Nevarez v. Commissioner of Social Security Administration

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Donna Nevarez,
Plaintiff,
v.
Commissioner of Social Security
Administration,
Defendant.
No. CV-25-00271-TUC-RM (JEM)
REPORT AND RECOMMENDATION
Plaintiff Donna Nevarez (“Nevarez”) seeks judicial review of a final decision by the
Commissioner of the Social Security Administration (“Commissioner”). (Doc. 1.) The
matter, on referral to the undersigned United States Magistrate Judge for Report and
Recommendation, is ripe for determination. (Doc. 11, 19, 23, 24.) As more fully set forth
below, the undersigned recommends that the district court reverse the ALJ’s decision and
remand to the Commissioner for further proceedings.
BACKGROUND
Procedural History
On May 9, 2022, Nevarez filed a Title XVI application for disability benefits under
the Social Security Act alleging disability beginning November 1, 2019.1 (AR 16.)
1 Nevarez later amended her alleged onset date to May 9, 2022. (Administrative Record
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Nevarez’s application was denied initially on February 9, 2023, and denied on
reconsideration on August 9, 2023. (AR 68-79 (disability determination at the initial level);
AR 80-89 (disability determination at the reconsideration level).) On May 7, 2024, Nevarez
appeared with a non-attorney representative and testified at a telephonic administrative
hearing before Administrative Law Judge (“ALJ”) Laura Speck Havens. (AR 48-67.) On
July 22, 2024, the ALJ issued her non-disability decision. (AR 16-29.) On November 27,
2024, the Appeals Counsel denied Nevarez’s request for review. (AR 1-6.) The ALJ’s
decision is the final decision of the Commissioner and the district court has jurisdiction
pursuant to 42 U.S.C. §§ 405(g) and 1383(c)(3).
The ALJ’s Decision
The ALJ found that Nevarez has not engaged in substantial gainful activity since
May 9, 2022, her application date. (AR 19.) The ALJ determined that Nevarez suffers from
the severe impairments of depression, anxiety, personality disorder, and post-traumatic
stress disorder (“PTSD”). Id. The ALJ determined Nevarez does not have an impairment
or a combination of impairments that meets or medically equals the severity of one of the
listed impairments in 20 CFR Part 404, Subpart P, Appendix 1. (AR 20.) The ALJ
determined Nevarez’s residual functional capacity (“RFC”) as the ability:
to perform a full range of work at all exertional levels but with the following
non-exertional limitations: can only have occasional interaction with co-
workers, supervisors, and the public. Occasional is defined as very little to
1/3 of the time.
(AR 23.)
“AR” 16.)
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The ALJ determined that Nevarez can perform her past relevant work as a hand
packer. (AR 26.) Considering Nevarez’s age, education, work experience and RFC, the
ALJ also found that Nevarez can make a successful adjustment to other work that exists in
significant numbers in the national economy such as laundry laborer, industrial cleaner,
and kitchen helper. (AR 28.) Accordingly, the ALJ found that Nevarez has not been under
a disability from the date her application was filed through the date of the ALJ’s decision.
Id.
Relevant Factual Background
Nevarez was 50 years old on the date of filing her application. (AR 16.) She holds
a General Educational Development certificate. (AR 216.)
Nevarez endorsed suffering from anxiety, PTSD, major depressive disorder,
borderline personality disorder, pituitary adenoma and Cushing’s disease. (AR 215.) In an
October 2022 Function Report, Nevarez described anxiety and depression limiting her
ability to leave her house, causing her to spend days in bed and sleep excessively. (AR 221-
222.) She identified suffering extreme fatigue despite sleeping for sixteen or more hours
per day. (AR 222.) As of October 2022, she could do laundry, take out the trash, and load
the dishwasher. (AR 223.) In a June 2023 Function Report, Nevarez explained that her
adult son cleans her house while she puts clothing in the washer and dryer because she gets
short of breath easily and is sensitive to heat and bright light. (AR 250.) At the
administrative hearing in July 2024, Nevarez stated that her son does the laundry. (AR 56.)
She explained that before she became sick, she was “an active, outgoing person.” (AR
252.)
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Since 2000, Nevarez has recorded earnings only from 2016 to 2018. (AR 194-199,
201.) In 2018, Nevarez told her primary care physician that she had been sleeping 18 hours
per day and felt that “there [wa]s something very wrong with her.” (AR 649.) She suspected
she had Cushing’s syndrome, which prompted an MRI on June 28, 2019, revealing a 3mm
mass that was determined to be a possible microadenoma. (AR 627-628.)
