Keyser v. Commissioner Social Security Administration

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PAMELA KEYSER, 

Plaintiff-Appellant, No. 10-35371

v.

 D.C. No.

1:08-cv-01268-CL

COMMISSIONER SOCIAL SECURITY

ADMINISTRATION, OPINION

Defendant-Appellee.



Appeal from the United States District Court

for the District of Oregon

Mark D. Clarke, Magistrate Judge, Presiding

Submitted March 9, 2011*

Portland, Oregon

Filed June 1, 2011

Before: Dorothy W. Nelson, Sidney R. Thomas, and

Susan P. Graber, Circuit Judges.

Opinion by Judge Thomas;

Dissent by Judge Graber

*The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

7231

KEYSER v. COMMISSIONER SSA 7233

COUNSEL

Tim Wilborn, Wilborn Law Office, P.C., Oregon City, Ore-

gon, for the appellant.

7234 KEYSER v. COMMISSIONER SSA

Dwight C. Holton, United States Attorney, Adrian L. Brown,

Assistant United States Attorney; David Morado, Regional

Chief Counsel; Benjamin J. Groebner, Assistant Regional

Counsel, Seattle, Washington, for the appellee.

OPINION

THOMAS, Circuit Judge:

Pamela Keyser appeals the district court’s decision affirm-

ing the Commissioner of Social Security’s denial of her appli-

cations for disability insurance benefits and supplemental

security income benefits under Titles II and XVI of the Social

Security Act. We have jurisdiction under 28 U.S.C. § 1291.

We reverse and remand for further proceedings.

I

Pamela Keyser applied for disability benefits based on

combined impairments including bullous emphysema, depres-

sion, anxiety, and bipolar disorder. Keyser alleges that her

disability began when her right lung collapsed. Her lung was

surgically repaired and she was discharged eight days later.

Keyser was advised that the chance of either her right lung

collapsing again, or her left lung collapsing for the first time,

was as high as thirty percent. Two of Keyser’s treating physi-

cians, Dr. Marc Jacobs and Dr. Stephen Knapp, reported that

Keyser was unable to work because of her severe emphysema

and potential for another collapsed lung. In addition to these

physical ailments, Drs. Jacobs and Knapp reported that

Keyser suffered from severe depression and generalized anxi-

ety disorder, which also impacted her ability to work. Dr.

Knapp referred Keyser to a psychiatrist, Dr. Monteverdi, who

diagnosed Keyser with bipolar disorder, and paranoid and

schizotypal personality traits. Dr. Monteverdi assessed

Keyser’s Global Assessment of Functioning1 at 55 to 65 and

1

“A GAF score is a rough estimate of an individual’s psychological,

social, and occupational functioning used to reflect the individual’s need

KEYSER v. COMMISSIONER SSA 7235

completed a medical source statement indicating that Keyser

had moderate limitations in a variety of areas.

A year after the onset of the disability, Dr. Lahman con-

ducted an agency review of Keyser’s psychiatric condition

and reported his findings on a Psychiatric Review Technique

Form. He noted that Keyser had medically determinable

impairments of depression and anxiety, but concluded that the

degree of limitation in three functional areas (restriction of

activities of daily living, difficulties in maintaining social

functioning, and difficulties in maintaining concentration, per-

sistence, or pace) were mild. Dr. Lahman also reported that

Keyser had no limitation in the fourth functional area (epi-

sodes of decompensation of extended duration).

During a hearing before an administrative law judge

(“ALJ”), Keyser reported shortness of breath while working,

which required her to sit or take breaks every half hour, and

to nap two or three times daily for around one hour. She also

testified that she has anxiety and paranoia, and a fear of col-

lapsing another lung if she over-exerts herself. However,

Keyser admitted that she sings in a rock-and-roll band

approximately three times a week. Keyser’s husband also tes-

tified at the hearing, confirming that her depression and bipo-

lar disorder had worsened after her lung collapsed. He further

testified that she needed to lie down ninety percent of the day

because she was so easily fatigued.

The ALJ asked a vocational expert (“VE”) who testified at

Keyser’s hearing to assume that a hypothetical worker could

lift twenty-pound items occasionally and ten-pound items fre-

quently, that she could stand or walk no more than six hours

in an eight-hour workday, and that she needed to avoid expo-

sure to fumes, odors, dusts, gases, and otherwise poor ventila-

for treatment.” Vargas v. Lambert, 159 F.3d 1161, 1164 n.2 (9th Cir.

