In the

United States Court of Appeals

For the Seventh Circuit

No. 09-4037

LYNN MARIE LARSON,

Plaintiff-Appellant,

v.

MICHAEL J. ASTRUE, Commissioner of Social Security,

Defendant-Appellee.

Appeal from the United States District Court 

for the Western District of Wisconsin.

No. 09-cv-67-bbc—Barbara B. Crabb, Judge.

ARGUED JUNE 9, 2010—DECIDED AUGUST 3, 2010

Before POSNER, WOOD, and HAMILTON, Circuit Judges.

WOOD, Circuit Judge. Lynn Marie Larson contends

that she is disabled by anxiety, depression, and ankle

pain. She applied for Supplemental Security Income

(“SSI”), but an Administrative Law Judge (“ALJ”) concluded that her impairments, although severe, are not

disabling. The district court upheld the agency’s decision, Larson v. Astrue, No. 09-cv-067-bbc, 2009 WL 3379144,

at *1 (W.D. Wis. Oct. 19, 2009), and Larson appeals. Among
2 No. 09-4037

other things, she argues that the ALJ erred by discrediting

her testimony and not giving controlling weight to the

opinion of her long-term treating psychiatrist. We agree

with her that the evidence supports an award of benefits.

I

Now 38, Larson was educated through three years of

college and has past work experience as a bartender.

She has been under the care of mental health specialists

since at least 1998, when she began seeing Dr. Bruce

Rhoades, a psychiatrist. He diagnosed Larson with

“major depression (recurrent) moderate.” His treatment

notes from 1999 through 2003 show that he prescribed and

regularly adjusted the dosages of several anti-depressants

and anxiety medications.

Matters went from bad to worse for Larson in January 2004, when she was raped by the grandfather of

one of her children and suffered a broken hand and

injured thumb. She dates the onset of her disability from

that incident. After the assault a social worker provided

therapy for depression and post-traumatic stress disorder (“PTSD”). The social worker scored Larson at

50 on the Global Assessment of Functioning (“GAF”),

which measures a person’s overall ability to function.

AMERICAN PSYCHIATRIC ASSOCIATION, DIAGNOSTIC AND

STATISTICAL MANUAL OF MENTAL DISORDERS, 30 (4th

ed. 1994). (A GAF of 50 indicates serious symptoms or

functional limitations. Id. at 32.) Larson also consulted

Dr. Rhoades, who observed that her mood was depressed

though she appeared “pleasant and settled.” He diagnosed
No. 09-4037 3

Larson with generalized anxiety disorder and possible

PTSD, renewed her prescriptions for anti-depressants,

and increased the dosage of her anti-anxiety medication.

A few months later Dr. Rhoades concluded that Larson

was doing much better and scored her at 70 on the GAF;

nevertheless, he confirmed his diagnosis of PTSD.

In April 2004, Larson tripped outside a bar after five

or six drinks and fractured her ankle in three places. The

same orthopedist who had treated her after the rape

surgically repaired the ankle fractures. A month later he

concluded that the ankle was healing well. Around the

same time, Larson confessed to Dr. Rhoades that she

had started drinking more heavily and questioned

whether her depression was the reason. Dr. Rhoades

responded by adjusting her medications; he decreased

the dosage of her anti-depressants but, gauging her

anxiety level as “fairly high,” he increased her antianxiety medication. Her GAF was back down to 50.

Dr. Rhoades later reported that Larson’s anxiety was

“under reasonable control,” a view that prompted him

to change her medication again. In June 2004 she

applied for benefits. Her initial application was limited

to allegations relating to the pain from her broken

ankle; later she added allegations of disability stemming

from mental impairments.

A month later, Larson’s stepfather beat her and reinjured her ankle. X-rays showed no evidence of a new

fracture, but Larson told her orthopedist that she was
4 No. 09-4037

having difficulty walking without an ankle brace. She

also saw Dr. Rhoades, who reconfirmed the diagnosis of

major depression and prescribed additional anti-depressants and anti-anxiety medications.

