Alejandro Moreno v. Nancy Berryhill , 882 F.3d 722 ( 2018 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-1954
ALEJANDRO MORENO,
Plaintiff-Appellant,
v.
NANCY BERRYHILL,
Acting Commissioner of Social Security,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:15-cv-11168 — Sidney I. Schenkier, Magistrate Judge.
____________________
ARGUED DECEMBER 12, 2017 — DECIDED FEBRUARY 16, 2018
____________________
Before BAUER, RIPPLE, and SYKES, Circuit Judges.
PER CURIAM. Alejandro Moreno appeals the order of the
district court upholding the Social Security Administration’s
denial of his applications for Supplemental Security Income
and Disability Insurance Benefits. Mr. Moreno contends that,
among other shortcomings in the Administrative Law Judge’s
(“ALJ”) determination, he improperly relied on an outdated
mental-health assessment and failed to incorporate all of
2 No. 17-1954
Mr. Moreno’s limitations when posing the hypothetical to the
vocational expert. We agree that the record contains new and
significant evidence that could have affected Mr. Moreno’s
mental-health assessment. We also agree that the ALJ’s hypo-
thetical to the vocational expert failed to include Mr. Moreno’s
limitations with respect to concentration, persistence, and
pace. Accordingly, we remand the matter to the agency for
further proceedings.
I
BACKGROUND
A. Mr. Moreno’s Condition
Mr. Moreno’s misfortunes began in February 2006 when
he fell off scaffolding and landed on his back while taping
drywall. He sought treatment from an orthopedist, who
found a soft tissue injury but no signs of fracture. Later testing
showed improvements in Mr. Moreno’s condition, but he re-
ported that he still felt significant pain. A follow-up diagnos-
tic test revealed acute lumbar radiculopathy—lower back
pain caused by compression, inflammation and/or injury to a
spinal nerve root. In addition to this condition, Mr. Moreno
also is diabetic, has high blood pressure, and is obese.
Beginning in April, Mr. Moreno sought treatment for his
chronic pain from clinical psychologist Dr. Enrique Gonzalez.
Dr. Gonzalez saw Mr. Moreno “on an almost weekly basis
through 2009 for cognitive behavioral therapy.”1 These visits
decreased in frequency to monthly between 2010 and the first
1 A. at 827.
No. 17-1954 3
half of 2011; however, for the remainder of 2011 through at
least June of 2013, Mr. Moreno saw Dr. Gonzalez on a weekly
basis.
In his treatment notes, Dr. Gonzalez reported that
Mr. Moreno manifested, among other symptoms, a depressed
mood, irritability, memory difficulties, and an inability to con-
centrate. Critical to our analysis, Dr. Gonzalez documented an
ongoing inability to sleep, including times when Mr. Moreno
would go days without sleep.2 Dr. Gonzalez also addressed
Mr. Moreno’s difficulties interacting with the public and with
his family, specifically outbursts of anger precipitated by feel-
ings that others were taking advantage of him.3 Dr. Gonzalez
observed fluctuations in Mr. Moreno’s mood and behavior
over time, including some periods of improvement; for in-
stance, Dr. Gonzalez reported improved mood when Mr.
Moreno had scheduled activities with his daughter and fam-
ily.4
From March 2008 through November 2013, Mr. Moreno
also saw a Dr. Walter Pedemonte on a monthly basis for psy-
chiatric medication management. Dr. Pedemonte observed
Mr. Moreno suffered from the following symptoms in March
2008: “depressed mood, anxious affect, poor immediate and
recent memory, fair remote memory, poor attention, [and]
poor concentration.”5 He diagnosed Mr. Moreno with major
depressive disorder and, over the years, prescribed
2 Id. at 639, 1947–48, 1996–98.
3 Id. at 644, 648, 1994, 1996.
4 See, e.g., id. at 638.
5 Id. at 829.
4 No. 17-1954
Mr. Moreno several medications, and combinations of medi-
cations, to address his condition.
B. The Administrative Proceedings
In March 2007, Mr. Moreno filed his applications for Sup-
plemental Security Income and Disability Insurance Benefits.
His claims were denied on initial application and upon recon-
sideration. A hearing was held before an ALJ in December
2009; the ALJ issued a decision denying relief in March 2010.
The Appeals Council denied review, and Mr. Moreno ap-
pealed to the United States District Court for the Northern
District of Illinois.
In the district court, the parties filed an agreed motion to
reverse and remand. The motion requested that, on remand,
the matter “be assigned to a different ALJ, who w[ould] con-
duct a new hearing, and reassess inter alia Plaintiff’s mental
impairment(s) and the treating physician opinion(s).”6
On remand, a different ALJ held a supplemental hearing.
