UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Jay Gagnon, Claimant

v. Case No. 15-cv-237-SM Opinion No.

Carolyn W. Colvin, Acting Commissioner, Social Security Administration, Defendant

O R D E R

Pursuant to

(g) and 1383(c)(3), claimant,

Jay Gagnon, moves to reverse the Acting Commissioner’s decision

denying his application for Disability Insurance Benefits under

Title II of the Social Security Act (the “Act”),

, and Supplemental Security Income Benefits under Title XVI

of the Act,

(c). The Acting Commissioner

objects and moves for an order affirming her decision.

For the reasons discussed below, claimant’s motion is

granted to the extent he seeks a remand for further proceedings,

and the Acting Commissioner’s motion is denied.

1 Factual Background

I. Procedural History

On May 16, 2012, Gagnon filed an application for Disability

Insurance Benefits (“DIB”) and Supplemental Security Income

(“SSI”), alleging that he had been unable to work since August

1, 2011, due to a “mental health diagnosis,” “schizoaffective

disorder bipolar type,” and depression. Administrative Record

(“Admin. Rec.”) at 83-84 and 172. That application was denied

(admin. rec. at 84-85), and claimant requested a hearing before

an Administrative Law Judge (“ALJ”) (admin. rec. at 93-94).

On November 18, 2013, Gagnon, his counsel, and a vocational

expert appeared before an ALJ, who considered claimant’s

application de novo. Admin. Rec. at 34-62. At the hearing,

Gagnon amended his alleged onset date to March 15, 2012. Admin.

Rec. at 36, 147. On December 18, 2013, the ALJ issued his

written decision, concluding that Gagnon had medically

determinable impairments, but that none of them were severe, as

that term is defined in the Act. Id. at 22. Therefore, the ALJ

concluded, Gagnon was not disabled. Id. at 28.

Gagnon then sought review of the ALJ’s decision by the

Appeals Council. Admin. Rec. at 8 - 14. By notice dated April

14, 2015, the Appeals Council denied Gagnon’s request for

review. Id. at 1 - 6. Accordingly, the ALJ’s denial of 2 Gagnon’s application for benefits became the final decision of

the Acting Commissioner, subject to judicial review. Id. at 1.

Subsequently, Gagnon filed a timely action in this court,

asserting that the ALJ’s decision is not supported by

substantial evidence. Gagnon then filed a “Motion for Order

Reversing Decision of the Commissioner” (document no. 8). In

response, the Acting Commissioner filed a “Motion for Order

Affirming the Decision of the Commissioner” (document no. 10).

Those motions are pending.

II. Stipulated Facts.

Pursuant to this court’s Local Rule 9.1, the parties have

submitted a statement of stipulated facts which, because it is

part of the court’s record (document no. 12), need not be

recounted in this opinion. Those facts relevant to the

disposition of this matter are discussed as appropriate.

Standard of Review

I. “Substantial Evidence” and Deferential Review.

Pursuant to

(g), the court is empowered “to

enter, upon the pleadings and transcript of the record, a

judgment affirming, modifying, or reversing the decision of the

Commissioner of Social Security, with or without remanding the

cause for a rehearing.” Factual findings and credibility

3 determinations made by the Commissioner are conclusive if

supported by substantial evidence. See

(g),

1383(c)(3). See also Ortiz v. Secretary of Health & Human

Services,

(1st Cir. 1991). Substantial

evidence is “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.” Consolidated

Edison Co. v. NLRB,

(1938). It is something

less than a preponderance of the evidence, so the possibility of

drawing two inconsistent conclusions from the evidence does not

prevent an administrative agency’s finding from being supported

by substantial evidence. Consolo v. Federal Maritime Comm’n.,

(1966). See also Richardson v. Perales,

(1971).

This court’s review of the ALJ’s decision is, therefore,

both limited and deferential. The court is not empowered to

consider claimant’s application de novo, nor may it undertake an

independent assessment of whether she is disabled under the Act.

