Phenobarb and Amitriptyline for her mental impairments and to help her sleep. (R.

378.) She takes Celebrex for her arthritis and bursitis and complains that her hands

and arms go numb and sometimes her legs get weak. (R. 379.) Plaintiff feels that her

condition is getting worse: she cries very easily and does not feel safe when around

other people. (R. 380.) She spends her time at home walking the floors, sitting down

and then getting back up. She will start something but never finishes what she starts. 

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(R. 381.) Socially, she will go to her friend’s house but then wants to come home

because she does not feel comfortable or safe there. She does not read. She watches

a little television but gets distracted easily. (Id.) She claims that she cannot manage

even a sedentary job because she cannot handle being around a lot of people. When

others try to tell her what to do, she gets upset and then will sit and cry. (R. 385.) 

Plaintiff testified that, when her nerves bother her, she experiences chest pains, shakes

all over, gets lightheaded and feels like she will vomit. (R. 386.) She states that she

never has a day where she is free of her mental symptoms. (R. 387.) She has difficulty

going places by herself and requires her husband’s company because she has fears

stemming from childhood of being taken away. (R. 387-88.)

Following the close of evidence and the ALJ’s adverse ruling, Plaintiff submitted

a report by William J. Fernan, Ph.D., a licensed psychologist who examined her on

December 7, 2004. Throughout this examination, Plaintiff was reportedly extremely

anxious, trembling, and constantly tearful. (R. 361.) Dr. Fernan administered a number

of tests, including the Weschler Adult Intelligence Scale (WAIS)-III, the Wide Range

Achievement Test-Revised, the Peabody Individual Achievement Test, and the

Minnesota Multiphasic Personality Inventory-2. As to the WAIS-III, Plaintiff earned a

verbal IQ score of 67, a performance IQ score of 76, and a full scale IQ score of 69. 

Dr. Fernan concluded that Plaintiff functions consistently in the mild range of mental

retardation with no abilities in the average intelligence range. His diagnosis was: AXIS

I: Major Depressive Disorder, recurrent, severe, without psychotic features, Panic

Disorder with agoraphobia, Generalized Anxiety Disorder; AXIS II: Mild Mental

Retardation; AXIS III: Meniere’s disease with hearing difficulties, tinnitus, vertigo and

poor balance; allergies, high cholesterol, seizure disorder and arthritis with chronic,

severe pain; AXIS IV: Problems with primary support group, problems with the social

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environment and occupational problems; AXIS V: GAF = 45 (current). (R. 364.) Dr.

Fernan’s prognosis was:

Extremely poor, give the severity, long term nature, and limited response

to treatment of her personal adjustment difficulties, combined with her

many significant physical problems and her very limited level of cognitive

functioning. Appropriate treatment would be seen as continued

pharmacotherapy, but she would be seen as gaining minimal benefit with

this treatment approach. She would be seen as most likely receiving no

benefit from individual psychotherapy given her severely limited verbal

skills, but she could possibly realize some mild improvement by

participating in a partial hospitalization program.

(R. 365.) Dr. Fernan also completed a medical assessment of Plaintiff’s mental ability

to do work-related activities, similar to the ones completed by Dr. Mercatoris and Dr.

Joneja. In this form, Dr. Fernan rated Plaintiff as having “good” ability to follow work

rules and maintain personal appearance and “fair” ability to function independently. In

all other twelve categories, he rated Plaintiff’s abilities as “poor or none.” (R. 367.)

II. STANDARD OF REVIEW

This Court must affirm the determination of the Commissioner unless it is not

supported by substantial evidence. See 42 U.S.C. § 405(g). Substantial evidence does

not mean a large or considerable amount of evidence, but only “such relevant evidence

as a reasonable mind might accept as adequate to support a conclusion.” Pierce v.

Underwood, 487 U.S. 552, 564-65 (1988) (quoting Consolidated Edison Co. v. NLRB,

305 U.S. 197, 229 (1938)). See Richardson v. Parales, 402 U.S. 389, 401 (1971). Yet

application of this standard is “not merely a quantitative exercise,” and “[a] single piece

of evidence will not satisfy the substantiality test if the [Commissioner] ignores, or fails

to resolve, a conflict created by countervailing evidence.” Kent v. Schweiker, 710 F.2d

110, 114 (3d Cir.1983). Moreover, evidence not substantial “if it is overwhelmed by

other evidence--particularly certain types of evidence (e.g., that offered by treating

physicians)--or if it really constitutes not evidence but mere conclusion." Id.