At the February 2014 hearing, Mr. Moreno testified regarding
his mental health. He described a significant number of psy-
chological concerns, including difficulty focusing, remember-
ing, and interacting with others. He recounted that his wife
administers his medication and keeps track of his physicians’
appointments because he struggles to remember things. He
also reported that he tried to take English classes but had trou-
ble concentrating. Mr. Moreno also testified, as he did in the
original hearing, that people “bother[]” him, 7 so he avoided
6 R.34 (1:11-cv-01771).
7 A. at 874.
No. 17-1954 5
going to crowded church services and using public transpor-
tation.
In addition to the hearing testimony and the notes of
Drs. Gonzalez and Pedemonte, the second ALJ also looked at
Mr. Moreno’s mental-health records, examinations, and as-
sessments that predated the hearing before the first ALJ.
Among these were the diagnosis and notes of Dr. Herman
Langner, who examined Mr. Moreno in 2007 and diagnosed
him with depression. The ALJ also considered the review of
Mr. Moreno’s mental-health records conducted by psycholo-
gist Margaret Wharton in 2007. In her assessment of
Mr. Moreno’s residual functional capacity, Dr. Wharton ob-
served that Mr. Moreno manifested a “[d]isturbance of mood”
evidenced by “[d]ecreased energy,” “[f]eelings of guilt or
worthlessness,” and “[d]ifficulty concentrating or thinking.”8
Under functional limitations, Dr. Wharton noted that Mr.
Moreno was only mildly limited in activities of daily life and
in social functioning, but he was moderately limited in main-
taining concentration, persistence, and pace.9 Her summary
conclusions described Mr. Moreno as not significantly limited
in “[t]he ability to carry out very short and simple instruc-
tions”; “[t]he ability to perform activities within a schedule,
maintain regular attendance, and be punctual within custom-
ary tolerances”; “[t]he ability to work in coordination with or
proximity to others without being distracted by them”; “[t]he
8 Id. at 411.
9 Id. at 418.
6 No. 17-1954
ability to make simple work-related decisions”; and “[t]he
ability to interact appropriately with the general public.”10
The ALJ then used this information to pose a hypothetical
question to a vocational expert regarding Mr. Moreno’s em-
ployability. Specifically, at the second hearing, the ALJ de-
scribed a hypothetical individual with Mr. Moreno’s physical
limitations. In addition to physical limitations, the ALJ in-
cluded in his question to the vocational expert that the hypo-
thetical “individual can understand, remember, and carry out
simple work instructions … and exercise simple work place
judgments. And further, the individual would be limited to
routine work … [with] no more than occasional changes in the
work setting.”11 Finally, the ALJ required that the individual
could have “no more than occasional interaction with the
public.”12 Given these restrictions, the vocational expert
opined that there were still a number of jobs that Mr. Moreno
could perform, including that of an assembler, an inspector, a
checker, and a hand packer.
