UNITED STATES CO URT OF APPEALS FOR THE TENTH CIRCUIT

ANTHONY JARAMILLO, Plaintiff - Appellant,

v. CAROLYN W. COLVIN, Acting Commissioner of Social Security Administration, Defendant - Appellee. No. 13-2194 (D.C. No. 1:11-CV-00980-RB-RHS) (D. N.M.)

ORDER AND JUDGMENT *

Before McHUGH , ANDERSON , and O’BRIEN , Circuit Judges.
Anthony Jaramillo appeals from the di strict court’s judgm ent affirming the denial of his application for social s ecurity disability be nefits. Exercising jurisdiction under 42 U.S.C. § 405(g) and 28 U.S.C. § 12 91, we reverse and remand for further considerat ion by the agency.

* After examining the briefs and appella te record, this pa nel has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctr ines of law of the case, res judicata, and collateral estoppel. It may be cite d, however, for its persuasi ve value consistent with Fed. R. App. P. 32.1 a nd 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### August 27, 2014 Elisabeth A. Shumaker Clerk of Court- 2 - I. Background Mr. Jaramillo applied for disability benefits based on neck and back pain, depression, anxiety, a broken clavicle, and sleep apn ea. After his application was denied initially and upon reconsideration, he had a hearing before an administrative law judge (ALJ). The ALJ found Mr. Jaramill o not disabled at the fifth and final step of the sequential evaluation used to assess social s ecurity claims. See 20 C.F.R. § 404.1520(a)(4) (describing five-step process). Specifi cally, the ALJ determined that despite several severe impairments that were not of listing-level severity (depression, post-traumatic st ress disorder, sleep apnea, degenerative disc disease, and headaches), Mr. Jaramill o retained the residual func tional capacity (RFC) to perform sedentary work but was “limited to simple, ro utine, repetitive and unskilled tasks” and had to avoid all exposure to di rect sunlight. Aplt. App., Vol. I at 18 (boldface omitted). At the h earing, the ALJ asked a voca tional expert (VE) whether there were any jobs someone with such an RFC could perform. The VE identified three, on which the ALJ relied in concludi ng that Mr. Jaramillo was not disabled: “label cutter,” “dowel insp ector,” and “stop attacher (s liding bottom of zippers in place, via machine).” Id. at 25. The Appeals Council de nied review, and the district court affirmed. II. The relevant medical evidence Mr. Jaramillo’s appeal focu ses on the limitation to simp le, routine, repetitive, and unskilled tasks in the ALJ’s RFC and dispositive hypothetical to the VE, which- 3 - he claims was insufficient to encompass his mental limita tions. He also takes issue with the ALJ’s handling of the medical evid ence related to his mental limitations. We will first review that medical evid ence and the ALJ’s comments on it before analyzing the issues. Three different state-agency medi cal consultants provided opinions on Mr. Jaramillo’s mental abilities. Two of those cons ultants examined Mr. Jaramillo, but the third did not. In 2007, Dr. Louis Wynne, Ph.D., examin ed Mr. Jaramillo and opined that he had no more than a mild limitation in his ab ility to concentrate a nd persist at simple work tasks. Otherwise, Dr. Wynne foun d Mr. Jaramillo could read and understand basic instructions; could interact well with the general public; would have no difficulty interacting with co-workers or supervisors; and coul d adapt to workplace changes, recognize hazards, and ma nage his own benefit payments. In 2009, psychiatrist Dr . Charles Mellon, M.D., ex amined Mr. Jaramillo and considered him moderately limited in his ability to (1 ) carry out instructions, (2) attend and concentrate, and (3) work without supervision. Dr. Mellon found Mr. Jaramillo not limited in any of th e other mental activ ities listed on the examination form: understand and remember very short and simple or detailed or complex instructions; interact with the pub lic, coworkers, and s upervisors; adapt to changes in the workplace; be aware of nor mal hazards and react appropriately; and use public transportation or tr avel to unfamiliar places.- 4 - Shortly after Dr. Mellon’s report, Dr . Scott Walker, M.D., reviewed the medical records (including the reports of Dr. Wynne and Dr. Mellon) and completed a Mental Residual Function Capacity Asse ssment (MRFCA). Dr. Walker did not examine Mr. Jaramillo. In Section I of the form, Dr. Wa lker checked boxes indicating moderate limita tions in nine mental ac tivities, seven of which Mr. Jaramillo emphasizes on appeal: (1) “m aintain attention and concentration for extended periods”; (2) “perfo rm activities within a sc hedule, maintain regular attendance, and be punctual within customary tolerances”; (3) “sustain an ordinary routine without special supe rvision”; (4) “complete a nor mal workday and workweek without interruptions from psychologically based symptoms and to perform at a consistent pace without an unreasonable number and length of rest periods”; (5) “accept instructions and respond appropriately to cr iticism from supervisors”; (6) “respond appropriately to ch anges in the work setting”; and (7) “set realistic goals or make plans independently of others.” Aplt. App., Vol. II at 427-28. In Section III of the MRFCA, Dr. Walker wrote a short narrative, stating that Mr. Jaramillo “is focused on his physical condition/pain. Ne vertheless, he can understand, remember, and carry out simple instructions, make si mple decisions, attend and concentrate for two hours at a time, interact adequately with co-workers and supervisors, and respond appropriately to changes in a routine work setting.” Id. at 429. The ALJ expressly discussed the findings of Dr. Mellon and Dr. Wynne, Aplt. App., Vol. I at 17, 20, then stated that the “State Agency medi cal consultants . . .- 5 - determined that . . . it did not appear there were any si gnificant functional limitations to prevent the claimant’s full-tim e participation in the workforce,” id. at 23. He then essentially summarized Dr. Walker’s Section III narrativ e comments and stated he “concur[red] in their opini on [i.e., the opinions of the state agency medical consultants] with respect to the claimant’s mental hea lth diagnoses and limitations, for the reasons discussed in this decision.” Id. A page later, in a summary paragraph, he stated that he placed great weight on the opinions of Drs. Wynne and Mellon as it [sic] relates to claimant ’s limitations resulting from his mental health conditions. On the basis of their opinions I have limited claimant to simple, routine, repetitive, [unskilled 1 ] tasks. I note that Dr. Wynne concluded that the clai mant could read and un derstand basic written instructions and his concentration a nd ability to persist at simple work tasks was no more than mildly impaired. Id. at 24. III. Discussion A. Standard of review Our task is limited to determining wh ether the agency’s “factual findings are supported by substantial eviden ce and whether correct legal standards were applied.” Barnett v. Apfel , 231 F.3d 687, 689 (10t h Cir. 2000). “Substant ial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (internal quotation marks omitt ed). We cannot “reweigh the

