Unreported / Non-Citable
Background
Manuel Rios Jr. filed applications for Disability Insurance Benefits (DIB) and Supplemental Security Income (SSI) on February 13, 2020, alleging disability beginning June 1, 2021. After initial denials, an Administrative Law Judge (ALJ) held hearings in January and April 2022 and issued a partially favorable decision on February 23, 2022. The Appeals Council denied review on March 31, 2023. Rios filed a complaint in federal court, resulting in a remand on November 13, 2023.
On July 12, 2024, the Appeals Council ordered a further remand limited to the issue of disability prior to December 22, 2020, instructing the ALJ to reevaluate mental impairments under the special technique at 20 C.F.R. § 404.1520a, reassess medical opinions under 20 C.F.R. § 404.1520c, and further consider the maximum residual functional capacity (RFC). Following supplemental hearings in January and April 2025, the ALJ issued an unfavorable decision on June 5, 2024 (dated June 5, 2024, but filed after 2025 hearings per the record), finding Rios not disabled for the period July 3, 2015 through December 21, 2020. Rios moved for summary judgment; the Commissioner cross-moved.
The Court’s Holding
The Magistrate Judge recommends granting Plaintiff's Motion for Summary Judgment, denying the Commissioner's Cross Motion, and remanding pursuant to sentence four of 42 U.S.C. § 405(g) with instructions to enter judgment in favor of Plaintiff. The ALJ's RFC determination was not supported by substantial evidence because the ALJ failed to properly consider the consultative examination opinion of Dr. Seward, dated August 19, 2020, which assessed moderate limitations in several mental functional areas. The ALJ rejected Dr. Seward's opinion as only 'partially persuasive,' finding it inconsistent with the record and overly reliant on subjective assertions.
However, the court found the ALJ's supportability analysis flawed: Dr. Seward's opinion regarding moderate limitations in understanding, remembering, and performing complex instructions was supported by objective WMS-IV testing showing memory scores in the borderline to extremely low range. The ALJ erroneously conflated adequate attention/concentration during the mental status exam with the distinct cognitive domain of memory. Regarding consistency, the ALJ cited treatment records for unrelated physical conditions (back pain, elbow pain, hemorrhoids) to assert an 'absence of psychiatric symptoms,' which the court held was taken out of context and did not constitute substantial evidence. Because the ALJ omitted all mental limitations from the RFC and the hypothetical posed to the vocational expert, the step-five finding of non-disability lacked evidentiary value. The error was not harmless.
Key Takeaways
- An ALJ must consider all impairments, including non-severe ones, when assessing RFC; the ALJ here found Major Depressive Disorder non-severe at step two but failed to include any mental limitations in the RFC.
- Under 20 C.F.R. § 404.1520c, an ALJ cannot reject an examining physician's opinion as unsupported or inconsistent without providing specific, cogent reasons supported by substantial evidence; the ALJ's 'cherry-picking' of mental status findings to contradict objective memory testing was insufficient.
- Citing treatment records for unrelated physical ailments to demonstrate an absence of psychiatric symptoms does not constitute substantial evidence of inconsistency with a mental RFC opinion.
- A hypothetical to a vocational expert must include all credible limitations; omission of mental limitations supported by the record renders the VE's testimony devoid of evidentiary value.
- The Appeals Council's remand order required the ALJ to 'properly consider' Dr. Seward's moderate limitations; the ALJ's failure to do so warranted remand with instructions to enter judgment for the claimant.
Why It Matters
This decision reinforces the Ninth Circuit's requirement that ALJs provide specific, legitimate reasons supported by substantial evidence when discounting examining medical opinions under the revised 2017 regulations (20 C.F.R. § 404.1520c).
It clarifies that supportability and consistency are distinct inquiries: an opinion may be supported by objective testing even if the mental status exam shows adequate attention, and consistency cannot be established by referencing medical records unrelated to mental health treatment. The ruling also underscores that harmless error analysis does not save an RFC that omits entire categories of limitations supported by the record, as the vocational expert's testimony then fails to address the claimant's actual functional capacity.