Acero v. Berryhill

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 RICARDO A., Case No.: 3:19-cv-00846-AHG 12 Plaintiff, ORDER RESOLVING JOINT MOTION FOR JUDICIAL REVIEW 13 v. AND REMANDING FOR 14 ANDREW SAUL, IMMEDIATE AWARD OF Commissioner of Social Security, BENEFITS [15] Defendant. 16 [ECF No. 13] 17 On November 26, 2019, Ricardo Acero (“Plaintiff”) and Andrew Saul 18 (Commissioner of Social Security) (“Commissioner”) filed a Joint Motion for Judicial 19 Review of Final Decision of the Commissioner of Social Security (“Joint Motion”) 20 pursuant to 42 U.S.C. § 405 (g), seeking judicial review of a decision by the Commissioner 21 of Social Security denying Plaintiff’s application for a period of disability and disability 22 insurance benefits. ECF No. 13. 23 After a thorough review of the parties’ submissions, the administrative record, and 24 applicable law, the Court REVERSES the Commissioner’s denial of disability insurance 25 benefits and REMANDS for the calculation and award of benefits. 26 \\ 27 \\ [28] 1 I. PROCEDURAL BACKGROUND 2 On October 26, 2015, Plaintiff filed an application for a period of disability and 3 disability insurance benefits (“DIB”) under Title II of the Social Security Act, alleging 4 disability beginning October 1, 2012. See Certified Administrative Record (“AR”) 43, ECF 5 No. 8-2. Plaintiff’s application was initially denied on March 21, 2016. AR 83-93. After 6 Plaintiff retained an attorney, his application was again denied upon reconsideration on 7 April 29, 2016. AR 94-103, 112. Plaintiff timely requested a hearing before an 8 Administrative Law Judge (“ALJ”) on May 10, 2016, and the hearing was held before the 9 ALJ on January 9, 2018. AR 119-120, 61-82. 10 On April 4, 2018, the ALJ issued an unfavorable decision, finding Plaintiff was not 11 disabled as defined by the Social Security Act, and accordingly denying disability 12 insurance benefits. AR 40-56. The Appeals Council affirmed the ALJ’s decision on 13 March 27, 2019, (AR 1-6), making the ALJ’s opinion the final decision of the 14 Commissioner. See 42 U.S.C. § 405 (h). On May 6, 2019, Plaintiff timely commenced the 15 instant appeal seeking judicial review of the Commissioner’s final decision pursuant to [16] 42 U.S.C. § 405 (g). ECF No. 1. 17 II. SUMMARY OF ALJ’S FINDINGS 18 The ALJ determined Plaintiff met the insured status requirements of the Social 19 Security Act through December 31, 2015. AR 46. Thereafter, the ALJ performed the 20 required five-step sequential evaluation process governing DIB claims under the Social 21 Security Act: (1) whether the claimant is involved in substantial gainful activity; 22 (2) whether the claimant has an impairment or combination of impairments that is “severe”; 23 (3) whether the claimant’s impairments meet or equal one of the listed impairments; 24 (4) whether the claimant can still perform his past relevant work given his residual 25 functional capacity despite his impairment(s); and (5) if the claimant cannot perform past 26 relevant work, whether the claimant can perform other work that exists in significant 27 numbers in the national economy. See 20 C.F.R. § 404.1520 (a)(4). The five steps are 28 addressed in order, but the ALJ is not always required to go through all five steps of the 1 process. Specifically, an affirmative answer at steps one or four (whether the claimant is 2 currently engaged in substantial gainful activity or can perform past relative work), or a 3 negative answer at step two (whether the claimant has an impairment or combination of 4 impairments that is severe), would immediately lead to a finding of non-disability, and the 5 analysis would stop there. Conversely, an affirmative answer at step three (whether the 6 claimant’s impairments meet a listing) would immediately lead to a finding of disability, 7 also ending the analysis. Id. See also Garfield v. Schweiker, 732 F.2d 605 , 607 n.2 (7th Cir. 8 1984). 9 However, the ordinary five-step analysis is altered where, as here, there is medical 10 evidence of the claimant’s drug abuse or alcoholism. In that case, even if the ALJ has found 11 the claimant disabled under the five-step inquiry, the ALJ must also conduct a drug abuse 12 and alcoholism analysis (“DAA analysis”) to determine whether the claimant’s drug 13 addiction or alcoholism is a contributing factor material to the determination of disability. [14] 20 C.F.R. § 404.1535 (a). The key factor in the DAA analysis is whether the claimant would 15 still be found disabled if he stopped using drugs or alcohol, by evaluating which of the 16 claimant’s current physical and mental limitations upon which the disability finding was 17 based would remain if the claimant stopped his drug or alcohol use. [18] 20 C.F.R. § 404.1535 (b)(1)-(2). If those remaining limitations would not be disabling, the 19 ALJ will conclude the claimant’s drug or alcoholism is a “contributing factor material to 20 the determination of disability” and will accordingly find the claimant not disabled. Id. See 21 also Parra v. Astrue, 481 F.3d 742, 746-47 (9th Cir. 2007). However, the ALJ must 22 conduct the five-step inquiry without considering the impact of alcoholism or drug 23 addiction before turning to the DAA analysis. Bustamante v. Massanari, 262 F.3d 949 , 955 24 (9th Cir. 2001). 25 In the case at hand, at step one of the five-step process, the ALJ was required to 26 determine whether Plaintiff engaged in substantial gainful activity (“SGA”) from his 27 alleged disability onset date of October 1, 2012 through the date last insured of 28 December 31, 2015. 20 C.F.R. § 404.1520 (b). SGA is defined as work activity that is both 1 substantial and gainful. 20 C.F.R. § 404.1572 . “Substantial work activity is work activity 2 that involves doing significant physical or mental activities.” C.F.R. § 404.1572(a). 3 “Gainful work activity is work activity that you do for pay or profit.” C.F.R. § 404.1572(b). 4 The ALJ concluded Plaintiff did not engage in SGA from the alleged onset date through 5 the date last insured. AR 46. 6 At step two, the ALJ must determine whether Plaintiff has a medically determinable 7 impairment or combination of impairments that is “severe.” 20 C.F.R. § 404.1520 (c). A 8 “severe” impairment is one that significantly limits physical or mental ability to do basic 9 work activities. Id. The ALJ concluded the Plaintiff had the following “severe” 10 impairments: drug abuse disorder; mood disorder, not otherwise specified, with psychotic 11 and paranoid features; and degenerative disc disorder. AR 46. 12 At step three, the ALJ must determine whether Plaintiff’s impairment or 13 combination of impairments meets or medically equals the criteria of an impairment listed 14 in 20 CFR Part 404, Subpart P, Appendix I (“the listings”). The listings describe 15 impairments that the Social Security Agency (“SSA”) considers “severe enough to prevent 16 an individual from doing any gainful activity, regardless of his or her age, education, or 17 work experience.” 20 C.F.R. § 404.1525 (a). A claimant’s impairment may also be 18 considered “medically equivalent” to a listed impairment if it is at least equal in severity 19 and duration to the criteria of any listed impairment. 20 C.F.R. § 404.1526 (a). If a 20 claimant’s impairments meet or medically equal any of the listings, the ALJ will find the 21 claimant disabled. See 20 C.F.R. § 404.1520 (d). 