Appeal from the United States District Court for the Eastern District of Wisconsin. No. 07-C-969-Rudolph T. Randa, Chief Judge.
Before ROVNER, WOOD and WILLIAMS, Circuit Judges.
Lotresia Terry applied for Disability Insurance Benefits, asserting that she cannot work because she suffers from depression, fibromyalgia, hypertension, pelvic floor disorder, hematuria, and severe back pain following spinal fusion surgery. After her claim was administratively denied, an administrative law judge ("ALJ") reviewed her claim and concluded that Terry's impairments did not render her disabled. The Social Security Appeals Council denied her request for review and the district court held that the ALJ's decision was supported by substantial evidence. Terry appeals. Because the ALJ relied on an unsigned medical report that should have been excluded from the record, failed to consider all of Terry's impairments, and erroneously found her not credible, we remand the case to the agency.
Terry, who was forty-one years old at the time of the ALJ's decision, was diagnosed with fibromyalgia in 2001 and depression in 2004. Despite these impairments, she continued to work as a certified nurse's assistant until the fall of 2004, when an MRI of her spine revealed degenerative disc disease. In early 2005, Terry had spinal fusion surgery to address her chronic back pain. On February 7, 2005, she was discharged from occupational therapy as "independent in all self-cares" so long as she wore a back brace and a "sock aide," used a walker, and received assistance from her husband. During the spring of 2005, she received follow-up CT scans of her spine, which showed that she was recovering from surgery normally and that her spine fusion was stable. Terry was also diagnosed with pelvic floor disorder, hematuria (blood in her urine), and urgency of urination; although initially her urologist recommended that she pursue "intense and aggressive treatment of her pelvic floor musculature," by May 2005, a physician's assistant had noted that these conditions were improving and that this was her fifth and final visit to the doctor.
In June 2005, Terry applied for disability insurance benefits and supplemental security income, claiming an onset date of November 15, 2004. As part of the application process, a state agency doctor reviewed her medical records in August 2005 and concluded that she could perform light work. Several months later, another state agency physician, Dr. Daniel Jankins, examined Terry and observed that, although she reported needing a walker, she had intact reflexes, no swelling, and excellent muscle tone in her legs. Jankins noted that he had "somewhat of a difficult time explaining why she needs the walker" and recommended an orthopedic evaluation. Jankins also observed that Terry reported significant pain associated with fibromyalgia and back surgery, and noted her positive straight leg raising test and limited range of motion in her spine and hips. Finally, Jankins reported that, although in 2004 Terry had been prescribed Zoloft to treat her depression, she had stopped taking the drug after one month.
On March 10, 2006, Terry's treating physician, Dr. Benjamin Tobin, completed a residual functional capacity ("RFC") evaluation focusing on her fibromyalgia. Tobin opined that she could not walk more than one city block, lift ten pounds or more, or sit or stand for more than five minutes without changing position. He also reported that she could sit for two hours and walk for two hours during an eight-hour workday so long as she had the option of shifting positions, keeping her legs elevated while sitting, and taking unscheduled breaks. Tobin concluded that Terry would likely miss work more than four times a month because her illnesses produced "good days and bad days." He reported that, in addition to fibromyalgia, Terry had been diagnosed with degenerative disc disease, hypertension, chronic sinusitis, restless leg syndrome, depression, and psycho-physiological pain. Treatment notes submitted by Tobin show that Terry was prescribed Zoloft off and on beginning in 2004 and was consistently prescribed Paxil, another drug used to treat depression as well as anxiety, throughout 2004, 2005, and 2006.
In February 2006, Terry had another CT scan that was positive for a possible nonunion at disc L5-1. Her treating surgeon, Dr. Shekar Kurpad, met with her in May 2006 to discuss the scan and her continuing back pain. Dr. Kurpad recommended waiting three months and, if her pain had not abated, considering a second spinal fusion surgery at that point. When Terry returned to Dr. Kurpad in August 2006, x-rays showed that she had healed "extremely well" from the surgery, but Kurpad could not tell whether the x-ray showed a second non-union. He again recommended waiting six months to see if her pain decreased before scheduling a second surgery.
In December 2006, Terry was examined by an orthopedist, Dr. Sean Tracy, at the request of the state agency. Tracy concluded that she had no orthopedic issues and could lift and carry less than ten pounds, stand and walk less than two hours in an eight-hour workday, and sit less than six hours in an eight-hour workday. Because Terry told him that her treating physician had recommended a second back surgery, Tracy instructed her to avoid heavy bending, lifting, pulling, or twisting until she could see her doctor again.
That same month Terry also underwent a psychological evaluation at the request of the state agency. Dr. Phillip Ruppert opined that, although Terry reported suffering from depression and taking Zoloft, he believed that she might have been exaggerating the degree of impairment she experienced. Ruppert noted that she was able to understand, remember, and carry out simple instructions, and her capacity to maintain concentration and pace was between fair and good. He concluded that Terry suffered from "depression, not otherwise specified."
The record also contains an unsigned, undated RFC form from the state agency which concluded that Terry could perform work at the sedentary level. The RFC form states that Terry could occasionally lift ten pounds, frequently lift less than ten pounds, stand or walk at least two hours in an eight-hour workday, and sit for six hours in an eight-hour workday.
At a hearing before an ALJ, Terry testified that she lived with her aunt, who performed most daily tasks for her because her pain prevented her from doing household chores. She explained that, because of her fibromyalgia and back pain, she experienced "burning and throbbing" pain all over. On most days, she reported a pain level of ten out of ten. She also described her symptoms of depression, explaining that she cried frequently, avoided people, and only left the house when she had a doctor's appointment.
A vocational expert ("VE"), Allen Searles, also testified. The ALJ asked Searles to assume that Terry was limited to sedentary, unskilled work and would have to stand for one or two minutes every half hour. Searles opined that, given those limitations, she would not be able to perform her past work as a certified nurse's assistant or home health care aide but would be able to work as a surveillance system monitor (10,570 jobs in Wisconsin), an order clerk (11,260 jobs), or a "callout operator" performing credit checks for mortgage companies (950 jobs). When the ALJ asked him whether someone who was off pace five percent of the time could perform these jobs, Searles replied yes, but cautioned that someone who was off pace ten percent of the time or who was absent more than two days per month would not be able to find work. The ALJ then, apparently as an intended joke, asked Searle, "And I suppose if she ...