Debbra Hill v. Michael Astrue

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DEBBRA J. HILL,  No. 10-35879
Plaintiff-Appellant,
D.C. No.
v.
 1:09-cv-00136-RFC
MICHAEL J. ASTRUE, Commissioner
ORDER AND
of Social Security,
OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the District of Montana
Richard F. Cebull, Chief District Judge, Presiding
Argued and Submitted
July 12, 2011—Portland, Oregon
Filed October 26, 2012
Before: Alfred T. Goodwin, Harry Pregerson, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Pregerson
12935
12938 HILL v. ASTRUE
COUNSEL
John E. Seidlitz, Jr., Seidlitz Law Office, Great Falls, Mon-
tana for the plaintiff-appellant.
David I. Blower, Social Security Administration, Office of the
General Counsel, Denver, Colorado for the defendant-
appellee.
ORDER
The opinion filed August 7, 2012 is withdrawn. A super-
seding opinion is being filed concurrently with this order. In
the opinion, Part I of the Discussion, paragraph six, penulti-
mate sentence, starting with “Dr. Johnson’s statement” and
ending with “Hill faces” shall be amended in full to read as
follows:
Dr. Johnson’s statement that Hill would be “unlike-
ly” to work full time was not a conclusory statement
like those described in 20 C.F.R. § 404.1527(d)(1),
but instead an assessment, based on objective medi-
cal evidence, of Hill’s likelihood of being able to
sustain full time employment given the many medi-
cal and mental impairments Hill faces and her inabil-
ity to afford treatment for those conditions.
HILL v. ASTRUE 12939
Thus, the Defendant-Appellee’s Petition for Panel Rehear-
ing is denied as moot.
OPINION
PREGERSON, Circuit Judge:
On December 7, 2006, Debbra Jo Hill (“Hill”) filed for dis-
ability insurance benefits and supplemental security income
under Title II and Title XVI of the Social Security Act. Hill
alleged disability beginning April 4, 2004. Hill claims that she
is disabled due to unstable diabetes, eyesight problems, bi-
polar disorder, anxiety, depression, a back injury, a right
shoulder injury, a history of two small strokes, attention defi-
cit hyperactivity disorder, a seizure disorder, and unpredict-
able euphoria.
The Social Security Administration denied Hill’s applica-
tion, and denied it again after reconsideration. On September
24, 2008, Administrative Law Judge (“ALJ”) Lloyd E. Hart-
ford held a video hearing. Hill was represented by counsel
and testified at the hearing, along with Dr. Monty Kuka,
Ph.D., a non-examining medical expert, and James Fortune, a
vocational expert. The ALJ issued a written decision denying
Hill’s application on April 6, 2009. The Appeals Council
denied Hill’s request for review, thereby making the ALJ’s
decision the final decision subject to judicial review. Hill then
filed a complaint with the district court. The district court
adopted the findings and recommendation of a magistrate
judge, granted summary judgment in favor of the Commis-
sioner, and affirmed the ALJ’s decision. Hill appeals the dis-
trict court’s decision.
On appeal, Hill argues that the ALJ’s decision denying all
benefits was not supported by substantial evidence. Specifi-
cally, Hill argues that: (1) the ALJ ignored or failed to con-
12940 HILL v. ASTRUE
sider evidence favorable to Hill, including the medical
opinions of Hill’s counselors, therapists, and treating physi-
cians; and, (2) the hypothetical question the ALJ posed to the
vocational expert improperly excluded evidence of Hill’s lim-
itations. As discussed below, we agree with Hill that the ALJ
failed to consider evidence favorable to Hill and posed an
improper hypothetical to the vocational expert.1 Accordingly,
we reverse the district court’s grant of summary judgment in
favor of the Commissioner.