Rather, the court’s inquiry is “limited to determining whether

the ALJ deployed the proper legal standards and found facts upon

the proper quantum of evidence.” Nguyen v. Chater,

(1st Cir. 1999). Provided the ALJ’s findings are properly

supported by substantial evidence, the court must sustain those

findings even when there may also be substantial evidence

4 supporting the contrary position. Such is the nature of

judicial review of disability benefit determinations. See,

e.g., Tsarelka v. Secretary of Health & Human Services,

(1st Cir. 1988); Rodriguez v. Secretary of Health &

Human Services,

(1st Cir. 1981).

II. The Parties’ Respective Burdens.

An individual seeking SSI and/or DIB benefits is disabled

under the Act if he or she is unable “to engage in any

substantial gainful 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 12 months.”

(d)(1)(A). See also 42 U.S.C. § 1382c(a)(3). The

Act places a heavy initial burden on the claimant to establish

the existence of a disabling impairment. See Bowen v. Yuckert,

(1987); Santiago v. Secretary of Health &

Human Services,

(1st Cir. 1991). To satisfy that

burden, the claimant must prove, by a preponderance of the

evidence, that his impairment prevents him from performing his

former type of work. See Gray v. Heckler,

(1st Cir. 1985); Paone v. Schweiker,

(D. Mass. 1982). If the claimant demonstrates an inability to

perform his previous work, the burden shifts to the Commissioner

5 to show that there are other jobs in the national economy that

he can perform, in light of his age, education, and prior work

experience. See Vazquez v. Secretary of Health & Human

Services,

(1st Cir. 1982). See also

(f) and 416.912(f).

In assessing a disability claim, the Commissioner considers

both objective and subjective factors, including: (1) objective

medical facts; (2) the claimant’s subjective claims of pain and

disability, as supported by the testimony of the claimant or

other witnesses; and (3) the claimant’s educational background,

age, and work experience. See, e.g., Avery v. Secretary of

Health & Human Services,

(1st Cir. 1986);

Goodermote v. Secretary of Health & Human Services,

(1st Cir. 1982). Ultimately, a claimant is disabled only if

his:

physical or mental impairment or impairments are 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, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work.

(d)(2)(A). See also 42 U.S.C. § 1382c(a)(3)(B).

6 With those principles in mind, the court reviews claimant’s

motion to reverse and the Acting Commissioner’s motion to affirm

her decision.

Background - The ALJ’s Findings

In concluding that Gagnon was not disabled within the

meaning of the Act, the ALJ employed the mandatory five-step

sequential evaluation process described in

and 416.920. 1 See generally Barnhart v. Thomas,

(2003). Accordingly, he first determined that Gagnon had not

been engaged in substantial gainful employment since his alleged

onset of disability: March 15, 2012. Admin. Rec. at 22. The

ALJ noted the evidence in the record (and Gagnon’s testimony)

demonstrating that Gagnon had worked after this date, performing

“odd jobs” in the community.

However, the ALJ pointed out,

because Gagnon had not reported that income, which was received

“under the table,” “there [was] no way to track substantial

1 As summarized by the court in Diomede-Reynolds v. Astrue, No. CV-07-222-PB,

, at *1, n.2 (D.N.H. Apr. 1, 2008), “[w]hen determining whether a claimant is disabled, the ALJ is required to make the following five inquiries: (1) whether the claimant is engaged in substantial gainful activity; (2) whether the claimant has a severe impairment; (3) whether the impairment meets or equals a listed impairment; (4) whether the impairment prevents the claimant from performing past relevant work; and (5) whether the impairment prevents the claimant from doing any other work.” (citing

).

7 gainful activity.”

Accordingly, the ALJ continued with the

sequential analysis.

The ALJ next concluded that Gagnon suffers from the

following medically determinable impairments: “mood disorder and

attention deficit and hyperactivity disorder.”

But, the

ALJ determined that those impairments did not significantly

limit Gagnon’s ability to perform basic work-related activities

for 12 consecutive months, and thus concluded that Gagnon did

not have a “severe impairment or combination of impairments”

under

et seq. and 416.921 et seq. through

the date of his decision.

In making that determination, the ALJ considered Gagnon’s

mental health diagnosis as well as Gagnon’s allegations relating

to his symptoms. The ALJ also considered the medical opinions

and reports of Monadnock Family Services practitioners Dr.

