# United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Argued April 26, 2017

Decided July 26, 2017

Before

DIANE P. WOOD, Chief Judge

KENNETH F. RIPPLE, Circuit Judge

DIANE S. SYKES, Circuit Judge

No. 16

‐ 2894

J OSHUA RAY LANIGAN,

Plaintiff

‐ Appellant

,

v

.

NANCY A. BERRYHILL,

Acting Commissioner of Social Security,

Defendant

‐ Appellee

. Appeal from the

United States District Court for the

Western District of Wisconsin.

No. 15

‐ cv

‐ 474

‐ bbc

Barbara B. Crabb,

J udge

.

O R D E R

Joshua Lanigan injured his back at his job in 2009. That same year he hurt his

neck in a car accident, and in 2011 he was diagnosed with diabetes. Since then his

medical impairments have been complicated by mental illness. Lanigan applied for

Supplemental Security Income and Disability Insurance Benefits in March 2012 when he

was 38 years old. An Administrative Law Judge (“ALJ”) found his physical and mental

impairments to be severe but not disabling and denied benefits. The Appeals Council

denied review, and the district court upheld the ALJ’s decision. See 42 U.S.C. § 405(g).

We conclude that the case must be returned to the agency for further proceedings

because the ALJ misinformed a vocational expert about Lanigan’s residual functional NONPRECEDENTIAL DISPOSITION

To be cited onl y in accordance with Fed. R. A pp

. P. 32.1No. 16

‐ 2894 Page 2

capacity, thus undermining the expert’s testimony that Lanigan could engage in

competitive employment.

I. Background

Lanigan asserts that he became disabled in May 2009 after injuring his lower

back while working as a general laborer. He received worker’s compensation for that

injury and tried various forms of physical therapy, but none proved to be effective.

Eventually he was diagnosed with degenerative disc disease in his lower back. In 2009

he also injured his neck in a car crash. Then in December 2011 he was diagnosed with

Type 2 diabetes. At one time Lanigan was a body builder, but since 2009 he has been

physically inactive, and he has bounced between part

‐ time or seasonal jobs and periods

of unemployment. The Commissioner of Social Security concedes that Lanigan’s

physical impairments, by themselves, would limit him to light work, so our focus is on

his mental illness and its effect on his ability to engage in competitive employment.

After Lanigan learned of his diabetes diagnosis, he fell into a state of depression,

anxiety, and suicidal preoccupation. He explained to a psychiatrist that he has an

“ingrained fear of diabetes” because as a child he watched his grandfather struggle with

and eventually die from the disease. In January 2012, a month after receiving the

diagnosis, Lanigan reported to his physician that he had been in a “very low mood,”

rarely leaving his apartment, and “sitting for hours at a time with a loaded pistol on his

lap.” The following year after a psychiatric evaluation, Lanigan’s treating psychiatrist

documented a history of alcohol abuse, bipolar affective disorder, major depression,

attention deficit/hyperactivity disorder, oppositional defiant disorder, and kleptomania.

The psychiatrist also noted that Lanigan had complained of intermittent episodes of

visual hallucinations in which he saw animals or people in his visual periphery and

five

‐ to ten

‐ minute episodes of palpitations, sweating, and tremors when in public

places or in the midst of family members. Lanigan attributes the episodes to his belief

that he is being stigmatized because he is mentally ill.

In addition to the stress of being diagnosed with diabetes, Lanigan’s inability to

maintain full

‐ time work has also contributed to his anxiety. He and his wife divorced in

2009, and in 2012 he moved in with his mother and stepfather after being evicted from

his apartment. In the months following that move, Lanigan complained to his

psychiatrist about the added stress of living with his verbally abusive stepfather,

prompting the doctor to opine that the living arrangement had “been tough on him”

and that “a lot of his pain and stress level would be improved ultimately if he can

acquire the finances to get his own living quarters back.”No. 16

‐ 2894 Page 3

In June 2012, three months after applying for benefits, Lanigan was examined by

a state

‐ agency psychologist who concluded that he suffers from “severe” affective and

anxiety disorders. Lanigan told the psychologist that he “can only pay attention for a

few minutes” and is limited in his ability to “complete tasks, concentrate, understand,

follow instructions, and get along [with] others.” Based on her examination, the

psychologist concluded that Lanigan’s mental impairments could cause moderate

limitations in his ability to (1) understand, remember, and carry out detailed

instructions; (2) maintain attention and concentration for extended periods; (3) perform

activities within a schedule, maintain regular attendance, and be punctual; and (4) work

in coordination with or in proximity to others without being distracted by them.

