IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

JAIME MACKEY, 

Plaintiff, 

v. 

CAROLYN W. COLVIN, 

Commissioner of Social Security, 

Defendant. 

PAPAK, Magistrate Judge: 

6: 13-cv-00698-PK 

FINDINGS AND 

RECOMMENDATION 

Plaintiff Jamie Mackey ("Mackey") seeks judicial review of the Commissioner of Social 

Security's final decision denying his applications for social security insurance ("SSI") and 

disability insurance benefits ("DIB") under Titles II and IX of the Social Security Act (the 

"Act"). This Court has jurisdiction pursuant to 42 U.S. C. § 405(g) and 1383(c)(3). I have 

considered all ofthe parties' briefs and all of the evidence in the administrative record. For the 

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reasons set forth below, the Commissioner's final decision should be reversed and remanded for 

immediate payment of benefits. 

DISABILITY ANALYSIS FRAMEWORK 

To establish disability within the meaning of the Act, a claimant must demonstrate an 

"inability to engage in any substantial gainful activity by reason of any medically determinable 

physical or mental impairment which can be expected ... to last for a continuous period of not 

less than 12 months." 42 U.S.C. § 423(d)(1)(A). The Commissioner has established a five-step 

sequential process for determining whether a claimant has made the requisite demonstration. See 

Bowen v. Yuckert, 482 U.S. 137, 140 (1987); see also 20 C.P.R.§§ 404.1520(a)(4), 

416.920(a)(4). At the first four steps of the process, the burden of proof is on the claimant; only 

at the fifth and final step does the burden of proof shift to the Commissioner. See Tackett v. 

Apftl, 180 F.3d 1094, 1098 (9th Cir. 1999). 

At the first step, the Administrative Law Judge considers the claimant's work activity, if 

any. See Bowen, 482 U.S. at 140; see also 20 C.P.R.§§ 404.1520(a)(4)(i), 416.920(a)(4)(i). If 

the ALJ finds that the claimant is engaged in substantial gainful activity, the claimant will be 

found not disabled. See Bowen, 482 U.S. at 140; see also 20 C.P.R.§§ 404.1520(a)(4)(i), 

404.1520(b), 416.920(a)(4)(i), 416.920(b). Otherwise, the evaluation will proceed to the second 

step. 

At the second step, the ALJ considers the medical severity of the claimant's impairments. 

See Bowen, 482 U.S. at 140-141; see also 20 C.P.R.§§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). An 

impairment is "severe" if it significantly limits the claimant's ability to perform basic work 

activities and is expected to persist for a period of twelve months or longer. See Bowen, 482 

U.S. at 141; see also 20 C.P.R.§§ 404.1520(c), 416.920(c). The ability to perform basic work 

2- FINDINGS AND RECOMMENDATION 

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activities is defined as "the abilities and aptitudes necessary to do most jobs." 20 C.F.R. §§ 

404.1521(b), 416.921(b); see also Bowen, 482 U.S. at 141. If the ALJ finds that the claimant's 

impairments are not severe or do not meet the duration requirement, the claimant will be found 

not disabled. See Bowen, 482 U.S. at 141; see also 20 C.F.R. §§ 404.1520(a)(4)(ii), 404.1520(c), 

416.920(a)(4)(ii), 416.920(c). 

If the claimant's impairments are severe, the evaluation will proceed to the third step, at 

which the ALJ determines whether the claimant's impairments meet or equal "one of a number of 

listed impairments that the [Commissioner] acknowledges are so severe as to preclude 

substantial gainful activity." Bowen, 482 U.S. at 141; see also 20 C.F.R. §§ 404.1520(a)(4)(iii), 

404.1520(d), 416.920(a)(4)(iii), 416.920(d). If the claimant's impairments are equivalent to one 

of the impairments enumerated in 20 C.F.R. § 404, subpt. P, app. 1, the claimant will 

conclusively be found disabled. See Bowen, 482 U.S. at 141; see also 20 C.F.R. §§ 

404.1520(a)( 4)(iii), 404.1520( d), 416.920(a)( 4)(iii), 416.920(d). 

