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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

MANUEL LOVATO,

Plaintiff, Civ. No. 6:16-cv-00046-JR

v. FINDINGS & 

 RECOMMENDATION

NANCY A. BERRYHILL,

ACTING COMMISSIONER OF 

SOCIAL SECURITY,

Defendant.

_______________________________________

RUSSO, Magistrate Judge:

Plaintiff Manuel Lovato, seeks judicial review of the final decision of the Commissioner 

of Social Security (“Commissioner”) denying Supplemental Security Income (“SSI”) under Title 

XVI of the Social Security Act. For the reasons set forth below, the decision of the 

Commissioner should be REVERSED and REMANDED for further proceedings.

BACKGROUND

Plaintiff was born on October 18, 1961. Tr. 27. He has a limited education and is able to 

communicate in English. Id. Plaintiff filed an SSI application on November 3, 2011, alleging 

disability based on diabetes, anxiety, depression, ankle injury, vision loss, and knee pain in both 

knees, with an onset date of March 1, 2008. Tr. 19, 124. His application was denied initially 

and upon review. Tr. 19. Plaintiff requested a hearing before an Administrative Law Judge 

(“ALJ”) and appeared telephonically at a hearing held on November 14, 2013. Id. On April 25, 

2014, the ALJ issued a decision finding plaintiff not disabled. Tr. 29. On November 6, 2015, 
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the Appeals Council denied review, making the ALJ’s decision the final decision of the 

Commissioner. Tr. 1. This appeal followed. 

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)(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, 648 F.3d 721, 724 (9th Cir. 2011). 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 is “severe” if it significantly limits the claimant’s physical or 

mental ability to do basic work activities. 20 C.F.R. §§ 404.1520(c); 

416.920(c). 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 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 
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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. The 

Commissioner bears the burden of proof at step five. Id. at 953-54. 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.” Tackett v. Apfel, 180 F.3d 1094, 1100 (9th Cir. 

1999); 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.

THE ALJ’S FINDINGS

The ALJ performed the sequential analysis. At step one, the ALJ found plaintiff had not 

engaged in substantial gainful activity since the filing date, November 3, 2011, although the ALJ 
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noted that plaintiff’s “[e]xtensive history of incarceration” had interfered with his ability to find 

employment. Tr. 21. At step two, the ALJ determined plaintiff had the following severe 

impairments: anxiety disorder, depressive disorder, anti-social behavior disorder, substance 

abuse, left knee degenerative joint disease, and cirrhosis of the liver. Tr. 22. At step three, the 

ALJ determined plaintiff’s impairments did not meet or medically equal one of the listed 

impairments. Tr. 23.

The ALJ then assessed plaintiff’s RFC and determined plaintiff could perform less than 

the full range of light work with the following additional limitations: the work must be unskilled, 

repetitive, and routine; no contact with the public and only occasional contact with supervisors 

and coworkers; even assuming he is “off-task” at work 9% of the time, he still meets the 

minimum production requirements of the job; he cannot stoop, climb, crawl, kneel, balance, or 

crouch; and he can do no work at any height. Tr. 24. 

At step four, the ALJ determined plaintiff could not perform past relevant work. Tr. 27. 

At step five, the ALJ found plaintiff had the RFC to perform work as an electronics assembler 

and basket filler. Tr. 28. Accordingly, the ALJ found plaintiff not disabled. Tr. 29. 

STANDARD OF REVIEW

The district court must affirm the Commissioner’s decision if the decision is based on 

proper legal standards and the legal findings are supported by substantial evidence in the record. 

42 U.S.C. § 405(g); Batson v. Comm’r, 359 F.3d 1190, 1193 (9th Cir. 2004). Substantial 

evidence “means such relevant evidence as a reasonable mind might accept as adequate to 

support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401 (1971) (citation and internal 

quotation marks omitted). In reviewing the Commissioner’s alleged errors, this court must 

weigh “both the evidence that supports and detracts from the [Commissioner’s] conclusion.” 
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Martinez v. Heckler, 807 F.2d 771, 772 (9th Cir. 1986). Variable interpretations of the evidence 

are insignificant if the Commissioner’s interpretation is rational. Burch v. Barnhart, 400 F.3d 

676, 679 (9th Cir. 2005). 

When the evidence before the ALJ is subject to more than one rational interpretation, we 

must defer to the ALJ's conclusion. Batson, 359 F.3d at 1198 (citing Andrews v. Shalala, 53 

F.3d 1035, 1039-40 (9th Cir. 1995)). A reviewing court, however, cannot affirm the 

Commissioner’s decision on a ground that the agency did not invoke in making its decision. 

