1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHELLE L. A.,1 Case No.: 3:23-cv-00147-VET

12 Plaintiff,

ORDER REGARDING JOINT

13 v. MOTION FOR JUDICIAL REVIEW

14 MARTIN O’MALLEY,2 [Doc. No. 11] 15 Defendant. 16 17 18 I. INTRODUCTION 19 Plaintiff seeks review of Defendant Commissioner’s denial of her application for 20 disability insurance benefits and supplemental security income. Doc. No. 1. Before the 21 Court is the parties’ Joint Motion for Judicial Review of Final Decision of the 22 Commissioner of Social Security (“Joint Motion”). Doc. No. 11. Therein, Plaintiff seeks 23 resolution of the following issues: (1) whether the Administrative Law Judge’s (“ALJ”) 24 residual functional capacity (“RFC”) determination is supported by substantial evidence 25

26 27 1 Partially redacted in compliance with Civil Local Rule 7.1(e)(6)(b). 2 Martin O’Malley, Commissioner of the Social Security Administration, is automatically 28 1 when he failed to assess Plaintiff’s mental impairments as severe; and (2) whether the 2 ALJ’s RFC determination is supported by substantial evidence given new evidence 3 submitted to the Appeals Council. Doc. No. 11 at 14. Having considered the parties’ 4 arguments, applicable law, and the record before it, and for the reasons discussed below, 5 the Court VACATES the Commissioner’s decision denying benefits and REMANDS for 6 further administrative proceedings consistent with this Order. 7 II. BACKGROUND 8 A. Procedural History 9 Pursuant to the Social Security Act, Plaintiff applied for disability insurance benefits 10 and supplemental security income on May 19, 2020, alleging disability commencing on 11 January 17, 2019. Administrative Record (“AR”) 196–197.3 The Commissioner denied the 12 application initially and on reconsideration. AR 125–129, 139–144. Plaintiff requested a 13 de novo hearing before an ALJ, and on December 2, 2021, the ALJ held a hearing. AR 14 146, 40–74. On January 27, 2022, the ALJ found that Plaintiff was not disabled because 15 she was able to perform past relevant work. AR 14–33. On December 8, 2022, the Appeals 16 Council declined review, rendering the ALJ decision the final decision of the 17 Commissioner. AR 1–4. On January 26, 2023, Plaintiff initiated this action seeking judicial 18 review of the ALJ’s decision. Doc. No. 1. The parties filed the Joint Motion on August 3, 19 2023. Doc. No. 11. 20 B. Summary of the ALJ’s Decision 21 The ALJ followed the Commissioner’s five-step sequential evaluation process to 22 determine whether Plaintiff was disabled. See 20 C.F.R. § 404.1520(a)(4). At step one, the 23 ALJ determined that Plaintiff had “not engaged in substantial gainful activity since January 24 17, 2019,” the alleged onset date. AR 19. At step two, the ALJ found that Plaintiff had the 25 following severe impairments: fibromyalgia, irritable bowel syndrome, lumbar 26 27 28 3 1 degenerative disc disease, and headaches. Id. In analyzing Plaintiff’s mental impairments 2 at step two, the ALJ considered the four areas of mental functioning commonly referred to 3 as the “paragraph B” criteria: 1) understanding, remembering, and applying information; 4 2) interacting with others; 3) concentrating, persisting, or maintaining pace; and 4) adapting 5 or managing oneself. AR 21–22 (citing 20 C.F.R. Part 404, Subpart P, Appendix 1). The 6 ALJ found no limitation in “interacting with others” and “mild” limitations in the 7 remaining three paragraph B criteria. AR 21–22. Based thereon, the ALJ concluded that: 8 The [Plaintiff’s] medically determinable mental impairments of major 9 depressive disorder, generalized anxiety disorder, and posttraumatic stress disorder, considered singly and in combination, do not cause more than 10 minimal limitation in [her] ability to perform basic mental work activities and 11 are therefore non-severe. 12 AR at 21. 