PAGE 1 – OPINION AND ORDER 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

DEBORAH M. POWELL, 

 Plaintiff, 

 v. 

CAROLYN W. COLVIN, Acting 

Commissioner of Social Security,

 Defendant. 

Case No. 6:14-cv-01900-SI 

OPINION AND ORDER

Kathryn Tassinari and Robert A. Baron, HARDER, WELLS, BARON & MANNING, P.C., 474 

Willamette, Suite 200, Eugene, OR 97401. Of Attorneys for Plaintiff. 

Billy J. Williams, Acting United States Attorney, and Janice E. Herbert, Assistant United States 

Attorney, U.S. Attorney’s Office, 1000 SW Third Avenue, Suite 600, Portland, OR 97204; L. 

Jamala Edwards, Special Assistant United States Attorney, Office of the General Counsel, Social 

Security Administration, 701 Fifth Avenue, Suite 2900 Mailstop 221A, Seattle, WA 98104. Of 

Attorneys for Defendant. 

Michael H. Simon, District Judge.

Deborah M. Powell (“Powell” or “Plaintiff”) seeks judicial review of the final decision of 

the Commissioner of the Social Security Administration (“Commissioner”) denying Plaintiff’s 

application for disability insurance benefits (“DIB”) under Title II of the Social Security Act. For 
PAGE 2 – OPINION AND ORDER 

the following reasons, the Court REVERSES the Commissioner’s decision and REMANDS for 

further proceedings. 

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. 42 U.S.C. § 405(g); see 

also Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989). “Substantial evidence” means 

“more than a mere scintilla but less than a preponderance.” Bray v. Comm’r of Soc. Sec. Admin., 

554 F.3d 1219, 1222 (9th Cir. 2009) (quoting Andrews v. Shalala, 53 F.3d 1035, 1039 (9th 

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

support a conclusion.” Id. (quoting Andrews, 53 F.3d at 1039). 

Where the evidence is 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 the Court may not substitute its judgment 

for that of the Commissioner. See Batson v. Comm’r of Soc. Sec. Admin., 359 F.3d 1190, 1193, 

1196 (9th Cir. 2004). “[A] reviewing court must consider the entire record as a whole and may 

not affirm simply by isolating a specific quantum of supporting evidence.” Orn v. Astrue, 495 

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

Cir. 2006) (quotation marks omitted)). A 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. 
PAGE 3 – OPINION AND ORDER 

BACKGROUND 

A. Plaintiff’s Application 

Powell protectively filed an application for DIB on October 17, 2010, alleging disability 

beginning April 30, 2009. AR 18, 82. She was 33 years old at the alleged disability onset date. 

AR 82. She alleges disability due to the following medical conditions: depression, diabetes, 

fibromyalgia, arthritis and posttraumatic stress disorder (“PTSD”). AR 82, 96. The 

Commissioner denied her application initially on January 14, 2011 and upon reconsideration on 

June 17, 2011. AR 16, 110, 119. Powell requested a hearing before an Administrative Law Judge 

(“ALJ”). AR 18, 122. Powell appeared for a hearing April 10, 2013, and was represented by 

counsel. AR 18. At the hearing, the ALJ heard testimony from Powell and vocational expert 

(“VE”) Caroline Kay Wise. AR 43-81. After considering all the evidence in the record, the ALJ 

concluded that Powell is not disabled under the Social Security Act. AR 18-29. 

Powell petitioned the Appeals Council for review of the ALJ’s decision. AR 8. Powell 

submitted post-decision evidence to the Appeals Council. AR 2. The evidence consisted of a 

psychological evaluation report dated September 19, 2013, from Dr. David R. Truhn, Psy.D. 

AR 2. On October 1, 2014, the Appeals council denied the request for review, rendering the 

ALJ’s decision the final decision of the Commissioner. AR 1-3. The Appeals Council further 

found that Dr. Truhn’s medical evidence related to the period after the ALJ’s decision on 

May 30, 2013, and thus that those records did not affect the ALJ’s decision. AR 2. The Appeals 

Council declined to consider this new evidence. AR 2. Powell now seeks review of the ALJ’s 

decision. 

