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UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 98-50892
FIDEL G. LOZA,
Plaintiff-Appellant,
VERSUS
KENNETH S APFEL, COMMISSIONER OF SOCIAL SECURITY,
Defendant-Appellee.
Appeal from the United States District Court
For the Western District of Texas
July 13, 2000
Before DUHÉ, BARKSDALE and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
The Commissioner of Social Security, concluding that Fidel G.
Loza ("Mr. Loza") was not disabled within the meaning of the Social
Security Act, denied his claim for Social Security disability
insurance benefits. See 42 U.S.C. § 423 (1991). Mr. Loza brought
an action in the district court for judicial review of the
Commissioner's decision pursuant to 42 U.S.C. § 405(g) (1991). The
parties consented to have the case reviewed by a magistrate judge
who affirmed the Commissioner's decision. Mr. Loza appealed. We

reverse the district court judgment and remand the case for further
proceedings as set forth in the conclusion of this opinion.
I. FACTUAL BACKGROUND
Fidel G. Loza was born on July 26, 1949. He completed
elementary and secondary schools through the ninth grade and later
obtained a G.E.D. He studied drafting at A.C.C. (Austin Community
College) for three years but did not complete the course. The
record does not reflect his work experience prior to military
service. Mr. Loza served on active duty in the United States Army
in Vietnam during the war from July 2, 1969 to July 1, 1970. He
served in combat and was wounded three times in the line of duty.
After his military service, he was employed by Glastron Boat Works
from 1970 to 1973. Following that he worked sporadically as a used
car lot porter and as a kennel attendant. In 1973 or 1974 the
Veterans Administration (VA) determined that Mr. Loza was 100
percent permanently disabled, service connected, and therefore
entitled to veteran's disability benefits. Mr. Loza has not
engaged in any substantial gainful activity since 1975.
Mr. Loza applied for Social Security disability insurance
benefits on June 10, 1993 when he was 43 years old. His claim was
denied at the initial determination level in 1993. Upon his
request, he received a hearing before an Administrative Law Judge
(ALJ) on November 18, 1994. The ALJ decided on September 28, 1995
that Mr. Loza was not entitled to a period of disability or to
2

disability insurance benefits under Sections 216(i) and 223 of the
Social Security Act. The Appeals Council denied his request for
review on October 22, 1996, and the district court, by a magistrate
judge's decision, affirmed the Commissioner's determination on
August 14, 1998.
Mr. Loza's Social Security earnings record establishes that he
was insured for the purpose of entitlement to a period of
disability and disability insurance benefits through June 30, 1980.
In order for him to be entitled to benefits, it must be established
that he had a disabling impairment or combination of impairments on
or between April 27, 1979 and June 30, 1980. Due to the unusually
detailed nature of Mr. Loza's medical records and the value of both
prospective and retrospective medical evidence, see Ivy v.
Sullivan, 898 F.2d 1045, 1049 (5th Cir. 1990); Rivas v. Weinberger,
475 F.2d 255, 258 (5th Cir. 1973), a comprehensive summary of the
claimant's medical records follows.
During Mr. Loza's active duty military service in Vietnam from
July 2, 1969 to July 1, 1970, his left leg and other parts of his
body were injured by shrapnel in a booby trap explosion in January
1970. He sustained a gunshot wound to his left loin and abdomen in
May 1970. On another occasion his leg was pierced by a punji
stick. After being evacuated from Vietnam to the United States in
1970, Mr. Loza received treatment for his injuries and their
sequela in VA hospitals.
3

From 1970 to the date of the 1994 ALJ hearing, Mr. Loza
received treatment, medications, and therapy at VA hospitals for
Organic Brain Syndrome ("OBS"), Post Traumatic Stress Disorder
("PTSD"), anxiety, insomnia, headaches, arthritis, elbow surgery,
and pain in his upper and lower back. According to the VA records
he reported that he had hallucinations, nightmares, and flashbacks
related to the Vietnam war, as well as memory loss, hearing loss,
concentration loss, lack of anger control, domestic conflicts with
his wife and children, and withdrawal from social contacts.
Mr. Loza apparently has never been examined, treated or
evaluated by any physician other than the VA doctors. The medical
evidence of record consists only of copies of the VA records
pertaining to his hospitalizations, examinations, treatments and
therapy related to his 100 percent service connected disability and
other medical problems. The Commissioner and the ALJ did not have
Mr. Loza medically examined or evaluated for the purpose of
determining whether he is entitled to Social Security disability
insurance benefits.
The VA hospital and medical facility records reflect that, on
March 21, 1974, Dr. R.W. Gaylord, M.D., examined Mr. Loza and
diagnosed him as having chronic brain syndrome and psychosis due to
trauma. The doctor also noted that Mr. Loza had left flank and
lumbar-sacral pain for which he had been hospitalized twice since
1970. Dr. Gaylord found that some of his symptoms were not related
4

to a detectable anatomical abnormality and concluded that Mr. Loza
was in need of psychiatric evaluation and medications. He ordered
that Mr. Loza be admitted to the VA hospital psychiatric ward.
When a psychiatric ward bed became available on April 8, 1974,
Mr. Loza was admitted to the VA Center (Olin R. Teague Veterans
Hospital) in Temple, Texas. His medical history indicates that he
complained of pain in his left side which began after he was
wounded by gunshot in Vietnam in May 1970. He also reported a
burning sensation in his side when he lifted 25 to 50 pounds; pain
in his upper and lower back; headaches from stooping that started
after his injury by a booby trap explosion in Vietnam in January
1970; pain caused by shrapnel in his left foot and other parts of
his body; insomnia due to the pains in his side and back; easily
aroused anger; auditory and visual hallucinations in 1970 after his
evacuation from Vietnam; and a recurrence of a hallucination six
months prior to his hospital admission.1
Dr. H.P. Reveley, M.D., noted during his examination of Mr.
Loza at the VA hospital on April 9 and 10, 1974 that the veteran's
interpretation of proverbs implied impairment of his abstract
thinking; that Mr. Loza reported trouble with his hearing that
required persons speaking to him to sometimes repeat questions 3 to
4 times; that Mr. Loza was said to be service-connected for chronic
1 Mr. Loza reported that as he was hammering on his porch, he
visually hallucinated a person charging him from a shed, and he
grabbed his hammer as if it were a rifle.
5

brain syndrome2 due to trauma with headaches, tinnitus,3 and post
traumatic nervous condition4; that he sustained a gunshot wound to
2 Organic Brain Syndromes (OBS) are "a heterogenous class of
conditions caused by brain tissue dysfunction due to abnormalities
of brain structure or secondary to alterations of brain
neurophysiology or neurochemistry. In all cases, there is a
failure of normal metabolic processes in the brain leading to a
cognizant loss characterized by impairment of four major areas: 1)
orientation; 2) memory; 3) intellectual functions (comprehension,
calculation, learning); and 4) judgment. According to the
Diagnostic and Statistical Manual of Mental Disorders, Third
edition-Revised (DSM-III-R), the essential feature of all organic
mental disorders is a psychological or behavioral abnormality
associated with transient or permanent dysfunction of the brain.
In some cases, the origin of the dysfunction is readily identified
with diagnostic tools such as computed tomography (CAT) scanning of
the brain, magnetic resonance imaging (MRI) of the brain, or
electroencephalography (EEG) which reveals the electrical brain
wave patterns. In other cases, it is impossible to identify the
underlying abnormality in brain structure or function accounting
for the behavioral changes, but an organic cause can be inferred
from characteristic physical findings." 5 Robert K. Ausman, M.D.,
and Dean E. Snyder, J.D., Ausman & Snyder's Medical Library Lawyers
Edition § 8:49, at 431-32 (1990).
3 Tinnitus: A sound in one ear or both ears, such as buzzing,
ringing, or whistling, occurring without an external stimulus and
usually caused by a specific condition, such as an ear infection,
the use of certain drugs, a blocked auditory tube or canal, or a
head injury. See The American Heritage Dictionary of the English
Language 1879 (3rd ed. 1992); see also Stedman's Medical Dictionary
1816 (26th ed. 1995).
4 Posttraumatic Stress Disorder: The essential feature of the
disorder is "the development of characteristic symptoms following
exposure to an extreme traumatic stressor involving direct personal
experience of an event that involves actual or threatened death or
serious injury, or other threat to one's physical integrity; or
witnessing an event that involves death, injury, or a threat to the
physical integrity of another person; or learning about unexpected
or violent death, serious harm, or threat of death or injury
experienced by a family member or other close associate...The
characteristic symptoms resulting from the exposure to the extreme
trauma include persistent reexperiencing of the traumatic event,
persistent avoidance of stimuli associated with the trauma and
6

