     15-819
     Ornelas-Sanchez v. Colvin

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 1st day of February, two thousand sixteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                RICHARD C. WESLEY,
 8                DEBRA ANN LIVINGSTON,
 9                              Circuit Judges.
10
11       - - - - - - - - - - - - - - - - - - - -X
12       BONNIE ORNELAS-SANCHEZ,
13                Plaintiff-Appellant,
14
15                    -v.-                                               15-819
16
17       CAROLYN W. COLVIN, Acting Commissioner
18       of Social Security,
19                Defendant-Appellee.
20       - - - - - - - - - - - - - - - - - - - -X
21
22       FOR APPELLANT:                        TIMOTHY E. HILLER, LAW OFFICES
23                                             OF KENNETH HILLER PLLC, Amherst,
24                                             New York.
25
26       FOR APPELLEE:                         REBECCA H. ESTELLE (with Stephen
27                                             P. Conte on the brief) for
28                                             William J. Hochul, Jr., United

                                                  1
 1                              States Attorney, Western
 2                              District of New York, Buffalo,
 3                              New York.
 4
 5        Appeal from a judgment of the United States District
 6   Court for the Western District of New York (Telesca, J.).
 7
 8        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
 9   AND DECREED that the judgment of the district court be
10   VACATED and REMANDED.
11
12        Bonnie Ornelas-Sanchez appeals from the October 21,
13   2014 order of the United States District Court for the
14   Western District of New York (Telesca, J.), affirming the
15   July 13, 2011 final administrative decision denying her
16   application for disability benefits. We assume the parties’
17   familiarity with the underlying facts, the procedural
18   history, and the issues presented for review.
19
20        “We undertake a plenary review of the administrative
21   record, and our focus is on the administrative ruling more
22   than on the district court’s decision.” Lamay v. Comm’r of
23   Soc. Sec., 562 F.3d 503, 507 (2d Cir. 2009). Our review is
24   limited to determining “if there is substantial evidence,
25   considering the record as a whole, to support the
26   Commissioner’s decision and if the correct legal standards
27   have been applied.” Shaw v. Chater, 221 F.3d 126, 131 (2d
28   Cir. 2000). “‘Substantial evidence’ is evidence that
29   amounts to ‘more than a mere scintilla,’ and has been
30   defined as ‘such relevant evidence as a reasonable mind
31   might accept as adequate to support a conclusion.’” McIntyre
32   v. Colvin, 758 F.3d 146, 149 (2d Cir. 2014) (quoting
33   Richardson v. Perales, 402 U.S. 389, 401 (1971)).
34
35        “The Social Security Administration regulations outline
36   the five-step, sequential evaluation process used to
37   determine whether a claimant is disabled: (1) whether the
38   claimant is currently engaged in substantial gainful
39   activity; (2) whether the claimant has a severe impairment
40   or combination of impairments; (3) whether the impairment
41   meets or equals the severity of the specified impairments in
42   the Listing of Impairments; (4) based on a ‘residual
43   functional capacity’ assessment, whether the claimant can
44   perform any of his or her past relevant work despite the
45   impairment; and (5) whether there are significant numbers of
46   jobs in the national economy that the claimant can perform
47   given the claimant’s residual functional capacity, age,

                                  2
 1   education, and work experience.” McIntyre, 758 F.3d at 150.
 2   We conclude that remand is necessary because the
 3   Administrative Law Judge (“ALJ”) made inadequate findings at
 4   the second step of this framework.
 5
 6        The regulations “require application of a ‘special
 7   technique’ at the second and third steps of the five-step
 8   framework” when evaluating the severity of mental
 9   impairments. Kohler v. Astrue, 546 F.3d 260, 265 (2d Cir.
10   2008) (quoting Schmidt v. Astrue, 496 F.3d 833, 844 (7th
11   Cir. 2007)). This technique requires “the reviewing
12   authority to determine first whether the claimant has a
13   ‘medically determinable mental impairment.’ If the claimant
14   is found to have such an impairment, the reviewing authority
15   must ‘rate the degree of functional limitation resulting
16   from the impairment(s) in accordance with paragraph (c),’
17   which specifies four broad functional areas: (1) activities
18   of daily living; (2) social functioning; (3) concentration,
19   persistence, or pace; and (4) episodes of decompensation.”
20   Id. at 266 (citations omitted) (quoting 20 C.F.R. §
21   404.1520a). It is mandatory that the ALJ’s written decision
22   “reflect application of the technique”; “the decision ‘must
23   include a specific finding as to the degree of limitation in
24   each of the functional areas described in paragraph (c) of
25   this section.’” Id. at 266 (quoting 20 C.F.R. §
26   404.1520a(e)(4)).
27
28        The ALJ did not properly follow this technique when
29   considering whether Ornelas-Sanchez had a severe impairment
30   or combination of impairments at step two of the evaluation
31   process. The ALJ concluded that Ornelas-Sanchez suffered
32   from mental health problems, including anxiety and
33   depression, and a history of substance and alcohol abuse in
34   alleged remission. No findings were elucidated to support
35   these conclusions, and there were no findings as to whether
36   Ornelas-Sanchez’s alleged intellectual disability
37   constitutes a severe impairment. The ALJ simply
38   conclusorily noted that the record showed that Ornelas-
39   Sanchez’s impairments caused more than minimal functional
40   limitations and interfered with her ability to perform some
41   basic work-related activities. Without more, we conclude
42   that “[e]ffective review by this Court is frustrated by the
43   decision’s failure to adhere to the regulations.” Kohler,
44   546 F.3d at 267. Granted, the ALJ did go on to engage with
45   the relevant evidence in its consideration of Ornelas-
46   Sanchez’s residual functional capacity to perform work. But
47   evaluating that evidence at step four, and not earlier,

