IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

NICHOLAS GRAY, 6:15-cv-00647-BR

Plaintiff, OPINION AND ORDER

v.

CAROLYN W. COLVIN, 

Commissioner, Social Security 

Administration,

Defendant.

RICHARD F. MCGINTY

McGinty & Belcher, PC

P.O. Box 12806

Salem, OR 97309

(503) 371-9636

Attorneys for Plaintiff

BILLY J. WILLIAMS

United States Attorney

JANICE E. HEBERT

Assistant United States Attorney

1000 S.W. Third Avenue, Suite 600

Portland, OR 97204-2902

(503) 727-1011

DAVID MORADO

Regional Chief Counsel

JEFFREY E. STAPLES

Special Assistant United States Attorney

Social Security Administration

701 Fifth Avenue, Suite 2900

Seattle, WA 98104

(206) 615-3706

Attorneys for Defendant

1 - OPINION AND ORDER

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BROWN, Judge.

Plaintiff Nicholas Gray seeks judicial review of a final

decision of the Commissioner of the Social Security

Administration (SSA) in which she denied Plaintiff’s application

for Disability Insurance Benefits (DIB) under Title II of the

Act. 

This Court has jurisdiction to review the Commissioner’s

decision pursuant to 42 U.S.C. § 405(g). Following a thorough

review of the record, the Court REVERSES the decision of the

Commissioner and REMANDS this matter pursuant to sentence four of

42 U.S.C. § 405(g) for further administrative proceedings

consistent with this Opinion and Order.

ADMINISTRATIVE HISTORY

Plaintiff filed his application for DIB on September 25,

2011. Tr. 18, 40.1 His application was denied initially and on

reconsideration. An Administrative Law Judge (ALJ) held a

hearing on December 12, 2013, at which Plaintiff was represented

by an attorney. Tr. 35. A vocational expert (VE) also testified

at the hearing. Tr. 35.

The ALJ issued a decision on December 20, 2013, in which he

found Plaintiff is not entitled to benefits. Tr. 18-31. That

1

 Citations to the official transcript of record filed by

the Commissioner on September 14, 2015, are referred to as “Tr.”

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decision became the final decision of the Commissioner on 

February 27, 2015, when the Appeals Council denied Plaintiff’s

request for review. Tr. 1-4. See Sims v. Apfel, 530 U.S. 103,

106-07 (2000).

BACKGROUND

Plaintiff was born on October 2, 1980; was 33 years old on

the date of the initial hearing; and has a high-school

equivalency. Tr. 41, 42, 167, 183. Plaintiff has prior relevant

work experience as a forklift operator, gas-station attendant,

service-station cashier, fast-food worker, yard worker, conveyorbelt monitor, and short-order cook. Tr. 29, 68-70.

Plaintiff alleges disability since January 5, 2010, due to

bipolar disorder, schizophrenia, post-traumatic stress disorder,

social anxiety, depression, and obsessive-compulsive disorder. 

Tr. 40, 178, 182. Plaintiff’s date last insured was March 31,

2015. Tr. 178.

Except as noted, Plaintiff does not challenge the ALJ’s

summary of the medical evidence. After carefully reviewing the

medical records, this Court adopts the ALJ’s summary of the

medical evidence. See Tr. 23-29.

STANDARDS

The initial burden of proof rests on the claimant to

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establish disability. Molina v. Astrue, 674 F.3d 1104, 1110 (9th

Cir. 2012). To meet this burden a claimant must demonstrate his

inability “to engage in any substantial gainful activity by

reason of any medically determinable physical or mental

impairment 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 ALJ must develop the record when there is

ambiguous evidence or when the record is inadequate to allow for

proper evaluation of the evidence. McLeod v. Astrue, 640 F.3d

881, 885 (9th Cir. 2011)(quoting Mayes v. Massanari, 276 F.3d

453, 459–60 (9th Cir. 2001)).

