                                                                               FILED
                           NOT FOR PUBLICATION                                   APR 02 2010

                                                                            MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                           U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


KATHRYN TERHUNE COTTON,                          No. 08-35428

             Plaintiff - Appellant,              D.C. No. 3:06-CV-06324-HA

  v.
                                                 MEMORANDUM *
MICHAEL J. ASTRUE, Commissioner of
Social Security Administration,

             Defendant - Appellee.


                  Appeal from the United States District Court
                            for the District of Oregon
                Ancer L. Haggerty, Senior District Judge, Presiding

                      Argued and Submitted February 2, 2010
                               Seattle, Washington

Before: RYMER, GOULD and BYBEE, Circuit Judges.

       Kathryn Terhune Cotton appeals the district court’s judgment affirming the

determination of the administrative law judge (ALJ) that she is ineligible for

disability benefits under Title II of the Social Security Act. We affirm.




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                          I

      Cotton testified that she had chronic fatigue, pain all over her body,

worsening fibromyalgia, a sleep disorder, difficulty concentrating, and sometimes

stayed in bed for days. She argues that the ALJ improperly discredited this

testimony. However, the ALJ made specific findings stating clear and convincing

reasons for doing so based on the following: medical evidence that Cotton was

histrionic, prone to dramatize and embellish symptoms; the ALJ’s own

observations, which indicated that Cotton exaggerated the extent of her hearing

loss; the absence of any physical disorders that might clinically produce symptoms

of the severity claimed by Cotton; and the nature of Cotton’s daily activities, which

included walking a mile four times a week as well as caring for and training dogs,

that exceeded her self-reported limitations. See Smolen v. Chater, 80 F.3d 1273,

1284 (9th Cir. 1996) (stating requirement for rejecting credibility of an applicant’s

testimony about the severity of impairments); Thomas v. Barnhart, 278 F.3d 947,

958-59 (9th Cir. 2002) (noting that the ALJ may consider the applicant’s reputation

for truthfulness, inconsistencies either in her testimony or between her testimony

and her conduct, her daily activities, her work record, and testimony from

physicians about the nature and severity of symptoms). These findings are

supported by substantial evidence. See Thomas, 278 F.3d at 959 (“If the ALJ’s

credibility finding is supported by substantial evidence in the record, we may not
engage in second-guessing.”). Among other things, Cotton’s treating psychologist

diagnosed her with histrionic personality disorder, a diagnosis that was confirmed

by a reviewing psychologist and a medical expert who testified at the hearing.1

There was no objective evidence of a back disorder, loss of motor strength,

diminished reflexes, dermatomal loss of sensation, spasm, or loss of joint motion.

Drs. McConochie, Mace, Lechnyr and Telew found no cognitive loss or

impairment. Cotton’s occupational therapist noted Cotton’s abnormal response to

all five of Waddell’s signs of non-organic pain, and found Cotton’s pain diagram

was indicative of symptom magnification which could not be explained on an

organic basis. Also, several medical reports indicated that Cotton had no medical

need for the cane she carried. In addition, the ALJ observed that although Cotton

was able to hear her attorney and respond to questions from the bench, she refused

to attend the hearing without her special assistance hearing dog.



                                          II

      Cotton further challenges the ALJ’s failure to accept the disability opinions

of treating physicians William Maier (a rheumatologist), James Morris (a pain

management specialist), Nicholas Telew (a psychiatrist), and Ron Lechnyr (a


      1
        Cotton did not apply for disability on the basis of her histrionic personality
disorder.
clinical psychologist).2 After considering and discussing the records of more than

twenty medical providers, the ALJ rejected these particular opinions of disability

because they were based primarily on self-reporting. Although an ALJ may not

reject an uncontradicted medical opinion based on sheer disbelief, Benecke v.

