IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

KIMBERLY ANN GRECCO, 

Plaintiff, 

v. 

COMMISSIONER, 

SOCIAL SECURITY ADMINISTRATION, 

Defendant. 

MARK D. CLARKE, Magistrate Judge. 

No. 3:15-cv-01379-CL 

REPORT AND 

RECOMMENDATION 

Plaintiff Kimberly Ann Grecco ("Plaintiff') seeks judicial review of the final decision of the 

Commissioner of the Social Security Administration ("Commissioner") denying her applications for 

Disability Insurance Benefits ("DIB") under Title II of the Social Security Act ("SSA"). This court 

has jurisdiction under 42 U.S.C. §§ 405(g) and 1383(c). Because the Appeals Council erroneously 

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rejected relevant evidence, this court should REVERSE the Commissioner's decision and 

REMAND for further proceedings. 

BACKGROUND 

Plaintiff was born on May 20, 1964, and was 49 years old at the time of the hearing. Tr. 265. 

She has a tenth grade education, completed her General Education Degree, and has worked as a 

sandwich maker, bar tender, cabinet assembler, and general clerk. Tr. 44. Plaintiff filed two 

previous applications which were denied by the ALJ and on review by the Appeals Council. Plaintiff 

filed the current applications for DIB and SSI on December 21, 2011, alleging disability beginning 

November 10, 2008. Because res judicata applies to the prior ALJ decisions, this cases concerns 

the period beginning July 30, 2011. 

Plaintiff alleges disability due to "bulging disc C6-7, rheumatoid arthritis, bilateral carpal 

tunnel syndrome." Tr. 265. The Commissioner denied her applications initially and upon 

reconsideration. At Plaintiffs request, a hearing was held before an Administrative Law Judge 

("ALJ'') on November 4, 2013. Tr. 51-90. On December 4, 2013, the ALJ found Plaintiff not 

disabled. Tr. 32-50. 

Plaintiff petitioned the Appeals Counsel for review of the ALJ' s decision. She submitted 

evidence to the Appeals Counsel consisting of 300 pages of Kaiser Permanente medical records 

predating her alleged onset date of July 30, 2011; a psychological examination report dated August 

6, 2014, by Scott T. Alvord, Psy.D., and Mental Residual Functional Capacity Assessment.; 

treatment notes from Multnomah County Health Department dated January 24, 2014 through May 

30, 2014. The Appeals Council denied Plaintiffs request for review, making the ALJ's 

decision the Commissioner's final decision Tr. 1-6. The Appeals Council further found that Dr. 

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Alvord's medical evidence related to the period after the ALJ's December 2013 decision, and 

therefore those records did not affect the ALJ's decision. Tr. 2. The Appeals Council found the 

Kaiser records not new or material because they predated the period at issue. The Appeals Council 

declined to consider this new evidence and did not make it part of the Administrative Record. 

Plaintiff now seeks judicial review of that decision. 

DISABILITY ANALYSIS 

A claimant is disabled if he or she is unable 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)(l)(A). 

"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 Soc. Sec. 

Admin., 648 F.3d 721, 724 (9th Cir. 2011); see also 20 C.F.R. § 416.920(SSI); Bowen v. Yuckert, 

482 U.S. 137, 140 (1987). Each step is potentially dispositive. 20 C.F.R. §§ 404.1520(a)(4); 

416.920(a)(4). The five-step sequential process asks the following series of questions: 

1. Is the claimant performing "substantial gainful activity?" 20 C.F.R. 

§§ 404.1520(a)(4)(i); 416.920(a)(4)(I). This activity is work involving 

significant mental or physical duties done or intended to be done for pay 

or profit. 20 C.F.R. §§ 404.1510; 416.910. If the claimant is performing 

such work, she is not disabled within the meaning of the Act. 20 C.F.R. 

§§ 404.1520(a)(4)(i); 416.920(a)(4)(i). If the claimant is not performing 

substantial gainful activity, the analysis proceeds to step two. 

2. Is the claimant's impairment "severe" under the Commissioner's 

regulations? 20 C.F.R. §§ 404.1520(a)(4)(ii); 416.920(a)(4)(ii). Unless 

expected to result in death, an impairment is "severe" if it significantly 

limits the claimant's physical or mental ability to do basic work activities. 