The district court must affirm the Commissioner’s decision

if it is based on proper legal standards and the findings are

supported by substantial evidence in the record as a whole. 42

U.S.C. § 405(g). See also Brewes v. Comm’r, 682 F.3d 1157, 1161

(9th Cir. 2012). Substantial evidence is “relevant evidence that

a reasonable mind might accept as adequate to support a

conclusion.” Molina, 674 F.3d. at 1110-11 (quoting Valentine v.

Comm’r Soc. Sec. Admin., 574 F.3d 685, 690 (9th Cir. 2009)). It

is “more than a mere scintilla” of evidence but less than a

preponderance. Id. (citing Valentine, 574 F.3d at 690). 

The ALJ is responsible for determining credibility,

resolving conflicts in the medical evidence, and resolving

ambiguities. Vasquez v. Astrue, 572 F.3d 586, 591 (9th Cir.

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2009). The court must weigh all of the evidence whether it

supports or detracts from the Commissioner’s decision. Ryan v.

Comm’r of Soc. Sec., 528 F.3d 1194, 1198 (9th Cir. 2008). Even

when the evidence is susceptible to more than one rational

interpretation, the court must uphold the Commissioner’s findings

if they are supported by inferences reasonably drawn from the

record. Ludwig v. Astrue, 681 F.3d 1047, 1051 (9th Cir. 2012). 

The court may not substitute its judgment for that of the

Commissioner. Widmark v. Barnhart, 454 F.3d 1063, 1070 (9th Cir.

2006).

DISABILITY ANALYSIS

Social Security Regulations set out a five-step sequential

process for determining whether an applicant is disabled within

the meaning of the Social Security Act. Keyser v. Comm’r of 

Soc. Sec. Admin., 648 F.3d 721, 724 (9th Cir. 2011). See also

Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007); 20 C.F.R. 

§ 404.1520. Each step is potentially dispositive. 

At Step One the claimant is not disabled if the Commissioner

determines the claimant is engaged in substantial gainful

activity. 20 C.F.R. § 404.1520(a)(4)(I). See also Keyser, 648

F.3d at 724.

At Step Two the claimant is not disabled if the Commissioner

determines the claimant does not have any medically severe

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impairment or combination of impairments. Stout v. Comm’r Soc.

Sec Admin., 454 F.3d 1050, 1052 (9th Cir. 2006). See also 20

C.F.R. § 404.1520(a)(4)(ii); Keyser, 648 F.3d at 724.

At Step Three the Commissioner must determine whether a

claimant’s impairments meet or equal one of the listed

impairments and are so severe that they preclude substantial

gainful activity. The claimant is disabled if the Commissioner

determines the claimant’s impairments meet or equal one of the

listed impairments that the Commissioner acknowledges are so

severe as to preclude substantial gainful activity. 20 C.F.R. 

§ 404.1520(a)(4)(iii). See also Keyser, 648 F.3d at 724. The

criteria for the listed impairments, known as Listings, are

enumerated in 20 C.F.R. part 404, subpart P, appendix 1 (Listed

Impairments).

If the Commissioner proceeds beyond Step Three, she must

assess the claimant’s residual functional capacity (RFC). The

claimant’s RFC is an assessment of the sustained, work-related

physical and mental activities the claimant can still do on a

regular and continuing basis despite her limitations. 20 C.F.R.

§ 404.1520(e). See also Social Security Ruling (SSR) 96-8p. “A

‘regular and continuing basis’ means 8 hours a day, for 5 days a

week, or an equivalent schedule.” SSR 96-8p, at *1. In other

words, the Social Security Act does not require complete

incapacity to be disabled. Taylor v. Comm’r of Soc. Sec. Admin.,

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659 F.3d 1228, 1234-35 (9th Cir. 2011)(citing Fair v. Bowen, 885

F.2d 597, 603 (9th Cir. 1989)). The assessment of a claimant’s

RFC is at the heart of Steps Four and Five of the sequential

analysis when the ALJ is determining whether a claimant can still

work despite severe medical impairments. An improper evaluation

of the claimant’s ability to perform specific work-related

functions “could make the difference between a finding of

‘disabled’ and ‘not disabled.’” SSR 96-8p, at *4. 

