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Hess v. Commissioner Social Security

United States Court of Appeals, Third Circuit

July 30, 2019


          Argued January 24, 2019

          On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 5-17-cv-01223) District Judge: Hon. Wendy Beetlestone

          Jordana Cooper [ARGUED] M. Jared Littman Social Security Administration Counsel for Appellant

          Christopher J. Marzzacco Thomas F. Meister [ARGUED] Marzzacco Niven & Associates Counsel for Appellee

          Before: JORDAN, KRAUSE, and ROTH, Circuit Judges.



         This is a case about form and substance in decisions about eligibility for social security benefits. The Appellee, Russell Hess, III, invites us to give supremacy to form. While form is not irrelevant in the scripted analytical steps called for when determining if someone is disabled, Hess's invitation would lead to the hidebound circumstance in which an Administrative Law Judge ("ALJ") would have to "chant every magic word correctly" or an otherwise thorough and well-reasoned opinion "would have to be remanded[.]" United States v. Hickman, 991 F.2d 1110, 1115 (3d Cir. 1993) (Roth, J., concurring in part and dissenting in part). The law makes no such demand. Cf. Biestek v. Berryhill, 139 S.Ct. 1148, 1157 (2019) ("Where Biestek goes wrong, at bottom, is in pressing for a categorical rule[.] … The inquiry, as is usually true in determining the substantiality of evidence, is case-by-case.").

         The ALJ who ruled on Hess's application for social security disability benefits concluded that Hess had "moderate difficulties" in "concentration, persistence or pace," but the ALJ offered a detailed explanation for why she believed those difficulties were not serious and why Hess was nevertheless capable of performing simple tasks. (App. at 32.) Based on that analysis, she found that Hess was "limited to jobs requiring understanding, remembering, and carrying out only simple instructions and making only simple work-related decisions[.]" (App. at 33-34.) In a series of hypothetical questions meant to include Hess's limitations, she asked a vocational expert whether there were jobs in the national economy available to someone with those limitations. The expert said there were. The ALJ thus decided that Hess was not disabled and rejected his claim for benefits.

         Hess then filed this lawsuit challenging the ALJ's decision. The District Court determined that the ALJ had erred because, in the limitations she described in her hypothetical questions to the vocational expert, she failed to include or account for her finding that Hess had "moderate" difficulties in "concentration, persistence, or pace." Accordingly, the Court ordered the case remanded to the ALJ.

         The government now appeals. It argues that an ALJ's statement of a limitation confining a person to "simple tasks" - like the limitation statement at issue here - is permissible after a finding of "moderate" difficulties in "concentration, persistence, or pace," if the ALJ offers a "valid explanation" for it. According to the government, the explanation given by the ALJ in this case was "valid," and the District Court failed to give it due consideration. We agree and, for the reasons that follow, will remand the case to the District Court with instructions to enter judgment for the government.

         I. BACKGROUND

         A. The Social Security Disability Determination Methodology

         Social security cases can be complex, in part because of the labyrinthine regulatory structure that governs them. The matter before us involves the part of that structure controlling disability determinations.

         The Social Security Administration, working through ALJs, decides whether a claimant is disabled by following a now familiar five-step analysis. 20 C.F.R. §§ 404.1520(a)(4), 416.920(a)(4) (2016).[1] The burden of proof is on the claimant at all steps except step five, where the burden is on the Commissioner of Social Security. Smith v. Comm'r of Soc. Sec., 631 F.3d 632, 634 (3d Cir. 2010). The analysis proceeds as follows:

At step one, the ALJ determines whether the claimant is performing "substantial gainful activity[.]" 20 C.F.R. §§ 404.1520(a)(4)(i), 416.920(a)(4)(i). If he is, he is not disabled. Id. Otherwise, the ALJ moves on to step two.

         At step two, the ALJ considers whether the claimant has any "severe medically determinable physical or mental impairment" that meets certain regulatory requirements. Id. §§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). A "severe impairment" is one that "significantly limits [the claimant's] physical or mental ability to do basic work activities[.]" Id. §§ 404.1520(c), 416.920(c). If the claimant lacks such an impairment, he is not disabled. Id. §§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). If he has such an impairment, the ALJ moves on to step three.

         At step three, the ALJ decides "whether the claimant's impairments meet or equal the requirements of an impairment listed in the regulations[.]" Smith, 631 F.3d at 634. If the claimant's impairments do, he is disabled. 20 C.F.R. §§ 404.1520(a)(4)(iii), 416.920(a)(4)(iii). If they do not, the ALJ moves on to step four.

         At step four, the ALJ assesses the claimant's "residual functional capacity" ("RFC") and whether he can perform his "past relevant work."[2] Id. §§ 404.1520(a)(4)(iv), 416.920(a)(4)(iv). A claimant's "[RFC] is the most [he] can still do despite [his] limitations." Id. §§ 404.1545(a)(1), 416.945(a)(1). If the claimant can perform his past relevant work despite his limitations, he is not disabled. Id. §§ 404.1520(a)(4)(iv), 416.920(a)(4)(iv). If he cannot, the ALJ moves on to step five.

         At step five, the ALJ examines whether the claimant "can make an adjustment to other work[, ]" considering his "[RFC, ] … age, education, and work experience[.]" Id. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). That examination typically involves "one or more hypothetical questions posed by the ALJ to [a] vocational expert." Podedworny v. Harris, 745 F.2d 210, 218 (3d Cir. 1984). If the claimant can make an adjustment to other work, he is not disabled. 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). If he cannot, he is disabled.