Stout v. Comm’r, 454 F.3d 1050, 1054 (9th Cir. 2006). Finally, a court may not reverse an 

ALJ’s decision on account of an error that is harmless. Id. at 1055–56. “[T]he burden of 

showing that an error is harmful normally falls upon the party attacking the agency’s 

determination.” Shinseki v. Sanders, 556 U.S. 396, 409 (2009). 

DISCUSSION

Plaintiff asserts the ALJ erred by improperly rejecting the opinion of the examining 

psychologist and assessing a limitation in the RFC that was not supported by substantial 

evidence. 

I. Medical Opinion Evidence 

Plaintiff asserts the ALJ erred by rejecting the opinion of Dr. Jody Guyette, Psy. D. The 

ALJ is responsible for resolving conflicts in the medical record, including conflicting physicians’ 

opinions. Carmickle v. Comm’r, 533 F.3d 1155, 1164 (9th Cir. 2008). Courts recognize three 

types of medical opinion sources: treating physicians, examining physicians, and non-examining 

physicians. “As a general rule, more weight should be given to the opinion of a treating source 

than to the opinion of doctors who do not treat the claimant.” Lester v. Chater, 81 F.3d 821, 830 

(9th Cir. 1995). “The opinion of an examining physician is, in turn, entitled to greater weight 
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than the opinion of a nonexamining physician.” Id. The ALJ can reject the uncontroverted 

opinion of a treating or examining physician only for “clear and convincing” reasons supported 

with substantial evidence in the record. Orn v. Astrue, 495 F.3d 625, 632 (9th Cir. 2007) 

(internal quotation marks and citation omitted). Even if a treating or examining doctor’s opinion 

is contradicted by another doctor, the ALJ can reject it only by providing “specific and legitimate 

reasons” that are supported by substantial evidence. Id. 

Plaintiff was examined by Dr. Guyette on February 25, 2012. Tr. 305. Dr. Guyette 

diagnosed plaintiff with antisocial personality disorder, polysubstance dependence with full 

sustained remission, and alcohol dependence with “full sustained remission per claimant report.” 

Tr. 308. Dr. Guyette declined to endorse a diagnosis for anxiety or depression. Id. Dr. Guyette 

concluded that plaintiff “would have difficulty with simple and repetitive tasks as well as 

detailed and complex tasks,” as well as “significant difficulty” interacting with coworkers, 

supervisors, or the public. Tr. 309.

During the exam, plaintiff reported that he used to drink heavily, but since the removal of 

his gallbladder he only “has a beer every once in awhile.” Tr. 306-07. Plaintiff admitted to 

drinking one beer before the examination because he was anxious. Tr. 307. Dr. Guyette noted a 

“faint odor of beer,” as well, but reported plaintiff “did not appear inebriated and there were no 

other signs of drug or alcohol use.” Id. 

The ALJ gave some weight to Dr. Guyette’s opinion, noting that the limitations she 

assessed regarding interactions with coworkers and supervisors, as well as difficulty with simple 

repetitive tasks were given less weight because plaintiff did not endorse depression and anxiety 

and “[s]igns of continued alcohol consumption give rise to an inference that the mental 

limitations as described have been exacerbated by alcohol use.” Tr. 26. 
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From this record, it is not clear how a non-endorsement of depression or anxiety 

contradicts Dr. Guyette’s findings as to plaintiff’s cognitive limitations or difficulties in 

interacting with coworkers or supervisors. Moreover, the ALJ does not clearly articulate any 

connection. While plaintiff admitted to having “a beer” before his examination, Dr. Guyette 

noted that plaintiff did not appear inebriated and she expressed no indication that alcohol use 

interfered with plaintiff’s performance during the exam. The ALJ’s inference that plaintiff’s 

mental limitations were exacerbated by alcohol use is not supported by substantial evidence. 

The Commissioner argues that the Court should infer that the ALJ relied on the opinions 

of the non-examining doctors, Dr. Martin Lahr and Dr. Bill Hennings, in assigning reduced

weight to the opinion of Dr. Guyette. The ALJ does not cite to the opinions of Dr. Lahr or Dr. 

Hennings as a basis for discounting the opinion of Dr. Guyette. Courts must review the ALJ’s 

decision “based on the reasoning and factual findings offered by the ALJ—not post hoc

rationalizations that attempt to intuit what the adjudicator may have been thinking.” Bray v. 

Comm’r, 554 F.3d 1219, 1225 (9th Cir. 2009). 

