Patterson v. Commissioner of Social Security Administration , 846 F.3d 656 ( 2017 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2487
CONSTANCE L. PATTERSON,
Plaintiff – Appellant,
v.
COMMISSIONER OF SOCIAL SECURITY ADMINISTRATION,
Defendant – Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. Bruce H. Hendricks, District
Judge. (2:14-cv-00763-BHH)
Argued: December 7, 2016 Decided: January 19, 2017
Before KING, DUNCAN, and KEENAN, Circuit Judges.
Reversed and remanded with instructions by published opinion.
Judge Duncan wrote the opinion, in which Judge King and Judge
Keenan joined.
ARGUED: William Daniel Mayes, SMITH, MASSEY, BRODIE, GUYNN &
MAYES, P.A., Aiken, South Carolina, for Appellant. Evelyn Rose
Marie Protano, SOCIAL SECURITY ADMINISTRATION, Philadelphia,
Pennsylvania, for Appellee. ON BRIEF: Nora Koch, Acting
Regional Chief Counsel, Charles J. Kawas, Acting Supervisory
Attorney, Office of the General Counsel, SOCIAL SECURITY
ADMINISTRATION, Philadelphia, Pennsylvania; William N. Nettles,
United States Attorney, Marshall Prince, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South
Carolina, for Appellee.
DUNCAN, Circuit Judge:
Plaintiff-Appellant Constance L. Patterson (“Patterson”)
appeals from a district-court order affirming the Social
Security Administration’s (“SSA”) decision to deny her
application for disability benefits. This case presents an
issue of first impression in our circuit: whether an
Administrative Law Judge’s (“ALJ”) failure to follow the special
technique required by 20 C.F.R. § 404.1520a when evaluating a
claimant’s mental impairment requires remand or may constitute
harmless error. We hold that such an error does not
automatically require remand, but that the error was not
harmless on these facts. For the reasons that follow, we
reverse the district court’s order with instructions to remand
to the ALJ for appropriate review of Patterson’s mental
impairment.
I.
Patterson filed an application for disability insurance
benefits on July 21, 2010. The SSA denied Patterson’s
application initially and on reconsideration. Patterson then
filed a timely request for a hearing on May 12, 2011.
After a hearing, an ALJ also denied her application,
finding that Patterson was not disabled during the period for
which she sought benefits. In so ruling, the ALJ claimed to
2
have reached his decision on the objective medical record, but
he based his findings regarding Patterson’s impairments
primarily on the conclusions of one doctor, Dr. Horn. With
regard to the ALJ’s evaluation of Patterson’s mental impairment
specifically, the ALJ failed to (1) follow the procedures
outlined in 20 C.F.R. § 404.1520a (“the special-technique
regulation”), and (2) discuss other medical-record evidence that
conflicted with Dr. Horn’s opinion, such as contrary opinions of
other physicians or contradictory portions of medical test
results. Understanding where the ALJ went wrong in evaluating
Patterson’s disability requires background knowledge of the
complex web of regulations governing the ALJ’s review, which we
discuss at great length infra Part II.A.1. For now it suffices
to note that, on appeal, the SSA concedes error in the ALJ’s
failure to assess Patterson’s mental impairment--and its effect
on her working abilities--in the manner prescribed by the
special-technique regulation.
Patterson sought review of the ALJ’s decision, but the
SSA’s Appeals Council denied her request, rendering the ALJ’s
decision the final decision of the SSA Commissioner for purposes
of judicial review. 42 U.S.C. § 405(g). Patterson timely filed
suit in federal district court, claiming that the ALJ ignored
regulatory requirements and reached a decision unsupported by
substantial evidence. Before the magistrate judge, Patterson
3
requested a reversal of the SSA’s determinations and a remand
for (1) an award of benefits, or alternatively, (2) further
administrative proceedings. The magistrate judge recommended
affirming the SSA, on the grounds that (1) substantial evidence
supported all of the ALJ’s challenged findings, and (2) the
ALJ’s failure to articulate his findings in accordance with the
special-technique regulation constituted harmless error. The
district court adopted the magistrate’s report and
recommendation and affirmed the SSA’s decision. Patterson
timely appealed.
II.
On appeal, Patterson seeks a remand to the SSA for
proceedings consistent with the special-technique regulation and
other applicable regulations. 1 The SSA counters that any
missteps by the ALJ constitute harmless error because this court
can itself apply the special technique in determining whether
substantial evidence supports the ALJ’s denial of benefits.