Nevarez’s primary care physician referred her to endocrinologist Alexandra Zwart,
M.D. (AR 653.) Nevarez saw Dr. Zwart in July 2020 complaining of a fifty-pound weight
gain, lethargy, blurry vision, easy bruising, and pain/cramping in the lower extremities after
exertion. (AR 299.) Dr. Zwart prescribed a dosage of Dexamethasone, a synthetic
corticosteroid that can be used to diagnose and treat Cushing’s syndrome and ordered
further testing. (AR 300-302.) Navarez was referred to a neurosurgeon for a second opinion
to confirm the preliminary diagnosis of Cushing’s disease. (AR 302, 305.)
On August 9, 2021, Nevarez had a consultation for possible Cushing’s syndrome
with Kevin Tuen, M.D. (AR 1340.) She reported to Dr. Tuen symptoms including fatigue,
muscle pains in her extremities, weight gain, vertigo, thin skin, and easy bruising. (AR 302,
305, 1350.) On September 2, 2021, Dr. Tuen opined, in part, that Nevarez’s “biochemical
workup so far remains equivocal in determining if she has Cushing syndrome or not.” (AR
1342.)
ISSUE ON REVIEW
Nevarez argues the Commissioner erred by failing to consider medical records that
she submitted to the Appeals Council after the administrative hearing that are relevant and
material to a diagnosis of Cushing’s disease. (Doc. 19 at p. 2; Doc. 24 at p. 2.) Nevarez
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argues that the Commissioner’s failure resulted in the improper determination that
Cushing’s disease is a non-severe impairment at step two and the improper discounting of
her symptom testimony. The Commissioner argues against the claim of error. (Doc. 23.)
As more fully explained below, this Court agrees with Nevarez and recommends that the
district court remand this matter to the Commissioner for further proceedings.
FIVE-STEP SEQUENTIAL EVALUATION PROCESS
The Commissioner employs a five-step sequential process to evaluate claims. 20
C.F.R. § 404.1520; see also Heckler v. Campbell, 461 U.S. 458, 460-462 (1983). To
establish disability the claimant bears the burden of showing: (1) s/he is not working;
(2) s/he has a severe physical or mental impairment; (3) the impairment meets or equals
the requirements of a listed impairment; and (4) the RFC precludes the performance of past
work. 20 C.F.R. § 404.1520(a)(4). At step five, the burden shifts to the Commissioner to
show that the claimant has the RFC to perform other work that exists in substantial numbers
in the national economy. Hoopai v. Astrue, 499 F.3d 1071, 1074 (9th Cir. 2007). If the
Commissioner conclusively finds the claimant “disabled” or “not disabled” at any point in
the five-step process, the ALJ does not proceed to the next step. 20 C.F.R.
§ 404.1520(a)(4).
“The ALJ is responsible for determining credibility, resolving conflicts in medical
testimony, and for resolving ambiguities.” Andrews v. Shalala, 53 F.3d 1035, 1039 (9th
Cir. 1995) (citing Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989)). The findings
of the Commissioner are meant to be conclusive if supported by substantial evidence. 42
U.S.C. § 405(g). Substantial evidence is “more than a mere scintilla but less than a
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preponderance.” Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999) (quoting Matney v.
Sullivan, 981 F.2d 1016, 1018 (9th Cir. 1992)). The court may overturn the decision to
deny benefits only “when the ALJ’s findings are based on legal error or are not supported
by substantial evidence in the record as a whole.” Aukland v. Massanari, 257 F.3d 1033,
1035 (9th Cir. 2001). This is so because the ALJ “and not the reviewing court must resolve
conflicts in the evidence, and if the evidence can support either outcome, the court may not
substitute its judgment for that of the ALJ.” Matney, 981 F.2d at 1019 (quoting Richardson
v. Perales, 402 U.S. 389, 400 (1971)); Batson v. Comm’r of Soc. Sec. Admin., 359 F.3d
1190, 1198 (9th Cir. 2004). The Commissioner’s decision, however, “cannot be affirmed
simply by isolating a specific quantum of supporting evidence.” Sousa v. Callahan, 143
F.3d 1240, 1243 (9th Cir. 1998) (citing Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir.
1989)). Reviewing courts must consider the evidence that supports as well as detracts from
the Commissioner’s conclusion. Day v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 1975).
A claimant is "disabled" for the purpose of receiving benefits if she is unable to
engage in any substantial gainful activity due to an impairment which has lasted, or is
expected to last, for a continuous period of at least twelve months. 42 U.S.C. §
423(d)(1)(A); 20 C.F.R. § 404.1505(a). "The claimant bears the burden of establishing a
prima facie case of disability." Roberts v. Shalala, 66 F.3d 179, 182 (9th Cir. 1995), cert.
denied, 517 U.S. 1122 (1996); Smolen v. Chater, 80 F.3d 1273, 1289 (9th Cir. 1996).