Other issues in 2004 and 2005 led to further consultations with Dr. Rhoades and Jennifer Herink, a psychotherapist. In August 2004 Dr. Rhoades noted that Larson

was “not doing very well” and prescribed additional

medication to treat her depression and anxiety. She had

a “nervous breakdown” and missed almost two weeks of

work at the Head Start program where she had been

working part-time as a bus driver. A nephew she had

been raising was placed in foster care after a social

services agency investigated an allegation of child neglect. And she was arrested for driving while under

the influence. She reported to Herink that she had

stopped taking her prescription medication and started

(or, it seems, continued) self-medicating with marijuana

and alcohol. Larson reported to Dr. Rhoades that she

was not getting out of bed, and so he prescribed two

additional anti-depressants. Throughout the last half of

2004 and 2005, Dr. Rhoades documented that Larson

was depressed, assessed her GAF at 50 to 60, and prescribed additional medications to control her anxiety

and mood.

Larson’s application for SSI was denied initially in

August 2004 and upon reconsideration in August 2005.

A state-agency psychologist had reviewed the medical

record shortly before the second denial and had assessed

Larson’s mental impairments using a standard form
No. 09-4037 5

“Psychiatric Review Technique,” see 20 C.F.R. § 404.1520a.

He diagnosed Larson with an “affective disorder”—specifically depression—under Listing 12.04 and

an “anxiety-related disorder” under Listing 12.06, see 20

C.F.R. § Pt. 404, Subpt. P. App. 1. In his opinion neither

of the impairments was severe. He concluded that

Larson had not suffered an extended episode of decompensation (a somewhat vague term whose meaning

we explore below) and was experiencing only “mild”

restrictions on daily living activities and “moderate”

difficulties in the realms of social functioning and concentration, persistence, or pace. He thought that Larson

could perform simple, repetitive, low-stress work even

though she would probably have trouble dealing with

large groups of people or stressful situations.

In December 2005, Dr. Rhoades completed a Mental

Impairment Questionnaire. He reported there that he

had been treating Larson since 1998 on roughly

a monthly basis. His diagnosis was severe, recurrent

depression and dissociate identity disorder. Her current

GAF score, he said, was 50. Observing that she

avoids most social situations, he noted that Larson was

experiencing repeated (i.e., three or more) episodes of

decompensation. He also checked a box indicating that

she had “slight” restrictions in activities of daily

living, “marked” difficulties in social functioning, and

“frequent” deficiencies of concentration, persistence,

or pace.

In January 2006, Larson reported to Herink that she

was having increased thoughts of suicide. Herink en-
6 No. 09-4037

couraged her to go to the hospital, but she did not follow

that advice. Herink later asked the police to check on

Larson. They did so and, according to Herink’s progress

notes, they took her to the hospital. The administrative record contains no other information about this

hospitalization.

Larson briefly testified before the ALJ at her hearing

in March 2007. Twice during the questioning she said

that she wanted to “go home.” Much of her testimony

focused on her efforts to hold a job since her alleged

onset date. The month before the hearing, Larson had

quit a part-time job at a gas station, where she occasionally had to hide in the bathroom, apparently to

avoid customers. Since 2004 she also had been working

about two hours per week at a restaurant, tending bar,

cooking, and waiting tables. Although she drove the

Head Start school bus for a short period, she was fired

from that job after suffering a breakdown that alerted

her employer to the drugs she was taking. Larson

insisted that she could not work full-time because

she suffers panic attacks and uncontrollable crying

spells that last as little as 15 minutes to as long as

several hours. She had succeeded in keeping the

restaurant job, she explained, only because the owner,

Paul Calliss, was a friend. Larson explained that she

was caring for her four children (then ranging in age

from 6 to 17), cooking for the family, and doing laundry

and other household chores. If she needed to shop, she

went with Calliss or else waited until late in the evening

to avoid encountering other people. Finally, she reported that she was taking medications (she did not say
No. 09-4037 7

what or for which condition) that made her drowsy and

required her to nap during the day.

Calliss, Larson’s friend and employer, confirmed that

Larson worked for him “very part time,” sometimes all

day if there was a special event but on average less

than two hours per week. He explained that Larson

typically needed a break after a short time because she

was nervous around strangers.