Following the hearing, the ALJ issued a written opinion in
which he reviewed the evidence, applied the standard
five-step analysis, see 20 C.F.R. § 404.1520(a), and concluded
that Mr. Moreno was not disabled. At step one, the ALJ deter-
mined that Mr. Moreno had not engaged in substantial gain-
ful activity since his alleged onset date in February 2006. At
step two, the ALJ evaluated Mr. Moreno’s physical and mental
conditions, and concluded that he was suffering from severe
10 Id. at 422–23.
11 Id. at 921–22.
12 Id. at 922.
No. 17-1954 7
impairments—lumbar disc disease, myofascial pain syn-
drome, left knee pain, obesity, and depression—within the
meaning of the Act and regulations, 20 C.F.R. §§ 404.1520(c),
416.920(c). But at step three the ALJ determined that these im-
pairments, individually or in combination, do not meet a list-
ing for presumptive disability. Applying the “special tech-
nique,” 20 C.F.R. §§ 404.1520a, 416.920a—the method that
considers “pertinent symptoms, signs, and laboratory find-
ings” to determine whether the claimant suffers from a med-
ically determinable mental impairment—the ALJ concluded
that Mr. Moreno’s mental impairments do not cause two or
more “marked limitations” or one such limitation coupled
with repeated episodes of decompensation. Therefore,
Mr. Moreno did not satisfy the paragraph B criteria of listings
12.04 and 12.06. He found, however, that Mr. Moreno’s mental
impairments do cause “moderate” restrictions in social func-
tioning and concentration, persistence, or pace, as well as
“mild” restrictions in his activities of daily living.13
At step four the ALJ found that Mr. Moreno could not per-
form his past work as a drywall taper, but at step five he con-
cluded that Mr. Moreno could “perform light work” with
some restrictions.14 In assessing Mr. Moreno’s residual func-
tional capacity, the ALJ afforded the opinion of Dr. Wharton
great weight, explaining that Dr. Wharton’s analysis was
“consistent with the longitudinal evidence of record.”15 The
ALJ also reviewed the notes of Mr. Moreno’s treating psy-
13 See id. at 814–15.
14 Id. at 816.
15 Id. at 831.
8 No. 17-1954
chologist, Dr. Gonzalez, who documented fluctuating symp-
toms of depression, suicidal ideations, low motivation, and ir-
ritability.16 But the evidence as a whole, in the ALJ’s view, did
not support a finding that Mr. Moreno’s depression precluded
him from engaging in work activity. The ALJ placed particu-
lar emphasis on portions of Dr. Gonzalez’s treatment notes
that showed improvements in Mr. Moreno’s mental health
during periods of increased activity.
Mr. Moreno appealed to the Appeals Council, which de-
clined review.
C. District Court Proceedings
Mr. Moreno then sought review in district court, which af-
firmed the agency’s decision. The court first rejected
Mr. Moreno’s argument that the ALJ’s assessment of residual
functional capacity was “flawed because … it did not account
for the recommendation of Dr. Wharton that claimant is only
16 The ALJ found Dr. Pedemonte’s notes, as well as the other materials
that he submitted, unreliable. The ALJ noted that, according to Dr. Pedem-
onte’s notes, Mr. Moreno’s mental status exam remained completely un-
changed, yet Mr. Moreno reported vastly different moods during his vis-
its, and his medications were altered. Id. at 828. Similarly, Dr. Pedemonte’s
source statement, completed on October 31, 2009, reported “clinical find-
ings of psychomotor retardation, hopelessness and helplessness”; how-
ever, the ALJ gave “little weight” to this report because it was inconsistent
with Dr. Pedemonte’s treatment records. Id. at 832. Finally, in a letter
Dr. Pedemonte submitted in 2011, he reported treating Mr. Moreno for
“major depression chronic severe recurrent psychotic features.” Id. at 834.
The ALJ observed, however, that the diagnosis of psychotic features is
“not supported by Dr. Pedemonte’s own treatment records.” Id.
No. 17-1954 9
capable of performing one-two step jobs.”17 The court con-
cluded that the record as a whole adequately supported the
ALJ’s determination that Mr. Moreno could carry out “simple
work instructions.”18 The district court also was unpersuaded
by Mr. Moreno’s argument that the ALJ’s residual functional
capacity assessment did not account for Mr. Moreno’s limita-
tions in concentration, persistence, and pace: “the ALJ’s hypo-
thetical to the [vocational expert] adequately addressed Mr.
Moreno’s specific deficiencies” even if the words concentra-
tion, persistence, and pace were not used.19 The district court
further determined that the ALJ was not required to seek an
updated mental-health evaluation because the treatment
notes that postdated Dr. Wharton’s assessment did not show
a significant change in Mr. Moreno’s condition that would
have caused Dr. Wharton to revise her conclusions. Finally,
the district court found that the ALJ had “adequately consid-
ered the combined effects of Mr. Moreno’s physical impair-
ments, mental health impairments, and obesity when deter-
mining his [residual functional capacity].”20
Mr. Moreno timely appealed.
17 R.26 (1:15-cv-11168) at 14.
18 Id.
19 Id. at 18.
20 Id. at 22.
10 No. 17-1954
II
DISCUSSION
Mr. Moreno renews on appeal the arguments made to the
district court. We conclude that two of his contentions are
meritorious—that the ALJ improperly relied on an outdated
mental-health assessment and that the ALJ’s hypothetical to
the vocational expert failed to incorporate all of Mr. Moreno’s
limitations.
A. Mental-Health Evaluation
Mr. Moreno’s primary argument on appeal is that the ALJ
improperly afforded great weight to the mental-health evalu-
ation of Dr. Wharton because the copious evidence submitted
after her initial assessment could have altered her conclu-
sions. The Commissioner, however, submits that the treat-
ment notes of Drs. Gonzalez and Pedemonte would not have
changed Dr. Wharton’s opinion because, as the ALJ con-
cluded, the notes indicated improvement in Mr. Moreno’s
mental health, not deterioration.