BACKGROUND
A. Hill’s Background
Debbra Jo Hill is currently 54 years old. Hill did not gradu-
ate from high school, but she earned her GED. She worked as
a certified nurse’s assistant (“CNA”) from 2000 until 2004
when she suffered a shoulder injury on the job. She had previ-
ously worked at a fast food restaurant, as a housekeeper, and
as a telemarketer and bill collector for short periods of time.
Hill was intermittently homeless and living out of her car or
with friends in 2005 and 2006. At the time of the hearing
before the ALJ, Hill lived by herself and worked part-time,
approximately 15 to 20 hours a week, as a cashier/stocker at
the Dollar Tree store in Great Falls, Montana, earning $7.21
an hour.
Hill was diagnosed with diabetes mellitus (type II) in 2002.
Her diabetes was poorly controlled, in part because Hill could
not afford to buy insulin and often relied on samples from
clinics. She was also living out of her car for a time, and her
doctors worried that she would not be able to properly moni-
tor her blood sugar levels.
1
Hill also argues that the ALJ erred in finding that Hill’s subjective tes-
timony about her limitations was not credible. Because we resolve this
case on alternative grounds, we do not address Hill’s argument that the
ALJ’s adverse credibility finding was improper.
HILL v. ASTRUE 12941
Hill injured her right shoulder and hand in 2004 and under-
went two surgeries. She was limited to lifting no more than
ten pounds, and has trouble reaching above her head. Hill was
referred to physical therapy, but attended only 7 out of 23
scheduled sessions. Later, Hill had “fair compliance” with her
attendance and “overall was improving.”
Hill was diagnosed with bipolar disorder around 1998. She
was last hospitalized for her bi-polar condition in July 2007,
under the care of Dr. Mark Mozer, a psychiatrist. She was
also diagnosed with borderline intellectual functioning by Dr.
Lynn Johnson, a psychologist, after tests revealed that Hill’s
full scale IQ was 76, in the 5th percentile.
In 2000, Dr. Mary Ann Evans diagnosed Hill with panic
disorder with agoraphobia, major depressive disorder, bipolar
disorder, polysubstance dependence in resolution, cognitive
disorder, chronic pain from her work injury, Hepatitis B and
C, and other ailments. In 2001, Dr. Evans witnessed Hill hav-
ing two limited symptom panic attacks. She was also diag-
nosed with diabetes, hypertension, hyperlipidemia, and
chronic anxiety and panic syndrome by Dr. Steven Chrza-
nowski at Benefis Healthcare in 2006. While working at the
Dollar Tree, Hill had panic attacks so severe that she had to
go to the back room and collapsed. These attacks were wit-
nessed by Hill’s case manager and job coach, Patty Mills.
Hill’s most recent panic attack occurred at work on March
7, 2008. Hill’s manager at the Dollar Tree called Hill’s job
coach, Patty Mills, to intervene because Hill had been acting
strangely. Ms. Mills later submitted a letter that states, in rele-
vant part,
As the Employment Specialist at the Center for Men-
tal Health, I would never have placed [Hill] at the
Dollar Tree. I have had to intervene with scheduling
problems. I have witnessed her in a manic phase in
which she was edgy at work, rocking back and forth
12942 HILL v. ASTRUE
while trying to stack, and people were staring at her.
I was called to come and get her since they thought
that she was on drugs. I have [ ] good communica-
tion[ ] with the manager so I was able to help them
learn about bipolar.
I think [Hill] needs assistance. She does not handle
stress well. I have had a lot of talks with [Hill] on
being positive. She has problems with co-workers. It
becomes a “he said, she said” relationship which
originally starts out good. She calls in sick [due to]
health problems so she is getting fewer hours.
After her panic attack, Hill “slept for about five days,” and
Ms. Mills advised her that her manager had requested a doc-
tor’s release before Hill could return to work. She obtained a
letter from her therapist, Tammi Coffey, which stated that
“there are no recognizable clinical reasons why Ms. Hill
would not be able to return back to work.” Hill returned to
work sometime after March 21, 2008, more than two weeks
after the panic attack.
