McGuire v. Berryhill

          MEMORANDUM OPINION AND ORDER

          Laura Fashing, United States Magistrate Judge

         THIS MATTER comes before the Court on plaintiff Nichole McGuire's Motion to Reverse and Remand for Rehearing with Supporting Memorandum (Doc. 21), which was fully briefed March 24, 2017. See Docs. 26, 27, 28. The parties consented to my entering final judgment in this case. Docs. 4, 8, 9. Having meticulously reviewed the entire record and being fully advised in the premises, I find that the Administrative Law Judge (“ALJ”) erred in finding Ms. McGuire's impairments not severe at step two. I therefore GRANT Ms. McGuire's motion and remand this case to the Commissioner for further proceedings consistent with this opinion.

         I. Standard of Review

         The standard of review in a Social Security appeal is whether the Commissioner's final decision^[2] is supported by substantial evidence and whether the correct legal standards were applied. Maes v. Astrue, 522 F.3d 1093, 1096 (10th Cir. 2008). If substantial evidence supports the Commissioner's findings and the correct legal standards were applied, the Commissioner's decision stands, and the plaintiff is not entitled to relief. Langley v. Barnhart, 373 F.3d 1116, 1118 (10th Cir. 2004). “The failure to apply the correct legal standard or to provide this court with a sufficient basis to determine that appropriate legal principles have been followed is grounds for reversal.” Jensen v. Barnhart, 436 F.3d 1163, 1165 (10th Cir. 2005) (internal quotation marks and brackets omitted). The Court must meticulously review the entire record, but may neither reweigh the evidence nor substitute its judgment for that of the Commissioner. Flaherty v. Astrue, 515 F.3d 1067, 1070 (10th Cir. 2007).

         “Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Langley, 373 F.3d at 1118. A decision “is not based on substantial evidence if it is overwhelmed by other evidence in the record or if there is a mere scintilla of evidence supporting it.” Id. While the Court may not reweigh the evidence or try the issues de novo, its examination of the record as a whole must include “anything that may undercut or detract from the ALJ's findings in order to determine if the substantiality test has been met.” Grogan v. Barnhart, 399 F.3d 1257, 1262 (10th Cir. 2005). “‘The possibility of drawing two inconsistent conclusions from the evidence does not prevent [the] findings from being supported by substantial evidence.'” Lax v. Astrue, 489 F.3d 1080, 1084 (10th Cir. 2007) (quoting Zoltanski v. F.A.A., 372 F.3d 1195, 1200 (10th Cir. 2004)).

         II. Applicable Law and Sequential Evaluation Process

         To qualify for disability benefits, a claimant must establish that he or 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. § 423(d)(1)(A); 20 C.F.R. §§ 404.1505(a), 416.905(a).

         When considering a disability application, the Commissioner is required to use a five-step sequential evaluation process. 20 C.F.R. §§ 404.1520, 416.920; Bowen v. Yuckert, 482 U.S. 137, 140 (1987). At the first four steps of the evaluation process, the claimant must show: (1) the claimant is not engaged in “substantial gainful activity;” (2) the claimant has a “severe medically determinable . . . impairment . . . or a combination of impairments” that has lasted or is expected to last for at least one year; and (3) the impairment(s) either meet or equal one of the Listings^[3] of presumptively disabling impairments; or (4) the claimant is unable to perform his or her “past relevant work.” 20 C.F.R. §§ 404.1520(a)(4)(i-iv), 416.920(a)(4)(i-iv); Grogan, 399 F.3d at 1260-61. If the claimant cannot show that his or her impairment meets or equals a Listing but proves that he or she is unable to perform his or her “past relevant work, ” the burden of proof shifts to the Commissioner, at step five, to show that the claimant is able to perform other work in the national economy, considering the claimant's residual functional capacity (“RFC”), age, education, and work experience. Id.

         III. Procedural History

         Ms. McGuire was born in 1982, has a bachelor's degree, and has past work experience as a restaurant assistant manager, call center employee, retail salesperson, and most recently as a substitute teacher. AR 207, 282, 387.^[4] Ms. McGuire filed applications for supplemental security income and disability insurance benefits on March 25, 2014, alleging disability since March 1, 2013 due to anxiety, depression, and a “bad back.” AR 200-12, 281. The Social Security Administration (“SSA”) denied her claims initially on October 15, 2014. AR 139-43. The SSA denied her claims on reconsideration on February 18, 2015. AR 145-48. Ms. McGuire requested a hearing before an ALJ. AR 149. On February 10, 2016, ALJ Barry O'Melinn held a hearing. AR 38-68. The ALJ issued his unfavorable decision on March 4, 2016. AR 20-37.