Richard Stein, Dr. Marianne Marsh, and counselor James Wood,

LCMHC, all of whom treated claimant, as well as the evaluations

of Dr. Evelyn Harriott, who completed a psychiatric evaluation

for the claimant’s application for state APTD benefits, and Dr.

Michael Schneider, a non-examining state agency medical

consultant. The ALJ concluded that the objective medical

evidence did not support claimant’s allegations, and that

8 Gagnon’s “symptom complaints [were] not credible to the extent

alleged.” Admin. Rec. at 23 (citations omitted).

Because he concluded that Gagnon had a medically

determinable mental impairment, the ALJ then considered the four

functional areas set forth in

.920a: activities

of daily living; social functioning; concentration, persistence

or pace; and episodes of decompensation.

The ALJ found that Gagnon had mild impairment in activities

of daily living, due to lack of motivation. In support of that

determination, he cited the evaluations of Drs. Harriott and

Schneider. The ALJ also noted that Gagnon had lived with

friends for two years, taken care of his own space, cleaned up

after his dog, and, while living at the Monadnock Family

Services group home, cleaned up the common area, helped his

housemates, and took a cooking class (but stopped after the

first class because Gagnon believed group home staff were having

him teach other residents to cook).

Regarding social functioning, the ALJ found that Gagnon had

no more than mild impairment, also due to lack of motivation.

He again cited to Dr. Harriott’s report in support of his

determination, and noted that Gagnon had lived with friends for

two years, reported smoking marijuana two to three times a week

9 with friends and family, and reported engaging in social

networking on-line. The ALJ also noted that Gagnon reported

spending time with peers to Dr. Marsh.

In conjunction with his analysis of Gagnon’s social

functioning, the ALJ considered Gagnon’s “reported intolerance

of others,” but found that Gagnon’s work history did not support

this allegation. Admin. Rec. at 26 - 27. The ALJ noted that

Gagnon had “worked three jobs for two years each, and a fourth

job for over four years, with two of the employers re-hiring

him. Additionally, he had been able to go out into the

community and work odd jobs under the table for two years.” Id.

at 27. Finally, the ALJ cited Dr. Stein’s observation that,

“despite the claimant’s reported inability to work with others,

‘on a personality inventory, he seems to identify with a great

many character traits consistent with getting along with

others.’” Id. (citations omitted).

With respect to Gagnon’s concentration, persistence and

pace, the ALJ again found that Gagnon had no more than mild

impairment. In support of that determination, he cited Dr.

Harriott’s report that Gagnon had “never-seldom” functional loss

in this area, and Dr. Stein’s observation that Gagnon “was very

intelligent and perhaps would do well as a tenured professor.”

Admin. Rec. at 27. The ALJ further considered that Gagnon 10 reported “being addicted” to video games, playing chess and

“being a science geek,” activities which the ALJ noted require

“exceptional concentration, persistence and pace.” The ALJ

further noted that Gagnon’s sensorium, including memory and

concentration, “was noted as normal.” Id.

Finally, considering episodes of decompensation, the ALJ

found that the record did not reflect any episodes of

decompensation of extended duration. Id.

Based on all of the foregoing, the ALJ concluded that

Gagnon’s mental impairments were not severe, and that Gagnon was

not under a disability from March 15, 2012, through the date of

the decision. Accordingly, the ALJ concluded his analysis at

step two, and did not progress to the remaining steps of the

disability evaluation process.

Discussion

Claimant challenges the ALJ’s decision, asserting that he

erred in finding that Gagnon does not have severe mental health

impairments. The Acting Commissioner disagrees.

It is well established in this circuit “‘that the Step 2

severity requirement is ... to be a de minimis policy, designed

to do no more than screen out groundless claims.’” McQuaid v.

11 Colvin, No. 15-CV-08-SM,

, at *6 (D.N.H. Nov. 2,

2015) (quoting McDonald v. Sec'y of Health & Human Servs.,

(1st Cir. 1986)).