13 At step three, the ALJ determined that Plaintiff did not have an impairment or 14 combination of impairments that met or was medically equivalent to those in the 15 Commissioner’s Listing of Impairments. AR 23. Before proceeding to step four, the ALJ 16 assessed Plaintiff’s RFC and found that she has the RFC to perform light work, with the 17 following limitations: (1) occasionally perform postural activities and (2) avoid work 18 environments that would expose her to concentrated cold, heat, vibration, pulmonary 19 irritants, or hazards. AR 25. The RFC included no mental limitations. Id. 20 As part of the RFC assessment, the ALJ considered the mental health opinions of 21 Dr. Ernest Banger, the psychological consultative examiner, and Dr. E. Campbell, the state 22 agency psychological consultant. AR 30–32. He found Dr. Banger’s opinion partially 23 persuasive, stating that Dr. Banger’s “moderate limitations” findings were inconsistent 24 with the totality of the evidence. AR 31. The ALJ found Dr. Campbell’s opinion 25 unpersuasive, citing examples in the record as the basis for concluding that “the record 26 does not support Dr. Campbell’s opinion as to mental limitations in the residual functional 27 capacity.” AR 31–32, 108–109. The ALJ also considered Plaintiff’s testimony on “mental 28 issues,” specifically testimony that she has memory loss and panic attacks one to three 1 times per week. AR 25. As part of his RFC analysis, the ALJ states that he took into 2 consideration statements and objective medical evidence regarding Plaintiff’s 3 fibromyalgia, irritable bowel syndrome, lumbar degenerative disease, and headaches, as 4 well as her asthma (which he determined to be non-severe). AR 32 (summarizing the 5 conditions considered by the ALJ). Although he refers to “previously discussed non-severe 6 impairments,” see AR 25, the ALJ does not list or expressly reference or analyze the mild 7 mental limitations he identified at step two. Nor does the ALJ discuss or incorporate by 8 reference his analysis of the paragraph B criteria at step two. Nonetheless, at step two, the 9 ALJ states that he “considered all the medically determinable impairments when 10 determining the [RFC] for [Plaintiff].” AR 22. 11 At step four, based on Plaintiff’s RFC, the ALJ found that Plaintiff could perform 12 past relevant work as an automobile salesperson, head animal keeper, retail store manager, 13 and restaurant manager. Id. The ALJ relied, in part, on the testimony of a Vocational Expert 14 (“VE”). Id. Having found that Plaintiff could perform past relevant work, the ALJ did not 15 continue to step five in the sequential evaluation process. 16 C. New Evidence Submitted to the Appeals Council 17 Following the ALJ’s decision, Plaintiff submitted to the Appeals Council a one-page 18 letter from Dr. Ray Mabaquiao, dated February 4, 2022 (“Mabaquiao Letter”). AR 13. 19 Therein, Dr. Mabaquiao opines that Plaintiff is “unable to physically perform work and 20 maintain employment due to her multiple medical problems.” Id. He states that Plaintiff 21 “spends the majority of her time at home laying down in bed” and relies on her mother to 22 do household chores as she is “unable to maintain her household.” Id. Dr. Mabaquiao also 23 indicates that “as far as [he] can tell,” Plaintiff suffers from “a type of spondyloarthropathy 24 SpA” that causes chronic spine pain and painful swollen stiff joints and is “possibly 25 associated with her chronic diarrhea.” Id. He details Plaintiff’s gastrointestinal problems 26 and then describes Plaintiff’s various treatments and challenges in treating her conditions. 27 Id. The Appeals Council concluded that the Mabaquiao Letter “does not show a reasonable 28 probability that it would change the outcome of [the ALJ’s] decision.” AR 2. 1 III. STANDARD OF REVIEW 2 A court may set aside the Commissioner’s denial of benefits “only if the ALJ’s 3 decision was not supported by substantial evidence in the record as a whole or if the ALJ 4 applied the wrong legal standard.” Coleman v. Saul, 979 F.3d 751, 755 (9th Cir. 2020); see 5 42 U.S.C. § 405(g). Substantial evidence is “more than a mere scintilla,” and “means only 6 . . . such relevant evidence as a reasonable mind might accept as adequate to support a 7 conclusion.” Biestek v. Berryhill, 587 U.S. 97, 103 (2019) (quoting Consolidated Edison 8 Co. v. NLRB, 305 U.S. 197, 229 (1938)); see also Lingenfelter v. Astrue, 504 F.3d 1028, 9 1035 (9th Cir. 2007) (substantial evidence is “more than a mere scintilla, but less than a 10 preponderance”). A court “must review the administrative record as a whole, weighing 11 both the evidence that supports and the evidence that detracts from the Commissioner’s 12 conclusion.” Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1998). 