If the claimant's impairments are not equivalent to one of the enumerated impairments, 

the ALJ is required to assess the claimant's residual functional capacity ("RFC"), based on all 

the relevant medical and other evidence in the claimant's case record. See 20 C.F.R. §§ 

404.1520(e), 416.920(e). The RFC is an estimate of the claimant's capacity to perform 

sustained, work-related, physical and mental activities on a regular and continuing basis, despite 

the limitations imposed by the claimant's impairments. See 20 C.F.R. §§ 404.1545(a), 

416.945(a); see also SSR 96-8p, 1996 WL 374184. 

At the fourth step of the evaluation process, the ALJ considers the RFC in relation to the 

claimant's past relevant work. See Bowen, 482 U.S. at 141; see also 20 C.F.R. §§ 

404.1520(a)(4)(iv), 416.920(a)(4)(iv). If, in light of the claimant's RFC, the ALJ determines that 

3 ~FINDINGS AND RECOMMENDATION 

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the claimant can still perform his or her past relevant work, the claimant will be found not 

disabled. See Bowen, 482 U.S. at 141; see also 20 C.F.R. §§ 404.1520(a)(4)(iv), 404.1520(±), 

416.920(a)( 4)(iv), 416.920(±). In the event the claimant is no longer capable of performing his or 

her past relevant work, the evaluation will proceed to the fifth and final step, at which the burden 

of proof is, for the first time, on the Commissioner. 

At the fifth step of the evaluation process, the ALJ considers the RFC in relation to the 

claimant's age, education, and work experience to determine whether the claimant can perform 

any jobs that exist in significant numbers in the national economy. See Bowen, 482 U.S. at 142; 

see also 20 C.F.R. §§ 404.1520(a)(4)(v), 404.1520(g), 404.1560(c), 404.1566, 416.920(a)(4)(v), 

416.920(g), 416.960(c), 416.966. If the Commissioner meets its burden to demonstrate that the 

claimant is capable of performing jobs existing in significant numbers in the national economy, 

the claimant is conclusively found not to be disabled. See Bowen, 482 U.S. at 142; see also 20 

C.F.R. §§ 404.1520(a)(4)(v), 404.1520(g), 404.1560(c), 404.1566, 416.920(a)(4)(v), 416.920(g), 

416.960(c), 416.966. A claimant will be found entitled to benefits if the Commissioner fails to 

meet its burden at the fifth step. See Bowen, 482 U.S. at 142; see also 20 C.F.R. §§ 

404.1520(a)(4)(v), 404.1520(g), 416.920(a)(4)(v), 416.920(g). 

LEGAL STANDARD 

A reviewing Court must affirm an Administrative Law Judge's decision if the ALJ 

applied the proper legal standards and his findings are suppotted by substantial evidence in the 

record. See 42 U.S.C. § 405(g); see also Batson v. Comm 'r, 359 F.3d 1190, 1193 (9th Cir. 

2004). '"Substantial evidence' means more than a mere scintilla, but less than a preponderance; 

it is such relevant evidence as a reasonable person might accept as adequate to support a 

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conclusion." Lingenfelter v. As/rue, 504 F.3d 1028, 1035 (9th Cir. 2007), citing Robbins v. Soc. 

Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006). 

The Court must review the record as a whole, "weighing both the evidence that supports 

and the evidence that detracts from the Commissioner's conclusion." !d. The Court may not 

substitute its judgment for that of the Commissioner. See id., citing Robbins, 466 F.3d at 882; 

see also Edlund v. Massanari, 253 F.3d 1152, 1156 (9th Cir. 2001). If the ALJ's interpretation of 

the evidence is rational, it is immaterial that the evidence may be "susceptible [ ofJ more than one 

rational interpretation." Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989). 