1998).

7236 KEYSER v. COMMISSIONER SSA

tion. Based on these limitations, the VE testified that this

hypothetical worker could not maintain Keyser’s prior work

as a grocery store cashier, because that would require her to

remain on her feet for the majority of the day, but that she

could work as a different kind of cashier, classified as Cashier

I or II. Although a Cashier I position is classified as a semi-

skilled job, the VE explained that a Cashier II position

involves only unskilled, simple, and routine work. The VE

then noted that there were 1.2 million cashier jobs in the

national economy, with 43,000 positions in the state of Ore-

gon. The VE further limited the state-specific number to

12,696 positions to account for Keyser’s need to be sitting.

The ALJ issued a written decision denying Keyser disabil-

ity benefits. The ALJ determined that Keyser’s emphysema

was a severe impairment. However, the ALJ noted that “while

the claimant’s bipolar disorder is a medically determinable

impairment, it is not severe. Such was the conclusion of the

state agency medical consultant, Frank Lahman, PhD, . . . as

found in the psychiatric review technique form.” The ALJ

then determined that Keyser did not meet or equal any of the

listed respiratory impairments. Finally, the ALJ reviewed the

record, including the opinions of Drs. Jacobs, Knapp, and

Monteverdi, and the lay testimony of Keyser and Keyser’s

husband. The ALJ concluded that although Keyser could not

perform any of her prior work, she could perform work as a

Cashier II and that a significant number of Cashier II posi-

tions exist in the national economy.

The Appeals Council declined to review the ALJ’s disabil-

ity determination. Keyser appealed to the United States Dis-

trict Court for the District of Oregon, which affirmed the

ALJ’s denial of disability. Keyser now appeals.

II

[1] Social Security Regulations set out a five-step sequen-

tial process for determining whether an applicant is disabled

KEYSER v. COMMISSIONER SSA 7237

within the meaning of the Social Security Act. See 20 C.F.R.

§ 404.1520. The five-steps are: (1) Is the claimant presently

working in a substantially gainful activity? (2) Is the claim-

ant’s impairment severe? (3) Does the impairment meet or

equal one of a list of specific impairments described in the

regulations? (4) Is the claimant able to perform any work that

he or she has done in the past? and (5) Are there significant

numbers of jobs in the national economy that the claimant can

perform? See Tackett v. Apfel, 180 F.3d 1094, 1098-99 (9th

Cir. 1999).

In this case, the ALJ erred in steps two and three by failing

to follow the procedures proscribed in 20 C.F.R. § 404.1520a

for determining whether Keyser has a severe mental impair-

ment and, if so, determining whether that impairment meets

or equals any of the listed impairments.

[2] In step two of the disability determination, an ALJ

must determine whether the claimant has a medically severe

impairment or combination of impairments. In making this

determination, an ALJ is bound by 20 C.F.R. § 404.1520a.

That regulation requires those reviewing an application for

disability to follow a special psychiatric review technique. 20

C.F.R. § 404.1520a. Specifically, the reviewer must deter-

mine whether an applicant has a medically determinable men-

tal impairment, id. § 404.1520a(b), rate the degree of

functional limitation for four functional areas, id.

§ 404.1520a(c), determine the severity of the mental impair-

ment (in part based on the degree of functional limitation), id.

§ 404.1520a(c)(1), and then, if the impairment is severe, pro-

ceed to step three of the disability analysis to determine if the

impairment meets or equals a specific listed mental disorder,

id. § 404.1520a(c)(2).

[3] At the first two levels of review, this technique is docu-

mented in a Psychiatric Review Technique Form (“PRTF”).

Id. § 404.1520a(e). At hearings before an ALJ or the Appeals

Council, however, the Commissioner must “document appli-

7238 KEYSER v. COMMISSIONER SSA

cation of the technique in the decision.” Id. Specifically, “the

written decision must incorporate the pertinent findings and

conclusions based on the technique” and “must include a spe-

cific finding as to the degree of limitation in each of the func-

tional areas.” Id. § 404.1520a(e)(4) (emphasis added); see

also Revised Medical Criteria for Evaluating Mental Disor-

ders and Traumatic Brain Injury, 65 Fed. Reg. 50,746,

50,757-58 (Aug. 21, 2000) (to be codified at 20 C.F.R. pt. 404

& 416) (“The primary purpose of the final rules is to describe

the technique, as distinct from the [PRTF], and to require the

use of the technique in all determinations and decisions at all

levels of the administrative review process . . . .”). In other

words, the regulations contemplate that written decisions at

the ALJ and Appeals Council levels should contain a “narra-

tive rationale,” instead of the “checklist of . . . conclusions”

found in a PRTF. See 65 Fed. Reg. at 50,757-58.