13 The Court may not impose its own reasoning to affirm the ALJ’s decision. Garrison 14 v. Colvin, 759 F.3d 995, 1010 (9th Cir. 2014). “If the evidence is susceptible to more than 15 one rational interpretation, it is the ALJ’s conclusion that must be upheld.” Ford v. Saul, 16 950 F.3d 1141, 1154 (9th Cir. 2020) (internal quotations omitted). Thus, “review of an 17 ALJ’s fact-finding for substantial evidence is deferential, and the threshold for such 18 evidentiary sufficiency is not high.” Id. at 1159 (internal quotations omitted) (quoting 19 Biestek, 587 U.S. at 103); Kitchen v. Kijakazi, 82 F.4th 732, 738 (9th Cir. 2023) (“Overall, 20 the standard of review is highly deferential.”). 21 Lastly, the Court will not reverse for harmless error. Marsh v. Colvin, 792 F.3d 1170, 22 1173 (9th Cir. 2015). “An error is harmless only if it is inconsequential to the ultimate 23 nondisability determination.” Lambert v. Saul, 980 F.3d 1266, 1278 (9th Cir. 2020) 24 (internal quotations omitted). 25 26 27 28 1 IV. DISCUSSION 2 A. Whether The ALJ’s RFC Determination Is Supported By Substantial 3 Evidence When He Failed To Assess Plaintiff’s Mental Impairments As Severe 4 5 In the context of this first issue, Plaintiff raises arguments that, in essence, present 6 two discrete questions. First, whether the ALJ erred at step two in finding that Plaintiff’s 7 mental impairments were not severe. Doc. No. 11 at 16–17. Second, whether the ALJ 8 subsequently erred by not considering all of Plaintiff’s impairments, including her non- 9 severe mental impairments, as part of the RFC assessment. Id. at 17–18. The Court 10 addresses each in turn. 11 1. Determination of Plaintiff’s Mental Impairments As Non-Severe 12 Step two of the Commissioner’s five-step evaluation process requires the ALJ to 13 determine whether an impairment is severe or not severe. See 20 C.F.R. §§ 404.1520(a), 14 416.920(a). “[A]n ALJ may find an impairment or combination of impairments ‘not severe’ 15 at step two only if the evidence establishes a slight abnormality that has no more than a 16 minimal effect on an individual’s ability to work.” Glanden v. Kijakazi, 86 F.4th 838, 844 17 (9th Cir. 2023) (citing Webb v. Barnhart, 433 F.3d 683, 686 (9th Cir. 2005)); see also 20 18 C.F.R. §§ 404.1520(c), 416.920(c). “In analyzing a mental impairment . . ., the Secretary 19 must consider the evidence in the case record - the mental status examination and 20 psychiatric history.” Corrao v. Shalala, 20 F.3d 943, 949 (9th Cir. 1994). 21 “[T]he step-two inquiry is a de minimis screening device to dispose of groundless 22 claims.” Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996) (citing Bowen v. Yuckert, 23 482 U.S. 137, 153–54 (1987)). The purpose is to identify at an early stage those claimants 24 whose medical impairments are so slight that it is unlikely they are disabled even if their 25 age, education, and experience is considered. Bowen, 482 U.S. at 153. The Court analyzes 26 step two by asking whether the ALJ had substantial evidence to find that the medical 27 evidence “clearly established” that Plaintiff did not have a severe mental impairment or 28 combination of impairments. Webb, 433 F.3d at 687; see also Glanden, 86 F.4th at 844. 1 The ALJ concluded that Plaintiff’s mental impairments were non-severe following 2 an analysis of the paragraph B criteria. AR 21. First, the ALJ found Plaintiff has a mild 3 limitation in understanding, remembering, or applying information. Id. He reaches this 4 conclusion based on Dr. Banger’s October 30, 2020 mental status examination (“October 5 2020 Exam”), showing that Plaintiff was “alert and oriented” with “normal naming and 6 repetition and normal fund of knowledge.” Id. (citing AR 974). Despite Plaintiff’s trouble 7 recalling objects after a 5-minute delay, the ALJ notes that she could “recall 3 out of 3 8 [objects] immediately, recall what she had for breakfast, recall her date of birth, name two 9 Presidents of the United States, and accurately state the number of days in a week and 10 months in year.” Id. The ALJ also cites Plaintiff’s ability to pay bills and handle her own 11 money. Id. 12 Next, the ALJ found no limitations in interacting with others. To support this finding, 13 he relies on Plaintiff’s reports that “she regularly socializes with others, including talking 14 on the telephone and video chatting; she gets along very well with authority figures; and 15 she has never lost a job due to issues getting along with others.” Id. (citing AR 289–297). 16 The ALJ also cites the October 2020 Exam, pointing to Plaintiff’s self-described 17 relationship with family and friends as “fair,” as well as her cooperative mood and “good” 18 eye contact. Id. (citing AR 974). Finally, he cites to Plaintiff’s reported activities, which 19 include giving vocal lessons. Id. (citing AR 1650). 20 The ALJ next found that Plaintiff has a mild limitation in concentrating, persisting, 21 or maintaining pace. Id. He notes that Plaintiff “could pay attention for 5 to 30 minutes at 22 a time; she does not finish tasks once she starts them; and she does not handle stress or 23 changes in routine well.” Id. (citing AR 289–297). Plaintiff also “could not perform Serial 24 [sevens] or spell ‘music’ forward or backward.”4 Id. (citing AR 974). Still, the ALJ 25