the left loin and abdominal region in May 1970, had multiple
metallic fragments in the arms and legs from the booby trap
explosion in May 1970, and had a small stab wound to the left leg;
and he may have had allergic reactions to medication received in
Brooke General Hospital in 1970. The initial impressions of Dr.
Reveley were: "(1) chronic brain syndrome secondary to trauma,
remote (s.c.) [service connected]; and (2) scars, left flank and
lateral abdominal muscles from prior gunshot wound."
Mr. Loza was discharged from the VA hospital in Temple, Texas
on April 25, 1974. Dr. Reveley recorded the following diagnoses
upon discharge: "(1) nonpsychotic brain syndrome due to trauma,
remote (s.c.) [service connected]; (2) weakness of left flank and
lateral abdominal muscles (s.c.) [service connected]; and (3)
adjustment reaction of adult life with marital conflicts." The
previous day Dr. Reveley had entered a provisional diagnosis of Mr.
Loza's condition as "Severe anxiety/chr. brain syndrome."
Dr. Reveley's report also noted that Mr. Loza suffered from
depression and nerve disorders and that antipsychotic medications
numbing of general responsiveness, and persistent symptoms of
increased arousal....Stimuli associated with the trauma are
persistently avoided....The individual has persistent symptoms of
anxiety or increased arousal that were not present before the
trauma. These symptoms may include difficulty falling or staying
asleep that may be due to recurrent nightmares during which the
traumatic event is relived, hypervigilance, and exaggerated startle
response. Some individuals report irritability or outbursts of
anger or difficulty concentrating or completing tasks." See
American Psychiatric Association, Diagnostic and Statistical Manual
of Mental Disorders (DSM-IV) 309.81, at 424-25 (1994).
7

were prescribed for him. Mr. Loza was placed on Haldol5 and
advised to take 2 mg at bedtime. Dr. Reveley noted that Mr. Loza
"required hospitalization for treatment of his nerves throughout."
Mr. Loza admitted to bouts of depression every day but denied
suicidal ideation. While in the hospital he participated actively
in group therapy conferences. Because Mr. Loza did not want to
remain in the hospital for psychotherapy, he was referred to the
human development center at the MHMR center in Travis County,
Austin, Texas. He was to return to see Dr. Reveley in 28 days for
follow-up treatment for his service connected, nonpsychotic OBS.
Although he was considered competent to handle funds due him, he
needed a 90 day period of convalescence.
On April 25, 1974, Dr. Reveley stated that Mr. Loza "cannot
return to full employment." He further noted Mr. Loza's physical
problems: pain in lumbosacral area, weakness of left flank and left
lateral abdominal muscles, burning in side upon lifting 25 to 50
pounds, lower and upper back pain. Dr. Reveley noted that Mr. Loza
had been hospitalized in July 1973 with similar complaints. An
orthopedic specialist reported to Dr. Reveley that Mr. Loza's lack
of musculature in the left flank created a postural problem which
resulted in pain in Mr. Loza's left lumbar area. Dr. Reveley noted
5 Haldol is a brand of haloperidol, which is the first of the
butyrophenone series of major tranquilizers. It is indicated for
use in the management of manifestations of psychotic disorders.
See Physicians' Desk Reference 2155-56 (54th Ed. 2000).
8

that Mr. Loza had been referred for physiotherapy, and that an X-
ray of the "lumbosacral spine" on August 8, 1973 showed metallic
fragments in left flank. An X-ray of the "cervical spine" showed
loss of cervical lordosis.
Mr. Loza was examined and treated by Dr. Reveley at the VA
hospital on November 22, 1974, February 7, 1975, and June 26, 1975.
He complained of worsening headaches, sore left shoulder, anxiety,
hyperventilation, vertigo as in Meniere's syndrome, and poor
hearing since the 1970 booby trap explosion. Dr. Reveley
prescribed Haldol and Darvon6 for Mr. Loza's conditions on each
visit.
Mr. Loza was seen by someone named Johnson at the "OPMHC"
("out patient medical hospital clinic" perhaps) of the VA Hospital
on April 8, 1977. Johnson's initials and profession are not clear
from the record. Johnson noted: "Increasing headaches No
psychiatric Condition to account for headaches Don't agree previous
dx of OBS Suggest neurological consult EEG & shall [undecipherable]
today. [a whole illegible sentence here] RTC ["return to clinic"
perhaps] 12 wks." In the margin are notes suggesting the
6Darvon is propoxyphene, a narcotic analgesic used to relieve mild
or moderate pain. See The American Medical Association Guide to
Prescription and Over-the-Counter Drugs 469 (1st ed. 1988).
9

scheduling of "EEG 5-10-77," "Neurological 5-10-77," and "MHC 6-13-
77". The notation also mentions "Acetaminophen."7
On June 13, 1977, over a similar "Johnson" signature an entry
under the heading "OPMHC" appears as follows: "Neuro can't find
anything wrong w[ith] this pt either[?] so maybe secondary gain
factors play a dominant role.8 Cont[inue] present regimen[.] RTC
12 wks[.]"
The preceding are the only entries in the record by Johnson.
The record does not reflect whether Johnson was a doctor, nurse or
some other type of medical technician. The entries are brusque and
cryptic, and they appear to have been made without taking or
reading Mr. Loza's medical history or consulting the treating VA
physicians. All of Mr. Loza's treating physicians consistently
diagnosed and treated Mr. Loza for OBS, PTSD, or a similar mental
or emotional disorder. Johnson expressed doubt but did not change
the diagnosis and ordered the continuance of the regimen prescribed
by Dr. Reveley and the other treating doctors.
On July 23, 1979, Mr. Loza was seen at "OP/MHC" by a doctor
whose signature is mostly illegible, except for a clear, bold
7Acetaminophen is a non-narcotic analgesic used to relieve pain and
reduce fever. See The American Medical Association Guide to
Prescription and Over-the-Counter Drugs, at 215.
8 Secondary gain factors are the interpersonal or social
advantages, such as attention, assistance, or sympathy, a person
gains indirectly from having an organic illness. See Stedman's
Medical Dictionary, 698 (24th ed. 1982).
10

"M.D." behind his name. The doctor noted: "Remains stable but
c[?] the same somatic discomfor[ts?] Wife works and he stays home
drawing 900 some dollars." The doctor prescribed Haldol and
Ascriptin9 for Mr. Loza's condition and scheduled him to "RTC in 24
wks."
On September 17, 1979, "V. Deinna[?] RN" saw Mr. Loza at the
VA hospital, recorded that he suffered a sudden onset of severe
upper back pain 5 days ago, and that his right great toe was very
painful to touch. Another entry below that in different
handwriting added that Mr. Loza had back pain, neck to buttocks
last 5-6 days and has "trauma, VTmiN[?] Pmh[?] nervous disorder."
The notation indicated that Haldol and Ascriptin had been
prescribed for Mr. Loza's disorders.
On October 8, 1980, Mr. Loza was examined and treated by Dr.
Flore, M.D., at the mental hygiene clinic of the VA hospital. The
doctor continued to diagnose Mr. Loza's problem as "non psychotic
Organic Brain Syndrome" and "post traumatic neurosis." The
patient reported a two day pulsating headache, disturbed sleep, and
less frequent nightmares. Dr. Flore determined that Stelazine10 had
9Ascriptin is a combination of aluminum hydroxide, an antacid, and
codeine, a narcotic analgesic. See The American Medical
Association Guide to Prescription and Over-the-Counter Drugs, at
224, 291.
10Stelazine is trifluoperazine, a phenothiazine antipsychotic agent
used for the symptomatic management of psychotic disorders and for
the short-term management of nonpsychotic anxiety. See American
11

been effective for Mr. Loza's anxiety. Dr. Flore prescribed
Stelazine, Benadryl11 and Darvon for Mr. Loza for the treatment of
his mental, emotional and other illnesses.
On January 21, 1981, Mr. Loza began therapy at the mental
hygiene clinic of the VA hospital where he was observed mainly by
Dr. J.M. Cooney, Ph.D., and registered nurses. The record reflects
that he visited the clinic on May 27, 1981, June 4, 1981, August
28, 1981, December 23, 1981, March 24, 1982, June 23, 1982, June
28, 1982, September 22, 1982, December 16, 1982, June 22, 1983,
September 28, 1983, December 14, 1983, March 9, 1984 and June 1,
1984. During this period Mr. Loza reported that he suffered from
headaches, dizzy spells, fainting and frequent neck pain. He was
administered Vistaril and Ascriptin. Dr. Flore noted his diagnosis
of OBS and posttraumatic neurosis on June 4, 1981 and August 28,
1981. On December 23, 1981, Dr. Cooney acknowledged Mr. Loza's OBS
diagnosis and recounted that Mr. Loza suffered from headaches three
to four times a week. On March 9, 1984, Dr. Cooney observed that
Mr. Loza still had frequent headaches and losses of temper, but no
thought disorder. Dr. Cooney on March 9, 1984, June 4, 1984,
Hospital Formulary Service Drug Information 2000, 2112 (42nd ed.
2000).
11Benadryl is diphenhydramine, an antihistamine used to treat
allergies and movement disorders caused by antipsychotic drugs.
See The American Medical Association Guide to Prescription and
Over-the-Counter Drugs, at 317.
12