The ALJ called Dr. Steven Carter, a psychologist, as

a medical expert to testify about Larson’s mental impairments. Dr. Carter considered whether Larson met

the criteria for a per se disability under Listing 12.04

for depression. A claimant suffering from an affective

disorder meets the listed severity level for a depressive

syndrome if enough listed factors (the “A criteria”) are

present. 20 C.F.R. § Pt. 404, Subpart P. App. 1, § 12.04(A);

see Rabbers v. Comm’r Soc. Sec. Admin., 582 F.3d 647, 653

(6th Cir. 2009); Holohan v. Massanari, 246 F.3d 1195, 1203

(9th Cir. 2001). There is no dispute that Larson’s depression qualified as severe for purposes of the “A criteria.”

But the “A criteria” alone are not enough; in order to be

considered per se disabled, at least two of the following

“B criteria” must also be present: (1) “marked” restriction

of activities in daily living, (2) “marked” difficulties

in maintaining social functioning, (3) deficiencies of

concentration, persistence or pace, or (4) “repeated episodes of decompensation each of extended duration.”

20 C.F.R. § Pt. 404, Subpart P. App. 1, § 12.04(B); see Craft

v. Astrue, 539 F.3d 668, 674-75 (7th Cir. 2008); Randolph

v. Barnhart, 386 F.3d 835, 840 (8th Cir. 2004).
8 No. 09-4037

Dr. Carter testified that Larson met the “A criteria”

but had not satisfied the “B criteria.” He thought (erroneously, as we have pointed out) that Larson had not

been hospitalized or been in a group home, and on that

basis he concluded that she had never experienced an

extended episode of decompensation. He was willing

to concede that she had “marked” restrictions in

social activities, but he saw only “mild” restrictions

on daily activities and no significant limitations with

respect to concentration, persistence, or pace. He opined

that Larson should work in a low-stress, alcohol-free

environment that did not involve large crowds.

Dr. Carter did not try to reconcile his assumption that

Larson had not been hospitalized with Herink’s

progress note reporting that Larson had been taken to

the hospital by the police. Nor did he confront

Dr. Rhoades’s contradictory finding that Larson had

suffered “repeated” episodes of decompensation. He

also said nothing about the relevance to Listing 12.04 of

the frequent adjustments to her medications. And

although Dr. Carter had been present for Larson’s testimony, he did not comment on her assertion that she

had suffered a nervous breakdown while working as a

bus driver or the fact that she had been fired from

that position shortly thereafter.

After the hearing, the ALJ denied Larson’s claim. At

Step 1 of the five-step analysis prescribed in 20 C.F.R.

§ 404.1520, the ALJ found that Larson had not engaged

in gainful employment since her 2004 onset date. At

Step 2 the ALJ concluded that Larson suffered from

severe impairments, namely, left ankle pain, a left wrist

fracture, right hand osteoarthritis, affective disorder, and
No. 09-4037 9

anxiety disorder. At Step 3, however, the ALJ concluded

that none of the impairments was medically equivalent

to anything on the lists. After explaining that he was

adopting the opinion of Dr. Carter, the ALJ asserted

that “there is no evidence in the record that the claimant

has ever suffered an episode of decompensation of extended duration due to her psychological symptoms.”

The ALJ acknowledged that Larson was experiencing

restrictions in social functioning, but he reasoned that

those restrictions were only “moderate” because she

attended doctor’s appointments on a regular basis, was

able to go to the grocery store alone if she went at

night, and had good relationships with two friends. The

ALJ pegged her difficulties maintaining concentration,

persistence, and pace at the “moderate” level.

At Step 4 the ALJ stated that he had given “some

weight” to Dr. Rhoades’s opinion that Larson met the

criteria in the listing, but he found that Rhoades’s assessment of the severity of Larson’s symptoms was not sufficiently corroborated. Larson’s testimony about the

severity of her impairments, the ALJ thought, was inconsistent with her account of her daily activities. The

ALJ concluded that her “psychological symptoms wax

and wane based on situational stressors.” At Step 5, the

ALJ concluded based on the testimony of a vocational

expert that Larson could work as a hand packager or

electronics worker.

