FINDINGS AND RECOMMENDATION – 1 

 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

CAROLE J. BLANCHER, ) Civil No.: 6:14-cv-01860-JE 

 ) 

 Plaintiff, ) FINDINGS AND 

 ) RECOMMENDATION 

 v. ) 

 ) 

CAROLYN W. COLVIN, ) 

Acting Commissioner of Social Security, ) 

 ) 

 Defendant. ) 

____________________________________ ) 

 Drew L. Johnson

 Drew L. Johnson, P.C. 

 1700 Valley River Drive 

 Eugene, OR 97405 

Kathryn Tassinari

 Harder Wells Baron & Manning, PC 

 474 Willamette Street, Suite 200 

 Eugene, OR 97401 

 

 Attorneys for Plaintiff 

 Billy J. Williams, Acting U.S. Attorney 

 Janice Hebert, Asst. U.S. Attorney 

 1000 S.W. 3rd Avenue, Suite 600 

 Portland, OR 97204 

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 Jordan Goddard 

 Special Asst. U.S. Attorney 

 Office of the General Counsel 

 Social Security Administration 

 701 5th Avenue, Suite 2900 M/S 221 A 

 Seattle, WA 98104-7075 

 Attorneys for Defendants 

JELDERKS, Magistrate Judge: 

 Plaintiff Carole Blancher brings this action pursuant to 42 U.S.C. §405(g) seeking 

judicial review of a final decision of the Commissioner of Social Security (the Commissioner) 

denying her application for Disability Income Benefits (DIB) under the Social Security Act (the 

Act). Plaintiff seeks an Order remanding the action to the Social Security Administration (the 

Agency) for an award of benefits. In the alternative, Plaintiff seeks a remand for further 

proceedings. 

 For the reasons set out below, the Commissioner’s decision should be reversed and this 

action should be remanded for an award of benefits. 

Procedural Background 

 Plaintiff filed an application for a period of disability and for DIB on October 10, 2010 

alleging she had been disabled since June 18, 2010. 

 After her claims were denied initially and upon reconsideration, Plaintiff timely requested 

an administrative hearing. 

 On June 11, 2013, a hearing was held before Administrative Law Judge (ALJ) John 

Michaelsen. Plaintiff and Mark McGowan, a Vocational Expert (VE), testified at the hearing. 

Plaintiff was represented by counsel. 

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 In a decision dated July 17, 2013, ALJ Michaelsen found that Plaintiff was not disabled 

within the meaning of the Act. 

 On September 23, 2014, the Appeals Council denied Plaintiff’s request for review, 

rendering the ALJ’s decision the final decision of the Commissioner. In the present action, 

Plaintiff challenges that decision. 

Background 

 Plaintiff was born in 1966 and was 47 years old at the time the ALJ issued his decision. 

She graduated from high school and received a certificate in cosmetology. Although Plaintiff 

worked as a recess coordinator and a paid care coordinator for a family member, the ALJ found 

that these jobs did not qualify as past relevant work. 

Disability Analysis 

 The ALJ engages in a five-step sequential inquiry to determine whether a claimant is 

disabled within the meaning of the Act. 20 C.F.R. §§ 404.1520, 416.920. Below is a summary 

of the five steps, which also are described in Tackett v. Apfel, 180 F.3d 1094, 1098-99 (9th Cir. 

1999). 

 Step One. The Commissioner determines whether the claimant is engaged in substantial 

gainful activity (SGA). A claimant engaged in such activity is not disabled. If the claimant is 

not engaged in substantial gainful activity, the Commissioner proceeds to evaluate the claimant’s 

case under Step Two. 20 C.F.R. § 404.1520(b). 

 Step Two. The Commissioner determines whether the claimant has one or more severe 

impairments. A claimant who does not have such an impairment is not disabled. If the claimant 

has a severe impairment, the Commissioner proceeds to evaluate the claimant’s case under Step 

Three. 20 C.F.R. § 404.1520(c). 

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 Step Three. Disability cannot be based solely on a severe impairment; therefore, the 

Commissioner next determines whether the claimant’s impairment “meets or equals” one of the 

presumptively disabling impairments listed in the Social Security Administration (SSA) 

regulations, 20 C.F.R. Part 404, Subpart P, Appendix 1. A claimant who has such an impairment 

is disabled. If the claimant’s impairment does not meet or equal an impairment listed in the 

regulations, the Commissioner’s evaluation of the claimant’s case proceeds under Step Four. 

20 C.F.R. § 404.1520(d). 

 Step Four. The Commissioner determines whether the claimant is able to perform 

relevant work he or she has done in the past. A claimant who can perform past relevant work is 

not disabled. If the claimant demonstrates he or she cannot do work performed in the past, the 

Commissioner’s evaluation of the claimant’s case proceeds under Step Five. 20 C.F.R. 