B. The Sequential 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 
PAGE 4 – OPINION AND ORDER 

can be expected to last for a continuous period of not less than 12 months[.]” 42 U.S.C. 

§ 423(d)(1)(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. 

§§ 404.1520 (DIB), 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). An 

impairment or combination of impairments 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). Unless expected to result in death, 

this impairment must have lasted or 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 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 continues. 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), 
PAGE 5 – OPINION AND ORDER 

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, 1098 (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 

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. 

C. The ALJ’s Decision 

The ALJ began her opinion by noting that Powell met the insured status requirements of 

the Social Security Act through June 30, 2011. AR 18, 21. The ALJ then applied the sequential 

process. AR 21-29. At step one, the ALJ determined that Powell had not engaged in substantial 
PAGE 6 – OPINION AND ORDER 

gainful activity after April 30, 2009, the alleged onset date. AR 21-22. At step two, the ALJ 

determined that Powell has the following severe impairments: insulin dependent diabetes 

mellitus II, fibromyalgia, morbid obesity, PTSD, and depression. Id. The ALJ discussed the 

records from treating nurse practitioner Michele O’Conner, FNP and Dr. Thea Petersen, M.D., 

concerning Powell’s complaints of tingling, hand pain and grip problems, and ultimately 

concluded that there was insufficient evidence to support a diagnosis of neuropathy before the 

last insured date. AR 22-23. The ALJ also mentioned in passing several other health complaints 

claimed by Powell and concluded that in the absence of any definitive diagnoses that those 

complaints were most probably attributable to Powell’s fibromyalgia. AR 23. 

At step three, the ALJ found that Powell did not have an impairment or combination of 

impairments that meets or medically equals the severity of one of the listed impairments in 

20 C.F.R. Part 404, Subpart P, Appendix 1. AR 23-24. The ALJ next found that Powell had 

the [RFC] to perform light work in that she can lift 20 pounds 

occasionally and 10 pounds frequently; sit, stand and walk each 6 

hours out of an 8 hour day for a combined total of 8 hours of 

activity, but requires the option to sit or stand at will while still 

performing essential tasks. She can occasionally climb ladders, 

ropes and scaffolds, frequently climb ramps and stairs, 

occasionally crouch, stoop, crawl and kneel, and frequently 

balance. Ms. Powell is to avoid concentrated exposure to hazard. 

She is to have no public contact and can have casual contact with 

coworkers but no teamwork assignments. Ms. Powell can 

understand and carry out simple instructions. 

AR 24. 

At step four, the ALJ found that Powell was unable to perform her past relevant work. 

AR 28. At step five, based on the testimony of a VE, the ALJ concluded that Powell could 

perform jobs that exist in significant numbers in the national economy including office helper, 

mail sorter, clerical checker, addressing clerk, and price checking clerk. AR 28-29. Accordingly, 

the ALJ found Powell was not disabled. AR 29. 
PAGE 7 – OPINION AND ORDER 

DISCUSSION 

Powell argues that the Appeals Council erred in failing to consider the new evidence 

from Dr. Truhn submitted by Powell in support of her request for review. She further argues that 

the ALJ failed to address the opinion of her treating therapist, Valeria Mainwald, MSW, LCSW. 

Finally, she argues that the ALJ erred in assessing Powell’s physical and mental impairments and 

in failing to pose a hypothetical to the VE that accurately reflected her limitations. 

A. Supplemental Evidence Submitted to the Appeals Council 

Powell first argues that Appeals Council erred by failing to consider evidence from 

Dr. Truhn that Powell submitted in support of her request for review. Powell submitted a report 

by Dr. Truhn dated September 19, 2013, regarding his evaluation of Powell. Dkt. 14-1 at 1-12. 

Powell also submitted a Mental Residual Functional Capacity form (“MRCF”) completed by 

Dr. Truhn. Id. at 13-16. 