1
Patterson also argues that the ALJ erred by failing to
(1) adequately consider all impairments listed in SSA
regulations, (2) accord controlling weight to her treating
physician’s opinion, and (3) properly explain the sit/stand
option in assessing her ability to work. As we explain, we
cannot consider the merits of these claims, or reach an
independent conclusion on whether Patterson is entitled to
benefits because the ALJ failed to follow the special-technique
regulation in documenting his conclusions.
4
We review an SSA decision only to determine if it is
supported by substantial evidence and conforms to applicable and
valid regulations. 42 U.S.C. § 405(g); Shively v. Heckler,
739 F.2d 987, 989 (4th Cir. 1984). Where an insufficient record
precludes a determination that substantial evidence supported
the ALJ’s denial of benefits, this court may not affirm for
harmless error. See Meyer v. Astrue, 662 F.3d 700, 707 (4th
Cir. 2011); see also Shinseki v. Sanders, 556 U.S. 396, 407
(2009) (noting that “general case law governing application of
the harmless-error standard” applies equally to administrative
cases). Because the ALJ’s failure to follow the special-
technique regulation frustrates effective judicial review in
this case, we reverse the district court’s order with
instructions to remand to the SSA for proceedings consistent
with its own regulations.
Below, we first outline the statutory and regulatory
framework governing the SSA’s grant or denial of benefits, and
how the ALJ applied that framework here. Next, we explain why
we cannot accept the SSA’s invitation to apply the special
technique ourselves in the first instance. We do not decide
whether failure to follow the special technique requires remand
in every case, but we are satisfied that the error here requires
remand.
5
A.
1.
The Social Security Act (“the Act”) provides for benefits
to claimants below retirement age who are “under a disability.”
42 U.S.C. § 423(a)(1)(E). SSA regulations set out a step-by-
step process for determining disability benefits. 20 C.F.R.
§ 404.1520(a)(1). Steps 1 through 3 ask: (1) whether the
claimant is working; (2) if not, whether she has a “severe
impairment”; and (3) if she does, whether the impairment “meets
or equals a listed impairment.” See id. § 404.1520. Satisfying
step 3 warrants an automatic finding of disability, and relieves
the decision maker from proceeding to steps 4 and 5. See id.
§ 404.1520(d); see also Sullivan v. Zebley, 493 U.S. 521, 532
(1990).
If the claimant satisfies steps 1 and 2, but not step 3,
then the decision maker must determine the claimant’s residual
functional capacity, that is, an evaluation of her ability to
perform work despite her limitations (“RFC assessment”).
20 C.F.R. § 404.1520(e). In determining the most a claimant can
still perform, the decision maker must evaluate “all” relevant
record evidence. Id. This RFC assessment is a holistic and
fact-specific evaluation; the ALJ cannot conduct it properly
without reaching detailed conclusions at step 2 concerning the
type and severity of the claimant’s impairments.
6
After conducting the RFC assessment, the ALJ proceeds to
step 4. Id. §§ 404.1520(a)(4)(iv), 404.1520(f). At step 4, the
decision maker determines whether the impairment prevents the
claimant from performing “past relevant work.”
Id. § 404.1520(a)(4)(iv). 2
The special-technique regulation affects how an ALJ
evaluates and documents his process at steps 1 through 4 if the
claimant alleges a mental impairment. Id. § 404.1520a. When
evaluating and documenting the severity of a claimant’s mental
impairment at steps 2 and 3--and its concomitant impact on the
RFC assessment relevant to step 4--the ALJ “must follow [the]
special technique.” Id. § 404.1520a(a) (emphasis added).
Under the special-technique regulation, if the ALJ
determines that a mental impairment exists, he “must specify the
symptoms, signs, and laboratory findings that substantiate the
presence of the impairment(s) and document [his] findings.”
Id. § 404.1520a(b)(1). The ALJ must also document “a specific
finding as to the degree of limitation in each of” the four
areas of functional limitation listed in § 404.1520a(c)(3). Id.
§ 404.1520a(e)(4). In the first three areas of functional
limitations--(a) activities of daily living, (b) social
2 An alternative process governs where insufficient evidence
supports a finding at the fourth step, 20 C.F.R. § 404.1520(h),
but that exception does not apply here.