B. The ALJ’s Decision
The ALJ performed the five-step sequential analysis
required under 20 C.F.R. § 404.1520(a)(4)(i)-(v). See also
Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999).
First, the ALJ found that Hill “ha[d] not engaged in sub-
stantial gainful activity since April 4, 2004, the alleged onset
date.” While noting that Hill had worked after her alleged dis-
ability onset date, the ALJ found that “this work did not rise
to the level of substantial gainful activity.” Since April 15,
2007, and at the time of the hearing, Hill had been working
part-time approximately 15 to 25 hours a week as a cashier at
the Dollar Tree, earning about $600 per month. But the ALJ
found that this work “has never risen to the level of substan-
tial gainful activity” because her earnings were less than the
HILL v. ASTRUE 12943
amounts prescribed by the earnings guidelines set forth by the
Social Security Administration.
At step two, the ALJ found that Hill has the following
severe impairments: “diabetes mellitus; status post right rota-
tor cuff repair times 2; bipolar disorder; mixed personality
disorder, not otherwise specified; anxiety; and borderline
intellectual functioning[.]”
At step three, the ALJ found that Hill “does not have an
impairment or combination of impairments that meets or med-
ically equals” one of those on the Listing of Impairments.2
At step four, the ALJ determined that Hill’s residual func-
tional capacity was the ability to
perform light work as defined in 20 C.F.R.
404.1567(b) and 416.967(b)[3] except she can lift
and/or carry 20 pounds occasionally and 10 pounds
frequently. She can stand and/or walk (with normal
breaks) for a total of about 6 hours in an 8-hour
workday. She can sit (with normal breaks) for a total
of about 6 hours in an 8-hour workday. She can push
and/or pull on a frequent basis with her right upper
extremity. She can climb ramps/stairs, balance,
stoop, kneel, crouch, and crawl frequently. She can
climb ladders, ropes, or scaffolds occasionally. She
can reach overhead occasionally with her right arm.
She should avoid concentrated exposure to hazards
2
The Listing of Impairments is found at 20 C.F.R. Part 404, Subpart P,
Appendix 1, and described at 20 C.F.R. §§ 404.1525, 404.1526, 416.925,
416.926.
3
“Light work involves lifting no more than 20 pounds at a time with fre-
quent lifting or carrying of objects weighing up to 10 pounds. Even though
the weight lifted may be very little, a job is in this category when it
requires a good deal of walking or standing, or when it involves sitting
most of the time with some pushing and pulling of arm or leg controls.”
20 C.F.R. § 404.1567(b); 20 C.F.R. § 416.967(b) (same).
12944 HILL v. ASTRUE
such as moving machinery and unprotected heights.
She should perform work that requires only occa-
sional interaction with the public and co-workers and
that interaction should be on a brief, superficial
basis. She can ask simple questions or request assis-
tance, and accept instructions and respond appropri-
ately to criticism from supervisors. She can
understand, remember, and carry out very short and
simple work instructions. She can remember loca-
tions and work-like procedures. She can maintain
attention and concentration for extended periods to
perform simple work tasks. She can perform activi-
ties within a schedule, maintain regular attendance,
and be punctual within customary tolerances. She
can sustain an ordinary routine without special
supervision. She can make simple work-related deci-
sion[s]. She can complete a normal workday and
workweek without interruptions from psychologi-
cally based symptoms, and she can perform at a con-
sistent pace without an unreasonable number and
length of rest periods. She can respond appropriately
to changes in the work setting. She can travel in
unfamiliar places or use public transportation. She
can set realistic goals or make plans independently
of others.
The ALJ noted that he had reduced Hill’s residual functional
capacity to accommodate limitations due to Hill’s shoulder
pain and “difficulty maintaining concentration, persistence,
and pace to perform complex or detailed tasks[,]” and to
incorporate limitations from Hill’s mental impairments.
