United States District Court, S.D. Indiana, Evansville Division
RHONDA L. DENNEY, Social Security No. XXX-XX-5405, Plaintiff,
CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.
REPORT AND RECOMMENDATION ON APPROPRIATE DISPOSITION OF THE ACTION
WILLIAM G. HUSSMANN, Jr., Magistrate Judge.
This action is before me, William G. Hussmann, Jr., United States Magistrate Judge, pursuant to Chief Judge Young's order. (Filing No. 20) Plaintiff Rhonda Denney seeks judicial review of the Social Security Administration's final decision, which deemed her able to work and therefore ineligible for Supplemental Security Income. The matter is fully briefed. (Filing No. 12 Filing No. 18; Filing No. 19.) Being duly advised, I find reversible errors in the Administrative Law Judge's opinion and therefore recommend that the Court REMAND this action.
Denney is 48 years old and has a high school education. (Filing No. 10-2 at ECF p. 39.) From 1996 until 1999, Denney performed office work managing an apartment complex. ( See id. at ECF pp. 40-42; Filing No. 10-7 at ECF p. 7.) From 2000 until 2005, she performed office work (primarily from her home) for her late husband's painting company. ( See Filing No. 10-2 at ECF pp. 42-43; Filing No. 10-7 at ECF p. 7.) She has not worked since he passed away in 2005. (Filing No. 10-7 at ECF p. 6.)
In 2010, Denney applied for Supplemental Security Income, claiming that a variety of physical and mental impairments rendered her disabled by January 1, 2007. ( See Filing No. 10-6 at ECF p. 2.) In May of 2012, an Administrative Law Judge found Denney disabled because her impairments satisfied Listing 12.04 (affective disorders). ( See Filing No. 10-3 at ECF pp. 4-13.) Thirteen months later, the Appeals Council vacated the ALJ's opinion and remanded Denney's claim. ( See id. at ECF pp. 40-44.) On rehearing, a different ALJ found that Denney was not disabled. ( See Filing No. 10-2 at ECF pp. 18-27.)
On judicial review, Denney contends that the second ALJ erred by disregarding important evidence of her mental impairments. I will elaborate on that evidence below as I address her arguments.
A. Denney's Burden of Proof and the ALJ's Five-Step Inquiry
In order to qualify for benefits, Denney must establish that she suffered from a disability as defined by the Social Security regulations. A disability is an "inability to do any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months." 20 C.F.R. § 416.905(a). To establish a disability, a claimant must present medical evidence of an impairment resulting "from anatomical, physiological, or psychological abnormalities which can be shown by medically acceptable clinical and laboratory diagnostic techniques. A physical or mental impairment must be established by medical evidence consisting of signs, symptoms, and laboratory findings, not only by [the claimant's] statement of symptoms." 20 C.F.R. § 416.908.
An ALJ must perform a sequential, five-step inquiry to determine whether a claimant is disabled:
(1) Was the claimant unemployed at the time of the hearing?
(2) Does the claimant suffer from a severe impairment or a severe combination of impairments?
(3) Are any of the claimant's impairments-individually or combined-so severe that the Social Security regulations have listed them as necessarily precluding the claimant from engaging in substantial gainful activity?
(4) Does the claimant lack residual functional capacity (RFC) to perform his past relevant work?
(5) Does the claimant lack RFC to perform any other work existing in significant numbers in the national economy?
See 20 C.F.R. § 416.920(a)(4).
The claimant is disabled only if the ALJ answers "yes" to all five questions. See Clifford v. Apfel , 227 F.3d 863, 868 (7th Cir. 2000). An answer of "no" to any question ends the inquiry immediately and precludes the claimant from eligibility for benefits. Id. The claimant bears the burden of proof at Steps One through Four. Id. If the claimant succeeds, the Commissioner bears the burden at Step Five of proving that the claimant is not disabled. Id.
B. The ALJ's Findings
At Step One, the ALJ found that Denney had not engaged in substantial gainful activity since December 2, 2010. (Filing No. 10-2 at ECF p. 20.) At Step Two, the ALJ found that Denney was severely impaired by degenerative disc disease, degenerative joint disease in both knees, bipolar disorder, and panic disorder. (Id. )
At Step Three, the ALJ found that none of Denney's impairments- individually or combined-met or medically equaled the severity of a listed impairment. (Id. at ECF p. 21.) The ALJ explained that she gave specific attention to Listings 1.02(A) (major dysfunction of her knees), 1.04 (disorders of the spine), 12.04 (affective disorders), and 12.06 (anxiety related disorders). (Id. at ECF pp. 21-24 (applying 20 C.F.R. § 404, Subp't P, App'x 1).) The ALJ specifically found that Denney's impairments satisfied neither the "B" nor "C" criteria of Listings 12.04 and 12.06. ( See id. at ECF pp. 22-23.) The ALJ did not address the "A" criteria for either listing.