Because the Appeals Council denied review, we evaluate
the ALJ’s supplemental decision as the final word of the Com-
missioner of Social Security. Scrogham v. Colvin, 765 F.3d 685,
695 (7th Cir. 2014). We must uphold the ALJ’s decision if it is
supported by “substantial evidence, that is, ‘such relevant ev-
idence as a reasonable mind might accept as adequate to sup-
port a conclusion.’” Moore v. Colvin, 743 F.3d 1118, 1120–21
(7th Cir. 2014) (quoting Richardson v. Perales, 402 U.S. 389, 401
(1971)).
No. 17-1954 11
An ALJ should not rely on an outdated assessment if later
evidence containing new, significant medical diagnoses rea-
sonably could have changed the reviewing physician’s opin-
ion. See Stage v. Colvin, 812 F.3d 1121, 1125 (7th Cir. 2016) (re-
manding where a later diagnostic report “changed the picture
so much that the ALJ erred by continuing to rely on an out-
dated assessment”); Goins v. Colvin, 764 F.3d 677, 680 (7th Cir.
2014) (remanding after ALJ failed to submit new MRI to med-
ical scrutiny). Here, a comparison between Dr. Wharton’s as-
sessment and Dr. Gonzalez’s treatment notes reveal signifi-
cant and new developments in Mr. Moreno’s mental health
that could have affected Dr. Wharton’s assessment. We focus
on those aspects of Dr. Wharton’s assessment where the con-
trast is most stark.
Turning first to “Affective Disorders,” the form completed
by Dr. Wharton asks the evaluator to indicate if the claimant
has “[d]epressive syndrome characterized by at least four” of
the listed symptoms.21 Dr. Wharton did not check this diag-
nosis because her evaluation suggested a presence of only
three of the nine symptoms: “[d]ecreased energy,” “[f]eelings
of guilt or worthlessness,” and “[d]ifficulty concentrating or
thinking.”22 Critically, Dr. Wharton concluded that
Mr. Moreno did not exhibit “[s]leep disturbance” or
“[t]houghts of suicide.”23 Dr. Gonzalez’s treatment notes,
however, indicate that, for at least some period of time after
Dr. Wharton’s assessment, Mr. Moreno experienced both of
21 A. at 411.
22 Id.
23 Id.
12 No. 17-1954
these symptoms. Specifically, on February 17, 2010, Dr. Gon-
zalez noted that Mr. Moreno “has not slept for three days,”
and on March 24, 2010, that Mr. Moreno “continues to report
sleep disturbance.”24 Sleep issues arose again from December
2011 through March 2012.25 Moreover, at different times in his
treatment, Mr. Moreno reported to Dr. Gonzalez that he was
“capable of having” suicidal thoughts, was having suicidal
thoughts, or was having “negative thoughts related to … the
purpose of living.”26 Because it bears directly on criteria that
Dr. Wharton considered, this evidence certainly could have
altered her conclusion regarding the existence and severity of
Mr. Moreno’s affective disorder.
Similarly, with respect to Mr. Moreno’s functional limita-
tions, Dr. Wharton assessed only mild limitations in social
functioning. Her consultant’s notes reveal that Mr. Moreno
did “not like to be around others, as people bother him.”27
Dr. Gonzalez’s notes reveal something more serious than a
general dislike of people—“anger outbursts in public
places,“28 especially when he felt “that people [we]re taking
advantage of him.”29 This documented history of aggressive
behavior could have “changed the picture so much” that
Dr. Wharton would have concluded that Mr. Moreno was
24 Id. at 1947–48.
25 See id. at 1994, 1996–98.
26 See id. at 645, 1946, 1997.
27 Id. at 420.
28 Id. at 1994.
29 Id. at 1996.
No. 17-1954 13
more than mildly limited in social functioning. Stage, 812 F.3d
at 1125.
We cannot accept the agency’s argument that the newer
mental-health records would not have made a difference be-
cause they showed improvement. This argument is based on
the ALJ’s own assessment of the more recent records. We have
made clear, however, that ALJs are not qualified to evaluate
medical records themselves, but must rely on expert opinions.
Meuser v. Colvin, 838 F.3d 905, 911 (7th Cir. 2016) (remanding
because the ALJ improperly “played doctor”); Goins, 764 F.3d
at 680 (prohibiting ALJs from “playing doctor” by summariz-
ing the results of a medical exam without input from an ex-
pert).
The Social Security Administration’s ALJs are significantly
overburdened with massive caseloads and insufficient re-
sources. We therefore credit the ALJ with authoring a decision
that reviewed and considered the lengthy record in detail.