Barnhart, 379 F.3d 587, 594 (9th Cir. 2004), “[a]n ALJ may reject a treating

physician’s opinion if it is based to a large extent on a claimant’s self-reports that

have been properly discounted as incredible.” Tommasetti v. Astrue, 533 F.3d

1035, 1041 (9th Cir. 2008) (quotation marks omitted). As the ALJ properly

discounted Cotton’s self-reports as incredible, she could reject medical opinions

based on those self-reports. The ALJ accepted the testimony of Dr. Davis, a

psychologist who reviewed the record and opined that Cotton had moderate

restrictions in dealing with people, performing activities of daily life, social

functioning, and maintaining concentration, persistence or pace. In sum, while

some doctors concluded Cotton was disabled and unable to work, others indicated

that at most she had moderate limitations and could sustain employment. In these

circumstances, the Commissioner’s decision must be upheld because the evidence




      2
        For the purposes of this appeal, we assume that both Dr. Morris and Dr.
Maier were treating physicians. However, this conclusion is not free from doubt,
as the ALJ concluded that Dr. Morris was not a treating physician, and Dr. Maier
saw Cotton only twice.
would support either outcome. Benton v. Barnhart, 331 F.3d 1030, 1035 (9th Cir.

2003).



                                           III

         Cotton maintains that fibromyalgia, diagnosed by her treating physicians,

must be accepted as a “severe” impairment. A severe impairment is one that

“significantly limits” a claimant’s “physical or mental ability to do basic work

activities.” 20 C.F.R. § 404.1520(c). An ALJ must consider all of the evidence at

Step Two to determine whether a medically determinable impairment significantly

limits the claimant’s ability to perform basic work activities. Id. § 404.1520(a);

Bowen v. Yuckert, 482 U.S. 137, 145 (1987).

         Fibromyalgia “is diagnosed entirely on the basis of patients’ reports of pain

and other symptoms . . . there are no laboratory tests to confirm the diagnosis.”

Benecke, 379 F.3d at 590. In any event, the ALJ did conclude that Cotton should

be limited to light work due to the possibility that she might have fibromyalgia.

For this reason, any error in failing to include fibromyalgia as a severe impairment

is harmless. See Lewis v. Astrue, 498 F.3d 909, 911 (9th Cir. 2007) (holding that

when an ALJ accounts for resulting limitations later in the sequential evaluation

process, any error in finding the impairment non-severe at Step Two is harmless).
                                           IV

      Finally, Cotton faults the ALJ for discrediting her husband’s testimony. The

ALJ must consider lay evidence, 20 C.F.R. § 404.1513(d)(4), and must give

reasons germane to each witness to discount that witness’s testimony. Dodrill v.

Shalala, 12 F.3d 915, 918 (9th Cir. 1993). Lay witness observations may not be

discounted on account of the applicant’s lack of credibility. Id. The ALJ

concluded here that Larry Cotton’s testimony must be “significantly discounted”

because Cotton herself was not credible and was histrionic. It was error to do so to

the extent she discounted Larry Cotton’s testimony based on Cotton’s own lack of

credibility. However, that error is harmless given the ALJ’s finding that Cotton

was histrionic, for this disorder caused her to exaggerate and advertise her

symptoms. Thus, Larry Cotton’s observations of Cotton were unreliable, even if

they were true accounts of Cotton’s behavior and symptoms, because it would not

be possible to tell whether Larry Cotton had observed the effects of fibromyalgia

and fatigue, or the effects of his wife’s histrionic personality.

      AFFIRMED.
                                                                               FILED
Cotton v. Astrue, No. 08-35428                                                  APR 02 2010

                                                                            MOLLY C. DWYER, CLERK
BYBEE, Circuit Judge, dissenting:                                            U.S. COURT OF APPEALS



      Cotton’s allegations of disabling physical and mental pain were supported

by the uncontradicted opinions of four treating doctors. The ALJ rejected Cotton’s

allegations based on a finding that she lacked credibility, and rejected the opinions

of all four of her treating doctors largely based on the idea that their diagnoses

were based on Cotton’s own (incredible) self-reporting. The majority holds that

both the ALJ’s adverse credibility determination and her evaluation of the medical

opinion evidence were supported by “clear and convincing” reasons. I respectfully

disagree, and would hold that the ALJ erred in both of these determinations.

