ORDER REVERSING AND REMANDING THE COMMISSIONER'S DECISION
BENJAMIN H. SETTLE, District Judge.
I. BASIC DATA
Type of Benefits Sought:
(X) Disability Insurance
() Supplemental Security Income
Age: 37 at alleged onset date
Principal Disabilities Alleged by Plaintiff: Obsessive compulsive disorder, depression, anxiety, chronic fatigue, spherocytosis, right arm numbness, and leg and ankle pain
Disability Allegedly Began: August 1, 2013
Principal Previous Work Experience: Food sales clerk, stock clerk, cashier, waitress, laundry worker
Education Level Achieved by Plaintiff: 10th grade
II. PROCEDURAL HISTORY—ADMINISTRATIVE
Before ALJ James W. Sherry:
Date of Hearing: June 5, 2015; hearing transcript AR 29-64
Date of Decision: July 10, 2015
Appears in Record at: AR 12-23
Summary of Decision:
Before Appeals Council:
Date of Decision: December 9, 2016
Appears in Record at: AR 1-7
Summary of Decision: Declined review
III. PROCEDURAL HISTORY—THIS COURT
Jurisdiction based upon: 42 U.S.C. § 405(g)
Brief on Merits Submitted by (X) Plaintiff (X) Commissioner
IV. STANDARD OF REVIEW
Pursuant to 42 U.S.C. § 405(g), the Court may set aside the Commissioner's denial of Social Security benefits when the ALJ's findings are based on legal error or not supported by substantial evidence in the record as a whole. Bayliss v. Barnhart, 427 F.3d 1211, 1214 n.1 (9th Cir. 2005). "Substantial evidence" is more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Richardson v. Perales, 402 U.S. 389, 401 (1971); Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989). The ALJ is responsible for determining credibility, resolving conflicts in medical testimony, and resolving any other ambiguities that might exist. Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995). While the Court is required to examine the record as a whole, it may neither reweigh the evidence nor substitute its judgment for that of the ALJ. See Thomas v. Barnhart, 278 F.3d 947, 954 (9th Cir. 2002). "Where the evidence is susceptible to more than one rational interpretation, one of which supports the ALJ's decision, the ALJ's conclusion must be upheld." Id.
V. EVALUATING DISABILITY
The claimant, Sheila Jones ("Jones"), bears the burden of proving that she is disabled within the meaning of the Social Security Act ("Act"). Meanel v. Apfel, 172 F.3d 1111, 1113 (9th Cir. 1999). The Act defines disability as the "inability to engage in any substantial gainful activity" due to a physical or mental impairment which has lasted, or is expected to last, for a continuous period of not less than twelve months. 42 U.S.C. § 423(d)(1)(A). A claimant is disabled under the Act only if her impairments are of such severity that she is unable to do her previous work, and cannot, considering her age, education, and work experience, engage in any other substantial gainful activity existing in the national economy. 42 U.S.C. §§ 423(d)(2)(A); see also Tackett v. Apfel, 180 F.3d 1094, 1098-99 (9th Cir. 1999).
The Commissioner has established a five-step sequential evaluation process for determining whether a claimant is disabled within the meaning of the Act. See 20 C.F.R. § 416.920. The claimant bears the burden of proof during steps one through four. Valentine v. Comm'r, Soc. Sec. Admin., 574 F.3d 685, 689 (9th Cir. 2009). At step five, the burden shifts to the Commissioner. Id.
VI. ISSUES ON APPEAL
1. Did the ALJ err in assessing Jones's testimony?
2. Did the ALJ err in assessing the lay witness testimony in the record?
Jones appeals the Commissioner's decision denying her disability benefits, arguing that the ALJ committed several errors requiring reversal. Dkt. 11. The Court addresses the alleged errors in turn.
A. Jones's Testimony
Jones argues that the ALJ erred in evaluating her testimony. See Dkt. 11 at 3-10. The Court agrees.
Questions of credibility are solely within the control of the ALJ. See Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982). The Court should not "second-guess" this credibility determination. Allen v. Heckler, 749 F.2d 577, 580 (9th Cir. 1984). Unless affirmative evidence shows the claimant is malingering, an ALJ's reasons for rejecting the claimant's testimony must be "clear and convincing." Lester v. Chater, 81 F.3d 821, 834 (9th Cir. 1996).
