The opinion of the court was delivered by: Alicia G. Rosenberg United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Penny Sheppard ("Sheppard") filed a Complaint on February 7, 2008. Pursuant to 28 U.S.C. § 636(c), the parties filed Consents to proceed before Magistrate Judge Rosenberg on February 22 and March 6, 2008. The parties filed a Joint Stipulation (the "Stip") on November 17, 2008, that addresses the disputed issues in the case. The Commissioner filed the certified administrative record ("AR"). The Court has taken the Joint Stipulation under submission without oral argument.
Having reviewed the entire file, the Court concludes that the decision of the Commissioner is reversed and remanded for consideration of a lay witness questionnaire dated August 8, 2005.
On June 7, 2005, Sheppard filed an application for Disability Insurance Benefits (DIB) and Supplemental Security Income (SSI) benefits, alleging an onset date of September 27, 2003. AR 13. The application was denied initially and on reconsideration. AR 25-26. Sheppard requested a hearing. A.R. 42. The Administrative Law Judge ("ALJ") conducted a hearing on July 25, 2007, at which Sheppard, a witness, a medical expert, and a vocational expert testified. AR 370-411. The ALJ issued a decision denying benefits on October 18, 2007. AR 10-21.
Sheppard filed a request for review of the ALJ's decision. AR 8. On December 21, 2007, the Appeals Council denied the request for review. AR 5-7. This lawsuit followed.
Pursuant to 42 U.S.C. § 405(g), this Court has authority to review the Commissioner's decision to deny benefits. The decision will be disturbed only if it is not supported by substantial evidence or it is based upon the application of improper legal standards. Moncada v. Chater, 60 F.3d 521, 523 (9th Cir. 1995); Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992).
In this context, "substantial evidence" means "more than a mere scintilla but less than a preponderance -- it is such relevant evidence that a reasonable mind might accept as adequate to support the conclusion." Moncada, 60 F.3d at 523. When determining whether substantial evidence exists to support the Commissioner's decision, the Court examines the administrative record as a whole, considering adverse as well as supporting evidence. Drouin, 966 F.2d at 1257. Where the evidence is susceptible to more than one rational interpretation, the Court must defer to the decision of the Commissioner. Moncada, 60 F.3d at 523.
III. EVALUATION OF DISABILITY
A person qualifies as disabled, and thereby eligible for such benefits, "only if his physical or 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." Barnhart v. Thomas, 540 U.S. 20, 21-22, 124 S.Ct. 376, 157 L.Ed. 2d 333 (2003).
The ALJ found that Sheppard has the following severe impairments: "fibromyalgia syndrome; depressive disorder; and multiple sclerosis, in remission." A.R. 15. Sheppard has the residual functional capacity ("RFC") "to perform the full range of light work, except for the following limitations. She should not work at a rapid production-rate pace -- ie, on a rapid assembly line. She should not perform work which requires hyper-vigilance, or which involves safety operations or responsibility for the safety of others." A.R. 17. The ALJ found that Sheppard "is capable of performing past ...