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Sandoval v. Berryhill

United States District Court, D. New Mexico

October 23, 2017

NANCY A. BERRYHILL,[1] Acting Commissioner of Social Security, Defendant.


         THIS MATTER comes before the Court on Plaintiff Bessie Darlene Sandoval's Motion to Reverse and Remand for a Rehearing with Supporting Memorandum (Doc. 17), filed November 5, 2015, as well as Defendant Nancy A. Berryhill's Motion to Alter or Amend Judgment Pursuant to Fed.R.Civ.P. 59(e) (Doc. 28), filed April 4, 2016. The Court has also considered Defendant's Notice of Supplemental Authority (Doc. 30), filed March 7, 2017, and Plaintiff's Motion for Leave to File Short Response to Defendant's Motion to Alter or Amend Judgment (Doc. 36), filed September 27, 2017. Pursuant to 28 U.S.C. § 636(c) and Federal Rule of Civil Procedure 73(b), the parties have consented to me serving as the presiding judge and entering final judgment in this case. See Doc. 34. Having reviewed the parties' submissions, the relevant law, and the Administrative Record, the Court will grant Defendant's Motion to Alter or Amend Judgment. However, because substantial evidence does not support the ALJ's determination in this case, the Court reaffirms Judge Lynch's decision to grant Plaintiff's Motion to Reverse or Remand.

         I. Introduction

         Plaintiff is a 43-year-old mother of three who has never had a full-time job and most recently worked in 1996. AR at 38-39.[2] The Administrative Law Judge (“ALJ”) who reviewed Plaintiff's claim determined that she is not disabled under the applicable regulations, and so denied her supplemental security income benefits. See AR at 22-32. After the ALJ's adverse determination, Plaintiff submitted additional evidence to the Appeals Council in the form of an opinion authored by her treating physician which, she claimed, rendered the ALJ's determination unsupported by substantial evidence. The Council affirmed the ALJ's decision to deny benefits despite this new evidence without expressly analyzing the opinion under the treating physician rules. The Honorable William P. Lynch determined that this failure to analyze was in error, and remanded this case. See Doc. 25. However, Judge Lynch stayed the judgment after Defendant filed the pending Motion to Alter or Amend Judgment in anticipation of the Tenth Circuit's decision in Vallejo v. Berryhill, 849 F.3d 951 (10th Cir. 2017). See Doc. 29. That decision has since subverted Judge Lynch's decision to remand. Compare Doc. 29 with Vallejo, 849 F.3d at 951. Accordingly, Defendant's Motion under Rule 59(e) will be granted.

         However, granting Defendant's Motion under Rule 59(e) does not end the matter; this Court must still review the ALJ's decision to determine whether it is supported by substantial evidence in light of Plaintiff's treating physician's opinion, and whether the correct legal standards were otherwise applied by the ALJ in denying benefits. Ultimately, the Court concludes that the new evidence from Plaintiff's treating physician undermines the ALJ's RFC finding in this case. As such, the ALJ's determination is unsupported by substantial evidence, and this Court will remand this case for further analysis by the Administration.

         II. Procedural History

         Plaintiff filed an application with the Social Security Administration for supplemental security income under Title XVI of the Social Security Act on June 21, 2011, with a protective filing date of June 14, 2011. AR at 129-134, 147-149. In her application Plaintiff alleged a disability onset date of May 18, 2011, the day after her previous denial by the Administration. AR at 147. Plaintiff claimed disability on the following bases: “back injury, locking elbows, right leg gives out, anxiety, depression, panic attacks, obesity, affective disorder, mild bilateral rotator cuff injury [and] mild lower extremity arterial occlusion disease.” AR at 151.

