Rounds v. Commissioner Social Security Administration

ORDER

The opinion filed on August 4, 2015, and published at 795 F.3d 1177, is hereby amended and replaced by the amended opinion filed concurrently with this order.

With these amendments, Judges W. Fletcher, Hurwitz, and Baylson have voted to deny the petition for panel rehearing. Judges W. Fletcher and Hurwitz have voted to deny the petition for rehearing en banc, and Judge Baylson so recommends.

The full court has been advised of the petition, and no judge of the court has requested a vote on the petition for rehearing en banc. Fed. R.App. P. 35.

The petitions for rehearing and rehearing en banc are DENIED. No further petitions for rehearing or rehearing en banc will be entertained.

OPINION

Appellant Heather Rounds appeals from the district court’s affirmance of the decision of a Social Security Administration Administrative Law Judge (ALJ) denying her application for Supplemental Security Income (SSI). Although we find no error in the ALJ’s rulings on several issues, we vacate in part and remand because the ALJ failed to reconcile an apparent conflict between a vocational expert’s (VE) testimony and the Dictionary of Occupational Titles.

BACKGROUND

I. Rounds’ Self-Reported Activities and Limitations

At the time of her SSI application, Rounds was 22 years old, a high school graduate, and the mother of a five-year-old daughter. She was living with her daughter, a roommate/boyfriend named Gavin Lipscomb, and her two cats. In the function report accompanying her application, Rounds described difficulties with social interactions, leaving the house, sleeping, remembering to eat and care for herself, and remembering instructions. Nevertheless, she stated that she was able to care for her daughter and her cats, prepare simple meals, share house work with her roommate, shop for groceries, and pay bills. Lipscomb submitted a third-party function report that described Rounds in similar terms, although he also noted that she “sees no reason to want to work.” During her oral testimony in August 2010, Rounds described similar daily activities but also testified to experiencing intermittent severe pain in her shoulders, neck, and back.

Rounds’ work history is limited to two short-lived jobs as a cashier at a gas station and at a fast food restaurant. She described such work as “hard and exhausting” due to not fitting in with her coworkers and struggling to interact with customers.

II. Rounds’ Medical History

For purposes of this appeal, we focus on whether Rounds was disabled between March 10, 2009, the date of her applica *1000 tion, and September 3, 2010, the date of the ALJ’s decision. 1 In January 2009, Rounds visited Dr. Molly McKenna for a comprehensive neuropsychological examination. Dr. McKenna diagnosed Rounds with (a) major depressive disorder, moderate, recurrent, in partial remission, (b) social phobia, (c) pervasive developmental disorder NOS (not otherwise specified), and (d) cognitive disorder NOS. She also noted schizotypal personality traits, recurrent headaches, and a variety of psychosocial stressors. Dr. McKenna noted that Rounds believed she related better to cats than to people, had a difficult childhood, suffered abuse during a prior relationship, and had a history of depression. Nevertheless, she concluded Rounds is “independent for all activities of daily living” and the “primary impediments to returning [her] to full-time gainful employment are her severe social anxiety, unusual beliefs and perceptions, limited verbal and working memory, and poor mental organization.” Dr. McKenna opined that “[w]ith appropriate placement in training or employment, she is a good candidate to return to work.”

In March and April 2009, Rounds attended five mental health diagnostic and counseling sessions at the Multnomah County Health Department. 2 During her initial appointment, she told the treating physician that she was mainly interested in getting a letter so she could keep her two cats. At various times she also stated that she did not want to take medication due to a prior bad experience with Prozac and that she was disinterested in therapy but willing to try it.

Rounds’ medical records were reviewed in May 2009 by Dr. Joshua Boyd and Dr. Richard Alley, whose opinions were used in the initial decision to deny her SSI claim. Her records were reviewed again in July 2009 by Dr. Robert Henry and Dr. Martin Kehrli, whose opinions were used in the denial of Rounds’ request for reconsideration.