22 Here, the ALJ concluded Plaintiff’s mental impairments met the listing in section 23 12.04 of Appendix I, which describes depressive, bipolar, and related disorders. AR 46. A 24 claimant’s impairment may meet listing 12.04 if the criteria of Paragraphs A and B or the 25 criteria of both Paragraphs A and C of the listing are met. In this case, the ALJ concluded 26 that Paragraph A of listing 12.04 was satisfied due to Plaintiff’s mood disorder 27 characterized by depressed mood, diminished interest in almost all activities, sleep 28 disturbance, decreased energy, feelings of guilt or worthlessness and difficulty 1 concentrating or thinking. AR 46. The ALJ also found Paragraph B to be satisfied because 2 the Plaintiff had “marked” limitations in three of the four categories of mental functioning: 3 interacting with others; concentrating, persisting, or maintaining pace; and adapting or 4 managing oneself.1 AR 47. Therefore, because Plaintiff’s impairments met a listing, the 5 ALJ found that Plaintiff was disabled at step three of the five-step inquiry. AR 47-48. 6 However, because there was medical evidence of Plaintiff’s drug abuse during the 7 claimed period of disability, the ALJ did not end the inquiry there, instead turning to the 8 requisite DAA analysis. AR 48. The SGA analysis at step one being unaffected, the ALJ 9 first returned to step two to consider whether Plaintiff would continue to have a severe 10 impairment or combination of impairments if he had stopped the substance abuse. The ALJ 11 answered that question in the affirmative, concluding that Plaintiff’s impairments of 12 degenerative disc disease and mood disorder, not otherwise specified, with psychotic and 13 paranoid features, would remain severe even without the drug use. AR 48. 14 At step three, the ALJ concluded that, if he had stopped the substance use, Plaintiff’s 15 impairments would no longer meet a listing. Specifically, the ALJ found that all of 16 Plaintiff’s limitations in the areas of mental functioning under Paragraph B of listing 12.04 17 would be reduced from marked to “mild” and “moderate,” thus no longer meeting the 18 criteria of the listing under both Paragraphs A and B. AR 49-50. The ALJ also found that 19 the Paragraph C criteria were not met. AR 50. Thus, because the ALJ determined that 20 Plaintiff’s impairments would not meet or medically equal a listing if he had stopped the 21 substance use, the ALJ proceeded to the next step of the DAA analysis. 22 Before considering whether Plaintiff could perform past relevant work at step four, 23 the ALJ must first determine Plaintiff’s residual functional capacity (“RFC”). 20 C.F.R. 24 § 404.1520(e). A claimant’s RFC is “. . . the most [the claimant] can still do despite [his] [27] 1 If a claimant has at least one extreme limitation or two marked limitations in any area of [28] 1 limitations.” 20 C.F.R. § 404.1545 (a)(1); Laborin v. Berryhill, 867 F.3d 1151, 1153 (9th 2 Cir. 2017). A claimant’s RFC is based on all relevant evidence in the case record. Id. 3 Based on his evaluation of the medical and opinion evidence in the record, the ALJ 4 determined that, if Plaintiff had stopped the substance use, through the date last insured, 5 Plaintiff would have the RFC “to perform medium work as defined in 20 C.F.R. 6 404.1567(c) except occasional contact with supervisors and co-workers and no public 7 contact.” AR 50. In reaching this conclusion, the ALJ found that although Plaintiff’s 8 medically determinable impairments could reasonably be expected to produce his alleged 9 symptoms, Plaintiff’s statements regarding the intensity, persistence, and limiting effects 10 of the symptoms of his mental impairments—i.e., hearing voices that told him to harm 11 himself, forgetfulness so severe that Plaintiff would forget to go to work or have to pull 12 over while driving to remember where he was going, inability to perform even simple work 13 without social interaction due to memory issues—were “not entirely consistent with the 14 objective medical and other evidence[.]” AR 51. 15 The ALJ gave a few reasons for this finding. First, the ALJ noted that despite 16 Plaintiff’s assertion that his mental impairment caused his termination from his last job in 17 October 2012, he waited three years (until October 2015) to seek mental health treatment. 18 AR 52. Second, the ALJ found that Plaintiff’s treatment records prior to October 2015 19 show appropriate mood and affect, normal insight, normal judgment, and normal or only 20 mildly impaired memory. AR 52 (citing to treatment records from the San Ysidro Health 21 Center between April and June 2015 concerning a head and back injury caused by a fall 22 from a ladder, as well as treatment records from Kaiser Permanente between November 23 2011 and May 2012, prior to Plaintiff’s alleged disability onset date). Third, the ALJ noted 24 that when Plaintiff first began mental health treatment only “a couple of months before the 25 date last insured[,]” he reported “only a 30-day period of sobriety” at that time, and that 26 the period of sobriety “occurred due to the claimant’s incarceration, which suggests his 27 incarceration was likely the reason for his sobriety.” AR 52-53. Finally, although the 28 treatment notes of Plaintiff’s treating psychiatrist, Dr. Gregory Paniccia, did tend to support 1 Plaintiff’s statements regarding the severity of his symptoms, the ALJ noted that Dr. 2 Paniccia’s records were internally inconsistent, and that Dr. Paniccia appeared not to 3 consider that Plaintiff’s substance abuse “was not in any sustained remission for the period 4 before his date last insured (December 31, 2015), and that his symptoms materially could 5 be attributed to his drug abuse disorder.” AR 52. Therefore, the ALJ did not fully credit 6 Plaintiff’s statements in determining the severity of Plaintiff’s mental limitations for 7 purposes of the RFC analysis. 8 Because the ALJ’s consideration of Dr. Paniccia’s opinion is central to Plaintiff’s 9 arguments in the joint motion, the Court will discuss that portion of the ALJ’s decision 10 discounting Dr. Paniccia’s opinion in more detail. 11 In his Mental Residual Functional Capacity Assessment (“MRFCA”) submitted in 12 connection with Plaintiff’s disability application, Dr. Paniccia opined that Plaintiff had 13 marked limitations in a number of areas of mental functioning, including two of the three 14 areas of functioning within the “understanding and memory” category, six of the eight 15 areas of functioning under “sustained concentration and persistence,” and two of the five 16 areas of functioning under “social interaction.” See AR 401-402. Dr. Paniccia also stated 17 that these limitations existed before Plaintiff’s date last insured of December 31, 2015. AR 18 402. In the narrative section of the MRFCA, Dr. Paniccia expounded on his opinions in 19 each area of social functioning. First, with respect to understanding and memory, 20 Dr. Paniccia stated that Plaintiff’s “mind goes blank in the middle of a sentence” and that 21 he would not be able to remember work-like locations/procedures or detailed instructions. 22 AR 403. In the area of sustained concentration and persistence, Dr. Paniccia opined that 23 Plaintiff would be limited to simple instructions, would not be able to maintain attention 24 or concentration for extended periods of time, would not be able to follow a schedule, 25 maintain regular attendance, or be punctual, could not sustain a routine without 26 supervision, and could not work in close proximity to others without being distracted due 27 to paranoia and hearing voices, and accordingly could not work a standard workday or 28 workweek at a consistent pace even with breaks. AR 403-404. In the social interaction area 1 of functioning, Dr. Paniccia posited that Plaintiff would have difficulty interacting with the 2 public, accepting instructions, or responding to criticism from supervisors due to his 3 paranoia and auditory hallucinations, and that his psychosis and behavior of pulling out his 4 arm and leg hair when anxious would distract coworkers. AR 404. Finally, in the area of 5 adaptation, Dr. Paniccia opined that Plaintiff would have difficulty negotiating changes in 6 the workplace or taking proper precautions because of a “psychotic level of anxiety,” and 7 would be somewhat limited in his ability to set realistic goals; nonetheless, Dr. Paniccia 8 suggested only moderate limitations in this area. AR 404. 