* The case is unanimously ordered submitted witho ut oral argument pursuant to

Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### MAR 24 2003 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

MACK E. JACKSON,

Plaintiff-Appellant,

v. JO ANNE B. BARNHART, Commissioner of Social Security Administration,

Defendant-Appellee. No. 02-5065 (D.C. No. 00-CV-870-J) (N.D. Oklahoma)

ORDER AND JUDGMENT *

Before SEYMOUR , KELLY , and LUCERO , Circuit Judges.-2-

Mack E. Jackson appeals from the district court’s o rder affirming the Commissioner’s determination to terminate his prioraward of social security disability benefits. Jackson began receiving disab ility benefits on June 6, 1995, after an administrative law judge (ALJ) determined that he had been disabled beginning February 15, 1992, from a seizure disorde r and alcoholism. In 1996, Congress amended the Social Security Act t o preclude a finding of disability and entitlement to benefits “if alcoholi sm or drug addiction would (but for this subparagraph) be a contributing factor mat erial to the Commissioner’s determination that the individual is disabled.” 42 U.S.C. § 423(d)(2)(C). Later that year, the Commissioner conducted a continuing- disability review and concluded that Jackson was no longer disabled. Acc ordingly, the Commissioner proposed to terminate his benefits effective January 1, 1997, the date the grace period for prior adjudicated disability claims expired. See Grigsby v. Barnhart , 294 F.3d 1215, 1217 (10th Cir. 2002). Jackson obtained a de novo hearing before an ALJ wh ere he was represented by his brother, Morice Jackson, Sr., a non-attorney. In a written decision entered after the hearing, the ALJ determi ned that Jackson retained the residual functional capacity to perform a full rang e of work at all exertional levels, limited by his need to avoid exposure to he ights, moving machinery, and driving. These limitations precluded him from perf orming his past relevant work,1 This regulation, dated February 10, 1995, is part o f a series of regulations

dealing with evaluation of the effect of drug addic tion or alcoholism on the determination of disability. The remaining regulat ions, §§ 404.1536 through 1541, which permit disability benefits to continue but require treatment, have been superseded by the amendment to 42 U.S.C. § 423 (d)(2)(C). We have continued to apply § 404.1535(b) even after the statutory amendment, ho wever. See, e.g. , Bellamy v. Massanari , No. 01-5070, 2002 WL 120532, at **1 (10th Cir. Jan. 30, 2002).

2 This case does not involve medical improvement, and the regulations concerning termination of benefits detailed in 20 C .F.R. § 404.1594(f)(1)-(8) therefore do not come into play. Mittlestedt v. Ap fel , 204 F.3d 847, 852 (8th Cir. 2000); but see Veino v. Barnhart , 312 F.3d 578, 586-87 (2d Cir. 2002) (applying (continued...) -3- but, the ALJ determined, permitted him to perform asignificant number of other jobs in the national economy. Thus, the ALJ conclu ded that Jackson was no longer disabled. The Appeals Council denied review, and the district court affirmed. We first consider the regulatory framework governi ng the procedure applied in this case. A change in the law concerni ng coverage of alcoholism, rather than an allegation of medical improvement, p rompted review of Jackson’s case. Pursuant to the new law, the Commissioner wa s required to determine which of Jackson’s current physical and mental limi tations would remain absent his alcohol abuse, and whether the remaining limitations were disabling. 20 C.F.R. § 404.1535(b). 1 As the record shows that Jackson is not currentl y drinking, the only issue here is whether he has oth er physical and mental limitations rendering him disabled under the Social Security Act. 22 (...continued)

§ 404.1594 standards to case that addressed continu ing disability under § 423(d)(2)(C) amendment in addition to medical imp rovement issues). -4- Although the regulations are not entirely clear on this point, both parties assume that Jackson’s remaining limitations must be evaluated using the five-step sequential procedure set out in § 404.1520 and desc ribed in detail in Williams v.
Bowen , 844 F.2d 748, 750-52 (10th Cir. 1988). Under thi s framework, the claimant bears the burden of establishing a prima f acie case of disability at steps one through four. Id. at 751 & n.2. If the claimant successfully meets this burden, the burden shifts to the Commissioner at st ep five to show that the claimant retains sufficient residual functional cap acity (RFC) to perform work in the national economy, given his or her age, educati on and work experience. Id. In the instant case, Jackson was determined disable d at step five, placing the burden on the Commissioner to establish RFC. We limit our review over the Commissioner’s decisio n to determining whether the factual findings are supported by subst antial evidence in the record and whether the correct legal standards were applie d. Andrade v. Secretary of Health & Human Servs

. , 985 F.2d 1045, 1047 (10th Cir. 1993). Substantia l evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Fowler v. Bowen , 876 F.2d 1451, 1453 (10th Cir. 1989) (quotations omitted).-5-