From August 2009 through at least August 2010, Rounds met with a counselor from Lifeworks NW, Nicole Warren. Warren diagnosed Rounds with generalized anxiety disorder and dysthymic disorder, and treated her for depression and anxiety. During these sessions, Rounds twice admitted that one reason for seeking therapy was to have documentation for her disability claim. However, Warren also noted that Rounds “under reports her problems” to medical providers and “can never think of what to say at the doctor’s.” Rounds described to Warren physical and lifestyle-problems including severe shoulder pain, difficulty interacting with other people, a possible psychotic break while living in Virginia, and her inability to pay to heat her apartment.

In February 2010, Rounds learned about the symptoms of fibromyalgia. 3 Suspecting that she might be afflicted with fibro- *1001 myalgia, she returned to the Multnomah County Health Department and was treated by Dr. Robert Henriques. In February or March 2010, after noting that Rounds “[c]ries with exam and recoils to minimal contact” and had “multiple Tender points on exam,” it appears that Dr. Henriques diagnosed Rounds with chronic fibromyal-gia syndrome and recommended yoga. 4 The fibromyalgia diagnosis was also mentioned in chart notes for appointments on April 13, 2010 and May 13, 2010, during which Dr. Henriques recommended exercise and stretches. He also prescribed medications for pain, nausea, and sleep.

III. Procedural History

Rounds applied for SSI in March 2009, with a protective filing date of March 10, 2009. She alleged that she had been disabled since June 1, 2005, and listed her disabilities as depression, schizophrenia, social phobias, learning disabilities, cognitive problems, and recurring headaches. Rounds’ claim was denied on initial review and again after reconsideration. While awaiting a hearing before an ALJ, Rounds submitted an update alleging that in February and March 2010 she was diagnosed with chronic fibromyalgia syndrome.

In August 2010, an ALJ conducted a hearing and, in September 2010, the ALJ issued his decision denying Rounds’ claim. The ALJ followed the five-step evaluation process set out at 20 C.F.R. § 416.920. At Step One, the ALJ found that Rounds had not engaged in substantial gainful activity since March 10, 2009. At Step Two, the ALJ determined that Rounds had severe impairments consisting of major depressive disorder, social phobia, pervasive developmental disorder NOS and cognitive disorder NOS. The ALJ concluded that the record was insufficient to support a finding that fibromyalgia was a medically determinable impairment.

At Step Three, the ALJ determined that Rounds had mild restrictions in activities of daily living, marked difficulties in social functioning, moderate difficulties with concentration, persistence or pace, and no episodes of decompensation. As a result, Rounds’ impairments did not meet or equal one of the impairments listed in the Social Security Regulations at 20 C.F.R. Part 404, Subpart P, Appendix 1.

The ALJ determined that Rounds had the residual functional capacity (RFC) to “perform a full range of work at all exer-tional levels but with the following nonex-ertional limitations: she can perform one to two step tasks with no public contact, no teamwork and limited coworker contact.” At Step Four, the ALJ determined that Rounds had no past relevant work. Finally, at Step Five, the ALJ relied on a vocational expert’s testimony that someone with Rounds’ RFC could perform jobs that exist in the national and local economy, including kitchen helper, hand packager, and'recycler/reclaimer. As a result, the ALJ found Rounds was not disabled.

The Social Security Administration Appeals Council denied Rounds’ appeal, making the ALJ’s decision the final decision of the Commissioner. Rounds appealed to the District Court, which considered the *1002 five issues presented for review in this appeal and affirmed the ALJ’s decision.

JURISDICTION

The District Court had jurisdiction under 42 U.S.C. § 405(g). This Court has jurisdiction under 28 U.S.C. § 1291.