ANALYSIS
After the ALJ’s non-disability determination on July 22, 2024, Nevarez submitted
additional medical records to the Appeals Council. (AR 2.) The additional medical records
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are: (1) a radiology report from Radiology Ltd. dated April 4, 2024; and (2) medical records
from Barrow Neurological Institute dated August 9, 2024, through September 25, 2024.
(AR 2 (Appeals Council letter); AR 34-35 (Radiology Ltd. record); AR 36-46 (Barrow
Neurological Institute records).) The Appeals Council acknowledged that Nevarez
submitted additional medical records after the administrative hearing. (AR 2.) The Appeals
Council stated that the Radiology Ltd. report “does not show a reasonable probability that
[it] would change the outcome of the ALJ’s decision” and for that reason the Appeals
Council did not “exhibit” the Radiology Ltd. record. Id. The Appeals Council stated that it
did not consider the Barrow Neurological Institute medical records finding that these
records do not relate to the period at issue and, therefore, do not affect whether Nevarez
was disabled beginning on or before July 22, 2024. Id.2
Receiving Additional Evidence
A court may “at any time order additional evidence to be taken before the
Commissioner of Social Security, but only upon a showing that there is new evidence
which is material and that there is good cause for the failure to incorporate such evidence
into the record in a prior proceeding.” 42 U.S.C. § 405(g).
Material
To be material, the proffered evidence “must bear directly and substantially on the
matter in dispute.” Burton v. Heckler, 724 F.2d 1415, 1417–18 (9th Cir. 1984). The
evidence must be “relevant, material, probative, and present a reasonable possibility of
2 As explained herein, this Court finds that the Appeals Council’s failure to consider the
Barrow Neurological Institute is dispositive.
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changing the outcome of the [Commissioner’s] determination.” Id. The evidence must also
relate to the period on or before the date of the hearing decision. See 20 C.F.R. §
404.970(a)(5).
The ALJ determined that Cushing’s disease was not a severe impairment at step
two. (AR 19.) In reaching her non-severity determination, the ALJ referred to Nevarez’s
“alleged” Cushing’s disease. Id. The ALJ highlighted Nevarez’s self-research, the lack of
formal diagnosis by a provider, and the need for ongoing testing to confirm a Cushing’s
disease diagnosis. Nevarez argues that the ALJ’s analysis regarding Cushing’s disease is
laden with skepticism. See Id. (stating, “in terms of the claimant’s alleged Cushing’s
disease and pituitary adenoma, the record show that there is a reference that the claimant
did ‘some’ research . . . she then ‘flew to LA’ to see Dr. T. Friedman and he suggested that
she might have a pituitary disorder.”)
Nevarez also points out that the ALJ relied on an October 25, 2023, office visit note
authored by Dr. Yuen stating, in relevant part, “3 days of salivary cortisols (sic) shows
diurnal rhythm, so the evidence of Cushing syndrome very unlikely.” (AR 1355.) Nevarez
also highlights Dr. Yuen’s assessment after a January 3, 2024, visit wherein Dr. Yuen: (1)
listed Cushing’s disease as the diagnosis, (2) ordered further testing (MRI and Inferior
Petrosal Sinus Sampling), and (3) made another neurosurgery referral recording that
Nevarez was “symptomatic and ha[d] positive LNSCs.”3 (AR 1352-53.) Considering the
October 25, 2023, and January 3, 2024, medical records Nevarez urges that Dr. Yuen’s
3 (late night salivary cortisol)
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“very unlikely” language in his October 25, 2023, office visit note is likely in error or,
alternatively, may refer to an earlier, incomplete diagnostic workup. Either way, taking the
medical records authored by Dr. Yeun together there is an ambiguity in the record
concerning Cushing’s disease. Nevarez therefore insists that the Appeals Council should
have considered the Barrow Neurological Institute records as these records confirm that
Dr. Yuen diagnosed her with Cushing’s disease.
The Commissioner defends the ALJ’s decision summarily claiming that “[t]he
[Neurological Institute] records postdate the relevant period, as the Appeals Council
correctly explained.” (Doc. 23 at p. 11.) While it is true that the Barrow Neurological
Institute records postdate the ALJ’s decision, for the reasons explained herein this Court
finds that the records are material to the period at issue.
Nevarez testified that almost daily she experiences debilitating fatigue, weakness,
and muscle pain. (AR 61-64.) The ALJ found Nevarez’s complaints of such symptoms not
entirely credible relying on her finding that Cushing’s disease was not a medically
determinable impairment at step two. (AR 19, 23-24.) Relevant Social Security
Regulations do not permit an ALJ to rely on “an individual's statements of symptoms alone
…to establish the existence of a physical or mental impairment or disability.” Soc. Sec.