9 As touched on above, the ALJ gave Dr. Paniccia’s opinions “little weight,” on the 10 basis that they “largely ignore the drug abuse issue.” AR 53. In particular, the ALJ found 11 that Dr. Paniccia’s treatment records “do not appear to consider the possibility that the 12 claimant’s drug abuse was not in remission and likely contributed in a material way to the 13 severity of the claimant’s symptoms before his date last insured.” AR 54. Moreover, 14 because Dr. Paniccia only began treating Plaintiff on October 23, 2015—approximately 15 two months before Plaintiff’s date last insured of December 31, 2015 and more than three 16 years after Plaintiff’s alleged disability onset date of October 1, 2012—the ALJ discounted 17 Dr. Paniccia’s assessment for the additional reason that it “speculates without foundation 18 as to the claimant’s mental status before the treating period.” AR 54. Therefore, the 19 majority of the mental limitations suggested by Dr. Paniccia were not incorporated into 20 Plaintiff’s RFC. Instead, the ALJ gave “substantial weight” to the assessments of the SSA’s 21 non-examining psychological consultants, which “found insufficient proof before the date 22 last insured of a disabling impairment without drug abuse.” AR 53. Accordingly, as already 23 explained, the ALJ found that all of Plaintiff’s mental limitations would be only mild or 24 moderate if he had stopped the drug use, and formulated Plaintiff’s RFC based on that 25 determination. 26 At step four, the ALJ had to determine whether, given his RFC, Plaintiff could 27 perform his relevant past work as an autobody repairer. See 20 C.F.R. § 404.1520 (f); AR 28 54. Based on the testimony of the vocational expert (“VE”) at the January 9, 2018 hearing 1 on Plaintiff’s application, the ALJ found that Plaintiff’s RFC would make him unable to 2 perform the autobody repairer job. AR 54; see also AR 74-75 (testimony of the vocational 3 expert that the autobody repairer job requires “a lot of contact with everybody, including 4 all the coworkers and supervisors and even customers[,]” and that someone with an RFC 5 limiting him to occasional contact with coworkers and supervisors and no public contact 6 whatsoever could not perform that work). 7 At step five, the burden shifted to the ALJ to determine whether Plaintiff could 8 perform any other work considering his RFC, capacity, age, education and work 9 experience. 20 C.F.R. § 404.1520 (g). To meet that burden, the ALJ must establish evidence 10 Plaintiff could perform other work that exists in significant numbers in the national 11 economy. 20 C.F.R. § 404.1560 (c). Here, based on the VE testimony and Plaintiff’s RFC, 12 the ALJ concluded that Plaintiff could perform jobs existing in the national economy, 13 including the jobs of laundry worker, hand packager, and garment marker. AR 55, 75. 14 Accordingly, the ALJ found that Plaintiff would not be disabled during the relevant time 15 period if he had stopped the substance use, and therefore Plaintiff’s substance use disorder 16 was a contributing factor material to the determination of disability. Consequently, the ALJ 17 found Plaintiff not disabled. 18 III. STANDARD OF REVIEW 19 The Court reviews the Commissioner’s decision to determine whether the ALJ’s 20 findings are supported by substantial evidence and whether the proper legal standards were 21 applied and, if so, the Court must affirm the Commissioner’s decision. See Batson v. 22 Comm’r of Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2004); Holohan v. Massanari, [23] 246 F.3d 1195, 1205 (9th Cir. 2001). 24 “Substantial evidence means more than a mere scintilla, but less than a 25 preponderance. It means such relevant evidence as a reasonable mind might accept as 26 adequate to support a conclusion.” Revels v. Berryhill, 874 F.3d 648, 654 (9th Cir. 2017) 27 (quoting Desrosiers v. Sec’y of Health & Human Servs., 846 F.2d 573, 576 (9th Cir. 1988)); 28 see also Richardson v. Perales, 402 U.S. 389, 401 (1971). In evaluating whether the 1 Commissioner’s decision is supported by substantial evidence on appeal, the Court must 2 review the record as a whole and consider adverse as well as supporting evidence. Green 3 v. Heckler, 803 F.2d 528, 529-30 (9th Cir. 1986). The ALJ is responsible for determining 4 credibility and resolving conflicts in medical testimony, and is also responsible for 5 resolving any ambiguities in the record. Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 6 1989). Where evidence is susceptible of more than one rational interpretation, the 7 Commissioner’s decision must be upheld. See Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 8 2007); Gallant v. Heckler, 753 F.2d 1450, 1453 (9th Cir. 1984). 9 The Court may also overturn the Commissioner’s denial of benefits if the denial is 10 based on legal error. Garcia v. Comm’r of Soc. Sec., 768 F.3d 925, 929 (9th Cir. 2014). 11 However, even if the Court finds the decision was based on legal error, a court may not 12 reverse an ALJ’s decision if the error is harmless, “which exists when it is clear from the 13 record that the ALJ’s error was inconsequential to the ultimate nondisability 14 determination.” Id. at 932 (internal quotations and citation omitted); see also Burch v. 15 Barnhart, 400 F.3d 676, 679 (9th Cir. 2005) (citation omitted). 16 IV. PARTIES’ POSITIONS 17 Plaintiff stipulates to the ALJ’s summary of the medical evidence, except the ALJ’s 18 statement that “Dr. Paniccia’s treatment records do not appear to consider the possibility 19 that the claimant’s drug abuse was not in remission and likely contributed in a material 20 way to the severity of the claimant’s symptoms before his date last insured.” ECF No. 13 21 at 2. Plaintiff argues there is insufficient evidence to support the ALJ’s decision that drug 22 abuse was a contributing factor material to the determination of disability. Id. Plaintiff’s 23 argument on this point is tied entirely to the ALJ’s treatment of the opinion of his treating 24 psychiatrist, Dr. Paniccia. 25 Plaintiff argues that, in making the determination on the materiality of Plaintiff’s 26 substance abuse to the disability determination, the ALJ failed to follow the “treating 27 physician rule.” This rule requires the ALJ to give controlling weight to a treating 28 physician’s opinion if it is “well-supported by medically acceptable clinical and laboratory 1 techniques” and is “not inconsistent with the other substantial evidence in the case record.” [2] Id. at 3-4 (quoting 20 C.F.R. § 404.1527 (c)(2)). Plaintiff cites to Ninth Circuit law that a 3 treating physician’s opinion may be rejected “only for ‘clear and convincing’ reasons 4 supported by substantial evidence in the record.” Orn v. Astrue, 495 F.3d 625, 632 (9th 5 Cir. 2007) (quoting Lester v. Chater, 81 F.3d 821, 830 (9th Cir. 1995)). See also Baxter v. 6 Sullivan, 923 F.2d 1391, 1396 (9th Cir. 1991). Plaintiff argues the ALJ did not meet this 7 standard, and instead “substituted his opinion of functioning” for the opinion of the treating 8 physician. ECF No. 13 at 4. 9 Arguing that the ALJ did not reject Dr. Paniccia’s opinion for clear and convincing 10 reasons here, Plaintiff challenges the ALJ’s “primary basis” for rejecting Dr. Paniccia’s 11 opinion, namely, Plaintiff’s history of substance use and the fact he was only thirty days’ 12 sober when Dr. Paniccia first treated Plaintiff in October of 2015. Id. Plaintiff argues that 13 Dr. Paniccia’s opinion should not have been discounted for that reason, because Dr. 14 Paniccia continued to treat Plaintiff for over two years prior to providing his opinion in 15 connection with Plaintiff’s benefits application in December 2017. Id. Plaintiff asserts that 16 he maintained sobriety throughout that period, which Dr. Paniccia would have known when 17 providing his MRFCA. Id. at 5. As for the ALJ’s finding that Dr. Paniccia did not appear 18 to consider the possibility that Plaintiff’s substance abuse was not in remission, Plaintiff 19 counters that “[a]lthough Dr. Paniccia’s records do not mention drugs, the absence of any 20 mention of drugs is a statement in itself. Plaintiff testified he is drug-free and has been 21 since his release from prison [in 2015].” Id. at 1-2. 