BACKGROUND 

Born in 1983, Mackey was 28 years old at the time of the hearing. Tr. 35, 145, !52. 1 He 

protectively filed for SSI and DIB on July 29, 2009, alleging disability as of June I, 2006, due to 

epilepsy and anemia. Tr. 152, 192. After his applications were denied initially and on 

reconsideration, Mackey requested a hearing before an ALJ. Tr. 85-94, 98-106. Mackey 

appeared and testified before ALJ James Yellowtail on March 2, 2012. Tr. 31-62. Mackey was 

represented by an attorney at the hearing. !d. The ALJ also took testimony from vocational 

expert ("VE") Jay Stutts. !d. 

At the hearing, Mackey testified that he left high school in his senior year prior to 

graduating and has not earned aGED. Tr. 35. He has past work experience as a fast-food 

worker, a landscape laborer, a hand-sander, and an amusement park worker. Tr. 53, 193. 

Mackey testified that he suffers from seizures day and night, and requires "[a]nywhere from two 

days to a week to recover." Tr. 40. In the three months prior to the hearing, Mackey had 

suffered from four grand mal seizures. Tr. 41. Mackey testified that he frequently forgot to take 

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his medications and, at times, could not afford his medications. Tr. 42-43. He was laid off from 

his job at McDonalds because of his seizures. Tr. 45. Mackey also testified to memory 

problems and stated that he had difficulty caring for his children. Tr. 48-49. 

On March 22, 2012, ALJ Yellowtail issued a decision finding Mackey not disabled. Tr. 

11-24. The Appeals Council denied Mackey's subsequent request for review, making the ALJ's 

decision the final decision of the Commissioner. Tr. 1-3; see 20 C.F.R. § 422.210(a); see also, 

e.g., Sims v. Apfel, 530 U.S. 103, 107 (2000). Mackey now seeks judicial review of that 

decision. 

SUMMARY OF ALJ FINDINGS 

At the first step of the five-step sequential evaluation process, the ALJ found that Mackey 

had not engaged in substantial gainful activity since his alleged onset date of June I, 2006. Tr. 

16. At the second step, the ALJ found that Mackey had the following severe impairments: 

seizure disorder, cognitive disorder, adjustment disorder with depressed mood, and history of 

polysubstance abuse. Tr. 17. Because Mackey's impairments were deemed severe, the ALJ 

properly proceeded to the third step of the analysis. !d. 

At the third step, the ALJ found that none of Mackey's impairments met or equaled any 

of the impairments enumerated in 20 C.F.R. § 404, subpt P, app. I. Tr. 17. The ALJ therefore 

conducted an assessment of Mackey's RFC. Tr. 18. The ALJ found that during the relevant 

adjudication period Mackey could perform a full range of work at all exertionallevels, with the 

following limitations: he may frequently balance, stoop, kneel, crouch, crawl and climb stairs or 

ramps, and should perform no more than occasional climbing of ladders or scaffolds; he should 

not be exposed to workplace hazards such as unprotected heights or moving machinery; he could 

1 Citations to "Tr." refer to the page(s) indicated in the official transcript of the administrative 

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Case 6:13-cv-00698-PK Document 17 Filed 06/16/14 Page 6 of 17
perform routine, repetitive work involving no more than simple instructions; he could 

occasionally interact with the general public. Id. At the foutih step of the five-step process, the 

ALJ found that Mackey had no past relevant work. Tr. 22. At step five, the ALJ determined that 

Mackey could perform jobs that exist in significant numbers in the national economy including 

auto detailer, hand packager, and basket filler. Jd. Based on his step five findings, the ALJ 

concluded that Mackey was not disabled. Tr. 23-24. 

ANALYSIS 

Mackey argues that the Commissioner erred because he (1) improperly evaluated the 

medical evidence; (2) failed to find his shoulder impairment to be severe at step two; (3) 

improperly rejected his subjective symptom testimony; and (4) improperly rejected the lay 

witness testimony. 