A second state

‐ agency psychologist who reviewed Lanigan’s file several months later

agreed with the first doctor about the limitations caused by Lanigan’s mental illness.

One feature of Lanigan’s mental illness is unmentioned in the evaluations of the

state

‐ agency psychologists—apparently because the problem did not arise until 2013.

That year Lanigan began experiencing recurring “black out” episodes. In June he was

hospitalized on an involuntary, emergency basis after being arrested for shooting out

windows with a BB gun. At the hospital he claimed he could not recall his actions.

When Lanigan was admitted, a doctor noted that he had attempted suicide four times

in the prior six months and scored his global assessment of functioning (commonly

known as “GAF” 1 ) at 30 to 35. In the discharge summary, another doctor noted that

Lanigan had been experiencing mood swings in which he would feel “okay” and then

suddenly become very irritable and express fear that he was “going to hurt people.”

1 The GAF is a 100

‐ point metric used to rate overall psychological, social, and

occupational functioning, with lower scores corresponding to lower functioning.

A M

. P SYCHIATRIC A SS ’ N

, D IAGNOSTIC AND S TATISTICAL M ANUAL OF M ENTAL D ISORDERS

32–34 (4th ed., Text Rev. 2000). A GAF score of 31 to 40 reflects “[s]ome impairment in

reality testing or communication (e.g., speech is at times illogical, obscure, or irrelevant)

OR major impairment in several areas, such as work or school, family relations,

judgment, thinking, or mood (e.g., depressed man avoids friends, neglects family, and

is unable to work).” Id. at 34. The American Psychiatric Association eliminated use of

the GAF in 2013, before the ALJ’s decision in this case, citing a “conceptual lack of

clarity” and “questionable psychometrics in routine practice.” See A M

. P SYCHIATRIC

A SS ’ N

, D IAGNOSTIC AND S TATISTICAL M ANUAL OF M ENTAL D ISORDERS 16 (5th ed. 2013).

Although the American Psychiatric Association no longer uses this metric, at the time of

Lanigan’s psychological evaluations, clinicians still used GAF scores to report their

assessment of a person’s overall level of functioning.No. 16

‐ 2894 Page 4

Lanigan had told staff he was not having homicidal thoughts while hospitalized but,

nevertheless, said he worried about his irritable episodes and thus avoided people and

isolated himself. At an outpatient visit a week after Lanigan’s release from the hospital,

a psychiatric nurse noted that he possibly suffers from a “dissociative disorder.”

At his hearing before the ALJ in December 2013, Lanigan testified about his

mental

‐ health limitations. He described having difficulty in social situations and said he

cannot go to a grocery store without first taking medication or having someone with

him to help in case of a panic attack. He also briefly testified about his stay in the

hospital in July 2013 and other blackout episodes when he would “not remember what I

was doing.” He said, “I’ve had episodes where [I’m] sitting down at dinner with my

family, they start fighting, it’s 6:00 in the evening and next thing I know I’m sitting in

my room and it’s 9:45 and I don’t remember anything.”

When asked about his current employment, Lanigan testified that as of the date

of the hearing, he had been working part

‐ time at Michaels craft store for five to six

weeks on the truck crew—unloading the truck, stocking the store, and setting up

displays. He described his limited interactions with customers as “very stressful” and

said he must have another employee present with him when he encounters customers.

Lanigan testified that even his five

‐ hour shifts three or four days a week are hard but

said his coworkers “are really nice” and make him “feel comfortable.” He also

explained that he excuses himself three to five times during each shift, sometimes for up

to 20 minutes, so that he can retreat to the bathroom and get his emotions “in check.”