22 Additionally, Plaintiff notes that during the initial five-step inquiry, the ALJ relied 23 on Dr. Paniccia’s opinions to support his findings of marked impairments in three of the 24 four categories of mental functioning under Paragraph B of listing 12.04, and to 25 accordingly conclude at step three that Plaintiff was disabled with the substance use 26 disorder. Id. at 3. However, Plaintiff notes that Dr. Paniccia’s opinions are dated 27 December 12, 2017, and January 10, 2018, “over two years after Plaintiff got sober.” Id. [28] 1 In sum, Plaintiff argues that the ALJ relied solely on Dr. Paniccia’s records to 2 determine Plaintiff was disabled while using drugs, discredited those same records in 3 finding that Plaintiff would not be disabled if the substance abuse stopped, and improperly 4 assigned little weight to the “uncontradicted” treating physician’s opinion, in violation of 5 the treating physician rule. ECF No. 13 at 1-4. 6 In response, Defendant asserts that Plaintiff has “fail[ed] to establish that the ALJ 7 committed reversible error in attributing little weight to Dr. Paniccia’s opinion.” ECF No. 8 13 at 4 (internal citation omitted). First, Defendant disagrees with Plaintiff’s assertion that 9 Dr. Paniccia’s opinion is uncontradicted. Id. at 9-10. Rather, the ALJ gave non-examining 10 physicians Dr. Mendelson and Dr. Weiss’s opinions “substantial” weight, because both 11 reviewed Plaintiff’s records and concluded there was “insufficient evidence of a disabling 12 mental impairment without drug abuse.” Id. Because Dr. Paniccia’s opinion is contradicted 13 by Dr. Mendelson and Dr. Weiss, Defendant contends the ALJ need not provide clear and 14 convincing reasons for assigning it little weight, since the Ninth Circuit has only applied 15 the “clear and convincing” standard to uncontroverted medical opinions of a treating 16 physician. Id. at 4 n.1. Rather, Defendant argues, the ALJ need only set forth “specific and 17 legitimate” reasons to reject a treating physician’s opinion. Id. at 4-5 (citing Chaudhry v. 18 Astrue, 688 F.3d 661, 671 (9th Cir. 2012)). Regardless, Defendant asserts that the ALJ’s 19 reasons suffice under either standard. ECF No. 13 at 4 n.1. 20 Specifically, the Commissioner argues that the ALJ gave four2 “specific and 21 legitimate reasons” why Dr. Paniccia’s opinion was properly assigned little weight: (1) Dr. [23] 2 In the Joint Motion, the Commissioner actually enumerates five reasons given by the ALJ [24] for rejecting Dr. Paniccia’s opinion. However, the third and fourth reasons are the same: 25 that Dr. Paniccia did not treat Plaintiff for the majority of the relevant time period, only beginning treatment three years after the alleged disability onset date, and that Dr. Paniccia [26] “did not begin treating Plaintiff until the tail end of Plaintiff’s eligibility period for DIB.” 27 ECF No. 13 at 7-8. Because the “relevant time period” is the time between Plaintiff’s alleged disability onset date and his date last insured, the Court has combined these reasons [28] 1 Paniccia’s treatment records are both internally inconsistent and inconsistent over time; 2 (2) the medical evidence is inconsistent with Dr. Paniccia’s assessment of marked 3 limitations in mental functioning; (3) Dr. Paniccia did not treat Plaintiff for the majority of 4 the relevant time period, beginning treatment three years after the alleged disability onset 5 date and only two months before the end date of Plaintiff’s eligibility period for DIB; and 6 (4) Dr. Paniccia did not appear to consider Plaintiff’s “longstanding history of drug abuse, 7 recent sobriety, and the impact this may have had on Plaintiff’s functioning.” ECF No. 13 8 at 5-8. In addition, the Commissioner argues that Plaintiff fails to challenge on appeal all 9 but one of the ALJ’s given reasons for assigning Dr. Paniccia’s opinion little weight (the 10 DAA analysis), and Plaintiff has thus waived any challenge to the uncontested reasons. Id. 11 at 9. 12 For the reasons discussed below, the Court finds the ALJ committed reversible error 13 in rejecting Plaintiff’s treating physician’s opinion. 14 V. DISCUSSION 15 Critical to the ALJ’s determination that substance abuse was a material contributing 16 factor to Plaintiff’s disability was the ALJ’s decision to assign “little weight” to treating 17 physician Dr. Paniccia’s opinion. The Court has reviewed the decision and concludes the 18 ALJ committed legal error in his analysis. Because the ALJ’s legal error impacted the 19 ALJ’s ultimate disability decision, the error warrants reversal of the ALJ’s decision. 20 A. The Treating Physician Rule 21 Plaintiff contends the ALJ’s decision to afford the opinion of treating physician, 22 Gregory Paniccia, M.D., “little weight” was legal error and not supported by substantial 23 evidence. ECF No. 13 at 2-4. A treating physician’s opinion is ordinarily entitled to 24 controlling weight because a treating physician “is employed to cure and has a greater 25 opportunity to know and observe the patient as an individual.” McAllister v. Sullivan, 888 26 F.2d 599, 602 (9th Cir. 1989). Specifically, the medical opinion of a claimant’s treating 27 physician is given “controlling weight” so long as it “is well-supported by medically 28 acceptable clinical and laboratory diagnostic techniques and is not inconsistent with the 1 other substantial evidence in [the plaintiff’s] case record.” 20 C.F.R. § 404.1527 (c)(2). 2 “The treating physician’s opinion is not, however, necessarily conclusive as to either a 3 physical condition or the ultimate issue of disability.” Magallanes v. Bowen, 881 F.2d 747 , 4 751 (9th Cir. 1989). 5 As a preliminary matter, the parties dispute whether Dr. Paniccia’s opinion is 6 contradicted or uncontradicted by another physician(s). Plaintiff claims that Dr. Paniccia’s 7 records were the only medical evidence in the record, and that his opinion “was the only 8 opinion considered.” ECF No. 13 at 2, 4. While unclear, it seems that Plaintiff later refines 9 this argument by asserting that Dr. Paniccia’s records constitute “the only evidence of 10 treatment prior to the Date Last Insured.” Id. at 4. Neither of these assertions is entirely 11 accurate. Dr. Paniccia’s treatment records were not the only medical evidence considered 12 by the ALJ, nor was his opinion the only one considered. As already discussed, the ALJ 13 also considered opinions of state agency psychological consultants, James Mendelson, 14 Ph.D. and Hillary Weiss, Ph.D (who did not treat Plaintiff, but who based their opinions 15 on all of the medical evidence of record), and cited to the treatment records of other medical 16 providers as evidence of Plaintiff’s mental state before October 2015, although those 17 records were not from mental healthcare providers. Nonetheless, it would be accurate to 18 say that Dr. Paniccia’s records are the only medical evidence from a treating source who 19 treated Plaintiff’s mental impairments. 20 In the SSA’s Disability Determination Explanation denying Plaintiff’s DIB 21 application at the initial level in March 2016, the SSA non-examining physician 22 Dr. Mendelson specifically addressed Dr. Paniccia’s records and diagnoses, stating, 23 “[Dr. Paniccia’s] records are not reliable in that they only cover a small portion of the time 24 leading up to his [date last insured of December 31, 2015], and are internally inconsistent.” 