1 The ALJ actually said “simple” again, but obviously meant uns killed, as in his formal RFC finding.- 6 - evidence” or “substitute our judgmen t for that of the agency.” Id. (internal quotation marks omitted). B. Whether the ALJ improperly ignored evidence Before turning to Mr. Ja ramillo’s primary argumen t, we will address his subsidiary contention that the ALJ impr operly picked and chose portions of the medical evidence to support hi s RFC finding. Mr. Jaramillo claims the ALJ erred in this respect by (1) not incorporating Dr. Me llon’s moderate limita tions into his RFC finding, (2) not assigning any weight to Dr . Walker’s opinion, a nd (3) not discussing or explaining why he did not adopt four of the modera te limitations Dr. Walker found in Section I of the MRFCA. It is not entirely clear whether the AL J improperly considered only portions of the evidence favorable to the de termination, as Mr. Jaramillo suggests. To the extent he did, he erred. See Hardman v. Barnhart , 362 F.3d 676, 681 (10t h Cir. 2004) (“It is improper for the ALJ to pick and choo se among medical reports , using portions of evidence favorable to his position while ignoring other evidence.”). Given that Dr. Mellon’s examination was mo re recent (by two years) than Dr. Wynne’s, and that Dr. Walker did not examine Mr. Jaramillo, the moderate limitations Dr. Mellon found in three mental activit ies are significant. See Howard v. Barnhart , 379 F.3d 945, 948 (10th Cir. 2004) (con cluding that report indicating cl aimant had no pain and normal gait was substantial evidence supporting ALJ’s RFC finding because it was “more recent” than records generated one month after injury); 20 C.F.R. § 404.1527(c)(1)- 7 - (stating that the agency gene rally “give[s] more weight to the opinion of a source who has examined [the clai mant] than to the opinion of a source who has not examined [him]”); cf. Harris v. Sec’y of Health & Human Servs. , 821 F.2d 541, 544 (10th Cir. 1987) (ALJ not justified in discounting treating physician’s new opinion that claimant’s condition was deteriorati ng, thus changing phys ician’s prior opinion that claimant would be ab le to return to work). 2 But with the sole exception of Dr. Wa lker’s Section I lim itations, which we will discuss separately below, we read the restriction to simple, routine, repetitive, and unskilled tasks as the AL J’s attempt to incorporate the limitations found by all three consultants rather than as a violation of Hardman . The ALJ expressly placed great weight on the opinions of Dr. Mellon and Dr. Wynne, summarized Dr. Walker’s Section III narrative, and conc urred in the consultants’ opinions. Thus, our ensuing analysis turns on whether the limitation to simple, routine, re petitive, and unskilled tasks included in the dispositive hypothetic al to the VE adequa tely accounts for the consultants’ opinions about Mr. Ja ramillo’s mental impairments. C. Expressing mental limitations in the RFC finding Mr. Jaramillo’s primary argument is th at, by limiting him to simple, routine, repetitive, and unskilled tasks, the ALJ viol ated the requirement of Social Security

