Krauser v. Astrue

• Decision Date: 06 May 2011
• Docket Number: No. 10–5103.,10–5103.
• Citation: 638 F.3d 1324
• Parties: Richard F. KRAUSER, Plaintiff–Appellant,v.Michael J. ASTRUE, Commissioner, Social Security Administration, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

638 F.3d 1324

166 Soc.Sec.Rep.Serv. 20

Richard F. KRAUSER, Plaintiff–Appellant,

v.Michael J. ASTRUE, Commissioner, Social Security Administration, Defendant–Appellee.

No. 10–5103.

United States Court of Appeals, Tenth Circuit.

May 6, 2011.

Submitted on the briefs: ^*Richmond J. Brownson, Timothy M. White, Tulsa, OK, for Plaintiff–Appellant.Thomas Scott Woodward, United States Attorney, Cathryn McClanahan, Assistant United States Attorney, Michael McGaughran, Regional Chief Counsel, Region VI, Eric D. Poole, Special Assistant United States Attorney, Office of the General Counsel, Region VI, Social Security Administration, Washington, D.C., for Defendant–Appellee.Before LUCERO, ANDERSON, and BALDOCK, Circuit Judges.ANDERSON, Circuit Judge.

Plaintiff Richard F. Krauser appeals from a district court order, issued by the magistrate judge on consent of the parties under 28 U.S.C. § 636(c), affirming the Commissioner's decision to deny social security disability and supplemental security income benefits. We independently review the Commissioner's decision to determine whether it is free from legal error and supported by substantial evidence, Fischer–Ross v. Barnhart, 431 F.3d 729, 731 (10th Cir.2005), though “our review ... is limited to the issues the claimant properly preserves in the district court and adequately presents on appeal.” Berna v. Chater, 101 F.3d 631, 633 (10th Cir.1996). We reverse and remand for the reasons explained below.

I. Agency Decision

The Administrative Law Judge (ALJ) denied benefits at the last step of the five-step sequential process for determining disability. See Fischer–Ross, 431 F.3d at 731 (summarizing process). The ALJ found that (1) Mr. Krauser had not engaged in substantial gainful activity since the alleged onset date of disability on November, 28, 2003; (2) Mr. Krauser is severely impaired from degenerative joint disease, diabetes, hepatitis B and C, and hypertension; (3) these impairments do not meet or equal any of the per se disabling impairments listed in 20 C.F.R. Part 404, Subpart P., App. 1; (4) Mr. Krauser has the residual functional capacity (RFC) to perform medium work, but is unable to perform his past relevant work as a truck driver and construction worker; and (5) considering his age, education, transferable work skills, and RFC, Mr. Krauser can perform other occupations, identified by a vocational expert (VE), that exist in significant numbers in the regional and national economy, such as delivery driver, hand packager, janitor, laundry sorter, cleaner, clerical mailer, and order clerk.

The Appeals Council denied review, making the ALJ's decision the Commissioner's final decision for our review. Doyal v. Barnhart, 331 F.3d 758, 759 (10th Cir.2003). It did, however, accept and consider certain additional evidence submitted by Mr. Krauser, concluding that it did not provide a basis for altering the ALJ's determination.

II. Challenges to Agency Decision

Mr. Krauser argues that the ALJ's determination of non-disability must be reversed, because it rests on a failure to properly consider all of his impairments (in particular, a depression impairment disregarded as medically indeterminable); on an incorrect analysis of the opinions of his treating physician; on an improper assessment of his credibility; and on an erroneous determination at step five resulting from an inadequate hypothetical inquiry to the VE. We take up these contentions in the order presented.

A. Rejection and/or Failure to Develop Evidence of Depression Impairment

The analysis of this issue is divided into two parts, one based on the record before the ALJ and the other based on the augmented record before the Appeals Council. As to the former, we agree with the district court that Mr. Krauser had not presented evidence demonstrating the existence of a medically determinable impairment. There was no medical testing for, let alone diagnosis and treatment of, any impairment regarding depression. Indeed, a report from Mr. Krauser's treating physician shortly before the hearing specifically noted “no abnormal findings” where indications of various psychological conditions, including depression, were to be assessed. App. Vol. 2 at 390. A couple of isolated, passing references to depression buried in the record hardly suggested that the medical personnel who examined Mr. Krauser had missed or ignored a serious mental illness,¹ undercutting his contention that the ALJ should have sent him for a consultative examination. There simply was not “evidence sufficient to suggest a reasonable probability that a severe impairment exist[ed].” Hawkins v. Chater, 113 F.3d 1162, 1167 (10th Cir.1997) (setting out claimant's burden to demonstrate issue requiring development by Commissioner); Cf. Carter v. Chater, 73 F.3d 1019, 1021–22 (10th Cir.1996) (noting Commissioner had a duty to develop issue where medical records showed depression had been diagnosed).