25 AR 91. Dr. Mendelson also gave the opinion, which the ALJ later included in his own 26 decision, that Dr. Paniccia “does not appear to have given much consideration to the 27 possibilities that the claimant is not in substance abuse remission and that his symptoms 28 could be also explained in terms of a Substance Induced Mood [Disorder] arising within 1 the context of an Antisocial Personality [Disorder], or that [drug addiction/alcoholism] 2 might be material to his case.” AR 91. At the reconsideration level, Dr. Weiss adopted the 3 initial decision upon review of the record, although she did not provide any independent 4 analysis of the reliability of Dr. Paniccia’s opinion. AR 100, 101.3 5 Therefore, Dr. Paniccia’s opinion is not uncontroverted. “‘[I]f the treating doctor’s 6 opinion is contradicted by another doctor,’ the ALJ may discount the treating physician’s 7 opinion by giving ‘specific and legitimate reasons’ that are supported by substantial 8 evidence in the record.” Ford v. Saul, 950 F.3d 1141, 1154 (9th Cir. 2020) (quoting Lester, [9] 81 F.3d at 830 ) (applying this rule where the treating physician’s opinion was contradicted 10 by the reports of two non-examining physicians). However, “[t]he opinion of a 11 nonexamining physician cannot by itself constitute substantial evidence that justifies the 12 rejection of the opinion of either an examining physician or a treating physician.” Lester, [13] 81 F.3d at 831 . Rather, opinions of non-examining physicians may only serve as substantial 14 evidence “when the opinions are consistent with independent clinical findings or other 15 evidence in the record.” Thomas v. Barnhart, 278 F.3d 947, 957 (9th Cir. 2002). 16 To determine whether the ALJ met this standard, the Court will address, in turn, each 17 reason given by the ALJ for discounting Dr. Paniccia’s opinion. 18 B. Whether the finding that Dr. Paniccia’s treatment records are “internally inconsistent” is a specific and legitimate reason supported by substantial [19] evidence [20] First, in attributing only “little weight” to Dr. Paniccia’s opinion, the ALJ states Dr. [21] Paniccia’s reports are “internally inconsistent.” AR 52. The ALJ offers several instances [22] of purported inconsistency: (1) “[f]or example, the claimant’s mood was listed as euthymic [25] 3 Notably, the state agency psychological consultants provided their opinions early in the [26] application process, more than a year before Dr. Paniccia formally submitted his MRFCA 27 setting forth his opinion for the ALJ’s consideration in December 2017 (amended in January 2018). See AR 347-350, 400-404. [28] 1 at times and depressed or anxious at other times” (AR 52) (internal citations omitted); 2 (2) “The claimant’s thought processes were described as logical, coherent, and normal, yet 3 also delusional” (AR 52) (internal citations omitted); (3) “[t]he [plaintiff’s] judgement was 4 described as normal, but the [plaintiff] reported he thought he was being watched and 5 followed and he indicated he would pull out his arm and leg hair when anxious.” AR 52 6 (internal citations omitted). 7 The Court finds the ALJ’s first example of “inconsistency” is not supported by 8 substantial evidence. The ALJ cites to records from two separate visits to illustrate the 9 purported inconsistency. Specifically, on October 23, 2015, Dr. Paniccia listed plaintiff’s 10 mood as “unremarkable (euthymic)” (AR 313). Nearly a month later, on 11 November 20, 2015, Plaintiff’s mood is listed as “anxious and depressed.” AR 311. There 12 is nothing inconsistent about a person’s mood being unremarkable one day, but anxious 13 and depressed four weeks later. Therefore, Dr. Paniccia’s observation that Plaintiff’s mood 14 changed over a period of four weeks is not a legitimate reason supported by substantial 15 evidence in the record for rejecting the opinion. 16 The ALJ’s second and third examples refer to purportedly internally inconsistent 17 observations in same-day treatment records. First, the ALJ notes that Dr. Paniccia listed 18 Plaintiff’s thought process as both “logical, coherent, and normal” and “delusional” on the 19 same day. During another visit, Dr. Paniccia’s records indicate Plaintiff’s judgment was 20 “normal,” while also noting that Plaintiff had thoughts of “being watched and followed.” 21 AR 309, 313. While these examples of inconsistency might suffice to justify discounting 22 the opinion in some circumstances, they are unconvincing here for several reasons. First, 23 the ALJ is required to examine these inconsistencies in broader view of Dr. Paniccia’s 24 opinion. See, e.g., Holohan v. Massanari, 246 F.3d 1195, 1205 (9th Cir. 2001) (“[The 25 treating physician’s] statements must be read in context of the overall diagnostic picture he 26 draws.”); Martinez v. Berryhill, 721 F. App’x 597 , 599 (9th Cir. 2017) (“The ALJ erred in 27 disregarding [the treating physician’s] opinion . . . . The ALJ isolated two treatment notes 28 that reflected some improvements, rather than considering the treatment records as a whole, 1 which showed the severity of [the claimant’s] condition and supported [the treating 2 physician’s] opinion.”); Ingram v. Barnhart, 72 F. App’x 631, 636 (9th Cir. 2003) (“Rather 3 than address these opinions [of two examining physicians that the claimant’s limitations 4 would not abate with sobriety], the Commissioner searched the record for isolated 5 statements which, when taken out of context, suggest that [claimant’s] DAA is material to 6 her disability.”). 7 In Holohan, the ALJ rejected a treating physician’s opinion because it conflicted 8 with the physician’s own treatment notes. However, the court explained: 9 Although such a conflict could justify a decision not to give the treating physician’s opinion controlling weight, see 20 C.F.R. §§ 404.1527 (c)(2), [10] (d)(2), (d)(4), in this case there is not substantial evidence in the record to 11 support the reason the ALJ gave for rejecting [the treating physician’s] opinion. When read in full and in context, [the treating physician’s] treatment [12] notes are consistent with his opinion letter. Because substantial evidence does 13 not support the specific reason the ALJ gave for rejecting [the treating physician’s] opinion concerning the question of Holohan's disability, we [14] conclude that the ALJ erred in rejecting [the treating physician’s] opinion. [15] Id. (emphasis added). The same holds true here. [16] When read in full and in context, Dr. Paniccia’s treatment notes are not internally [17] inconsistent. For example, the treatment notes characterized by the ALJ as internally [18] inconsistent because they described Plaintiff’s thought processes as “logical, coherent, and [19] normal, yet also delusional” also describe Plaintiff’s “[s]poradic paranoia” and explain that [20] Plaintiff “hears voices four times per month when depressed.” AR 311. These notes [21] indicate that Plaintiff’s delusional thinking is not constant. In the Mental Status Exam [22] portion of the records, Dr. Paniccia notated: “Thought Process: delusions, logical/coherent [23] and normal.” AR 311. Again, this description is consistent with a patient elsewhere [24] described as having only sporadic paranoia and temporary auditory hallucinations. [25] Similarly, as examples of internal inconsistencies, the ALJ cites to Dr. Paniccia’s treatment [26] records describing Plaintiff’s judgment as “normal,” despite Plaintiff’s reports that he [27] “thought he was being watched and followed” and “would pull out his arm and leg hair [28] 1 when anxious.” AR 52 (citing to AR 309 and 313). However, those treatment notes—from 2 two separate visits—specifically state that Plaintiff experiences “[s]poradic paranoia of 3 family members talking about him[,]” that he “[h]ears voices of neighbors at night,” that 4 he reported “pulling out arm and leg hairs over the last few months[,]” and that he was 5 “[p]aranoid of being followed on the freeway 2-3 months ago.” AR 309, 313 (emphasis 6 added). None of these reports is inconsistent with Dr. Paniccia’s description of Plaintiff’s 7 current judgment as “normal” in the Mental Status Exams that took place during the 8 appointments with Dr. Paniccia. 