         The Administration initially denied Plaintiff's claims on August 23, 2011, and then affirmed its decision at the reconsideration stage of review on November 30, 2011. AR at 72-82. Plaintiff requested a de novo hearing before an ALJ, and her case was assigned to ALJ Ann Farris for a hearing to be held on May 14, 2013. AR at 83, 98, 33-58. Plaintiff and Vocational Expert (“VE”) Leslie White testified at the hearing. See AR at 33-58, 119. After conducting the hearing, ALJ Farris issued an unfavorable decision on June 24, 2013, finding that Plaintiff has “not been under a disability, as defined by the Social Security Act, since June 14, 2011, the date the application was filed. . . .” AR at 19-32.

         Plaintiff submitted a request for review of the ALJ's decision on September 20, 2013, which, while untimely, was granted by the Appeals Council on May 1, 2014. See AR at 6. Thereafter, Plaintiff submitted additional evidence in the form of a “Medical Assessment of Ability to do Work-Related Activities (Mental) signed and dated by Kenneth Bull, MD on 10/10/13” to the Appeals Council on May 7, 2014. AR at 327-329. The Appeals Council made Dr. Bull's statement “part of the record, ” AR at 4; however, it ultimately denied Plaintiff's request for review without further analysis, concluding that Dr. Bull's statement did “not provide a basis for changing the Administrative Law Judge's decision.” AR at 1-4. As such, the ALJ's decision became the final decision of the Acting Commissioner. Doyal v. Barnhart, 331 F.3d 758, 759 (10th Cir. 2003). This Court now has jurisdiction to review the decision pursuant to 42 U.S.C. § 405(g) and 20 C.F.R. § 422.210(a).

         A claimant seeking disability benefits must establish that she is unable to engage in “any substantial gainful activity by reason of any 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 12 months.” 42 U.S.C. § 1382c(a)(3)(A); 20 C.F.R. § 416.905(a). The Commissioner must use a five-step sequential evaluation process to determine eligibility for benefits. See 20 C.F.R. § 416.920(a)(4).[3]

         At Step One of the sequential evaluation process, the ALJ found that Plaintiff has not engaged in substantial gainful activity since her application date. AR at 24. At Step Two, she determined that Plaintiff has the following severe impairments: “fibromyalgia; chronic obstructive pulmonary disease (COPD); dysthymic disorder; anxiety; and a somatoform disorder[.]” AR at 24. At Step Three, the ALJ concluded that Plaintiff's impairments do not individually or in combination meet or medically equal the regulatory “listings.” AR at 24-27.

         When a plaintiff does not meet a listed impairment, the ALJ must determine her residual functional capacity (“RFC”). 20 C.F.R. § 416.920(a)(4). RFC is a multidimensional description of the work-related activities a plaintiff retains in spite of her medical impairments. 20 C.F.R. § 416.945(a)(1). “RFC is not the least an individual can do despite his or her limitations or restrictions, but the most.” SSR 96-8P, 1996 WL 374184, at *1. In this case, the ALJ determined that Plaintiff retains the RFC to “perform light work as defined in 20 C.F.R. 416.967(b); however, she is further limited to making only simple work related decisions, with few workplace changes; she can have no interaction with the public, and only occasional and superficial interaction with co-workers.” AR at 27.

         Ordinarily, an ALJ will employ this RFC at Step Four to determine whether a claimant can return to her past relevant work. However, in this case, the ALJ skipped Step Four because Plaintiff has no past relevant work under the regulations. See 20 C.F.R. § 416.968. Accordingly, the ALJ proceeded to Step Five. There, employing Plaintiff's RFC, and relying on the testimony of vocational expert White, the ALJ determined that “there are jobs that exist in significant numbers in the national economy that the claimant can perform[, ]” namely: housekeeper, bench assembler, bakery worker, lens inserter, and jewel stringer. AR at 31. Thus, because there are jobs that Plaintiff maintains the RFC to perform, the ALJ determined that she is not disabled under the regulations, and denied benefits. AR at 32.