26 27 4 The ALJ states that Plaintiff “could not perform Serial 3’s” but in the next sentence states that she “was able to perform Serial 3’s.” AR 21. The record confirms that the 28 1 highlights again findings from the October 2020 Exam and cites Plaintiff’s April 2019 2 “continuous performance test for assessing attention and impulse control,” in which her 3 “Performance Index and Accuracy Index” and total scores were within “normal range.” 4 AR 21–22 (citing AR 378–383). He emphasizes Plaintiff’s ability to watch television and 5 read without difficulty, generally manage her finances, and drive, “which necessarily 6 requires a person to adhere to traffic signs and signals, maintain a vehicle in a lane of traffic, 7 respond to changes in traffic patterns, and either remember or follow directions.” Id. (citing 8 AR 289–297). 9 Finally, the ALJ found the Plaintiff has a mild limitation in adapting or managing 10 oneself. AR 22. Citing the April 2019 tests, the ALJ finds that Plaintiff “cares for her own 11 personal hygiene and uses detailed calendars and charts to manage her medications and 12 other medical-related issues.” Id. (citing AR 289–297). Plaintiff also can prepare simple 13 meals, with limitations on full meal preparation attributable to inflammation rather than 14 mental issues, and that she only required occasional help with household chores also due 15 to pain and inflammation rather than mental issues. Id. Additionally, the ALJ again notes 16 Plaintiff’s ability to drive a car and generally manage her own finances. Id. Lastly, the ALJ 17 cites to Plaintiff’s psychotherapy notes, which reference her ability to give voice lessons, 18 garden, and help an elderly couple. Id. (citing AR 1639, 1650). 19 Ultimately, the ALJ concludes that Plaintiff’s medically determinable mental 20 impairments are non-severe because they “cause no more than ‘mild’ limitation in any of 21 the functional areas and the evidence does not otherwise indicate that there is more than a 22 minimal limitation in the [Plaintiff’s] ability to do basic work activities.” AR 22 (emphasis 23 in original). The Court finds that this conclusion is not supported by substantial evidence. 24 25 26 initial reference to “Serial 3’s” is a typographical error that should read Serial “sevens,” 27 as Plaintiff was able to perform serial threes but unable to perform serial sevens. See AR 974 (“The claimant was not able to perform serial sevens. She was able to perform 28 1 As the ALJ acknowledges, Plaintiff suffers from major depressive disorder, 2 generalized anxiety disorder, and PTSD. While the ALJ focuses on certain findings in 3 Dr. Banger’s October 2020 Exam, he ignores others within the same report. For instance, 4 Dr. Banger found moderate limitations in Plaintiff’s ability to follow detailed instruction 5 and interact appropriately with the public, coworkers, and supervisors. AR 975. Dr. Banger 6 also notes that Plaintiff takes psychotropic medication and does not do household chores, 7 run errands, shop, or cook, observations the ALJ fails to mention. AR 972–973. Separately, 8 Dr. Campbell reported that Plaintiff was depressed/anxious, with sustained concentration 9 and persistence limitations. AR 115. He further found that Plaintiff had moderate 10 limitations in her abilities to (i) understand and remember detailed instructions, (ii) carry 11 out detailed instructions, and (iii) maintain attention and concentration for extended 12 periods. AR 115–116. Plaintiff’s psychotherapy records also show the severity rating for 13 her anxiety and major depressive disorder as moderate. See, e.g., AR 1642, 1647, 1654, 14 1688, 1694, 1755. Those same records show periods when Plaintiff is losing weight due to 15 not eating, describes her PTSD triggers, and document that Plaintiff occasionally 16 experiences suicidal thoughts. AR 1644, 1645, 1697, 1726. 