Here, the ALJ discounted Jones's testimony regarding both her physical and mental symptoms because her complaints were not substantiated by the objective medical evidence. See AR 18-19. However, a claimant's pain testimony may not be rejected "solely because the degree of pain alleged is not supported by objective medical evidence." Orteza v. Shalala, 50 F.3d 748, 749-50 (9th Cir. 1995) (quoting Bunnell v. Sullivan, 947 F.2d 341, 346-47 (9th Cir. 1991) (en banc)) (emphasis added); see also Rollins v. Massanari, 261 F.3d 853, 856 (9th Cir. 2001); Fair v. Bowen, 885 F.2d 597, 601 (9th Cir. 1989). The same is true with respect to a claimant's other subjective complaints. See Byrnes v. Shalala, 60 F.3d 639, 641-42 (9th Cir. 1995) (finding that while holding in Bunnell was couched in terms of subjective complaints of pain, its reasoning extended to claimant's non-pain complaints as well). The Ninth Circuit found that to allow otherwise "`would render meaningless' the requirement that" the ALJ "consider all relevant evidence," not just that which is medical. Bunnell, 947 F.2d at 347 (citation omitted).
The ALJ in fact stated in his opinion that "whenever statements about the intensity, persistence, or functionally limiting effects of pain or other symptoms are not substantiated by objective medical evidence, the undersigned must make a finding on the credibility of the statements based on a consideration of the entire case record." AR 18. Therefore, the ALJ erred by failing to provide any reason to discount Jones's testimony other than the inconsistency between that testimony and the medical evidence.
The Ninth Circuit has "recognized that harmless error principles apply in the Social Security Act context." Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012) (citing Stout v. Comm'r, Soc. Sec. Admin., 454 F.3d 1050, 1054 (9th Cir. 2006) (collecting cases)). The Ninth Circuit noted that "in each case we look at the record as a whole to determine [if] the error alters the outcome of the case." Id. The Ninth Circuit has "adhered to the general principle that an ALJ's error is harmless where it is `inconsequential to the ultimate nondisability determination.'" Id. (quoting Carmickle v. Comm'r, Soc. Sec. Admin., 533 F.3d 1155, 1162 (9th Cir. 2008)) (other citations omitted). The court noted the necessity to follow the rule that courts must review cases "`without regard to errors' that do not affect the parties' `substantial rights.'" Id. at 1118 (quoting Shinseki v. Sanders, 556 U.S. 396, 407 (2009)).
Had the ALJ fully credited Jones's testimony, the RFC would have included additional limitations, as would the hypothetical questions posed to the vocational expert. As the ALJ's ultimate determination regarding disability was based on the testimony of the vocational expert on the basis of an improper hypothetical question, this error affected the ultimate disability determination and is not harmless.
B. Lay Witness Evidence
Jones argues that the ALJ erred in evaluating the lay witness testimony of her husband, her father, and her friend. See Dkt. 11 at 10-12. The Court agrees.
The Commissioner argues only that any error in the ALJ's evaluation of the lay witness testimony was harmless because each of the witnesses testified to the same limitations to which Jones testified, and when that occurs, the ALJ's valid reasons for rejecting the claimant's testimony apply equally well to the lay witness testimony. See Dkt. 12 at 7-8 (citing Molina, 674 F.3d at 1117). However, as described above, the ALJ did not provide a valid reason for discounting Jones's testimony. See supra § VII.A. Therefore, the ALJ must re-evaluate the lay witness testimony on remand as well.
C. The RFC and Step-Five Finding
Jones argues that the ALJ's RFC assessment and step-five finding are not supported by substantial evidence due to the aforementioned errors. See Dkt. 11 at 12. As discussed above, because the ALJ erred in assessing Jones's testimony and the lay testimony, the RFC analysis was not complete, and the ALJ's step-five determination is not supported by substantial evidence and is in error.
The Court may remand this case "either for additional evidence and findings or to award benefits." Smolen v. Chater, 80 F.3d 1273, 1292 (9th Cir. 1996). Generally, when the Court reverses an ALJ's decision, "the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation." Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004) (citations omitted). Thus, it is "the unusual case in which it is clear from the record that the claimant is unable to perform gainful employment in the national economy," that "remand for an immediate award of benefits is appropriate." Id.
Benefits may be awarded where "the record has been fully developed" and "further administrative proceedings would serve no useful purpose." Smolen, 80 F.3d at 1292; Holohan v. Massanari, 246 F.3d 1195, 1210 (9th Cir. 2001). Specifically, benefits should be awarded where:
Smolen, 80 F.3d 1273 at 1292; McCartey v. Massanari, 298 F.3d 1072, 1076-77 (9th Cir. 2002). Here, issues still remain regarding conflicts between the medical evidence and other testimony over Jones's functional capabilities and her ability to perform work despite any additional functional limitations. Accordingly, remand for further consideration is warranted in this matter.
Therefore, it is hereby