20 C.F.R. §§ 404.1521(a); 416.921(a). This impairment must have lasted 

or must be expected to last for a continuous period of at least 12 months. 

20 C.F.R. §§ 404.1509; 416.909. If the claimant does not have a severe 

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impairment, the analysis ends. 20 C.F.R. §§ 404.1520(a)(4)(ii); 

416.920(a)(4)(ii). If the claimant has a severe impairment, the analysis 

proceeds to step three. 

3. Does the claimant's severe impairment "meet or equal" one or more of the 

impairments listed in 20 C.F.R. Part 404, Subpart P, Appendix 1? If so, 

then the claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4)(iii); 

416.920(a)(4)(iii). If the impairment does not meet or equal one or more of 

the listed impairments, the analysis proceeds beyond step three. At that 

point, the ALJ must evaluate medical and other relevant evidence to assess 

and determine the claimant's "residual functional capacity" ("RFC"). This 

is an assessment of work-related activities that the claimant may still 

perform on a regular and continuing basis, despite any limitations imposed 

by his or her impairments. 20 C.F.R. §§ 404.1520(e); 404.1545(b)-(c); 

416.920(e); 416.945(b)-(c). After the ALJ determines the claimant's RFC, 

the analysis proceeds to step four. 

4. Can the claimant perform his or her "past relevant work" with this RFC 

assessment? If so, then the claimant is not disabled. 20 C.F .R. 

§§404.1520(a)(4)(iv); 416.920(a)(4)(iv). If the claimant cannot perform 

his or her past relevant work, the analysis proceeds to step five. 

5. Considering the claimant's RFC and age, education, and work experience, 

is the claimant able to make an adjustment to other work that exists in 

significant numbers in the national economy? If so, then the claimant is 

not disabled. 20 C.F.R. §§ 404.1520(a)(4)(v); 416.920(a)(4)(v); 404.1560(c); 

416.960(c). If the claimant cannot perform such work, he or she is 

disabled. Id 

See also Bustamante v. Massanari, 262. F.3d 949, 954 (9th Cir. 2001). 

The claimant bears the burden of proof at steps one through four. Id at 953; see also 

Tackett v. Apfel, 180 F.3d 1094, 1100 (9th Cir. 1999); Yuckert, 482 U.S. at 140-41. The 

Commissioner bears the burden of proof at step five. Tackett, 180 F.3d at 1100. At step five, the 

Commissioner must show that the claimant can perform other work that exists in significant numbers 

in the national economy, "taking into consideration the claimant's residual functional 

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capacity, age, education, and work experience." Id.; see also 20 C.F.R. §§ 404.1566; 416.966 

(describing "work which exists in the national economy"). If the Commissioner fails to meet this 

burden, the claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4)(v); 416.920(a)(4)(v). If, however, 

the Commissioner proves that the claimant is able to perform other work existing in significant 

numbers in the national economy, the claimant is not disabled. Bustamante, 262 F.3d at 953-54; 

Tackett, 180 F.3d at 1099. 

THE ALJ'S FINDINGS 

The ALJ applied the sequential process. At step one, the ALJ found Plaintiff has not engaged 

in substantial gainful activity since her amended onset date of July 30, 2011, and met the insured 

status requirements of the Social Security Act through December 31, 2013. Tr. 38. At step two, 

the ALJ found Plaintiffs degenerative disc disease of the cervical spine, carpal tunnel syndrome, 

asthma, and anxiety disorder were severe impairments. Id. At step three, the ALJ found that 

Plaintiff did not have an impairment or combination of impairments that met or equaled one of the 

specific impairments listed in the regulations. Tr. 39. 

The ALJ determined that Plaintiff had the RFC to perform light work but with the following 

limitations: she cannot climb ladders, ropes or scaffolds, stand and walk for about six hours and sit 

for about six hours in an eight-hour workday with normal breaks. She can lift, carry, push, and pull 

within the light exertional limits. She can occasionally stoop, kneel, crouch, and crawl. She can 

perform work in which dust, fumes, odors, gases, and or poor ventilation are not present, and that 

does not require more than occasional full rotation of the neck, such as may be required in the 

operation of a motor vehicle, or in other stationary positions requiring a 360 degree lookout. She 

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can frequently finger and handle. She can understand, remember and carry out work that is 

unskilled, routine, and repetitive. Tr. 40-41. 