September 4, 1984, February 5, 1985 and August 20, 1985
consistently assessed Loza's condition as "anxiety disorder" and
recognized a need for review of the patient's medications.
On February 19, 1986 the VA records reflect complaints of back
pain and headaches and the use of crutches because of foot pain.
The treating physician assessed Mr. Loza's condition as "Chronic
pain; anxiety, generally well controlled." Medical progress notes
dated March 13, 1986 reflect that Mr. Loza was continued on
Vistaril12 and Ascriptin by an M.D. whose identity is unclear from
the record. On May 14, 1986 and September 10, 1986, Mr. Loza
complained of headaches, insomnia, and was again assessed as having
"anxiety." A December 2, 1986 assessment performed by Dr. Cooney
noted that Mr. Loza lost his temper frequently but found no
evidence of "major depression." On March 3, 1987, Dr. Cooney made
an assessment of "nonpsychotic Brain Syndrome" and called for a
referral to an M.D. to review medications.
On March 24, 1987 and June 22, 1987, Mr. Loza was seen by Dr.
Gaylord, who diagnosed and treated his painful right foot as
"Metatarsalgia, right foot."
12Vistaril is hydroxyzine, a piperazine-derivative antihistamine
used for the symptomatic management of anxiety and tension
associated with psychoneuroses and as an adjunct in patients with
organic disease states who have associated anxiety. See American
Hospital Formulary Service Drug Information 2000, at 2227.
13

On September 1, 1987, Dr. Gaylord saw Mr. Loza and noted his
complaints of severe pain of the right elbow which started
approximately 4-6 weeks prior and had gotten progressively worse;
he was unable to flex or lift anything because of severe pain. Dr.
Gaylord diagnosed his condition as "acute Tendinitis, Bursitis of
the right elbow." The doctor started Mr. Loza on Motrin and
continued a prescription for Allopurinol.13 On October 1, 1987, Dr.
Gaylord found that Mr. Loza's painful right elbow had not improved,
sent for splint and referred him to Orthopedics. On December 28,
1987, he was seen by someone in Orthopedics whose signature is
unclear who ordered an increase in his Ascriptin.
On February 12, 1988, Dr. Gaylord saw Mr. Loza who complained
of back pain which he related to a back injury in military service.
The doctor diagnosed "low back syndrome, acute," and prescribed
continuation of same medicines, hard mattress, 2-3 hot baths daily
and no lifting.
On March 1, 1988, Dr. Cooney entered this assessment: "100
percent service connected veteran service connected for chronic
brain syndrome - Hx of anxiety - I see no evidence of significant
psychiatric disturbance - refer to M.D. to review medication." On
September 6, 1988, Dr. Cooney made the same OBS assessment and
13Allopurinol is used primarily in the management of gout but the
drug also serves to lower high uric acid levels (hyperuricemia)
caused by other drugs. See The American Medical Association Guide
to Prescription and Over-the-Counter Drugs, at 221.
14

referred to an "M.D." who advised Mr. Loza to take 50-100 mg
Vistaril. On March 6, 1989, Dr. Cooney recorded that Mr. Loza was
service connected for "`nonpsychotic brain syndrome,' as well as
other injuries he sustained in combat in Vietnam - He complains of
memory and concentration difficulties and occasional anxiety."
Progress notes taken by Dr. McCord on August 9, 1989 recognize
Mr. Loza's diagnosis of anxiety and OBS. Mr. Loza complained of
headaches, an ear infection, and leg, arm and back pain. Dr.
McCord described Mr. Loza's difficulties in managing the behavior
of his daughter, and assessed Mr. Loza as suffering from mild
anxiety. On November 8, 1989 and February 7, 1990, Dr. McCord's
progress notes indicate that Mr. Loza again complained of pain in
his arm, elbow and legs but no serious mental problems were
detected.
On October 20, 1990, Dr. David Howie, M.D., assisted by Dr.
Shapiro, M.D., and Dr. Taylor, M.D., performed surgery on Mr.
Loza's right elbow. The chief complaint, pertinent history, and
condition on admission was: "greater than one year right lateral
epicondylitis [which] continued to progress despite concentrated
treatment including NSAIDS, analgesics and elbow wrap." The major
operation performed consisted of a lateral epicondylar repair
(conjoined tendon recession, partial annular ligament resection,
partial ostectomy of lateral epicondyle). Mr. Loza was
hospitalized August 19-21, 1990. He was discharged with his elbow
15

to remain in a cast and with instructions to engage in no vigorous
activity.
In the fall of 1990 Mr. Loza's wife divorced him and had the
court award him custody of their two children, ages 9 and 17. On
March 25, 1991, a long history was entered in Mr. Loza's VA
hospital medical record, perhaps in connection with his transfer to
the out patient clinic. It was again noted that he suffered
service connected brain injury, abdominal wall impairment and
lumbosacral strain; the assessment of his problems remained: Non
Psychotic OBS and "adjustment to adult life secondary to marital
problems."
On November 23, 1992, Mr. Loza was referred and accompanied by
a VA counselor, Ruben Cano, M.S.W., to see Dr. George Clay, a
medical doctor at the VA hospital. Mr. Loza reported feeling
depressed. Mr. Cano said that Mr. Loza's appetite fluctuated and
he withdrew from others. Dr. Clay noted that Mr. Loza "tends to
isolate" and opined that he was "not sure he (Loza) has much hope
for the future." Mr. Loza said, "I sit down and wonder whatever
happened to my life." Mr. Loza reported that he had experienced
insomnia; a bad memory due to OBS; a suicide attempt which failed
because the gun jammed; occasional feelings of worthlessness; and
a desire not to live in the pain he suffered. Nevertheless, Mr.
Loza denied having any current suicidal thoughts. Mr. Cano
16

suggested that Mr. Loza transfer to the VA Waco PTSD unit.
Nortriptyline14 was prescribed for his depression.
On December 28, 1992, Mr. Loza was seen by Dr. Marcia Michals,
Ph.D. Mr. Loza reported no side effects to taking Nortriptyline,
except dry mouth. He did not feel that the medicine was helping
him and his sleep was still disturbed. He did not exercise and he
slept only 2-4 hours each night. The doctor tripled Mr. Loza's
Nortriptyline intake. A February 19, 1993 appointment with Dr.
Michals revealed that Mr. Loza still suffered from nightmares and
slept only 3 to 4 hours per night, but Mr. Loza claimed to feel
"more calm" and had no crying spells since beginning Nortriptyline.
However, by February 25, 1993 Mr. Loza reported nightmares,
flashbacks and depression to Dr. Michals. Mr. Loza reported to Dr.
Michals on February 26, 1993 that his sleep difficulties,
nightmares and flashbacks had continued, and that he had difficulty
controlling his anger and had even struck his son the previous
evening.
Mr. Loza participated in VA sponsored group therapy sessions
from March 24, 1982 until March 9, 1984 and has continued to attend
monthly group sessions since April 25, 1991. Mr. Loza's first two
14Nortriptyline is a dibenzocycloheptene-derivative tricyclic
antidepressant. See American Hospital Formulary Service Drug
Information 2000, at 2036.
17

years in group therapy went poorly. Dr. Cooney noted that Mr. Loza
appeared "slightly defensive and reluctant to speak in group."
Dr. Cooney removed Mr. Loza from group therapy on March 9,
1984 and initiated individual therapy. The individual sessions
which occurred before and after 1984 reveal some of Mr. Loza's
continuing emotional difficulties. During an individual session
with Dr. Cooney on March 24, 1982, Mr. Loza described an incident
in which he became angry with his wife and attempted to shoot
himself, only to fail because the weapon would not load. During a
December 2, 1986 interview with Dr. Cooney, Mr. Loza indicated he
was experiencing difficulty managing the behavior of his 13 year
old daughter. In a March 3, 1987 counseling session, Mr. Loza
expressed recurring doubt about the effectiveness of his medication
and described his propensity to become angry with family members.
A September 1, 1987 consultation typifies many of the record
entries by recounting Mr. Loza's difficulty sleeping and his
recurring delusions concerning the presence of unknown individuals
in his home at night.
Although Mr. Loza preferred individual sessions with Dr. Jeff
Cooney and Dr. M. McCord he reentered group counseling with other
veterans at the Veterans Readjustment Counseling Center #703, or
the "Vet Center", in Austin, Texas. Progress notes made during
these meetings by Dr. McCord portray Mr. Loza as withdrawn,
suffering from physical pain, depression, isolation, headaches,
18

feelings of worthlessness and recurrent auditory and visual
hallucinations.
In group therapy on February 26, 1993, Dr. McCord noted that
Mr. Loza was "not doing well", felt depressed and was not sleeping.
During an August 26, 1993 group therapy session at the Vet Center,
Dr. McCord reported that Mr. Loza "talked reluctantly about his
near death experiences" but was "relieved to discover others in
group had similar experiences." On October 28, 1993, Mr. Loza told
the group about a "recent incident in which he witnessed an auto
accident and later, when some helicopters flew over, (he) had a
flashback (to Vietnam)." A member of the therapy group, who had
received treatment at the VA Waco PTSD unit, recommended that Mr.
Loza seek admission to that facility. But Mr. Loza replied he
could not leave Austin because he had to care for his son.
On October 29, 1993, Mr. Loza confessed to VA social worker
Paul Berclof, A.C.S.W., M.S.W., that he had been depressed and
plagued by Vietnam nightmares since he quit taking his prescribed
medication. Mr. Loza told Mr. Berclof that he wanted to try
antidepressants again. Mr. Loza and Mr. Berclof agreed on a plan:
the patient would meet with Dr. Michals, request permission to
start taking antidepressant medicine again, work with Mr. Berclof
and Mr. Cano concerning his Vietnam nightmares, and abstain from
drinking while on medication.
19