                                           I

      Because Cotton “produce[d] objective medical evidence of an underlying

impairment or impairments that could reasonably be expected to produce some

degree of symptom,” and because “there is no affirmative evidence of malingering,

the ALJ [could] reject [Cotton’s] testimony about the severity of her symptoms

only by offering specific, clear and convincing reasons for doing so.” Tommasetti

v. Astrue, 533 F.3d 1035, 1039 (9th Cir. 2008) (quotation marks omitted). The

ALJ did not meet this burden.

      First, the ALJ’s selective reliance on Cotton’s histrionic personality disorder

to find that Cotton “dramatizes and exaggerates her symptoms” is not convincing.
None of Cotton’s treating doctors found that Cotton had exaggerated her

symptoms, and the only doctor to diagnose Cotton with histrionic personality

disorder, Dr. Lechnyr, also diagnosed Cotton with fibromyalgia and at least three

mental disorders—borderline personality disorder, dysthymic disorder, and pain

disorder—not necessarily involving any tendency to exaggerate one’s symptoms.

The ALJ’s cherry-picking of Cotton’s histrionic personality out of her host of other

disorders is not a convincing basis for the adverse credibility finding.

      Moreover, the fact that Cotton was able to perform some routine activities,

such as walking and using a computer, shows only that she could at times briefly

perform certain light activities. It does not contradict her testimony that her

impairments prevented her from performing a full-day’s work on a daily basis. See

Vertigan v. Halter, 260 F.3d 1044, 1050 (9th Cir. 2001) (“This court has

repeatedly asserted that the mere fact that a plaintiff has carried on certain daily

activities . . . does not in any way detract from her credibility as to overall

disability. One does not need to be utterly incapacitated to be disabled.” (quotation

marks omitted)).

      Finally, the ALJ’s statement that Cotton’s testimony was not supported by

objective evidence in the record is simply inaccurate. Multiple doctors found her

to be disabled based on her fibromyalgia and various mental disorders, and these


                                            2
doctors supported their conclusions with specific medical evidence, such as Dr.

Morris’s finding that Cotton had fourteen out of eighteen positive tender points and

negative control points. Because “the doctors’ reports and test results usually

corresponded with the afflictions [Cotton] perceived, particularly [her

fibromyalgia],” the ALJ erred in rejecting Cotton’s testimony. Webb v. Barnhart,

433 F.3d 683, 688 (9th Cir. 2005).

                                         II

      Even if the ALJ had correctly determined that Cotton lacked credibility, the

ALJ committed reversible error in her evaluation of the medical opinion evidence,

both in (1) rejecting the opinions of Drs. Maier and Morris regarding their

diagnoses of fibromyalgia and their assessment of Cotton’s resulting limitations;

and (2) rejecting the opinions of Drs. Telew and Lechynr regarding Cotton’s

mental limitations.

      Where a treating doctor’s opinion or ultimate conclusion is not contradicted

by another doctor, it may be rejected only for clear and convincing reasons. Lester

v. Chater, 81 F.3d 821, 830 (9th Cir. 1996). In rejecting the opinions of Drs. Maier

and Morris, the ALJ reasoned that these physicians did not provide “objective

findings” in support of their diagnoses but rather based these diagnoses on

Cotton’s own self-reporting, which the ALJ found lacked credibility.


                                         3
      Fibromyalgia “is diagnosed entirely on the basis of patients’ reports of pain

and other symptoms.” Benecke v. Barnhart, 379 F.3d 587, 590 (9th Cir. 2004).

Thus, we have stated explicitly that an ALJ is not permitted to reject a treating

physician’s opinion regarding fibromyalgia because of a lack of supporting

“objective” evidence. See id. at 594 (“The ALJ erred by effectively requiring

objective evidence for a disease that eludes such measurement.” (alteration and

quotation marks omitted)). Even putting aside this principle from Benecke, Drs.