         The ALJ found that Ms. McGuire met the insured status requirements of the Social Security Act through September 30, 2015. AR 25. At step one, the ALJ found that Ms. McGuire had not engaged in substantial, gainful activity since March 1, 2013. Id. At step two, the ALJ found that Ms. McGuire had the following medically determinable impairments: “obesity, degenerative disc disease, and mental impairments variously diagnosed to include depression, anxiety, and bipolar disorder.” Id. The ALJ found, however, that Ms. McGuire did not have a severe impairment or combination of impairments, and therefore was not disabled. AR 26-32. The ALJ did not complete any of the other steps in the sequential evaluation process beyond step two.

         On April 25, 2016, Ms. McGuire requested that the Appeals Council review the ALJ's unfavorable decision. AR 14-16. On June 14, 2016, the Appeals Council denied the request for review. AR 1-6. Ms. McGuire timely filed her appeal to this Court on July 15, 2016. Doc. 1.^[5]

         IV. Ms. McGuire's Claims

         Ms. McGuire raises two arguments for reversing and remanding this case: (1) the ALJ erred in finding her impairments not severe; 2) the ALJ's credibility finding is contrary to the evidence and the law. Doc. 21 at 3, 14. In response to Ms. McGuire's first claim of error, the Commissioner argues that Ms. McGuire “had the burden of establishing that her mental impairments were severe, and did not meet that burden.” Doc. 26 at 11. The Commissioner asserts that “[t]he ALJ's conclusion that [Ms. McGuire] did not have a severe impairment was supported by substantial evidence and free from harmful legal error.” Id. at 16-17. Because I agree that the ALJ erred in finding Ms. McGuire's impairments not severe at step two, I grant her motion to remand to give the ALJ an opportunity to remedy his error. I do not reach Ms. McGuire's other alleged error, which “may be affected by the ALJ's treatment of this case on remand.” Watkins v. Barnhart, 350 F.3d 1297, 1299 (10th Cir. 2003).

         V. Analysis

         At step two, the agency determines whether the claimant's alleged impairment or combination of impairments is “severe.” 20 C.F.R. §§ 404.1520(a)(4)(ii), (c); 416.920(a)(4)(ii), (c). A claimant's impairment or combination of impairments is severe if it “significantly limits her ability to do basic work activities.” Fleetwood v. Barnhart, 211 F. App'x 736, 739 (10th Cir. 2007) (internal citations omitted).

         The SSA regulation that governs the determination of severity at step two is designed to screen out only those claimants with “impairments of a minimal nature which could never prevent a person from working.” SSR 85-28^[6] (S.S.A. 1985), 1985 WL 56856, at *2 (internal citation and quotation omitted). Step two is designed “to weed out at an early stage of the administrative process those individuals who cannot possibly meet the statutory definition of disability.” Bowen v. Yuckert, 482 U.S. 137, 156 (1987) (O'Connor, J., concurring). The inquiry at step two is a “de minimis screening device to dispose of groundless claims.” Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996) (citing Bowen, 482 U.S. at 153-54). Given the purpose behind step two, “case law prescribes a very limited role for step two analysis.” Lee v. Barnhart, 117 F. App'x 674, 676-77 (10th Cir. 2004) (unpublished).

         The claimant has the burden of proof at step two to show that he or she has an impairment severe enough to interfere with the ability to work. Bowen, 482 U.S. at 146-54. Although the claimant “must show more than the mere presence of a condition or ailment[, ]” Hinkle v. Apfel, 132 F.3d 1349, 1352 (10th Cir. 1997), the burden at step two is a de minimis showing of impairment, Hawkins v. Chater, 113 F.3d 1162, 1169 (10th Cir. 1997) (internal citation omitted); see also Lee, 117 F. App'x at 677 (“a claimant need only make a ‘de minimus' showing of impairment to move on to further steps in the analysis.”).

         The determination of whether an impairment is severe at step two “is based on medical factors alone, and does not include consideration of such vocational factors as age, education, and work experience.” Langley v. Barnhart, 373 F.3d 1116, 1123 (10th Cir. 2004) (internal citation and quotation omitted). At step two, “medical evidence alone is evaluated in order to assess the effects of the impairment(s) on ability to do basic work activities.” SSR 85-28, 1985 WL 56856, at *4. Basic work activities are “abilities and aptitudes necessary to do most jobs.” 20 C.F.R. §§ 404.1521(b), 416.921(b) (both effective March 5, 1985 through March 26, 2017). These “abilities and aptitudes” include “walking, standing, sitting, lifting, pushing, pulling, reaching, carrying or handling; seeing, hearing, and speaking; understanding, carrying out, and remembering simple ...