9 The ALJ’s reasons for discounting Dr. Paniccia’s opinion are also not “legitimate” 10 because, earlier in the ALJ’s opinion, he relies solely on Dr. Paniccia’s records in his 11 analysis of whether Plaintiff is disabled with the substance abuse. In finding that Plaintiff 12 was disabled while using drugs, the ALJ cites almost exclusively4 to Dr. Paniccia’s 13 treatment records and MRFCA as evidence of Plaintiff’s marked limitations in three of the 14 four areas of functioning under Paragraph B, apparently fully crediting the very same 15 records he later gives little weight due to these purported internal inconsistencies. See AR 16 47-48 (citing to Exhibits 5F—Dr. Paniccia’s treatment records—and 7F—Dr. Paniccia’s 17 MRFCA—in finding that, with the substance abuse, Plaintiff had marked limitations in the 18 areas of interacting with others, concentrating, persisting, or maintaining pace, and 19 adapting or managing oneself). The ALJ never explains this apparent and inscrutable 20 conflict between the controlling weight given to the records in one portion of his analysis 21 and the little weight given later. This internal inconsistency in the ALJ’s opinion casts 22 serious doubt on the legitimacy of the ALJ’s reasons for discounting Dr. Paniccia’s opinion 23 in the DAA analysis. See Leroux v. Berryhill, No. 17-CV-00452-SI, 2018 WL 1258206 , at [25] 26 4 The ALJ also cites once to Plaintiff’s testimony that he was terminated from his last job 27 because he could not remember to go to work. AR 47. Otherwise, all citations supporting the ALJ’s findings of marked limitations are to Dr. Paniccia’s treatment records and [28] 1 *9 (N.D. Cal. Mar. 12, 2018) (finding the ALJ’s rejection of a treating physician’s opinion 2 to be “internally inconsistent with the ALJ’s other findings” where the ALJ relied on the 3 treating physician’s “2013 assessment in order to determine the materiality of plaintiff’s 4 substance abuse and then rejected her assessment from June 2014” but “offered no 5 explanation for this inconsistency.”). 6 C. Whether the ALJ erred in performing the DAA analysis 7 As discussed above, in the DAA analysis, the ALJ must determine whether drug 8 addiction or alcoholism is a contributing factor material to the determination of disability. [9] 20 C.F.R. § 404.1535 (a). See also, e.g., Bender v. Saul, 788 F. App’x 490 , 491 (9th Cir. 10 2019) (finding claimant was not disabled because consistent and daily use of marijuana 11 was a material contributing factor to his disability). The key factor in determining 12 materiality is whether the claimant would still be found disabled if the drug use stopped. [13] 20 C.F.R. § 404.1535 (b)(1); see also Ball v. Massanari, 254 F.3d 817, 821 (9th Cir. 2001). 14 If the DAA analysis determines disabling limitations would remain if the applicant had 15 stopped using drugs or alcohol, substance abuse is not a material contributing factor and 16 the applicant is entitled to benefits. Parra v. Astrue, 481 F.3d 742 , 744–45 (9th Cir. 2007). 17 The Ninth Circuit has held that courts must not “fail [ ] to distinguish between 18 substance abuse contributing to the disability and the disability remaining after the claimant 19 stopped using drugs or alcohol.” Richey v. Colvin, No. C 12-4988 LB, 2013 WL 5228185 , 20 at *1 (N.D. Cal. Sept. 17, 2013) (citing Sousa v. Callahan, 143 F.3d 1240, 1245 (9th Cir. 21 1998)). Said differently, “[j]ust because substance abuse contributes to a disability does 22 not mean that when the substance abuse ends, the disability will too.” Id. Once evidence is 23 presented of drug abuse, the burden shifts to the claimant to show substance abuse is not a 24 material contributing factor to his disability. Astrue, 481 F.3d at 744-45 . 25 Plaintiff argues the ALJ erred by relying on Dr. Paniccia’s failure to properly 26 consider the effects of Plaintiff’s substance abuse as a reason for rejecting Dr. Paniccia’s 27 opinion. ECF No. 13 at 1, 3. Specifically, in deciding to give Dr. Paniccia’s opinion little 28 weight in determining whether Plaintiff’s substance abuse was a material factor 1 contributing to Plaintiff’s disability, the ALJ reasoned: 2 Furthermore, and very importantly, it appears the treating psychiatrist did not consider that the claimant’s substance abuse was not in any sustained [3] remission for the period before his date last insured (December 31, 2015), and 4 that his symptoms materially could be attributed to his drug abuse disorder. Once again, the claimant had admitted only 30 days’ sobriety to this source [5] on October 23, 2015. [6] AR 52 (emphasis added). [7] Based on this reasoning, the ALJ gave “little weight” to Dr. Paniccia’s opinions [8] because they “largely ignore the drug abuse issue[,]” reiterating that Dr. Paniccia’s [9] treatment records “do not appear to consider the possibility that the claimant’s drug abuse [10] was not in remission and likely contributed in a material way to the severity of the [11] claimant’s symptoms before his date last insured.” AR 54 (emphasis added). [12] However, there is no record evidence that Plaintiff’s drug abuse was not in remission [13] for 30 days on October 23, 2015, when Plaintiff first met with Dr. Paniccia, and the ALJ [14] does not explain the basis for this speculation. Indeed, the ALJ’s heavy reliance on Dr. [15] Paniccia’s treatment records and opinions in the earlier portion of his analysis regarding [16] Plaintiff’s limitations with the substance abuse necessitates the conclusion that the ALJ [17] assumed, without any evidentiary basis, that those treatment records were from a time when [18] Plaintiff was using drugs. But there is no evidence in the record that Plaintiff was not 30 [19] days’ sober on October 23, 2015, or failed to maintain his sobriety since then, and the ALJ [20] cites to none. Indeed, the ALJ’s own language is not consistent in pinpointing Plaintiff’s [21] date of sobriety, first stating that the claimant “had admitted only 30 days’ sobriety” on [22] October 23, 2015, but later speculating that Plaintiff’s drug abuse was possibly not in [23] remission during the treatment period at all, which Dr. Paniccia supposedly failed to [24] account for. AR 52, 54. The ALJ appears to have overlooked that in each of Dr. Paniccia’s [25] treatment notes after October 2015, in the DSM-IV Multi-Axial Assessment, Dr. Paniccia [26] states: “Other psychoactive substance dependence, in remission,” which indicates that [27] Plaintiff was not abusing drugs during those times. AR 308, 310, 312, 354, 356, 358, 360, [28] 1 362, 364, 366, 368, 370, 372, 374, 376, 378, 380, 382, 384, 386, 388, 390, 392, 394, 396, 2 398. 