15-819 Ornelas-Sanchez v. Colvin



### UNITED STATES COURT OF APPEALS **FOR THE SECOND CIRCUIT**



## SUMMARY ORDER

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**ON OR AFTER J** **ANUARY 1,**  **2007, IS PERMITTED AND IS GOVERNED BY**  **F EDERAL**  **R ULE OF**  **A PPELLATE**  **P ROCEDURE**  **32.1 AND THIS COURT**  **’ S**  **L OCAL**  **R ULE**  **32.1.1. W**  **HEN CITING A SUMMARY ORDER IN A**
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**At a stated term of the United States Court of Appeals** 1 **for the Second Circuit, held at the Thurgood Marshall United** 2 **States Courthouse, 40 Foley Square, in the City of New York,** 3 **on the 1 st** **day of February, two thousand sixteen.** 4 5 **PRESENT: DENNIS JACOBS,** 6 **RICHARD C. WESLEY,** 7 **DEBRA ANN LIVINGSTON,** 8 **Circuit Judges**

**.** 9 10
- - - - - - - - - - - - - - - - - - - -X 11 **BONNIE ORNELAS-SANCHEZ,** 12 **Plaintiff-Appellant ,**  13 14 **-v.- 15-819** 15 16 **CAROLYN W. COLVIN, Acting Commissioner** 17 **of Social Security,** 18 **Defendant-Appellee**

**.** 19
- - - - - - - - - - - - - - - - - - - -X 20 21 **FOR APPELLANT:** TIMOTHY E. HILLER, LAW OFFICES 22 OF KENNETH HILLER PLLC, Amherst, 23 New York. 24 25 **FOR APPELLEE:** REBECCA H. ESTELLE (with Stephen 26 P. Conte on the brief ) for 27 William J. Hochul, Jr., United 28

1States Attorney, Western 1 District of New York, Buffalo, 2 New York. 3 4 Appeal from a judgment of the United States District 5 Court for the Western District of New York (Telesca, J. ). 6 7 **UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED** 8 **AND DECREED**that the judgment of the district court be 9 **VACATED and REMANDED**

. 10 11 Bonnie Ornelas-Sanchez appeals from the October 21, 12 2014 order of the United States District Court for the 13 Western District of New York (Telesca, J. ), affirming the 14 July 13, 2011 final administrative decision denying her 15 application for disability benefits

. We assume the parties’ 16 familiarity with the underlying facts, the procedural 17 history, and the issues presented for review. 18 19 “We undertake a plenary review of the administrative 20 record, and our focus is on the administrative ruling more 21 than on the district court’s decision.” Lamay v. Comm’r of 22 Soc. Sec. , 562 F.3d 503, 507 (2d Cir. 2009). Our review is 23 limited to determining “if there is substantial evidence, 24 considering the record as a whole, to support the 25 Commissioner’s decision and if the correct legal standards 26 have been applied.” Shaw v. Chater , 221 F.3d 126, 131 (2d 27 Cir. 2000). “‘Substantial evidence’ is evidence that 28 amounts to ‘more than a mere scintilla,’ and has been 29 defined as ‘such relevant evidence as a reasonable mind 30 might accept as adequate to support a conclusion.’” McIntyre 31 v. Colvin , 758 F.3d 146, 149 (2d Cir. 2014) (quoting 32 Richardson v. Perales , 402 U.S. 389, 401 (1971)). 33 34 “The Social Security Administration regulations outline 35 the five-step, sequential evaluation process used to 36 determine whether a claimant is disabled: (1) whether the 37 claimant is currently engaged in substantial gainful 38 activity; (2) whether the claimant has a severe impairment 39 or combination of impairments; (3) whether the impairment 40 meets or equals the severity of the specified impairments in 41 the Listing of Impairments; (4) based on a ‘residual 42 functional capacity’ assessment, whether the claimant can 43 perform any of his or her past relevant work despite the 44 impairment; and (5) whether there are significant numbers of 45 jobs in the national economy that the claimant can perform 46 given the claimant’s residual functional capacity, age, 47