§ 404.1520(f). 

 Step Five. The Commissioner determines whether the claimant is able to do any other 

work. A claimant who cannot perform other work is disabled. If the Commissioner finds that 

the claimant is able to do other work, the Commissioner must show that a significant number of 

jobs exist in the national economy that the claimant can do. The Commissioner may satisfy this 

burden through the testimony of a vocational expert (VE) or by reference to the MedicalVocational Guidelines, 20 C.F.R. Part 404, Subpart P, Appendix 2. If the Commissioner 

demonstrates that a significant number of jobs exist in the national economy that the claimant 

can do, the claimant is not disabled. If the Commissioner does not meet this burden, the claimant 

is disabled. 20 C.F.R. § 404.1520(g)(1). 

 At Steps One through Four, the burden of proof is on the claimant. Tackett, 180 F.3d at 

1098. At Step Five, the burden shifts to the Commissioner to show that the claimant can perform 

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jobs that exist in significant numbers in the national economy. Id. 

Medical Record and Testimony 

 The court has carefully reviewed the medical record and testimony and the parties are 

familiar with both. Accordingly, the details of that evidence will be set out below only as they 

are relevant to the issues before the court. 

ALJ’s Decision 

 As an initial matter, the ALJ found that Plaintiff met the insured status requirements of 

the Act through September 30, 2015. 

 At the first step of his disability analysis, the ALJ found that Plaintiff had not engaged in 

substantial gainful activity since her alleged onset of disability on June 18, 2010. 

 At the second step, the ALJ found that Plaintiff had the following severe impairments: 

multiple sclerosis (MS) and obesity. 

 At the third step, the ALJ found that Plaintiff did not have an impairment or combination 

of impairments that met or equaled a presumptively disabling impairment set out in the listings, 

20 C.F.R. Part 404, Subpart P, App. 1. 

 The ALJ next assessed Plaintiff’s residual functional capacity. He found that Plaintiff 

retained the capacity to perform sedentary work but was further limited to no more than 

occasional crawling, balancing, or climbing; and should avoid concentrated exposure to extreme 

temperatures, humidity, moving machinery, heights or “similar hazards.” Tr. 16-17. In 

determining Plaintiff’s RFC, the ALJ found that Plaintiff’s statements concerning the intensity, 

persistence and limiting effects of her symptoms were not entirely credible. 

 At the fourth step of his disability analysis, the ALJ found that Plaintiff had no past 

relevant work. 

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 At the fifth step, the ALJ found that Plaintiff retained the functional capacity required to 

perform jobs that existed in significant numbers in the national economy. Based upon the VE’s 

testimony, the ALJ cited telephone solicitor, ticket seller, and information clerk as examples of 

work Plaintiff could perform. Based upon the conclusion that Plaintiff could perform such work, 

the ALJ found that Plaintiff was not disabled within the meaning of the Act. 

Standard of Review

 A claimant is disabled if he or she is unable “to engage in 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). Claimants bear the initial burden of establishing disability. Roberts v. Shalala, 66 

F.3d 179, 182 (9th Cir. 1995), cert. denied, 517 U.S. 1122 (1996). The Commissioner bears the 

burden of developing the record, DeLorme v. Sullivan, 924 F.2d 841, 849 (9th Cir. 1991), and 

bears the burden of establishing that a claimant can perform “other work” at Step Five of the 

disability analysis process. Tackett, 180 F.3d at 1098. 

 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 Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995). 

“Substantial evidence means more than a mere scintilla but less than a preponderance; it is such 

relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” 

Andrews, 53 F.3d at 1039. The court must weigh all of the evidence, whether it supports or 

detracts from the Commissioner’s decision. Martinez v. Heckler, 807 F.2d 771, 772 (9th Cir. 

1986). The Commissioner’s decision must be upheld, however, even if “the evidence is 

susceptible to more than one rational interpretation.” Andrews, 53 F.3d at 1039-40. 

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Discussion 

 Plaintiff contends that the ALJ improperly rejected her testimony; failed to give legally 

sufficient reasons for rejecting the opinions of her treating neurologist, Dr. Balm and her treating 

therapist, Jackie Hudson; improperly rejected lay witness evidence; failed to include Plaintiff’s 

lumbar radiculopathy, anxiety and depression at Steps Two and Four of the sequential analysis; 

and failed to meet her burden of proving that Plaintiff retains the capacity to perform “other 

work” in the national economy. 

I. Plaintiff’s Subjective Symptom Testimony1

 Plaintiff contends that the ALJ failed to articulate a clear and convincing reason, 

supported by substantial evidence, for rejecting her statements concerning the extent and severity 

of her impairments. 