At step five, the ALJ found that Hill could perform jobs
that exist in significant numbers in the national economy in
light of her age, education, and residual functional capacity.
The ALJ noted that Hill was 46 years old at the time of her
alleged disability onset date, which would put her in the
“younger individual age 18-49” category, but that she had
HILL v. ASTRUE 12945
subsequently changed to the “closely approaching advanced
age” category. The ALJ also found that Hill has “at least a
high school education and is able to communicate in English.”
The ALJ asked vocational expert Fortune whether jobs exist
in the national economy for an individual with Hill’s age,
education, work experience, and residual functional capacity.
Fortune offered representative occupations in the light,
unskilled category, including office machine operator (520
regional jobs and 290,000 national jobs), mail clerk (1000
regional jobs and 141,170 national jobs), and photograph pro-
cessor (800 regional and 63,500 national jobs), and masker
(475 regional jobs and 178,000 national jobs). Based on this
testimony, the ALJ found that Hill was not disabled.
STANDARDS OF REVIEW
We review a district court’s order affirming the Commis-
sioner’s denial of benefits de novo. Berry v. Astrue, 622 F.3d
1228, 1231 (9th Cir. 2010). The district court reviews the
Commissioner’s final decision for substantial evidence, and
the Commissioner’s decision will be disturbed only if it is not
supported by substantial evidence or is based on legal error.
See 42 U.S.C. § 405(g); Batson v. Comm’r of Soc. Sec.
Admin., 359 F.3d 1190, 1193 (9th Cir. 2004). Substantial evi-
dence is “more than a mere scintilla but less than a preponder-
ance; it is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Sandgathe v.
Chater, 108 F.3d 978, 980 (9th Cir. 1997) (citation omitted).
“However, a reviewing court must consider the entire record
as a whole and may not affirm simply by isolating a ‘specific
quantum of supporting evidence.’ ” Robbins v. Soc. Sec.
Admin., 466 F.3d 880, 882 (9th Cir. 2006) (quoting Hammock
v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989)).
DISCUSSION
A claimant is considered “disabled” under the Social Secur-
ity Act if: (1) “he is unable to engage in any substantial gain-
12946 HILL v. ASTRUE
ful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous
period of not less than twelve months,” 42 U.S.C.
§ 1382c(a)(3)(A), and, (2) the impairment is “of such severity
that he is not only unable to do his previous work but cannot,
considering his age, education, and work experience, engage
in any other kind of substantial gainful work which exists in
the national economy.” 42 U.S.C. § 1382c(a)(3)(B); see also
Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999). In order
to determine whether a claimant is disabled, the ALJ performs
the five-step sequential analysis required under 20 C.F.R.
§ 404.1520(a)(4)(i)-(v). See also Tackett v. Apfel, 180 F.3d at
1098; Lounsburry v. Barnhart, 468 F.3d 1111, 1114 (9th Cir.
2006).
In this case, the ALJ found that Hill (step 1) had not
engaged in substantial gainful activity since her alleged dis-
ability onset date, and (step 2) suffered from several severe
physical and mental impairments (step 3) that did not meet or
medically equal any of the listed impairments that automati-
cally qualify as disabilities under the Social Security Act, but
which limited (step 4) her residual functional capacity to per-
forming light work that required only occasional, brief, and
superficial interaction with the public and with co-workers.
Although these limitations prevented Hill from performing
any past relevant work, the ALJ found that Hill could (step 5)
perform jobs that exist in significant numbers in the economy,
and thus found Hill not disabled, as defined under the Social
Security Act. Neither party challenges the ALJ’s findings at
steps one through three. Hill, however, challenges the ALJ’s
determination of her residual functional capacity at step four,
and its use in the hypothetical question asked of the voca-
tional expert at step five.
I. The ALJ’s Consideration of the Evidence
[1] The ALJ found that Hill has the residual functional
capacity “to perform light work . . . . that requires only occa-
HILL v. ASTRUE 12947
sional interaction with the public and co-workers . . . .” Hill
argues that the ALJ ignored or failed to consider evidence
favorable to Hill when making the residual functional capac-
ity determination.
