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Goodman v. Berryhill

United States District Court, W.D. Washington, Seattle

June 15, 2017

SUSAN A. GOODMAN, Plaintiff,
NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.


          JOHN C. COUGHENOUR United States District Judge

         Susan A. Goodman seeks review of the denial of her application for Disability Insurance Benefits. Ms. Goodman contends the ALJ erred by misevaluating: (1) the Department of Veterans Affairs' (VA) disability rating; (2) the medical evidence; (3) her own testimony; and (4) the lay evidence. Dkt. 9 at 2. Ms. Goodman also contends that new evidence, in the form of a new VA disability determination, submitted to and considered by the Appeals Council undermines the ALJ's decision. Id. Ms. Goodman contends that in light of these errors and the new evidence submitted to the Appeals Council, the ALJ's residual functional capacity (RFC) determination fails to account for all of her limitations and is not supported by substantial evidence.[1] Id. Ms. Goodman contends that this matter should be remanded for an award of benefits or, alternatively, for further administrative proceedings. Dkt. 9 at 19. As discussed below, the Court REVERSES the Commissioner's final decision and REMANDS the matter for further administrative proceedings under sentence four of 42 U.S.C. § 405(g).


         In August 2012, Ms. Goodman applied for benefits, alleging disability as of June 29, 2012. Tr. 47, 184-189. Ms. Goodman's application was denied initially and on reconsideration. Tr. 47, 98-122. After the ALJ conducted a hearing on April 15, 2014, the ALJ issued a decision finding Ms. Goodman not disabled. Tr. 47-59.


         Utilizing the five-step disability evaluation process, [2] the ALJ found:

Step one: Ms. Goodman has not engaged in substantial gainful activity since June 29, 2012, the alleged onset date.
Step two: Ms. Goodman has the following severe impairments: major depressive disorder, anxiety disorder, and posttraumatic stress disorder (PTSD).
Step three: These impairments do not meet or equal the requirements of a listed impairment.[3]
Residual Functional Capacity: Ms. Goodman can perform a full range of work at all exertional levels. She can perform simple routine tasks. She can have superficial, infrequent contact with coworkers. She should have no contact with the public. She can have few, if any, changes in work routine or setting.
Step four: Ms. Goodman cannot perform past relevant work.[4]
Step five: As there are jobs that exist in significant numbers in the national economy that Ms. Goodman can perform, she is not disabled.

Tr. 47-59. The Appeals Council denied Ms. Goodman's request for review making the ALJ's decision the Commissioner's final decision. Tr. 1-6.[5]


         A. Department of Veterans' Affairs (VA) Disability Determination

         Ms. Goodman contends that substantial evidence does not support the ALJ's evaluation of the VA's disability determination. Dkt. 9 at 3. The Court agrees.

         The record contains a letter from the VA dated October 3, 2013, indicating that it had reached a “provisional decision” on Ms. Goodman's application for benefits. Tr. 291-97. Specifically, the letter indicated that the VA had provisionally determined that Ms. Goodman was 70% disabled due to “PTSD, major depression, and alcohol dependence in remission.” Id. The letter further indicated that Ms. Goodman was “denied entitlement to the 100% rate because it wasn't shown that [she was] unable to work as a result of [her] service connected disability/disabilities.” Tr. 262. The letter indicated that a copy of the “Rating Decision” was also enclosed which “provides a detailed explanation of our decision, the evidence considered, and the reasons for our decision.” Tr. 294. However, the Rating Decision referenced in the letter is not included in the record nor does the letter itself explain the basis for the VA's provisional decision. The ALJ gave “some weight” to the VA's provisional decision finding it “consistent with the record as a whole supporting the claimant was able to work with the limitations set forth in the above residual functional capacity.” Tr. 57. The ALJ also discounted the VA's provisional decision in part because “the Social Security Administration has different rules governing the definition and assessment of disability.” Id.

         Subsequent to the ALJ's decision, in March 2015, the VA issued a “final decision” based on the submission of additional evidence. Tr. 7-16. The final decision reaffirmed the finding that Ms. Goodman was 70% disabled but found that she was entitled to “individual unemployability” effective February 1, 2012, because the evidence showed she was “unable to secure or follow a substantially gainful occupation as a result of service-connected posttraumatic stress disorder with major depression and alcohol dependence in remission.” Id. The March 2015 VA determination further indicates that the 70% disability evaluation is based on: “occupational and social impairment, with deficiencies in most areas, such as work, school, family relations, judgment, thinking, or mood”; “difficulty in adapting to a worklike setting”; “difficulty in adapting to stressful circumstances”; “difficulty in adapting to work”; “inability to establish and maintain effective relationships”; “difficulty in establishing and maintaining effective work and social relationships”; “disturbances of motivation and mood”; “flattened affect”; “anxiety”; “chronic sleep impairment”; and “depressed mood.” Tr. 15-16.