II

On appeal, Larson first argues that the ALJ should

have granted controlling weight to the opinion of
10 No. 09-4037

Dr. Rhoades, who easily qualified as her treating psychiatrist, and found her disabled at Step 3. Larson maintains

that the assessment given by Rhoades is consistent—or

at least not inconsistent—with the evidence in the record. A treating physician’s opinion is entitled to “controlling weight” if it is “well-supported by medically

acceptable clinical and laboratory diagnostic techniques

and is not inconsistent with other substantial evidence.”

20 C.F.R. § 404.1527(d)(2); see Schaaf v. Astrue, 602 F.3d

869, 875 (7th Cir. 2010); Denton v. Astrue, 596 F.3d 419,

424 (7th Cir. 2010). An ALJ who does not give controlling weight to the opinion of the claimant’s treating

physician must offer “good reasons” for declining to

do so. 20 C.F.R. § 404.1527(d)(2); see Schaaf, 602 F.3d at

875; Schmidt v. Astrue, 496 F.3d 833, 842 (7th Cir. 2007).

If the ALJ had given Dr. Rhoades’s opinion controlling

weight, Larson’s condition would have been recognized

as a listed impairment and she would have been found

disabled at Step 3. See 20 C.F.R. § 404.1520a(d)(1); Craft,

539 F.3d at 675. All medical experts agreed that Larson

met the “A criteria” for depression, and Dr. Rhoades

opined that she satisfied the “B criteria” as well. With

regard to the latter, Dr. Rhoades saw “marked” difficulties

in Larson’s ability to function socially. The ALJ offered

several reasons for rejecting Rhoades’s view. First, he

found Dr. Carter’s opinion more persuasive. In addition,

he was impressed by the evidence showing that Larson

attended doctors’ appointments, went grocery shopping

at night, and had good relationships with two friends. All

of this indicated to him that her difficulties were just

“moderate.” But the ALJ mischaracterized Dr. Carter’s
No. 09-4037 11

opinion; Dr. Carter, like Dr. Rhoades, had concluded

that Larson experienced “marked,” not “moderate,”

limitations in this area. Whether by mistake or design, the

ALJ disregarded this medical evidence and improperly

substituted his own opinion. See Murphy v. Astrue, 496

F.3d 630, 634 (7th Cir. 2007) (“[A]n ALJ cannot disregard

medical evidence simply because it is at odds with the

ALJ’s own unqualified opinion.”); Clifford v. Apfel, 227

F.3d 863, 870 (7th Cir. 2000). The Commissioner tries to

salvage the ALJ’s conclusion by pointing to one instance

in 2004 when Dr. Rhoades described Larson’s demeanor

as “pleasant and settled” and by recalling that the stateagency psychologist thought that Larson had only “moderate” limitations in social functioning. But these are not

reasons that appear in the ALJ’s opinion, and thus they

cannot be used here. See SEC v. Chenery Corp., 318 U.S.

80, 87-88 (1943); Parker v. Astrue, 597 F.3d 920, 922 (7th

Cir. 2010); Stewart v. Astrue, 561 F.3d 679, 684 (7th Cir.

2009).

Dr. Rhoades also stated that Larson had experienced

repeated (by which he meant at least three) episodes of

decompensation. The ALJ disagreed, insisting that there

was “no evidence in the record that the claimant has

ever suffered an episode of decompensation of extended

duration due to her psychological symptoms.” The ALJ’s

conclusion followed Dr. Carter’s. But, as we noted

earlier, both the ALJ and Dr. Carter overlooked the evidence from Herink of Larson’s suicidal thinking and trip

to the hospital in 2006.

Although everyone seemed to think that he or she

knew what is meant by “episodes of decompensation,” this
12 No. 09-4037

is not a self-defining phrase. Dr. Carter took an approach that was too narrow in light of the definitions

that the Social Security Administration uses. The listing

defines “episodes of decompensation” as “exacerbations

or temporary increases in symptoms or signs accompanied by a loss of adaptive functioning, as manifested

by difficulties in performing activities of daily living,

maintaining social relationships, or maintaining concentration, persistence, or pace.” 20 C.F.R. § Pt. 404,

Subpart P. App. 1, § 12.00; see also STEDMAN’S MEDICAL

DICTIONARY, 497 (28th ed. 2006) (defining decompensation as the “appearance or exacerbation of a mental

disorder due to failure of defense mechanisms”); Zabala

v. Astrue, 595 F.3d 402, 405 (2d Cir. 2010) (stating that

decompensation is a temporary increase in symptoms);

Kohler v. Astrue, 546 F.3d 260, 266 n.5 (2d Cir. 2008) (same).