In reaching his conclusion, the ALJ considered Plaintiffs testimony, but found her not fully 

credible. Tr. 41. At step four, the ALJ found Plaintiff was unable to perform her past relevant 

work. Tr. 44. At step five, the ALJ found there were jobs in the national economy Plaintiff can 

perform, including small products assembler, photo copy machine operator, and new account clerk. 

Tr. 45. Therefore, the ALJ concluded Plaintiff had not been under a disability, as defined by the 

Social Security Act, through December 4, 2013. 

STANDARD OF REVIEW 

The district court must affirm the Commissioner's decision if it is based on the proper legal 

standards and the findings are supported by substantial evidence. See 42 U.S.C. § 405(g); see also 

Batson v. Comm'r of Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2004). "Substantial evidence" 

means "more than a mere scintilla, but less than a preponderance." Bray v. Comm 'r Soc. Sec. 

Admin., 554 F.3d 1219, 1222 (9th Cir. 2009)(quotingAndrews v. Shala/a, 53 F.3d 1035, 1039 (9th 

Cir. 1995)). It means "such relevant evidence as a reasonable person might accept as adequate to 

support a conclusion." Id. 

Where the evidence 1s susceptible to more than one rational interpretation, the 

Commissioner's conclusion must be upheld. Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005). 

Variable interpretations of the evidence are insignificant if the Commissioner's interpretation is a 

rational reading of the record, and this court may not substitute its judgment for that of the 

Commissioner. Id. "However, a reviewing court must consider the entire record as a who le and may 

not affirm simply by isolating a specific quantum of supporting evidence." Orn v. Astrue, 495 F.3d 

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625, 630 (9th Cir. 2007)(quoting Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 

2006)(intemal quotations omitted)). The reviewing court, however, may not affirm the 

Commissioner on a ground upon which the Commissioner did not rely. Id.; see also Bray, 554 F .3d 

at 1226. 

Even where findings are supported by substantial evidence, "the decision should be set aside 

if the proper legal standards were not applied in weighing the evidence and making the decision." 

Flake v. Gardner, 399 F.2d 532, 540 (9th Cir. 1968). Under sentence four of 42 U.S.C. § 405(g), 

the court has the power to enter, upon the pleadings and transcript record, a judgment affirming, 

modifying, or reversing the decision of the Commissioner, with or without remanding the case for 

a rehearing. 

DISCUSSION 

Plaintiff argues that the Appeals Council erred in failing to consider the evidence from Dr. 

Alvord and the evidence from Kaiser Permanente. In the alternative, Plaintiff Moves for Remand 

pursuant to sentence six of 42 U.S.C. § 405(g). She further argues the ALJ erred by (1) failing to 

find depression and fibromyalgia severe impairments at step two; (2) improperly finding her less 

than fully credible; (3) improperly weighing the medical evidence; and (4) improperly formulating 

her RFC. Because this matter should be remanded for supplemental proceedings, the court need not 

address the assertions of error by the ALJ. 

I. Supplemental Evidence Submitted to the Appeals Council 

A. September 2014 Report by Scott T. Alvord, Psy.D. 

Plaintiff argues the Appeals Council erred by failing to consider evidence from Dr. Alvord. 

Plaintiff submitted to the Appeals Council a report by Dr. Alvord dated September 6-21, 2014. Dct. 

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20-2. Plaintiff also submitted a Mental Residual Functional Capacity form ("MRFC") completed 

by Dr. Alvord. Dct. 20-4. 

Dr. Alvord completed a comprehensive psychological evaluation that included a clinical 

interview, mental status examination, records review, and extensive psychometric testing. Dr. 

Alvord administered the Wechsler Adult Intelligence Scale 4th Edition ("WAIS IV"), the Wechsler 

Memory Scale 4th Edition ("WMS IV"), the Trail Making Test, and the Test of Memory 

Malingering. Based on his evaluation, Dr. Alvord diagnosed Major Depressive Disorder, recurrent 

(severe); Obsessive Compulsive Disorder; and Panic Disorder with Agoraphobia, and assessed a 

GAF of 45. Dct. 20-2, at 8. 