Under Social Security Ruling (“SSR”) 85–28, “a finding of ‘non-severe’ is only to be made where ‘medical evidence establishes only a slight abnormality or combination of slight abnormalities which would have no more than a minimal effect on an individual's ability to work.’” McDonald,

(quoting SSR 85–28,

, at *3 (S.S.A. 1985)). Thus, a proper analysis at step two should “do no ‘more than allow the [Acting Commissioner] to deny benefits summarily to those applicants with impairments of a minimal nature which could never prevent a person from working.’”

at 1125 (quoting Baeder v. Heckler,

(3d Cir. 1985)) (emphasis added).

McQuaid,

, at *6. But, as this court has

previously stated, an error at step two may, under certain

circumstances, be harmless:

Typically, arguments of the sort advanced by claimant can be resolved fairly easily. Provided the ALJ continues the sequential analysis and considers those impairments previously deemed “not severe” later in the analysis, this court has consistently held that any error at step two was harmless. See, e.g., Chabot v. U.S. Soc. Sec. Admin., No. 13-CV-126-PB,

, at *9 (D.N.H. May 20, 2014) (collecting cases). Here, however, because the ALJ concluded that none of claimant's impairments was severe, [he] ended [his] analysis and concluded that claimant was not disabled. Consequently, the court must carefully scrutinize [his] step two conclusion.

Kalloch v. Colvin, No. 14-CV-520-SM,

, at *5

(D.N.H. Mar. 24, 2016). While the ALJ’s Step Two discussion is

12 detailed and thorough, he erred in finding that Gagnon had not

met the minimal showing required at step two.

The ALJ’s determination is problematic for several reasons.

First, the ALJ largely disregarded the majority of the medical

opinions in the record, including the opinions of Gagnon’s

treating physicians and the opinion of the state medical

consultant. Instead, the ALJ focused his analysis on statements

Gagnon made at appointments with those providers. From those

statements, the ALJ drew independent conclusions that Gagnon’s

mental health impairments imposed no more than a minimal effect

on his ability to work. That is impermissible. See Manso-

Pizarro v. Sec’y of Health & Human Servs.,

(1st

Cir. 1996) (“With a few exceptions (not relevant here), an ALJ,

as a lay person, is not qualified to interpret raw data in a

medical record.”).

An obvious illustration of the point is the ALJ’s treatment

of the medical reports of James Wood, LCMHC, with whom Gagnon

participated in group therapy for anger management. 2 The ALJ

noted the following:

2 In his order, the ALJ indicated that Gagnon was a “no show” at his scheduled June 11, 2013, appointment with Wood. Admin. Rec. at 25. However, that finding is contradicted by the record, which reflects Gagnon’s attendance (see admin. rec. 13 On July 16, 2013, Mr. Wood noted that the claimant enjoyed being confrontational and “being right,” was defensive when asked about his need to have the last word, but was also able to re-orient to the group and was “contributing well with good insight.” On July 30, 2013, Mr. Wood noted that the claimant requested to leave the group until the summer was over “so he can make some money when the weather is good.” These observations are not indicative of disability, nor are they indicative of severe mental health impairment.

Admin. Rec. at 25 (citations omitted). It is not entirely clear

what the ALJ was relying upon in concluding that Mr. Wood’s

observations were “not indicative of disability” or “severe

mental health impairment.” What is clear, however, is that,

while an ALJ is “not ‘precluded from rendering common-sense

judgments about functional capacity based on medical findings,’”

“the ALJ cannot ‘overstep the bounds of a lay person’s

competence and render a medical judgment.’” George v. Astrue,

No. 11-cv-356-PB,

, at *8 (D.N.H. Jun. 7, 2012)

363), as well as the parties’ joint statement of facts (see document no. 12, p. 11).

During the June 11, 2013, appointment, Wood noted that Gagnon’s mood/affect were “variable, impulsively exaggerated,” his thought process and orientation was “narcissistic” and, regarding Gagnon’s behavior/functioning, recorded: “[Gagnon is] reporting [that he is] resisting being open to other people, which is anathema to him, naturally, yet he is trying to do his best[;] his resistance was validated as his comfort zone is very small[;] stress level is high for Jay.” Admin. Rec. at 363.