An incident—such as hospitalization or placement in

a halfway house—that signals the need for a more structured psychological support system would qualify as an

episode of decompensation, 20 C.F.R. § Pt. 404, Subpart P.

App. 1, § 12.00, but so would many other scenarios. The

listing recognizes that an episode may be inferred from

medical records showing a significant alteration in medication, see 20 C.F.R. § Pt. 404, Subpart P. App. 1, § 12.00.

Larson has a long history of problems that have led to

significant alterations in her medications. See Rabbers, 582

F.3d at 660 (observing that treating physician’s testimony that side effects of medication affects claimant’s

ability to function is consistent with a finding of repeated

episodes of decompensation); Natale v. Comm’r of Soc. Sec.,

651 F. Supp. 2d 434, 451-53 (W.D. Pa. 2009) (stating that
No. 09-4037 13

it was error for ALJ to reject treating physician’s conclusion that claimant suffered repeated episodes of

decompensation where claimant had history of adjustments to medication and fluctuating mood); 3 SOCIAL

SECURITY LAW & PRACTICE § 42:124 (2010) (“Episodes

of decompensation may be demonstrated by an exacerbation in symptoms or signs that would ordinarily

require increased treatment or a less stressful situation

(or a combination of the two).”). Dr. Carter, despite being

present for Larson’s testimony, never mentioned the

nervous breakdown that caused her to miss almost two

weeks of work; that incident qualified as an episode

of decompensation, see Lankford v. Sullivan, 942 F.2d 301,

307-08 (6th Cir. 1991).

In addition, although the listing defines “repeated

episodes of decompensation” as three episodes within

one year or an average of one every four months (each

lasting for at least two weeks), the listing also states

that for claimants who experience more frequent episodes

of shorter duration, the ALJ should determine if the

duration and the functional effects are of equal severity.

20 C.F.R. § Pt. 404, Subpart P. App. 1, § 12.00. A fair

reading of the record indicates that Dr. Rhoades reached

exactly the latter conclusion about Larson.

In response, the Commissioner makes much of the

fact that Dr. Rhoades did not explain on the questionnaire his conclusion that Larson had experienced

repeated episodes of decompensation. But in every section

on the questionnaire that allowed for comments, Dr.

Rhoades made them; the question dealing with Larson’s

functional limitations and episodes of decompensation
14 No. 09-4037

did not invite further explanation or include space for

comments. Although by itself a check-box form might

be weak evidence, the form takes on greater significance

when it is supported by medical records. Mason v. Shalala,

994 F.2d 1058, 1065 (3d Cir. 1993); see also Johnson v.

Apfel, 189 F.3d 561, 564 (7th Cir. 1999) (upholding ALJ’s

rejection of physician’s check-box form where it was

contradicted by evidence in the record). Here, there is a

long record of treatment by Dr. Rhoades that supports

his notations on the form.

In arguing that “the ALJ also premised his weighing of

Dr. Rhoades’s assessment on the fact that his treatment

notes reflected ‘waxing and waning symptoms’ depending

on particular situational stressors,” the Commissioner

distorts the ALJ’s reasoning. The ALJ simply stated

that “the claimant’s psychological symptoms wax and

wane based on situational stressors” without tying this

observation to Dr. Rhoades’s treatment notes. More

importantly, symptoms that “wax and wane” are not

inconsistent with a diagnosis of recurrent, major depression. “A person who has a chronic disease, whether

physical or psychiatric, and is under continuous treatment for it with heavy drugs, is likely to have better

days and worse days.” Bauer v. Astrue, 532 F.3d 606, 609

(7th Cir. 2008). No doctor concluded that Larson’s symptoms were just a response to situational stressors as

opposed to evidence of depression. The ALJ’s conclusion

to the contrary thus finds no support in the record.

See Hopgood ex rel. L.G. v. Astrue, 578 F.3d 696, 702 (7th

Cir. 2009).
No. 09-4037 15

Even if the ALJ had articulated good reasons for

rejecting Dr. Rhoades’s opinion, it still would have been

necessary to determine what weight his opinion was

due under the applicable regulations. See 20 C.F.R.