On the same day, Mr. Loza saw Dr. Michals and reported the
flashback incident that he had described to his therapy group. He
also complained of pain from his old injuries. Dr. Michals
prescribed Sertraline15 as treatment for Mr. Loza's medial
disorders.
On November 17, 1993, Vet Center therapists Ruben Cano and
John Ferguson stated that they had examined Mr. Loza and counseled
him over the past several years in individual and group sessions
with regard to his Vietnam experiences. In their opinions, Mr.
Loza exhibited symptomology characteristic of Post-Traumatic Stress
Disorder (PTSD).
During a November 30, 1993 visit with Dr. Michals, Mr. Loza
stated that his condition had improved after being placed on the
antidepressant Sertraline. However, on December 30, 1993 Dr.
Michals made the following entry showing a deterioration of Mr.
Loza's mental condition: "Vet states he has had a bad headache,
doesn't remember if he took Ibuprofen. Complained of temper
outbursts
since
decreasing
Sertraline,
family
stays
away....Suggested pill container to help vet remember if he's taken
15Sertraline is a naphthalenamine-derivative antidepressant agent.
The drug is used in the treatment of depressive affective (mood)
disorders such as major depression. A major depressive episode
implies a prominent and relatively persistent depressed or
dysphoric mood that usually interferes with daily functioning
(nearly every day for at least 2 weeks). See American Hospital
Formulary Service Drug Information 2000, at 2075-87.
20

meds each day." Mr. Loza continued to attend his monthly veterans'
group meetings in December 1993 and January 1994. At each meeting,
Mr. Loza complained of serious physical pain.
At Mr. Loza's group counseling meetings with Dr. McCord on
April 28, 1994, May 26, 1994, June 23, 1994 and July 28, 1994, Mr.
Loza spoke of his "continuing problems with Vietnam" and his
recurring nightmares. At the April 28, 1994 meeting of the retired
veterans' group, Mr. Loza spoke of thinking about Vietnam when he
became stressed. On May 26, 1994, Dr. McCord noticed that Mr. Loza
appeared upset that a Vet Center counselor he relied on had been
suspended, and Mr. Loza felt his "support" was gone. Dr. McCord
observed that Mr. Loza appeared "alert, somewhat anxious and
angry", and assessed Mr. Loza's condition as "PTSD." At the June
23, 1994 meeting Mr. Loza spoke of his continuing nightmares. At
the July 28, 1994 meeting Mr. Loza spoke to the group about his
"continuing problems with Vietnam."
The record is replete with evidence of Mr. Loza's social
isolation. On April 9, 1974, April 25, 1974, December 14, 1983,
February 6, 1991, May 30, 1991, September 26, 1991 and November 23,
1992, the record shows numerous observations by therapists that Mr.
Loza often "isolates" himself from other people. On April 9, 1974,
Dr. Reveley reported Mr. Loza's "phobic trends" involving his
refusal to enter a theater with other people present, and on April
25, 1974 noted Mr. Loza's "adjustment reaction of adult life with
21

marital conflicts." Dr. Cooney repeatedly observed (in particular
on December 14, 1983) that Mr. Loza appeared defensive and
reluctant to participate in group therapy. Dr. McCord noted in a
report on February 6, 1991 that Mr. Loza expressed a preference for
individual counseling and sought to avoid group sessions. After
convincing Mr. Loza to attend group therapy sessions, Dr. McCord
made numerous notations through 1991 and 1992 concerning Mr. Loza's
reluctant participation in group settings. A November 23, 1992 a
doctor's entry noted Mr. Loza's tendency to isolate himself from
others.
Mr. Loza's separation and divorce from his wife, lack of
friends and estrangement from his brothers and sisters further
evince his social withdrawal. During the ALJ hearing Mr. Loza
testified: "I guess the only friend I have right now would be my
neighbor. He'll invite me once in awhile, you know, call me and
have coffee with him or sometimes he knows that I'm sick...And he's
the only one I can think of right now." In a disability report Mr.
Loza filled out at the request of the Social Security
Administration, he described his "social contacts" as consisting of
"one friend" he fished with occasionally and his mother whom he
visited every two to three months. Mr. Loza's clinical record from
April 9, 1974 indicated that he had two brothers and seven sisters
in south Texas with whom he had no contact.
22

At the ALJ hearing Mr. Loza testified to other war-related
symptoms of his OBS or PTSD, including "losing concentration a
lot", headaches, having trouble sleeping for weeks at a time,
recurrent blackouts, bouts of anger, nightmares, hallucinations and
Vietnam War "flashbacks." Mr. Loza testified to his hallucinations
associated with the sounds of helicopters or loud explosions. Mr.
Loza also testified that as he was rendering assistance to an auto
accident victim, a rescue helicopter flew over, and he hallucinated
that he was in combat again in Vietnam. Mr. Loza further testified
that he was nervous in public places and had hardly any friends or
relationships other than his mother, ex-wife and two children. Mr.
Loza also entered into the administrative record a disability card
issued by the Department of Veterans' Affairs showing him to be 100
percent disabled.
Mr. Loza's former wife, Janie Loza, and daughter, Michelle
Tanguma Loza, gave statements concerning his change in personality
and behavior following his return from Vietnam:
My name is Janie Loza, ex wife of Fidel Loza. We were
married from Jan-3-70 to Feb-4-90. Fidel was sent to
Vietnam in the end of January. A few months later [he]
was shot in combat and was sent home to a hospital to
recover. When he was released and sent home that's when
the problems started. Fidel had recurrent nightmares,
suffered from paranoia of being in crowded places and of
people. The sound of a fire cracker would send him to
the ground. One day we were going down a highway and a
car backfired and he suddenly told me to duck because
they were gunshots. One of his night mares he had was to
start crawling around the bed in the middle of the night
while he was asleep. I would ask him about it the next
23

morning and he would not have any recollection of it
happening. Up to this day [11-10-93] he still has
flashbacks. A few weeks ago he was at my house and I
turned on the ceiling fan and as soon as he heard the
noise the fan was making he had to leave because it sound
to[o] much like a chopper overhead. (Helicopter) The
young man I said good-bye to after only a couple of weeks
being married to and was sent to war never returned.
Instead a stranger came home a young man old before his
time with shattered hopes and dreams. And I didn't know
how to help him or understand him because he is [not] the
only one, and many others like him that experienced the
War in Vietnam, and it will stay with them until the day
they die.
Regards,
S/Janie T. Loza

Let me start by telling you who I am. My name is
Michelle Tanguma Loza. I am 20 years old. I've lived
with my father all these years. Through these years I've
seen my father go through some harsh pains. He looks like
a very healthy man outside, but inside he has a lot going
on in their(sic). For one he has constant migraine
headaches, these headaches, at times don't let him relax
and make him irritable at times. These headaches occur
quite frequent more than regular headaches. He also has
bad feet. He can't be on his feet for long periods of
time if he's on his feet for a few hours as soon as he
gets off his feet, takes his shoes off his feet swell
like balloons. Once his feet swole up so bad his feet,
well his toes didn't touch the carpet his bottom of his
foot had blown up. We constantly massage his feet for
him to soothe the pain or he soaks them in hot water.
He also had some problems with one of his arms he
couldn't lift anything that was very heavy. He had to
get that arm operated on. He was then receiving very
painful shots in the elbow. His elbow is still very
tender.
My Father also has very bad back problems. Their have
been many mornings where he was unable to even sit up in
bed. He was getting out of his truck once and his back
went out. My mother and I practically carried him into
the house because he was unable to get out of his truck
by himself.
The colder weather, a lot of times keeps him in bed
because of body aches. When my father stays in bed late
it's because he's not feeling well he's usually up very
24

early if he feels well.
I also know my father has a lot of feelings inside
about Viet Nam. I can tell by the look in his eyes and
a lot of poetry he's written about that place. He has
never really talked about it but a lot of his poetry says
a lot.
I think it's not fair my father went to Viet Nam and
fought and now has to pay for it everyday of the rest of
his life.

