Olive v. Social Security Administration, 2:16-cv-00559

Carl Lee Olive applied for DIB and SSI alleging onset Dec. 31, 2011; claims denied administratively and by ALJ (Aug. 27, 2014); Appeals Council denied review.
ALJ found severe impairments (degenerative disc disease, borderline intellectual functioning, affective and anxiety disorders) but not disabling; assessed an RFC limiting reading/writing to name only and simple arithmetic.
At hearing, vocational expert (VE) identified 2,000 state / 245,000 national jobs (production worker, hand packager) the hypothetical illiterate claimant could perform, citing DOT codes classified at Language Development Level 2.
The ALJ did not ask the VE whether her testimony was consistent with the DOT and concluded the VE testimony was consistent; record contains medical notes that claimant cannot read/write beyond his name and evidence the consultative IQ test may reflect underperformance.
Magistrate Judge recommended reversal and remand because the VE testimony conflicted with the DOT (Level 2 language requires reading 190–215 wpm and writing compound/complex sentences) and the ALJ failed to ask or resolve the conflict under SSR 00-4p, causing prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ALJ erred at Step 5 by relying on VE testimony possibly inconsistent with the DOT without eliciting or resolving the conflict	VE identified jobs that an illiterate person cannot perform per DOT; ALJ should have asked about consistency and resolved the conflict	VE testimony was adequate and ALJ’s reliance was proper; claimant waived challenge by not cross-examining VE	The ALJ erred: there was an apparent, non-tangential conflict between VE testimony and DOT and the ALJ failed to ask/resolve it, causing prejudice and requiring remand

Perez v. Barnhart, 415 F.3d 457 (5th Cir. 2005) (standard for substantial evidence review and five-step sequential evaluation)
Richardson v. Perales, 402 U.S. 389 (U.S. 1971) (definition of substantial evidence)
Hames v. Heckler, 707 F.2d 162 (5th Cir. 1983) (substantial-evidence standard discussion)
Carey v. Apfel, 230 F.3d 131 (5th Cir. 2000) (VE testimony may resolve DOT limits where not conflicting)
Graves v. Colvin, 837 F.3d 589 (5th Cir. 2016) (ALJ must ask VE about DOT consistency; failure requires prejudice showing)
Newton v. Apfel, 209 F.3d 448 (5th Cir. 2000) (prejudice standard when ALJ fails to fully develop record)
Ripley v. Chater, 67 F.3d 552 (5th Cir. 1995) (deference to Commissioner’s fact findings if supported by substantial evidence)
Fields v. Bowen, 805 F.2d 1168 (5th Cir. 1986) (value of vocational expert testimony)
Romine v. Barnhart, 454 F. Supp. 2d 623 (E.D. Tex. 2006) (remand where ALJ failed to elicit/resolve VE–DOT conflict regarding noise/vibration limits)
Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996) (procedural rule on objections to magistrate judge reports)