On appeal, Jackson raises three issues, arguing that the ALJ erred by failing: (1) to develop the record properly; (2) to consider all of his impairments; and (3) to perform a proper credibility analysis. Having conducted a careful review of the record, we conclude that substantial evidence supports the ALJ’s decision that Jackson is no longer disabled by the impairments that resulted in the initial finding of disability: his seizures are co ntrolled by medication and his alcoholism is in remission. The ALJ erred, however , by failing to take into account other serious impairments with record suppo rt that could affect Jackson’s ability to perform substantial gainful employment. In conducting an initial disability determination, the ALJ must examine all of the claimant’s impairments that find support in the record. See 20 C.F.R. § 404.1520(a). This is also true of cases involving medical improvement, see id. , § 404.1594(a)(5), and it follows that the same is tru e of reviews conducted pursuant to 42 U.S.C. § 423(d)(2)(C). Jackson has consistently argued that he suffers from serious memory deficits that may impair his abilityto perform jobs available in the national economy. Dismissing this claim, the A LJ stated, “[t]here is no evidence of a complaint related to a memory problem .” (2 Appellant’s App. at 19.) As will be seen, this conclusion is not suppo rted by substantial evidence. In determining that Jackson was no longer disabled, the ALJ concluded that Jackson could do the full range of work at all exertional levels, limited only by-6-

three non-exertional restrictions: exposure to heig hts, moving machinery, and driving. When presented with a hypothetical questi on incorporating only these limited restrictions, the vocational expert (VE) st ated that there were many jobs Jackson could perform. Id. at 73. When presented with a second hypothetical, based broadly upon the testimony at the hearing, ho wever, the VE reached a very different conclusion: Judge, I don’t feel there would be [jobs for Mr. Ja ckson] on a competitive basis and I’m basing that on the fact o f consideration that he is [actually] working in a structured situation with a job coach the way I understood it. He can handle, he seemed to do all right when he’s got constant assistance. The stress of g oing any longer than say four hours seems to, he really deteriorate s fast with that, memory and things like that seem to, would be one o f the key factors. So I feel like he, he could continue working on a p art time basis in the shelter setting, but I don’t feel, at least at this time he could work on a competitive basis. Id. at 73-74. Of course, the ALJ was required to include in the hypothetical only those impairments that were supported by substantial evid ence in the record, Decker v. Chater , 86 F.3d 953, 955 (10th Cir. 1996); the ALJ electe d to follow the VE’s response to his first hypothetical question, ratherthan his second. The question we are faced with here, therefore, is two-fold. Fi rst, did the ALJ’s first hypothetical question adequately reflect all of Jac kson’s impairments demonstrated in the record, including his alleged m ental impairments? Second,3 Most of these reasons related to disabling pain, animpairment not even

presented in this case. -7- even if it did, should the ALJ have further develop ed the record concerning the existence of a mental impairment? We begin with the uncontested fact that much of Jac kson’s recent work experience has been in a sheltered workshop environ ment. (Appellant’s App. at 67-68.) This fact would seem to be relevant to the ALJ’s analysis of Jackson’s residual functional capacity (RFC). Persons who can perform the full range of work in all occupational categories typically do no t require a sheltered environment in which to work. The regulations impl icitly recognize this by providing special rules for analyzing the claimant’ s employment in a sheltered work environment. See 20 C.F.R. § 404.1573(c). It is therefore somewhat surprising that the ALJ provided no discussion what soever concerning this factor. Second, we are troubled by numerous references in the record to memory loss and other mental impairments to which the ALJ gave only perfunctory consideration. In his decision, the ALJ gave a lis t of boilerplate reasons why he did not find Jackson’s testimony credible, 3 but did not address the cognitive deficits evident in Jackson’s responses, riddled wi th indications of memory deficits and confusion, to simple autobiographical questions. Additionally, the-8-

ALJ said nothing at all about the testimony of Jack son’s brother, Morice Jackson, Sr. Morice Jackson testified, in response to the A LJ’s questioning, as follows: Q. [Mr. Jackson has had no] alcohol for three years ? A. Three years. I’m the one that administered that case but he doesn’t remember. But he hasn’t had a drink. Q. So why is his memory still so bad (INAUDIBLE)? A. I don’t know why. I went, last month I went to Dr. Dan Schaffer (Phonetic) last month, (INAUDIBLE) of December and there to see Dr. Dan Schaffer and I think from the memory loss h e has, he can’t remember this and that, he has to take (INAUDIBLE)