II. STANDARD OF REVIEW
On judicial review, the ALJ's determination that a claimant is
not disabled will be upheld, if the findings of fact upon which it
is based are supported by substantial evidence on the record as a
whole, and if it was reached through the application of proper
legal standards. See 42 U.S.C. § 405(g); Greenspan v. Shalala, 38
F.3d 232, 236 (5th Cir. 1994).
III. DISCUSSION
Mr. Loza argues that the ALJ's determination was not based on
findings of facts supported by the record as a whole, and that the
ALJ did not apply the proper legal standards in determining that
his mental impairment was non-severe, in applying the medical-
vocational guidelines to a case in which there are non-exertional
impairments, and in failing to analyze the combined effects of all
his physical and mental impairments.
A. Overview of Legal Principles Applicable
The Social Security Act provides for the payment of insurance
benefits to persons who have contributed to the program and who
25

suffer from a physical or mental disability. See 42 U.S.C. §
423(a)(1)(D) (1991). "Disability" is defined as the "inability to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months...." 42
U.S.C. § 423(d)(1)(A); Bowen v. Yuckert, 482 U.S. 137, 140 (1987);
Anthony v. Sullivan, 954 F.2d 289, 292 (5th Cir. 1992). The Act
further provides that an individual is disabled "only if his
physical and mental impairment or impairments are of such severity
that he is not only unable to do his previous work but cannot,
considering his age, education, and work experience, engage in any
other kind of substantial gainful work which exists in the national
economy, regardless of whether such work exists in the immediate
area in which he lives, or whether a specific job vacancy exists
for him, or whether he would be hired if he applied for work." 42
U.S.C. § 423(d)(2)(A).
The Secretary promulgated regulations establishing a five step
sequential evaluation process for deciding whether an individual is
disabled. See 20 C.F.R. §§ 404.1520, 416.920. The first two steps
involve threshold determinations that the claimant is not presently
engaged in substantial gainful activity and has an impairment or
combination of impairments which significantly limits his physical
or mental ability to do basic work activities. See 20 C.F.R. §§
26

404.1520, 404.1520(b)-(c), 416.920, 416.920(b)-(c). In the third
step, the medical evidence of the claimant's impairment(s) is
compared to a list of impairments presumed severe enough to
preclude any gainful activity. See 20 C.F.R. pt. 404, subpt. P,
App. 1 (pt. A) (1999). If the claimant's impairment matches or is
equal to one of the listed impairments, he qualifies for benefits
without further inquiry.16 See 20 C.F.R. §§ 404.1520(d),
416.920(d). If the person cannot qualify under the listings, the
evaluation proceeds to the fourth and fifth steps.17 At these
steps, analysis is made of whether the person can do his own past
work or any other work that exists in the national economy, in view
of his age, education, and work experience. If he cannot do his
past work or other work, the claimant qualifies for benefits. See
20 C.F.R. §§ 404.1520(e)-(f), 416.920(e)-(f); Sullivan v. Zebley,
493 U.S. 521, 525-26 (1990); Yuckert, 482 U.S. at 141-42; Anthony,
954 F.2d at 293.
16"If the impairment meets or equals one of the listed impairments,
the claimant is conclusively presumed to be disabled. If the
impairment is not one that is conclusively presumed to be
disabling, the evaluation proceeds to the fourth step...."
Yuckert, 482 U.S. at 141-42 (citing 20 C.F.R. §§ 404.1520(e),
416.920(e)).
17See Sullivan v. Zebley, 493 U.S. 521, 532 (1990) (citing Yuckert,
482 U.S. at 141) ("if an adult's impairment `meets or equals one of
the listed impairments, the claimant is conclusively presumed to be
disabled. If the impairment is not one that is conclusively
presumed to be disabling, the evaluation proceeds to the fourth
step[.]'").
27

In Stone v. Heckler, 752 F.2d 1099 (5th Cir. 1985), this court
was confronted with another in a series of cases in which a
decisive administrative determination was made against disability
at step two on the grounds of non-severity through a literal
application of the Secretary's "severity" or "significant
limitation" regulation.18 The Stone court pointed out that this
Circuit had construed the regulation as setting the following
standard in determining whether a claimant's impairment is severe:
"'[A]n impairment can be considered as not severe only if it is a
slight abnormality [having] such minimal effect on the individual
that it would not be expected to interfere with the individual's
ability to work, irrespective of age, education or work
experience.'" Stone, 752 F.2d at 1101 (quoting Estran v. Heckler,
745 F.2d 340, 341 (5th Cir. 1984) and citing Martin v. Heckler, 748
18 The current version of this regulation has not changed since
Stone considered it in 1985 except for the addition of the phrase
"or combination of impairments", and reads:
(c) You must have a severe impairment. If you do not
have any impairment or combination of impairments which
significantly limits your physical or mental ability to
do basic work activities, we will find that you do not
have a severe impairment and are, therefore, not
disabled. We will not consider your age, education, and
work experience. However, it is possible for you to have
a period of disability for a time in the past even though
you do not now have a severe impairment.
20 C.F.R. § 404.1520(c)(1999).
28

F.2d 1027, 1032 (5th Cir. 1984); Davis v. Heckler, 748 F.2d 293, 296
(5th Cir 1984)).
In Stone this court explained that a literal application of
the regulation would be inconsistent with the Act and its
legislative history. See Stone, 752 F.2d at 1104-05. Because the
severity regulation defined "severe impairment" to include far
fewer conditions than the statute indicated, we admonished the
Secretary not to use the severity regulation to systematically deny
benefits to statutorily eligible claimants. See id. at 1105.
"Although we recognized in Stone that the fact finder is entitled
to follow a sequential process that disposes of appropriate cases
at an early stage, we also recognized that it is impermissible to
conduct the evaluation in such a manner as to deny benefits to
individuals who are in fact unable to perform `substantial gainful
activity.'" Anthony, 954 F.2d at 293 (quoting Stone, 752 F.2d at
1103).
Moreover, the Stone court, in censuring misuse of the severity
regulation, forewarned that we would "in the future assume that the
ALJ and the Appeals Council have applied an incorrect standard to
the severity requirement unless the correct standard is set forth
by reference to this opinion or another of the same effect, or by
an express statement that the construction we give to 20 C.F.R. §
29

404.1520(c) is used." Stone, 752 F.2d at 1106; see also Anthony,
954 F.2d at 293-94.
After the Supreme Court's decision in Bowen v. Yuckert, this
court addressed the issue of whether Yuckert had altered the
standard we announced in Stone. See Anthony, 954 F.2d at 294. We
concluded that it had not:
Yuckert simply upheld the facial validity of the severity
regulation as an appropriate method of streamlining the
review process. Yuckert did not conclude that the
severity regulation properly interpreted the statutory
requirements, and Yuckert did not purport to state the
proper definition of the term "severe impairment." Thus,
Stone is not inconsistent with the Supreme Court's
pronouncement in Yuckert; Stone merely reasons that the
regulation cannot be applied to summarily dismiss,
without consideration of the remaining steps in the
sequential analysis, claims of those whose impairment is
more than a slight abnormality.
Id. That interpretation of the Stone requirements as being
consistent with Yuckert has been recognized continuously as the
view of this Circuit. See Spellman v. Shalala, 1 F.3d 357, 364
n.11 (5th Cir. 1993); Frizzell v. Sullivan, 937 F.2d 254, 255 (5th
Cir. 1991); Harrell v. Bowen, 862 F.2d 471, 481 (5th Cir. 1988);
Rodriguez v. Bowen, 857 F.2d 275, 278 (5th Cir. 1988). Most other
Circuits agree that Yuckert does not displace prior limitations on
the Secretary's reliance on the severity regulation. See, e.g.,
Gilbert v. Apfel, 175 F.3d 602, 604 (8th Cir. 1999); Dixon v.
Shalala, 54 F.3d 1019, 1030 (2d Cir. 1995); Bailey v. Sullivan, 885
30

F.2d 52, 56-57 (3d Cir. 1989); Higgs v. Bowen, 880 F.2d 860, 863
(6th Cir. 1988); Yuckert v. Bowen, 841 F.2d 303, 306 (9th Cir. 1988);
Gonzalez-Garcia v. Secretary of Health and Human Services, 835 F.2d
1, 2 (1st Cir. 1987); Stratton v. Bowen, 827 F.2d 1447, 1453 (11th
Cir. 1987); Brown v. Bowen, 827 F.2d 311, 312 (8th Cir. 1987)
(concluding that a majority of the Supreme Court adopted the
standard that "'[o]nly those claimants with slight abnormalities
that do not significantly limit any "basic work activity" can be
denied benefits without undertaking' the subsequent steps of the
sequential evaluation process.")(quoting Yuckert, 107 S.Ct. at
2298).19
19 This court in Anthony, 954 F.2d at 294, n.7 further noted that:
In Brown, the Eighth Circuit concluded that a majority of
the Supreme Court adopted a standard that provides that
"'[o]nly those claimants with slight abnormalities that
do not significantly limit any "basic work activity" can
be denied benefits without undertaking' the subsequent
steps of the sequential evaluation process." Brown v.
Bowen, 827 F.2d 311, 312 (8th Cir. 1987) (quoting
Yuckert, 107 S.Ct. at 2298 (O'Connor, J., concurring)).
In so doing, the court noted that five justices--the
justices of the concurrence and the dissent--agreed that
the language of the severity regulation cannot be used to
disqualify those who meet the statutory requirements for
disability. Justice O'Connor authored the concurrence in
Yuckert, joined by Justice Stevens, which expressed
concern that the severity regulation, as articulated,
might erroneously permit the premature dismissal of
claims, but emphasized that this fact did not undermine
the facial validity of the regulation. Three other
justices--Justice Blackmun, Justice Brennan and Justice
Marshall--dissented.
It is unclear whether Justice O'Connor intended to
31