At Step Four the claimant is not disabled if the

Commissioner determines the claimant retains the RFC to perform

work he has done in the past. 20 C.F.R. § 404.1520(a)(4)(iv). 

See also Keyser, 648 F.3d at 724.

If the Commissioner reaches Step Five, she must determine

whether the claimant is able to do any other work that exists in

the national economy. 20 C.F.R. § 404.1520(a)(4)(v). See also

Keyser, 648 F.3d at 724-25. Here the burden shifts to the

Commissioner to show a significant number of jobs exist in the

national economy that the claimant can perform. Lockwood v.

Comm’r Soc. Sec. Admin., 616 F.3d 1068, 1071 (9th Cir. 2010). 

The Commissioner may satisfy this burden through the testimony of

a VE or by reference to the Medical-Vocational Guidelines set

forth in the regulations at 20 C.F.R. part 404, subpart P,

appendix 2. If the Commissioner meets this burden, the claimant

is not disabled. 20 C.F.R. § 404.1520(g)(1).

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ALJ’S FINDINGS

At Step One the ALJ found Plaintiff has not engaged in

substantial gainful activity since January 5, 2010, his alleged

onset date. Tr. 20.

At Step Two the ALJ found Plaintiff has the following severe

impairments: Major depressive disorder; post-traumatic stress

disorder; social phobia; personality disorder, not otherwise

specified with schizoid, dependent features; attention deficit

hyperactivity disorder; and math and written-expression

disorders. Tr. 20-21.

At Step Three the ALJ found Plaintiff’s impairments do not

meet or equal the criteria for any impairment in the Listing of

Impairments. Tr. 21-22. 

In his assessment of Plaintiff’s RFC the ALJ found Plaintiff

has the functional capacity to perform a full range of work at

all exertional levels but with the following nonexertional

limitations: Plaintiff can perform “simple, routine tasks and

follow short, simple instructions” that require “little or no

judgment” and consist of “simple duties that can be learned on

the job in a short period.” Tr. 22. The ALJ also concluded

Plaintiff has an “average ability to perform sustained work

activities (i.e., Plaintiff can maintain attention and

concentration; persistence and pace), but he cannot have more

than minimal supervisor contact and can only work in proximity to

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“a few co-workers but not in a cooperative or team effort.” Tr.

22. In addition, the ALJ found Plaintiff must work in a

“predictable” work environment with “few work setting changes”;

have no contact with the public; and have “no requirement to read

detailed or complex instructions,” write reports, or perform

“detailed or complex math calculations.” Tr. 22-23.

At Step Four the ALJ found Plaintiff is capable of

performing his past relevant work as a conveyor-belt monitor,

yard worker, and forklift operator. Tr. 29-30.

In the alternative, at Step Five the ALJ found Plaintiff is

capable of performing other work that exists in significant

numbers in the national economy, including work as a pressure

washer, warehouse worker, and grounds caretaker. Tr. 30-31.

Accordingly, the ALJ found Plaintiff is not disabled and,

therefore, is not entitled to benefits. Tr. 31.

DISCUSSION

Plaintiff contends the ALJ erred when he (1) excluded

Plaintiff from the hearing room during the lay testimony of

Plaintiff’s wife, Jessica Mae Gray; (2) failed to incorporate

adequately his Step Three finding that Plaintiff had moderate

difficulties with concentration, persistence, and pace; and 

(3) failed to ask the VE whether his testimony was consistent

with the Dictionary of Occupational Titles (DOT); and, as a

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result, relied on VE testimony that was, in fact, inconsistent

with the DOT.

I. Exclusion of Plaintiff from Hearing Room

As noted, Plaintiff contends the ALJ erred when he excluded

Plaintiff from the hearing room during the testimony of

Plaintiff’s wife, Jessica Mae Gray.