17 Also, while the ALJ emphasizes activities like voice lessons and driving, her therapy 18 records also show periods when Plaintiff is often not giving voice lessons or driving. See, 19 e.g., AR 1645, 1650. Moreover, the ALJ seemingly faults Plaintiff for trying to lead a 20 normal life, like driving, talking to people on the phone, or getting along with authority 21 figures. “[A] disability claimant need not ‘vegetate in a dark room’ in order to be deemed 22 eligible for benefits.” Reddick, 157 F.3d at 722 (quoting Cooper v. Bowen, 815 F.2d 557, 23 561 (9th Cir. 1987)). Nor should disability claimants “be penalized for attempting to lead 24 normal lives in the face of their limitation.” Id.; see also Webb, 433 F.3d at 688 (“The mere 25 fact that a plaintiff has carried on certain daily activities, such as grocery shopping, driving 26 a car, or limited walking for exercise, does not in any way detract from [his] credibility as 27 to [his] overall disability. One does not need to be ‘utterly incapacitated’ in order to be 28 disabled.”). 1 In short, this evidence establishes that the combination of Plaintiff’s mental 2 impairments constitutes more than a “slight abnormality” and satisfies step two’s de 3 minimis standard. Smolen, 80 F.3d at 1290 (“At the step two inquiry, the ALJ must consider 4 the combined effect of all the claimant’s impairments on her ability to function, without 5 regard to whether each alone was sufficiently severe.”); Delgado v. Comm’r of SSA, 500 6 F. App’x 570, 570–571 (9th Cir. 2012) (finding a severe mental impairment at step two 7 when claimant had “fair to poor” ability to make personal and professional adjustments 8 and could maintain concentration for two-hour increments except during times of stress). 9 However, the Court finds that any error at step two was harmless. The ALJ also 10 concluded at step two that Plaintiff suffered from severe physical impairments, allowing 11 the sequential evaluation process to continue to the next steps. Hence, once Plaintiff 12 prevailed at step two, it made no difference for the ALJ’s ensuing analysis whether her 13 medically determinable mental impairments were previously considered “severe” since the 14 ALJ was required to consider all impairments—severe and non-severe—in his RFC 15 analysis. Loader v. Berryhill, 722 F. App’x 653, 655 (9th Cir. 2018); see also Buck v. 16 Berryhill, 869 F.3d 1040, 1048–49 (9th Cir. 2017) (“Step two is merely a threshold 17 determination meant to screen out weak claims. It is not meant to identify the impairments 18 that should be taken into account when determining the RFC. In fact, [i]n assessing RFC, 19 the adjudicator must consider limitations and restrictions imposed by all of an individual’s 20 impairments, even those that are not severe.”) (internal quotations and citation omitted); 21 Jennifer T. v. O’Malley, No. 23-cv-0357-MAA, 2024 U.S. Dist. LEXIS 18998, at *9–*10 22 (holding that ALJ’s finding that mental impairments were non-severe did not warrant 23 reversal because “the ALJ resolved the severity step in Plaintiff’s favor by finding that 24 Plaintiff did have other severe impairments,” and therefore “the classification of Plaintiff’s 25 mental impairments as non-severe could not have prejudiced her”) (internal citation 26 omitted). 27 28 1 2. Determination of Plaintiff’s Residual Functional Capacity 2 Plaintiff also contends that the ALJ erred in the RFC assessment, arguing that the 3 “RFC was devoid of any non-exertional limitations related to Plaintiff’s mental health.” 4 Doc. No. 11 at 18. The ALJ is not required to include every impairment in the RFC, but he 5 is required to consider each impairment, and in this regard, the ALJ erred. 6 The RFC is the maximum a claimant can do in the workplace despite his or her 7 limitations. 20 C.F.R. § 404.1545(a)(1). Between steps three and four of the sequential 8 analysis, the ALJ is required to assess all of a claimant’s impairments—including those 9 that are not “severe”—in combination as part of the RFC determination. See 20 C.F.R. 10 §§ 404.1545(a)(2), 416.945(a)(2). Therefore, “in assessing RFC, the adjudicator must 11 consider limitations and restrictions imposed by all of an individual’s impairments, even 12 those that are not ‘severe.’” Buck, 869 F.3d at 1049 (9th Cir. 2017). 13 “In determining a claimant’s RFC, an ALJ must consider all relevant evidence in the 14 record, including, inter alia, medical records, lay evidence, and the effects of symptoms, 15 including pain, that are reasonably attributed to a medically determinable impairment.” 