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III. DISCUSSION

A person is "disabled" within the meaning of the Social Security Act if he or she

is unable 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 12

months." 42 U.S.C. § 423(d)(1)(A). The Social Security Administration has established

a five-step evaluation process to determine when an individual meets this definition:

First, the Commissioner considers whether the claimant is currently

engaged in substantial gainful activity. If he is not, then the

Commissioner considers in the second step whether the claimant

has a “severe impairment” that significantly limits his physical or

mental ability to perform basic work activities. If the claimant

suffers a severe impairment, the third inquiry is whether, based on

the medical evidence, the impairment meets the criteria of an

impairment listed in the “listing of impairments,” 20 C.F.R. pt. 404,

subpt. P, app. 1 (1999), which result in a presumption of disability,

or whether the claimant retains the capacity to work. If the

impairment does not meet the criteria for a listed impairment, then

the Commissioner assesses in the fourth step whether, despite the

severe impairment, the claimant has the residual functional

capacity to perform his past work. If the claimant cannot perform

his past work, then the final step is to determine whether there is

other work in the national economy that the claimant can perform. 

The claimant bears the burden of proof for steps one, two, and four

of this test. The Commissioner bears the burden of proof for the

last step.

Allen v. Barnhart, 417 F.3d 396, 401 n. 2 (3d Cir. 2005) (citations omitted).

In this case, the ALJ resolved the Plaintiff’s claim at the fifth step. At step one,

he acknowledged that Plaintiff has not engaged in substantial gainful activity since her

alleged disability onset date. At step two, he found that Plaintiff has impairments –

namely, vertigo, hearing loss, depression, anxiety, and osteoarthritis (especially

involving the lumbar spine) – that are “severe” within the meaning of the Act. At step

three, the ALJ found that Plaintiff’s impairments do not meet or medically equal any

listed impairment. At step four, the ALJ acknowledged that Plaintiff has no relevant

past work experience. In connection with his analysis at step five, the ALJ determined

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12

that Plaintiff’s subjective complaints were not fully credible and that she retains the

residual functional capacity (RFC) to perform:

sedentary work which would allow her to sit or stand at her discretion and

would allow for occasional postural movements. The claimant should

avoid jobs involving good hearing, and she would not be able to perform

work involving more than simple, short instructions, she should avoid

close interaction with coworkers, work setting changes, more than simple,

routine, repetitive tasks with one or two step instructions, decision-making,

dealing with the public, and exposure to heights, dangerous machinery,

driving , dust, fumes, chemicals, temperature extremes, and vibration.

(R. 28, finding 6.) Based on this RFC assessment, the ALJ found that the Plaintiff

retains the residual functional capacity to perform other work in the national economy,

including work as a packager and small parts assembler. Accordingly, the ALJ

determined that Plaintiff is not “disabled” within the meaning of the Social Security Act.

Plaintiff poses a laundry list of challenges to the ALJ’s analysis at steps three

and five of the disability evaluation process, which can be summarized as follows: (1)

the ALJ erred in his analysis at step three by failing to consider whether Plaintiff’s

mental impairment met or equaled the requirements for Mental Retardation under

Listing 12.05; (2) the ALJ erred at step three with respect to his analysis of Plaintiff’s

abilities to carry out activities of daily living, to function socially, and to maintain

concentration, persistence, and pace, and in further finding that there is no evidence of

episodes of deterioration and decompensation; (3) the ALJ erred in his assessment of

Plaintiff’s credibility; (4) the ALJ mischaracterized the evidence regarding Plaintiff’s

vestibular impairment and/or Meniere’s disease; (5) the ALJ improperly rejected Dr.

Joneja’s assessment of Plaintiff’s mental impairments; (6) the ALJ erred in his

evaluation of Dr. Mercatoris’ consultative opinion; (7) the ALJ erred in concluding that

his RFC assessment was consistent with the opinions of the state agency medical

consultants; (8) the ALJ’s hypothetical did not encompass all of Plaintiff’s relevant

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13

limitations; (9) there is new evidence concerning Plaintiff’s limited intellectual ability that

should be considered under Matthews v. Apfel, 239 F.3d 589 (3d Cir. 2001).