I. Medical Evidence 

The ALJ is responsible for resolving conflicts in the medical record, including conflicts 

among physicians' opinions. Carmickle v. Comm 'r, 533 F.3d 1115, 1164 (9th Cir. 2008). The 

Ninth Circuit distinguishes between the opinions of treating, examining, and non-examining 

physicians. The opinion of a treating physician is generally accorded greater weight than the 

opinion of an examining physician, and the opinion of an examining physician is accorded 

greater weight than the opinion of a non-examining physician. Lester v. Chafer, 81 F .3d 821, 

830 (9th Cir. 1995). An uncontradicted treating physician's opinion can be rejected only for 

"clear and convincing" reasons. Baxter v. Sullivan, 923 F.2d 1391, 1396 (9th Cir. 1991). In 

contrast, if the opinion of an examining physician is contradicted by another physician's opinion, 

the ALJ must provide "specific, legitimate reasons" for discrediting the examining physician's 

record filed herein as Docket No. 9. 

7- FINDINGS AND RECOMMENDATION 

Case 6:13-cv-00698-PK Document 17 Filed 06/16/14 Page 7 of 17
opmwn. Lester, 81 F3d at 830. Specific, legitimate reasons for rejecting a physician's opinion 

may include its reliance on a claimant's discredited subjective complaints, inconsistency with 

medical records, inconsistency with a claimant's testimony, and inconsistency with a claimant's 

daily activities. Tommasetti v. Astrue, 533 F.3d 1035, 1040 (9th Cir. 2008). An ALJ may also 

discount a medical source's opinion that is inconsistent with the source's other findings. Bayliss 

v. Barnhart, 427 F.3d 1211, 1216 (9th Cir. 2005). It is legal error to ignore an examining 

physician's medical opinion without providing reasons for doing so, and an ALJ effectively 

rejects an opinion where he ignores it. Smolen v. Chafer, 80 F.3d 1273, 1286 (9th Cir. 1996). 

1. Treating Neurologist Mia Schreiner 

Mackey first argues that the ALJ improperly rejected the opinion of treating neurologist 

Mia Schreiner, M.D. Dr. Schreiner first examined Mackey at Roseberg Neurology Clinic in 

June, 2009. Tr. 478. She opined that Mackey was having complex partial seizures, "sometimes 

with secondary generalization." Tr. 480. In July, 2010, Dr. Schreiner wrote that Mackey's 

seizures were increasing in frequency and opined that Mackey's seizures could be occurring 

more often than repotted because of his poor memory. Tr. 550. She also noted that Mackey's 

seizure medication, Tegretol, was not working well. !d. Dr. Schreiner concluded by noting, 

"[Mackey] is applying for disability right now, which is a good idea, as I don't think he could 

hold a job." !d. Later treatment notes reveal that Mackey continued to have seizures despite 

adjustments in his medications. Tr. 586-94. Mackey contends that the ALJ failed to address Dr. 

Schreiner's opinion. Pl.'s Br. 16. 

The ALJ is required to explain why "significant, probative evidence has been rejected." 

Vincent v. Heckler, 739 F.2d 1393, 1394-95 (9th Cir. 1984). Here, Dr. Schreiner was Mackey's 

treating neurologist for two years. See Tr. 478-81, 548-63. Based on her treatment relationship 

8- FINDINGS AND RECOMMENDATION 

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with Mackey, and noting the frequency of Mackey's seizures and the fact that medication failed 

to manage his seizures, Dr. Schreiner concluded that Mackey could not hold a job. Tr. 550. This 

opinion is both significant and probative, and the ALJ was required to provide legally sufficient 

reasons for rejecting Dr. Schreiner's opinion. Vincent, 739 F.2d at 1394-95; Baxter, 923 F.2d at 

1396. 

The Commissioner argues that the ALJ was not required to consider Dr. Schreiner's 

opinion because it addressed Mackey's ability to hold a job, an area "reserved to the 

Commissioner." Def. 's Br. II. However, the ALJ must provide clear and convincing reasons 

supported by substantial evidence for rejecting a treating physician's uncontrovetted opinion, 

even if that opinion addresses the ultimate issue of disability. Holohan v. Massanari, 246 F.3d 

1195, 1202-03 (9th Cir. 2001). Here, the ALJ failed to provide clear and convincing reasons 

sufficient for rejecting Dr. Schreiner's opinion; the ALJ merely noted that the non-examining 

physicians' opinions contradicted Dr. Schreiner's opinion because they suggested Mackey was 

capable of a level of functioning that could sustain gainful employment. See Def. 's Br. 11. The 