-- * * * A. Without me constantly reminding him to do this he’d go home right now, have to go lie down for a couple hours, he, he just stressed out, but you have to do all the things (INAUDIBLE). (2 Appellant’s App. 62-63 (emphasis added).) Later , the ALJ asked Morice: Q. Do you have anything else you can tell me aboutyour brother’s disability? A. He doesn’t drive, I can’t afford, I won’t let h im drive because he don’t remember if he know how to start a car and pu t the reverse, so he doesn’t drive, he knows that. Q. You mean he can’t, he can’t remember how to dri ve? A. . . . [I]f he do drive he may not know how to co ntrol or handle it. But he thinks nothing like I have remind him his lu nch time, breakfast time, Mack change shirts, change this or do this, I have to constantly monitor him because he just doesn’t reme mber. Mack, it’s time to go to work. . . .I have to constantly, Mack , that’s too much coffee, two teaspoons, that’s too much or I go lookfor it and I can’t-9-

find it, he misplaced it somewhere and I can’t find it. Things like that. Q. Thank you. Q. All right. I think what we need to do is reque st some of these records that we’re missing. Id. at 69. Morice Jackson’s testimony is not the only evidence of memory loss or mental impairment in the record. There are many re ferences in the medical record to Jackson’s cognitive deficits and mental impairme nts. Although many of these references date from the time period before Jackson stopped drinking and had stabilized his seizures with Dilantin, there is nev ertheless a strong indication that Jackson may suffer from persistent mental deficits that go beyond his problems with seizures and alcohol. On February 6, 1993, fo r example, a physician noted that Jackson had “low intelligence” and lived with his brother. Id. at 324. On November 8, 1993, a CT scan of Jackson’s brain show ed mild atrophy. Id. at 169. On February 1, 1994, Dr. Steele examined Jackson an d noted that he had “problems thinking and he does not drive.” Id. at 181. Jackson also complained at that time of blackout spells, headaches and dizz iness. He stated that his seizures had affected his memory. He seemed confus ed and had trouble answering questions. Id. On March 1, 1994, Dr. Passmore administered a mental status examination, during which Jackson seemed ale rt but performed poorly on a4 It appears the ALJ requested this record but it cou ld not be located. (2

Appellant’s App. at 378.) Nevertheless, the fact t hat such an appointment was scheduled is evidence that the rehabilitation servi ce was concerned about Jackson’s possible mental impairments. -10- test of similarities because he did not understand and kept giving differences instead. Id. at 185. In addition, the record contains troublin g reports of head injuries suffered as a result of Jackson’s seizure disorder. In June 1994, he fell off a porch and hit his head. Id. at 196. In September 1994, he fell and hit his head on a coffee table. Id. at 323. After he was granted disability benefits, Jackson s ought assistance from the State of Oklahoma Vocational Rehabilitation Service s. Although he had stopped drinking and no longer had seizures, his other ment al problems evidently persisted. In a disability report dated July 24, 1 996, Jackson averred he had difficulty remembering what to do on the job. Id. at 269. He also stated he could not remember what food to buy, and needed assistanc e shopping. Id. at 264. In connection with his application for rehabilitative services, an appointment was scheduled with a psychologist, on December 19, 1995 . Id. at 368. There is no indication in the medical record whether Jackson ke pt the appointment, or what the psychologist found. 4 Jackson eventually obtained assistance in finding aposition in a sheltered workshop from the Developmental Disabilities Servic es Division. Id. at 360. A-11-

report from his placement at the Children’s Medical Center sheltered workshop indicates that he has trouble controlling his angerand behavior when upset with others. Id. at 372. He was also admonished about his hygiene. Id

. at 375. In short, the record evidence that Jackson may suff er from (1) mental retardation, (2) forgetfulness or memory lapses, (3 ) residual effects from prior head injuries, and/or (4) difficulties controlling his anger and behavior, raises a serious question as to whether Jackson is capable o f performing full-time work that exists in the national economy. None of these deficiencies were evaluated on the Psychiatric Review Technique form completed by the ALJ, presented to the VE in the hypothetical, or discussed with any speci ficity in the ALJ’s decision. Even if the evidence were insufficient on this reco rd to have required that a specific mental limitation be included in the VE hypothetical, that lack of development itself represents an insufficiency in t he record that cannot be attributed to Jackson. First, “[a]n ALJ has the duty to develop the record by obtaining pertinent, available medical records whic h come to his attention during the course of the hearing.” Carter v. Chater , 73 F.3d 1019, 1022 (10th Cir. 1996). If there are, in fact, additional records that have not yet been obtained and that pertain to Jackson’s mental status, the ALJ should take steps to obtain them on remand. Second, there are sufficient references to Jackson’s mental limitations “to suggest a reasonable possibility that a severe impairment exists” warranting a-12-

consultative examination “if such an examination is necessary or helpful to resolve the issue of impairment.” Hawkins v. Chate r , 113 F.3d 1162, 1167 (10th Cir. 1997). On remand, the ALJ should further develop the recor d as to any mental impairments, including memory loss, from which Jack son may suffer. The ALJ should adjust his RFC findings and questions to the VE, as appropriate, if required to reflect any information obtained from a dditional factual development. The judgment is REVERSED and this case is REMANDED to the district court with instructions to REMAND to the Commission er for further proceedings in accordance with this order and judgment.

Entered for the Court

Carlos F. Lucero Circuit Judge