3 Social Security Ruling 13-2p governs how ALJs should evaluate cases involving 4 DAA. See SSR 13-2p, 2013 WL 621536 (S.S.A. Feb. 20, 2013). There, the Agency 5 explains that it is “unable to provide exact guidance on the length and number of periods 6 of abstinence to demonstrate whether DAA is material in every case” because in some 7 cases, “the acute and toxic effects of substance use or abuse may subside in a matter of 8 weeks, while in others it may take months or even longer to subside.” Id. at *12 . Thus, 9 because of the “wide variations in the interactions of DAA with different types of physical 10 and mental disorders[,]” the Agency provides the following guidance: 11 In all cases in which we must consider periods of abstinence, the claimant should be abstinent long enough to allow the acute effects of drug or alcohol [12] use to abate. Especially in cases involving co-occurring mental disorders, the 13 documentation of a period of abstinence should provide information about what, if any, medical findings and impairment-related limitations remained [14] after the acute effects of drug and alcohol use abated. Adjudicators may draw 15 inferences from such information based on the length of the period(s), how recently the period(s) occurred, and whether the severity of the co-occurring [16] impairment(s) increased after the period(s) of abstinence ended. [17] Id. Although the Agency has no bright-line rule about the length of a period of sobriety [18] required to demonstrate whether DAA is material to a disability determination, the Ninth [19] Circuit has relied on the Social Security Administration’s internal Programs Operations [20] Manual System (“POMS”) to find that a claimant’s drug addiction “should not be [21] considered material” where a claimant has been sober for one month but still has disabling [22] impairments. For example, in Ingram, the Ninth Circuit explained: [23] Although the Social Security Administration’s Program Operation Manual 24 System (POMS) lacks the force of law, the POMS directs that an individual 25 should not be considered disabled if ‘the evidence documents that, after a drug-free period of 1 month, the other impairment(s) is by itself not disabling.’ 26 POMS § DI 90070.050(D)(3). The logical inference is that if, after a drug27 []free period of one month, the other impairments are still disabling, the individual’s drug and alcohol addiction should not be considered material. [28] 1 Ingram, 72 F. App’x at 636 n.30 (emphasis added). See also McKee v. Comm'r of Soc. Sec. 2 Admin., 446 F. App’x 36 , 38 n.1 (9th Cir. 2011) (quoting and citing POMS § DI 3 90070.050(D)(3) and Ingram for the same proposition that there is a “logical inference” 4 that a claimant’s drug or alcohol addiction should not be considered material if the 5 claimant’s other impairments are still disabling after a one-month drug-free period); 6 Richey, 2013 WL 5228185 , at *16-*17 (relying on Ingram, McKee, POMS § DI 7 90070.050(D)(3), and the DSM-IV to find that “[i]f any period of sobriety is required in 8 order to make a determination, the above sources indicate that a period of one month is 9 sufficient[,]” and thus concluding the ALJ erred by rejecting the treating physician’s 10 opinion in favor of a nonexamining physician’s opinion that “18 months of abstinence is 11 required before a reliable assessment [of the materiality of claimant’s substance abuse to 12 his disability] could occur.”). 13 Here, as discussed above, the ALJ relied exclusively on Dr. Paniccia’s records, 14 MRFCA, and Plaintiff’s testimony to find Plaintiff disabled with the substance abuse at 15 step three of his evaluation. See AR 47. But all of this evidence is from a time period when 16 Plaintiff was at least 30 days’ sober, not from a time when there is any evidence that 17 Plaintiff was using drugs. “Adjudicators should generally not rely on a medical opinion to 18 find that DAA is material if the case record contains credible evidence from an acceptable 19 medical source from a relevant period of abstinence indicating that the impairment(s) 20 would still be disabling in the absence of DAA.” SSR 13-2p, 2013 WL 621536 , at *9. 21 Additionally, “[t]o find that DAA is material, [the ALJ] must have evidence in the case 22 record demonstrating that any remaining limitations were not disabling during the period 23 [of abstinence].” Id. at *12 . The ALJ pointed to no such evidence, and in fact initially found 24 Plaintiff’s mental limitations documented by Dr. Paniccia during a period of abstinence to 25 be disabling at step three. 26 Moreover, even if the treating physician’s records had been from a period when 27 Plaintiff was still using drugs—which is not supported by the record—the law does not 28 require a claimant to produce records from a period of abstinence to establish that his drug 1 abuse was not material to his disability. See id. at *4 (“There does not have to be evidence 2 from a period of abstinence for the claimant to meet his or her burden of proving 3 disability.”); Richey, 2013 WL 5228185 , at *16-*17 (finding the ALJ erred by requiring a 4 sustained abstinence period). As in Richey, the ALJ here erred by rejecting the treating 5 physician’s opinion in favor of the opinions of two non-examining physicians on the basis 6 that Plaintiff had reported only a 30-day period of sobriety when he first met with Dr. 7 Paniccia, and Dr. Paniccia’s opinions “do not appear to consider the possibility that the 8 claimant’s drug abuse was not in remission,” thereby improperly applying a period of 9 abstinence requirement. AR 54. 10 Therefore, the ALJ’s reasoning that Dr. Paniccia’s opinion should be given little 11 weight either because Dr. Paniccia failed to consider the possibility that Plaintiff was still 12 using drugs, or otherwise that Plaintiff’s 30-day period of sobriety was insufficient to gauge 13 whether Plaintiff’s mental impairments were still disabling absent drug abuse, is not 14 supported by substantial evidence in the record and is contrary to controlling law. 15 For the same reasons, the Court is also not persuaded by Defendant’s argument that 16 “Dr. Paniccia had no knowledge of Plaintiff’s condition during the majority of the alleged 17 disability period” because he did not begin treating Plaintiff until three years after the 18 alleged disability onset date and two months before the date last insured. ECF No. 13 at 719 8. Although Dr. Paniccia’s MRFCA opinions were submitted in December 2017 and 20 January 2018, and Dr. Paniccia primarily treated Plaintiff after his date last insured of 21 December 31, 2015, these facts actually strengthen Dr. Paniccia’s opinions as evidence of 22 whether Plaintiff’s previous substance abuse was a material factor contributing to his 23 disability. See Kroeger v. Saul, No. 18-CV-00389-SI, 2019 WL 4451025 , at *12-*13 (N.D. 24 Cal. Sept. 17, 2019). In Kroeger, the ALJ refused to consider a sustained period of sobriety 25 that occurred after the alleged period of disability to determine whether the plaintiff’s 26 mental impairments would have remained in the absence of his substance use. Id. at *12 . 27 After the court remanded the case and ordered the ALJ to consider the later period of 28 sobriety in the DAA analysis, the ALJ again refused to consider any evidence from after 1 the claimant’s date last insured of December 31, 2010: 2 Counsel argued that “the period at June 29, 2011 through 2012 is the closest long period of sobriety, so we should actually be looking at that period.” The [3] ALJ responded that “if you can’t look at the evidence in the live period, then 4 we need to move on.” Plaintiff’s counsel argued that the “period from 2011 going forward is applicable to the live period because it’s the closest [5] longstanding period of sobriety,” but the ALJ rejected this argument, stating, 6 “you want me to take a later period and read it back, and I don’t think that’s appropriate under the regulations and the law.” [8] Id. (internal citations omitted) (emphasis added). 9 Considering this transcript, the Kroeger court concluded the ALJ erred a second 10 time, finding that “the ALJ’s refusal to ‘read back’ records from a later period of sobriety 11 to inform whether a claimant was disabled before his Date Last Insured contradicts SSR 12 13-2p[, which] states: ‘Especially in cases involving co-occurring mental disorders, the 13 documentation of a period of abstinence should provide information about what, if any, 14 medical findings and impairment-related limitations remained after the acute effects of 15 drug and alcohol use abated. . . . ” Id. (quoting SSR 13-2p, 2013 WL 621536 , at *12). The 16 Kroeger court explained that “[n]othing in SSR 13-2p states that an ALJ should only look 17 to periods of abstinence that occur before the ‘live period’ rather than after.” Kroeger, 2019 18 WL 4451025 , at *13. And, in a conclusion that applies with equal force here, the Kroeger 19 court found that “[e]ven if the ALJ had looked to the later period of sobriety, the fact that 20 plaintiff was found to be disabled even after maintaining sobriety indicates that the ALJ 21 lacked ‘evidence in the case record demonstrating that any remaining limitations were not 22 disabling during the period.’” Id. (quoting SSR 13-2p, 2013 WL 621536 , at *12). 