16 Robbins v. Soc. Sec. Admin., 466 F.3d 880, 883 (9th Cir. 2006) (emphasis in original). In 17 assessing mental abilities specifically, the ALJ must consider the nature and extent of the 18 claimant’s mental limitations and restrictions to determine a claimant’s RFC “for work 19 activity on a regular and continuing basis.” 20 C.F.R. §§ 404.1545(c), 416.945(c). The ALJ 20 meets this burden “by setting out a detailed and thorough summary of the facts and 21 conflicting evidence, stating his interpretation thereof, and making findings.” Magallanes 22 v. Bowen, 881 F.2d 747, 751 (9th Cir. 1989) (quoting Cotton v. Bowen, 799 F.2d 1403, 23 1408 (9th Cir. 1986)). The Court will affirm an ALJ’s determination of a claimant’s RFC 24 “if the ALJ applied the proper legal standard and his decision is supported by substantial 25 evidence.” Bayliss v. Barnhart, 427 F.3d 1211, 1217 (9th Cir. 2005). 26 Here, in formulating the RFC, the ALJ addresses Dr. Banger’s October 2020 Exam 27 and Dr. Campbell’s December 2020 psychological assessment. AR 30–32 While the ALJ 28 analyzes the psychological assessments in detail, there is no discussion of his own findings 1 at step two regarding Plaintiff’s mild mental limitations. Specifically, after concluding at 2 step two that Plaintiff had mild mental limitations in three of the four broad functional 3 areas, see AR 21–22, the ALJ failed to discuss or analyze how these mild mental limitations 4 factored into the RFC determination. Hutton v. Astrue, 491 F. App’x 850, 851 (9th Cir. 5 2012) (holding that ALJ was required to consider the claimant’s PTSD and erred by 6 disregarding his own finding that claimant’s nonsevere PTSD caused some “mild” 7 limitations in the areas of concentration, persistence, or pace); Loader, 722 F. App’x at 8 654–55 (“Once past Step 2, the ALJ was required to consider [the claimant’s] depression 9 as a medically determinable impairment, even if it was not found to be severe.”). 10 Moreover, the ALJ’s boilerplate statement that he “considered all the medical 11 determinable impairments when determining” the RFC, see AR 22, does satisfy the 12 requirement that he provide a detailed RFC assessment. See Carlson v. Berryhill, No. 18- 13 cv-03107-LB, 2019 U.S. Dist. LEXIS 38893, at *49 (N.D. Cal. Mar. 10, 2019) (holding 14 that ALJ erred by failing to “explain that he had considered the mild mental limitations or 15 nonsevere impairments and offered only boilerplate language that the plaintiff’s RFC” 16 reflected the degree of limitation found in his “‘paragraph B’ mental function analysis”); 17 Barrera v. Berryhill, No. CV 17-07096-JEM, 2018 U.S. Dist. LEXIS 151317, at *14 (C.D. 18 Cal. Sep. 5, 2018) (finding that ALJ erred by not saying she had considered mild limitations 19 or non-severe impairments and offering only boilerplate language that she had considered 20 “all symptoms”). In sum, the ALJ erred by failing to address Plaintiff’s non-severe mental 21 impairments, and specifically the mild mental limitations he found, in formulating 22 Plaintiff’s RFC. See Hutton, 491 F. App’x at 851; Kitty S. v. Kijakazi, No. EDCV 21- 23 00390-JEM, 2022 U.S. Dist. LEXIS, at *5–7 (C.D. Cal. June 13, 2022) (finding reversible 24 error when the ALJ made “mild step two paragraph B findings” but did not discuss 25 claimant’s non-severe mental impairments at later steps, “in particular in formulating 26 RFC”); Victor R. v. O’Malley, No. 23-cv-00501-GPC-BGS, 2024 U.S. Dist. LEXIS 18120, 27 at *15 (S.D. Cal. Feb. 1, 2024) (finding error when the ALJ did not address four mild 28 1 limitations in the RFC determination), report and recommendation adopted by 2024 U.S. 2 Dist. LEXIS 52972 (S.D. Cal. Mar. 25, 2024). 