REPORT AND RECOMMENDATION

ELIZABETH A. PRESTON DEAVERS, Magistrate Judge.

Plaintiff, Patrick J. Quinn, brings this action under 42 U.S.C. §§ 405(g) and 1383(c)(3) for review of a final decision of the Commissioner of Social Security ("Commissioner") denying his applications for Social Security Disability Insurance Benefits and Supplemental Security Income. This matter is before the United States Magistrate Judge for a Report and Recommendation on Plaintiff's Statement of Errors (ECF No. 10), the Commissioner's Memorandum in Opposition (ECF No. 11), Plaintiff's Reply (ECF No. 12), and the administrative record (ECF No. 9). For the reasons that follow, it is RECOMMENDED that the Court REVERSE the Commissioner of Social Security's nondisability finding and REMAND this case to the Commissioner and the ALJ under Sentence Four of § 405(g).

I. BACKGROUND1

Plaintiff protectively filed applications for benefits in April 2009, alleging that he had been disabled since January 19, 2009. On June 17, 2009, Plaintiff's applications for benefits were denied. (R. at 64-65.) Plaintiff subsequently filed the current application for disability insurance benefits on October 3, 2011, and an application for Supplemental Security Income on October 4, 2011, alleging disability due to vertigo, heart problems, punctured lung, and broken ribs. (R. at 66.)

Plaintiff's applications were denied initially and upon reconsideration. Plaintiff sought a de novo hearing before an administrative law judge. (R. at 184-85.) Administrative Law Judge Joseph L. Heimann (the "ALJ") held a hearing on March 11, 2013, at which Plaintiff, who was represented by counsel, testified. (R. at 25-63.) At the hearing, Plaintiff amended his alleged onset date to July 20, 2011. A vocational expert, Georgette Gunther, (the "VE") also testified. On March 28, 2013, the ALJ issued a decision finding that Plaintiff was not disabled within the meaning of the Social Security Act. (R. at 8-18.)

In his decision, the ALJ found that Plaintiff meets the insured status requirements of the Social Security Act through September 30, 2015. (R. at 10.) At step one of the sequential evaluation process,2 the ALJ found that Plaintiff had not engaged in substantially gainful activity since his alleged onset date of July 20, 2011. (Id.) At step two, the ALJ found that Plaintiff had the severe impairments of status post myocardial infarction with defibrillator placement and lumbar degenerative disc disease. (Id.) The ALJ found that because Plaintiff's mental health impairments "cause no more than `mild' limitation in [activities of daily living, social functioning, and maintaining concentration, persistence, or pace] and `no' episodes of decompensation which have been of extended duration . . . they are non-severe." (R. at 12.)

At step three, the ALJ found that Plaintiff did not have an impairment or combination of impairments that met or medically equaled one of the listed impairments described in 20 C.F.R. Part 404, Subpart P, Appendix 1. (Id.) At step four, the ALJ set forth Plaintiff's residual functional capacity ("RFC") as follows:

(R. at 13.) The ALJ found Plaintiff's statements concerning the presence of incapacitating discomfort and associated functional limitations not entirely credible. (R. at 15.) In determining Plaintiff's RFC, the ALJ gave "great weight" to the State Agency medical advisors.

At step four, relying on the VE's testimony, the ALJ concluded that Plaintiff is unable to perform any past relevant work. (R. at 16.) At step five, he found that Plaintiff can, however, perform jobs that exist in significant numbers in the national economy. (R. at 17.) The ALJ therefore concluded that Plaintiff was not disabled under the Social Security Act. (R. at 18.)

On July 18, 2014, the Appeals Council denied Plaintiff's request for review and adopted the ALJ's decision as the Commissioner's final decision. (R. at 1-3.) Plaintiff then timely commenced the instant action.

II. STANDARD OF REVIEW

When reviewing a case under the Social Security Act, the Court "must affirm the Commissioner's decision if it `is supported by substantial evidence and was made pursuant to proper legal standards.'" Rabbers v. Comm'r of Soc. Sec., 582 F.3d 647, 651 (6th Cir. 2009) (quoting Rogers v. Comm'r of Soc. Sec., 486 F.3d 234, 241 (6th Cir. 2007)); see also 42 U.S.C. § 405(g) ("[t]he findings of the Commissioner of Social Security as to any fact, if supported by substantial evidence, shall be conclusive . . . ."). Under this standard, "substantial evidence is defined as `more than a scintilla of evidence but less than a preponderance; it is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Rogers, 486 F.3d at 241 (quoting Cutlip v. Sec'y of Health & Hum. Servs., 25 F.3d 284, 286 (6th Cir. 1994)).