         A VA determination of disability is “ordinarily” entitled to “great weight.” McCartey v. Massanari, 298 F.3d 1072, 1076 (9th Cir. 2002). However, an ALJ may “give less weight to VA disability rating if he gives persuasive, specific, valid reasons for doing so that are supported by the record.” Valentine v. Comm'r of Soc. Sec. Admin., 574 F.3d 685, 694-95 (9th Cir. 2009) (quoting McCartey, 298 F.3d at 1076) (internal quotation marks omitted). Here, substantial evidence does not support the ALJ's finding that the VA's 70% disability rating is “consistent with” the RFC assessment. Tr. 57. In the first instance, the letter discussing the provisional decision of 70% disability does not include an explanation of the basis for that finding or the areas in which Ms. Goodman was limited. Tr. 291-97. As such, the ALJ's conclusion that the 70% disability rating is consistent with his RFC is purely speculative and is not supported by substantial evidence. Moreover, the letter describing the provisional decision references a “Rating Decision” that provides a “detailed explanation of our decision, the evidence considered, and the reasons for her decision.” Tr. 294. However, here, there is no indication the ALJ attempted to obtain the Rating Decision explicitly referenced in the VA's letter. The ALJ has “an independent duty to fully and fairly develop the record and to assure that the claimant's interests are considered.” Tonapetyan v. Halter, 242 F.3d 1144, 1150 (9th Cir. 2001) (internal citations and quotation marks excluded). This duty is triggered by “[a]mbiguous evidence, or the ALJ's own finding that the record is inadequate to allow for proper evaluation of the evidence[.]” Id. Under the circumstances, the VA's provisional determination of 70% disability was ambiguous and the record inadequate for the ALJ to conclude that this rating was consistent with the limitations contained in his RFC determination. Accordingly, absent further development of the record, substantial evidence did not support the ALJ's finding.

         Moreover, the VA's 2015 final determination further undermines the ALJ's evaluation of the VA's disability determination. Tr. 7-16. The 2015 final determination was new evidence which was submitted to the Appeals Council after the ALJ's decision. Tr. 1-4. The Appeals Council examined the evidence and determined that it did not affect the decision about whether Ms. Goodman was disabled. Id. Thus, the 2015 VA final determination “became part of the administrative record, which the district court must consider when reviewing the Commissioner's final decision for substantial evidence.” Brewes v.Comm'r of Soc. Sec. Admin., 682 F.3d 1157, 1163 (9th Cir. 2012). The 2015 final determination undermines the ALJ's finding that the 70% disability determination was “consistent with the RFC” in two ways. Tr. 57. First, the final decision does include a Rating Decision which indicates that the 70% rating is based in part on Ms. Goodman's “difficulty in adapting to stressful circumstances.” Tr. 13-16. The RFC does not include any limitation directly addressing Ms. Goodman's ability to deal with stress. Second, the final decision determined that, while Ms. Goodman maintained a 70% disability rating, she was also unemployable beginning February 1, 2012, due to her impairments. Tr. 7-16. The Commissioner argues that the VA's 2015 final determination does not undermine the ALJ's findings because it is based on a new diagnosis rendered after the ALJ's decision. Dkt. 16 at 17-18. However, the 2015 final determination indicates that while the VA considered a record from 2015 indicating a new diagnosis of bipolar disorder, it also considered records from 2013, prior to the ALJ's decision. Tr. 15. Moreover, based on those records the VA determined that,

A review of your VA Medical Center treatment records show you continue to be treated for posttraumatic stress disorder and major depressive disorder. Symptoms shown in your treatment records and current examination are consistent with exam findings of 2013. Although recent VA examination findings show a separate and distinct new mental illness and abatement of PTSD symptoms, the weight of the medical evidence, specifically VA Medical Center treatment records, shows ongoing care for PTSD with your mood lability more consistent with personality traits rather than a diagnosis of bipolar disorder. Consequently, the evidence being in equipoise, we are assigning more weight to favorable findings showing continuity of your condition.

Id. (emphasis added). Thus, contrary to the Commissioner's argument, the VA concluded that the evidence showed continuity of Ms. Goodman's condition, namely PTSD and major depressive disorder, and that the evidence established individual unemployability commencing February 1, 2012, prior to Ms. Goodman's application for DIB. Id. Under these circumstances, the final determination by the VA serves to further undermine the ALJ's finding that the VA's 70% disability rating was consistent with the RFC. Tr. 57.

         Finally, the ALJ also discounts the VA's disability rating because “the Social Security Administration has different rules governing the definition and assessment of disability.” Tr. 57. However, this generalized rationale is not a “persuasive, specific, valid reason[ ]” for discounting the VA determination. See Valentine, 574 F.3d at 695 (ALJ's rejection of the VA's disability rating “on the general ground that VA and SSA disability inquiries are different” was not a persuasive, specific, valid reason); and see McCartey, 298 F.3d at 1076 (noting the “marked similarity between [the disability programs of the VA and of the SSA].”).

         In sum, substantial evidence does not support the ALJ's finding with respect to the VA's disability determination. On remand, the ALJ should reevaluate the VA's disability rating taking into account the 2015 final decision.

         B. Medical Opinion Evidence

         In general, more weight should be given to the opinion of a treating physician than to a non-treating physician, and more weight to the opinion of an examining physician than to a nonexamining physician. See Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1995). Where a treating or examining doctor's opinion is not contradicted by another doctor, it may be rejected only for clear and convincing reasons. Id. Where contradicted, a treating or examining physician's opinion may not be rejected without “specific and legitimate reasons supported by substantial evidence in the record for so doing.” Id. at 830-31. “An ALJ can satisfy the ‘substantial evidence' requirement by ‘setting out a detailed and thorough summary of the facts and conflicting clinical evidence, stating his interpretation thereof, and making findings.'” Garrison v. Colvin, 759 F.3d 995, 1011 (9th Cir. 2014) (quoting Reddick v. Chater, 157 F.3d 715, 725 (9th Cir. 1998)).

         1.Physical Impairments

         a. Step Two and Consideration of ...

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