14 (quoting Gordils v. Sec’y of Health & Human Servs.,

(1st Cir. 1990)). 3

The ALJ’s conclusions are also doubtful given: (1) that

they are inconsistent with the majority of the medical opinions

in the record; and (2) there are multiple factual errors and

inconsistencies reflected in the ALJ’s order. The clearest

example is the ALJ’s treatment of Dr. Marsh’s opinion. Dr.

Marsh opined that Gagnon had marked limitations in his ability

to maintain attention and concentration for extended periods, to

perform activities within a schedule and maintain regular

attendance, to work in coordination with or proximity to others

without being distracted by them, to accept instruction and

respond appropriately to criticism from supervisors, and to get

along with co-workers or peers without distracting them or

exhibiting behavior extremes. Admin. Rec. at 375-77. Dr. Marsh

further opined that Gagnon’s symptoms included:

significant emotional dysregulation and mood swings, anger, irritability, hostility, and tremendous interpersonal difficulties. Minor incidents [could] result in rage, impulsivity, and inappropriate behavior. He has road rage, numerous tickets, threatens people, and has a history of assaultive 3 Another example is the ALJ’s determination that Gagnon had mild impairment with respect to activities of daily living and social functioning “due to lack of motivation.” Admin. Rec. at 26 (emphasis added). The ALJ cites no medical evidence or opinions in the record that support of his determination that Gagnon suffers from a “lack of motivation.” 15 behavior. He is unable to spend much time with others and clearly could not function in a work setting.

Admin. Rec. at 380.

In determining that Dr. Marsh’s opinion warranted little

weight, the ALJ noted that Marsh had seen Gagnon only three

times before completing her evaluation, and that the symptoms

she reported were not consistent with the record. The ALJ is

correct that Dr. Marsh had seen Gagnon only three times before

rendering her evaluation. But, with respect to the ALJ’s

determination concerning the purportedly inconsistent record,

the Acting Commissioner concedes that “the relevance of some of

the evidence” the ALJ cited in support “was less clear.”

Document No. 10-1, p. 12. For example, the ALJ discounted Dr.

Marsh’s opinions, in part, because he found that Dr. Marsh’s

“assessment that the claimant was working on anger management

was unfounded.” Admin. Rec. at 25. That determination,

however, was premised on the ALJ’s incorrect finding that Gagnon

had not attended the June 11, 2013, appointment. Admin. Rec. at

25; see supra, note 2.

The ALJ’s decision contains several other errors. For

example, the ALJ gave little weight to Dr. Stein’s 4 opinions.

4 The ALJ referred to Dr. Stein as “Dr. Stearn” at various points in his order. See, e.g., Admin. Rec. at 27. 16 This was, in part, because the ALJ found that Dr. Stein’s

conclusion – that Gagnon had “marked limitation” in maintaining

concentration for extended periods because Gagnon could be

“intermittently consumed by irrational intense anger” – was not

supported by the record. Admin. Rec. at 27 (quoting Admin. Rec.

at 356). But, as the Acting Commissioner concedes, the record

“is replete with examples of [Gagnon] overreacting to mundane

situations.” Document No. 10-1, at p. 12 n.7. Indeed, at the

hearing, Gagnon testified that he had recently gotten into an

altercation at McDonald’s with another customer who cut him in

line; Gagnon “smacked [the customer] upside the head with a

McDonald’s tray.” 5 Admin. Rec. at 49.

The ALJ also erroneously interpreted the medical opinion

upon which he most heavily relied: Dr. Harriot’s report. The

ALJ misread Dr. Harriott’s checked assessment of Gagnon’s

functions. For each category, daily activities, social

interactions, and task performance, Dr. Harriott was given the

5 The ALJ also discounted Dr. Stein’s opinion because he saw Gagnon only “three times” prior to completing his functional evaluation. As the Acting Commissioner points out, Dr. Stein initially completed the functional evaluation at Gagnon’s January 25, 2013, appointment, at which point he had only met with Gagnon three times. Admin. Rec. at 359. But, Dr. Stein and Gagnon updated the functional evaluation at Gagnon’s appointment on January 28, 2013, at which point Dr. Stein had met with Gagnon four times. Id. 17 option to check a box assessing “degree of functional loss” as:

“none,” “slight,” “moderate” or “marked.” For each category,

Dr. Harriott checked that Gagnon had “slight” or “seldom”

functional loss. See Admin. Rec. at 245-46. The ALJ

interpreted those check marks as indicating “none-to-slight” or

“none-to-seldom” functional loss in each category. See Admin.