23 Similarly, in the present case, the ALJ initially found Plaintiff met listing 12.04, and 24 accordingly found him disabled at step three, based on evidence from Dr. Paniccia’s 25 opinions and some of Dr. Paniccia’s treatment records from a period of abstinence that 26 post-dated the relevant time period. AR 47. Therefore, to the extent the ALJ considered 27 evidence from a period of sobriety, he found that evidence showed that disabling 28 limitations remained. See AR 48 (giving Dr. Paniccia’s assessments “some weight” in 1 considering Plaintiff’s mental impairments, “including the substance use disorder,” 2 because Dr. Paniccia’s “assessment that the claimant has marked and moderate limitation 3 of his ability to perform work-related activities due to his mental impairments, including 4 the substance use disorder . . . is consistent with the claimant’s reported symptoms of 5 hallucinations, paranoia, and pulling of arm and leg hair when anxious.”). The ALJ also 6 relied on these behaviors in finding that Plaintiff was disabled with the substance abuse. 7 AR 47. But in reaching this conclusion, the ALJ cited to Dr. Paniccia’s treatment records 8 from November 20, 2015—approximately two months after Plaintiff stopped using 9 drugs—and Dr. Paniccia’s December 2017 MRFCA. AR 47, 48. The Agency’s regulations 10 provide that “[t]he key factor . . . in determining whether drug addiction or alcoholism is a 11 contributing factor material to the determination of disability is whether we would still find 12 you disabled if you stopped using drugs or alcohol.” 20 C.F.R. § 404.1535 (b)(1) 13 (emphasis added). The ALJ did not adhere to that regulation here. More importantly, the 14 ALJ did not point to any evidence “demonstrating that any remaining limitations were not 15 disabling during the period [of abstinence,]” as necessary to find Plaintiff’s substance abuse 16 material. SSR 13-2p, 2013 WL 621536 , at *12. 17 Finally, the ALJ’s error was not harmless, because it is not “clear from the record” 18 that the error was “inconsequential to the ultimate nondisability determination.” Garcia, 19 768 at 932. Had the ALJ properly considered Dr. Paniccia’s treatment records as being 20 from a period of sobriety—rather than baselessly relying on them as evidence of the 21 severity of Plaintiff’s mental impairments, including the substance abuse—it appears that 22 the ALJ would have concluded that Plaintiff’s mental impairments met listing 12.04 even 23 after Plaintiff’s drug use stopped. 24 Because the Court finds that the ALJ committed legal error in his DAA analysis, the 25 Court need not consider the remaining reasons proffered by Defendant to support a finding 26 that the Commissioner’s decision was supported by substantial evidence. Accordingly, the 27 Court will also not address Defendant’s argument that Plaintiff has waived the right to 28 challenge any of the ALJ’s other reasons for discounting Dr. Paniccia’s opinion. 1 VI. THE APPROPRIATE REMEDY 2 The next issue for determination is whether a remand for further proceedings, or a 3 remand for payment of benefits, is appropriate. “The decision whether to remand for further 4 proceedings or simply to award benefits is within the discretion of this court.” McAllister, 5 888 F.2d at 603. The court “should credit evidence that was rejected during the 6 administrative process and remand for an immediate award of benefits if: (1) the ALJ failed 7 to provide legally sufficient reasons for rejecting the evidence; (2) there are no outstanding 8 issues that must be resolved before a determination of disability can be made; and (3) it is 9 clear from the record that the ALJ would be required to find the claimant disabled were 10 such evidence credited.” Benecke v. Barnhart, 379 F.3d 587, 593 (9th Cir. 2004). 11 Crediting the evidence that was rejected, and considering the record as a whole, it is 12 clear that substance abuse is not a material contributing factor and Plaintiff is entitled to 13 benefits. Dr. Paniccia’s October 23, 2015 treatment notes indicate that Plaintiff’s 14 psychiatric problems were longstanding. AR 313. His notes state that Plaintiff was arrested 15 in 2000 and 2010/11 for “mania.” AR 313. The treatment notes also disclose two suicide 16 attempts in 2010. Dr. Paniccia obviously asked Plaintiff about substance abuse during this 17 visit, since his notes state “In past, used Heroin/Crystal Meth. No ETOH [referring to 18 alcohol]. Clean now for 30 days.” AR 313. 19 Plaintiff’s testimony confirms that his substance abuse occurred after the onset of 20 the psychiatric issues that underlie his disability. Plaintiff testified that his drug use did not 21 start until after he was fired from his job in October 2012, the same month as his disability 22 onset date of October 1, 2012. AR 80. See also AR 66-67, 75-76. Plaintiff was fired from 23 his job because of his psychiatric issues, including forgetting to go to work, inability to 24 remember where he was going, and hearing voices. AR 66-67. 25 In each of Dr. Paniccia’s treatment notes after October 2015, in the DSM-IV Multi26 Axial Assessment, he states: “Other psychoactive substance dependence, in remission,” 27 which indicates that Plaintiff was not abusing drugs during those times. AR 308, 310, 312, 28 354, 356, 358, 360, 362, 364, 366, 368, 370, 372, 374, 376, 378, 380, 382, 384, 386, 388, 1 || 390, 392, 394, 396, 398. Despite this, Plaintiff's psychiatric problems persisted. 2 The key factor in the DAA analysis is determining whether a claimant would still be 3 found disabled if his drug use stopped. 20 C.F.R. § 404.1535 (b)(1); see Ball, 254 F.3d at 4 ||921. Here, there is ample evidence in the record to show that Plaintiff's drug use did stop, 5 that his disability continued. Indeed, the ALJ relied on records that post-dated 6 || Plaintiffs drug use by at least 30 days to find in the first part of his analysis that □□□□□□□□□□ □ 7 ||mental impairments met listing 12.04. AR 47-48. Since those records are from a time 8 || period after Plaintiffs drug use stopped, that conclusion dictates a finding of disability. 20 9 ||C.F.R. § 404.1520(a)(4)Gi1). Because Plaintiff’s disabling limitations remained after he 10 stopped using drugs, substance abuse is not a material contributing factor, and there are 11 |/thus no outstanding issues to be resolved to conclude that Plaintiff is entitled to benefits. 12 ||See Parra y. Astrue, 481 F.3d 742 -744-45 (9th Cir. 2007); Bernecke, 379 F.3d at 593 . 13 Finally, had the ALJ fully credited Dr. Paniccia’s opinions from over two years after 14 || Plaintiff obtained sobriety (AR 347-350, 401-404), the ALJ would have been required to 15 || find Plaintiff disabled. Therefore, pursuant to Bernecke, remand for an immediate award 16 || of benefits is appropriate. Jd. 17 VU. CONCLUSION 18 For the foregoing reasons, the Court finds that the ALJ committed reversible legal 19 |/ error. 20 Therefore, pursuant to sentence four of 42 U.S.C. § 405 (g), IT IS HEREBY 21 |} ORDERED that the Commissioner’s decision is REVERSED and this case is 22 || REMANDED for the calculation and award of benefits. 23 IT IS SO ORDERED. 24 || Dated: July 22, 2020 05 _ArwiorwH. Xyolard Honorable Allison H. Goddard 26 United States Magistrate Judge