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functioning, and (c) concentration, persistence, or pace--the
ALJ must rate the degree of limitation using “the following
five-point scale: None, mild, moderate, marked, and extreme.”
Id. § 404.1520a(c)(4). The ALJ must rate the fourth functional
area--(d) episodes of decompensation--using “the following four-
point scale: None, one or two, three, four or more.” Id. Next,
the ALJ must determine if the mental impairment is severe, and
if so, whether it qualifies as a listed impairment.
Id. § 404.1520a(d). If the mental impairment is severe but is
not a listed impairment, the ALJ must assess the claimant’s RFC
in light of how the impairment constrains the claimant’s work
abilities. See id. § 404.1520a(d)(3). The regulation
specifically provides that the ALJ must document all of the
special technique’s steps. Id. § 404.1520a(e)(4).
The claimant carries the burden of proof at steps 1
through 4. See 42 U.S.C. § 423(d)(5); 20 C.F.R. § 404.1512(a).
If a claimant carries her burden, the burden shifts to the SSA
at step 5 to demonstrate that the impairment does not prevent
the claimant from engaging in other substantial gainful
employment. See 20 C.F.R. §§ 404.1520(g)(1), 404.1512(f). To
do this, the SSA Commissioner must present “evidence that
demonstrates that other work exists in significant numbers in
the national economy that [the claimant] can do, given [her]
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residual functional capacity and vocational factors.” Id.§ 404.1560(c)(2). 3
2.
In the present case, at steps 1 and 2, the ALJ found that
Patterson was not working, and had severe physical and mental
impairments. At step 3, he determined these impairments did not
meet or equal any listed impairment. In reaching these
conclusions, the ALJ mentioned the findings of two doctors--
Dr. Horn and Dr. Ritterspach. 4 However, the ALJ did not evaluate
the severity of Patterson’s mental impairment in accordance with
the special technique, nor did he document application of the
special technique in his decision as required by the regulation.
20 C.F.R. § 404.1520a(e). In addition, the record contained
evidence that conflicted with the findings of these doctors, and
the ALJ did not address these conflicts.
3The Act defines “work which exists in the national
economy” as work that “exists in significant numbers either in
the region where such individual lives or in several regions of
the country.” 42 U.S.C. § 423(d)(2)(A). This is often
demonstrated by vocational-expert testimony on the matter. See
Grant v. Schweiker, 699 F.2d 189, 191–92 (4th Cir. 1983).
4
Dr. Ritterspach had completed a psychological evaluation
of Patterson, and Dr. Horn had reviewed this evaluation to
conclude that Patterson had the severe mental impairment of
borderline intellectual functioning. The ALJ agreed with
Dr. Horn “that the claimant’s test results show that the
claimant was functioning at the borderline intellectual level,”
A.R. 15, in making his mental-impairment findings and in
conducting his RFC assessment.
9
In his RFC assessment, the ALJ explained that Patterson’s
impairments allowed her to perform “light work” with the
requirement that employers give her discretion to switch from
sitting to standing while performing work. At step 4, the ALJ
found that this RFC assessment prevented Patterson from
performing any “past relevant work.” But at step 5, he
concluded that Patterson did not qualify as disabled because
vocational-expert testimony established that her RFC assessment
matched available alternative work activity.
B.
1.
The SSA concedes that the ALJ did not document application
of the special technique in reaching these findings, or
explicitly adopt physician findings that could possibly qualify
alone as a surrogate for the special-technique assessment.
Nevertheless, the SSA claims that we can examine the record
evidence and apply the special technique ourselves. Noting that
the question before us is an issue of first impression, the SSA
argues that if we reach the ALJ’s conclusion after our own
application of the special technique, then we can affirm the
ALJ’s denial of benefits on harmless-error grounds. Our sister
circuits that have considered this issue have split on whether
10
harmless-error review applies, both in analyzing the current
special-technique regulation and its predecessor. 5
Of the courts that have found harmless error, only the
Sixth Circuit has analyzed the language of the special-technique
regulation in so holding. See Rabbers v. Comm’r Soc. Sec.