[4] The question, then, is what consequences attach in fail-

ing to append the PRTF or incorporate its findings in the writ-

ten ALJ decision. We previously analyzed this question under

the predecessor regulation, and concluded it was reversible

error. In Gutierrez v. Apfel, we held that the failure of the ALJ

to complete and append the PRTF, as required at the time,

required reversal of the district court’s decision upholding the

ALJ’s denial of benefits. Gutierrez, 199 F.3d 1048, 1050 (9th

Cir. 2000), superseded by regulation as stated in Blackmon v.

Astrue, 719 F. Supp. 2d 80, 92 (D.D.C. 2010). When we

decided Gutierrez, the ALJ was required to both make the

specific findings, and attach the PRTF to the written decision.

See 20 C.F.R. § 404.1520a(d)(2) (2000) (“For all cases

involving mental disorders at the administrative law judge

hearing or Appeals Council levels, the standard document will

be appended to the decision.”). When this rule was changed,

the Commissioner explained that because the written decision

must include “the pertinent findings and conclusions required

in the application of the technique,” requiring attachment

“would only repeat information already required . . . and ren-

ders the PRTF redundant.” Revised Medical Criteria for Eval-

KEYSER v. COMMISSIONER SSA 7239

uating Mental Disorders and Traumatic Brain Injury, 65 Fed.

Reg. 50,746, 50,757-58 (Aug. 21, 2000) (to be codified at 20

C.F.R. pt. 404 & 416). Although the regulation no longer

requires attachment of the PRTF, the Gutierrez analysis

remains unchanged: the Social Security Regulations require

the ALJ to complete a PRTF and append it to the decision, or

to incorporate its mode of analysis into the ALJ’s findings and

conclusions.

Our sister circuits agree. See Stambaugh v. Sullivan, 929

F.2d 292, 296 (7th Cir. 1991), superseded by regulation as

stated in Burke v. Astrue, 306 Fed. Appx. 312 (7th Cir. 2009)

(ALJ’s failure to evaluate claimant’s alleged mental disorder

or to document the procedure on a PRTF required reversal);

Hill v. Sullivan, 924 F.2d 972, 975 (10th Cir. 1991) (same);

Montgomery v. Shalala, 30 F.3d 98, 99-100 (8th Cir. 1994)

(reversing and remanding because ALJ purported to evaluate

mental disorder, but failed to do so in accordance with psychi-

atric review technique). As the Eleventh Circuit summarized

in Moore v. Barnhart, 405 F.3d 1208, 1214 (11th Cir. 2005):

We thus join our sister circuits in holding that where

a claimant has presented a colorable claim of mental

impairment, the social security regulations require

the ALJ to complete a PRTF and append it to the

decision, or incorporate its mode of analysis into his

findings and conclusions. Failure to do so requires

remand.

[5] In this case, the written decision did not document the

ALJ’s application of the technique and did not include a spe-

cific finding as to the degree of limitation in any of the four

functional areas. The decision simply referenced and adopted

the PRTF completed earlier by Dr. Lahman. Under Guiterrez,

this is insufficient to meet the requirements of 20 C.F.R.

§ 404.1520a(e) and constitutes legal error.

Hoopai v. Astrue, 499 F.3d 1071, 1077-78 (9th Cir. 2007),

is not to the contrary. In Hoopai, the ALJ did in fact make an

7240 KEYSER v. COMMISSIONER SSA

explicit finding as to each of the four functional areas as

required under 20 C.F.R. § 404.1520a(e). Hoopai, 499 F.3d at

1078 (“The ALJ clearly met this requirement by rating and

assessing Hoopai’s limitations in each of these four functional

areas.”). Hoopai’s argument was that the ALJ was further

required to document the considerations underlying the find-

ings for those four areas. We rejected such an extensive

requirement, concluding that a specific finding as to the four

functional limitations was sufficient even without a finding

“based on all of the enumerated functional limitations.” Id. at

1077. In Keyser’s case, in contrast, the ALJ did not state his

findings as to the four functional areas as required by the

plain language of 20 C.F.R. § 404.1520a(e).