Rul. 16-3p, 2017 WL 5180304 (S.S.A. Oct. 25, 2017). Before an ALJ can consider
subjective symptom testimony, there must be objective evidence establishing there is a
medically determinable impairment that “could reasonably be expected to produce an
individual’s alleged symptoms.” Id. Given the requirements for an ALJ’s consideration of
a claimant’s symptom testimony, the ALJ’s failure to find that Cushing’s was a medically
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determinable impairment bore directly on the ALJ’s symptom testimony analysis.
As mentioned above, Dr. Yuen’s August 9, 2024, office visit record evidences a
diagnosis of Cushing’s disease and is thus objective medical evidence of Cushing’s disease.
(AR 42-45.) Nevarez points out that other evidence of Cushing’s contained in the record
is: (1) Nevarez’s past high ACTH4 levels, see AR 1310 (October 19, 2021, lab result), AR
1341 (August 9, 2021, note); (2) elevated morning cortisol levels on multiple occasions
and abnormal LNSCs, see AR 1334 (September 22, 2022, note), AR 1341 (August 9, 2021,
note), AR 1346 (December 17, 2021, office visit note); and (3) an abnormal dexamethasone
suppression result, see AR 1335 (September 22, 2022 note).
Given the foregoing objective evidence of the medically determinable impairment
of Cushing’s disease, this Court finds that the additional medical records submitted by
Navarez after the administrative hearing are material.
Good Cause
Section 405(g), Title 42, of the United States Code, “also requires a finding of good
cause.” Burton, 724 F.2d at 1417. “The good cause requirement often is liberally applied,
where, as in the present case, there is no indication that a remand for consideration of new
evidence will result in prejudice to the [Commissioner].” Id. at 1417-18. Good cause is also
found where the new evidence “surfaced after the [Commissioner’s] final decision and
therefore could not have been presented” at the administrative hearing. Id. at 1418.
Here, the Barrow Neurological Institute records submitted after the administrative
4 Adrenocorticotropic hormone
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hearing were unavailable because they did not exist prior to the administrative hearing. The
Commissioner fails to identify any prejudice it may suffer if the district court remands this
matter for the ALJ’s consideration of the medical records that Nevarez submitted to the
Appeals Council. Indeed, the Commissioner does not seriously dispute that good cause
exists. (Doc. 23 at pp. 10-11.)
In sum, the Court finds that medical records submitted to the Appeals Council are
material and that good cause exists as required by 42 U.S.C. § 405(g).
Remand Is Required
Because the ALJ did not consider the Barrow Neurological Institute records that
Nevarez submitted to the Appeals Council, this Court finds that remand for further
administrative proceedings is required. See Daywitt v. Colvin, No. CV-15-02476-PHX-
BSB, 2017 WL 393601, at *4 (D. Ariz. Jan. 30, 2017) (remanding for ALJ to consider
additional evidence of medical treatment presented to the Appeals Council that post-dated
ALJ’s decision); Vahey v. Saul, Case No. 18-00350-ACK-KJM, 2019 WL 3763436, at *11
(D. Hawai’i Aug. 9. 2019); (concluding that further proceedings “would be useful to allow
the ALJ to evaluate the relevance and impact of the [p]ost-[d]ecision [r]ecords, if any.”);
West v. Berryhill, Case No. 18-cv-00092-DKW-RT, 2019 WL 362259, at *5 (recognizing
that “[w]hen the Appeals Council fails to consider additional evidence that satisfies the
requirements of [20 C.F.R.] Section 404.970(b), remand to the ALJ is appropriate.”);
Garrison, 759 F.3d at 1020; Smolen, 80 F.3d at 1292 (the court has discretion to remand
for additional findings or for an award of benefits.).
On remand the ALJ may conduct a new hearing, further consider the medical
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evidence, including the medical records that were presented to the Appeals Council,
reassess Nevarez’s RFC, reassess the five-step sequential evaluation process, and issue a
new decision.
RECOMMENDATION
For the foregoing reasons, it is RECOMMENDED that the district court
REVERSE the decision of the ALJ and remand the matter to the Commissioner for further
administrative proceedings. Pursuant to Federal Rule of Civil Procedure 72(b)(2), any party
may serve and file written objections within fourteen days of being served with a copy of
the Report and Recommendation. A party may respond to the other party’s objections
within fourteen days. No reply brief shall be filed on objections unless leave is granted by
the District Court. If objections are not timely filed, they may be deemed waived. If
objections are filed, the parties should use the following case number: 25-cv-00271-RM.
Dated this 17th day of February, 2026.
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