Nevertheless, the ALJ was presented with a case that had
trekked through a seven-year-long journey, which rendered
important aspects of the early mental-health analysis stale.
Because the ALJ relied heavily on that stale analysis, we re-
mand to the Agency to conduct a new mental-health assess-
ment on which Mr. Moreno’s functional capacity reasonably
can be determined.30
30 Because our remand requires the ALJ to solicit an updated men-
tal-health evaluation, we do not address Mr. Moreno’s other argument
concerning Dr. Wharton’s assessment—that the ALJ erred in selectively
omitting Dr. Wharton’s recommendation of one- to two-step work in for-
mulating his hypothetical question to the vocational expert.
14 No. 17-1954
B. Hypothetical Question
The ALJ’s determination is faulty for another reason. Both
Dr. Wharton’s assessment31 and Dr. Gonzalez’s notes set forth
problems with Mr. Moreno becoming distracted, “spacing
out,” and experiencing difficulties concentrating.32 These lim-
itations, however, were not included in the hypothetical ques-
tion posed to the vocational expert.
Our cases require that an ALJ “orient the [vocational ex-
pert] to the totality of a claimant’s limitations,” including “de-
ficiencies of concentration, persistence and pace.” O'Connor-
Spinner v. Astrue, 627 F.3d 614, 619 (7th Cir. 2010). Moreover,
“the most effective way to ensure that the [vocational expert]
is apprised fully of the claimant’s limitations is to include all
of them directly in the hypothetical.” Id. We, however, have
not required the ALJ to use “this specific terminology” in all
cases. Id. For instance, “[w]e sometimes have assumed a [vo-
cational expert]’s familiarity with a claimant’s limitations, de-
spite any gaps in the hypothetical, when the record shows
that the [vocational expert] independently reviewed the med-
ical record or heard testimony directly addressing those limi-
tations.” Id. “We also have let stand an ALJ’s hypothetical
omitting the terms ‘concentration, persistence and pace’ when
it was manifest that the ALJ’s alternative phrasing specifically
excluded those tasks that someone with the claimant’s limita-
tions would be unable to perform.” Id.
31 Id. at 418 (noting “[m]oderate” “[d]ifficulties in [m]aintaining [c]oncen-
tration, [p]ersistence, or [p]ace”).
32 See id. at 648–49, 651, 655 (noting “distractibility”); 660 (noting “spacing
out”); 704, 706–07 (noting difficulty concentrating).
No. 17-1954 15
Here, the question posed to the vocational expert included
that the hypothetical “individual can understand, remember,
and carry out simple work instructions,” can “exercise simple
work place judgments,” is “limited to routine work,” and can
have “no more than occasional changes in the work setting.”33
Clearly, the ALJ’s question did not account explicitly for
Mr. Moreno’s moderate limitations in concentration, persis-
tence, and pace. Moreover, there is no evidence in the record
to suggest that the vocational expert engaged in an independ-
ent review of Mr. Moreno’s medical records.
The Commissioner contends, however, that the question
posed by the ALJ adequately accounted for Mr. Moreno’s lim-
itations. She asserts that the ALJ’s reference to simple work
instructions and to routine, low-stress work “reasonably ac-
commodated Moreno’s moderate difficulties in concentra-
tion, persistence or pace.”34 We cannot accept this argument.
“[W]e have repeatedly rejected the notion that a hypothetical
like the one here confining the claimant to simple, routine
tasks and limited interactions with others adequately cap-
tures temperamental deficiencies and limitations in concen-
tration, persistence, and pace.” Yurt v. Colvin, 758 F.3d 850,
858–59 (7th Cir. 2014); see also Stewart v. Astrue, 561 F.3d 679,
684–85 (7th Cir. 2009).
“When an ALJ poses a hypothetical question to a voca-
tional expert, the question must include all limitations sup-
ported by medical evidence in the record.” Stewart, 561 F.3d
at 684. The question posed to the vocational expert did not
33 A. at 921–22.
34 Appellee’s Br. 23.
16 No. 17-1954
address Mr. Moreno’s documented limitations in concentra-
tion, persistence, and pace. As a result, the vocational expert’s
assessment of the jobs available to Mr. Moreno necessarily is
called into doubt, as is the ALJ’s conclusion that Mr. Moreno
is not disabled under the Social Security Act.
Conclusion
For the reasons set forth in this opinion, we reverse the
judgment of the district court and remand for proceedings
consistent with this opinion.
REVERSED and REMANDED