He said his boss knows his situation “so she’s tolerant of it.”

A vocational expert also testified. The ALJ asked him to assess whether

competitive employment would be available to a person with the following

hypothetical residual functional capacity (“RFC”): capable of performing low

‐ stress jobs

constituting light work so long as those jobs involve only routine tasks; does not require

more than occasional interaction with coworkers or the public; does not involve piece

work or a rapid assembly line; is limited to occasional stooping, crouching, kneeling, or

crawling; and can be off task up to 10% of the workday in addition to regularly

scheduled breaks. The ALJ did not explain the source of the 10% figure. The vocational

expert opined that a person with this RFC could not operate a buffing machine or work

as a general laborer as Lanigan once had done. But, the vocational expert continued, a

person with the RFC described by the ALJ could work as a hand packer,

machine operator, or factory inspector. The vocational expert acknowledged, however,

that this hypothetical person would be unemployable if any of the following is true: heNo. 16

‐ 2894 Page 5

will be off task more than 10% of the workday, he must leave his work station and walk

around when off task, he cannot interact at all with coworkers or the public, or he will

miss work more than twice per month.

The ALJ applied the five

‐ step analysis for assessing disability, see 20 C.F.R.

§§ 404.1520(a), 416.920(a), and concluded that Lanigan was not disabled. At step 1 the

ALJ determined that Lanigan had not engaged in substantial gainful activity since his

alleged onset in May 2009. At step 2 the ALJ identified Lanigan’s severe impairments as

“degenerative disc disease

... , obesity, affective disorder, and anxiety disorder.” And at

step 3 the ALJ concluded that these impairments, individually or in combination, do not

satisfy a listing for presumptive disability. The ALJ concluded that Lanigan’s mental

impairments do not cause two or more “marked limitations” or one such limitation

coupled with repeated episodes of decompensation, and thus the paragraph B criteria

of listings 12.04 and 12.06 were not satisfied. The ALJ acknowledged that Lanigan’s

mental impairments do cause moderate restriction in his activities of daily living and

moderate difficulty in social functioning. The ALJ reasoned, however, that Lanigan

must not have any marked limitations because he was working part

‐ time in a retail

environment, cares for his cat and dog, prepares meals daily, vacuums, helps with

laundry, drives, shops in stores, manages money, and sees family regularly.

In assessing Lanigan’s RFC, the ALJ found Lanigan’s testimony to be “generally

credible” but rejected his statements concerning the intensity, persistence, and limiting

effects of his mental illness. The ALJ reasoned that although Lanigan described severe

problems being in public, he “actually works in a retail store[] about 15–22 hours a

week” and has sustained other work that would require some social interaction “with

no evidence that the work activity caused his symptoms to flare

‐ up or made him need

emergency treatment.” The ALJ also noted that while the record provides “some

support” for Lanigan’s testimony about his social limitations and anxiety in public,

Brian Eggener, a treating psychiatrist, had assigned a GAF score of 65 to 70 in

March 2012. This means, the ALJ posited, that Lanigan has only mild symptoms and

limitations. And even when Lanigan was having suicidal ideations, the ALJ noted, his

GAF score was 71 upon discharge from the hospital. Moreover, the ALJ asserted, the

physician who approved Lanigan’s release said he was not showing signs of depression

or anxiety. The ALJ commented that the record lacks “opinions from treating or

examining physicians indicating that the claimant is disabled or even has limitations

greater than those determined in this decision,” and said he placed “great weight on the

opinions of the State agency medical consultants that the claimant can sustain light to

medium work” because those opinions are “consistent with the record as a whole.” TheNo. 16

‐ 2894 Page 6

ALJ concluded that Lanigan’s RFC matched the “hypothetical” given to the vocational

expert. At step 4, then, the ALJ found that Lanigan could not perform his past work but

at step 5 concluded that he could work one of the jobs identified by the vocational

expert.