2 Mr. Jaramillo also clai ms that although Dr. Wy nne’s opinion was after the alleged onset date of his di sability, it predates the pe riod for which he can collect benefits, implying that the opi nion’s relevance is of dimi nished importance. Given our disposition of this case, we need not address this issue.- 8 - Ruling (SSR) 96-8p that “nonexertional capac ity [which includes mental limitations] must be expressed in terms of work-rela ted functions” or “[w] ork-related mental activities.” SSR 96-8p, 1996 WL 374184, at *6 (July 2, 1996). He points out that in Chapo v. Astrue , we explained that “men tal functions . . . ‘are not skills but, rather, general prerequisites for most work at a ny skill level.’” 682 F.3d 1285, 1290 n.3 (10th Cir. 2012) (quoting Wayland v. Chater , Nos. 95-7029 & 95-7059, 1996 WL 50459, at *2 (10th Cir. Fe b. 7, 1996) (unpublished)). He further notes a similar statement in an unpublished case, Groberg v. Astrue , 505 F. App’x 763, 770 (10th Cir. 2012), that “[a] li mitation to ‘simple work’ or ‘ unskilled jobs’ is generally insufficient to address a clai mant’s mental impairments.” Mr. Jaramillo also relies on a provisi on of another SSR that recognizes a distinction between mental functions and skill level: Because response to the demands of work is highly individualized, the skill level of a position is not necessa rily related to the difficulty an individual will have in meeting the de mands of the job. A claimant’s condition may make performance of an unskilled job as di fficult as an objectively more demanding job. . . . Any impairment-related limitations created by an individual’s response to demands of work . . . must be reflected in the RFC assessment. SSR 85-15, 1985 WL 56857, at *6. He furt her notes that, according to the Social Security Administration’s Program Operations Manual System (POMS), “[m]oderately limited” means “the ev idence supports the c onclusion that the individual’s capacity to perform the activity is impaired.” POMS DI 24510.063 B.2.- 9 - (boldface omitted). 3 And he points to two pub lished cases from this circuit remanding where the ALJ failed to explain the omission of moderate limitations from an RFC finding. See Haga v. Astrue , 482 F.3d 1205, 1208 (10t h Cir. 2007) (rejecting argument that moderate impa irment means an ability to function satisfactorily, as formerly defined on the MRFCA); see also Frantz v. Astrue , 509 F.3d 1299, 1302-03 (10th Cir. 2007) (relying on Haga and remanding where RFC failed to reflect moderate limitations identif ied on an MRFCA, including “maintaining attention and concentration for an extended period of ti me” (internal quotation marks omitted)). We agree with Mr. Jaramillo, at leas t with respect to Dr. Mellon. Under SSR 85-15, “[t]he basic me ntal demands of competitiv e, remunerative, unskilled work include the abi lities (on a sustained basis) to understand, carry out, and remember simple instructions ; to respond appropriately to supervision, coworkers, and usual work situations; and to deal w ith changes in a rou tine work setting.” SSR 85-15, 1985 WL 56857, at *4 (1985). 4 These abilities are examples of work-related mental functions. See SSR 96-8p, 1996 WL 374184, at *6. Therefore,