At the hearing the ALJ excluded Plaintiff from the hearing

room during Jessica Gray’s testimony over Plaintiff’s objection

because the ALJ “want[ed] to have the witness to be able to speak

freely, openly and candidly and not feel that maybe she needs to

hold something back that might be embarrassing.” Tr. 58. 

Although Plaintiff was excluded from the hearing room,

Plaintiff’s counsel remained in the room and examined Jessica

Gray. Tr. 60-63. One reason the ALJ provided for discrediting

Plaintiff’s testimony was his perceived inconsistency between

Plaintiff’s testimony and the testimony of Jessica Gray. Tr. 26.

Plaintiff contends, without citation to any authority, that

the ALJ’s decision to exclude Plaintiff from the hearing room

during Jessica Gray’s testimony “precluded [Plaintiff] from fully

participating in his own hearing and denied [Plaintiff] his due

process rights to a full and fair hearing.” Pl.’s Br. (#16) at

7. Plaintiff contends his exclusion from the hearing room

precluded him from explaining the apparent discrepancies between

his testimony and Jessica Gray’s testimony, which the ALJ

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ultimately relied on when he discredited Plaintiff’s testimony.

At the outset the Court notes Plaintiff is incorrect that he

did not have an opportunity to resolve inconsistences between his

testimony and the testimony of Jessica Gray. Plaintiff’s counsel

examined both Plaintiff and Jessica Gray and could have sought to

recall Plaintiff as a witness if there were matters that required

clarification.

In any event, even if the ALJ erred when he excluded

Plaintiff from the hearing room during Jessica Gray’s testimony,

that error would be harmless. “An error is harmless if it is

‘inconsequential to the ultimate nondisability determination,’ or

‘if the agency’s path may reasonably be discerned,’ even if the

agency ‘explains its decision with less than ideal clarity.’” 

Treichler v. Comm'r Soc. Sec. Admin., 775 F.3d 1090, 1099 (9th

Cir. 2014)(quoting Alaska Dep’t of Evntl. Conservation v. Envtl.

Prot. Agency, 540 U.S. 461, 497 (2004), and Molina v. Astrue, 674

F.3d 1104, 1115 (9th Cir. 2012)). “The burden is on the party

claiming error to demonstrate not only the error, but also that

it affected his substantial rights, which is to say, not merely

his procedural rights.” Ludwig v. Astrue, 681 F.3d 1047, 1054

(9th Cir. 2012).

Although the ALJ cited inconsistencies between the testimony

of Plaintiff and Ms. Gray as a reason for discrediting

Plaintiff’s testimony, the ALJ also provided several other

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reasons for discrediting Plaintiff’s testimony that were

supported by the record. In any event, Plaintiff did not assign

error to the ALJ’s determination that Plaintiff’s testimony was

not credible.

After reviewing the record the Court concludes the ALJ

provided legally sufficient reasons for rejecting Plaintiff’s

testimony outside of his consideration of the inconsistency

between the testimony of Plaintiff and Jessica Gray. Any error

by the ALJ in excluding Plaintiff from the hearing room,

therefore, was “‘inconsequential to the ultimate nondisability

determination.’” See Treichler, 775 F.3d at 1099 (quoting

Molina, 674 F.3d at 1115).

On this record the Court concludes the ALJ did not commit

prejudicial error when he excluded Plaintiff from the hearing

room during the testimony of Jessica Gray.

II. Consistency Between the ALJ’s Step Three “Paragraph B”

Findings and the RFC

Plaintiff next contends the ALJ erred when he found

Plaintiff had “moderate difficulties” with concentration,

persistence, and pace in his “paragraph B” analysis at Step

Three, but, nonetheless, concluded in his assessment of

Plaintiff’s RFC that Plaintiff had “average ability to perform

sustained work activities (i.e., can maintain attention and

concentration; pace and persistence) in an ordinary work setting

on a regular basis.” Tr. 21-22.

