F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           JUN 11 1999
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    RAYMOND LARRY, JR.,

                Plaintiff-Appellant,

    v.                                                    No. 98-7086
                                                    (D.C. No. CV-97-215-B)
    KENNETH S. APFEL, Commissioner,                       (E.D. Okla.)
    Social Security Administration,

                Defendant-Appellee.




                            ORDER AND JUDGMENT            *




Before ANDERSON , KELLY , and BRISCOE , Circuit Judges.



         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.




*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      Plaintiff Raymond Larry, Jr. appeals from the denial of social security

disability and supplemental security income (SSI) benefits. He argues that the

administrative law judge (ALJ) erred: (1) by finding at step four that he could

perform the full range of sedentary work, limited only by the need to alternate

sitting and standing, without also considering his claimed manipulative

impairment; and (2) by not ordering a consultative examination at step five to fully

develop the record regarding the nature and severity of his impairments. We have

jurisdiction under 42 U.S.C. § 405(g) and 28 U.S.C. § 1291.

      Plaintiff was born on December 25, 1958, and was thirty-seven years old

at the time of the ALJ’s decision. He has a high school education. His past work

includes owning and operating a café, destroying rejected ammunition, and

working in a stockyard. He filed his claim for disability and SSI benefits on

September 16, 1994, alleging that he became disabled on July 30, 1994, due to

the residual effects of being shot six times. His alleged impairments include

bullets remaining in his body; surgical staples still in his abdomen; pain, aching,

and stinging in his legs; headaches; and problems reaching and using his fingers.

He was shot on July 30, 1994, spent three months in the hospital, and was last seen

by his doctor on November 30, 1994. He has not consulted any doctor since then.

He testified that he could not afford medical treatment, and that every time he




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went to his doctor’s office, the staff asked him when he would be able to pay

something on his large outstanding bill.

      The ALJ decided plaintiff’s claim at step five of the evaluation sequence.

See Williams v. Bowen , 

, 750-52 (10th Cir. 1988). At step four, the

ALJ determined that plaintiff could not return to any of his past jobs. He found

that plaintiff nevertheless retained the residual functional capacity (RFC) to

perform the full range of sedentary work, limited only by the need to alternate

sitting and standing. At step five, the ALJ found that plaintiff had a high school

education, no transferable skills, and was a younger individual. Based on these

findings, the ALJ used Rules 201.27, 201.28, and 201.29 of the medical-vocational

guidelines (the “grids”), 20 C.F.R. pt. 404, subpt. P, app. 2, as a framework for

a decision that plaintiff is not disabled. A vocational expert identified

approximately thirty unskilled sedentary jobs that plaintiff can perform with the

limitations the ALJ found him to have. The ALJ therefore concluded that plaintiff

is not disabled. The Appeals Council denied review, making the ALJ’s decision

the final agency decision. Plaintiff then brought this suit. The district court

adopted the magistrate judge’s recommendation that the agency’s decision

be upheld.

      We review the agency’s decision on the whole record to determine only

whether the factual findings are supported by substantial evidence and the correct


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legal standards were applied.    See Goatcher v. United States Dep’t of Health

& Human Servs. , 

, 289 (10th Cir. 1995). We may not reweigh the

evidence or substitute our judgment for that of the agency.       See Kelley v. Chater ,

, 337 (10th Cir. 1995).

       Because plaintiff demonstrated that he could not return to any of his past

work, the ALJ had the burden “to show that the claimant retain[ed] the . . . RFC

to do other work that exists in the national economy.”        Thompson v. Sullivan ,

, 1487 (10th Cir. 1993). Plaintiff argues that the ALJ erred by

impliedly finding at step four that he could perform the manipulative demands of

sedentary work. Plaintiff alleges a manipulative impairment due to atrophy and

partial loss of use of his fingers after being shot in his left arm. The ALJ found

that plaintiff “has severe residuals of multiple gun shot wounds to the abdomen,

neck and left arm,” but made no specific finding as to whether plaintiff has

a significant manipulative impairment. Appellant’s App., Vol. II, at 10. This

was error.

       The agency acknowledges that “[m]ost unskilled sedentary jobs require good

use of both hands and the fingers; i.e., bilateral manual dexterity.” Social Security

Ruling 96-9p, 

, at *8. Thus, “[a]ny significant manipulative

limitation of an individual’s ability to handle and work with small objects with

both hands will result in a significant erosion of the unskilled sedentary


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occupational base.”   

reason, a manipulative impairment would matter

greatly to plaintiff’s claim.

       The ALJ is also required to assess the claimant’s “work-related abilities on a

function-by-function basis.” Social Security Ruling 96-8p, 

,

at *1 (citing 20 C.F.R. §§ 404.1545(b), 416.945(b));       see also Social Security

Ruling 96-9p, 

, at *2. The ALJ is bound by the agency’s rulings.

See 20 C.F.R. § 402.35(b)(1). In light of the evidence of a gunshot injury to

plaintiff’s arm, which the ALJ expressly found to be true, the ALJ was required to

assess whether plaintiff suffered a manipulative impairment as a result.      See 

the ALJ must make a specific finding on this point. If the ALJ

determines that the medical evidence is inconclusive, he should exercise his

discretionary power to order a consultative examination.       See Thompson , 987 F.2d

at 1491.

       Plaintiff also argues that the ALJ should have ordered a consultative

examination at step five to fully develop the record concerning all of his

impairments. Because we remand the case for legal error in the assessment of

plaintiff’s RFC at step four, we remand this step five issue as well.




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      The judgment of the United States District Court for the Eastern District of

Oklahoma is REVERSED and the case is REMANDED with directions to remand

to the agency for additional proceedings.



                                                   Entered for the Court



                                                   Stephen H. Anderson
                                                   Circuit Judge




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