                                                                       FILED
                                                           United States Court of Appeals
                                                                   Tenth Circuit

                                                                 August 19, 2011
                     UNITED STATES COURT OF APPEALS
                                                  Elisabeth A. Shumaker
                                                                   Clerk of Court
                            FOR THE TENTH CIRCUIT


    JEFFREY ALAN MCFERRAN,

                Plaintiff-Appellant,
                                                         No. 10-7095
    v.                                      (D.C. No. 6:09-CV-00370-FHS-KEW)
                                                         (E.D. Okla.)
    MICHAEL J. ASTRUE, Commissioner
    of Social Security Administration,

                Defendant-Appellee.


                             ORDER AND JUDGMENT *


Before HARTZ, Circuit Judge, HOLLOWAY and PORFILIO, Senior Circuit
Judges.



         Jeffrey Alan McFerran appeals from a judgment of the district court

affirming the Commissioner’s denial of his application for Social Security

disability benefits. We have jurisdiction under 28 U.S.C. § 1291 and 42 U.S.C.




*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
§ 405(g). Because the Commissioner failed to follow the correct legal standards

in denying benefits, we reverse and remand for further proceedings.

                                          I.

      Mr. McFerran, a 40-year-old Air Force veteran, sought disability benefits

based on degenerative disc disease of the lumbar and cervical spine and

associated pain; coronary artery disease; hypertension; obesity; postsurgery

hernia, knee, and shoulder limitations; depression; and anxiety. He had worked

as a postal service clerk for 15 years before his alleged disability-onset date,

February 13, 2007. Applying its own standards, the Veterans Administration

(VA) had determined that Mr. McFerran was “entitled to receive service

connected compensation at the 100 percent rate effective February 10, 2007.”

Admin. R., Vol. 3 at 252.

      Mr. McFerran takes medications for high blood pressure, back pain, chronic

pain, high cholesterol, depression, and anxiety. In his testimony he asserted that

back pain is his most significant limitation. He spends most of his day in a

recliner and must constantly adjust his position. He uses a TENS unit daily and

often uses a cane to move about the house. To assist his wife in running the

household, he helps his four-year-old daughter get ready for preschool and folds

laundry. He claimed that he could sit upright for at most ten minutes and walk

without a cane for about five minutes. With regard to mental impairments,

Mr. McFerran testified that he has memory problems as a result of his

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medications and that it takes a force of will for him to leave home. The medical

records indicate that he has been treated for depression and anxiety.

      The Administrative Law Judge (ALJ) denied benefits at the last step of the

five-step sequential process for determining disability. See Fischer-Ross v.

Barnhart, 431 F.3d 729, 731 (10th Cir. 2005) (explaining the five steps). At step

two the ALJ found that Mr. McFerran had multiple severe physical impairments,

but that his medically determinable mental impairments of depression and anxiety

were not severe because they caused only mild or “minimal limitation in [his]

ability to perform basic mental work activities.” Admin. R., Vol. 2 at 17.

      At step three the ALJ found that none of the identified impairments or a

combination of impairments met or equaled any of the listed impairments in

20 C.F.R. Part 404, Subpart P, Appendix 1. The ALJ then assessed

Mr. McFerran’s residual functional capacity (RFC), and at step four determined

that (1) he could perform a range of sedentary work as long as his overhead

lifting was restricted to accommodate his shoulder impairment but (2) he could

not perform his past relevant work as a postal clerk. The ALJ found

Mr. McFerran’s testimony characterizing the extent of his pain and mental

impairments to be not entirely credible.

      Relevant to step five, a vocational expert responded to a hypothetical

question describing an individual able to perform a range of sedentary work, but

with an above-shoulder-level restriction. The expert testified that there were

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other jobs in significant numbers in the regional and national economy that the

individual could perform. Based on this testimony the ALJ found that Mr.

McFerran’s RFC allowed him to perform a significant number of jobs in the

national economy, and therefore concluded that he was not disabled and denied

his application for benefits. The Appeals Council denied review, making the

ALJ’s decision the final agency decision. The district court affirmed.

      On appeal to this court, Mr. McFerran does not challenge the ALJ’s finding

at step two that his mental impairment is not severe. Rather, he asserts that the

ALJ’s credibility determination was improper; that the ALJ should have

taken his mental impairment into account when determining his RFC and crafting

hypothetical questions for the vocational expert; and that the ALJ failed to

consider and evaluate his VA 100% disability rating. 1

                                         II.

      “We independently review the Commissioner’s decision to determine

whether it is free from legal error and supported by substantial evidence.”

Krauser v. Astrue, 638 F.3d 1324, 1326 (10th Cir. 2011). We do “not reweigh the

evidence or substitute our judgment for the Commissioner’s.” Hackett v.


1
        This court’s review is “limited to the issues the claimant properly preserves
in the district court and adequately presents on appeal.” Krauser v. Astrue,
638 F.3d 1324, 1326 (10th Cir. 2011) (internal quotation marks omitted). The
above listing of issues disregards Mr. McFerran’s stray allegations of error based
on the treating-physician rule and the ALJ’s step-three analysis. See Aplt. Br.
at ii, 6, 17.