II. Discussion

Because the Appeals Council denied review, the ALJ’s decision constitutes the

final word of the Commissioner of Social Security. Scrogham v. Colvin

, 765 F.3d 685, 695

(7th Cir. 2014). An order from a district court upholding the Commissioner is reviewed

de novo by this court, so we review directly the ALJ’s decision. See Yurt v. Colvin

,

758 F.3d 850, 856 (7th Cir. 2014). We will uphold that decision if it is supported by

substantial evidence in the record. Moore v. Colvin

, 743 F.3d 1118, 1120–21 (7th Cir.

2014).

On appeal Lanigan argues that the hypothetical RFC posed to the vocational

expert—“hypothetical” in name only because the ALJ assigned that very same RFC to

Lanigan—is flawed and prompted the vocational expert to inaccurately assert that jobs

are available which Lanigan can perform. Lanigan identifies two flaws: First, the ALJ

failed to lay a foundation for certain limitations described in the hypothetical, including

that he might be off task up to 10% of the workday (but not more) and that he is able to

maintain “frequent” (rather than just “occasional”) contact with coworkers and the

public. Second, Lanigan says, the hypothetical failed to account for his moderate

limitations in concentration, persistence, and pace. See O’Connor–Spinner v. Astrue

,

627 F.3d 614, 619



### – 20 (7th Cir. 2010).

We agree with Lanigan that the ALJ’s hypothetical is not supported by

substantial evidence. See Ehrhart v. Sec’y of Health & Human Servs.

, 969 F.2d 534, 540

(7th Cir. 1992) (stating the rule that a hypothetical question must be supported by

medical evidence in the record). The ALJ instructed the vocational expert to evaluate a

hypothetical person who would “be off task up to 10% of the work day, in addition to

regularly scheduled breaks.” Significantly, the vocational expert testified that persons

who will be off task 10% or less of the time still are capable of maintaining full

‐ time

employment. But those who will be off task more than 10% of the time, the vocational

expert acknowledged, will be incapable of maintaining competitive employment and,

thus, disabled. Lanigan argues that the ALJ had no basis to conclude that he wouldn’t

be off task more than 10% of the time, especially given his unrebutted testimony that he

was taking unscheduled breaks (sometimes for 20 minutes) three to five times duringNo. 16

‐ 2894 Page 7

his five

‐ hour shifts at Michaels. At that rate it’s likely Lanigan would be off task more

than 10% of a typical workday.

The Commissioner responds that the ALJ’s 10% calculation was supported by the

state

‐ agency psychologists, who opined that Lanigan demonstrated “adequate ability”

to sustain concentration and had only moderate—not marked—difficulty in various

functional areas. But the Commissioner’s position is unpersuasive for two reasons. First,

the ALJ made no effort to “build an accurate and logical bridge,” see Beardsley v. Colvin

,

758 F.3d 834, 837 (7th Cir. 2014), between the ”no more than 10%” finding and the

psychologists’ general assessment that Lanigan exhibits moderate difficulty in areas like

the “ability to maintain attention and concentration for extended periods” and the

“ability to perform activities within a schedule.” An ALJ need not address every piece

of evidence, but he must establish a logical connection between the evidence and his

conclusion. O’Connor–Spinner

, 627 F.3d at 618. That did not happen here.

Second, the ALJ did not explain why he gave more weight to the opinions of the

state

‐ agency psychologists than he did to Lanigan’s long

‐ time counselor, Carrie Paisar.

The reviewing state

‐ agency psychologist, Edmund Musholt, opined that Lanigan’s

assertion that he cannot pay attention for more than a few minutes is “only partially

credible because exams show his activities and interests involve adequate ability to

sustain concentration and social interaction.” But Dr. Musholt did not identify, and thus

the ALJ had no way of knowing, what “activities and interests” Lanigan supposedly

was tackling adequately. Perhaps Lanigan was succeeding at “activities and interests”

relevant to competitive employment, or he might have been excelling at wholly

irrelevant tasks, e.g., caring for his pets or vacuuming the house. See Stark v. Colvin