A. Standards 

 When a claimant has medically documented impairments that could reasonably be 

expected to produce some degree of the symptoms complained of, and the record contains no 

affirmative evidence of malingering, “the ALJ can reject the claimant’s testimony about the 

severity of . . . symptoms only by offering specific, clear and convincing reasons for doing so.” 

Smolen v. Chater, 80 F.3d 1273, 1281 (9th Cir. 1996) (internal citation omitted). An ALJ 

rejecting a claimant's testimony may not simply provide “general findings,” but instead must 

identify the testimony that is not credible and the evidence that undermines the claimant's 

 

1

 The Social Security Administration recently rescinded Social Security Ruling (“SSR”) 96-7P, “Policy 

Interpretation Ruling Titles II and XVI Evaluation of Symptoms in Disability Claims: Assessing the Credibility of 

an Individual's Statements.” SSR 16-3P, available at 2016 WL 1119029, at *1.The Administration noted the use of 

the term “credibility” was not consistent with its regulations, and further clarified “subjective symptom evaluation is 

not an examination of the individual's character.” Id. Pursuant to SSR 16-3p, the ALJ is no longer tasked with 

making an overarching credibility determination and instead assesses whether the claimant's subjective symptom 

statements are consistent with the record as a whole. Id. The ALJ’s evaluation of Plaintiff’s testimony, here, failed to 

meet either the SSR 96-7P or SSR 16-3P standard. 

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complaints. Dodrill v. Shalala, 12 F.3d 915, 918 (9th Cir.1993). The reasons proffered must be 

“sufficiently specific to permit the reviewing court to conclude that the ALJ did not arbitrarily 

discredit the claimant’s testimony.” Orteza v. Shalala, 50 F.3d 748, 750 (9th Cir. 1995) (internal 

citation omitted). 

 In addition, an ALJ must consider the entire record and consider several factors, 

including the claimant's daily activities; the location, duration, frequency, and intensity of the 

claimant’s pain or other symptoms; medications taken and their effectiveness; treatment other 

than medication; measures other than treatment used to relieve pain or other symptoms; and 

“other factors concerning the individual's functional limitations and restrictions due to pain or 

other symptoms.” C.F.R. §404.1529(c). 

B. Analysis 

 In support of his credibility determination, the ALJ cited evidence that Plaintiff had 

testified to symptoms that were inconsistent with a treatment record that showed she was capable 

of performing limited sedentary work and had engaged in activities of daily living that were 

inconsistent with her contemporary reports of her actual functioning. Because there was no 

evidence of malingering, the ALJ was required to provide clear and convincing reasons for 

supporting his finding that Plaintiff’s testimony was not wholly credible. 

 The reasons supporting the ALJ’s credibility determination do not meet that standard. 

The ALJ’s assertion that Plaintiff’s subjective symptom testimony was inconsistent with the 

medical evidence is not supported by the record. The ALJ, while noting Plaintiff’s “chronic 

fatigue,” asserted her examinations did not show any significant neurological limitations other 

than stiffness in her legs and gait. He thus concluded that the medical evidence showed that 

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Plaintiff was “still capable of performing limited sedentary level activity despite her condition.” 

Tr. 19. 

 The Commissioner contends that Plaintiff’s treating neurologist, Dr. Balm, described 

Plaintiff’s condition as “stable” and that the ALJ noted she exhibited only mild spasticity in her 

legs and gait. Def. Brief at 7, Tr. 17-19. The Commissioner argues that Plaintiff has “failed to 

explain how these mild objective findings in her lower extremities would prevent her from 

performing sedentary work,” and that these mild neurological deficits were a relevant factor for 

the ALJ to consider when evaluating Plaintiff’s subjective symptom testimony. Def. Brief at 

7(emphasis in the original). 

 The Commissioner’s argument is unavailing. At the hearing, Plaintiff testified that she 

cannot work because of debilitating fatigue. Tr. 38, 59. She testified that she naps for two hours 

almost every day and that she gets very sleepy and “nods off” even when she is doing nothing 

during the day except watching television. Tr. 58-59. Plaintiff repeatedly reported excessive 

fatigue to her medical providers. Tr. 42, 209, 306, 360, 401, 410, 413,424, 451, 494, 508. Lay 

witness evidence corroborated that significant fatigue was a pronounced aspect of her 

symptomology. Tr. 238-246. Where, as here, medical evidence establishes the existence of an 

impairment reasonably expected to produce some symptoms, an ALJ cannot reject a claimant's 

testimony on the grounds that the degree of symptoms alleged is not fully supported by objective 

medical evidence. E.g., Cotton v. Bowen, 799 F.2d 1403, 1407 (9th Cir.1986). The ALJ’s 

reliance on what he characterized as mild neurological deficits as a basis for discounting 

Plaintiff’s testimony regarding debilitating fatigue was, therefore, in error. 