Morris and Maier did in fact support their diagnoses with objective findings,

including Dr. Maier’s finding that Cotton had “widespread triggering” and chronic

back pain, and Dr. Morris’s finding of fourteen out of eighteen positive tender

points and negative control points.

      Moreover, I find unconvincing the ALJ’s reasoning that the doctors’

opinions should be rejected because they were based on Cotton’s self-reporting.

The majority relies on the proposition in Tommasetti that “[a]n ALJ may reject a

treating physician’s opinion if it is based to a large extent on a claimant’s self-

reports that have been properly discounted as incredible.” 533 F.3d at 1041

(quotation marks omitted). However, Tomasetti did not hold that such reasoning

could constitute “clear and convincing reasons” for rejecting a doctor’s

uncontradicted testimony but rather “specific and legitimate reasons,” id., which is


                                           4
a lower standard of review used when the ALJ is evaluating a contradicted medical

opinion, see Lester, 81 F.3d at 830. I do not believe that the mere lack of

credibility of the claimant can constitute “clear and convincing reasons” for

rejecting the uncontradicted opinions of two treating physicians. The circularity of

that logic is starkly evident in this case: essentially, the ALJ found that Cotton

lacked credibility because her allegations were unsupported by objective medical

evidence, and then rejected the opinions of her treating doctors (the objective

medical evidence she provided) because they were based on Cotton’s testimony.

Under this reasoning, it is hard to imagine how Cotton could have possibly

demonstrated that she had fibromyalgia.

      The ALJ erred in rejecting the opinions of Drs. Telew and Lechnyr for

similar reasons. A psychologist’s opinion is almost always based to a large degree

on the patient’s “self-reporting,” so an over-reliance on this fact would make it

extremely difficult for a claimant to establish disability based on mental

impairments. Furthermore, contrary to the ALJ’s assertions, both Drs. Telew and

Lechnyr provided a variety of objective findings in support of their conclusions,

including findings that Cotton suffered from impaired concentration, persistence,

and pace, and that she exhibited symptoms of borderline personality disorder,

dysthymic disorder, pain disorder, and polysubstance abuse in remission.


                                           5
      The ALJ’s determination is especially unconvincing with respect to Dr.

Lechnyr, who found that Cotton was disabled based on a combination of testing

and clinical interviews despite being the only doctor to diagnose her with histrionic

personality disorder, the basis of the ALJ’s claim that Cotton was prone to

exaggeration. The ALJ apparently rejected all of Dr. Lechnyr’s conclusions except

for his diagnosis of histrionic personality disorder, a line of reasoning I consider

quite dubious.

      Finally, the ALJ erred in placing more weight on the opinion of Dr.

Davis—a nonexamining physician—than on the opinions of Cotton’s treating

doctors, see Lester, 81 F.3d at 831 (opinion of nonexamining doctor cannot by

itself constitute substantial evidence that justifies rejection of treating physician),

particularly in the context of fibromyalgia, see Benecke, 379 F.3d at 594 n.4

(noting that the opinions of rheumatologists—specialists in fibromyalgia—are

given particular weight with respect to fibromyalgia because this disease “is poorly

understood within much of the medical community”). The majority reasons that

since “some doctors . . . indicated that at most [Cotton] had moderate limitations

and could sustain employment[,] . . . the Commissioner’s decision must be upheld

because the evidence would support either outcome.” Mem. Dispo. at 4-5. This

reasoning conflicts with our requirement that an ALJ give more weight to the


                                            6
opinions of treating doctors than to doctors that do not treat the claimant. See

Lester, 81 F.3d at 830.

      In sum, four treating doctors opined that Cotton could not work due to her

physical and mental impairments and provided extensive evidence for their

conclusions that is not contradicted by any treating or examining physician.

Because the ALJ failed to provide “clear and convincing reasons” for rejecting

these uncontradicted opinions, I respectfully dissent.




                                          7