Rec. at 24, 26-27. While that may seem a minor misconstruction,

it bears notice, given the ALJ’s substantial reliance on Dr.

Harriot’s report.

Finally, the ALJ relied heavily on Gagnon’s work history in

his analysis. See, e.g., Admin. Rec. at 26-27 (“I note that

[claimant] has worked consistently above the substantial gainful

activity level 1994 through 2008, 2010 and 2011. . . . This work

history does not support the claimant’s inability to work with

others.”); see also Admin. Rec. at 27 (noting that Dr. Stein’s

observation that claimant could be consumed by anger was

“especially not supported by the work history;”); id. at 28

(noting that Dr. Marsh’s opinion is not supported by Gagnon’s

work history). The ALJ’s reliance was problematic because the

work history discussed largely predated Gagnon’s alleged onset

date. While Gagnon did report that his difficulties in getting

along with others dated back to childhood, there is also

evidence in the record suggesting that Gagnon’s symptoms were

18 becoming progressively worse. For instance, Dr. Stein’s initial

evaluation reports: “[Gagnon] was referred by his friend’s

landlord’s concern about his increasing reclusive isolation and

self neglect. He reports lifelong difficulties in

socialization, schooling, occupational functioning and

consequently increasing alienation. . . . Heretofore he has not

seen himself as ill or defective, except insofar as other people

recurrently have conveyed his functional and interpersonal

difficulties to him.” Admin. Rec. at 234 (emphases added); see

also Admin. Rec. at 359 (Dr. Stein’s Functional Evaluation:

Gagnon’s “[symptoms and functional limitations described in

questionnaire developed in] 1982 or 1983, age 6 or 7, [and]

progressively worse since.”) (emphasis added). While the ALJ

may consider all evidence in the record – including Gagnon’s

pre-onset work history – it was improper to rely so heavily on

Gagnon’s pre-onset work history while failing to acknowledge

evidence in the record suggesting that Gagnon’s mental

impairments were progressive in nature.

Taken alone, these factual errors might not be significant

enough to warrant remand. However, viewed in the aggregate, the

collective effect undermines a conclusion that the ALJ carefully

considered the factual evidence in the record. See Renaudette

v. Astrue,

(D. Mass. 2007) (“the ALJ's

19 decision is riddled with factual errors and misstatements. The

cumulative effect of these mistakes undermines any confidence

either that the evidence in the plaintiff's case has been fully

and fairly considered or that the ALJ's decision was supported

by substantial evidence.”)

As discussed above, in order to establish severity, Gagnon

“need only show that [his] impairment or combination of

impairments amounts to more than a ‘slight abnormality’ and has

more than a ‘minimal effect’ on [his] ability to perform work.”

Rascoe v. Comm'r of Soc. Sec.,

(D.

Mass. 2015) (quoting McDonald,

). Given that de

minimus burden, the ALJ’s seemingly independent assessment of

the medical data in the record, and the multiple factual

inaccuracies contained in the ALJ’s order, the court finds that

this matter must be remanded for clarification of the ALJ’s

findings.

Conclusion

For the foregoing reasons, as well as those set forth in

the claimant’s legal memorandum, claimant’s motion to reverse

the decision of the Acting Commissioner (document no. 8) is

granted, to the extent he seeks a remand for further

proceedings. The Acting Commissioner’s motion to affirm her

decision (document no. 10) is denied. 20 Pursuant to sentence four of

(g), the

decision of the ALJ dated December 18, 2013, is vacated and this

matter is hereby remanded for further proceedings consistent

with this order. The Clerk of the Court shall enter judgment in

accordance with this order and close the case.

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge August 10, 2016

cc: Bennett B. Mortell, Esq. Michael T. McCormack, Esq.

21