Although the substantial evidence standard is deferential, it is not trivial. The Court must "`take into account whatever in the record fairly detracts from [the] weight'" of the Commissioner's decision. TNS, Inc. v. NLRB, 296 F.3d 384, 395 (6th Cir. 2002) (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 487 (1951)). Nevertheless, "if substantial evidence supports the ALJ's decision, this Court defers to that finding `even if there is substantial evidence in the record that would have supported an opposite conclusion.'" Blakley v. Comm'r of Soc. Sec., 581 F.3d 399, 406 (quoting Key v. Callahan, 109 F.3d 270, 273 (6th Cir. 1997)). Finally, even if the ALJ's decision meets the substantial evidence standard, "`a decision of the Commissioner will not be upheld where the SSA fails to follow its own regulations and where that error prejudices a claimant on the merits or deprives the claimant of a substantial right.'" Rabbers, 582 F.3d at 651 (quoting Bowen v. Comm'r of Soc. Sec., 478 F.3d 742, 746 (6th Cir. 2007)).

III. ANALYSIS

Plaintiff raises three contentions in his Statement of Errors. The first two contentions relate to the ALJ's step two finding that Plaintiff did not suffer from a severe mental impairment. Plaintiff first asserts that the ALJ's finding that Plaintiff has no severe mental impairment is not supported by substantial evidence. He also asserts that the ALJ improperly concluded that Mr. Sours is not an acceptable medical source and therefore erred in weighing his opinion. Finally, Plaintiff contends that the ALJ's RFC determination is not supported by substantial evidence because he erred in weighing Dr. Weaver's opinion. The Undersigned concludes that the ALJ erred at step two in evaluating whether Plaintiff's mental impairments were severe. This finding obviates the need for in-depth analysis of Plaintiff's remaining assignments of error. Thus, the Undersigned need not resolve the alternative bases Plaintiff asserts to support reversal and remand. Nevertheless, on remand, the ALJ may consider Plaintiff's remaining assignments of error if appropriate.

The United States Court of Appeals for the Sixth Circuit has described step two of the sequential process as follows:

Rabbers, 582 F.3d at 652-53. Thus, if no signs or laboratory findings substantiate the existence of an impairment, it is appropriate to terminate the disability analysis. See SSR 96-4p, 1996 WL 374187, at *2 (July 2, 1996) ("In claims in which there are no medical signs or laboratory findings to substantiate the existence of a medically determinable physical or mental impairment, the individual must be found not disabled at step 2 of the sequential evaluation process set out in 20 CFR 404.1520 and 416.920. . . ."). Furthermore, in the Sixth Circuit, "the step two severity regulation codified at 20 C.F.R. §§ 404.1520(c) and 404.1521 has been construed as a de minimis hurdle in the disability determination process." Higgs v. Bowen, 880 F.2d 860, 862 (6th Cir. 1988).

Here, the ALJ explained his findings at step two as follows:

(R. at 12.)

The Undersigned finds that Plaintiff's contention that the ALJ erred in determining that Floyd Sours, M.A., is not an acceptable medical source is well-taken. Because Mr. Sours is a licensed psychologist, the ALJ was required to consider his opinion in determining whether Plaintiff's medical conditions are severe. See 20 C.F.R. § 416.927(c) (providing that the ALJ must consider all medical opinions that he or she receives in evaluating a claimant's case); see also 20 C.F.R. § 404.1513(a) (explaining that acceptable medical sources include licensed or certified psychologists). The Commissioner admits that the ALJ's determination that Mr. Sours is not an acceptable medical source "appears incorrect." (Commissioner's Resp. in Opp. 12, ECF No. 11.) The Commissioner contends, however, that the ALJ's error is harmless because the ALJ stated other, valid reasons supported by substantial evidence for discounting Mr. Sours' opinion. Id. The Undersigned disagrees.

On January 12, 2012, Mr. Sours conducted a consultative examination of Plaintiff on behalf of the Social Security Administration. Mr. Sours diagnosed Plaintiff with Bipolar Disorder, mixed; Alcohol Dependence in remission; and noted that Plaintiff exhibited a number of anti-social personalities. (R. at 540.) Mr. Sours assigned Plaintiff a GAF score of 59 and noted that he exhibited bipolar disorder and alcohol dependence in remission, but seems to be functioning very well at the present time. He assigned Plaintiff a functional GAF score of 61. Id. Regarding Plaintiff's appropriateness of response to supervision and co-workers, Mr. Sours concluded as follows:

(R. at 540-41.)

With regard to his appropriateness of response to work pressures, Mr. Sours found as follows:

Id.

As explained above, the ALJ erred in reviewing Mr. Sours' opinion because he concluded that he was not an acceptable medical source. This error is not harmless. First and most importantly, it is not clear whether the ALJ would have concluded that Plaintiff does not have a severe mental impairment had he not improperly concluded that Mr. Sours is not an acceptable treating source. Furthermore, the ALJ's finding that Mr. Sours must have relied on Plaintiff's subjective reports is not supported by substantial evidence, as Mr. Sours specifically noted that he considered Plaintiff's arrest history, history of problems in school, history of being fired from two different jobs, and Plaintiff's demeanor and behaviors throughout the examination.