STANDARD OF REVIEW

This Court “reviewfs] the district court’s order affirming the ALJ’s denial of social security benefits de novo, and reversed] only if the ALJ’s decision was not supported by substantial evidence in the record as a whole or if the ALJ applied the wrong legal standard.” Molina v. Astrue, 674 F.3d 1104, 1110 (9th Cir.2012) (citing Tommasetti v. Astrue, 533 F.3d 1035, 1038 (9th Cir.2008), and Stone v. Heckler, 761 F.2d 530, 531 (9th Cir.1985)). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,” and “must be ‘more than a mere scintilla,’ but may be less than a preponderance.” Id. at 1110-11 (quoting Valentine v. Comm’r Soc. Sec. Admin., 574 F.3d 685, 690 (9th Cir.2009)). This Court “must consider the evidence as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner’s conclusion.” Smolen v. Chater, 80 F.3d 1273, 1279 (9th Cir.1996). However, if “the evidence is susceptible to more than one rational interpretation, we must uphold the ALJ’s findings if they are supported by inferences reasonably drawn from the record.” Molina, 674 F.3d at 1111. In addition, this Court “may not reverse an ALJ’s decision on account of an error that is harmless.” Id. Overall, the standard of review is “highly deferential.” Valentine, 574 F.3d at 690.

DISCUSSION

Rounds contends that the ALJ erred by discrediting her fibromyalgia diagnosis, ignoring opinions from two psychologists, discounting her testimony, discounting other lay witness testimony, and wrongly concluding at Step Five that she could perform jobs that exceed her RFC. We begin by discussing the ALJ’s Step Five findings because we hold that they require remand to the ALJ.

I. The ALJ’s Step Five Findings

At Step Five, “the Commissioner has the burden ‘to identify specific jobs existing in substantial numbers in the national economy that [a] claimant can perform despite [his] identified limitations.’ ” Zavalin v. Colvin, 778 F.3d 842, 845 (9th Cir.2015) (quoting Johnson v. Shalala, 60 F.3d 1428, 1432 (9th Cir.1995)). Based on a VE’s testimony, the ALJ concluded that Rounds was capable of performing at least three jobs: kitchen helper, hand packager, and recycler/reclaimer. According to the Dictionary of Occupational Titles (DOT), these jobs require a GED Reasoning Level of Two. DOT (4th ed. 1991) § 318.687-010, 1991 WL 672755 (kitchen helper); id. § 920.587-018, 1991 WL 687916 (hand packager); id. § 929.687-022, 1991 WL 688172 (salvage laborer).

There are six GED Reasoning Levels that range from Level One (simplest) to Level Six (most complex). Id., App. C, § III, 1991 WL 688702. The lowest two levels are:

Level 1: Apply commonsense understanding to carry out simple one- or two-step instructions. Deal with standardized situations with occasional or no variables in or from these situations encountered on the job.

Level 2: Apply commonsense understanding to carry out detailed but uninvolved written or oral instructions. *1003 Deal with problems involving a few concrete variables in or from standardized situations.

Id. Rounds argues that the ALJ erred because her RFC limitation to “one to two step tasks” exactly matches the Level One standard of carrying out “simple one- or two-step instructions” and is exceeded by the Level Two standard of carrying out “detailed but uninvolved written or oral instructions.”

This Court’s recent Zavalin opinion held that “[w]hen there is an apparent conflict between the vocational expert’s testimony and the DOT — for example, expert testimony that a claimant can perform an occupation involving DOT requirements that appear more than the claimant can handle — the ALJ is required to reconcile the inconsistency.” Zavalin, 778 F.3d at 846 (citing Massachi v. Astrue, 486 F.3d 1149, 1153-54 (9th Cir.2007)). Pursuant to Social Security Ruling (SSR) 00-4p, the ALJ has an affirmative duty to “ask the expert to explain the conflict and ‘then determine whether the vocational expert’s explanation for the conflict is reasonable’ before relying on the expert’s testimony to reach a disability determination.” Id. (quoting Massachi, 486 F.3d at 1152-54); SSR 00-4p, 2000 WL 1898704, at *2, *4 (Dec. 4, 2000).

In Zavalin, this Court remanded to the ALJ because “there [was] an apparent conflict between the residual functional capacity to perform simple, repetitive tasks, and the demands of Level 3 Reasoning,” which the ALJ had not recognized and reconciled before relying on the VE’s testimony. Id. at 846-48. We conclude that Zavalin — this Court’s most recent holding regarding the review of a VE’s testimony — controls the analogous facts of this case.