Ninth Circuit has stated that the opinion of a non-examining physician "cannot by itself 

constitute substantial evidence that justifies the rejection of the opinion of ... a treating 

physician." See Lester, 81 F.3d at 831. The opinions cited by the ALJ in justifying his rejection 

of Dr. Schreiner's opinion were from consultative Agency physicians and, without more, did not 

constitute substantial evidence. Id On this record, the ALJ's rejection of Dr. Schreiner's 

statement was error. Holohan, 246 F.3d at 1202-03. 

2. Examining Psychologist Judith Eckstein 

Mackey argues, second, that the ALJ improperly rejected the opinion of examining 

psychologist Judith Eckstein, Ph.D. Pl.'s Br. 16. Dr. Eckstein examined Mackey and opined 

9- FINDINGS AND RECOMMENDATION 

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that he has "abnormally low processing speed." Tr. 538. Dr. Eckstein wrote that Mackey's 

difficulty with cognitive processing put him at risk for not being able to complete tasks in a 

timely manner. She also opined that Mackey would be most successful if allowed to work at his 

own pace. Tr. 538-39. 

The ALJ considered Dr. Eckstein's opinion and found that Mackey was able to perform 

routine, repetitive, simple, unskilled work. Tr. 18. In Stubbs-Danielson v. Astrue, the Ninth 

Circuit held that the ALJ's limitation of the claimant to simple tasks adequately captured her 

limitations in concentration, persistence and pace because medical evidence in the record also 

stated that claimant was able to "carry out simple tasks." Stubbs-Danielson v. As true, 539 F.3d 

1169, 1173-74 (9th Cir. 2008). In so doing, the Ninth Circuit stated that the ALJ properly 

translated the claimant's condition, "including the pace and menta1limitations, into the only 

concrete restrictions available to him." !d. at 1174. Stubbs-Danielson is apposite here, because 

the RFC limited Mackey to performing only simple tasks. The ALJ's rejection of Dr. Eckstein's 

opinion was therefore not error, because the RFC sufficiently captured Mackey's cognitive 

limitations as assessed by Dr. Eckstein. 

II. Credibility 

Mackey next argues that the ALJ erred by rejecting his subjective symptom testimony. 

In assessing the credibility of a claimant's testimony regarding subjective pain or the intensity of 

symptoms, the ALJ engages in a two-step analysis. 20 C.F.R. § 404.1529. First, the ALJ 

determines whether there is objective medical evidence of an underlying impairment that could 

reasonably be expected to produce some degree of symptoms. Smolen, 80 F.3d at 1282. If such 

evidence exists, and barring affirmative evidence of malingering, the ALJ must give clear and 

convincing reasons for discrediting the claimant's testimony regarding the severity of the 

10- FINDINGS AND RECOMMENDATION 

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symptoms. Id at 1284; see also Lingerifidter, 504 F.3d at 1036. If the record contains 

affirmative evidence of malingering, the ALJ need only provide specific and legitimate reasons 

for an adverse credibility finding. Morgan v. Comm 'r, 169 F.3d 595, 599 (9th Cir. 1999). 

The ALJ may consider many factors in weighing a claimant's credibility, including: (I) 

ordinary techniques of credibility evaluation, such as the claimant's reputation for lying, prior 

inconsistent statements concerning the symptoms, and other testimony by the claimant that 

appears less than candid; (2) unexplained or inadequately explained failure to seek treatment or 

to follow a prescribed course of treatment; and (3) the claimant's daily activities. Tommasetti, 

533 F.3d at 1039. Where the ALJ's credibility findings are supported by substantial evidence in 

the record, the reviewing court "may not engage in second-guessing." Thomas v. Barnhart, 278 

F.3d 947, 959 (9th Cir. 2002). However, a general assertion that plaintiff is not credible is 

insufficient; the ALJ must "state which ... testimony is not credible and what evidence suggests 

the complaints are not credible." Dodrill v. Shalala, 12 F.3d 915, 918 (9th Cir. 1993); see also 

Morgan, 169 F.3d at 599. 