 Plaintiff also contends that the ALJ’s evaluation oversimplified and isolated evidence that 

indicated she remained “upbeat” or “in good spirits,” continued to work, and had normal 

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sensation and reflexes. Tr. 18, Pl. Brief at 12-13. Plaintiff correctly notes that the record 

demonstrates that while Plaintiff made an effort to remain positive as she adjusted to her 

diagnosis and subsequent symptomology, she struggled with and was treated for depression and 

anxiety. Tr. 309, 387, 393, 396, 425. The record clearly does not support a finding that Plaintiff’s 

complaints were inconsistent with the medical evidence. 

 Plaintiff also notes that although the ALJ cited Dr. Balm’s January 2013 treatment record 

as demonstrating that Plaintiff continued to work, had normal sensation and reflexes, and 

“stable” MS, that same treatment note also indicated that Plaintiff reported anxiety, back and 

neck pain, loss of coordination and balance, muscle weakness and headaches. Tr. 430. Three 

months later, Plaintiff reported a decline in her mobility and functional status. She reported 

significant fatigue and spasticity. Dr. Balm noted a moderately spastic gait and 4/5 weakness of 

the hip flexors and hamstrings. He opined that she exhibited “slowly progressive myelopathic 

symptoms, without discrete exacerbation.” Tr. 511. An MRI performed on December 13, 2012 

showed lesions on Plaintiff’s cervical spine consistent with chronic plaques of demyelination2

, as 

well as multilevel disc bulges and protrusions/extrusions “resulting in mild to moderate canal 

stenoses with mass effect upon the ventral cord also seen at the C4-5 and C5-6 levels.” Tr. 421. 

 The ALJ’s finding that claimant’s complaints were inconsistent with the objective 

medical evidence is not supported by the record and does not provide a clear and convincing 

reason for rejecting Plaintiff’s testimony. 

 The ALJ also found that Plaintiff’s subjective symptom testimony was less than fully 

credible because he concluded that her activities of daily living were inconsistent with her 

 

2

 Demyelination is damage to the protective covering (myelin sheath) that surrounds nerve fibers in your brain and 

spinal cord. See “Demyelinating disease: What causes it?” The Mayo Clinic (available at 

http://www.mayoclinic.org/diseases-conditions/multiple-sclerosis/expert-answers/demyelinating-disease/faq20058521). 

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allegations that she could not sustain sedentary work. Tr. 19. The ALJ noted that Plaintiff was 

the “designated driver” for her teenage daughter, cared for her family, helped care for family pets 

and assisted with chores, spent two to three hours on the computer daily, socialized with friends, 

enjoyed hobbies and continued to work as a hairdresser. Tr. 19-20. The Commissioner contends 

that Plaintiff’s “under the table work as a hairdresser throughout the alleged period of disability” 

is valid support for the ALJ’s determination that she could maintain less demanding work. Def. 

Brief at 4, Tr. 20. She argues that Plaintiff’s activities must be considered in combination and 

that Plaintiff was able to perform many activities during her day, albeit from a seated position. 

The Commissioner argues that Plaintiff’s daily activities do not need to be the equivalent of fulltime work to serve as a basis for discrediting her claims of a totally debilitating impairment. 

Plaintiff argues that none of the activities cited by the ALJ conflict with her testimony that she 

could not perform even sedentary work on a full-time basis because of fatigue and back pain. 

 Plaintiff’s argument is persuasive. The record supports her contention that she performs 

activities such as household chores for short periods of time throughout the day and with 

frequent and lengthy breaks in between activities. Tr. 42-43, 52-53, 186, 187, 209. She is able to 

drive her daughter for short periods of time but testified she must do so “in a rested state.” Tr. 46, 

51. Plaintiff performs a number of activities from a seated position; however, as noted above, 

chores are performed in brief intervals with periods of rest. In addition, Plaintiff testified she can 

sit for only about two hours before her back pain causes her to have to lie down. Tr. 44. Also, as 

noted, Plaintiff testified that she has needed to nap for two hours each afternoon. Tr. 58. 

 The Commissioner makes much of what she characterizes as Plaintiff’s “under the table 

work” as a hairdresser. Def. Brief at 4, 5, 10, 12, 15, 17. Citing Drouin v. Sullivan, 966 F2d 

1255, 1258 (9th Cir. 1992), the Commissioner argues that this work activity supports the ALJ’s 

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disability determination. I disagree. Lay witness statements indicate that Plaintiff cut hair for 

some of her personal friends. Tr. 240, 244-245. These lay witnesses commented that Plaintiff 

could no longer perform two haircuts without taking a break, had to sit down for part of the time 

and had, on one occasion, needed to cancel a friend’s haircut due to her fatigue. Id. The ALJ did 

not address this activity during the hearing and found that Plaintiff had not engaged in substantial 

gainful activity since her alleged onset date and that she had no past relevant work. Tr. 15, 22. 