Dr. Truhn performed a comprehensive psychological evaluation that included a clinical 

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

Dr. Truhn’s evaluation included the Wechsler Adult Intelligence Scale–Fourth Edition, 

Comprehensive Trail Making Test, Wide Range Achievement Test–4, Minnesota Multiphasic 

Personality Inventory–2–RF, and Millon Clinical Multiaxial Inventory–III. Id. at 7-9. Based on 

this evaluation, Dr. Truhn diagnosed Powell with posttraumatic stress disorder (chronic), 

dysthymic disorder (early onset), major depressive disorder (recurrent, moderate), panic disorder 

without agoraphobia, “rule out” pain disorder associated with both psychological factors and a 
PAGE 8 – OPINION AND ORDER 

general condition,1

 and dependent personality disorder (avoidant, borderline, self-defeating 

features). Id. at 10. 

Powell submitted Dr. Truhn’s MRFC assessment and report to the Appeals Council in 

support of her request for review. AR 2. The Appeals Council denied Powell’s request for 

review, stating that they had “looked at the medical report dated September 19, 2013 from 

Dr. David R. Truhn,” but refused to examine it because “the [ALJ] decided your case through 

June 30, 2011 [and] “[t]his new information is about a later time.” Id. The Appeals Council 

therefore concluded that Dr. Truhn’s evidence “does not affect the decision about whether you 

were disabled at the time you were last insured.” Id.

Powell argues that the Appeals Council was required to examine Dr. Truhn’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 date of the ALJ’s decision where they concern the 

claimant’s condition during the time period before the ALJ’s decision. See Taylor v. Comm’r of 

Soc. Sec. Admin., 659 F.3d 1228, 1232 (9th Cir. 2011). 

The evidence from Dr. Truhn relates to the period of time on or before the date of the 

ALJ hearing decision. Although Dr. Truhn’s MRFC and report were dated after the ALJ’s 

 1

 In the medical context, a “rule-out” or “rule/out” diagnosis “means there is ‘evidence 

that [the patient] may meet the criteria for that diagnosis, but [the doctors] need more 

information to rule it out.’ In other words, there is reason to suspect the presence of a ‘rule-out’ 

psychotic disorder, but the doctor would not be comfortable giving such a diagnosis at that 

time.” United States v. Grape, 549 F.3d 591, 593 n.2 (3d Cir. 2008) (quoting witness testimony) 

(alteration in original). 
PAGE 9 – OPINION AND ORDER 

decision, Dr. Truhn indicated that he was able to infer that Powell’s mental limitations existed at 

the present level dating back to April 30, 2009. Dkt. 14-1 at 16. Dr. Truhn further concluded, that 

considering Powell’s mental abilities, she would be unable to work, as of the date of last insured, 

“independently, appropriately, effectively and on a sustained basis, 7.5 hours per day, five days 

per week, in a regular, competitive work setting” 95-percent of the time. Id. Therefore, the 

Appeals Council erred in concluding Dr. Truhn’s report related to a later time period and in 

refusing to examine Dr. Truhn’s findings. 

The Commissioner cites to Brewes v. Astrue, 682 F.3d 1157, 1159-60 (9th Cir. 2012), 

and Taylor, 659 F.3d at 1231, for the proposition that federal courts cannot review an Appeals 

Council’s denial of a request to review an ALJ’s decision, because the Appeals Council’s 

decisions are not final agency actions. The Commissioner misunderstands Powell’s argument. 

Powell, like the plaintiff in Taylor, is not “arguing that the Appeals Council’s decision to deny 

[her] request for review should be reversed.” 659 F.3d at 1231. Rather, Powell is arguing that 

Dr. Truhn’s evidence was improperly rejected by the Appeals Council and Powell is asking the 

Court to review Dr. Truhn’s “improperly rejected opinion in [the Court’s] overall review of the 

ALJ’s final decision, not in review of the Appeals Council’s decision denying [the] request for 

review.” Id. at 1232. If Powell is correct that the Appeals Council improperly rejected 

Dr. Truhn’s evidence, then the Court may consider this improperly rejected opinion. Id.

This case falls squarely within the factual situation discussed in Taylor. In Taylor, the 

Appeals Council did not consider a mental health evaluation that was dated after the last date 

insured but related to an earlier time period. Id. at 1231-32. The Ninth Circuit noted that if the 

Appeals Council rejected the medical opinion as relating to the later time period, that rejection 

was improper. Id. at 1232. That is precisely what occurred in this case. In Taylor, the Ninth 
PAGE 10 – OPINION AND ORDER 

Circuit ultimately concluded that the Appeals Council had not considered the new medical 

evidence at all, which the Ninth Circuit also held to be an improper rejection of the evidence. Id.