Admin., 582 F.3d 647, 656–57 (6th Cir. 2009). In Rabbers, the
court reached its harmless-error conclusion after noting that
the opening provision of 20 C.F.R. § 404.1520a states “[u]sing
the technique helps us,” id. § 404.1520a(a), with “us” referring
to the SSA. Rabbers, 582 F.3d at 656. Reasoning primarily from
this one textual hook, the court decided that the special
technique is a procedure designed solely to aid the ALJ. Id.The Sixth Circuit therefore concluded that the special technique
5
Compare Wells v. Colvin, 727 F.3d 1061, 1065 & n.3, 1068–
71 (10th Cir. 2013) (failure to follow the special-technique
regulation requires remand if claimant has medically
determinable mental impairments); Keyser v. Comm’r Soc. Sec.
Admin., 648 F.3d 721, 726 (9th Cir. 2011) (same); Moore v.
Barnhart, 405 F.3d 1208, 1214 (11th Cir. 2005) (same), and
Montgomery v. Shalala, 30 F.3d 98, 100 (8th Cir. 1994) (same
with predecessor regulation), with Kohler v. Astrue, 546 F.3d
260, 269 (2d Cir. 2008) (leaving “open the possibility that an
ALJ’s failure to adhere to the regulations’ special technique
might under other facts be harmless” but concluding that the
record before it could not support such a finding), and Pepper
v. Colvin, 712 F.3d 351, 366–67 (7th Cir. 2013) (can be harmless
error); Rabbers v. Comm’r Soc. Sec. Admin., 582 F.3d 647, 661
(6th Cir. 2009) (same). Notably, in an unpublished case
considering the predecessor of the current regulation, this
court found reversible error where the ALJ failed to follow the
special technique. Long v. U.S. Dep’t of Health & Human Servs.,
No. 88-3651, 1990 WL 64793 at *4 (4th Cir. 1990) (per curiam)
(unpublished).
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could not also provide (1) a mandatory process designed to
confer procedural benefits on claimants or (2) a necessary
component to establish a record for possible judicial review.
See id. at 655–57.
While we agree with the Sixth Circuit that the language of
the special-technique regulation guides our inquiry, we disagree
on the import of that language. The special-technique
regulation’s plain language describes what the SSA must do. The
regulation states that the SSA “will document application of the
technique in the decision,” 20 C.F.R. § 404.1520a(e) (emphasis
added), and its subsections all say what the decision maker
“must” include or document, e.g., id. § 404.1520a(e)(3) (noting
that “the determination must document application of the
technique”). Therefore, the plain language of the special-
technique regulation militates against the holding that the
special-technique regulation offers only nonbinding guidance for
the benefit of the ALJ. See Rabbers, 582 F.3d at 664–65
(Holschuh, J., dissenting in part, and concurring in part).
Moreover, that the SSA codified the special-technique
process in a regulation contradicts the argument that the SSA
sought only to offer decision makers nonbinding guidance. The
SSA knows how to issue nonbinding policy statements and guidance
documents. See, e.g., Social Security Administration, Program
Operations Manual System (2016). Explaining how an agency wants
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its decision makers to apply a regulation is one purpose of such
nonbinding guidance. See Cmty. Nutrition Inst. v. Young, 818
F.2d 943, 949 (D.C. Cir. 1987) (per curiam). In issuing
nonbinding guidance, agencies need not undergo the laborious and
demanding requirements of promulgating a regulation, nor must
they publish this type of guidance in the Federal Register.
Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 173
(2007). In establishing its special-technique process for
evaluating and documenting mental impairments, the SSA did not
choose to issue nonbinding policy guidance, but instead chose
the much more arduous process of promulgating and publishing a
regulation with mandatory language. We cannot conclude that the
SSA codified the special-technique process simply for the
benefit of ALJs. See id. at 172–73.
Furthermore, the weight of authority suggests that failure
to properly document application of the special technique will
rarely, if ever, be harmless because such a failure prevents, or
at least substantially hinders, judicial review. See, e.g.,
Kohler v. Astrue, 546 F.3d 260, 267 (2d Cir. 2008); see also
Mascio v. Colvin, 780 F.3d 632, 636–37 (4th Cir. 2015) (finding
reversible error where ALJ failed to employ a parallel special-
technique regulation for assessing supplemental security income
benefits claims). Without documentation of the special
technique, it is difficult to discern how the ALJ treated
13
relevant and conflicting evidence. See Mascio, 780 F.3d at 637
(refusing to hold that ALJ’s lack of reasoning constituted
harmless error “[b]ecause we are left to guess about how the ALJ
arrived at his conclusions” regarding an RFC assessment); Myers
v. Califano, 611 F.2d 980, 983 (4th Cir. 1980).