 In Drouin, the ALJ discounted the claimant’s allegations of pain in part because she had 

worked during her alleged period of disability but had not lost her past two jobs because of pain. 

The claimant had worked for six months for a fast-food restaurant. She usually worked four 

hours a day, five days a week and occasionally worked an eight-hour shift. She alleged that she 

quit due to mental and physical exhaustion. Prior to that she had worked for almost a year at a 

photo film processing lab but was laid off. Id. at 1256. In finding that there was substantial 

evidence supporting the ALJ’s decision, the Drouin Court noted that the claimant had been able 

to hold “two previous jobs with a fair amount of success, and even if those particular jobs are, as 

she claims, too taxing for her, the vocational counselor testified that she is qualified for 

thousands of less strenuous jobs.” Id. The Drouin Court did not hold, as the Commissioner seems 

to suggest, that the claimant’s work activity, in and of itself, was a clear and convincing reason to 

discredit her testimony. 

 The Commissioner must evaluate a claimant’s “ability to work on a sustained basis.” 20 

C.F.R. §404.1512(a); Lester v. Chater, 81 F.3d. 821, 833 (9th Cir. 1995). A claimant need not be 

utterly incapacitated and even the “sporadic ability to work” is not inconsistent with disability. 

Fair v. Bowen, 885 F.2d 597, 603 (9th Cir. 1989); Lester, 81 F.3d at 833. Here, the record does 

not support the conclusion that Plaintiff’s activities of daily living, including the haircuts she 

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provided for friends, were inconsistent with her allegations that fatigue and back pain precluded 

her from performing even sedentary work on a sustained basis. 

 Here, the ALJ failed to provide clear and convincing reasons for his adverse credibility 

finding. This was not harmless legal error and, accordingly, the action should be remanded. 

II. Evaluating Medical Opinion 

 The ALJ is required to consider all medical opinion evidence and is responsible for 

resolving conflicts and ambiguities in the medical testimony. Tommasetti v. Astrue, 533 F.3d 

1035, 1041 (9th Cir. 2008). In reviewing an ALJ's decision, the court does not assume the role of 

fact-finder, but instead determines whether the decision is supported by substantial evidence in 

light of the record as a whole. Matney v. Sullivan, 981 F.2d 1016, 1019 (9th Cir.1992). 

 Because treating physicians have a “greater opportunity to know and observe” their 

patients, their opinions are given greater weight than the opinions of other physicians. Smolen, 

80 F.3d at 1285. An ALJ must provide clear and convincing reasons for rejecting a treating 

physician's uncontroverted opinions, Lester, 81 F.3d at 830–31; and must provide “specific, 

legitimate reasons ... based upon substantial evidence in the record” for rejecting opinions of a 

treating physician which are contradicted. Magallanes v. Bowen, 881 F.2d 747, 751 (9th 

Cir.1989)(citations omitted). 

A. Dr. Balm 

As noted above, Plaintiff contends the ALJ improperly rejected the opinions of her 

treating neurologist, Dr. Michael Balm. 

 Dr. Balm’s treatment notes begin on March 3, 2010. On that date, Plaintiff’s muscle 

strength, bulk and tone were notable for 2+ spasticity in the left leg and 1+ in the right leg. Tr. 

362. Dr. Balm noted that a December 2009 MRI of Plaintiff’s brain displayed “a single 3mm 

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enhancing lesion, with otherwise moderate MS lesion burden.” He confirmed earlier diagnoses 

of relapsing, remitting MS, initiated Rebif treatment and referred Plaintiff to physical therapy. 

Tr. 363. 

 During an office visit on June 21, 2010, Plaintiff reported neurogenic bladder symptoms 

with urgency, occasional bowel incontinence and difficulty emptying her bladder. She reported 

persistent fatigue and mild balance difficulty. Dr. Balm noted that Plaintiff had chronic 

depression and anxiety. On exam, Plaintiff demonstrated normal strength, bulk and tone in her 

arms and legs. Dr. Balm opined that Plaintiff’s “stamina and ability to perform physically 

demanding work that requires prolonged standing will be compromised by her MS” and that she 

“would find it difficult to work in her current capacity.” Tr. 359 

 In notes of a visit dated December 15, 2010, Dr. Balm noted that Plaintiff’s muscle 

strength, bulk and tone were notable for 2+ spasticity in both legs; she had a mildly spastic gait 

and exhibited new right facial symptoms that suggested the possibility of a small brainstem acute 

MS lesion. Sensation to light touch and vibration were normal in both arms and legs. Dr. Balm 

noted that Plaintiff remained ambulatory “and in good spirits.” Tr. 353-354. 