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“[T]he Ninth Circuit has found failure to include

‘difficulties with concentration, persistence, or pace’ in the VE

hypothetical to be reversible error when the ALJ found such a

limitation at step three.” Saucedo v. Colvin, 2014 WL 4631225,

at *17 (D. Or. Sep. 15, 2014)(citing Lubin v. Comm’r Soc. Sec.

Admin, 507 F. App’x 709, 712 (9th Cir. 2013)). 

In this case the ALJ found as part of his paragraph B

analysis at Step Three that Plaintiff “has moderate difficulties

in maintaining concentration, persistence and pace.” Tr. 21. 

The ALJ also explained “[t]he limitations identified in the

‘paragraph B’ criteria are not a residual functional capacity

assessment but are used to rate the severity of mental

impairments at steps 2 and 3,” and the “mental residual

functional capacity assessment . . . requires a more detailed

assessment.” Tr. 22. In his assessment of Plaintiff’s RFC the

ALJ found Plaintiff had “average ability to perform sustained

work activities (i.e., can maintain attention and concentration;

pace and persistence) in an ordinary work setting on a regular

basis.” Tr. 22. The ALJ based this finding on the opinion of

Robert A. Kruger, Psy.D., who found “Mr. Gray’s overall attention

ability and capability of sustaining his attention on brief,

basic, routine repetitive tasks were seen as fair, such that he

would be able to complete those tasks adequately, within an

appropriate period of time.” Tr. 26-27, 312. 

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In his assessment of Plaintiff’s RFC the ALJ found Plaintiff

has “average ability” to maintain concentration, persistence, and

pace. Although the ALJ’s RFC finding may be supported by

substantial evidence in isolation, the ALJ did not explain the

internal inconsistency between his Step Three findings and his

assessment of Plaintiff’s RFC. The difference between the ALJ’s

findings in the RFC assessment and at Step Three were not, as the

ALJ attempted to explain, merely a matter of the RFC assessment

containing a “more detailed assessment,” but rather represented

an internal inconsistency in the ALJ’s findings.

Accordingly, on this record the Court concludes the ALJ

erred when he made inconsistent findings in his “paragraph B”

analysis at Step Three and his assessment of Plaintiff’s RFC.

III. VE Testimony Consistency with DOT

“To rely on vocational expert testimony, the ALJ must ask

the VE if his or her testimony is consistent with the DOT.” 

Wentz v. Comm’r Soc. Sec. Admin., 401 F. App’x 189, 191 (9th Cir.

2010). See also Massachi v. Astrue, 486 F.3d 1149, 1152–53 (9th

Cir. 2007). An ALJ’s failure to ask the VE whether his or her

testimony is consistent with the DOT is harmless, however, if

“there [is] no conflict, or if the vocational expert had provided

sufficient support for her conclusion so as to justify any

potential conflicts.” Massachi, 486 F.3d at 1153-54 n.19.

When a VE’s testimony deviates from the DOT, “the ALJ must

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first determine whether a conflict exists” and then “determine

whether the vocational expert’s explanation for the conflict is

reasonable and whether a basis exists for relying on the expert”

rather than the DOT. Massachi, 486 F.3d at 1153. Reasonable

explanations for conflicts between the DOT and VE testimony

include the reality that “[e]ach occupation [in the DOT]

represents numerous jobs,” VEs may have additional information

about particular job requirements from other publications or from

the VE’s professional experience, and “[t]he DOT lists maximum

requirements of occupations as generally performed, not the range

of requirements of a particular job as it is performed in

specific settings.” SSR 00-49, 200 WL 1898704, at *2-*3 (Dec. 4,

2000). See also Massachi, 486 F.3d at 113 n.17.