We agree with the Plaintiff that the ALJ committed legal error with respect to his

treatment of Dr. Mercatoris’ consultative opinion. In his detailed report, Dr. Mercatoris

wrote, among other things, that he doubted Plaintiff would be able to maintain regular

attendance if she found employment. The ALJ rejected this particular limitation,

explaining that “[Dr. Mercatoris’] overall psychological examination appears inconsistent

with that assessment, as he reported that the claimant had no impairment of thought

processes, memory, concentration, or communication skills.” (R. 25.) Initially, we note

that it is not entirely accurate to represent that Dr. Mercatoris found “no impairment”

with regard to Plaintiff’s thought processes. Dr. Mercatoris’ report indicates that he

considered several subcategories of functioning under the general rubric of “thought

processes” and, while he reported no major deficiencies in Plaintiff’s stream of thought,

thought content and concentration, Dr. Mercatoris observed that Plaintiff’s abstract

thinking was only fair and her intelligence level appeared to be low average to

borderline. (R. 158-59.) More to the point, however, the categories of functioning

which the ALJ cited as “unimpaired” do not necessarily relate to the Plaintiff’s ability to

maintain regular attendance at a job and, therefore, they do not in any logical fashion

undermine Dr. Mercatoris’ professed concern about attendance.

The ALJ referred also to Dr. Mercatoris’ medical source statement, in which

Plaintiff was rated “fair” or “good” in virtually all areas of psychiatric functioning. Upon

closer scrutiny, however, this evidence similarly fails to support the ALJ’s reasons for

discounting Dr. Mercatoris’ opinion. It is true that Dr. Mercatoris rated Plaintiff as

having “good” ability in five different categories – including her ability to use judgment,

execute simple job instructions, and interact appropriately with co-workers, supervisors,

and the public – and we see no problem insofar as the ALJ relied on these particular

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14

findings. However, the ALJ also relied on the fact that Plaintiff was rated “fair” in nine

categories, including her ability to follow work rules, deal with work stresses, function

independently, maintain attention and concentration, maintain personal appearance,

behave in an emotionally stable manner, relate predictably in social situations, and

demonstrate reliability. The administrative record does not include the entire form on

which Dr. Mercatoris provided his medical source statement and, consequently, no

information is provided to us defining or explaining the examiner’s use of the term “fair.” 

The ALJ apparently interpreted the numerous “fair” ratings as indicating adequate

functional ability for purposes of sustained employment. He did not dispute the “fair”

ratings and concluded that his residual functional capacity assessment adequately

accounted for “any possible nonexertional limitations.” (R. 25.) Plaintiff, on the other

hand, submits that a rating of “fair” indicates “serious limitation.” This ambiguity cannot

be resolved on the present record, but considering the fact that “residual functional

capacity” refers to the most that a claimant can do on a regular and continuing basis

despite any relevant physical or mental limitations, see 20 C.F.R. 416.945(a)(1) and (c),

it is not at all clear that Dr. Mercatoris’ ratings of a “fair” functional ability in numerous

domains supports the ALJ’s RFC determination. In short, on this record, the ALJ’s

evaluation of Dr. Mercatoris’ opinion is unsupportable because it appears to be based

purely on personal inferences and speculation. 

This problem is exacerbated by the ALJ’s reliance on the opinion of the state

agency expert, Dr. Becker Tarter, in support of his RFC determination. Dr. Becker

Tarter completed a mental residual functional capacity assessment in which she rated

Plaintiff as “not significantly limited” in several categories and only “moderately” limited

in her ability to:

- carry out detailed instructions, 

- maintain attention and concentration for extended periods of time,

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15

- complete a normal workday/workweek without interruption from

psychologically based symptoms,

- get along with coworkers or peers without distracting them or exhibiting

behavioral extremes, 

- respond appropriately to changes in the work setting, and 

- set realistic goals ro make plans independently of others.

(R. 179.) Plaintiff objects that the ALJ failed to discuss, quantify or incorporate into his

hypothetical the “moderate” limitations identified by Dr. Becker Tarter. Thus, Plaintiff

submits that the ALJ was inaccurate in representing that his RFC assessment was

consistent with the opinions of the state agency consultants. 

We agree that the ALJ’s reliance on Dr. Becker Tarter’s opinion is problematic,

but for a different reason. In opining on Plaintiff’s work-related abilities, Dr. Becker

Tarter specifically relied upon and adopted Dr. Mercatoris’ medical source statement

which she opined is “well supported” by the medical and non-medical evidence. (R.