B. The ALJ's Determination That Mr. Loza's Mental Impairment Was
Non-Severe Was Based On An Error Of Law
The ALJ's administrative determination that Mr. Loza did not
have any mental impairment related disabilities was made at step
two on the grounds that his mental impairment was not severe. The
ALJ adverted only to the literal terms of 20 C.F.R. § 404.1520(c)
as setting forth the criteria for that determination:
The second step in the evaluation process is a
determination as to whether the claimant has an
impairment or combination of impairments which is
`severe.' A severe impairment is defined in the
Regulations as one which significantly limits an
individual's physical or mental ability to meet the basic
demands of work activity. 20 C.F.R. § 404.1520(c).
The ALJ based his conclusion that Mr. Loza's mental impairment
was non-severe on his finding that "between April 27, 1979 and June
30, 1980,...the claimant [was] at most, slightly restricted by his
mental impairment in his activities of daily living." Thus, the
ALJ did not apply the correct standard as set forth in Stone, which
held that an impairment can be considered as not severe only if it
is a slight abnormality having such minimal effect on an individual
that it would not be expected to interfere with the individual's
formulate a formal, precedent making definition of the
term "severe impairment." Even if Justice O'Connor did
so intend, we do not believe that she intended to
formulate a definition that differed in its application
from our definition in Stone; Justice O'Connor cited a
progenitor of Stone--Estran v. Heckler, 745 F.2d 340, 341
(5th Cir. 1984)--as authority for her definition of
severe impairment.
32

ability to work, irrespective of age, education or work experience.
The ALJ erroneously applied his own standard involving a slight
restriction in "activities of daily living" instead of this court's
standard based on a slight abnormality having such minimal effect
as would not be expected to interfere with "ability to work,
irrespective of age, education or work experience." Stone, 752
F.2d at 1101; see also Brown v. Bowen, 864 F.2d 336, 337 (5th Cir.
1988); Hampton v. Bowen, 785 F.2d 1308, 1311 (5th Cir. 1986); Sewell
v. Heckler, 764 F.2d 291, 294 (5th Cir. 1985); Martin v. Heckler,
748 F.2d 1027, 1032-34 (5th Cir. 1984).
The ALJ did not set forth the standard as it was construed in
Stone, refer to Stone or another decision of this court to the same
effect, or expressly state that the construction this court gives
to 20 C.F.R. § 404.1520(c) was used. Consequently, in accordance
with our holding in Stone, we must assume that the ALJ and Appeals
Council applied an incorrect standard to the severity requirement,
reverse the magistrate's judgment dismissing Mr. Loza's claim, and
cause the case to be remanded to the Commissioner for
reconsideration.
C. The ALJ's Finding That Mr. Loza's Mental Impairment Is Non-
Severe Or Insignificant Is Not Supported By Substantial Evidence
Based On The Record As A Whole
The inquiry here is whether the record, read as a whole,
yields such evidence as would allow a reasonable mind to accept the
33

conclusions reached by the ALJ. See Richardson v. Perales, 402
U.S. 389, 401 (1971); Randall v. Sullivan, 956 F.2d 105, 109 (5th
Cir. 1992); Rivas, 475 F.2d at 257-58; Ward v. Celebrezze, 311 F.2d
115, 116 (5th Cir. 1963). Written reports by physicians who have
examined the claimant setting forth medical data are admissible in
evidence in a disability hearing and may constitute evidence
supportive of findings by hearing examiners. See Perales, 402 U.S.
at 402. "Medically acceptable evidence includes observations made
by a physician during physical examination and is not limited to
the narrow strictures of laboratory findings or test results."
Ivy, 898 F.2d at 1048-49. Medical evidence must support a
physician's diagnosis, but if it does "[t]he expert opinion[] of a
treating physician as to the existence of a disability [is] binding
on the fact-finder unless contradicted by substantial evidence to
the contrary." Bastien v. Califano, 572 F.2d 908, 912 (2d Cir.
1978); see also 20 C.F.R. § 404.1527(d)(2). "Evidence" includes
medical history, statements of the claimant, decisions by any
governmental or non-governmental agency, and findings made by the
administrative law judge levels. See 20 C.F.R. § 404.1512(b)(1)-
(6). However, the determinations of other agencies, while
persuasive, do not bind the Social Security Administration. See 20
C.F.R. § 404.1504. "[E]stablished policy provides that information
may be obtained from family members, friends, and former employers
34

regarding the course of the claimant's condition." Ivy, 898 F.2d
at 1049. "[N]oncontemporaneous medical records are relevant to the
determination of whether onset occurred on the date alleged by the
claimant." Id. (citing Basinger v. Heckler, 725 F.2d 1166 (8th Cir.
1984); Soc.Sec.R. 83-20, 1983 CE 109).
In determining whether a claimant's physical or mental
impairments are of a sufficient medical severity as could be the
basis of eligibility under the law, the ALJ is required to consider
the combined effects of all impairments without regard to whether
any such impairment, if considered separately, would be of
sufficient severity. See 20 C.F.R. § 404.1523; Crowley v. Apfel,
197 F.3d 194, 197 (5th Cir. 1999); Anthony, 954 F.2d at 293; Sewell,
764 F.2d at 294; Davis, 748 F.2d at 296; Estran, 745 F.2d at 341.
If the ALJ finds a medically severe combination of impairments,
"the combined impact of the impairments will be considered
throughout the disability determination process." 20 C.F.R. §
404.1523. Finally, it is clear that the ALJ must consider all the
record evidence and cannot "pick and choose" only the evidence that
supports his position. See Switzer v. Heckler, 742 F.2d 382, 385-
86 (7th Cir. 1984); Garfield v. Schweiker, 732 F.2d 605, 609 (7th
Cir. 1984); Green v. Shalala, 852 F.Supp. 558, 568 (N.D. Tex.
1994); Armstrong v. Sullivan, 814 F.Supp. 1364, 1373 (W.D. Tex.
1993).
35

A claimant is eligible for benefits only if the onset of the
qualifying medical impairment [or combination of impairments] began
on or before the date the claimant was last insured. See Ivy, 898
F.2d at 1048 (citing POMS § KI 25501.050(B)(1)). "Claimants bear
the burden of establishing a disabling condition before the
expiration of their insured status." Id. (citing Milam v. Bowen,
782 F.2d 1284 (5th Cir. 1986)). Factors relevant to the
determination of the date of disability include the individual's
declaration of the date of when the disability began, work history
and available medical history. See id. (citing Soc.Sec.R. 83-20,
1983 CE 109)). The claimant's stated onset date of disability is
to be used as the established date when it is consistent with
available medical evidence and may be rejected only if reasons are
articulated and the reasons given are supported by substantial
evidence. See Spellman, 1 F.3d at 361; Ivy, 898 F.2d at 1048.
The ALJ found that Mr. Loza had been diagnosed with a
nonpsychotic brain syndrome due to trauma in April 1974; that a
hospital summary report stated that he required follow-up
treatment; that he was considered competent to handle funds due
him, and a 90 day convalescence was recommended; that he received
no further treatment for his mental impairment until October 1980;
that there was no record of ongoing medical treatment or therapy
for anxiety between April 27, 1979 and June 30, 1980; and that the
claimant had recurrent and intrusive recollections of a traumatic
36

experience which were a source of marked distress. From these
findings, the ALJ inferred that between April 27, 1979 and June 30,
1980 the claimant suffered from an anxiety related disorder by
which he was "at most, slightly restricted...in his activities of
daily living." The ALJ concluded: "Considering all the evidence,
the undersigned finds the claimant's mental impairment to be a non-
severe impairment."
The ALJ's determination that Mr. Loza's mental impairment was
non-severe is not supported by substantial evidence because, first,
the ALJ did not consider whether the combined effects of all
impairments, mental and physical, would be of sufficient severity.
See C.F.R. §§ 404.1520(a), 404.1523; Crowley, 197 F.3d at 197;
Anthony, 954 F.2d at 293; Sewell, 764 F.2d at 294; Davis, 748 F.2d
at 296; Estran, 745 F.2d at 341; second, the ALJ did not take into
account: (1) the VA's determination that Mr. Loza had a service
connected 100 percent disability rating prior to and during the
relevant period of April 27, 1979 through June 30, 1980; (2) Dr.
Reveley's determination on April 25, 1974 that Mr. Loza "cannot
return to full employment[,]" which has not been changed by Dr.
Reveley or any other physician; (3) the consistent diagnosis and
treatment of Mr. Loza's mental impairment as Organic Brain
Syndrome, Chronic Brain Syndrome, or Post Traumatic Stress Disorder
by several VA treating physicians from 1974, during the relevant
period, and up to the date of the ALJ hearing; (4) the VA treating
37