After the ALJ issued his decision on October 31, 2007, Mr. Krauser sought and obtained a referral for possible depression, “reporting he feels sad all the time because of his current economic and health situation.” App. Vol. 2 at 397. A medical report from January 18, 2008, notes a diagnosis of major depression and a prescription for an anti-depressant. Id. at 398–99. Mr. Krauser argues that in light of this new evidence, submitted to and considered by the Appeals Council, he had either established a medically determinable mental impairment or at least demonstrated the existence of an issue that required further development.

Because of the circumstances of its admission, the proper treatment of this evidence is somewhat unclear, as it implicates a potential tension in our case law. The basic principle, derived from the relevant regulations, is well-established: the Appeals Council must consider additional evidence offered on administrative review—after which it becomes a part of our record on judicial review—if it is (1) new, (2) material, and (3) related to the period on or before the date of the ALJ's decision. Chambers v. Barnhart, 389 F.3d 1139, 1142 (10th Cir.2004) (discussing 20 C.F.R. §§ 404.970(b), 416.1470(b)). If the evidence does not qualify, the Appeals Council does not consider it and it plays no role in judicial review. Id. Here, the district court held that the new evidence submitted to the Appeals Council failed to satisfy the third requirement because it “pertained to dates after the ALJ's final decision,” and, therefore, “cannot be given merit in evaluating plaintiff's alleged mental impairment.” App. Vol. 1 at 43. This ruling begs the question: who decides whether evidence qualifies as new, material, and related to the relevant period?

One line of our cases suggests that we do: we have repeatedly held that whether evidence is “new, material and chronologically pertinent is a question of law subject to our de novo review.” Threet v. Barnhart, 353 F.3d 1185, 1191 (10th Cir.2003); see Chambers, 389 F.3d at 1142. But we have also held that when the Appeals Council accepts additional evidence, that is “an implicit determination [that it is] ... qualifying new evidence,” requiring the Appeals Council to consider it and this court to include it in our review of the ALJ's decision, without separate consideration of the requirements for qualification. Martinez v. Barnhart, 444 F.3d 1201, 1207–08 (10th Cir.2006); Hill v. Astrue, 289 Fed.Appx. 289, 293 (10th Cir.2008); Foy v. Barnhart, 139 Fed.Appx. 39, 41–42 (10th Cir.2005). These two lines of cases do not clash where the Appeals Council rejects new evidence as non-qualifying and the claimant challenges that ruling on judicial review—in that event, Martinez does not apply and our general rule of de novo review permits us to resolve the matter and remand if the Appeals Council erroneously rejected the evidence. Chambers, 389 F.3d at 1142. But, as has been remarked, our cases do present a potential conflict if the Appeals Council accepts new evidence: do we revisit the matter de novo (per Threet) or are we bound by the agency's decision to accept the evidence (per Martinez)? See Haddock v. Astrue, No. 08–cv–00393–PAB, 2009 WL 3162170, at *11 n. 2 (D.Colo. Sept. 29, 2009).

Identifying the limited ground of potential conflict here actually suggests the path out of it. When the Appeals Council accepts new evidence, the claimant obviously benefits (he may not succeed with such evidence, but that is a separate issue), hence the only “aggrieved” party that could object is the agency. But the agency would be objecting to its own ruling. In supporting a denial of benefits on judicial review by challenging its own rulings as to the admission of the evidence on which the denial was based, the agency would inherently be offering a new, post-hoc rationale for its decision contrary to the general rule of SEC v. Chenery Corp., 318 U.S. 80, 94–95, 63 S.Ct. 454, 87 L.Ed. 626 (1943), and SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947). See generally Haga v. Astrue, 482 F.3d 1205, 1207–08 (10th Cir.2007); Hackett v. Barnhart, 475 F.3d 1166, 1174–75 (10th Cir.2007). Thus, there may be good reason to hold the agency to its own decision when the Appeals Council accepts new evidence, even though we exercise de novo review when the claimant challenges the Appeal Council's rejection of such evidence.

We need not definitively resolve the matter here, however, since we can in any event affirm the ALJ's rejection of a depression impairment even with the new evidence considered by the Appeals Council augmenting our record. As noted above, the only evidence of diagnosis and treatment of depression is in a report prepared two and a half months after the ALJ's decision. And that report does not purport to retroactively diagnose a condition existing in the period preceding the ALJ's decision, much less does it indicate any impaired functioning relating back to that period. Indeed, Mr....