The Ninth Circuit held that: “Where 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.” Id. (citing 20 C.F.R. § 404.970(b)). 

In denying Powell’s request for review, the Appeals Council refused to evaluate the 

evidence from Dr. Truhn, stating that “[t]his new information is based on a later date. Therefore, 

it does not affect the decision about whether you were disabled at the time you were last insured 

for disability benefits.” AR 2. As previously discussed, although dated September 19, 2013, 

Dr Truhn’s opinion concerned the time before the date last insured and the ALJ hearing decision 

and thus the Appeals Council was required to consider it. Taylor, 659 F.3d at 1232; see also 

Lester v. Chater, 81 F.3d 821, 832 (9th Cir. 1996) (noting that “medical evaluations made after 

the expiration of a claimant’s insured status are relevant to an evaluation of the preexpiration 

condition”). Because the Appeals Council improperly rejected the evidence of Dr. Truhn, the 

Court remands the matter to the ALJ for consideration of this evidence. Taylor, 659 F.3d at 1233. 

The Commissioner further argues that under sentence six of 42 U.S.C. § 405(g), the 

Court may only remand for further proceedings if Powell has shown good cause for failing to 

produce the evidence from Dr. Truhn earlier. In support of this argument the Commissioner cites 

to Mayes v. Massanari, 276 F.3d 453, 462 (9th Cir. 2001), and Clem v. Sullivan, 894 F.2d 328, 

332 (9th Cir. 1990). Again, the Commissioner misunderstands Powell’s argument. Powell argues 

that her evidence from Dr. Truhn 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. 

§ 404.970(b). In Taylor, the court found that a remand to the ALJ was appropriate 
PAGE 11 – OPINION AND ORDER 

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).2 659 F.3d at 1233 (citing to Ramirez v. 

Shalala, 8 F.3d 1449, 1452 (9th Cir. 1993) (holding that “[t]he Secretary’s findings must be 

reversed if they are tainted by legal error”)); see also Ward v. Colvin, 2014 WL 4925274, at * 4 

(E.D. Cal. September 30, 2014) (remanding under Taylor for the ALJ to consider new evidence 

improperly rejected by the Appeals Council without undertaking a sentence six analysis); 

Mancillas v. Colvin, 2014 WL 2918897, at *4 (N.D. Cal. June 26, 2014) (same). Thus, the Court 

remands for the ALJ to consider how the evidence from Dr. Truhn could affect each step of the 

sequential analysis, and any relevant credibility findings. 

B. Evidence from Valeria Mainwald, MSW, LCSW 

In April 2011, Powell went to South Lane Mental Health seeking treatment for her 

mental health issues. AR 510-16. Valeria Mainwald, MSW, LCSW, was her treating therapist. 

AR 660. Powell had a number of treatment sessions with Ms. Mainwald before her last insured 

date. AR 506-09. On April 1, 2013, Ms. Mainwald wrote a letter regarding her observations of 

Powell. AR 660-61. Ms. Mainwald indicated that Powell would have difficulty holding a regular 

job because she would likely have issues with attendance, anxiety, flashbacks and fear. AR 661. 

Powell argues that the ALJ erred by ignoring all evidence from Ms. Mainwald. The 

Commissioner responds that although the ALJ did not mention Ms. Mainwald by name, the ALJ 

cited to evidence from Ms. Mainwald. Additionally, argues the Commissioner, if an error was 

made, it did not constitute a reversible error. 

 2

 Even if Powell must show good cause, the Court finds that Powell has done so. Powell 

has limited financial means, had requested that the ALJ supplement the record with a 

comprehensive psychological evaluation, and was not aware how important such an evaluation 

would be until after seeing the ALJ’s opinion and the ALJ’s failure to credit the mental health 

evidence of Powell’s treating licensed clinical social worker. 
PAGE 12 – OPINION AND ORDER 

Under the applicable regulations, only licensed physicians and certain other qualified 

specialists are considered “[a]cceptable medical sources.” 20 C.F.R. § 404.1513(a); see also

Social Security Ruling (“SSR”) 06–03p, available at 2006 WL 2329939 (Aug. 9, 2006) (defining 