Mackey testified to disabling limitations caused by his seizure disorder and cognitive and 

memory problems. The ALJ rejected Mackey's testimony for several reasons. Tr. 18-22. First, 

the ALJ noted that the medical evidence did not corroborate Mackey's testimony regarding his 

musculoskeletal injuries. Tr. 20, citing Tr. 583, 587, 590, 593, 600, 603 (treatment records 

revealing normal muscle strength, normal muscle tone, normal reflexes, and normal range of 

motion). Mackey alleged back, neck, and left shoulder pain and limitations consistently 

throughout the medical record. See Tr. 226, 304, 537, 583, 602. In 2008, Charles McCart, M.D. 

opined that Mackey had "significant tenderness" in his left shoulder, but no range of motion 

limitations secondary to shoulder pain. Tr. 487. An MRI in 2010 revealed severe post-traumatic 

II -FINDINGS AND RECOMMENDATION 

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deformity of Mackey's left glenohumeral joint, with joint effusion. Tr. 571. This record 

provides objective medical evidence of an underlying impairment that could reasonably be 

expected to produce some degree of Mackey's symptoms. Smolen, 80 F.3d at 1282. It therefore 

does not provide, by itself, a clear and convincing reason for rejecting Mackey's testimony 

regarding his musculoskeletal pain and limitations. See id. 

Second, the ALJ noted that Mackey had a history of noncompliance with prescribed antiseizure medication. Tr. 20-21. However, Mackey provided compelling reasons for his 

noncompliance that are supported by the record. For example, Mackey cited poor memory as 

one cause of his noncompliance with treatment. Tr. 42-43 (testimony from Mackey that he often 

forgot his medications). In August, 2011, Dr. Schreiner noted that Mackey had problems 

understanding his medication dosage. Tr. 587. Dr. Eckstein opined that Mackey has 

"abnormally low processing speed" comparable with mild mental retardation, and an IQ score in 

the low average range of intellectual functioning. Tr. 538. Mackey's cognitive issues, 

corroborated by the medical record, explain his record of failure to consistently comply with 

treatment. On this record, noncompliance with prescribed anti-seizure medication was not a 

clear and convincing reason for finding Mackey not credible. 

Third, the ALJ found that Mackey's reports of side effects were not supported by his 

treatment records. Tr. 21. The record, however, contains documentation of side effects 

including sleepiness, fatigue, dizziness, diplopia, and gum atrophy. See Tr. 234, 550, 555, 556, 

558. The Comt thus rejects the ALJ's third reason for rejecting Mackey's testimony. 

Fourth, the ALJ found that Mackey made inconsistent statements. Tr. 21. The ALJ may 

consider ordinary techniques of credibility evaluation in weighing a claimant's credibility. 

Tommasetti, 533 F.3d at 1039. The ALJ found that Mackey made inconsistent statements about 

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his use of substances; specifically, that he appeared to "underreport his use of' substances. Tr. 

21. The record, however, contains no indication of substance problems following an incident in 

June, 2006 when Mackey was hospitalized for acute intoxication. Tr. 358-59. Because the 

Commissioner presents no clear contradictions in Mackey's testimony regarding his record of 

substance use, the ALJ did not provide legally sufficient reason to reject Mackey's testimony. 

Finally, although the Commissioner also argues that Mackey made inconsistent statements about 

the frequency of his seizures, Def.'s Br. 8, Mackey's statements simply reflect a changing pattern 

of seizure onset over time. The Court can find no straightforward contradiction in Mackey's 

statements regarding the frequency of his seizures. On this record, therefore, the ALJ did not 

provide legally sufficient reasons for rejecting Mackey's credibility, and his finding should be 

reversed. 