 During an office visit on June 8, 2011, Plaintiff reported chronic midline upper lumbar 

pain that she felt limited her walking and activity. There had been no change to her neurogenic 

bladder symptoms. Plaintiff reported trouble sleeping and continued chronic fatigue. Dr. Balm 

opined that Plaintiff’s neurogenic bladder and spastic gait disorder were probably aggravating 

her chronic back pain and “her overall sense of decreased endurance that has been slowly 

progressive.” Tr. 348. He noted, “I do think she is experiencing a mild degree of secondary 

progressive symptoms.” Id. 

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 During an office visit on December 7, 2011, Plaintiff reported trouble sleeping, unusual 

fatigue and a slow, gradual increase in imbalance. Dr. Balm noted that Plaintiff’s muscle 

strength, bulk and tone were notable for 2+ spasticity in both legs and her gait was mildly 

spastic. He opined that Plaintiff “represents a high degree of complexity, with significant risk of 

morbidity.”Tr. 389. 

 In treatment notes dated April 17, 2013, Dr. Balm noted that Plaintiff remained 

ambulatory but was using a walking stick “most of the time” and was experiencing “significant 

fatigue and spasticity.”Tr. 508. He noted that she had “slowly progressive myelopathic 

symptoms, without discrete exacerbation” despite Rebif therapy. Tr. 511. Dr. Balm opined that 

Plaintiff was “permanently disabled at this point by her progressive neurologic decline. She is 

not having discrete exacerbations but is having slowly progressive increasing disability as 

documented by history and exam.” Id. 

 The ALJ asserted that Dr. Balm’s opinions were entitled to little weight because despite 

“repeated opportunities to examine the claimant and form an opinion, he fails to provide an 

assessment of her functioning level.” Tr. 20 He also found that Plaintiff’s activities of daily 

living undermined the doctor’s opinion that she was unable to tolerate work activity and his 

opinion regarding her permanent disability was a finding reserved for the Commissioner. Id. 

 The Commissioner argues that the ALJ properly rejected Dr. Balm’s opinion because it 

was brief, conclusory and inadequately supported by clinical findings. She argues that all 

neurological examinations prior to April 2013 documented mild neurological deficits limited to 

Plaintiff’s legs and that Dr. Balm, himself, “expressly acknowledged a lack of clinical findings.” 

Def. Brief at 9 citing Tr. 359. However, a thorough review of the record reveals that Dr. Balm’s 

opinions are consistent with both his own treatment notes and the findings of other providers. 

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See Orn v. Astrue, 495 F.3d 625, 634 (9th Cir. 2007)(record as a whole, including medical test 

results, laboratory findings and reports from other health care providers was sufficient support 

for physician’s opinion). In June 2010, at the beginning of her alleged onset, Dr. Balm did note 

that he discussed with Plaintiff the “lack of specific neurologic deficits demonstrable on exam.” 

Tr. 359. However, in addition to clinical findings that documented increased spasticity and 

mobility issues, Dr. Balm’s notes reflect Plaintiff’s reports of and treatment for her chronic 

fatigue and back pain. When viewed in its entirety, the record demonstrates that Dr. Balm’s 

assessment was based on his interpretation of his exam findings and his multiple interactions 

with Plaintiff as her treating neurologist. 

 Inconsistency with Plaintiff’s activities was also not a legally sufficient reason for 

rejecting Dr. Balm’s opinion. As discussed above in the context of Plaintiff’s credibility, her 

ability to perform certain activities on an intermittent basis, combined with the need to rest and 

to change from a sitting to lying down position are not consistent with the ability to perform 

sedentary work on a sustained basis. As such, Plaintiff’s activities are not inconsistent with Dr. 

Balm’s opinions regarding her ability to work and are thus not a legally sufficient reason for 

failing to credit those opinions. 

The Commissioner next argues that the ALJ properly rejected Dr. Balm’s opinions 

regarding Plaintiff’s ability to work because this is a finding reserved for the Commissioner. The 

ALJ is certainly correct that the ultimate issue of disability is reserved for the Commissioner. 