         Plaintiff appealed the ALJ's decision to this Court. See Doc. 1. Magistrate Judge Lynch granted Plaintiff's Motion to Reverse or Remand this case, and entered Judgement in her favor on March 7, 2016. See generally Docs. 25, 26. However, Defendant filed her Motion to Alter or Amend Judgment on April 4, 2016, and Judge Lynch stayed the judgment “pending briefing on the motion or the Tenth Circuit's decision in Vallejo v. Colvin, No. 15-1283, whichever comes first.” Doc. 29. Vallejo was decided on February 28, 2017, and Defendant gave notice of that decision on March 7, 2017. Doc. 30. Plaintiff never responded to Defendant's Motion, or Notice, and the time to do so has long since passed. See D.N.M.LR-Civ. 7.4(a). Technically, this failure to respond “constitutes consent to grant the motion.” See D.N.M.LR-Civ. 7.1(b). However, given the procedural complexity of this case, and the technical nuances incumbent to Social Security law, the Court will explain why Defendant's Motion must be granted. The Court will then analyze the merits of Plaintiff's appeal.

         III. Discussion

         In Social Security appeals such as this, the Court “review[s] the Commissioner's decision to determine whether the factual findings are supported by substantial evidence and whether the correct legal standards were applied.” Vigil v. Colvin, 805 F.3d 1199, 1201 (10th Cir. 2015) (quoting Mays v. Colvin, 739 F.3d 569, 571 (10th Cir. 2014)). A deficiency in either area is grounds for remand. Keyes-Zachary v. Astrue, 695 F.3d 1156, 1161 (10th Cir. 2012). “In order to determine whether the [Commissioner's] decision is supported by substantial evidence, [this Court] must meticulously examine the record.” Musgrave v. Sullivan, 966 F.2d 1371, 1374 (10th Cir. 1992). This “meticulous examination” pertains to the “record as a whole, including anything that may undercut or detract from the ALJ's findings[.]” Wall v. Astrue, 561 F.3d 1048, 1052 (10th Cir. 2009) (quoting Flaherty v. Astrue, 515 F.3d 1067, 1070 (10th Cir.2007)). However, this Court “cannot reweigh the evidence or substitute [its] judgment for the administrative law judge's.” Smith v. Colvin, 821 F.3d 1264, 1266 (10th Cir. 2016) (citation omitted).

         In this case, Judge Lynch determined that the Appeals Council failed to apply the correct legal standard when it incorporated Dr. Bull's Medical Assessment into the record. Specifically, he held that the Appeals Council did not conduct a treating physician analysis as required by unpublished Tenth Circuit case law. See Doc. 25 at 11. Defendant asserts that this result was unwarranted because “the Appeals Council does not have to make specific factual findings when it declines review.” Doc. 28 at 2. This is the position Defendant pursued, and was successful on, in Vallejo. Id.

         In Vallejo, the claimant's administrative record contained no medical opinions from treating physicians; however, she informed the ALJ at the hearing that her treating physician was preparing a mental health opinion which would then be submitted to the Administration. Vallejo v. Berryhill, 849 F.3d 951, 953 (10th Cir. 2017). The ALJ agreed to consider the opinion if it was received before issuing her decision. Id. However, the ALJ issued an adverse decision the day before the opinion was received by the Administration. Id. As such, it was not addressed by the ALJ, or weighed in accordance with the factors normally applied to treating physician's opinions. The claimant then appealed to the Appeals Council, including the opinion with her request for review. Id. The Appeals Council denied review, stating that while it had reviewed the opinion, it did not “provide a basis for changing the ALJ's decision.” Id. The claimant appealed, and the district court remanded the case on the ground that the Appeals Council was required to follow the same rules as the ALJ would have in evaluating the opinion, rendering its summary denial insufficient. Id.