3 The POMS is “a set of policies issued by the Admini stration to be used in processing claims.” McNamar v. Apfel , 172 F.3d 764, 766 (10t h Cir. 1999). This court “defer[s] to the POMS provisions unless we determine they are ‘arbitrary, capricious, or contrary to law.’” Ramey v. Reinertson , 268 F.3d 955, 964 n.2 (10th Cir. 2001) (quoting McNamar , 172 F.3d at 766).
4 “Unskilled work” is also described by regulation as “work which needs little or no judgment to do simple duties that can be learned on the job in a short period of time.” 20 C.F.R. § 404.1568(a). However, this description adds nothing relevant to our analysis.- 10 - a limitation to unskilled work or, as the AL J phrased it here, “unskilled tasks,” could be used as shorthand for th e specific mental abilities described in SSR 85-15, and that is how we read the AL J’s decision in this case. Mr. Jaramillo does not contend (nor doe s it appear) that Dr. Wynne’s mild limitation in the ability to concentrate and persist at simple ta sks exceeds the basic mental demands of unskilled work as desc ribed in SSR 85-15. And Dr. Walker’s narrative largely tracks the passage quot ed from SSR 85-15. The only portion that does not track the Ruling is his finding th at Mr. Jaramillo could concentrate for two-hour periods. But that finding conforms with POMS DI 25020.010 B.2.a., which states that any job, including unskilled wo rk, requires “[t]he ab ility to maintain concentration and attention for extended pe riods (the approximate ly 2-hour segments between arrival and first break , lunch, second break, and de parture),” and with POMS DI 25020.010 B.3.d., which lists the abil ity to “maintain attention for extended periods of 2-hour segments (concentrati on is not critical)” among “Mental Abilities Critical For Performing Unskill ed Work.” Hence, althou gh this court has noted a distinction between skill le vel and mental functions, see, e.g. , Chapo , 682 F.3d at 1290 n.3, the distinction does not apply here with re spect to Dr. Wynne’s mild limitation or the mental capac ities set out in Dr. Walke r’s Section III narrative. However, the distinction is relevant to Dr. Mellon’s opinion, on which the ALJ expressly placed great weight. None of the basic mental abilities of unskilled work described in SSR 85-15 captures any of the three moderate limitations Dr. Mellon- 11 - found (carry out instructions , attend and concentrate, and work without supervision), nor do the additional limitations to simple, routine, and repetitive tasks. “[A] moderate impairment is not the sa me as no impairment at all.” Haga , 482 F.3d at 1208. Instead, it “supports the conclusion that the indi vidual’s capacity to perform the activity is impaired,” POMS DI 24510. 063 B.2. (boldface om itted), and therefore must be related with suffici ent precision in a dispositive hypothetical to a VE and in an RFC finding. The limitation to simple, r outine, repetitive, and unskilled tasks the ALJ included in his hypothe tical to the VE did not cl early relate the moderate impairments Dr. Mellon found. Rather, the ALJ was required to express those impairments “in terms of work-related functions” or “[w]ork-related mental activities,” SSR 96-8p, 1996 WL 374184, at *6. As a result, the ALJ’s reliance on the jobs the VE identifie d in response to the hypot hetical was not supported by substantial evidence. See Evans v. Chater , 55 F.3d 530, 532 (10th Cir. 1995) (explaining that a hypothetical inquiry to a VE “must include all (and only) those impairments borne out by the evidentiary record”); Hargis v. Sullivan , 945 F.2d 1482, 1492 (10th Ci r. 1991) (“Testimony elicited by hypothetical questions that do not relate with precision all of a claimant’s impairments cannot constitute substantial evidence to support the [Commissioner’s] d ecision.” (brackets and internal quotation marks omitted)). We are unpersuaded by the Commissioner’s arguments to the contrary. She first claims that the limi tation to simple, repetitive, routine, and unskilled tasks- 12 - accounted for the functional limitati ons all three consultants found. See Appellee’s Br. at 21. But the analysis related to this conclusion concerns only Dr. Walker’s Section III narrative. See id. at 21-23. As shown abov e, Dr. Mellon found more severe limitations than Dr. Walker did in his Section III narrative. Moreover, the unpublished cases the Commissioner cites 5 for the proposition that moderate levels of impairment do not preclude non -complex work are unpersua sive given the facts of this case and in light of our statements in published cases that moderate limitations must be accounted for in an RFC findi ng and, consequently, in a dispositive hypothetical to a VE. See Frantz , 509 F.3d at 1302-03; Haga , 482 F.3d at 1208. We also are unpersuaded by two othe r unpublished cases the Commissioner cites for her conclusion that a limitation to unskilled work is adequate to encompass a variety of moderate mental limitations. See Wendelin v. Astrue , 366 F. App’x 899, 904 (10th Cir. 2010); Heinritz v. Barnhart , 191 F. App’x 718, 721-22 (10th Cir. 2006). Neither of those cases examin ed the specific mental abilities that can properly be inferred from a limitation to “unskilled work ” under SSR 85-15. And we have reached the opposite conclusion in at least one other unp ublished case where SSR 85-15 also was not considered. See Wiederholt v. Barnhart , 121 F. App’x 833, 839 (10th Cir. 2005) ( holding that limitation to “sim ple, unskilled job tasks” was