physicians' regular prescription of powerful antipsychotic and
antidepressant drugs for Mr. Loza's mental impairment that began in
1974 and continued through the relevant period and the date of the
ALJ hearing; (5) the overwhelming evidence of Mr. Loza's inability
to maintain social interactions and other pertinent evidence of
combined mental and physical impairments contained in Mr. Loza's
medical records.
(1) Veterans' Administration Determination
In 1973 or 1974, the Veterans' Administration determined that
Mr. Loza was 100 percent permanently disabled in connection with
military service as the result of his Vietnam War combat wounds and
experiences. A VA rating of 100 percent service connected
disability is not legally binding on the Commissioner, but it is
evidence that is entitled to great weight and should not have been
disregarded by the ALJ. See Latham v. Shalala, 36 F.3d 482, 483
(5th Cir. 1994); Rodriguez v. Schweiker, 640 F.2d 682, 686 (5th Cir.
1981); Epps v. Harris, 624 F.2d 1267, 1274 (5th Cir. 1980); DePaepe
v. Richardson, 464 F.2d 92, 101 (5th Cir. 1972). The record
demonstrates that the VA 100 percent disability rating had not
changed at the time of the ALJ hearing and was in effect between
April 27, 1979 and June 30, 1980. In Rodriguez, 640 F.2d at 686,
this court stated that "[a]lthough the ALJ mentioned the Veteran's
Administration disability rating on Rodriguez, he obviously refused
38

to give it much weight....A VA rating of 100% disability should
have been more closely scrutinized by the ALJ." In the present
case, the ALJ did not mention or scrutinize Mr. Loza's VA rating of
100 percent disability.
(2) Determinations of Treating Physicians
On April 25, 1974, when Mr. Loza was transferred from the VA
hospital psychiatric ward to VA therapy, Dr. Reveley, his treating
physician, specifically determined that Mr. Loza "cannot return to
full employment." In addition to Dr. Reveley, Dr. Gaylord, Dr.
Flore, Dr. Cooney and Dr. Michals diagnosed Mr. Loza as having OBS
and treated him for this condition from April 1974 through the date
of the ALJ hearing. There is no evidence that Dr. Reveley or any
of the other treating physicians have ever changed the diagnosis of
Mr. Loza's medical conditions, his inability to work or his 100
percent service connected permanent disability status.
"This court has repeatedly held that ordinarily the opinions,
diagnoses and medical evidence of a treating physician who is
familiar with the claimant's injuries, treatment, and responses
should be accorded considerable weight in determining disability."
Scott v. Heckler, 770 F.2d 482, 485 (5th Cir. 1985) (citing Barajas
v. Heckler, 738 F.2d 641, 644 (5th Cir. 1984); Smith v. Schweiker,
646 F.2d 1075, 1081 (5th Cir. 1981); Perez v. Schweiker, 653 F.2d
997, 1001 (5th Cir. 1981); Fruge v. Harris, 631 F.2d 1244, 1246 (5th
Cir. 1980)). "The ALJ may give less weight to a treating
39

physician's opinion when `there is good cause shown to the
contrary[.]'" Scott, 770 F.2d at 485 (citing Perez, 653 F.2d at
1001; Smith, 646 F.2d at 1081; Fruge, 631 F.2d at 1246); accord
Newton v. Apfel, 209 F.3d 448, 455-56 (5th Cir. 2000); Leggett v.
Chater, 67 F.3d 558, 566 (5th Cir. 1995); Greenspan, 38 F.3d at 237;
Moore v. Sullivan, 919 F.2d 901, 905 (5th Cir. 1990).
In his opinion, the ALJ did not consider Dr. Reveley's
determination on April 25, 1974 that Mr. Loza could not return to
full employment. Similarly, the ALJ did not advert to the treating
physicians' continuing diagnoses of OBS and PTSD and treatment of
Mr. Loza for those conditions before, during and after his period
of eligibility. No good cause appears in the ALJ opinion or in the
record to justify the ALJ's failure to give "considerable weight"
to the treating doctors' medical evidence. See Scott, 770 F.2d at
485. The ALJ cannot reject a medical opinion without an
explanation. See Strickland v. Harris, 615 F.2d 1103, 1110 (5th
Cir. 1980); Goodley v. Harris, 608 F.2d 234, 236 (5th Cir. 1979).
The ALJ is not at liberty to make a medical judgment regarding the
ability or disability of a claimant to engage in gainful activity,
where such inference is not warranted by clinical findings. See
Spencer v. Schweiker, 678 F.2d 42, 45 (5th Cir. 1982).
Consequently, the ALJ and the Commissioner committed reversible
error by failing to accord "great weight" to the medical reports of
40

the treating physicians. See Fraga v. Bowen, 810 F.2d 1296, 1304
n.8 (5th Cir. 1987); Fruge, 631 F.2d at 1246.
(3) Prospective And Retrospective Effects
Of Diagnoses Of Conditions
Further, "[o]nce evidence has been presented which supports a
finding that a given condition exists it is presumed in the absence
of proof to the contrary that the condition has remained
unchanged." Rivas, 475 F.2d at 258 (citing Hall v. Celebrezze, 314
F.2d 686, 688 (6th Cir. 1963)); Byerly v. Heckler, 744 F.2d 1143,
1144 (5th Cir. 1984); Taylor v. Heckler, 742 F.2d 253, 254 (5th Cir.
1984); Richardson v. Heckler, 750 F.2d 506, 509 (6th Cir.
1984)(medical evidence of Korean War related PTSD available in 1953
supported a finding of disability and presumption of its
continuance which the Secretary failed to overcome with evidence of
improvement in claimant's condition); Dotson v. Schweiker, 719 F.2d
80, 82 (4th Cir. 1983); Kuzmin v. Schweiker, 714 F.2d 1233, 1237 (3d
Cir. 1983); Schauer v. Schweiker, 675 F.2d 55, 59 n.4 (2d Cir.
1982); accord Prevette v. Richardson, 316 F.Supp. 144, 146 (D.S.C.
1970). The record as a whole shows no genuine improvement in Mr.
Loza's mental and physical impairments. The ALJ's findings
suggesting the contrary are not supported by substantial evidence
on the record as a whole for the reasons already stated and those
to be given later.
41

On the other hand,"`[s]ubsequent medical evidence is [also]
relevant...because it may bear upon the severity of the claimant's
condition before the expiration of his or her insured status.'"
Ivy, 898 F.2d at 1049 (citing Basinger, 725 F.2d at 1169; Parsons
v. Heckler, 739 F.2d 1334 (8th Cir. 1984)). Retrospective medical
diagnoses of PTSD, even if uncorroborated by contemporaneous
medical reports but corroborated by lay evidence relating back to
the claimed periods of disability, can support a finding of past
impairment. See Likes v. Callahan, 112 F.3d 189, 190 (5th Cir.
1997)("`PTSD is an unstable condition that may not manifest itself
until well after the stressful event which caused it, and may wax
and wane after manifestation.'" Id. at 191 (quoting and adopting
the rule of Jones v. Chater, 65 F.3d 102, 103 (8th Cir. 1995)). In
addition to the primary medical evidence, the record contains
reports by family members, therapists and counselors of Mr. Loza's
hallucinations, social withdrawal and other symptoms of PTSD and
OBS before and after his insured status had lapsed. The ALJ's
failure to recognize the existence and significance of this cogent
evidence further demonstrates that the administrative determination
is not supported by substantial evidence on the record as a whole.
(4) Antipsychotic and Antidepressant Medications
The ALJ did not take into account the evidence concerning the
nature and quantity of medications that Mr. Loza's treating
42

physicians prescribed for his mental impairment and disability
before, during and after the period in question. The ALJ neither
elicited testimony nor made any findings regarding the timing,
purpose or effect of the antipsychotic drugs and other medicines
that were prescribed for Mr. Loza between 1974 and the date of the
ALJ hearing. Mr. Loza was placed on Haldol20 by Dr. Reveley during
his April 1974 confinement at the Olin R. Teague Center. On
November 22, 1974, February 7, 1975 and June 26, 1975 Dr. Reveley
prescribed Darvon21 and Haldol. Dr. Johnson prescribed
acetaminophen22 on April 8, 1977. A medical doctor whose name is
not clear from the record prescribed Haldol and Ascriptin23 on July
23, 1978 and September 17, 1979. On April 7, 1980, October 8,
1980, and February 10, 1981, Dr. Flore, M.D., prescribed
Ascriptin, Stelazine24 and Benadryl25. Stelazine was prescribed by
Dr. Flore on August 28, 1981, and he prescribed Stelazine and
Ascriptin on December 23, 1981. On June 28, 1982, Mr. Loza was
taken off Stelazine by Dr. Lipt and placed on Ascriptin and
20See supra note 5.
21See supra note 6.
22See supra note 7.
23See supra note 9.
24See supra note 10.
25See supra note 11.
43

