Unreported / Non-Citable
Background
Sheena Castelanelli, born in 1959, protectively filed applications for disability insurance benefits and Supplemental Security Income in April 2023. She alleged disability beginning December 28, 2022, from hypertension and a heart problem. After denials initially and on reconsideration, an administrative law judge held a telephonic hearing on April 2, 2025, and found her not disabled in an April 8, 2025 decision. The ALJ found severe emphysema, asthma, and hiatal hernia and no listed impairment. The ALJ assessed a residual functional capacity (RFC) for medium work, with occasional exposure to humidity, wetness, dust, odors, fumes, and irritants and no exposure to extreme heat or cold. The ALJ found she could do past work as a short order cook and, alternatively, other jobs in the national economy. The Appeals Council denied review on February 10, 2026, making the decision final.
Castelanelli sought review in the Eastern District of California, and the parties consented to a magistrate judge. She argued that the RFC lacked substantial evidence because the ALJ interpreted medical records without a medical expert instead of developing the record. She also argued that the ALJ gave no clear and convincing reasons for discounting her symptom complaints. The state agency consultants had found the evidence insufficient because no medical evidence was in the file and she had not returned forms. Her representative later reported that she needed a consultative examination because of limited records. None appears to have occurred, and the record held no other opinion evidence on her functioning.
The Court’s Holding
The court held that the RFC was not supported by substantial evidence. It first rejected the Commissioner's waiver argument, finding that Castelanelli had raised the development issue at the hearing level. It acknowledged that the RFC is the ALJ's administrative finding, that the lack of a medical opinion is not automatically fatal, and that the duty to develop the record arises only when evidence is ambiguous or inadequate. It also noted that an ALJ need not order a consultative examination just because a representative asks. Here, though, the only 'opinions' said the evidence was insufficient to form an opinion. The treatment records showed pneumonia and moderate asthma without describing functional limits. The imaging showed lung opacities, enlarged lymph nodes, a pleural effusion, a large hiatal hernia, and emphysema, again without functional limits. The court found the ALJ could not translate those findings into work limitations as a layperson and was required to obtain a medical expert's opinion.
The court found the error harmful. Different or additional limitations, based on a properly developed record, might have changed the disability determination, though the court did not say the outcome should change. Because the record did not support the hypotheticals given to the vocational expert, that testimony had no evidentiary value. The court vacated the decision and remanded for further proceedings, finding that outstanding issues remained and that disability was not clear from the record. Castelanelli agreed that remand, not an award of benefits, was the proper remedy. The Commissioner must further develop the record. The Clerk was directed to enter judgment for Castelanelli. The court did not reach her challenge to the ALJ's treatment of her symptom complaints.
Key Takeaways
- An ALJ may not act as a medical expert, so an RFC resting on the ALJ's own reading of diagnoses and imaging, with no medical opinion on function, lacks substantial evidence.
- The duty to develop the record arises when evidence is ambiguous or inadequate, and state agency findings of insufficient evidence do not count as opinions on functional capacity.
- An ALJ is not automatically required to order a consultative examination at a claimant's request, but the ALJ must still support the RFC with adequate evidence.
- A defective RFC taints vocational expert testimony built on it, which supports a finding of harmful error.
- Remand here is for further proceedings only, not an award of benefits, and the symptom-testimony challenge remains unresolved for the remand.
Why It Matters
The order applies established Ninth Circuit principles that an ALJ may not 'play doctor' and that findings reflecting only diagnoses and test results are hard for laypeople to turn into work limits. It also treats a claimant's raising of the issue at the hearing as preserving it, which matters because the Commissioner pressed waiver and other courts in this district have found it where the issue was not raised before the ALJ.
This is an unreported decision of a single magistrate judge. It binds only the parties and is not binding precedent, though it may be persuasive. It does not decide that Castelanelli is disabled. The Commissioner must develop the record, and the symptom-testimony question can be revisited.