                                  3
 1   means “it is not clear whether the ALJ adequately considered
 2   the entire record when determining the severity of [the]
 3   impairment.” Id. at 268. The failure to make findings on
 4   this point is significant because the result of at least one
 5   IQ test in the record meets the intellectual disability
 6   requirements in the Listing of Impairments; so if this
 7   finding was credited, Ornelas-Sanchez would be disabled
 8   without proceeding to steps four and five. See id. at 266
 9   (“If the claimant’s medical impairment is severe, the
10   reviewing authority will first compare the relevant medical
11   findings and the functional limitation ratings to the
12   criteria of listed mental disorders in order to determine
13   whether the impairment meets or is equivalent in severity to
14   any listed mental disorder. If so, the claimant will be
15   found to be disabled.” (citations omitted)).1 Even at step
16   four, it is not clear why the ALJ gave great weight to the
17   opinion of the state agency review physician. Ultimately,
18   the ALJ’s analysis did not suffice and misapplied pertinent
19   legal standards. See id. at 265 (“Failure to apply the
20   correct legal standard constitutes reversible error,
21   including, in certain circumstances, failure to adhere to
22   the applicable regulations.”) (citations omitted).
23
24        This case is remanded so that the ALJ can make specific
25   findings as to whether Ornelas-Sanchez made a sufficient
26   showing that she suffered from an intellectual disability as
27   a severe impairment, using the mandated special technique.


         1
           Step three of the analysis appears to follow the
     special technique, but the passage simply determined whether
     the impairments the ALJ deemed severe were catalogued in the
     Listing of Impairments. But because no findings were made
     regarding whether Ornelas-Sanchez’s proffered intellectual
     disability qualified as a severe impairment, we do not know
     whether the ALJ considered this a severe impairment and
     included this in its step three analysis. Moreover, when
     the ALJ evaluated the list of impairments in 20 C.F.R. § 404
     Subpart P., App. 1, Pt. A, it considered only ¶¶ 12.02,
     12.04, and 12.09. There is no evaluation of Ornelas-
     Sanchez’s eligibility under ¶ 12.05 (“Intellectual
     Disability”), which has a structure “different from that of
     the other mental disorder listings.” 20 C.F.R. § 404
     Subpart P., App. 1, Pt. A ¶ 12.00. In sum, the ALJ’s
     failure to adequately consider whether Ornelas-Sanchez
     suffered from an intellectual disability at step two of the
     analysis impaired the application of the framework.
                                  4
 1   In so doing, we note that “[w]hen there is medical evidence
 2   of an applicant’s drug or alcohol abuse, the ‘disability’
 3   inquiry does not end with the five-step analysis.” Cage v.
 4   Comm’r of Soc. Sec., 692 F.3d 118, 123 (2d Cir. 2012).
 5   Rather, the ALJ remains free to find that “in the absence of
 6   . . . drug and alcohol abuse” Ornelas-Sanchez “would not
 7   meet the requirements for those disorders.” Id. at 121. But
 8   such findings are not present on this record.
 9
10        Accordingly, we VACATE the judgment of the district
11   court and REMAND with instructions for the district court to
12   remand to the Commissioner to specifically consider whether
13   Ornelas-Sanchez, at step two of the framework, has shown
14   that she suffers from a severe impairment in the form of an
15   intellectual disability.
16
17                              FOR THE COURT:
18                              CATHERINE O’HAGAN WOLFE, CLERK
19




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