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September 14, 2005.

BRYAN L. JACKSON, Plaintiff,
JO ANNE B. BARNHART, Commissioner of Social Security, Defendant.

The opinion of the court was delivered by: LARRY BURNS, Magistrate Judge

Plaintiff Bryan L. Jackson brought this action pursuant to 42 U.S.C. §§ 1383(c)(3) and 405(g) for Judicial Review and Remedy on Administrative Decision Under the Social Security Act, requesting that the decision of the Commissioner of Social Security denying his disability benefits be reversed. Subsequently he filed a motion for summary judgment, and Defendant filed a cross-motion for summary judgment. The motions were referred to Magistrate Judge Louisa S. Porter for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(b) and Civil Local Rule 72.1(c)(1)(c). Judge Porter recommended denying Plaintiff's motion, granting Defendant's cross-motion, and affirming the agency decision to deny benefits ("Report and Recommendation"). Plaintiff filed objections to the Report and Recommendation ("Objections"), and Defendant has not responded. Upon review of the record in light of the Objections, the Court ADOPTS the Report and Recommendation AS MODIFIED HEREIN. FACTUAL AND PROCEDURAL BACKGROUND

On November 26, 2002, Plaintiff applied for supplemental social security income benefits. At the time of filing his application, he was a 50 years old and had high school education. His past work experience included employment as a blue print machine operator, bartender and auto mechanic. He alleged he had become disabled in 1994, after three knee arthroscopies. He subsequently underwent additional knee surgeries, and also suffered from back pain and substance abuse. His substance abuse was in remission at the time of the application.

  The application was denied initially and on reconsideration. After an administrative hearing, the Administrative Law Judge ("ALJ") concluded Plaintiff was not disabled and denied his request for benefits. Plaintiff's request for administrative review was denied. Where a request for review is denied, the ALJ's decision becomes the final agency decision reviewed by the court. See Batson v. Comm'r of the Social Security Admin., 359 F.3d 1190, 1193 n. 1 (9th Cir. 2004). Plaintiff sought judicial review in this Court. In her Report and Recommendation Judge Porter found the ALJ's decision was based on substantial evidence and was free of legal error. She therefore recommended denying Plaintiff's summary judgment motion, granting Defendant's summary judgment motion and affirming the agency decision.


  I. Standard of Review

  The district court has jurisdiction to review the magistrate judge's report and recommendation concerning a dispositive motion, and makes a de novo determination of any portion of the magistrate judge's disposition to which specific written objection have been timely and appropriately made. Fed.R.Civ.P. 72(b); see also United States v. Reyna-Tapia, 238 F.3d 1114, 1121 (9th Cir. 2003) (en banc). "A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). Since Plaintiff objects only to the Magistrate Judge's finding pertaining to two hypothetical questions posed by the ALJ to the vocational expert, this is the only aspect of the Report and Recommendation reviewed by this Court. II. Court Review of Agency's Decision to Deny Benefits

  The Social Security Act provides for judicial review of a final agency decision denying a claim for disability benefits. 42 U.S.C. § 405(g). A reviewing court must affirm the denial of benefits if the agency's decision is supported by substantial evidence and applies the correct legal standards. Batson, 359 F.3d at 1193. Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Ostenbrock v. Apfel, 240 F.3d 1157, 1162 (9th Cir. 2001).

  To qualify for disability benefits under the Social Security Act, a claimant must show he is unable to engage in any substantial gainful activity because of a medically determinable physical or mental impairment that has lasted or can be expected to last at least 12 months. 42 U.S.C. § 423(d). The Social Security regulations establish a five-step sequential evaluation for determining whether a claimant is disabled under this standard. 20 C.F.R. § 404.1520(a); Batson, 359 F.3d at 1194. First, the agency must determine whether the applicant is engaged in substantial gainful activity. 20 C.F.R. § 404.1520(a)(4)(i). If not, the agency must determine at step two of the evaluation whether the claimant is suffering from a "severe" impairment within the meaning of the regulations. Id. at § 404.1520(a)(4)(ii). If the claimant's impairment is severe, the agency must determine at step three whether the impairment meets or equals one of the "Listing of Impairments" contained in the regulations. Id. at § 404.1520(a)(4)(iii). If the claimant's impairment meets or equals a listing, he must be found disabled. Id. If the impairment does not meet or equal a listing, the agency must determine at step four whether the claimant retains the residual functional capacity to perform his past relevant work. Id. at § 404.1520(a)(4)(iv). If the claimant can no longer perform his past relevant work, the agency at step five of the evaluation must consider whether he can perform any other work that exists in the national economy. Id. at § 404.1520(a)(4)(v). While the claimant carries the burden of proving eligibility at steps one through four, the burden at step five rests on the agency. Celaya v. Halter, 332 F.3d 1177, 1180 (9th Cir. 2003). Claimants not disqualified at step five are eligible for disability benefits. Id. III. Plaintiff's Objections

  Plaintiff contends the ALJ's finding of no disability should be reversed because the hypothetical questions he posed to the vocational expert were incomplete, and the expert's opinions therefore could not properly support the finding. The Court disagrees.

  The ALJ found at step four of the evaluation that Plaintiff could perform his past work as a blueprint machine operator despite his severe impairments. At step four, the ALJ must compare the claimant's residual functional capacity ("RFC") with the physical and mental demands of his past relevant work to determine whether he is able to perform such work. 20 C.F.R. § 404.1560(a)&(b).

  Accordingly, the first component of evaluation at step four is the RFC assessment. "RFC is what an individual can still do despite his or her limitations."*fn1 SSR 96-8p, 1996 WL 374184 (S.S.A.). Since the formulation of an RFC assessment does not involve a vocational expert opinion,*fn2 the ALJ in this case did not rely on the vocational expert for this purpose (see AR at 3-4), and Plaintiff in his Objections does not challenge the RFC assessment, the RFC assessment is relevant in the present discussion only insofar as Plaintiff contends the hypothetical questions to the vocational expert must include the entire RFC assessment.

  The second component of evaluation at step four is a determination of a claimant's ability to return to his past relevant work in light of the RFC assessment and the physical and mental demands of the prior work. The ALJ may use a vocational expert to assist in making this determination. 20 C.F.R. § 404.1560(b)(2). Specifically, a vocational expert "may offer expert opinion testimony in response to a hypothetical question about whether a person with the physical and mental limitations imposed by claimant's medical impairment(s) can meet the demands of claimant's previous work. . . ." Id.

  The ALJ in this case asked the vocational expert, Connie Guillory, four hypothetical questions. Plaintiff contends the first and third hypotheticals were incomplete. Plaintiff's Objections are based on the premise the ALJ has an "obligation under Social Security Rulings of formulating complete [RFC] assessments in the hypothetical questions." (Objections at 2.) For this proposition, Plaintiff relies on DeLorme v. Sullivan, 924 F.2d 841 (9th Cir. 1991). DeLorme, however, is distinguishable from the instant case.

  In DeLorme the ALJ found the claimant met his burden to prove he could not return to his prior relevant work, and the evaluation therefore continued to step five. Id. at 849. At step five, the agency has the burden to prove the claimant is not disabled because he could do other work in the national economy. Id. The ALJ consulted a vocational expert on this point, but in stating the hypothetical questions, he omitted the claimant's significant mental impairment. Id. "If the hypothetical does not reflect all the claimant's limitations, we have held that the expert's testimony has no evidentiary ...

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