A. Dr. Lynn Johnson
[2] Hill argues that the ALJ’s residual functional capacity
determination failed to take into account an evaluation by Dr.
Lynn Johnson, a psychologist who examined Hill on May 25,
2007. In her evaluation, Dr. Johnson found that Hill’s “combi-
nation of mental and medical problems makes the likelihood
of sustained full time competitive employment unlikely.”
(emphasis added). Hill correctly notes that the ALJ’s decision
does not address this finding by Dr. Johnson.
[3] In order to reject an examining physician’s opinion,
“the ALJ has to give clear and convincing reasons. . . . Even
if contradicted by another doctor, the opinion of an examining
doctor can be rejected only for specific and legitimate reasons
that are supported by substantial evidence in the record.”
Regennitter v. Comm’r of Soc. Sec. Admin., 166 F.3d 1294,
1298-99 (9th Cir. 1999).
[4] Here, the ALJ failed to provide Dr. Johnson’s state-
ment any degree of review at all, and gave no reasons for
doing so, let alone any clear and convincing reasons. See Mat-
thews v. Shalala, 10 F.3d 678, 680 (9th Cir. 1993) (Although
the ALJ “is not bound by the uncontroverted opinions of the
claimant’s physicians on the ultimate issue of disability, . . .
he cannot reject them without presenting clear and convincing
reasons for doing so.” (internal quotation marks omitted)).
[5] The Commissioner concedes that the ALJ’s decision
does not address Dr. Johnson’s opinion that Hill’s “combina-
tion of mental and medical problems makes the likelihood of
sustained full time competitive employment unlikely.” Never-
theless, the Commissioner argues that the ALJ’s failure to
12948 HILL v. ASTRUE
consider Dr. Johnson’s opinion was harmless because an
opinion that an individual cannot work is an opinion on an
issue reserved to the Commissioner and, therefore, it is not
binding. See 20 C.F.R. § 404.1527(d)(1) (“A statement by a
medical source that you are ‘disabled’ or ‘unable to work’
does not mean that we will determine that you are disabled.”).
We disagree.
[6] Dr. Johnson’s statement that Hill would be “unlikely”
to work full time was not a conclusory statement like those
described in 20 C.F.R. § 404.1527(d)(1), but instead an
assessment, based on objective medical evidence, of Hill’s
likelihood of being able to sustain full time employment given
the many medical and mental impairments Hill faces and her
inability to afford treatment for those conditions. Thus, the
ALJ’s disregard for Dr. Johnson’s medical opinion was not
harmless error and Dr. Johnson’s opinion should have been
considered. See 20 C.F.R. § 404.1527(c) (“Regardless of its
source, we will evaluate every medical opinion we receive.”).
B. Dr. Kuka
Dr. Kuka, a non-treating, non-examining medical consul-
tant, testified at Hill’s hearing. Less weight is given to the
opinion of a non-examining source than to an examining
source. See Lester v. Chater, 81 F.3d 821, 830-31 (9th Cir.
1996). “The opinion of a nonexamining physician cannot by
itself constitute substantial evidence that justifies the rejection
of the opinion of either an examining physician or a treating
physician.” Id. at 831.
Hill argues that the ALJ ignored Dr. Kuka’s testimony that
Hill was “markedly limited” at times when she was suffering
panic attacks or manic episodes. But the ALJ clearly acknowl-
edged this testimony, and based his decision in part on Dr.
Kuka’s opinion that these severe panic attacks or manic epi-
sodes only occurred about two times a year for two or three
days.
HILL v. ASTRUE 12949
Nevertheless, Dr. Kuka failed to consider that Hill’s most
recent panic attack, which occurred at the Dollar Tree store on
March 7, 2008, kept Hill in bed for five days and out of work
for about two weeks. Thus, Dr. Kuka’s conclusion that Hill’s
most severe attacks lasted only two or three days was directly
contradicted by the record.
