Julie S. v. Bisignano

Background

Julie S. applied for disability insurance benefits (DIB) under Title II and supplemental security income (SSI) under Title XVI of the Social Security Act in June 2017, alleging a disability onset date of December 20, 2016. Her claims were denied initially and on reconsideration. After an administrative law judge (ALJ) denied her request for disability benefits on October 30, 2019, and the Appeals Council declined review, she appealed to the Western District of Wisconsin. Upon a joint motion, that court remanded the case to an ALJ.

On remand, Julie S. amended her disability onset date to October 23, 2017. The ALJ held a second hearing on December 16, 2021, and again denied benefits on February 2, 2022. The ALJ followed the standard five-step sequential analysis: (1) whether the claimant is engaged in substantial gainful activity; (2) whether impairments are severe; (3) whether impairments meet a listed severity level; (4) whether the claimant can perform past relevant work given her residual functional capacity (RFC — the most a claimant can still do despite limitations); and (5) whether other jobs exist in significant numbers that the claimant can perform. The ALJ found Julie S. could not perform past relevant work but could perform jobs such as cleaner (193,000 nationally), assembler (16,000 nationally), and sorter (105,000 nationally), and therefore was not disabled. The Appeals Council declined to assume jurisdiction. Julie S. then filed the present action.

Standard of Review

Judicial review under 42 U.S.C. § 405(g) is limited to whether the ALJ's decision complies with relevant legal standards and is supported by substantial evidence — defined as less than a preponderance but enough that a reasonable mind might accept it as adequate to support a conclusion. The court may not reverse an ALJ decision simply because it might have reached a different result, so long as the decision falls within the available zone of choice.

Julie S.'s Arguments

Julie S. raised two categories of challenges to the RFC determination: (1) physical impairments — specifically her hands and knees — and (2) mental impairments.

Hand Impairments

Julie S. argued the ALJ improperly substituted her own judgment for that of medical experts when formulating RFC limitations on her ability to handle and finger objects, and failed to develop the record adequately. The Commissioner argued the ALJ relied on medical professionals' conclusions and that Julie S. had not identified objective medical evidence showing greater functional limitations.

The court agreed with Julie S. on this point. The only medical opinion addressing her hands after surgery — from Dr. Giusti — covered only a six-week post-surgical lifting restriction. The ALJ found Dr. Giusti's opinion unpersuasive as temporary, and noted that post-surgery exams showed no arm or hand weakness. However, the court found this reasoning misleading: the ALJ acknowledged a June 2021 examination by Dr. Khan for hand pain (resulting in a finger injection), and Julie S. reported at the December 2021 hearing that one hand had been giving her serious trouble. More critically, the court noted in a footnote that most records cited by the ALJ were medical examinations for entirely unrelated conditions — not evaluations of hand function.

The state agency consultants, Dr. Bush (2017) and Dr. Chan (2018), provided their opinions before the hand surgery records even existed and offered no assessment of Julie S.'s ability to handle or finger frequently. The ALJ acknowledged the new records warranted a more restrictive RFC (light rather than medium work), in part due to bilateral carpal tunnel syndrome — but there was still no medical opinion or consultive examination addressing how the hand impairments affected her ability to work.

The court held that the ALJ crossed the line from permissible RFC formulation into improperly drawing her own inferences from medical reports (sometimes called "playing doctor"). An ALJ is not required to rely on a specific medical opinion, but she may not draw her own inferences from medical evidence to fill a void. The court found the case distinguishable from the Commissioner's cited authority, Hannah L. v. O'Malley, because there the consultants had actually opined on handling and fingering; here they had not.

The court further held that the ALJ failed her independent duty to fully and fairly develop the record. When the record lacks medical evidence of functionality, the ALJ must seek an opinion from a treating physician or order a consultive examination. The failure to develop the record is reversible error when it does not contain enough evidence to determine the impact of a claimant's impairment on her ability to work, and is only warranted where the failure is unfair or prejudicial. The court found Julie S. was prejudiced because the undeveloped record left no medical basis for the RFC's frequent handling and fingering finding.

The court declined Julie S.'s request to simply award benefits, finding that a direct award is appropriate only when all essential factual issues have been resolved and the record adequately establishes entitlement to benefits — conditions not met here.

Knee Impairments

Julie S. argued the RFC did not account for all functional limitations from her bilateral knee osteoarthritis, particularly pain and inability to ambulate. The court rejected this argument. The record cited regarding inability to ambulate predated her knee surgeries. The ALJ had considered the records regarding arthritic changes, crepitus, and injections. The court found that Julie S. was essentially asking it to reweigh evidence the ALJ already considered, which is not within the court's role.

Julie S. also argued the ALJ failed to account for future time off task and absenteeism related to potential future right knee surgery. The court found this argument speculative — Julie S. did not point to evidence substantiating the degree of absenteeism such appointments would cause, and the ALJ cannot speculate on the outcome of future surgery when fashioning an RFC. The court concluded the knee limitations included in the RFC were supported by substantial evidence.

Mental Impairments

Julie S. argued the ALJ erred by rejecting the opinion of Dr. Weber and relying on her own inferences, and that the RFC failed to account for her inability to interact with others. The court rejected both arguments.

On the first point, the court noted that an ALJ is not required to adopt a specific medical opinion's conclusions, and rejecting an opinion does not automatically mean the ALJ interpreted raw data. The court characterized Julie S.'s argument as a disagreement about which evidence the ALJ should have weighted more heavily, not a showing that the ALJ improperly substituted her own medical judgment.

On the second point, the ALJ had found at step two that Julie S. had only a moderate (not marked) limitation in interacting with others and in adapting or managing herself — findings Julie S. did not challenge. The ALJ also accounted for interaction limitations in the RFC by restricting Julie S. to only occasional interaction with the public and prohibiting group or team-based work. The court found substantial evidence supported the RFC's treatment of mental impairments.

Disposition

Magistrate Judge Elkins granted in part and denied in part Julie S.'s request for relief, and granted in part and denied in part the Commissioner's request for relief. The case was remanded to the Social Security Administration under sentence four of 42 U.S.C. § 405(g) for further proceedings, with instructions for the ALJ to obtain medical evidence addressing how Julie S.'s hand impairments affected her functioning during the relevant time period. Both parties had consented to disposition by the Magistrate Judge under 28 U.S.C. § 636(c).