III

[6] An ALJ’s failure to comply with 20 C.F.R.

§ 404.1520a is not harmless if the claimant has a “colorable

claim of mental impairment.” Gutierrez, 199 F.3d at 1051.

The record demonstrates that Keyser has made such a claim.

Keyser’s treating doctors diagnosed her with bipolar disorder,

and paranoid and schizotypal personality traits. Dr. Monte-

verdi completed a medical source statement indicating that

she had moderate limitations in several areas including the

ability to understand and remember detailed instructions, the

ability to maintain attention and concentration for extended

periods, the ability to interact appropriately with the general

public or customers, the ability to accept instructions and

respond appropriately to criticism from supervisors, the abil-

ity to maintain socially acceptable behavior, and the ability to

respond to unexpected changes in the work place. She also

received a Global Assessment of Functioning of 55 to 65,

which indicates mild to moderate symptoms. Furthermore,

Keyser’s husband submitted a written statement and testified

as to his wife’s mental impairments and their impact on her

ability to maintain employment. Thus, the ALJ’s failure to

follow 20 C.F.R. § 404.1520a(e) was not harmless because

KEYSER v. COMMISSIONER SSA 7241

Keyser has demonstrated a colorable claim of mental impair-

ment.

The ALJ also erred at step three because he failed to con-

sider whether Keyser’s mental impairment met or equaled a

listed impairment. See 20 C.F.R. § 404.1520a(d)(2) (“If your

mental impairment(s) is severe, we will then determine if it

meets or is equivalent in severity to a listed mental disor-

der.”). This failure was understandable given the ALJ’s adop-

tion of Dr. Lahman’s conclusion that the mental impairment

was not severe. However, because we hold that the ALJ erred

in his determination of the severity of Keyser’s impairment at

step two, we cannot determine whether the impairment was in

fact severe, thereby triggering the meets or equals analysis

under step three.

IV

[7] In summary, we hold that the ALJ erred by failing to

follow the requirements of 20 C.F.R. § 404.1520a in deter-

mining whether Keyser’s mental impairments were severe

and, if severe, whether they met or equaled a listed impair-

ment. We reverse the judgment of the district court with

instructions to remand to the ALJ to conduct a proper review

of Keyser’s mental impairments. We need not, and do not,

reach any other issue urged by the parties.

REVERSED AND REMANDED WITH INSTRUC-

TIONS.

GRABER, Circuit Judge, dissenting:

I respectfully dissent because I find no error in the ALJ’s

decision. And, even assuming that the ALJ erred when he did

not explicitly state his findings in each of the four functional

7242 KEYSER v. COMMISSIONER SSA

areas prescribed by 20 C.F.R. § 404.1520a, that error is harm-

less. I therefore would affirm the denial of benefits.

The ALJ considered Keyser’s mental problems and con-

cluded that they did not add up to a severe impairment. “Such

was the conclusion of the state agency medical consultant,”

the ALJ explained, “as found in the psychiatric review tech-

nique form” (“PRTF”). Although Keyser sought the help of

Dr. Monteverdi only after the medical consultant’s review,

nothing in Dr. Monteverdi’s reports caused the ALJ to ques-

tion the earlier determination made by the consultant. To the

contrary, the ALJ observed, “Dr. Monteverdi reported that,

during the few times he treated [Keyser], she had responded

well to medication.” The ALJ also observed that Keyser had

worked successfully for years under the primary diagnosis

that Monteverdi gave her. For those reasons, all of which the

record supports,1 the ALJ determined that Keyser had no

severe mental impairment.

Despite the substantial evidence underlying the ALJ’s

determination, the majority faults him for failing “to complete

a PRTF and append it to [his] decision, or to incorporate its

mode of analysis into [his] findings and conclusions.” Maj.

op. at 7239. In my view, the ALJ did incorporate the PRTF’s

mode of analysis into his findings and conclusions. He explic-

itly referenced the PRTF completed by the agency consultant

and explained cogently why the consultant’s analysis per-

suaded him even in light of Dr. Monteverdi’s more recent

assessments and treatment. The relevant regulation requires

nothing more.2

1

Indeed, consistent with Dr. Monteverdi’s reports, Keyser admitted at

her hearing that her mental troubles improved after she began to take the

medication that Dr. Monteverdi had prescribed.