180.) No mention is made, however, of Dr. Mercatoris’ clinical evaluation report or the

limitations noted therein, most notably, his professed doubt that Plaintiff could maintain

regular attendance in a work setting. It is therefore unclear whether Dr. Becker Tarter

was even aware of this particular limitation. (See SSR 96-6p 1996 WL 374180 (July 2,

1996) (opinions of state agency consultants can be given weight only insofar as they

are supported by evidence in the case record, considering such factors as, among other

things, consistency of the opinion with the record as a whole)). Since Dr. Becker Tarter

opined that Plaintiff’s mental limitations did not preclude her from working, Dr. Becker

Tarter, like the ALJ, appears to have interpreted Dr. Mercatoris’ ratings of “fair” ability to

indicate adequate functional ability on a sustained basis. Because the record lacks any

basis for this interpretation, as opposed to, e.g., an interpretation that “fair” indicates

inadequate functional ability or adequate functional ability only on an intermittent basis,

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Dr. Becker Tarter’s opinion does not constitute substantial evidence in support of the

ALJ’s RFC determination.

In sum, the ALJ’s assessment of Plaintiff’s residual functional capacity is not

supported by substantial evidence because neither the ALJ nor the state agency expert

on whom he relies adequately accounted for Dr. Mercatoris’ concern that Plaintiff

cannot maintain regular work attendance. And, because that potentially relevant

limitation is not included in the ALJ’s hypothetical question to the vocational expert, we

cannot say that the ALJ’s decision to deny benefits is supported by substantial

evidence. See Ramirez v. Barnhart, 372 F.3d 546, 550 (3d Cir. 2004) (“If ... an ALJ

poses a hypothetical question to a vocational expert that fails to reflect ‘all of the

claimant’s impairments that are supported by the record(,) ... it cannot be considered

substantial evidence.’”) (quoting Chrupcala v. Heckler, 829 F.2d 1269, 1276 (3d Cir.

1987)).

We have found that the ALJ’s rejection of Dr. Mercatoris’ opinion, based on

personal inferences and speculation as to an unresolved ambiguity in the record,

cannot stand. On remand, the Commissioner should attempt to supplement the record

relative to Dr. Mercatoris’ ratings on his medical source statement, in particular, the

meaning of the term “fair” as it is used by him. The Commissioner should then

reassess Dr. Mercatoris’ opinion as to Plaintiff’s ability to maintain regular job

attendance with the benefit of this ambiguity having been resolved. 

Two additional challenges raised by Plaintiff merit some comment. First, Plaintiff

contends that the ALJ erred in failing to conduct any analysis at step three of the

disability evaluation process as to whether Plaintiff met or equaled the requirements for

mental retardation set forth at 20 C.F.R. Part 404, Subpt. P, App. 1, § 12.05. Second,

Plaintiff contends that new and material evidence exists, in the form of Dr. Fernan’s

December 2004 consultative opinion, which is relevant to a determination under

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17

§ 12.05. Plaintiff seeks to have this evidence considered under the mandates of

Matthews v. Apfel, 239 F.3d 589 (3d Cir. 2001).

Matthews holds that, when a claimant seeking judicial review of the

Commissioner’s final decision seeks to rely on evidence that was not before the ALJ,

the district court may remand to the Commissioner “but only if the evidence is new and

material and if there was good cause why it was not previously presented to the ALJ.” 

239 F.3d at 593. The court of appeals explained the “sound public policy” underlying

this rule:

We should encourage disability claimants to present to the ALJ all

relevant evidence concerning the claimant’s impairments. If we

were to order remand for each item of new and material evidence,

we would open the door for claimants to withhold evidence from the

ALJ in order to preserve a reason for remand. .... Instead, we

believe that it is a much sounder policy to require claimants to

present all material evidence to the ALJ and prohibit judicial review

of new evidence unless there is good reason for not having brought

it before the ALJ. Such a holding is instrumental to the speedy and

orderly disposition of Social Security claims.

Id. at 595 (internal citations omitted).

Here, Plaintiff contends that Dr. Fernan’s report is both new and material

evidence “because it speaks to mental retardation, Listing 12.05, a listing identified as a

category upon which the state agency psychologist conducted their medical disposition

(Tr. 164), but never analyzed or mentioned by the ALJ.” (Pl.’s Br. [Doc. 7] at 19.) 

Plaintiff insists that there is good cause for her previous failure to submit the report

inasmuch as the evidence did not exist prior to the ALJ’s decision. 