“Administrative determinations are required to be made in
accordance with certain procedures which facilitate judicial
review.” Cook v. Heckler, 783 F.2d 1168, 1172 (4th Cir. 1986).
We cannot fill in the blanks for the ALJ in the first instance.
Failure to document application of the special-technique
regulation constitutes error.
2.
Although such error may be harmless error in some cases,
this is not one of them. Based on the findings of Dr. Horn, the
ALJ concluded that Patterson had the severe mental impairment of
borderline intellectual functioning, but also found that this
impairment did not meet or equal a listed impairment. In so
deciding, the ALJ noted other evidence that is admittedly
pertinent to his conclusions, but he did not address conflicting
evidence, or explain away contrary findings of other doctors in
a comprehensive manner. Looking at the ALJ’s decision, the most
we can say is that he appears to have at least partially
examined the correct evidence, and began the correct evaluation.
14
But the special-technique regulation requires more, see
supra Part II.A.1, and we hesitate to declare the error here
harmless because it implicates the validity of so many of the
ALJ’s conclusions. We cannot affirm the ALJ’s evaluation of
Patterson’s mental impairment because his decision did not
explain how he weighed all relevant evidence: he did not rate
Patterson’s four areas of functional limitation listed in
§ 404.1520a(c)(3) according to the prescribed scale, nor did he
explain how he reached his conclusions about the severity of the
mental impairment. 20 C.F.R. §§ 404.1520a(c), 404.1520a(d).
For example, on this record, the IQ score is a red flag that the
ALJ should have analyzed in greater depth before summarily
concluding that Patterson’s condition met none of the listed
impairments. Likewise, because we cannot review the ALJ’s
mental-impairment evaluation, we cannot say that he properly
assessed Patterson’s RFC. 20 C.F.R. § 404.1520a(c)(3); Mascio,
780 F.3d at 637. And because we cannot gauge the propriety of
the ALJ’s RFC assessment, we cannot say that substantial
evidence supports the ALJ’s denial of benefits. See Meyer, 662
F.3d at 707; Mascio, 780 F.3d at 636. Harmonizing conflicting
evidence and bolstering inconclusive findings requires
credibility determinations that we cannot make; these exercises
15
fall outside our scope of review. See Mascio, 780 F.3d at 637–
40. 6
Put simply, “[t]he ALJ’s lack of explanation requires
remand.” Id. at 640. Normally, our opinion would end here, and
we would not go beyond ordering the ALJ to apply the regulation
that it failed to observe. Here, however, in the interest of
judicial efficiency, we direct the ALJ to provide a more
detailed explanation of any evaluation of applicable Listings,
including Listing 12.05, and Patterson’s treating physician’s
opinion in determining the type and severity of Patterson’s
mental impairment. We also exhort him to more fully define
Patterson’s RFC, which will obviate the concerns Patterson
raises on appeal about the adequacy of the ALJ’s definition of
the sit/stand option in assessing her ability to work.
III.
We do not take a position on the merits of Patterson’s
application for disability benefits. Instead, the dispute here
arises from a problem that has become all too common among
administrative decisions challenged in this court--a problem
6
Importantly, in articulating its harmless-error exception
in Rabbers, the Sixth Circuit noted that an ALJ’s failure to
follow the special technique likely could not be reviewed for
harmless error where the record contained “conflicting or
inconclusive evidence.” 582 F.3d at 657. That is precisely
what we have here.
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decision makers could avoid by following the admonition they
have no doubt heard since their grade-school math classes: Show
your work. The ALJ did not do so here, and this error rendered
his decision unreviewable. See Kohler, 546 F.3d at 267.
On remand, the ALJ should follow the dictates of all
applicable regulations. Reaching a decision in a well-reasoned
and documented fashion serves multiple purposes. It provides an
appropriate record for review. It also accords a claimant’s
arguments the procedure and respect they deserve. And of
course, providing comprehensive review of a claimant’s arguments
is in the SSA’s best interest--in the instant case, providing
such review in a well-documented manner would allow a court to
readily determine the merits of Patterson’s other arguments
related to the ALJ’s (1) evaluation of a particular Listing,
(2) consideration of her treating physician’s opinion, and
(3) definition of her sit/stand option in formulating her RFC
assessment. For the reasons stated above, we reverse the
district court’s order with instructions to remand to the ALJ
for appropriate review of Patterson’s mental impairment.
REVERSED AND REMANDED WITH INSTRUCTIONS
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