2

That regulation, 20 C.F.R. § 404.1520a(e), places the “overall respon-

sibility for assessing medical severity and for completing and signing the

[PRTF]” on the agency consultant. At the hearing stage, § 404.1520(e)(4)

requires the ALJ merely to “document application of the technique.”

KEYSER v. COMMISSIONER SSA 7243

In reaching the opposite conclusion, the majority relies too

much on Gutierrez v. Apfel, 199 F.3d 1048 (9th Cir. 2000),

and similar cases. As the majority acknowledges, the rules

have changed since Gutierrez. Maj. op. at 7238. The agency

amended § 404.1520a in September 2000 to excuse ALJs

from the redundant process of having to document their appli-

cation of the technique in written decisions and also having to

complete the “checklist of . . . conclusions” in the PRTF. 65

Fed. Reg. 50,746-01, 50,757 (2000). “The PRTF (i.e., the

form itself) should not be confused with application of the

technique,” the agency warned. Id. Unlike the PRTF, a deci-

sion documenting application of the technique will “include

a more detailed explanation of the findings and conclusions

reached, supported by a narrative rationale.” Id. It is the

amended rule, not the old one, that applies here.3

The ALJ followed the amended rule. His written decision

provided precisely what the agency had in mind. He explained

his conclusion with respect to the severity of Keyser’s mental

impairment and he supported that conclusion with a narrative

rationale. Requiring the ALJ to go back and include the

PRTF’s checklist of conclusions, either by amending his writ-

ten decision or by attaching a newly completed PRTF,

restores the redundancy that the agency sought to eliminate.

The majority nevertheless remands this nearly six-year-old

case for just that empty exercise.

Even if it were error not to give more attention to the find-

ings in the PRTF in the written decision, that error is harmless

Although § 404.1520(e)(4) states that the ALJ “must include a specific

finding as to the degree of limitation in each of the functional areas,” we

have declined to read that provision stingily. Hoopai v. Astrue, 499 F.3d

1071, 1077-78 (9th Cir. 2007). And, in any case, the ALJ included such

findings by expressly incorporating the agency consultant’s conclusions

“as found in the psychiatric review technique form.”

3

Keyser’s hearing took place on October 30, 2007, and the ALJ issued

his written decision on November 30, 2007.

7244 KEYSER v. COMMISSIONER SSA

here. We have recognized that an error “inconsequential to the

ultimate nondisability determination” is harmless. Stout v.

Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1055 (9th Cir.

2006); see also Carmickle v. Comm’r, Soc. Sec. Admin., 533

F.3d 1155, 1162 (9th Cir. 2008) (refusing to disturb an ALJ’s

decision, regardless of error, “[s]o long as there remains ‘sub-

stantial evidence supporting the ALJ’s conclusions’ . . . and

the error ‘does not negate the validity of the ALJ’s ultimate

. . . conclusion’ ” (quoting Batson v. Comm’r of Soc. Sec.

Admin., 359 F.3d 1190, 1197 (9th Cir. 2004))). Applying the

harmlessness analysis here, it is clear to me that the ALJ’s

failure to fill out the PRTF was inconsequential. There

remains substantial evidence to support the ALJ’s conclusion

that Keyser had no severe mental impairment. The absence of

a PRTF, which undoubtedly would repeat the same findings

made by the agency’s consultant, does not negate the validity

of the ALJ’s decision.

That analysis reveals yet another way in which Gutierrez

differs from this case. In Gutierrez, 199 F.3d at 1051, the

claimed mental impairment formed the “central” basis of the

disability claim and the facts were far more suggestive of a

severe mental impairment. Indeed, the ALJ agreed with the

claimant that she suffered from “a serious mental impair-

ment,” but simply disagreed as to how long it would take for

her to recover. Id. at 1050. In those circumstances, we could

not say that the ALJ’s failure to complete and attach a PRTF

was inconsequential, so we sent the case back to the agency

for reconsideration. Id. at 1051.

Here, by contrast, Keyser’s lung condition formed the cen-

tral basis for her claim. Only after her lung collapsed could

she no longer work. As mentioned earlier, Keyser worked for

years with bipolar disorder and, although she developed anxi-

ety and depression after her lung collapsed, those problems

consistently improved after Dr. Monteverdi gave her a new

medication. The record firmly supports the ALJ’s determina-

KEYSER v. COMMISSIONER SSA 7245

tion that Keyser had no severe mental impairment. Any proce-

dural error in making that determination was harmless.