         The Tenth Circuit reversed. Pertinent here, the court held that, under the statutes and regulations, “the Appeals Council is required only to ‘consider' the new evidence - and a conclusory statement that it has done so is sufficient.” Id. at 955 (citation omitted). In other words, the court held that where the Appeals Council denies review of an ALJ's decision it is not required to follow the same rules for considering physician opinion evidence as are ALJs. Id. at 956. Rather, in such cases, the district court's “only option” in reviewing the Administration's decision is “to conduct a substantial-evidence review by assessing the entire agency record, ” including the never-before assessed opinion, to determine if the ALJ's decision to deny benefits is supported by substantial evidence notwithstanding the new opinion. Id. (emphasis added); see Yanni v. Colvin, CIV 15-0935 SCY, 2017 WL 3397382, *4 (D.N.M. March 32, 2017) (Yarbrough, M.J.).

         In sum, Vallejo invalidated Judge Lynch's reasoning in remanding this case. The question that remains is whether Defendant is entitled to relief under Rule 59(e) on this basis. Rule 59(e) states only that “[a] motion to alter or amend a judgment must be filed no later than 28 days after the entry of judgment.” Fed.R.Civ.P. 59(e). Thus, “[n]o matter how styled, a motion will be deemed a Rule 59(e) motion if it is served within the specified time period and seeks relief appropriate to Rule 59(e) by questioning the correctness of the underlying judgment.” Hayes Family Tr. v. State Farm Fire & Cas. Co., 845 F.3d 997, 1004 (10th Cir. 2017) (citation omitted). This threshold requirement is met in this case. That said, “Rule 59(e) relief is [only] available in limited circumstances, including ‘(1) an intervening change in the controlling law, (2) when new evidence previously was unavailable, and (3) the need to correct clear error or prevent manifest injustice.'” Id. (quoting Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000)). Defendant does not explicitly invoke any of these circumstances, see Doc. 28; however, the Court finds that either (1) or (3) applies, as Vallejo might be said to represent an intervening change in the controlling law, or Judge Lynch's decision a clear error of law. See Id. at 1005 (“Certainly a motion under Rule 59(e) allows a party to reargue previously articulated positions to correct clear legal error.”). Accordingly, the Court considers relief under Rule 59(e) appropriate in this case, and grants Defendant's Motion to alter or amend the judgment.

         IV. Analysis

         The Court must now consider Plaintiff's alternative arguments for reversal. Plaintiff argues: (1) that the ALJ's Step Two analysis is not supported by substantial evidence because the ALJ failed to include two medically determinable and severe impairments in her findings; (2) that the ALJ's RFC finding is not supported by substantial evidence because it conflicts with findings of the Administration's own medical experts; and, (3) that the ALJ's RFC is not supported by substantial evidence because it is “directly contradicted by the medical opinion of a treating physician.” Doc. 17 at 2. The Court addresses these arguments in turn.

         A) The ALJ's Step Two Errors Are Harmless

         As Judge Lynch recognized: “[a]ny error at step two is harmless when the ALJ reached the proper conclusion that claimant could not be denied benefits conclusively at step two and proceeded to the next step of the evaluation sequence.” Doc. 25 at 5 (quoting Carpenter v. Astrue, 537 F.3d 1264, 1266 (10th Cir. 2008)); see Allman v. Colvin, 813 F.3d 1326, 1330 (10th Cir. 2016) (“the failure to find a particular impairment severe at step two is not reversible error when the ALJ finds that at least one other impairment is severe.”). In this case, the ALJ determined that Plaintiff has the following severe impairments: “fibromyalgia; chronic obstructive pulmonary disease (COPD); dysthymic disorder; anxiety; and a somatoform disorder[.]” AR at 24. The ALJ then proceeded to analyze Plaintiff's claims under Steps Three and Five. As such, any error by the ALJ in failing to find additional severe impairments at Step Two is harmless under Tenth Circuit case law, and the Court will not reverse on this basis.

         B) The ALJ's RFC Findings Do Not Conflict with the Findings of the ...

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