Plaintiff contends the ALJ failed to ask the VE whether his

testimony was consistent with the DOT and asserts the error was

not harmless because there were inconsistencies between the ALJ’s 

hypothetical to the VE and the VE’s testimony. In particular,

Plaintiff contends the VE’s testimony that Plaintiff could

perform work at Specific Vocational Preparation (SVP) 2 is

inconsistent with the ALJ’s finding in his assessment of

Plaintiff’s RFC that Plaintiff could only “perform simple duties

that could be learned on the job in a short period.” In

addition, Plaintiff contends the VE failed to explain how various

narrative portions of the ALJ’s assessment of Plaintiff’s RFC fit

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within the DOT when the DOT does not explicitly address such

issues. For example, Plaintiff contends the ALJ’s failure to

inquire whether the VE’s testimony was consistent with the DOT

was harmful error because the ALJ found Plaintiff had an “average

ability to perform sustained work activities” and the DOT “does

not address sustaining work activities.” Pl.’s Mem. in Supp.

(#16) at 13.

Although Plaintiff is correct that the ALJ erred when he

failed to ask the VE whether his testimony was consistent with

the DOT, that error was harmless because the VE and ALJ

adequately explained the only possible inconsistency with the

DOT. Thus, because the narrative descriptions of certain

limitations not addressed in the DOT did not create a “conflict”

between the VE’s testimony and the DOT, the ALJ could rely on the

expertise of the VE.

There was, however, an apparent conflict between the ALJ’s

assessment that Plaintiff is limited to work that consists of

“simple duties that could be learned on the job in a short

period” and the VE’s testimony that Plaintiff could perform jobs

at SVP level 2. This apparent conflict, however, was resolved at

the hearing when the VE asked the ALJ whether this limitation

would be “consistent with SVP 1 and 2.” Tr. 71. The ALJ

clarified he was “using that to describe unskilled work, however

there could be some semi-skilled work that would meet that

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definition if it’s simple, routine, short instructions of that

nature.” Tr. 71. “Unskilled work corresponds to an SVP of 1-2.” 

SSR 00-4p, 2000 WL 1898704, at *3. Although the ALJ could have

been clearer when he set out his assessment of Plaintiff’s RFC,

the record, nonetheless, reflects there was not any inconsistency

between the VE’s testimony and the DOT.

Accordingly, on this record the Court concludes the ALJ’s

error in failing to ask the VE whether his testimony was

consistent with the DOT was harmless.

IV. 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 172, 1178 (9th Cir. 2000). The

issue turns on the utility of further 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 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 court may not award benefits punitively and must conduct

a “credit-as-true” analysis to determine whether a claimant is

disabled under the Act. Strauss v. Comm’r, 635 F.3d at 1138. 

Under the “credit-as-true” doctrine, evidence should be credited

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and an immediate award of benefits directed when: 

(1) the ALJ has failed to provide legally sufficient reasons

for rejecting such evidence, (2) there are not any

outstanding issues that must be resolved before a

determination of disability can be made, and (3) it is clear

from the record that the ALJ would be required to find the

claimant disabled if such evidence were credited.

Id. The reviewing court should decline to credit testimony when

“outstanding issues” remain. Luna v. Astrue, 623 F.3d 1032, 1035

(9th Cir. 2010). 

When the reviewing court finds the elements of the “creditas-true” rule have been satisfied, however, the court may only

remand for further proceedings if “an evaluation of the record as

a whole creates serious doubt that the claimant is, in fact,

disabled.” Garrison v. Colvin, 759 F.3d 995, 1021 (9th Cir.

2014).

Here further proceedings are necessary to permit the ALJ to

clarify his findings regarding Plaintiff’s ability to maintain

concentration, persistence, and pace and to issue a new decision

based on his clarified findings.

Accordingly, on this record the Court remands this matter to

the Commissioner for further proceedings consistent with this

Opinion and Order.

CONCLUSION

For these reasons, the Court REVERSES the decision of the

Commissioner and REMANDS this matter pursuant to sentence four of

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42 U.S.C. § 405(g) for further administrative proceedings

consistent with this Opinion and Order. 

IT IS SO ORDERED.

DATED this 13th day of June, 2016.

/s/ Anna J. Brown

 

ANNA J. BROWN

United States District Judge

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