,

813 F.3d 684, 688 (7th Cir. 2016) (concluding that the claimant’s “persistence in

struggling through household chores despite her pain does not mean, as the ALJ

extrapolated, that she can manage the requirements of the work

‐ place” because a

person performing chores, unlike an employee, has more flexibility “and is not held to a

minimum standard of performance”); Hill v. Colvin

, 807 F.3d 862, 865, 869 (7th Cir. 2015)

(warning against equating the activities of daily living—like babysitting, caring for pets,

going to church, visiting with family members, and doing household chores—with

those of a full

‐ time job). On this record there is no way to know. In addition,

Dr. Musholt’s assessment of Lanigan’s credibility differs from that of Esther Lefevre, the

psychologist who actually examined Lanigan in June 2012. True, Dr. Lefevre did not

fully credit Lanigan’s account of his physical limitations, but she did not say anything

suggesting skepticism about his report of significant mental limitations.No. 16

‐ 2894 Page 8

Further, Dr. Musholt’s assessment is from March 2013, before Lanigan’s

involuntary commitment in June 2013, and nothing is said about how long Dr. Lefevre

spent examining Lanigan in 2012. In contrast, the records from Paisar, who had been

seeing Lanigan weekly or biweekly for roughly two years, recount that in July 2013

Lanigan had “talked about being fearful of what he might do if he gets angry and

‘blacks out’” again and was “frustrated with not being able to remember time periods.”

The counselor’s opinion is more recent than those of the state

‐ agency consultants, and it

corroborates Lanigan’s own account of serious difficulties with concentration.

See Clifford v. Apfel

, 227 F.3d 863, 870 (7th Cir. 2000) (“[M]ore weight is generally given

to the opinion of a treating physician because of his greater familiarity with the

claimant’s conditions and circumstances.”). Yet the ALJ seized on just one of Lanigan’s

many sessions with Paisar—when Lanigan had reported enjoying a day outdoors with

a friend—and from that single session concluded that “increasing his activity outside of

the house” had improved Lanigan’s symptoms “rather than caused anxiety attacks or

other problems.” That selective reading of two years of treatment notes is not

persuasive. See Larson v. Astrue

, 615 F.3d 744, 751 (7th Cir. 2010) (having “symptoms

that ‘wax and wane’ [is] not inconsistent with a diagnosis of recurrent, major

depression”); Bauer v. Astrue

, 532 F.3d 606, 609 (7th Cir. 2008) (a claimant with a chronic

disease like bipolar disorder “is likely to have better days and worse days,” and even if

“half the time she is well enough that she could work,” she still “could not hold down a

full

‐ time job”).

Similarly, the ALJ’s conclusion that Lanigan could maintain frequent (instead of

only occasional) contact with coworkers is not supported by the record. The distinction

matters because the vocational expert testified that someone who is limited to

occasional contact with coworkers and has the hypothetical’s other limitations cannot

maintain competitive employment. The ALJ reasoned that although Lanigan described

severe problems being in public, he “actually works in a retail store[] about 15–22 hours

a week” and has sustained other work that would require some social interaction “with

no evidence that the work activity caused his symptoms to flare

‐ up or made him need

emergency treatment.” But we have told ALJs not to draw conclusions about a

claimant’s ability to work full time based on part

‐ time employment. See Jelinek v. Astrue

,

662 F.3d 805, 812 (7th Cir. 2011) (explaining that a claimant’s “brief, part

‐ time

employment” did not support the conclusion “that she was able to work a full

‐ time job,

week in and week out, given her limitations”); Larson

, 615 F.3d at 752 (“There is a

significant difference between being able to work a few hours a week and having the

capacity to work full time.”). That is especially true when, as here, the claimant’s

employer is accommodating him. See Larson

, 615 F.3d at 752. At the hearing LaniganNo. 16

‐ 2894 Page 9

testified that his supervisor at Michaels was aware of his mental illness and “tolerant of

it,” but instead of acknowledging the employer’s commendable generosity, the ALJ

pretended that Lanigan’s work performance was no different than any other

employee’s. Equally troubling, the ALJ failed to mention that Lanigan had been on the