We do not agree that a showing of “good cause” can be made here for Matthews

purposes. As of March 2003, Plaintiff was on notice of Dr. Mercatoris’ observation that

she appeared to have “low average to borderline” intellectual ability. There is nothing of

record to suggest that she would have been unable to obtain a consultative examination

by Dr. Fernan prior to the ALJ’s decision, thus allowing the ALJ to consider the

evidence in a timely fashion. Nor is this a situation where Plaintiff’s intellectual abilities

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18

are likely to have changed significantly over time; presumably, if Dr. Fernan would have

conducted his intelligence testing prior to July 2004, when the ALJ rendered his

decision, Plaintiff would have produced comparable scores. Claimants who delay the

procurement of relevant medical evidence until after the ALJ’s decision is rendered will

always, perforce, be able to assert that the evidence did not previously exist simply by

virtue of the fact that it was not sought. If this could satisfy Matthew’s “good cause”

standard, the policy interests outlined in that case would be subverted.

Nevertheless, while we do not believe that consideration of Dr. Fernan’s report is

compelled under Matthews, this conclusion does not render Dr. Fernan’s report wholly

irrelevant. It is well established in this circuit that an ALJ has a duty to develop the

record adequately, even where the claimant is represented by counsel. See Rutherford

v. Barnhart, 399 F.3d 546, 557 (3d Cir. 2005); Boone v Barnhart, 353 F.3d 203, 208

n.11 (3d Cir. 2004) (citing other cases). In this case, as we have noted, Dr. Mercatoris

opined that Plaintiff appeared to have only limited – and possibly borderline –

intelligence. Dr. Becker Tarter similarly found that the Plaintiff is impaired by limited

intellectual ability, but she determined that Plaintiff did not meet or equal the

requirements for listing 12.05, pertaining to mental retardation. The ALJ never

addressed the issue at all in his step three analysis, contrary to the mandates of 20

C.F.R. § 416.920a, which require the ALJ to evaluate mental impairments by using the

prescribed psychiatric review technique. One of the Administration’s stated reasons for

employing this technique is to “[i]dentify the need for additional evidence to determine

impairment severity.” Id. at § 916.920a(a)(1). As this matter is already being remanded

to the Commissioner for further administrative proceedings, the ALJ should further

develop the record, consistent with his duties, by exploring the extent of Plaintiff’s

impaired intelligence and the degree to which it impairs her ability to maintain

substantial gainful employment. We will leave it to the ALJ’s discretion whether and to

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19

what extent he accepts Dr. Fernan’s report. However, on remand, the ALJ should

analyze Plaintiff’s limited intellectual abilities with specific reference to whether she

meets or equals the requirements of Listing 12.05, particularly §12.05(C).

Plaintiff also contends that the ALJ committed reversible error in failing to

properly credit her own testimony, in failing to accord appropriate weight to the opinion

of her treating physician, and in failing to credit (at step three of the evaluation process)

her limitations relative to activities of daily living, social functioning, concentration,

persistence, and pace, and episodes of deterioration and decompensation. Because it

is conceivable that the ALJ’s assessments in these areas might be affected on remand

by reconsideration of Dr. Mercatoris’ opinion and evidence as to Plaintiff’s intellectual

functioning, we need not address these challenges at present. Instead, we will leave it

to the Commissioner to address these issues in the first instance on remand. We have

considered Plaintiff’s remaining challenges to the Commissioner’s decision but we find

them to be without merit and immaterial to reconsideration of Plaintiff’s claim on

remand.

IV. CONCLUSION

Based upon the foregoing reasons, we will vacate the Commissioner’s final

decision in this matter and remand the case for further administrative proceedings

consistent with this Memorandum Opinion. An appropriate order follows.

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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

DEBRA K. BAKER, )

)

Plaintiff, ) 1:05cv96

v. )

)

JO ANNE B. BARNHART, )

Commissioner of Social Security, )

)

Defendant. )

O R D E R

AND NOW, to wit, this 28th day of October, 2005, for the reasons set forth in the

accompanying Memorandum Opinion,

IT IS HEREBY ORDERED that the Plaintiff’s motion [Doc. 6] for summary

judgment is DENIED, the Commissioner’s motion [Doc. 8] for summary judgment is

DENIED, and the above-captioned case is REMANDED to the Commissioner for further

administrative proceedings consistent with this Memorandum Opinion and Order.

s/ Sean J. McLaughlin

United States District Judge

cm: All counsel of record.

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