“acceptable medical sources” as licensed physicians, licensed or certified psychologists, licensed 

optometrists, licensed podiatrists, and qualified speech pathologists). Other health care providers 

who are not “acceptable medical sources,” such as “nurse practitioners, physician assistants, 

licensed clinical social workers, naturopaths, chiropractors, audiologists, and therapists,” are still 

considered “medical sources” under the regulations, and the ALJ can use these other medical 

source opinions in determining the “severity of the individual’s impairment(s) and how it affects 

the individual’s ability to function.” 20 C.F.R. § 404.1513(d). Because Ms. Mainwald is a 

licensed clinical social worker, she is considered an “other” medical source. 

To reject the competent testimony of “other” medical sources like Ms. Mainwald, the 

ALJ need only give “reasons germane to each witness for doing so.” Molina v. Astrue, 674 F.3d 

1104, 1111 (9th Cir. 2012) (quoting Turner v. Comm’r of Soc. Sec., 613 F.3d 1217, 1224 (9th 

Cir. 2010)). In rejecting such testimony, the ALJ need not cite the specific record so long as 

“arguably germane reasons” for dismissing the testimony are noted, even though the ALJ does 

“not clearly link his determination to those reasons,” and substantial evidence supports the ALJ’s 

decision. Lewis v. Apfel, 236 F.3d 503, 512 (9th Cir. 2001). The ALJ also may “‘draw inferences 

logically flowing from the evidence.’” Tommasetti v. Astrue, 533 F.3d 1035, 1040 (9th 

Cir. 2008) (quoting Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982)). 

Ms. Mainwald’s statements regarding Powell’s symptoms and how her impairments 

affect her ability to work constitute competent, probative evidence from an “other” medical 
PAGE 13 – OPINION AND ORDER 

source.3

 The ALJ gave no reasons, germane or otherwise, for rejecting evidence from 

Ms. Mainwald. The Commissioner points to a section of the ALJ’s decision that cited to medical 

records from Ms. Mainwald’s treatment of Powell as proof that the ALJ addressed 

Ms. Mainwald’s evidence. In Molina, the Ninth Circuit held that although such statements may 

show that the ALJ considered the lay witness evidence in the record, they do not provide 

germane reasons for discounting lay witness evidence. 674 F.3d at 1114-15. Molina further states 

that although “[t]he ALJ gave reasons for rejecting Molina’s testimony . . . that were equally 

relevant to the similar testimony of the lay witnesses, and would support a finding that the lay 

witness testimony was not credible . . . lay witness testimony ‘cannot be disregarded without 

comment.” Id. at 1115 (emphasis in original) (quoting Nguyen, 100 F.3d at 1467). 

Here, the ALJ erred in failing to explain her reasons for disregarding Ms. Mainwald’s 

testimony. The court in Molina went on to hold that the error was harmless, 674 F.3d at 1115. 

Because the Court has concluded that it must remand the case for consideration of the new 

evidence from Dr. Truhn concerning Powell’s mental limitations, the Court does not further 

consider whether the ALJ’s error in silently disregarding Ms. Mainwald’s testimony was 

harmless. Upon remand, the ALJ shall address Ms. Mainwald’s testimony. 

C. Diabetic Neuropathy 

Powell argues that the ALJ erred by failing to find peripheral neuropathy to be a severe 

impairment at step two and failing to include it in the RFC analysis and VE hypothetical. In 

 3

 Powell does not argue that Ms. Mainwald is an acceptable medical source. See 20 

C.F.R. § 404.1513(a). Nor does Powell contend that Ms. Mainwald became an acceptable 

medical source by “working closely with, and under the supervision” of another person who 

constituted an acceptable medical source. Taylor, 659 F.3d at 1234. 
PAGE 14 – OPINION AND ORDER 

determining that Powell’s peripheral neuropathy was not severe, the ALJ considered evidence 

from Michele O’Connor, FNP, and Dr. Thea Petersen, M.D. 

Ms. O’Connor’s testimony is relevant as an “other” medical source under 20 C.F.R. 