Here, the ALJ stated at the outset of the VE’s testimony that “unless you tell me otherwise, I’ll assume that your testimony is based on your knowledge, education, training, and experience consistent with the DOT, does that work for you, sir?”, to which the VE replied ‘Tes, sir.” Based on that exchange, the ALJ concluded that the VE’s testimony was consistent with the DOT. As a result, although the VE’s testimony was ostensibly consistent ■with the DOT, he never directly addressed whether Rounds’ limitation to one- to two-step tasks was consistent with jobs requiring Level Two reasoning and, if so, why.

Under these circumstances, Zavalin is controlling. There was an apparent conflict between Rounds’ RFC, which limits her to performing one- and two-step tasks, and the demands of Level Two reasoning, which requires a person to “[ajpply commonsense understanding to carry out detailed but uninvolved written or oral instructions.” The conflict between Rounds’ RFC and Level Two reasoning is brought into relief by the close similarity between Rounds’ RFC and Level One reasoning. Level One reasoning requires a person to apply “commonsense understanding to carry out simple one- or two-step instructions.” The Commissioner resists the obvious similarity between Rounds’ RFC and Level One reasoning, and the concomitant contrast between Rounds’ RFC and Level Two reasoning, by stressing that “task” and “instruction” are different terms. In the Commissioner’s view, Rounds’ inability to complete multi-step tasks does not necessarily contradict the VE’s opinion that she has the ability to follow detailed instructions, as required in Level Two jobs. Based on the record, we disagree. Only tasks with more than one or two steps would require “detailed” instructions. And these are precisely the kinds of tasks Rounds’ RFC indicates she cannot perform.

*1004 Because the ALJ did not recognize the apparent conflict between Rounds’ RFC and the demands of Level Two reasoning, the VE did not address whether the conflict could be resolved. As a result, we “cannot determine whether substantial evidence supports the ALJ’s step-five finding.” Id. at 848 (quoting Massachi, 486 F.3d at 1154). On remand, the ALJ must determine whether there is a reasonable explanation to justify relying on the VE’s testimony. 5 See id. at 846-48; Massachi, 486 F.3d at 1153-54; see also Tommasetti, 533 F.3d at 1042 (“[A]n ALJ ‘may rely on expert testimony which contradicts the DOT, but only insofar as the record contains persuasive evidence to support the deviation.’ ” (quoting Johnson, 60 F.3d at 1435)).

The ALJ’s failure to reconcile this apparent conflict was not harmless. In his RFC assessment, the ALJ did not merely restrict Rounds to “simple” or “repetitive” tasks. 6 Instead, he expressly limited her to “one to two step tasks,” apparently to address her “moderate” problems with memory and concentration. There is no explanation in the record as to why the VE or the ALJ may have believed that Rounds’ specific limitation to “one to two step tasks” should not be taken at face value. As such, the record does not support a conclusion that the ALJ’s failure to resolve this apparent conflict was harmless error. This Court “cannot affirm the decision of an agency on a ground that the agency did not invoke in making its decision.” Zavalin, 778 F.3d at 848 (quoting Stout v. Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1054 (9th Cir.2006)) (holding that ALJ’s failure to reconcile apparent conflict between RFC arid DOT was not harmless error). 7

II. The ALJ’s Consideration of the Fibromyalgia Diagnosis

Rounds argues that the ALJ erred by (a) failing to develop the record of her fibromyalgia diagnosis, (b) relying on the opinions of medical experts who reviewed her records before the fibromyalgia diagnosis or who question the existence of fibromyalgia, and (c) substituting the ALJ’s own assessment of the fibromyalgia diagnostic criteria for that of her treating physician. However, we need not reach *1005 these arguments. 8