Finally, the ALJ states that Mr. Sours' opinion is inconsistent with the overall record, which he found does not reflect significant mental health problems. The ALJ expresses this finding, and then purports to assign "significant weight" to the state agency non-reviewing psychologists. The state agency psychologists, however, also determined that Plaintiff had moderate difficulties in maintaining social functioning and concluded that Plaintiff retains the capacity to interact superficially. They also concluded Plaintiff is moderately limited in his ability to respond appropriately to changes in the work setting and can function in a work setting where work expectations are clear, changes infrequent, and when necessary, easily explained. (R. at 73, 77, 78, 103, 107, 108.) Additionally, state agency psychologist, Deryck Richardson, Ph.D., also found that Plaintiff had moderate limitations in maintaining concentration, persistence, or pace. (R. at 122.) Accordingly, the state agency psychologists' opinions are consistent with Mr. Sours' findings. Furthermore, all of the medical opinions in the record suggest that Plaintiff has severe mental impairments.

Moreover, while the ALJ points to evidence in the record including Plaintiff's lack of mental health treatment, activities of daily living, and Plaintiff's ability to maintain a relationship with a girlfriend as evidence that Plaintiff's mental health conditions are not severe, his arrest history and history of being fired from jobs due to verbal altercations supports Mr. Sours and the state agency psychologists' opinions that Plaintiff has moderate difficulties in social functioning.

Given that the ALJ improperly rejected Mr. Sours' opinion, this case should be remanded for further review of the evidence. Further, under this Circuit's prevailing de minimus view, "an impairment can be considered not severe only if it is a slight abnormality that minimally affects work ability regardless of age, education, and experience." Higgs, 880 F.3d at 862. Here, Plaintiff has put forth evidence that demonstrates that his mental impairments have more than a minimal effect on his work ability. Thus, remand is necessary.

Moreover, this error is not harmless. Where the ALJ determines that a claimant has a severe impairment at step two of the analysis, "the question of whether the ALJ characterized any other alleged impairment as severe or not severe is of little consequence." Pompa v. Comm'r of Soc. Sec., 73 F. App'x 801, 803, (6th Cir. 2003). Instead, the pertinent inquiry is whether the ALJ considered the "limiting effects of all [claimant's] impairment(s), even those that are not severe, in determining [the claimant's] residual functional capacity." 20 C.F.R. § 404.1545(e); Pompa, 73 F. App'x at 803 (rejecting the claimant's argument that the ALJ erred by finding that a number of her impairments were not severe where the ALJ determined that claimant had at least one severe impairment and considered all of the claimant's impairments in her RFC assessment); Maziarz v. Sec'y of Health & Hum. Servs., 837 F.2d 240, 244 (6th Cir. 1987) (same). Here, the ALJ did not consider Plaintiff's mental limitations after step two or account for any mental limitations in Plaintiff's RFC. Accordingly, the ALJ's errors at step two are not harmless.

IV. CONCLUSION

Due to the errors outlined above, Plaintiff is entitled to an order remanding this case to the Social Security Administration pursuant to Sentence Four of 42 U.S.C. § 405(g). Accordingly, the Undersigned RECOMMENDS that the Court REVERSE the Commissioner of Social Security's non-disability finding and REMAND this case to the Commissioner and the ALJ under Sentence Four of § 405(g) for further consideration consistent with this Report and Recommendation.

V. PROCEDURE ON OBJECTIONS

If any party seeks review by the District Judge of this Report and Recommendation, that party may, within fourteen (14) days, file and serve on all parties objections to the Report and Recommendation, specifically designating this Report and Recommendation, and the part in question, as well as the basis for objection. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). Response to objections must be filed within fourteen (14) days after being served with a copy. Fed. R. Civ. P. 72(b).

The parties are specifically advised that the failure to object to the Report and Recommendation will result in a waiver of the right to de novo review by the District Judge and waiver of the right to appeal the judgment of the District Court. See, e.g., Pfahler v. Nat'l Latex Prod. Co., 517 F.3d 816, 829 (6th Cir. 2007) (holding that "failure to object to the magistrate judge's recommendations constituted a waiver of [the defendant's] ability to appeal the district court's ruling"); United States v. Sullivan, 431 F.3d 976, 984 (6th Cir. 2005) (holding that defendant waived appeal of district court's denial of pretrial motion by failing to timely object to magistrate judge's report and recommendation). Even when timely objections are filed, appellate review of issues not raised in those objections is waived. Robert v. Tesson, 507 F.3d 981, 994 (6th Cir. 2007) ("[A] general objection to a magistrate judge's report, which fails to specify the issues of contention, does not suffice to preserve an issue for appeal. . . .") (citation omitted)).