The opinion of the court was delivered by: Simandle, District Judge
This matter comes before the Court pursuant to Section 205(g) of the Social Security Act, as amended, 42 U.S.C. § 405(g) (2006), to review the final decision of the Commissioner of the Social Security Administration ("Commissioner" or "Defendant") denying the application of Plaintiff, Marcella Wooten ("Plaintiff"), for Disability Insurance Benefits ("DIB") under Title II of the Social Security Act ("the Act"), 42 U.S.C. §§ 401-434, and for Supplemental Security Income ("SSI") under Title XVI of the Act, 42 U.S.C. § 1381a. This Court must decide whether the Commissioner properly determined that Plaintiff is capable of performing work available in the national economy and is, therefore, not disabled. For the reasons explained below, the Court shall remand the decision of the Commissioner for a determination of how Plaintiff's panic attacks and hallucinations would affect her ability to perform work available in the national economy.
Plaintiff filed applications for DIB and SSI on July 8, 2002, alleging a disability onset date of May 3, 2000. The applications were denied and Plaintiff filed a request for reconsideration on April 28, 2003, which was also denied, on May 29, 2003. Plaintiff then filed a request for a hearing, which was held August 24, 2004 before Administrative Law Judge William Reddy ("the ALJ" or "ALJ Reddy"). On September 24, 2004, ALJ Reddy issued his decision denying Plaintiff entitlement to DIB and SSI benefits.
The ALJ found that Plaintiff had not engaged in substantial work activity since May 3, 2000, her alleged onset date. He next examined the severity of her impairments. The ALJ found that Plaintiff suffers from "major depression, a panic disorder, asthma, diabetes mellitus, disorders of the neck, hypertension, right shoulder impairment, and a seizure disorder." (R. at 25.) The ALJ found that these impairments cause significant "vocationally relevant limitations" on Plaintiff, in other words that they were severe, but that any alleged low-back pain and carpal tunnel syndrome do not impose such limitations and are not severe. (Id.)
Next, the ALJ determined that none of these impairments meets or exceeds the criteria in any of the listed impairments in 20 C.F.R., Part 404, Subpart P, Appendix 1. (R. at 28.) The ALJ determined, however, that Plaintiff's capacity to work was limited but that she retained the capacity for "a restricted range of light work"; that she cannot push and pull with her right arm; balance; climb ladders, ropes, or scaffolds; or reach overhead with her right arm.*fn1 The ALJ also found that Plaintiff can only occasionally climb stairs, bend, kneel, or crouch; that she should avoid frequent exposure to extremes of hot and cold temperature, wetness, humidity, fumes, odors, dusts, gases and poor ventiliation; and that she should avoid all hazards, such as moving machinery and unprotected heights. ALJ Reddy also found that Plaintiff had the mental residual capacity "to perform simple, routine tasks, with no more than occasional interactions with supervisors and fellow employees, and she is to have no contact with the general public." (R. at 29.)
Plaintiff filed a request for review of that hearing decision, which was denied by the Appeals Council on July 28, 2006. Thus, the decision of the ALJ became the final decision of the Commissioner. Plaintiff timely filed this action.
B. Evidence in the Record
1. Records of Psychological Impairment
There is significant evidence in the record that Plaintiff suffers from panic attacks, severe depression, and hallucinations. While the ALJ addressed Plaintiff's responses to stress in his assessment of Plaintiff's RFC, he failed to discuss how her panic attacks or her hallucinations would affect her employability.
An August 2000 evaluation by Dr. Edward Tobe, D.O., indicated that Plaintiff reported a life-long history of anxiety and depression, including auditory hallucinations in the late 1980s. Dr. Tobe estimated that Plaintiff was 75% permanently impaired by her psychiatric disabilities. (R. at 453.)
Dr. Rudy Horwitz, a Psy.D., evaluated Plaintiff in January of 2002, as part of her attempt at vocational rehabilitation. (R. at 359-63.) Using objective testing (R. at 362), Dr. Horwitz determined that there were clinical indications of anxiety and depression, and perhaps Posttraumatic Stress Disorder. (R. at 363-63.) (Plaintiff suffered significant abuse in her childhood and adult life.)