After the ALJ’s decision in this case, the Commissioner adopted SSR 12-2p, which designates two separate sets of diagnostic criteria that can establish fibromyalgia as a medically determinable impairment. SSR 12-2p, 2012 WL 3104869, at *2-3 (Jul. 25, 2012). These criteria, published by the American College of Rheumatology in 1990 and 2010, were both available at the time of Rounds’ August 2010 hearing and the ALJ’s September 2010 decision. 9 However, it appears that the ALJ considered only the 1990 diagnostic criteria and did not consider the 2010 criteria. 10 Many of Rounds’ symptoms (e.g., cognitive and memory problems, poor sleep, depression, anxiety, headaches, fatigue, dizziness, and nausea) appear to fit the 2010 criteria better than the 1990 criteria. Id. at *2-3 & n. 9. To be fair to Rounds, and to be consistent with the Commissioner’s binding ruling in SSR 12-2p that applies on remand, the ALJ must determine whether Rounds established fibromyalgia as a medically determinable impairment under the 2010 diagnostic criteria. See 20 C.F.R. § 402.35(b)(1) (providing that SSRs “are binding on all components of the Social Security Administration”). Because the ALJ has not yet made this determination and it may moot Rounds’ other arguments regarding her fibromyalgia diagnosis, we need not reach Rounds’ other arguments at this time.

III. The ALJ’s Evaluation of Medical Opinions

Rounds argues that the ALJ erred by ignoring Dr. Boyd’s opinion (also adopted by Dr. Rullman) that Rounds has moderate limitations in her ability to accept instructions and respond appropriately to criticism from supervisors. This “opinion” was a checkbox in Dr. Boyd’s “Summary Conclusions” and was not repeated in his narrative “Functional Capacity Assessment.”

The ALJ did not ignore Dr. Boyd’s opinion; rather, he explicitly noted that Dr. Boyd had checked this box and gave the whole of Dr. Boyd’s opinion, including the narrative portion, “great weight” in crafting Rounds’ RFC.

Rounds also argues that the ALJ improperly rejected some of Dr. McKenna’s “Treatment Recommendations” that Rounds should (a) avoid math or use a calculator, (b) write information down and use various memory aids, (c) request that instructions be repeated and provided both verbally and in writing, and (d) limit customer or public contact. However, Dr. McKenna’s formal conclusions were set out *1006 in a separate section of her report subtitled “Clinical Formulation/Prognosis” and Rounds does not contend that the ALJ ignored those conclusions. An ALJ may rationally rely on specific imperatives regarding a claimant’s limitations, rather than recommendations. Carmickle v. Comm’r, Soc. Sec. Admin., 533 F.3d 1155, 1165 (9th Cir.2008). In addition, the ALJ is responsible for translating and incorporating clinical findings into a succinct RFC. See Stubbs-Danielson v. Astrue, 539 F.3d 1169, 1174 (9th Cir.2008).

We hold that the ALJ’s RFC determination — which limited Rounds to “one to two step tasks with no public contact, no teamwork and limited coworker contact” — adequately incorporated the opinions of Dr. McKenna and Dr. Boyd.

IV. The ALJ’s Consideration of Rounds’ Testimony

Rounds argues that the ALJ improperly rejected her testimony. Having determined that Rounds’ medically determinable impairments could reasonably be expected to cause her alleged symptoms, “the ALJ may reject the claimant’s testimony regarding the severity of her symptoms only if he makes specific findings stating clear and convincing reasons for doing so.” Smolen, 80 F.3d at 1284. “The ALJ must state specifically which symptom testimony is not credible and what facts in the record lead to that conclusion.” Id. To assess a claimant’s credibility, the ALJ may consider, among other factors, “ordinary techniques of credibility evaluation,” “inadequately explained failure to seek treatment or to follow a prescribed course of treatment,” and “the claimant’s daily activities.” Id. The ALJ must also consider factors including the “observations of treating and examining physicians and other third parties regarding ... the claimant’s symptom[s]; ... functional restrictions caused by the symptoms; and the claimant’s daily activities.” Id.

