United States District Court, W.D. Washington, Tacoma
REPORT AND RECOMMENDATION
KAREN L. STROMBOM, Magistrate Judge.
Plaintiff has brought this matter for judicial review of defendant's denial of his application for disability insurance benefits. This matter has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule MJR 4(a)(4) and as authorized by Mathews, Secretary of H.E.W. v. Weber , 423 U.S. 261 (1976). After reviewing the parties' briefs and the remaining record, the undersigned submits the following Report and Recommendation for the Court's review, recommending that for the reasons set forth below, defendant's decision to deny benefits should be reversed and this matter should be remanded for further administrative proceedings.
FACTUAL AND PROCEDURAL HISTORY
On December 10, 2007, plaintiff filed an application for disability insurance benefits, alleging disability as of October 28, 2003, due to neck and upper extremity impairments. See Administrative Record ("AR") 287-91, 320-28. Plaintiff's application was denied upon initial administrative review and on reconsideration. See AR 213-15, 217-21. A hearing was held before an administrative law judge ("ALJ") on April 14, 2010, at which plaintiff, represented by counsel, appeared and testified, as did a vocational expert. See AR 115-82. On July 2, 2010, the ALJ issued a partially favorable decision in which plaintiff was determined to be disabled from October 28, 2003, through August 1, 2006. See AR 185-204.
The Appeals Council, on its own motion, reviewed the ALJ's decision under 20 C.F. R. § 404.970(a)(2), due to an error of law. See AR 205-08; see also AR 249-50. On August 25, 2010, the Appeals Council issued a notice of action, finding that payment of benefits on plaintiff's claim was not permitted because the period of disability determined by the ALJ ended more than one year prior to the filing date of plaintiff's application for disability insurance benefits. See AR 206. The Appeals Council also found the ALJ failed to sufficiently address plaintiff's obesity as required by Social Security Ruling 02-1p and improperly assessed the medical opinion of examining physician John Mileu, M.D. See AR 205-08. The Appeals Council further determined it was necessary to obtain medical expert testimony regarding the nature and severity of plaintiff's physical impairments and to re-evaluate plaintiff's residual functional capacity ("RFC") and period(s) in which plaintiff was disabled, if any. See AR 205-08. On October 28, 2010, the Appeals Council issued an order vacating the hearing decision and remanding plaintiff's case to an ALJ for further proceedings. AR 209-12.
A second hearing was held before the same ALJ on May 26, 2011, at which plaintiff, represented by counsel, appeared, and testimony was taken from a medical expert and a vocational expert. See AR 52-114. On May 26, 2011, the ALJ issued an unfavorable decision in which plaintiff was again determined to be disabled from October 28, 2003, through August 1, 2006, but not after. See AR 29-51. Plaintiff's request for review of the ALJ's decision was denied by the Appeals Council on September 5, 2012, making the ALJ's May 2011 decision defendant's final decision. See AR 1-5; see also 20 C.F.R. § 404.981.
On November 2, 2012, plaintiff filed a complaint in this Court seeking judicial review of the ALJ's decision. See Dkt. No. 1. On August 2, 2013, this Court issued plaintiff an order to show cause regarding plaintiff's failure to serve the complaint in a timely manner. See Dkt. No. 7. Following service of the complaint, defendant requested, and was granted three motions for extension of time to file the answer. See Dkt. Nos. 11-19. The administrative record was filed with the Court on January 8, 2014. See Dkt. No. 22. Following filing of the administrative record, defendant was again granted an extension of time to file her responsive brief to pursue settlement options. See Dkt. No. 29. No settlement was reached. The parties have completed their briefing, and thus this matter is now ripe for judicial review and a decision by the Court.
Plaintiff argues the ALJ's decision should be reversed and remanded to defendant for payment of benefits, because the ALJ erred: (1) in evaluating the medical evidence in the record; (2) in discounting plaintiff's credibility; (3) in rejecting the lay witness evidence in the record; and (4) in determining plaintiff's residual functional capacity. See Dkt. No. 24. In contrast, defendant argues the ALJ's decision should be reversed and remanded to defendant for further proceedings because there are unresolved issues and the record does not require a finding of disability. See Dkt. 30. Specifically, defendant argues this case should be remanded for further consideration of plaintiff's hand and wrist limitations, headaches, credibility, and residual functional capacity. The undersigned agrees the ALJ erred in determining plaintiff to be not disabled, but, for the reasons set forth below, recommends that while defendant's decision should be reversed, this matter should be remanded for further administrative proceedings.
The determination of the Commissioner of Social Security (the "Commissioner") that a claimant is not disabled must be upheld by the Court, if the "proper legal standards" have been applied by the Commissioner, and the "substantial evidence in the record as a whole supports" that determination. Hoffman v. Heckler , 785 F.2d 1423, 1425 (9th Cir. 1986); see also Batson v. Comm'r of the Soc. Sec. Admin. , 359 F.3d 1190, 1193 (9th Cir. 2004); Carr v. Sullivan , 772 F.Supp. 522, 525 (E.D. Wash. 1991) ("A decision supported by substantial evidence will, nevertheless, be set aside if the proper legal standards were not applied in weighing the evidence and making the decision.") (citing Brawner v. Sec'y of Health and Human Serv. , 839 F.2d 432, 433 (9th Cir. 1987)).
Substantial evidence is "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 omitted); see also Batson , 359 F.3d at 1193 ("[T]he Commissioner's findings are upheld if supported by inferences reasonably drawn from the record."). "The substantial evidence test requires that the reviewing court determine" whether the Commissioner's decision is "supported by more than a scintilla of evidence, although less than a preponderance of the evidence is required." Sorenson v. Weinberger , 514 F.2d 1112, 1119 n.10 (9th Cir. 1975). "If the evidence admits of more than one rational interpretation, " the Commissioner's decision must be upheld. Allen v. Heckler , 749 F.2d 577, 579 (9th Cir. 1984) ("Where there is conflicting evidence sufficient to support either outcome, we must affirm the decision actually made.") (quoting Rhinehart v. Finch , 438 F.2d 920, 921 (9th Cir. 1971)).
I. The ALJ's Evaluation of the Medical Evidence in the Record
Plaintiff argues the ALJ erred in his assessment of the medical evidence related to his physical limitations. See Dkt. No. 24, pp. 10-14. This Court agrees. In 2010, the Appeals Council remanded plaintiff's claim to the ALJ to obtain medical expert ("ME") testimony to clarify the nature and severity of plaintiff's physical impairments, residual functional capacity, and the period(s), if any, during which claimant was disabled. AR 210-11. The testimony of medical expert ("ME") Charles Hancock, MD, obtained at plaintiff's second hearing, however, failed to address the nature and severity of all plaintiff's physical impairments. Furthermore, portions of Dr. Hancock's testimony are unreviewable due to inaudible portions of the hearing recording. Finally, the reasons offered by the ALJ to reject the 2011 medical opinion of plaintiff's treating physician David Whitaker, DO, that plaintiff could perform less than a full range of sedentary work activities, are not supported ...