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Barnhart, 395 F.3d 1168, 1172 (10th Cir. 2005). But an ALJ’s failure “to provide

this court with a sufficient basis to determine that appropriate legal principles

have been followed is grounds for reversal.” Jensen v. Barnhart, 436 F.3d 1163,

1165 (10th Cir. 2005) (internal quotation marks omitted).

A.    Credibility Determination, Evaluation of Mental-Impairment
      Evidence, and Limitation in Hypothetical Question

      First, Mr. McFerran argues that the ALJ’s adverse credibility determination

was not in accordance with the correct legal standard. “Credibility

determinations are peculiarly the province of the finder of fact,” Kepler v. Chater,

68 F.3d 387, 391 (10th Cir. 1995) (internal quotation marks omitted), and our

precedent “does not require a formalistic factor-by-factor recitation of the

evidence so long as the ALJ sets forth the specific evidence he relies on in

evaluating the claimant’s credibility,” Poppa v. Astrue, 569 F.3d 1167, 1171

(10th Cir. 2009) (alteration and internal quotation marks omitted). “However,

findings as to credibility should be closely and affirmatively linked to substantial

evidence and not just a conclusion in the guise of findings.” Kepler, 68 F.3d

at 391 (alteration and internal quotation marks omitted).

      The ALJ’s decision sets forth the criteria for evaluating allegations of

symptoms and credibility, summarizes portions of Mr. McFerran’s testimony, and

restates entries in the medical record. But it provides no explanation of how the

ALJ applied the criteria to the testimony and medical records. The decision does


                                          -5-
not “contain specific reasons for the finding on credibility, supported by the

evidence in the case record” and is not “sufficiently specific to inform subsequent

reviewers of both the weight the ALJ gave to a claimant’s statements and the

reasons for that weight.” Hayden v. Barnhart, 374 F.3d 986, 992 (10th Cir. 2004)

(internal quotation marks omitted). The ALJ’s ultimate credibility determination

is a singularly unhelpful sentence: “[T]he claimant’s statements concerning the

intensity, persistence and limiting effects of [his] symptoms are not credible to

the extent they are inconsistent with the . . . residual functional capacity

assessment.” Admin. R., Vol. 2 at 20. We agree with Mr. McFerran that the

ALJ’s credibility assessment must be set aside.

      The ALJ’s errors in the credibility assessment necessarily affect the RFC

determination. “Since the purpose of the credibility evaluation is to help the ALJ

assess a claimant’s RFC, the ALJ’s credibility and RFC determinations are

inherently intertwined.” Poppa, 569 F.3d at 1171. If the ALJ reaches a different

credibility assessment on remand, it may be necessary to revise Mr. McFerran’s

RFC. See id.

      The ALJ’s RFC assessment and step-five determination are also defective

for other reasons. An ALJ must “consider the limiting effects of all [a claimant’s]

impairment(s), even those that are not severe, in determining [RFC].”

20 C.F.R. § 404.1545(e). “While a ‘not severe’ impairment(s) standing alone may

not significantly limit an individual’s ability to do basic work activities, it

                                           -6-
may–when considered with limitations or restrictions due to other impairments–be

critical to the outcome of a claim.” SSR 96-8p, 1996 WL 374184, at *5 (July 2,

1996). And the hypothetical questions posed to a vocational expert to assist with

the step-five determination must reflect with precision “all . . . those impairments

borne out by the evidentiary record.” Evans v. Chater, 55 F.3d 530, 532

(10th Cir. 1995).

      At steps four and five of the sequential evaluation process, however, the

ALJ made no findings on what, if any, work-related limitations resulted from

Mr. McFerran’s nonsevere mood disorder and chronic pain. He did not include

any such limitations in either his RFC determination or his hypothetical question.

Nor did he explain why he excluded them.

      In sum, we cannot conclude that the Commissioner applied the correct legal

standards in evaluating Mr. McFerran’s credibility, assessing an appropriate RFC,

and posing a proper hypothetical question to the vocational expert. We must

remand for the agency’s additional consideration of these issues.

B. Consideration of VA Disability Rating

      Mr. McFerran next argues that the ALJ committed reversible error by not

giving enough weight to the VA’s disability rating and by not discussing that

rating more fully. “[A]lthough findings by other agencies are not binding on the

Commissioner, they are entitled to weight and must be considered.” Hackett,

395 F.3d at 1172 (alteration and internal quotation marks omitted); see also

                                         -7-
20 C.F.R. § 404.1512(b)(5) (stating that agency will consider “[d]ecisions by any

governmental or nongovernmental agency about whether you are disabled”).

      The record demonstrates that the ALJ examined the VA medical records

and acknowledged the VA’s 100% disability rating. See Admin. R., Vol. 2 at 20

(“[C]onsideration of the Veteran[s] Administration rating has been considered.”).

This court’s “general practice . . . is to take a lower tribunal at its word when it

declares that it has considered a matter.” Hackett, 395 F.3d at 1173. Moreover,

Mr. McFerran “has not pointed to any specific factual finding or evidence in the

[VA] determination that should have changed the [ALJ’s] decision.” Id.

Although the Commissioner may decide to give fuller consideration to the VA

rating on remand, we reject this claim of error.

                                          III.

      The judgment of the district court is REVERSED and REMANDED with

instructions to remand to the Commissioner for further proceedings in accordance

with this Order and Judgment.


                                                 Entered for the Court



                                                 Harris L Hartz
                                                 Circuit Judge




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