Here, the ALJ considered Rounds’ written and oral testimony and concluded that Rounds’ “statements concerning the intensity, persistence and limiting effects of [her] symptoms are not credible to the extent they are inconsistent with the above residual functional capacity assessment.” The ALJ explicitly did “not discount the claimant’s consistent report of significant difficulties, particularly with interpersonal relationships.” In support of these conclusions, the ALJ reviewed and summarized the lay and expert testimony in the record. To justify discounting Rounds’ testimony about the severity of her symptoms, the ALJ concluded that her medical records show a higher level of functionality, that she has been uncooperative regarding use of medications and engaging in therapy, and that she appears to access support resources only when she has secondary motivations.

Taken in context, the ALJ’s determination of Rounds’ RFC was based on the totality of Rounds’ and her roommate’s testimony about her daily activities and the opinions of Dr. McKenna and Dr. Boyd regarding her functional capabilities. This evidence provides clear and convincing reasons for discounting Rounds’ testimony regarding the severity of her symptoms. See Molina, 674 F.3d at 1112-14 (affirming ALJ’s decision to discount claimant’s testimony based on inconsistencies with her daily activities and the medical evidence, and her failure to seek or follow prescribed treatment); Matney ex rel. Matney v. Sullivan, 981 F.2d 1016, 1020 (9th Cir.1992) (affirming ALJ’s decision to discount claimant’s pain testimony based on his doctor’s report, his daily activities, and his secondary motive to seek disability benefits). We discern no error in the ALJ’s consideration of Rounds’ testimony.

*1007 V. The ALJ’s Consideration of Lay Witness Testimony

Rounds argues that the ALJ improperly rejected lay witness testimony from Rounds’ roommate, Lipscomb, who stated that- Rounds needs instructions repeated and has trouble focusing on and finishing tasks. She also argues that the ALJ ignored a lay witness statement from an Oregon state employee, Gary Davidson, who noted that Rounds had memory problems and concluded that she was unable to work outside a sheltered work environment. “[Competent lay witness testimony ‘cannot be disregarded without, comment’ ” and “in order to discount competent lay witness testimony, the ALJ ‘must give reasons that are germane to each witness.’ ” Molina, 674 F.3d at 1114 (quoting Nguyen v. Chafer, 100 F.3d 1462, 1467 (9th Cir.1996) and Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir.1993)) (emphasis omitted).

With respect to Lipscomb, the ALJ described his statement as generally consistent with Rounds’ testimony and statements, accepted it “as descriptive of his perceptions,” but concluded that “it does not provide sufficient support to alter the RFC arrived at herein.” The ALJ also noted that Lipscomb’s statement indicated that Rounds sees no reason to want to work, suggesting a secondary motive for applying for SSI. It is not clear that the ALJ rejected Lipscomb’s statement at all. The ALJ limited her RFC to one- to two-step tasks, which addressed her memory and focus problems. Even if the ALJ discounted his statement, Lipscomb’s admission that Rounds has a secondary motive for seeking SSI was a germane reason for doing so.

As for Davidson, even assuming that he was a “competent lay witness,” the ALJ’s failure to consider his comments was harmless. Davidson was Rounds’ appointed representative for filing her SSI claim. As her advocate, he was not a typical lay witness. Even if he qualified as a lay witness, most of his comments were in the form of conclusions that Rounds is disabled and unable to work outside of a sheltered work environment. These are ultimate determinations reserved to the ALJ. See Tonapetyan v. Halter, 242 F.3d 1144, 1148 (9th Cir.2001) (noting that even a treating physician’s opinion is not binding on the ultimate determination of disability). Davidson’s non-conclusory comments refer to “memory problems” and were addressed in the RFC by limiting Rounds to one- to two-step tasks. Accordingly, to the extent the ALJ may have failed to consider Davidson’s lay witness evidence, the error was harmless because it was “inconsequential to the ultimate nondisability determination.” Molina, 674 F.3d at 1115.

CONCLUSION

We affirm in part, vacate in part, and remand to the District Court so that it may remand to the agency for further proceedings consistent with this opinion.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

Each party shall bear its own costs on appeal.