JOHN E. McDERMOTT, Magistrate Judge.
On September 12, 2012, Marlene Goodhall ("Plaintiff" or "Claimant") filed a complaint seeking review of the decision by the Commissioner of Social Security ("Commissioner") denying Plaintiff's applications for Social Security Disability Insurance benefits and Supplemental Security Income benefits. The Commissioner filed an Answer on December 27, 2012. On May 31, 2013, the parties filed a Joint Stipulation ("JS"). The matter is now ready for decision.
Pursuant to 28 U.S.C. § 636(c), both parties consented to proceed before this Magistrate Judge. After reviewing the pleadings, transcripts, and administrative record ("AR"), the Court concludes that the Commissioner's decision must be reversed and this case remanded for further proceedings in accordance with this Memorandum Opinion and Order and with law.
Plaintiff is a 58-year-old female who applied for Social Security Disability Insurance benefits on January 16, 2010, and Supplemental Security Income benefits on February 4, 2010. (AR 13.) The ALJ determined that Plaintiff has not engaged in substantial gainful activity since March 9, 2006, the alleged onset date of her disability. (AR 15.)
Plaintiff's claims were denied initially on July 14, 2010, and on reconsideration on August 9, 2010. (AR 13.) Plaintiff then sought review and on June 15, 2011, the matter proceeded to a hearing before Administrative Law Judge ("ALJ") Milan D. Dostal in Orange, California. (AR 13-21.) Claimant appeared and testified at the hearing and was represented by counsel. (AR 13.) Vocational expert ("VE") Luis Mas also appeared and testified at the hearing. (AR 13.)
The ALJ issued an unfavorable decision on July 11, 2011. (AR 13-21.) The Appeals Council denied review on July 9, 2012. (AR 1-3.)
As reflected in the Joint Stipulation, Plaintiff raises the following disputed issues as grounds for reversal and remand:
Under 42 U.S.C. § 405(g), this Court reviews the ALJ's decision to determine whether the ALJ's findings are supported by substantial evidence and free of legal error.
Substantial evidence means "`more than a mere scintilla,' but less than a preponderance."
This Court must review the record as a whole and consider adverse as well as supporting evidence.
The Social Security Act defines disability as the "inability 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 . . . can be expected to last for a continuous period of not less than 12 months." 42 U.S.C. §§ 423(d)(1)(A), 1382c(a)(3)(A). The Commissioner has established a five-step sequential process to determine whether a claimant is disabled. 20 C.F.R. §§ 404.1520, 416.920.
The first step is to determine whether the claimant is presently engaging in substantial gainful activity.
Before making the step four determination, the ALJ first must determine the claimant's residual functional capacity ("RFC"). 20 C.F.R. § 416.920(e). Residual functional capacity ("RFC") is "the most [one] can still do despite [his or her] limitations" and represents an assessment "based on all the relevant evidence." 20 C.F.R. §§ 404.1545(a)(1), 416.945(a)(1). The RFC must consider all of the claimant's impairments, including those that are not severe. 20 C.F.R. §§ 416.920(e), 416.945(a)(2); Social Security Ruling ("SSR") 96-8p.
If the claimant cannot perform his or her past relevant work or has no past relevant work, the ALJ proceeds to the fifth step and must determine whether the impairment prevents the claimant from performing any other substantial gainful activity.
In this case, the ALJ determined at step one of the sequential process that Plaintiff has not engaged in substantial gainful activity since March 9, 2006, the alleged onset date. (AR 15.)
At step two, the ALJ determined that Plaintiff has the following combination of medically determinable severe impairments: loss of articular cartilage most prominent in the medial compartment, degenerative changes in the tibial spine and osteophytosis, consistent with degenerative osteoarthritis of the right knee; status post right knee partial lateral meniscectomy, chondroplasty of medial and lateral femoral condyle, and trochlea due to meniscus tear and chondral wear; mild lumbar degenerative disc disease; and asthma. (AR 15.)
At step three, the ALJ determined that Claimant does not have an impairment or combination of impairments that meets or medically equals one of the listed impairments. (AR 16.)
The ALJ then found that Plaintiff has the RFC to perform light work with the following limitations:
(AR 16-17.) In determining the RFC, the ALJ made an adverse credibility determination. (AR 17-20.)
At step four, the ALJ found that Plaintiff is able to perform her past relevant work as a call center worker and retail clerk. (AR 20-21.)
Consequently, the ALJ determined that Claimant is not disabled within the meaning of the Social Security Act at any time from the alleged onset date through the date of the ALJ's decision. (AR 21.)
The ALJ decision must be reversed. The ALJ erred in determining the Claimant can perform her past relevant work ("PRW"). The ALJ's non-disability determination is not supported by substantial evidence nor free of legal error.
At step four of the sequential process, the ALJ determined that Plaintiff could perform her PRW as a call center worker and retail clerk, both as actually and generally performed. (AR 20-21.) The Commissioner concedes that the ALJ's finding as to the retail worker was in error.
As for the call center operator, the ALJ determined at step one of the sequential process that Plaintiff's earnings as a call center worker did not rise to the level of
The Commissioner argues that under the Regulations earnings are not necessarily determinative of SGA. Although earnings are the "primary" consideration in evaluating SGA, the fact that the earnings are not substantial "will not necessarily show that you are not able to do substantial gainful activity." 20 C.F.R. § 404.1574(a)(1);
The problem with the Commissioner's argument is that, unlike
The same analysis applies to the Commissioner's argument that Plaintiff's call center work was SGA because under the Regulations SGA means work that (a) involves doing significant and productive physical or mental duties, and done for profit. 20 C.F.R. § 404.1510. The Commissioner notes that Plaintiff testified at the hearing she had no trouble learning the job and had looked for work in a call center. (AR 30.) The Commissioner argues Plaintiff does not contend she stopped performing the job because of her impairments. Thus, says the Commissioner, substantial evidence supports the ALJ's determination that the call center job "qualifies as past relevant work." (JS 12.)
The Commissioner's argument fails on several levels. Again, the Commissioner focuses on what the ALJ could have done in evaluating whether the call center job qualified as SGA and as PRW, but alas never did because he found no SGA. Some of the evidence cited by the Commissioner, moreover, is not mentioned in the ALJ's decision and cannot be considered here.
Fundamentally, the Commissioner has cited no case or regulation providing that, where there has been a step one finding of no SGA, the ALJ nonetheless may determine at step four that a claimant can perform PRW. The ALJ should have proceeded to step five. The failure to do so was error.
The ALJ's non-disability determination is not supported by substantial evidence nor free of legal error.
IT IS HEREBY ORDERED that Judgment be entered reversing the decision of the Commissioner of Social Security and remanding this case for further proceedings in accordance with this Memorandum Opinion and Order and with law.