Dr. Kuka also noted that the medical records mention
numerous panic attacks, sometimes daily and sometimes sev-
eral times a week. When the ALJ asked if there was indepen-
dent verification of this, Dr. Kuka replied that Hill’s panic
attacks had been “observed on occasions but certainly not to
the frequency that they’re reported[,] but then that’s normal
too for therapist notes.” It makes sense that not every panic
attack would be observed by Hill’s physicians, therapists, or
counselors (or even family, friends, and co-workers), because
these attacks would not always occur in their presence. There
remains, however, a substantial amount of evidence in the
record that Hill complained of anxiety and panic attacks, and
some of those attacks were actually witnessed by Hill’s physi-
cians, therapists and counselors.
C. Panic Disorder
Where the ALJ has found a severe medically determinable
impairment at step two of the sequential analysis, “all medi-
cally determinable impairments must be considered in the
remaining steps of the sequential analysis.” Orn v. Astrue, 495
F.3d 625, 630 (9th Cir. 2007) (citing 42 U.S.C.
§ 423(d)(2)(B)). In this case, the ALJ found, based in part on
Dr. Kuka’s opinion, that Hill had severe mental impairments
that included bi-polar disorder, mixed personality disorder,
anxiety, and borderline intellectual functioning.
But Hill was also diagnosed with panic disorder. The symp-
toms of Panic Disorder include
sudden attacks of intense fear or anxiety, usually
associated with numerous physical symptoms such
12950 HILL v. ASTRUE
as heart palpitations, rapid breathing or shortness of
breath, blurred vision, dizziness, and racing
thoughts. Often these symptoms are thought to be a
heart attack by the individual, and many cases are
diagnosed in hospital emergency rooms . . . . Left
untreated . . . symptoms can worsen and Agorapho-
bia can develop. In these cases, the individual has
developed such an intense fear that leaving the safety
of home feels impossible.
Index of Psychiatric Disorders, Diagnostic and Statistical
Manual of Mental Disorders, Fourth Edition 2000),
§§ 300.21 & 300.01. Hill described symptoms just like these
when she testified before the ALJ. But the ALJ excluded the
panic disorder diagnosis and improperly limited the definition
of panic attack to only those attacks severe enough to collapse
someone to the ground.
[7] Because the ALJ excluded panic disorder from Hill’s
list of impairments and instead characterized her diagnosis as
anxiety alone, the residual functional capacity determination
was incomplete, flawed, and not supported by substantial evi-
dence in the record.
***
[8] For the foregoing reasons, we find that the ALJ
improperly ignored or discounted significant and probative
evidence in the record favorable to Hill’s position—including
the opinion of Dr. Johnson and substantial evidence that con-
tradicts Dr. Kuka’s opinion—and thereby provided an incom-
plete residual functional capacity determination.
II. The ALJ’s Hypothetical Question to the Vocational
Expert
[9] At the fifth step of the sequential analysis, the burden
shifts to the Commissioner to demonstrate that the claimant is
HILL v. ASTRUE 12951
not disabled and can engage in work that exists in significant
numbers in the national economy. 20 C.F.R.
§ 404.1520(a)(4)(v); Lockwood v. Comm’r of Soc. Sec.
Admin., 616 F.3d 1068, 1071 (9th cir. 2010). The ALJ may
meet his burden at step five by asking a vocational expert a
hypothetical question based on medical assumptions sup-
ported by substantial evidence in the record and reflecting all
the claimant’s limitations, both physical and mental, sup-
ported by the record. See Valentine v. Comm’r of Soc. Sec.