Before proceeding to Step Four, the ALJ found that Denney's RFC would allow her to perform "medium work" ( see 20 C.F.R. § 416.967(c)) with the following exceptions:
Denney can only understand, remember, and carry out simple instructions.
Denney can only make judgments commensurate with the functions of unskilled work.
Denney can respond appropriately to brief supervision and interaction with coworkers in a work setting requiring no more than incidental interaction with the public.
Denney can deal with changes in a routine work setting.
( See Filing No. 10-2 at ECF p. 24.)
In reaching this conclusion, the ALJ generally discounted Denney's testimony that her panic disorder and bipolar depression made it difficult for her to leave her home or concentrate. ( See id. at ECF p. 25.) Instead, the ALJ credited treatment notes from Denney's treating psychiatrists, Drs. Lawrence Katz and John Wuertz, consistently indicating that Denney could concentrate and think logically and insightfully. ( See id. ) The ALJ also found that Denney's "history of babysitting multiple grandchildren demonstrates her ability to focus, concentrate, and multitask contrary to her allegations." (Id. )
Given those limitations, the ALJ found at Step Four that Denney could not work full-time at either of her previous, relevant jobs. (Id. at ECF p. 26.) At Step Five, though, the ALJ accepted a vocational expert's testimony that Denney's RFC would allow her to perform jobs like hospital cleaner, industrial cleaner, and machine feeder. (Id. at ECF p. 27.)
II. Standard of Review
The Court must affirm the ALJ's decision unless it lacks the support of substantial evidence or rests upon a legal error. E.g., Nelms v. Astrue , 553 F.3d 1093, 1097 (7th Cir. 2009); 42 U.S.C. § 405(g). The ALJ-not the Court- has discretion to weigh the evidence, resolve material conflicts, make independent factual findings, and decide questions of credibility. Richardson v. Perales , 402 U.S. 389, 399-400 (1971). Accordingly, the Court may not re-evaluate facts, reweigh evidence, or substitute its judgment for the ALJ's. See Butera v. Apfel , 173 F.3d 1049, 1055 (7th Cir. 1999).
Even where the ALJ has based his decision on a legal error, the Court may not remand the action if the error was harmless. McKinzey v. Astrue , 641 F.3d 884, 892 (7th Cir. 2011). The harmless error standard does not allow the ALJ's decision to stand just because it is otherwise supported by substantial evidence. E.g., Spiva v. Astrue , 628 F.3d 346, 353 (7th Cir. 2010). Substantial-evidence review ensures that the Administration has fulfilled its statutory duty to "articulate reasoned grounds of decision." Id. In contrast, review for legal errors "ensure[s] that the first-line tribunal is not making serious mistakes or omissions." Walters v. Astrue , 444 Fed.App'x 913, 919 (7th Cir. 2011) (non-precedential order) (citing Spiva , 628 F.3d at 353). Therefore, an error is harmless only if the Court determines "with great confidence" that remand would be pointless because no reasonable trier of fact could reach a conclusion different from the ALJ's. McKinzey , 641 F.3d at 892; Sarchet v. Chater , 78 F.3d 305, 309 (7th Cir. 1996).
Denney purports that the ALJ erred by failing to give proper attention to important, contradictory evidence when determining at Step Three that her impairments did not satisfy a listing and when determining at Step Five that she retained sufficient ability to work. For the following reasons, I agree and recommend that the Court remand this action to the Commissioner.
A. The ALJ erred by failing to address evidence that contradicted his conclusion at Step Three.
Denney first argues that the ALJ erred at Step Three by ignoring evidence contrary to his conclusion that her mental impairments neither met nor medically equaled Listing 12.04 (affective disorders) or 12.06 (anxiety related disorders). ( See Filing No. 12 at ECF pp. 4-15.)
Listings 12.04 and 12.06 follow a similar structure. See 20 C.F.R. § 404, Subp't P, App'x 1, §§ 12.04, 12.06. Each presents three sets of criteria ("A, " "B, " and "C"), and a claimant succeeds by demonstrating that her impairments satisfy the A criteria plus either the B or C criteria. Because Denney has not criticized the ALJ's analysis of the C criteria, I confine my review to the A and B criteria for each listing.
To satisfy Listing 12.04(A), a claimant must demonstrate that her impairments constitute a "[m]edically documented persistence, either continuous or intermittent, of" at least one of three conditions:
"Depressive syndrome characterized by at least four" of nine specified symptoms;
"Manic syndrome characterized by at least three" of eight specified symptoms; or
"Bipolar syndrome with a history of episodic periods manifested by the full symptomatic picture of both manic and depressive syndromes (and currently characterized by either or both syndromes)".
Similarly, to satisfy Listing 12.06(A), a claimant must demonstrate that her impairments are supported by ...