Dr. D'Ambola completed a medical evaluation of Ms. Wooten in July of 2002 and diagnosed her with panic disorder, severe anxiety, and major depression, and referred her to the South Jersey Behavioral Health Center for mental health treatment. (R. at 347-48.) A similar diagnosis, "Phobic Anxiety (Panic Disorder)," had been rendered in February 2001. (R. at 355.)
An intake form filled out by South Jersey Behavioral Health Resources in 2002, indicated that Ms. Wooten reported experiencing visual hallucinations, including a "black shadow." (R. At 391.)
In April 2003, Plaintiff again visited South Jersey Behavioral Health, and she was described as suffering from "anxiety, depression, [and] anger/rage." (R. at 436.)
On June 2, 2003 a psychiatric evaluation at South Jersey Behavioral Health Resources indicated that Plaintiff "acknowledges v[isual] hallucinations, [but] is not willing to take antipsychotics at this time." (R. at 429.)*fn2 Again, the intake form indicated hallucinations and referred to a "dark figure." (R. at 431.) Plaintiff was diagnosed with major depressive disorder with psychotic features. (R. at 434.)
In August of 2004, Jennifer Sherman, a licensed counselor, composed a letter to Plaintiff's representative summarizing Plaintiff's treatment with South Jersey Behavioral Health Resources. Ms. Sherman indicated that she had been treating Plaintiff since April 2003 and that her diagnosis was major depressive disorder recurrent severe with psychotic features. (R. at 428.)
On August 18, 2004, Ms. Sherman completed a SSA form, "Medical Source Statement Concerning the Nature and Severity of an Individual's Mental Impairment." (R. at 454 - 57.) Ms. Sherman indicated that Plaintiff was "not significantly limited" in the following abilities:
to remember locations and work-like procedures;
to understand and remember very short and simple repetitive instructions or tasks;
to understand and remember detailed instructions or tasks that may or may not be repetitive;
to carry out short and simple instructions or tasks;
to carry out detailed instructions that may or may not be repetitive;
to make simple work-related decisions;
to ask simple questions or request assistance from supervisors;
to be aware of normal hazards and take appropriate precautions;
to travel in unfamiliar places and/or to use public transportation; and
to set realistic goals or to make plans independently of others.
Ms. Sherman indicated that Plaintiff was moderately limited*fn3 in her abilities to:
maintain attention and concentration for extended periods (the approximately 2-hour segments between arrival and first break, lunch, second break, and departure) with four such periods in a workday; perform activities within a schedule, maintain regular attendance and be punctual with customary tolerances; and sustain an ordinary routine without special supervision.
Ms. Sherman indicated that Plaintiff was markedly limited*fn4 in her abilities to:
work in coordination with or proximity to others without being unduly distracted by them; complete a normal workday and workweek without interruptions from psychologically based symptoms and to perform at a consistent pace without an unreasonable number and length of rest periods; interact appropriately with the general public or customers; accept instructions and to respond appropriately to criticism from supervisors; get along with co-workers or peers without unduly distracting them or exhibiting behavioral extremes; maintain socially appropriate behavior; and respond appropriately to expected and unexpected changes in the work setting.
Ms. Sherman noted that "the following work-related stressors would increase the level of impairment beyond those indicated above:"
unruly, demanding or disagreeable customers even on an infrequent basis; production demands or quotas; a demand for precision (intolerance of error rates in excess of 5% to 10%); a need to make quick and accurate, independent decisions in problem solving on a consistent basis; and a need to make accurate, independent decisions in problem solving on a consistent basis.
Ms. Sherman further indicated that Plaintiff is "the type of person for whom a routine repetitive, simple, entry-level job would serve as a stressor which would exacerbate instead of mitigate psychological symptoms in the workplace." (Id.) She also indicted that Plaintiff's disabilities would cause her to be unable to complete a workday more than three or four times per month. (R. at 457.) The ALJ rejected these indications and failed to address the fact that Plaintiff was likely to have ...