§ 404.1513(d)(1), and such testimony may be discounted if the ALJ provides “reasons that are 

germane to each witness.” Molina, 674 F.3d at 1111. The ALJ noted Ms. O’Connor’s diagnosis 

of diabetic neuropathy, but also noted that tests performed by Ms. O’Connor showed no 

objective evidence of the neuropathy. AR 22. In citing to the medical test results, which 

contradicted Ms. O’Connor’s diagnosis, the ALJ provided a germane reason to discount 

Ms. O’Connor’s diagnosis. 

Dr. Petersen’s evidence is relevant as a treating physician under 20 C.F.R. § 404.1527. 

As the ALJ noted, however, Dr. Petersen did not diagnose neuropathy before the date last 

insured. AR 23. Neuropathy first appears in Dr. Petersen’s notes one and one-half years after the 

last insured date, and Dr. Petersen provides no indication regarding the date of onset of the 

diagnosed neuropathy. The ALJ permissibly concluded that Dr. Petersen’s records do not 

provide any evidence that Powell suffered from peripheral neuropathy before the last insured 

date. 

The ALJ’s conclusion that Powell did not have a severe impairment resulting from 

peripheral diabetic neuropathy is supported by substantial evidence in the record and is not in 

error. Even if the ALJ had erred in failing to find a severe impairment as a result of diabetic 

neuropathy, the error would have been harmless because the ALJ included Powell’s symptoms of 

pain, including peripheral pain, in formulating the RFC and hypothetical to the VE. AR 23. 

D. Mental Limitations 

Powell argues that the RFC fails to address the limitations reasonably due to her mental 

health issues. Powell asserts that her mental health issues impair her ability to function in a 
PAGE 15 – OPINION AND ORDER 

workplace. According to Powell, because the ALJ failed to account for all of Powell’s 

limitations, the hypothetical relied on by the VE at step five was faulty. Because the Court has 

found that this case must be remanded to consider the new evidence from Dr. Truhn, the RFC 

determination may need to be reconsidered in light of that new evidence. 

E. Remand 

Within the Court’s discretion under 42 U.S.C. § 405(g) is the “decision whether to 

remand for further proceedings or for an award of benefits.” Holohan v. Massanari, 246 

F.3d 1195, 1210 (9th Cir. 2001) (citation omitted). Although a court should generally remand to 

the agency for additional investigation or explanation, a court has discretion to remand for 

immediate payment of benefits. Treichler v. Comm’r of Soc. Sec. Admin., 775 F.3d 1090, 1099-

1100 (9th Cir. 2014). 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. Id. at 1100. A court may not award benefits 

punitively and must conduct a “credit-as-true” analysis on evidence that has been improperly 

rejected by the ALJ to determine if a claimant is disabled under the Act. Strauss v. Comm’r of 

the Soc. Sec. Admin., 635 F.3d 1135, 1138 (9th Cir. 2011). 

In the Ninth Circuit, the “credit-as-true” doctrine is “settled” and binding on this Court. 

Garrison v. Colvin, 759 F.3d 995, 999 (9th Cir. 2014). It has been described by the United States 

Court of Appeals for the Ninth Circuit as follows: 

[The Ninth Circuit has] devised a three-part credit-as-true standard, 

each part of which must be satisfied in order for a court to remand 

to an ALJ with instructions to calculate and award benefits: (1) the 

record has been fully developed and further administrative 

proceedings would serve no useful purpose; (2) the ALJ has failed 

to provide legally sufficient reasons for rejecting evidence, 

whether claimant testimony or medical opinion; and (3) if the 
PAGE 16 – OPINION AND ORDER 

improperly discredited evidence were credited as true, the ALJ 

would be required to find the claimant disabled on remand. 

Id. at 1020. 

A remand for an immediate award of benefits is not warranted in this case. The record 

has not been fully developed. Powell has submitted new evidence that the ALJ has not yet had a 

chance to evaluate. A remand to the agency for further proceedings to fully develop the record is 

the appropriate remedy. 

CONCLUSION 

The Commissioner’s decision that Powell is not disabled is REVERSED and 

REMANDED for further proceedings consistent with this Opinion. 

IT IS SO ORDERED. 

DATED this 22nd day of February, 2016. 

 /s/ Michael H. Simon 

Michael H. Simon 

 United States District Judge