§ 404.1527(d)(2). An ALJ must consider the length, nature,

and extent of the treatment relationship; frequency

of examination; the physician’s specialty; the types of

tests performed; and the consistency and support for

the physician’s opinion. Moss v. Astrue, 555 F.3d 556, 561

(7th Cir. 2009); Elder v. Astrue, 529 F.3d 408, 415 (7th

Cir. 2008); Hofslien v. Barnhart, 439 F.3d 375, 377 (7th Cir.

2006). These factors support Dr. Rhoades: he had

treated Larson for several years on a monthly basis; he is

a psychiatrist, not a psychologist; and his opinion is

consistent with the evidence in the record. Apart from

the ALJ’s unhelpful statement that Dr. Rhoades’s opinion was entitled to “some weight,” the ALJ said nothing

regarding this required checklist of factors. See 20 C.F.R.

§ 404.1527(d)(2); Moss, 555 F.3d at 561; Bauer, 532 F.3d

at 608-09. 

Thus, the ALJ erred by failing to give controlling

weight to Dr. Rhoades’s opinion about the limitations on

Larson’s social functioning and her experience with

episodes of decompensation. Once we give his opinion

the proper weight, the record shows that Larson’s condition meets the standards of the Listing, and thus that

the ALJ should have found her disabled at Step 3.
16 No. 09-4037

III

Our conclusion is reinforced by the problems we see

in the approach the ALJ took in his assessment of

Larson’s credibility. Normally, we give an ALJ’s credibility

determinations special deference because the ALJ is

in the best position to see and hear the witness. See

Eichstadt v. Astrue, 534 F.3d 663, 667-68 (7th Cir. 2008).

But it is nevertheless possible to upset a credibility

finding if, after examining the ALJ’s reasons for discrediting testimony, we conclude that the finding is

patently wrong. See Schaaf, 602 F.3d at 875; Prochaska v.

Barnhart, 454 F.3d 731, 738 (7th Cir. 2006); Sims v.

Barnhart, 442 F.3d 536, 538 (7th Cir. 2006).

Here, the ALJ rejected Larson’s testimony about the

severity of her symptoms. The ALJ suggested that Larson

must have overstated the effects of her impairments

because she had developed relationships with two

friends whom she visited often, she had “held down” a

series of part-time jobs, and she had accommodated

her fear of the public by going to the grocery store at

night. But Larson’s ability to maintain a small number

of close friendships does not undermine her testimony

that she is afraid of going out in public. And the ALJ’s

assertion that Larson has succeeded in holding down

a series of part-time jobs stretches the evidence beyond

the breaking point. There is a significant difference between being able to work a few hours a week and having

the capacity to work full time. See SSR 96-8p, 1996 WL

374184, at *1; Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640,

648 (7th Cir. 2007); Carradine v. Barnhart, 360 F.3d 751, 755
No. 09-4037 17

(7th Cir. 2004). Larson was able to work for Calliss parttime only because he was a friend who tolerated frequent

breaks and absences that an ordinary employer would

have found unacceptable. This does not contradict her

claim of disability. See Henderson v. Barnhart, 349 F.3d

434, 435 (7th Cir. 2003). In fact, it is not accurate to say

that Larson “held down” (meaning kept) these parttime jobs. She testified without contradiction that she

was fired from her job at Head Start because of her

nervous breakdown and the medications she was taking,

and she quit her job at the gas station because of the

stress in dealing with unfamiliar customers. Last, the

ALJ’s conclusion that Larson accommodated her fear of

going out in public does not discredit her testimony

that she has a fear of going out in public and gives in to

that fear regularly. Nothing in the record supported the

ALJ’s inference that there were ways in which Larson’s

condition could be treated or managed. See Myles v.

Astrue, 582 F.3d 672, 677-78 (7th Cir. 2009). The ALJ’s

reasons for his adverse credibility ruling find no

support, on close examination, and for that reason, the

credibility determination cannot stand.

IV

For these reasons, we find that Larson is entitled to

an award of benefits. The ALJ’s decision is REVERSED

and the case is REMANDED for entry of an order consistent with this opinion.

8-3-10