                                                                             FILED
                            NOT FOR PUBLICATION                               MAR 22 2011

                                                                         MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                        U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



CONSTANCE MURPHY,                                 No. 10-35239

              Plaintiff - Appellant,              D.C. No. 6:08-cv-00723-HO

  v.
                                                  MEMORANDUM *
COMMISSIONER SOCIAL SECURITY
ADMINISTRATION,

              Defendant - Appellee.



                    Appeal from the United States District Court
                             for the District of Oregon
                    Michael R. Hogan, District Judge, Presiding

                             Submitted March 9, 2011 **
                                 Portland, Oregon

Before: D.W. NELSON, THOMAS, and GRABER, Circuit Judges.

       Constance Murphy (“Murphy” or “claimant”) appeals the district court’s

judgment affirming the Commissioner of Social Security’s denial of her

application for disability insurance benefits under Title II of the Social Security


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel granted appellant’s motion to waive oral argument.
Act. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we reverse and

remand.

      This court reviews the district court’s judgment de novo to determine

whether the Commissioner’s decision is supported by substantial evidence and

whether the Commissioner applied the correct legal standards. Batson v. Comm’r

of Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2004). “[I]n dealing with a

determination or judgment which an administrative agency alone is authorized to

make,” this court “must judge the propriety of such action solely by the grounds

invoked by the agency.” SEC v. Chenery Corp., 332 U.S. 194, 196 (1947).

      The Social Security Regulations set out a five-step process for deciding

whether a claimant is disabled under the Act. See 20 C.F.R. § 404.1520. In

“determining whether a combination of impairments establishes equivalence”

under Step 3, the administrative law judge (“ALJ”) “must explain adequately his

evaluation of alternative tests and the combined effects of the impairments.”

Marcia v. Sullivan, 900 F.2d 172, 176 (9th Cir. 1990). The ALJ’s “statement that

[a claimant] did not equal the listing [is] insufficient.” Id.

      This is equally true of the ALJ’s explanation of equivalence in this case,

where under Step 3 his decision reads as follows: “Dr. McDevitt testified that

claimant did not have any other impairment or combination of impairments that


                                            2
‘meets’ or ‘medically equals’ the requirements of any of the impairments listed in

Appendix 1, Subpart P of the Social Security Regulations.” Not only is this

explanation insufficient, it is also incorrect. Dr. McDevitt testified repeatedly that

he believed Murphy’s impairments probably qualified as somatoform disorder

under Listing 12.07, and this testimony was the reason why the ALJ decided to

order further psychological testing. At one point during the exchange, the ALJ

even likened Murphy’s proclivity for elective surgeries to “suicide by police,” and

Dr. McDevitt described this as a “fair analogy.” That the ALJ then used Dr.

McDevitt’s testimony as support for his conclusion that Murphy did not have an

impairment that “meets” or “medically equals” the requirements listed in the Social

Security Regulations simply begs the question. If the ALJ actually adopted Dr.

McDevitt’s opinion, he would have found that Murphy was disabled.

        This confusion is exacerbated by the fact that Listing 12.07 is not mentioned

in the ALJ’s brief discussion of disability, but decompensation, one of the

provisions of subsection (B) in Listing 12.07, is mentioned during the ALJ’s

discussion of residual functional capacity. See 20 C.F.R. pt. 404, subpt. P, app. 1,

§ 12.07(B). The other provisions of subsection (B) are not discussed in any detail,

if at all.




                                           3
      The ALJ ordered additional neuropsychological screening, and Ronald

Duvall, Ph.D., was tasked with examining Murphy “as part of determining her

eligibility for Social Security Disability benefits.” Within this context, and in

response to specific referral questions, Duvall listed somatoform disorder as a

“primary diagnosis,” writing that

      [s]he has multiple systemic involvement, with the DSM-IV criteria of
      multiple painful areas, sexual problems, GI complaints, pseudo-
      neurological conditions (e.g. hallucinations, seizures, dissociative
      symptoms), and so forth. There is rarely much time that passes
      without the individual presenting yet another complaint to a physician.
      This is a person who is likely to have had multiple exploratory
      diagnostic procedures and surgeries. It is usually a lifelong disorder.

Duvall also indicated that Murphy suffered from depression and borderline

personality disorder, including “substance abuse, suicide attempts, broken

relationships, anger outbursts, poor self-identity, and others.” As with Dr.

McDevitt’s testimony, however, the ALJ seems to have taken the fact that Duvall

did not use the magic words “meets or equals” as an indication that Murphy’s

somatoform disorder did not satisfy the requirements of the statute. Because no

such reasoning is provided in the ALJ’s decision, his finding is insufficient to show

that he actually considered the issue of equivalence. See Marcia, 900 F.2d at 176.

      What is more, the ALJ then used Dr. McDevitt’s testimony to justify

dismissing evidence from Dr. Richardson and Susan Blesch, both of whom


                                           4
indicated that Murphy’s somatoform disorder satisfied at least one of the

provisions of Listing 12.07, subsection (B). In fact, the evidence and testimony

from Dr. McDevitt, Ronald Duvall, Dr. Richardson, and Susan Blesch is

remarkably consistent on the issue of Listing 12.07. In either expressly or

implicitly rejecting the opinions of one medical expert and three examining

physicians,1 the ALJ must, at the very least, provide “specific and legitimate”

reasons for his decision. Lester v. Chater, 81 F.3d 821, 830-31 (9th Cir. 1996).

The ALJ has not done so here.

      “We have discretion to remand for further proceedings or to award benefits.”

Marcia, 900 F.2d at 176. When the Commissioner is in a better position than this

court to evaluate the evidence, remand is appropriate. Id. Because this is the case

here, we remand to the Commissioner for proper consideration of Step 3

equivalence. On remand, if the Commissioner finds that Murphy’s impairment or

combination of impairments equals a listing, Murphy is entitled to benefits. If the

Commissioner determines that Murphy’s medical evidence is insufficient to raise a




      1
        For purposes of this disposition, the term “physician” or “doctor” includes
psychologists and other health professionals who do not have M.D.’s. See 20
C.F.R. § 404.1527(a)(2) (partially defining “medical opinions” as “statements from
physicians and psychologists or other acceptable medical sources”).

                                          5
presumption of disability, he should continue the disability evaluation to Steps 4

and 5.2 See id. at 176-77.

      REVERSED and REMANDED for further proceedings.




      2
      Because we remand for reconsideration of Step 3, we do not reach the other
arguments raised.

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