2education, and work experience.” McIntyre , 758 F.3d at 150. 1 We conclude that remand is necessary because the 2 Administrative Law Judge (“ALJ”) made inadequate findings at 3 the second step of this framework. 4 5 The regulations “require application of a ‘special 6 technique’ at the second and third steps of the five-step 7 framework” when evaluating the severity of mental 8 impairments. Kohler v. Astrue , 546 F.3d 260, 265 (2d Cir. 9 2008) (quoting Schmidt v. Astrue , 496 F.3d 833, 844 (7th 10 Cir. 2007)). This technique requires “the reviewing 11 authority to determine first whether the claimant has a 12 ‘medically determinable mental impairment.’ If the claimant 13 is found to have such an impairment, the reviewing authority 14 must ‘rate the degree of functional limitation resulting 15 from the impairment(s) in accordance with paragraph (c),’ 16 which specifies four broad functional areas: (1) activities 17 of daily living; (2) social functioning; (3) concentration, 18 persistence, or pace; and (4) episodes of decompensation.” 19 Id. at 266 (citations omitted) (quoting 20 C.F.R. § 20 404.1520a). It is mandatory that the ALJ’s written decision 21 “reflect application of the technique”; “the decision ‘must 22 include a specific finding as to the degree of limitation in 23 each of the functional areas described in paragraph (c) of 24 this section.’” Id. at 266 (quoting 20 C.F.R. § 25 404.1520a(e)(4)). 26 27 The ALJ did not properly follow this technique when 28 considering whether Ornelas-Sanchez had a severe impairment 29 or combination of impairments at step two of the evaluation 30 process. The ALJ concluded that Ornelas-Sanchez suffered 31 from mental health problems, including anxiety and 32 depression, and a history of substance and alcohol abuse in 33 alleged remission. No findings were elucidated to support 34 these conclusions, and there were no findings as to whether 35 Ornelas-Sanchez’s alleged intellectual disability 36 constitutes a severe impairment. The ALJ simply 37 conclusorily noted that the record showed that Ornelas38 Sanchez’s impairments caused more than minimal functional 39 limitations and interfered with her ability to perform some 40 basic work-related activities. Without more, we conclude 41 that “[e]ffective review by this Court is frustrated by the 42 decision’s failure to adhere to the regulations.” Kohler

, 43 546 F.3d at 267. Granted, the ALJ did go on to engage with 44 the relevant evidence in its consideration of Ornelas45 Sanchez’s residual functional capacity to perform work. But 46 evaluating that evidence at step four, and not earlier, 47

3means “it is not clear whether the ALJ adequately considered 1 the entire record when determining the severity of [the] 2 impairment.” Id. at 268. The failure to make findings on 3 this point is significant because the result of at least one 4 IQ test in the record meets the intellectual disability 5 requirements in the Listing of Impairments; so if this 6 finding was credited, Ornelas-Sanchez would be disabled 7 without proceeding to steps four and five. Seeid. at 266 8 (“If the claimant’s medical impairment is severe, the 9 reviewing authority will first compare the relevant medical 10 findings and the functional limitation ratings to the 11 criteria of listed mental disorders in order to determine 12 whether the impairment meets or is equivalent in severity to 13 any listed mental disorder. If so, the claimant will be 14 found to be disabled.” (citations omitted)). 1Even at step 15 four, it is not clear why the ALJ gave great weight to the 16 opinion of the state agency review physician. Ultimately, 17 the ALJ’s analysis did not suffice and misapplied pertinent 18 legal standards. Seeid. at 265 (“Failure to apply the 19 correct legal standard constitutes reversible error, 20 including, in certain circumstances, failure to adhere to 21 the applicable regulations.”) (citations omitted). 22 23 This case is remanded so that the ALJ can make specific 24 findings as to whether Ornelas-Sanchez made a sufficient 25 showing that she suffered from an intellectual disability as 26 a severe impairment, using the mandated special technique. 27

1Step three of the analysis appears to follow the special technique, but the passage simply determined whether the impairments the ALJ deemed severe were catalogued in the Listing of Impairments. But because no findings were made regarding whether Ornelas-Sanchez’s proffered intellectual disability qualified as a severe impairment, we do not know whether the ALJ considered this a severe impairment and included this in its step three analysis. Moreover, when the ALJ evaluated the list of impairments in 20 C.F.R. § 404 Subpart P., App. 1, Pt. A, it considered only ¶¶ 12.02,12.04, and 12.09. There is no evaluation of OrnelasSanchez’s eligibility under ¶ 12.05 (“Intellectual Disability”), which has a structure “different from that of the other mental disorder listings.” 20 C.F.R. § 404 Subpart P., App. 1, Pt. A ¶ 12.00. In sum, the ALJ’s failure to adequately consider whether Ornelas-Sanchez suffered from an intellectual disability at step two of the analysis impaired the application of the framework.

4In so doing, we note that “[w]hen there is medical evidence 1 of an applicant’s drug or alcohol abuse, the ‘disability’ 2 inquiry does not end with the five-step analysis.” Cage v. 3 Comm’r of Soc. Sec. , 692 F.3d 118, 123 (2d Cir. 2012). 4 Rather, the ALJ remains free to find that “in the absence of 5 . . . drug and alcohol abuse” Ornelas-Sanchez “would not 6 meet the requirements for those disorders.” Id. at 121. But 7 such findings are not present on this record. 8 9 Accordingly, we **VACATE**the judgment of the district 10 court and **REMAND**with instructions for the district court to 11 remand to the Commissioner to specifically consider whether 12 Ornelas-Sanchez, at step two of the framework, has shown 13 that she suffers from a severe impairment in the form of an 14 intellectual disability. 15 16 FOR THE COURT: 17 CATHERINE O’HAGAN WOLFE, CLERK 18 19

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