III. Lay Witness Testimony 

Mackey also argues that the ALJ improperly rejected the lay testimony of his wife, 

Tiffany Mackey. Pl.'s Br. 17. The ALJ must to provide "germane reasons" for rejecting lay 

testimony. 20 C.P.R.§§ 404.1513(d)(l), 416.913(d)(1); Lewis v. Apfel, 236 F.3d 503, 511 (9th 

Cir. 2001). The ALJ need not discuss every witness's testimony, and "if the ALJ gives germane 

reasons for rejecting testimony by one witness, the ALJ need only point to those reasons when 

rejecting similar testimony by a different witness." Molina v. Astrue, 674 F.3d 1104, 1114 (9th 

Cir. 2012). Inconsistency with other evidence in the record is a germane reason for rejecting the 

testimony of a lay witness. Lewis, 236 F.3d at 511. 

Ms. Mackey completed a Third Party Function report and stated that Mackey "cannot 

always keep up with a conversation and gets confused easily." Tr. 204. She wrote that Mackey 

had difficulty "doing things the way it is asked,' and that he had difficulty following directions. 

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Tr. 205. She described Mackey's seizures as unpredictable and characterized by falling, jerking, 

hard breathing, and foaming at the mouth. Tr. 19. Ms. Mackey noted that Mackey's seizures 

have resulted in concussions, back problems, and severe arthritis in his left shoulder, and 

estimated that Mackey suffers about three seizures per month. Id. 

The ALJ rejected Ms. Mackey's testimony because it was similar to Mackey's own 

testimony, and because he previously found Mackey to be not credible. Molina, 674 F.3d at 

1122 (it is not reversible error to reject lay testimony when "the lay testimony described the same 

limitations as [claimant's] own testimony, and the ALJ's reasons for rejecting [claimant's] 

testimony apply with equal force to the lay testimony"). Because the ALJ improperly rejected 

Mackey's credibility, however, he similarly failed to provide legally sufficient reasons for 

rejecting Ms. Mackey's statements. The ALJ's evaluation of the lay witness testimony should 

therefore be reversed. 

IV. Step Two Findings 

Mackey argues that the ALJ erred by failing to find his left shoulder impairment "severe" 

at step two. At step two, the ALJ determines whether the claimant has a medically severe 

impairment or combination of impairments; step two findings must be based upon medical 

evidence. 20 C.F.R. § 416.920(a). An impairment is "not severe" if it "does not significantly 

limit [the claimant's] ability to do basic work activities." !d. "Omissions at step two are 

harmless if the ALJ's subsequent evaluation considered the effect ofthe impairment omitted at 

step two." Harrison v. Astrue, 2011 WL 2619504, *7 (D. Or. July I, 2011) (citing Lewis v. 

Astrue, 498 F.3d 909, 911 (9th Cir. 2007)). 

At step two, the ALJ found that Mackey's alleged back, neck, and left shoulder pain and 

limitations did not constitute a severe impairment. Tr. 17. To justify this finding, the ALJ stated 

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that there was no evidence that Mackey's shoulder condition significantly limited his work 

activities, citing medical evidence of good muscle strength and tone, normal reflexes, and normal 

range of motion. Tr. 17, citing Tr. 583, 587, 603. Mackey's medical history, however, reveals a 

history of left shoulder problems. See Tr. 304,457,458, 483, 492, 571. For example, MRI 

testing revealed "severe post-traumatic deformity with joint effusion." !d. In June, 2010, agency 

physician Mary Ann Westfall, M.D., concluded that Mackey's ability to reach overhead was 

"limited" due to problems on his left side.2 Tr. 73. Mackey also testified to musculoskeletal 

pain. While this evidence could be considered consistent with good muscle strength and tone 

and a normal range of motion, it was reasonable for the ALJ to conclude that Mackey's 

musculoskeletal problems were not severe, because it is reasonable to assume that the alleged 

shoulder problems would result in abnormal range of motion and poor muscle strength and tone 

in some areas. As noted, if the ALJ's interpretation of the evidence is rational, it is immaterial 

that the evidence may be "susceptible [of] more than one rational interpretation." Magallanes, 

881 F.2d at 750. The ALJ did not err at step two. 

V. Remand 

The decision whether to remand for further proceedings or for immediate payment of 

benefits is within the discretion of the court. Harman v. Apfel, 211 F.3d 1172, 1178 (9th Cir. 