Vistaril26. Dr. Lipt prescribed Vistaril on September 22, 1982, and
both Vistaril and Ascriptin on December 16, 1982, June 22, 1983,
December 14, 1983, June 1, 1984, September 4, 1984, February 5,
1985, August 20, 1985, March 13, 1986 and September 22, 1986. On
March 3, 1987 Dr. Lipt prescribed only Vistaril for Mr. Loza. Dr.
Gaylord prescribed Allopurinol27 on June 22, 1987, presumably to
lower the uric acid levels in the claimant's blood. Mr. Loza
received Motrin and Tylenol from Dr. Gaylord, and Vistaril from Dr.
Lipt on September 1, 1987. A medical doctor with an illegible
signature prescribed Vistaril on March 1, 1988. Dr. McCormick
refilled Mr. Loza's Hydroxyzine (presumably Stelazine) prescription
on August 30, 1989 to help the claimant rest. However, Dr.
McCormick canceled the Hydroxyzine prescription on November 13,
1989 and prescribed Ibuprofen and Diphenhydramine28 (the
antihistamine present in Benadryl). Dr. McCormick issued another
prescription for Ibuprofen and Diphenhydramine on August 8, 1990.
After a Motrin prescription from a medical doctor with an illegible
signature on March 4, 1992, Mr. Loza was placed on Nortriptyline29
26See supra note 12.
27See supra note 13.
28Diphenhydramine is an antihistamine sometimes used as a nighttime
sleep aid for the short-term management of insomnia. See American
Hospital Formulary Service Drug Information 2000, at 25-29.
29See supra note 14.
44

by another doctor on November 23, 1992. Dr. Michals prescribed
Nortriptyline on December 28, 1992 and subsequently canceled the
prescription on February 19, 1993. On October 29, 1993 Dr. Michals
started Mr. Loza on Sertraline.30 An unidentified medical doctor
prescribed Verapamil to control blood pressure on November 22,
1993, March 2, 1994 and September 30, 1994. Sertraline dosage was
decreased by Dr. Michals on November 30, 1993 but returned to
earlier levels at Mr. Loza's request on December 30, 1993.
The history of Mr. Loza's extensive medical treatment with
antipsychotic and other mood altering medications not only
indicates the presence of a disabling mental illness but also the
possibility of medication side effects that could render a claimant
disabled or at least contribute to a disability. See Cowart v.
Schweiker, 662 F.2d 731, 737 (11th Cir. 1981)(citing 20 C.F.R. Pt.
404, Subpart P, App. 1, § 11.00 (1981); Figueroa v. Secretary of
HEW, 585 F.2d 551 (1st Cir. 1978)). The lack of consideration of
the antipsychotics, antidepressants, and other medications
administered to Mr. Loza before, during and after the period of
April 27, 1979 to June 30, 1980 as evidence of mental impairment
and disability further demonstrates that the ALJ's findings of fact
are not substantially supported by the record when viewed as a
whole.
30See supra note 15.
45

(5) ALJ's Findings Contrary to Overwhelming Evidence of Mr.
Loza's Inability to Maintain Social Functioning; Disregard of
Other Pertinent Evidence in Medical Record
The ALJ found that "[T]he claimant's ability to maintain
social functioning was only slightly limited by his mental
impairment....There is nothing in the medical record to suggest
that the claimant was socially inhibited by his mental impairment."
The ALJ's finding is fundamentally at odds with the evidence. Dr.
Reveley on April 9, 1974 noted Mr. Loza's "phobic trends" and his
refusal to enter a theater with other people present. Dr. Reveley
also recognized Mr. Loza's "adjustment reaction of adult life with
marital conflicts." Moreover, Mr. Loza's testimony before the ALJ
reveals his social impoverishment: "I can't be around -- I get
nervous around a lot of people. For a long time I couldn't even go
into a movie theater because I couldn't have nobody sitting behind
me." Mr. Loza's former wife Janie in her letter also describes his
paranoia and fear of crowds. After years of marital problems, she
divorced him in 1990. On June 28, 1982 Mr. Loza confided to Dr.
Cooney his suicide attempt after an argument with his wife. An
August 9, 1989 medical report completed by Dr. McCord makes
reference to the misbehavior of Mr. Loza's daughter and his
dysfunctional relationship with her. Finally, on February 26,
1993, Mr. Loza admitted striking his son the previous evening.
Doctors observed that Mr. Loza appeared unwilling or unable to
participate in group therapy from 1982 to 1983, and, consequently,
46

he was removed to individual therapy. On November 23, 1992, Dr.
George Clay commented that Mr. Loza "tends to isolate." Mr. Loza
testified that he only has one friend, his neighbor. In a
disability report he filled out for the SSA, he described his
"social contacts" as one friend he fished with and his mother. The
available medical records show he has two brothers and seven
sisters in south Texas. Yet the evidence indicates that Mr. Loza
has withdrawn from a social relationship with them.
The ALJ also did not indicate that he had given consideration
to Mr. Loza's tinnitus, hearing loss, inability to concentrate,
abdominal wall impairment, lumbosacral strain, hallucinations, and
other mental and physical impairment symptoms.
(6) Summary
The ALJ found that between April 27, 1979 and June 30, 1980,
Mr. Loza was "at most, slightly restricted by his mental impairment
in his activities of daily living." In making this determination
the ALJ did not consider the totality of the evidence relevant to
Mr. Loza's mental and physical impairments, including the VA
determination
of
100
percent
disability;
Dr.
Reveley's
determination that Mr. Loza could not return to full employment;
the repeated diagnoses of Mr. Loza's PTSD and OBS; the prospective
and retrospective significance of determinations by treating
physicians and therapists of Mr. Loza's PTSD and OBS; the nature
and quantity of the treating physicians' administration of
47

antipsychotics, antidepressants, and other medications; and the
claimant's wounded and weakened abdominal wall and back, back pain,
acute back sprain, headaches, depression, hallucinations,
nightmares, insomnia, tinnitus, hearing loss, memory loss,
concentration loss, difficulties in anger management and social
isolation. Consequently, the record viewed as a whole does not
contain substantial evidence supporting an administrative
determination that the combination of Mr. Loza's mental and
physical impairments did not exceed the level of "a slight
abnormality [having] such minimal effect...that it would not be
expected to interfere with the individual's ability to work,
irrespective of age, education or work experience." Stone, 752
F.2d at 1101 (internal quotes and citations omitted).
D. The ALJ's Use of the Medical-Vocational Guidelines
Was Improper And Must Be Reconsidered
After considering Mr. Loza's physical impairments, the ALJ
concluded that "[b]ased on exertional capacity for medium work, and
the claimant's age, education and work experience, Section 404.1569
and Rule 203.28, Appendix 2, Subpart P, Regulations No. 4, directs
a conclusion of `not disabled'". However, based on the record as
a whole, it cannot be said that the ALJ's reliance solely on the
Medical-Vocational Guidelines at the fifth level in this case was
a correct application of the proper legal standards. "Use of the
`Grid Rules' is appropriate when it is established that a claimant
48

suffers only from exertional impairments, or that the claimant's
nonexertional impairments do not significantly affect his residual
functional capacity." Crowley, 197 F.3d at 199. Moreover, the
Secretary bears the burden at the fifth step of establishing that
the claimant is capable of performing work in the national economy.
See Leggett, 67 F.3d at 565 n.11; Greenspan, 38 F.3d at 236.
We have determined that the ALJ's finding that Mr. Loza's
mental impairment was non-severe was not reached through the
application of the proper legal standard and was not supported by
substantial evidence on the record. Accordingly, if it should be
determined on remand that Mr. Loza's non-exertional mental
impairments during the period of disability were not merely a
slight abnormality of minimal effect on ability to work, the ALJ's
reliance on the Grid Rules at the fifth level also constitutes
error and must be reconsidered. See Newton, 209 F.3d at 458;
Crowley, 197 F.3d at 199; Fraga, 810 F.2d at 1304; Dellolio v.
Heckler, 705 F.2d 123, 127-28 (5th Cir. 1983); Thomas v. Schweiker,
666 F.2d 999, 1004 (5th Cir. 1982).
E. Failure to Employ Proper Legal Standards By Not Considering
the Combined Effects of Impairments
The ALJ erred by separately evaluating the consequence of Mr.
Loza's mental and physical impairments and by not considering their
combined effects. The law of this Circuit requires consideration
of the combined effect of impairments: "The well-settled rule in
49

this Circuit is that in making a determination as to disability,
the ALJ must analyze both the `disabling effect of each of the
claimant's ailments' and the `combined effect of all of these
impairments.'" Fraga, 810 F.2d at 1305 (citing Dellolio, 705 F.2d
at 128).
The ALJ's disposition of the present case bears a strong
resemblance to the situation encountered by this court in
Strickland v. Harris:
The ALJ failed to address at all a fact issue raised
herein which was essential to a conclusion of no
disability, namely, the degree of impairment caused by
the combination of physical and mental medical problems.
Dodsworth v. Celebrezze, 349 F.2d 312 (5th Cir. 1965).
The ALJ addressed certain of the claimant's complaints
separately, tending to minimize them (sometimes despite
quite strong evidence to the contrary, see note 4 supra),
but he devoted no discussion and made no factfindings as
to disability indicated as arising from the interaction
or cumulation of even those medical problems whose
existence he acknowledged or did not rule out.
Strickland, 615 F.2d at 1110; see also, e.g., Scott, 770 F.2d at
487 ("Although the ALJ stated that he had `carefully considered the
entire record in this case,' his `evaluation of the evidence'
addresses each impairment separately and does not specifically
discuss the interaction or cumulation of all of the claimant's
medical problems."). Thus, the interaction or cumulation of all of
Mr. Loza's mental and physical medical problems and impairments
also must be addressed on remand.
IV. CONCLUSION
50

For the aforementioned reasons, we REVERSE the district
court's judgment affirming the Commissioner's decision, and REMAND
the case to the district court with instructions to vacate the
Commissioner's decision and remand the case to the Commissioner for
further consideration and proceedings in accordance with this
opinion.
51