Admin., 574 F.3d 685, 690 (9th Cir. 2009); Thomas v. Barn-
hart, 278 F.3d 947, 956 (9th Cir. 2002); Desrosiers v. Sec’y
of Health & Human Servs., 846 F.2d 573, 578 (9th Cir. 1988)
(Pregerson, J., concurring) (“The ALJ’s depiction of the
claimant’s disability must be accurate, detailed, and supported
by the medical record.”). “If a vocational expert’s hypotheti-
cal does not reflect all the claimant’s limitations, then the
expert’s testimony has no evidentiary value to support a find-
ing that the claimant can perform jobs in the national econo-
my.” Matthews v. Shalala, 10 F.3d 678, 681 (9th Cir. 1993)
(internal quotation marks and citation omitted).
[10] As discussed earlier, the ALJ failed to include all of
Hill’s impairments in determining Hill’s residual functional
capacity, and therefore, the ALJ asked an incomplete hypo-
thetical question of Mr. Fortune, the vocational expert. The
hypothetical did not take account of Hill’s limitations because
of her frequent anxiety and panic attacks, and thereby
included incorrect assumptions. Specifically, the hypotheti-
cal’s assumption concerning Hill’s residual functional capac-
ity that she can complete a normal workday and workweek
without interruptions from psychologically-based symptoms,
and that she can maintain regular attendance, are not sup-
ported by the record. “Because neither the hypothetical nor
the answer properly set forth all of [Hill’s] impairments, the
vocational expert’s testimony cannot constitute substantial
evidence to support the ALJ’s findings.” Gallant v. Heckler,
753 F.2d 1450, 1456 (9th Cir. 1984).
12952 HILL v. ASTRUE
Accordingly, we hold that the ALJ’s hypothetical question
to the vocational expert was incomplete and therefore the
ALJ’s reliance on the vocational expert’s answers was
improper.
III. Remedy
When an ALJ’s denial of benefits is not supported by the
record, “the proper course, except in rare circumstances, is to
remand to the agency for additional investigation or explana-
tion.” Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004)
(internal quotation marks omitted). We may exercise our dis-
cretion and direct an award of benefits “where no useful pur-
pose would be served by further administrative proceedings
and the record has been thoroughly developed.” Swenson v.
Sullivan, 876 F.2d 683, 689 (9th Cir. 1989). Remand for fur-
ther proceedings is appropriate where there are outstanding
issues that must be resolved before a determination can be
made, and it is not clear from the record that the ALJ would
be required to find the claimant disabled if all the evidence
were properly evaluated. See Vasquez v. Astrue, 572 F.3d 586,
593 (9th Cir. 2009); cf. Reddick v. Chater, 157 F.3d 715, 729
(9th Cir. 1998) (“We do not remand this case for further pro-
ceedings because it is clear from the administrative record
that Claimant is entitled to benefits.”).
In this case, the ALJ’s residual functional capacity determi-
nation was flawed and the hypothetical question was incom-
plete and included incorrect assumptions. When Hill’s
attorney asked Mr. Fortune, the vocational rehabilitation
expert, on cross-examination whether there would be any jobs
for a person who had weekly panic attacks and missed work
two to four days a month, Mr. Fortune admitted that it would
not be possible to engage in substantial gainful activity with
absences of that frequency. Because the overall record shows
these additional assumptions should have been incorporated
into the ALJ’s hypothetical, remand is appropriate. Harman
v. Apfel, 211 F.3d 1172, 1180 (9th Cir. 2000) (“In cases where
HILL v. ASTRUE 12953
the testimony of the vocational expert has failed to address a
claimant’s limitations as established by improperly discred-
ited evidence, we consistently have remanded for further pro-
ceedings rather than payment of benefits.”).
CONCLUSION
[11] Substantial evidence does not support the ALJ’s
determination that Hill is not disabled under the Social Secur-
ity Act. Accordingly, we REVERSE the district court’s grant
of summary judgment in favor of the Commissioner. On
remand, the district court shall refer this case to the ALJ for
reconsideration of Hill’s application for benefits.
REVERSED and REMANDED.