Plaintiff submitted Dr. Alvord's report and MRFC assessment to the Appeals Council in 

support of her request for review. Tr. 2. The Appeals Council denied Plaintiffs request, stating 

they had looked at Dr. Alvord' s assessment dated August 6-21, 2014, but the ALJ "decided your case 

through December 4, 2013. The new information is about a later time. Therefore, it does not affect 

the decision about whether you were disabled beginning on or before December 4, 2013." Tr. 2. 

Plaintiff contends the Appeals Council was required to examine Dr. Alvord's opinions in 

determining whether to grant review of the ALJ' s decision. The Commissioner's regulations provide 

that "[i]f new and material evidence is submitted, the Appeals Council shall consider the additional 

evidence only where it relates to the period on or before the date of the administrative law judge 

hearing decision." 20 C.F .R. § 404.970(b ). The Ninth Circuit has interpreted this to include medical 

evaluations made after the ALJ's decision where they concern the claimant's condition during the 

time period prior to the ALJ's decision. Taylor v. Comm 'rofSoc. Sec. Admin., 659F.3d1228, 1232 

(9th Cir. 2011 ). 

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Dr. Alvord's evidence relates to the period of time on or before the date of the ALJ's 

decision. Dr. Alvord stated that in "terms of reasonable psychiatric probability, her symptoms are 

believed to have existed at their current level of severity beginning 7 /3 0111 until 12/ 4/ 13, based upon 

the typical presentation of depression and anxiety over the lifetime in an individual suffering from 

external stressors, medical issues including pain, and a history of poor response to treatment." Dct. 

20-2, at 4. Dr. Alvord opined that the stress of attempting to work or maintain a schedule would 

exacerbate panic and contribute to decompensation. Dct. 20-2, at 7. Dr. Alvord stated Plaintiff 

would be unable to respond to instruction, reliably transport herself to a job, or maintain 

concentration, persistence and pace. Id. Therefore, the Appeals Council erred in concluding Dr. 

Alvord's report related to a later time period and in refusing to examine Dr. Alvord's report. 

The Ninth Circuit has found that "[w]here the Appeals Council was required to consider 

additional evidence, but failed to do so, remand to the ALJ is appropriate so that the ALJ can 

reconsider its decision in light of the additional evidence." Taylor v. Comm 'r of Soc. Sec. Admin., 

659 F.3d 1228, 1232 (9th Cir. 201l)(citing20 C.F.R. § 404.970(b)). Because the Appeals Council 

improperly rejected Dr. Alvord's evidence, the court should remand the matter to the ALJ for 

consideration of this evidence at each step of the sequential analysis and any relevant credibility 

findings. 

The Commissioner argues that under sentence six of 42 U.S.C. § 405(g) the court may only 

remand for further proceedings if Plaintiff has shown good cause for failing to produce the evidence 

from Dr. Alvord earlier. Plaintiff argues that the evidence from Dr. Alvord is not subject to the good 

cause requirement of 42 U.S.C. § 405(g) because the evidence was properly before the Appeals 

Council pursuant to 20 C.F.R. § 970(b). The Taylor court found that remand to the ALJ was 

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appropriate under 20 C.F.R. § 404.970(b) and did not discuss the good cause and materiality 

requirements of a sentence six remand under 42 U.S.C. 405(g). 

B. Kaiser Permanente Records of March 2006 through November 2009 

Plaintiff contends the Kaiser Permanente records contain evidence of diagnoses of myofascial 

pain syndrome that support her allegation that fibromyalgia is a severe impairment. Accordingly, 

the Appeals Council erred by failing to make the records part of the administrative record. 

RECOMMENDATION 

For the foregoing reasons, the Commissioner's final decision should be REVERSED and 

this matter should be REMANDED pursuant to sentence four, 42 U.S.C. § 405(g), for consideration 

of all of the medical evidence. 

This Report and Recommendation will be referred to a district judge. Objections, if any, are 

due no later than fourteen (14) days after the date this recommendation is filed. If objections are 

filed, any response is due within fourteen (14) days after the date the objections are filed. See FED. 

R. CIV. P. 72, 6. Parties are advised that the failure to file objections within the specified time may 

waive the right to appeal the District Court's order. Martinez v. Ylst, 9 

Mark D. Clarke 

United States Magistrate Judge 

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