Furthermore, the opinion of a non-examining physician, by itself, is insufficient to 

constitute substantial evidence to reject the opinion of a treating or examining physician. 

Widmark v. Barnhart, 454 F.3d 1063, 1066 n.2 (9th Cir. 2006). While the opinion of a nonexamining physician may serve as substantial evidence in rejecting the opinion of an examining 

or treating physician when that opinion is “consistent with independent clinical findings or other 

evidence in the record,” Thomas v. Barnhart, 278 F.3d 947, 957 (9th Cir. 2002), the ALJ has 

identified no such evidence here.
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The ALJ erred by failing to adequately explain or support his decision to assign reduced 

weight to the opinion of Dr. Guyette. If credited, Dr. Guyette’s opinion might have altered the 

outcome of this case, and so the error cannot be considered harmless. 

II. Plaintiff’s RFC

The ALJ is responsible for resolving conflicts in the medical testimony and translating a 

claimant’s impairments into concrete functional limitations in the RFC. Stubbs-Danielson v. 

Astrue, 539 F.3d 1169, 1174 (9th Cir. 2008). Only limitations supported by substantial evidence 

must be incorporated into the RFC and, by extension, the dispositive hypothetical question posed 

to the Vocational Expert (“VE”). Osenbrock v. Apfel, 240 F.3d 1157, 1163-65 (9th Cir. 2001). 

During the hearing, the ALJ asked the VE for “the maximum percentage of time that 

employers would tolerate an employee being off task as long as they still meet minimum 

production requirements.” Tr. 67-68. The VE testified that employers would “probably” tolerate 

an employee being off task 9% of the time, however, an employee who was off task 10% of the 

time would not be able to sustain employment. Tr. 68. 

In formulating plaintiff’s RFC, the ALJ determined that plaintiff would be off task 9% of 

the time while working, but would still be able to meet the minimum production requirements of 

his job. Tr. 24, 26. The ALJ identified Dr. Guyette’s report as the basis for this conclusion, but 

it is unclear how the ALJ derived a 9% limitation from Dr. Guyette’s findings. 

Based on this record, the Court is unable to discern what substantial evidence supported 

the ALJ’s conclusion that plaintiff would be off task 9% of the time, beyond the VE’s testimony 

that a larger percentage would necessitate a finding of disability. 
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III. Remand

The Ninth Circuit provides that an award of benefits is appropriate where three 

prerequisites are met: (1) the record is fully developed and further administrative proceedings 

would serve no useful purpose; (2) the ALJ has not provided legally sufficient reasons for 

rejecting the evidence; and (3) if the improperly discredited evidence were credited as true, the 

ALJ would be required to find the claimant disabled on remand. Garrison v. Colvin, 759 F.3d 

995, 1020 (9th Cir. 2014). The decision to remand for an award of benefits is always 

discretionary, and the court may decline to do so if there is “serious doubt” the claimant is 

disabled. Id. at 1021. 

As previously discussed, the ALJ failed to provide legally sufficient reasons for 

discounting portions of Dr. Guyette’s report. The Court finds, however, there remains conflicts 

and ambiguities in the record, especially in terms of reconciling Dr. Guyette’s report with the 

reports of the non-examining physicians and the record as a whole. Furthermore, it is not clear

that even crediting Dr. Guyette’s report as true, whether the ALJ would be required to find 

plaintiff disabled. 

Accordingly, the Court should remand this matter for further administrative proceedings 

consistent with this Findings and Recommendation, specifically to allow the ALJ reevaluate Dr. 

Guyette’s opinion, to reassess plaintiff’s RFC, and to determine whether plaintiff is disabled. 
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RECOMMENDATION

Pursuant to sentence four of 42 U.S.C. § 405(g), the decision of the Commissioner should 

be REVERSED and REMANDED for further proceedings consistent with this Findings and 

Recommendation.

This recommendation is not an order that is immediately appealable to the Ninth Circuit 

Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate 

Procedure, should not be filed until entry of the district court’s judgment or appealable order. 

The parties shall have fourteen (14) days from the date of service of a copy of this 

recommendation within which to file specific written objections with the court. Thereafter, the 

parties shall have fourteen (14) days within which to file a response to the objections. Failure to 

timely file objections to any factual determination of the Magistrate Judge will be considered as 

a waiver of a party’s right to de novo consideration of the factual issues and will constitute a 

waiver of a party’s right to appellate review of the findings of fact in an order or judgment 

entered pursuant to this recommendation. 

DATED this 9th day of May 2017.

s/Jolie A. Russo

JOLIE A. RUSSO

United States Magistrate Judge