3 Furthermore, this error was not harmless. At step four, the ALJ concluded that 4 Plaintiff was capable of performing past relevant work as an “automobile salesperson,” 5 “retail store manager,” “retail store manager and restaurant manager,” and “head animal 6 keeper.” AR 32. These occupations have specific vocational preparation times (“SVP”) of 7 6 and 7, meaning that they are skilled occupations. SSR 00-4p, 2000 SSR LEXIS 8 (jobs 8 with SVP ratings of 5 to 9 are skilled work); see also AR 67–68. An RFC that considers 9 Plaintiff’s mild mental limitations may be inconsistent with Plaintiff’s past relevant work. 10 See, e.g., Victor R., 2024 U.S. Dist. LEXIS 18120, at *16 (not harmless error when the ALJ 11 found claimant could perform past relevant work without considering mild mental 12 limitations); David Allan G. v. Comm’r of SSA, No. 21-cv-00162-DKG, 2023 U.S. Dist. 13 LEXIS 43084, at *6 (D. Idaho Mar. 10, 2023) (not harmless error because it was unclear 14 whether Plaintiff could perform past relevant work despite mild mental limitations); 15 Carlson, 2019 U.S. Dist. LEXIS 38893, *50 (“[T]he court cannot determine what would 16 have happened had the ALJ considered the plaintiff’s mild mental impairments when 17 assessing the RFC or how the [VE] would have testified had that limitation been included 18 in the hypotheticals posed.”). 19 Also, the ALJ did not include any mild mental limitations in hypothetical questions 20 to the VE at the December 2, 2021 hearing. The ALJ included moderate mental limitations 21 in one hypothetical, and the VE responded that such limitations are the “preclusive factor 22 that eliminates all of [Plaintiff’s] past work as they are skilled occupations.” AR 68. Instead 23 of posing the hypothetical again with “mild” mental limitations, the ALJ posed a 24 hypothetical “without the mental limitations.” AR 69. In this scenario, the VE confirmed 25 that the hypothetical person could perform Plaintiff’s past relevant work. AR 69. In a final 26 hypothetical, which assumed certain physical and environmental limitations, the ALJ 27 added the following limitation: “due to problems, primarily physical, but occasionally 28 mental,” the hypothetical person would be off task for periods during the day that would 1 equal about fifteen percent of a workday. AR 71 (emphasis added). The VE testified that 2 this additional limitation would have a “preclusive effect” — “[t]here would be no jobs.” 3 Id. 4 The VE’s testimony confirms that, depending on the severity and/or type of mental 5 limitation, such limitations can have a significant impact on the ability to perform certain 6 jobs, including potentially Plaintiff’s past relevant work. And at this juncture, it is unclear 7 how Plaintiff’s mild mental limitations would impact her ability to perform such jobs. 8 Under these circumstances, the Court cannot conclude that the ALJ’s error in failing to 9 consider Plaintiff’s mild mental limitations in the RFC assessment was harmless. 10 B. Whether There is a Reasonable Possibility the Mabaquiao Letter Would 11 Change The Outcome 12 A claimant may submit new and material evidence for consideration by the Appeals 13 Council. Brewes v. Comm’r of SSA, 682 F.3d 1157, 1162 (9th Cir. 2012); see also 20 C.F.R. 14 § 404.970(a)(5). The Appeals Council will review a case if the new evidence relates to the 15 period on or before the ALJ’s decision and there is a “reasonable probability” the new 16 evidence would change the outcome of the ALJ’s decision. 20 C.F.R. § 404.970(a)(5). 17 Here, the Appeals Council considered the Mabaquiao Letter, but concluded that 18 there was no reasonable probability it would change the outcome.5 AR 2. Plaintiff argues 19 that this conclusion was in error. Doc. No. 11 at 23. The Court will remand if the 20 Mabaquiao Letter “relates to the relevant time period and there is a reasonable possibility 21 [it] would have changed the [ALJ’s] decision.” Mengistu v. Colvin, 537 F. App’x 724, 725 22 (9th Cir. 2013). 23 24

25 5 Because the Appeals Council considered the Mabaquiao Letter, it is part of the 26 administrative record the Court now reviews. AR 2; Brewes, 682 F.3d at 1164 27 (“[E]vidence submitted to and considered by the Appeals Council is not new but rather is part of the administrative record[.]”); Wischmann v. Kijakazi, 68 F.4th 498, 504 (9th 28 1 First, Dr. Mabaquiao explains that he has treated Plaintiff for over three years and 2 opines that she has been unable to perform any work for the last two and a half years. Id. 3 Thus, the Mabaquiao Letter relates to the relevant time period. Next, the Mabaquiao Letter 4 states that Plaintiff spends the majority of her time at home laying down in bed, that she 5 cannot do household chores like laundry or cooking, that she lives with her mother due to 6 her inability to maintain her household, and that she was prescribed an electric scooter for 7 mobility because she cannot walk a block. Id. The ALJ already considered this information. 