However, although “the administrative law judge is not bound by the uncontroverted opinions of 

the claimant's physicians on the ultimate issue of disability . . . he cannot reject them without 

presenting clear and convincing reasons for doing so.” Matthews v. Shalala, 10 F.3d 678, 680 

(9th Cir. 1993)(citations omitted). This is especially true when, as in this case, the opinion is 

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provided by a treating source of many years with specialized training. See Holohan v. Massanari, 

246 F.3d 1195, 12021203 (9th Cir. 2001) (citations omitted)(more weight afforded to the 

opinions of specialists concerning matters relating to their specialty and treating physician's 

opinion on disability, even if controverted, can be rejected only with specific and legitimate 

reasons supported by substantial evidence in the record). Thus, the fact Dr. Balm rendered what 

could be characterized as an opinion on the ultimate issue of disability dictates only that the ALJ 

was not bound by that opinion, it did not relieve the ALJ of the obligation to state legally 

sufficient reasons for rejecting it. 

I have already concluded that this action should be remanded due to harmful error in the 

evaluation of Plaintiff’s subjective symptom testimony. I also conclude that the ALJ erred in 

rejecting Dr. Balm’s opinion and that such error also warrants a recommendation to remand. 

B. Ms. Hudson 

 Plaintiff’s mental health therapist, Ms. Jackie Hudson, opined that it would not be 

possible for Plaintiff to work full-time, as she lacked the physical capacity or emotional stamina 

to do so. Plaintiff argues that the ALJ failed to properly consider Ms. Hudson’s opinion. 

 Although Ms. Hudson is not an acceptable medical source and is an “other medical” 

source, evidence from “other medical” sources can demonstrate “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); 

SSR 06-03p, available at 2006 WL 2329939. ALJs must consider opinions from “other” sources, 

and must provide a “germane reason” for their rejection. Turner v. Commissioner of Social 

Security, 613 F.3d 1217, 1224 (9th Cir.2010). 

 The ALJ supported his rejection of Ms. Hudson’s opinion by asserting it was inconsistent 

with Plaintiff’s daily activities and the medical record did not support a finding that Plaintiff has 

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FINDINGS AND RECOMMENDATION – 18 

any severe mental impairments. He also rejected her opinion because she “largely followed the 

claimant for depression and anxiety, so her opinion regarding the claimant’s physical limitations 

carries little weight.” Tr. 21 

 For the same reasons discussed with regard to the ALJ’s assessment of Plaintiff’s 

credibility and Dr. Balm’s opinion, I conclude that Plaintiff’s activities of daily living were not a 

germane reason for rejecting Ms. Hudson’s opinion. Likewise, although the ALJ concluded that 

Plaintiff did not have any severe mental impairments, the record does support the conclusion that 

she struggled with significant anxiety and depression. Tr. 309, 387, 393, 396, 493-495, 425, 504-

507. The record, therefore, is not inconsistent with Ms. Hudson’s opinion that Plaintiff lacked the 

“emotional stamina” to work full-time. 

 Nevertheless, Ms. Hudson’s lack of medical expertise was a proper basis for discounting 

her opinion. Although I agree with Plaintiff that Ms. Hudson’s personal observations of 

Plaintiff’s physical challenges were valid lay witness evidence, I also agree that these 

observations neither refute a determination that Plaintiff cannot perform sedentary work nor are 

they sufficient to support a medical conclusion that Plaintiff lacks the physical stamina to work 

full-time. Thus, despite offering two legally insufficient reasons, the ALJ did offer a single 

germane reason for rejecting Ms. Hudson’s opinion. Accordingly, I conclude there was no error. 

III. Lay Witness Evidence 

Eight lay witnesses, including Plaintiff’s husband, submitted letters describing their 

observations of Plaintiff’s limitations. Plaintiff contends the ALJ did not provide legally 

sufficient reasons for disregarding this evidence. Lay witness testimony regarding a claimant’s 

symptoms or how an impairment affects a claimant’s ability to work is competent evidence that 

an ALJ must take into account. Nguyen v. Chater, 100 F3d 1462, 1467 (9th Cir. 1996)(citations 

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FINDINGS AND RECOMMENDATION – 19 

omitted). The ALJ must provide “reasons germane to each witness” in order to reject such 

testimony. Lewis v. Apfel, 236 F.3d 503, 511 (9th Cir. 2001)(citations omitted). Here, the ALJ 

summarized the lay witness statements then wrote: 

The undersigned has carefully considered the lay witness statements by the 

claimant’s family and friends. However, these statements do not convince the 

undersigned that the residual functional capacity is less limiting than warranted by 

the evidence discussed in this decision. Although the claimant’s family and 

friends have understandably expressed their concern over the claimant’s 

condition, their statements regarding the claimant’s perceived limitations are not 

completely consistent with the medical evidence of record. 

Tr. 22. 

 The ALJ’s treatment of the lay witness statements was improper for at least two reasons. 

First, his blanket assessment addressing all lay witness evidence together fails to meet the 

requirement that he support his rejection of lay witness evidence with reasons “germane to each

witness.” Lewis, 236 F.3d at 511(emphasis added). Furthermore, an ALJ may not reject a lay 

witness's subjective report merely because it is not corroborated by objective medical evidence. 