         When, as in this instance, mental impairments are at issue, additional inquiries are layered on top of the basic five-step disability analysis. Id. §§ 404.1520a(a), 416.920a(a). An ALJ assesses mental impairments in the following way.

         As part of step two of the disability analysis, the ALJ decides whether the claimant has any "medically determinable mental impairment(s)." Id. §§ 404.1520a(b)(1), 416.920a(b)(1); see also id. §§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii) (providing that, at step two, the ALJ determines whether the claimant has "a severe medically determinable physical or mental impairment"). Then, as part of that same step and also step three of the disability analysis, the ALJ determines "the degree of functional limitation resulting from the impairment(s)[.]" Id. §§ 404.1520a(b)(2), 416.920a(b)(2); see also id. §§ 404.1520a(d), 416.920a(d), 404.1520(a)(4)(ii)-(iii), 416.920(a)(4)(ii)-(iii) (explaining that the ALJ uses "the degree of functional limitation" in assessing "the severity of [the claimant's] mental impairment(s)[, ]" which is considered at steps two and three). The ALJ does so in "four broad functional areas …: Activities of daily living; social functioning; concentration, persistence, or pace; and episodes of decompensation." Id. §§ 404.1520a(c)(3), 416.920a(c)(3). The first three of those areas are rated on a "five-point scale: None, mild, moderate, marked, and extreme." Id. §§ 404.1520a(c)(4), 416.920a(c)(4). The fourth is rated on a scale of: "None, one or two, three, four or more." Id.

         The ALJ uses that degree rating in "determin[ing] the severity of [the] mental impairment(s)[, ]" which is considered at steps two and three. Id. §§ 404.1520a(d), 416.920a(d); see also id. §§ 404.1520(a)(4)(ii)-(iii), 416.920(a)(4)(ii)-(iii) (stating that, at steps two and three, the ALJ "consider[s] the medical severity of [the claimant's] impairment(s)"). "If … the degree of [the claimant's] limitation in the first three functional areas [is] 'none' or 'mild' and 'none' in the fourth area, [the ALJ] will generally conclude that [the claimant's] impairment(s) is not severe, unless the evidence otherwise indicates that there is more than a minimal limitation in [his] ability to do basic work activities." Id. §§ 404.1520a(d)(1), 416.920a(d)(1) (citation omitted).

         At step three, if the ALJ has found that a mental impairment is severe, he "then determine[s] if it meets or is equivalent in severity to a listed mental disorder." Id. §§ 404.1520a(d)(2), 416.920a(d)(2); see also id. §§ 404.1520(a)(4)(iii), 416.920(a)(4)(iii) (explaining that, at step three, the ALJ determines whether the claimant has "an impairment(s) that meets or equals" a listed impairment). That analysis is done "by comparing the medical findings about [the claimant's] impairment(s) and the rating of the degree of functional limitation to the criteria of the appropriate listed mental disorder." Id. §§ 404.1520a(d)(2), 416.920a(d)(2). For example, the claimant may have the equivalent of a listed impairment if, inter alia, he has at least two of "1. Marked restriction of activities of daily living; or 2. Marked difficulties in maintaining social functioning; or 3. Marked difficulties in maintaining concentration, persistence, or pace; or 4. Repeated episodes of decompensation, each of extended duration[.]" Id. Pt. 404, Subpt. P, App. 1.

         Finally, to complete steps four and five of the disability analysis, if the ALJ has found that the claimant does not have a listed impairment or its equivalent, the ALJ "will then assess [the claimant's mental RFC]." Id. §§ 404.1520a(d)(3), 416.920a(d)(3); see also id. §§ 404.1520(a)(4)(iv)-(v), 416.920(a)(4)(iv)-(v) (providing that, at steps four and five, the ALJ considers the claimant's RFC).

         With that regulatory framework in mind, we turn to the details of the case before us.

         B. Factual and Procedural Background

         1. Hess's Social Security Application and the ALJ's Opinion

         In August 2013, Hess applied for social security disability benefits. After a hearing, the ALJ denied his claims. Her decision was based on her conclusion that Hess was not disabled within the meaning of the applicable regulations. In reaching that conclusion, she followed the five-step disability analysis just outlined.

         The ALJ's reasoning and the findings she made are central to this case. Consequently, we describe the relevant portions of her opinion in detail. As to step one, however, it is sufficient to simply note that the ALJ determined Hess was not engaged in substantial gainful activity.

         At step two, the ALJ found that Hess had multiple "severe impairments[.]" (App. at 30.) Specifically, she said that Hess suffered from:

major depressive disorder single episode-mild, depressive disorder not otherwise specified, bipolar disorder, posttraumatic stress disorder, history of conduct disorder and impulse control disorder, personality disorder not otherwise specified with antisocial tendencies, osteoarthritis and degenerative joint disease of the right ankle, cervical degenerative disc disease, chronic pain disorder and history of opioid abuse and dependence. (App. at 30-31 (citations omitted).)[3]

         At step three, the ALJ found that Hess's mental impairments did not meet the standards for a "listed impairment[.]" (App. at 31.) In making that finding, she rated Hess in the four areas of mental functional limitation.[4] As to "concentration, persistence or pace" - the area of functional limitation at issue here - she concluded that Hess had "moderate difficulties." (App. at 32.) She reasoned that, although a state psychological consultant had rated Hess as having "not … more than mild limitation in this area of functioning," that opinion was inconsistent with the record, including that Hess had been "diagnosed with mental health impairments, was in mental health treatment, and was prescribed mental health medications." (App. at 32, 37.)

         The ALJ clarified, however, that she did not consider Hess's "moderate"-level difficulties in "concentration, persistence, or pace" to be so serious that he could ...

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