8 Based on Plaintiff’s testimony, the ALJ was aware that Plaintiff had difficulty walking, 9 was prescribed a scooter, lived with her mother because she cannot clean her home, and 10 that she spends 85% of her day reclining or laying down. AR 54–55, 65. The ALJ also 11 acknowledged Plaintiff’s limitations regarding cooking and laundry in his decision. AR 22. 12 The Mabaquiao Letter goes on to detail Plaintiff’s chronic pain in her spine, joints, 13 and limbs, requiring pain clinic visits and, “as far as [Dr. Mabaquiao] can tell,” Plaintiff 14 has a type of spondyloarthropathy SpA. AR 13. The Mabaquiao Letter further notes that 15 Plaintiff has elevated markers of inflammation and that the spondyloarthropathy is possibly 16 associated with her chronic diarrhea. Id. Again, the ALJ was aware of these issues at the 17 time of his decision. Plaintiff’s representative laid out many of Plaintiff’s physical 18 impairments at the hearing, including spondyloarthropathy, diarrhea, and inflammation. 19 AR 43. The ALJ also acknowledged Plaintiff’s pain, inflammation, and diarrhea issues in 20 his decision. AR 22, 28. While the ALJ does not specifically address spondyloarthropathy 21 in his decision, Plaintiff alleged the condition directly in her claim for benefits and the ALJ 22 considered all the symptoms described above. AR 125. 23 Lastly, the Mabaquiao Letter sets out in detail Plaintiff’s purported gastrointestinal 24 issues related to weight loss, chronic nausea preventing use of oral medication, potential 25 malnutrition, numbness, and decreased balance. AR 13. The ALJ heard testimony 26 regarding Plaintiff’s purported weight loss, malnourishment, and being underweight. AR 27 43, 54–55. The ALJ also directly addresses Plaintiff’s reported issues with balance in his 28 decision. AR 25, 26. The ALJ did not directly address or hear testimony regarding chronic 1 nausea or numbness, but the administrative record repeatedly documents Plaintiff’s nausea 2 issues. AR 575, 668, 1114, 1118, 1270; see Howard v. Barnhart, 341 F.3d 1006, 1012 (9th 3 Cir. 2003) (“[I]n interpreting the evidence and developing the record, the ALJ does not 4 need to discuss every piece of evidence.”). 5 The only information in the Mabaquiao Letter that does not otherwise appear in the 6 administrative record is Dr. Mabaquiao’s report that Plaintiff “has some numbness in her 7 feet and legs[.]” AR 13. Plaintiff denied numbness in her medical reports. See, e.g., AR 8 574, 1057, 1061, 1066, 1070. Thus, this represents the only “new” information in the 9 Mabaquiao Letter. However, Dr. Mabaquiao does not connect this short and vague 10 description to a particular diagnosis or impairment or identify any associated functional 11 limitations. He states instead: “I wonder if [Plaintiff] has malnutrition as well since she has 12 numbness in her feet and legs and decreased balance such that she has had falls.” AR 13. 13 In the absence of any diagnostic records, there is no reasonable possibility that this vague 14 and non-conclusive statement would change the outcome of the ALJ’s decision. 15 Notably, Plaintiff places much significance on the Mabaquiao Letter to the extent it 16 confirms prescription of an electric scooter. Doc. No. 11 at 24. However, the ALJ did not 17 reject the representation that Plaintiff was prescribed a scooter, but rather the suggestion 18 that it was medically necessary. AR 29. Further, the assertions in the Mabaquiao Letter do 19 not cure the primary reason for the ALJ rejecting Dr. Mabaquiao’s opinion, namely that 20 the opinion was not supported by his own treatment records or imaging studies and was 21 inconsistent with pain management records. AR 29–30. Critically, Plaintiff does not 22 challenge the ALJ’s conclusion that Dr. Mabaquiao’s opinion was unpersuasive. 23 In short, given the information conveyed in the Mabaquiao Letter, the majority of 24 which was already considered and analyzed by the ALJ, the Mabaquiao Letter does not 25 provide a basis for remand. 26 V. CONCLUSION 27 Based on the foregoing, the Court VACATES the Commissioner’s decision denying 28 benefits and REMANDS for further proceedings consistent with this Order. Accordingly, 1 |} IT IS HEREBY ORDERED that judgment be entered vacating the decision of the 2 ||Commissioner of Social Security and remanding this matter for further administrative 3 || proceedings. The Clerk of the Court is directed to close this action. 4 IT IS SO ORDERED. [ r= cay 6 Dated: September 30, 2024 7 Honorable Valerie E. Torres United States Magistrate Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17