5 Those cases are: Atkinson v. Astrue , 389 F. App’x 804 (10th Cir. 2010), Sayles v. Astrue , 275 F. App’x 790 (10th Cir. 2008), and Foy v. Barnhart , 139 F. App’x 39 (10th Cir. 2005).- 13 - insufficient to incorporate “moderate di fficulties maintaining concentration, persistence, or pace”). The Commissioner cites to a portion of SSR 85-15 for the proposition that “[a] claimant who has ‘a substantial loss of ability to meet any of these basic work-related activities [to understand, carry out, and re member simple instructions; to respond appropriately to supervision, coworkers, a nd usual work situations; and to deal with changes in a routine work se tting]’ may be unable to perfo rm even unskilled work.” Appellee’s Br. at 24 (emphasis added) (quo ting SSR 85-15, 1985 WL 56857, at *4). But the framing of this proposition is somewhat misleading because the Commissioner has paraphrased the last part of the material quoted from SSR 85-15, which focuses on using the Medical-Vocationa l Guidelines (or “gri ds,” as they are often referred to), 20 C.F.R. Pt. 404, Subpt. P., App. 2, as a framework for a disability determination when solely nonexertional impairments are involved. See SSR 85-15, 1985 WL 56857, at *1. 6 The full statement reads: “A substantial loss of ability to meet any of these basic work-re lated activities would severely limit the potential occupational base[,]” which “wou ld justify a finding of disability.” SSR 85-15, 1985 WL 56857, at *4.