job for just six weeks, too short a time to infer anything about his prospects of

maintaining even part

‐ time employment. See Jelinek

, 662 F.3d at 812; Larson

, 615 F.3d at

752. And, finally, Lanigan’s testimony directly contradicts the ALJ’s assertion that his

work activity never “caused his symptoms to flare

‐ up.” Lanigan testified that the very

purpose of his frequent breaks was to make sure his “emotions [were] in check.” And

he said that on Black Friday he “melted down on the floor” and “went in the back for

over a half hour just to get away from everybody.”

Thus, as Lanigan contends, the ALJ’s hypothetical includes assumptions about

his RFC that simply lack support in the record. And, as Lanigan further argues, there is

a second serious flaw in the hypothetical: it fails to account for his moderate limitations

in concentration, persistence, and pace. See O’Connor

‐ Spinner

, 627 F.3d at 619 (“Among

the limitations the [vocational expert] must consider are deficiencies of concentration,

persistence and pace.”). We have said that an ALJ must explicitly address those

limitations in the hypothetical unless one of three exceptions applies: (1) the vocational

expert was independently familiar with the claimant’s medical file; (2) the hypothetical

adequately apprised the vocational expert of the claimant’s underlying mental

conditions; or (3) the hypothetical otherwise accounted for the limitations using

different terminology. Id. at 619–20. None of the exceptions applies here. As for the first

exception, the Commissioner does not contend that the vocational expert examined

Lanigan’s medical records, even if he might have reviewed information about Lanigan’s

employment history. And though the vocational expert was present when Lanigan

testified at the hearing, that testimony was too limited to provide a complete and full

picture of his mental limitations.

As for the next two exceptions, the Commissioner argues that the ALJ’s

hypothetical effectively communicated, using different words, that Lanigan had

experienced “moderate difficulties in concentration, persistence, or pace.” We cannot

agree. The hypothetical begins by positing a person capable of performing “simple,

routine, and repetitive tasks.” These terms refer to “unskilled work,” which the

regulations define as work that can be learned by demonstration in less than 30 days.

See 20 C.F.R. §§ 404.1568, 404.1520. We have explained, though, that the speed at which

work can be learned is unrelated to whether a person with mental impairments—

i.e., difficulties maintaining concentration, persistence, or pace—can perform suchNo. 16

‐ 2894 Page 10

work. See Yurt

, 758 F.3d at 858–59 (rejecting the notion that “confining the claimant to

simple, routine tasks and limited interactions with others adequately captures

temperamental deficiencies and limitations in concentration, persistence, and pace”);

Stewart v. Astrue

, 561 F.3d 679, 685 (7th Cir. 2009); Craft v. Astrue

, 539 F.3d 668, 677–78

(7th Cir. 2008). The Commissioner also argues that the hypothetical question about

“off

‐ task” behavior informed the vocational expert about Lanigan’s moderate

difficulties in the domain of concentration, persistence, or pace. But to the extent that

the 10% calculation was flawed, so was the hypothetical. See Young v. Barnhart

, 362 F.3d

995, 1004 (7th Cir. 2004) (“For all of the same reasons that the RFC fell short, the

hypothetical question, which was based entirely on that RFC[,] did as well.”).

Additionally, the Commissioner argues that even if the hypothetical posed to the

vocational expert is flawed, Lanigan waived any challenge to it by not objecting to the

vocational expert’s testimony during the hearing. The Commissioner relies on Donahue

v. Barnhart

, which holds that claimants must raise objections to a vocational expert’s

testimony at the hearing. 279 F.3d 441, 446 (7th Cir. 2002). But Lanigan is not

challenging the vocational expert’s testimony. Rather, he is challenging the ALJ’s lack of

a substantial basis for how he characterized Lanigan’s mental RFC in his hypothetical

questions posed to the vocational expert.

Accordingly, we REVERSE the decision upholding the ALJ’s denial of benefits

and REMAND to the agency for further proceedings.