Bruce v. Astrue, 557 F.3d 1113, 1116 (9th Cir.2009); see also SSR 96-7p, available at 1996 WL 

374186 (1996)(“allegations concerning the intensity and persistence of pain or other symptoms 

may not be disregarded solely because they are not substantiated by objective medical 

evidence”). In addition, the Commissioner’s argument that “it is not clear how [the lay witness 

statements] contradict the ALJ’s finding that Plaintiff could perform sedentary work,” is 

unavailing. Def. Brief at 13. Plaintiff’s husband wrote that Plaintiff needed frequent naps to 

recover from any level of exertion. Tr. 242. Plaintiff’s mother-in-law wrote that Plaintiff spent 

most of her time lying down and her fatigue had steadily worsened. Tr. 239. Other friends and 

family noted Plaintiff’s significant fatigue and its interference with her daily activities. Tr. 240-

241, 244, 246. 

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FINDINGS AND RECOMMENDATION – 20 

 The ALJ here improperly discounted lay witness statements and this error further 

supports a recommendation for remand. 

IV. Remand 

 A reviewing court has discretion to remand an action for further proceedings or for a 

finding of disability and an award of benefits. See, e.g., Stone v. Heckler, 761 F.2d 530, 533 (9th 

Cir.1985). Whether an action is remanded for an award of benefits or for further proceedings 

depends on the likely utility of additional proceedings. Harman v. Apfel, 211 F.3d 1172, 1179 

(9th Cir. 2000). 

 In determining whether an award of benefits is warranted the court follows the “threepart credit-as-true standard.” Garrison v. Colvin, 759 F3d 995, 1020 (9th Cir. 2014). Under this 

standard the court considers whether: “(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's testimony or medical 

opinion; and (3) if the improperly discredited evidence were credited as true, the ALJ would be 

required to find the claimant disabled on remand.” Id. (citing Ryan v. Comm'r Soc. Sec., 528 

F.3d 1194, 1202 (9th Cir. 2008)) 

 On the first factor, there is no need to further develop the record. See Garrison, 759 F.3d 

at 1021 (citing Benecke v. Barnhart, 379 F.3d 587, 595(9th Cir. 2004)) (“Allowing the 

Commissioner to decide the issue again would create an unfair ‘heads we win; tails, let's play 

again’ system of disability benefits adjudication.”)). On the second factor, the court has 

concluded that the ALJ failed to provide legally sufficient reasons that are supported by 

substantial evidence in the record for rejecting Dr. Balm’s opinions and failed to provide legally 

sufficient reasons for rejecting Plaintiff's subjective complaints. On the third factor, if the 

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FINDINGS AND RECOMMENDATION – 21 

discredited evidence were credited as true, the ALJ would be required to find Plaintiff disabled 

on remand because the vocational expert testified that a person with the limitations that Dr. Balm 

identified and to which Plaintiff testified, would be incapable of sustained full-time work. Tr. 65-

67. 

 If a court concludes, as in this case, that a Plaintiff meets the three criteria of the creditas-true standard, the improperly discredited evidence is credited as true and remand for an award 

of benefits is appropriate unless “the record as a whole creates serious doubt as to whether the 

claimant is, in fact, disabled with the meaning of the Social Security Act.” Garrison, 759 F.3d at 

1020-1021) (citations omitted). 

 Considering the record as a whole, I conclude that there is no reason for serious doubt as 

to whether Plaintiff is disabled. On the record before the Court, Dr. Balm's opinions and 

Plaintiff's subjective complaints should be credited as true and the case should be remanded for 

an award of benefits.3 

Conclusion 

 For the reasons set out above, a judgment should be entered REVERSING the 

Commissioner’s decision and REMANDING this action to the Agency for an award of benefits.

Scheduling Order

 This Findings and Recommendation will be referred to a district judge. Objections, 

if any, are due September 19, 2016. If no objections are filed, then the Findings and 

Recommendation will go under advisement on that date. 

 

3

 Plaintiff also contends and provides cursory argument that the ALJ erred in failing to include her lumbar 

radiculopathy, depression and anxiety at Steps two and four of the sequential analysis and erred in concluding that 

Plaintiff retained the capacity to perform “other work” in the national economy. Because I have concluded that this 

action should be remanded for an award of benefits for other reasons I need not and do not address those issues here. 

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FINDINGS AND RECOMMENDATION – 22 

 If objections are filed, then a response is due within 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 Recommendation will go under advisement. 

 DATED this 1st day of September, 2016. 

 

 /s/ John Jelderks 

 John Jelderks 

 U.S. Magistrate Judge 

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