6 Even though Mr. Jaramillo did not ha ve solely nonexertional impairments (he was also limited to sedentary work), SSR 85- 15 is still useful for its discussion of the mental requirements for unskilled work.- 14 - But it does not automatically follo w from this proposition that only a substantial loss of ability is relevant to a claimant’s ability to work. Because the ALJ used the grids as a fra mework in this case, he was requi red to “identify, and establish [Mr. Jaramillo’s] ability to perform, so me specific occupation(s) which—however few in themselves—encompass a signi ficant number of available jobs.” Evans , 55 F.3d at 532. Accordingly, the pa ssage from SSR 85-15 that the Commissioner relies on does not justify omitting modera te limitations from an RFC finding or from the dispositive hypothetical to a VE. The Commissioner also notes that in Chapo , the claimant had more numerous and more severe impairments. But the relevant point of Chapo is its distinction between skills and mental functions, a distinc tion that we consider applicable to the moderate limitations Dr. Mellon found. The Commissi oner further claims that Groberg is distinguishable becaus e the limitation found insuffi cient to address mental impairments was to “simple work” or “unskilled jobs,” see 505 F. App’x at 770, whereas the ALJ here limited Mr. Jaramillo to jobs that were not only simple and unskilled but also “routine” a nd “repetitive.” This is a meaningless distinction because neither “routine” nor “repetitive” is logically connected to any of the moderate limitations th at Dr. Mellon found. D. Dr. Walker’s Section I limitations Mr. Jaramillo also claims th at (1) the ALJ erred in fail ing to discuss four of the moderate limitations Dr. Wa lker found in Section I of the MRFCA; (2) Dr. Walker- 15 - failed to elaborate in Sec tion III on all of the moderate limitations he found in Section I, as required by POMS DI 24510.063; and (3 ) Dr. Walker’s Section III narrative contradicts some of the modera te limitations he found in Section I. See Aplt. Opening Br. at 14 n.10, 21-22. Althou gh he argued to the district court that the ALJ erred in failing to in clude the Section I moderate limitations in his RFC, he did not advance his POMS-based arguments or contend that Dr. Walker’s Section III narrative contradicted some of the moderate limitations he marked in Section I. “Absent compelling reasons, we do not consider arguments that were not presented to the district court.” Crow v. Shalala , 40 F.3d 323, 324 (10th Cir. 1994); see also Lyons v. Jefferson Bank & Trust , 994 F.2d 716, 721-22 (10t h Cir. 1993) (stating that we will not consider a new theory on appeal , even if it falls under the same general category as an argument raised below). Given that we are remanding, we see no compelling reason to reach the forfeited issues. And because the forfeited issues may have some bearing on whether the ALJ was required to include any of Dr. Walker’s Section I limitations in his RF C finding, we decline to reach that preserved issue. On remand, the ALJ should consid er these issues, including wh ether any of the claimed deficiencies in Dr. Walker’s Section III narrative affect the ALJ’s reliance on it. 7

7 On remand, the ALJ sh ould also consider the policies described in the following POMS provisions: POMS DI 250 20.010 B.1. (regardi ng an adjudicator’s use of Section I and Section III to assess RFC); POMS DI 24510.060 B.4.a. & B.4.b. (regarding a consultant’s obligation to desc ribe the Section I li mitations in Section III); and POMS DI 245 10.063 B.2. (same).- 16 - IV. Conclusion The judgment of the district court is re versed, and this case is remanded with instructions to remand the matter to the Commissioner fo r further consideration in accordance with the foregoing analysis. Entered for the Court
Carolyn B. McHugh Circuit Judge