                                                                          F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                          OCT 21 2004
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk


    DONNA MCINTOSH LOUIE,

                Plaintiff-Appellant,

    v.                                                    No. 04-7022
                                                    (D.C. No. CV-03-262-S)
    JO ANNE B. BARNHART,                                  (E.D. Okla.)
    Commissioner, Social Security
    Administration,

                Defendant-Appellee.


                            ORDER AND JUDGMENT            *




Before McCONNELL , HOLLOWAY , and PORFILIO , Circuit Judges.



         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      This order and judgment is not binding precedent, except under the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. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      Donna McIntosh Louie appeals from a district court order affirming the

Commissioner’s decision denying disability benefits. The Commissioner adopted

the ruling of an administrative law judge (ALJ), who found that Louie suffers

from “osteoarthritis of the knees and fingers, which causes more than slight

impairment with limitation in motion and functioning,” R., Doc. 4 at 19, and that,

despite these limitations, Louie is capable of performing sedentary work, although

she is not able to resume any of her past relevant work, see id. at 20. Applying

the Medical-Vocational Guidelines, 20 C.F.R. Part 404, Subpt. P, App. 2 (Grids),

the ALJ found that Louie is not disabled.

      On appeal from this decision, we review to determine “whether the factual

findings are supported by substantial evidence in the record as a whole and

whether the correct legal standards were applied.” Howard v. Barnhart, 379 F.3d

945, 947 (10th Cir. 2004). We hold that the ALJ erred in one respect, and we

therefore reverse the decision of the district court approving the denial of

disability benefits.

      Louie suffers from chronic pain and swelling in her joints. In March 2001,

her treating physician, Marc Davis, referred her to a rheumatologist, Robert

McArthur, for assistance in diagnosing Louie’s condition; among other questions,

Dr. Davis wanted to determine whether Louie has lupus. Dr. McArthur initially

advised Dr. Davis, “I cannot entirely rule out systemic lupus although on the


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surface, I think it is probably not too likely that is the source of her discomfort,

however it does seem somewhat unusual that she would have relatively recent

onset of these musculoskeletal complaints at her young age.” R., Doc. 4 at 224.

Then, after receiving results from several tests, Dr. McArthur diagnosed Louie

with “[u]ndifferentiated autoimmune disease,” adding that he “really cannot

confirm classic lupus.” Id. at 223.

      Louie did not see Dr. Davis for more than a year after he referred her to

Dr. McArthur. She did, however, receive several months of treatment from other

physicians for a fractured left elbow. When she returned to Dr. Davis in April

2002, he made an assessment of “Lupus with Rheumatoid Arthritis,” id. at 234,

and filled out a Medical Source Statement form describing significant limitations.

      In the instant disability proceeding, the ALJ rejected Dr. Davis’s opinion

with respect to both his diagnosis of lupus and his assessment of Louie’s residual

functional capacity. Louie contends that this was improper, because Dr. Davis

was her treating physician and his opinion was therefore entitled to greater weight

than the ALJ gave it. We find no error. We have held that the ALJ must clearly

indicate how much weight he has accorded to the treating physician’s opinion and

explain his reasons for doing so. See Watkins v. Barnhart, 350 F.3d 1297, 1300

(10th Cir. 2003). Here, the ALJ complied with these requirements by stating that

he gave no weight to portions of Dr. Davis’s opinion because they were premised


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primarily on his diagnosis of lupus, which was inconsistent with Dr. McArthur’s

opinion that Louie probably did not suffer from systemic lupus. Although the

ALJ did not expressly apply the factors enumerated in Watkins for assigning

weight to a treating physician’s opinion, see id. at 1301, his opinion reflects that

the decision to give no weight to Dr. Davis’s opinion was supported by the

considerations deemed relevant in Watkins.

      Louie next asserts that the ALJ erred in applying the Grids because she

suffers from nonexertional limitations; thus, it was improper for the ALJ to make

a conclusive determination of nondisability based on the Grids, see 20 C.F.R. Part

404, Subpt. P, App. 2. We agree. The record contains several indications that

Louie is subject to nonexertional limitations, including findings by Dr. Davis that

Louie could not perform any job requiring stooping, kneeling, crouching,

crawling, or repetitive joint movements involving pushing and pulling. The ALJ

discounted other portions of Dr. Davis’s opinion but made no reference to these

findings or to any other medical evidence of nonexertional limitations.

Accordingly, we must remand this case to the Commissioner to determine whether

Louie has nonexertional limitations and, if so, to obtain testimony from a

vocational expert regarding the effect of these limitations on jobs that Louie

could perform.




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      For the foregoing reasons, the judgment of the district court is REVERSED

and this case is REMANDED with instructions to remand to the Commissioner for

further proceedings.


                                                 Entered for the Court



                                                 John C. Porfilio
                                                 Circuit Judge




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