2000), cert. denied, 531 U.S. 1038 (2000). The issue turns on the utility offurther proceedings. 

A remand for an award of benefits is appropriate when no useful purpose would be served by 

further administrative proceedings or when the record has been fully developed and the evidence 

2 The Comt notes, however, that when formulating Mackey's RFC the ALJ omitted Dr. 

Westfall's limitation on overhead reaching without explanation. See Tr. 18. It is legal error to 

ignore an examining physician's medical opinion without providing reasons for doing so, and an 

ALJ effectively rejects an opinion where he ignores it. Smolen, 80 F.3d at 1286. The ALJ's 

omission of Dr. Westfall's medical opinion was error. 

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is insufficient to support the Commissioner's decision. Strauss v. Comm 'r, 635 F.3d 1135, 

1138-39 (9th Cir. 2011) (quoting Benecke v. Barnhart, 379 F.3d 587, 593 (9th Cir 2004)). The 

comt may not award benefits punitively and must conduct a "credit-as-true" analysis to 

determine if a claimant is disabled under the Act. Jd at 1138. · 

Under the "credit-as-true" doctrine, evidence should be credited and an immediate award 

of benefits directed where: (1) the ALJ has failed to provide legally sufficient reasons for 

rejecting such evidence; (2) there are no outstanding issues that must be resolved before a 

determination of disability can be made; and (3) it is clear from the record that the ALJ would be 

required to find the claimant disabled were such evidence credited. !d. The "credit-as-true" 

doctrine is not a mandatory rule in the Ninth Circuit, but leaves the comt flexibility in 

determining whether to enter an award of benefits upon reversing the Commissioner's decision. 

Connett v. Barnhart, 340 F.3d 871 876 (9th Cir. 2003) (citing Bunnell v. Sullivan, 947 F.2d 341, 

348 (9th Cir. 1991) (en bane)). The reviewing court should decline to credit testimony when 

"outstanding issues" remain. Luna v. Astrue, 623 F.3d 1032, 1035 (9th Cir. 2010). 

Here, the comt finds no outstanding issues that must be resolved before a determination 

of disability can be made. The ALJ did not provide legally sufficient reasons for rejecting Dr. 

Schreiner's opinion that Mackey could not work due to his seizures. The ALJ also improperly 

rejected testimony from Mackey and his wife regarding Mackey's symptoms. When credited as 

true, the improperly rejected evidence justifies a finding of disability. 

At the hearing, the VE testified that Mackey would probably not be able to sustain 

employment with absences of more than once a month. Tr. 59-60. Given the frequency of 

Mackey's seizures and necessary recovery time, Mackey would be required miss more than one 

day per month of work. See Tr. 40-41. The severity of Mackey's condition is underscored by 

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Case 6:13-cv-00698-PK Document 17 Filed 06/16/14 Page 16 of 17
the opinion of treating physician Dr. Schreiner. Based on this evidence, the Court finds that 

there are no outstanding issues that must be resolved before a determination of disability can be 

made. This case should be reversed and remanded for the immediate payment of benefits. 

RECOMMENDATION 

The ALJ improperly rejected medical evidence and testimony from Mackey and his wife. 

When credited as true, that testimony justifies a finding of disability; therefore, this case should 

be remanded for the immediate payment of benefits and judgment should be entered accordingly. 

SCHEDULING ORDER 

These Findings and Recommendations will be referred to a district judge. Objections, if 

any, are due fomteen (14) days from service of the Recommendation. If no objections are filed, 

then the Findings and Recommendations will go under advisement on that date. 

If objections are filed, then a response is due fourteen (14) days after being served with a 

copy of the objections. When the response is due or filed, whichever date is earlier, the Findings 

and Recommendations will go under advisement. ~---·-·--

Dated this 16th day of June, 2014. 

)J2 

Honorable Paul Papak 

United States Magistrate Judge 

17- FINDINGS AND RECOMMENDATION 

Case 6:13-cv-00698-PK Document 17 Filed 06/16/14 Page 17 of 17