The opinion of the court was delivered by: Suzanne H. Segal United States Magistrate Judge
MEMORANDUM DECISION AND ORDER
Miguel Magallon Diaz ("Plaintiff") brings this action seeking to overturn the decision of the Commissioner of the Social Security Administration (hereinafter the "Commissioner" or the "Agency") denying his application for Disability Insurance Benefits ("DIB"). The parties consented, pursuant to 28 U.S.C. § 636(c), to the jurisdiction of the undersigned United States Magistrate Judge. For the reasons stated below, the decision of the Commissioner is REVERSED and REMANDED for further proceedings.
Plaintiff filed an application for DIB on August 5, 2004. (Administrative Record ("AR") 57-60). He alleged a disability onset date of June 4, 2004 (AR 57) due to osteomyelitis in the spine and diabetes. (AR 80, 140). The Agency denied Plaintiff's claim for DIB initially on September 14, 2004. (AR 26-30). This denial was upheld upon reconsideration on December 9, 2004. (AR 32-36).
On December 4, 2006, a hearing was held before Administrative Law Judge ("ALJ") Peter J. Valentino. (AR 1201-28). The ALJ denied benefits in a written decision dated December 15, 2006. (AR 16-24). On January 25, 2007, Plaintiff sought review of the unfavorable decision. (AR 15). The Appeals Council declined review on October 28, 2008. (AR 5-7). Plaintiff commenced the instant action on December 24, 2008.
III. THE FIVE-STEP SEQUENTIAL EVALUATION PROCESS
To qualify for disability benefits, a claimant must demonstrate a medically determinable physical or mental impairment that prevents him from engaging in substantial gainful activity*fn1 and that is expected to result in death or to last for a continuous period of at least twelve months. Reddick v. Chater, 157 F.3d 715, 721 (9th Cir. 1998) (citing 42 U.S.C. § 423(d)(1)(A)). The impairment must render the claimant incapable of performing the work he previously performed and incapable of performing any other substantial gainful employment that exists in the national economy. Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999) (citing 42 U.S.C. § 423(d)(2)(A)).
To decide if a claimant is entitled to benefits, an ALJ conducts a five-step inquiry. 20 C.F.R. §§ 404.1520, 416.920. The steps are as follows:
(1) Is the claimant presently engaged in substantial gainful activity? If so, the claimant is found not disabled. If not, proceed to step two.
(2) Is the claimant's impairment severe? If not, the claimant is found not disabled. If so, proceed to step three.
(3) Does the claimant's impairment meet or equal one of a list of specific impairments described in 20 C.F.R. Part 404, Subpart P, Appendix 1? If so, the claimant is found disabled. If not, proceed to step four.
(4) Is the claimant capable of performing her past work? If so, the claimant is found not disabled. If not, proceed to step five.
(5) Is the claimant able to do any other work? If not, the claimant is found disabled. If so, the claimant is found not disabled.
Tackett, 180 F.3d at 1098-99; see also 20 C.F.R. §§ 404.1520(b)-(g)(1), 416.920(b)-(g)(1); Bustamante v. Massanari, 262 F.3d 949, 953-54 (9th Cir. 2001) (citations omitted).
The claimant has the burden of proof at steps one through four, and the Commissioner has the burden of proof at step five. Bustamante, 262 F.3d at 953-54. If, at step four, the claimant meets his burden of establishing an inability to perform past work, the Commissioner must show that the claimant can perform some other work that exists in "significant numbers" in the national economy, taking into account the claimant's residual functional capacity ("RFC"),*fn2 age, education, and work experience. Tackett, 180 F.3d at 1098, 1100; Reddick, 157 F.3d at 721; 20 C.F.R. §§ 404.1520(g)(1), 416.920(g)(1). The Commissioner may do so by the testimony of a vocational expert or by reference to the Medical-Vocational Guidelines appearing in 20 C.F.R. Part 404, Subpart P, Appendix 2 (commonly known as "the Grids"). Osenbrock v. Apfel, 240 F.3d 1157, 1162 (9th Cir. 2001). When a claimant has both exertional (strength-related) and non-exertional limitations, the Grids are inapplicable and the ALJ must take the testimony of a VE. Moore v. Apfel, 216 F.3d 864, 869 (9th Cir. 2000).
At step one, the ALJ found that Plaintiff had not engaged in substantial gainful activity at any time relevant to the ALJ's decision. (AR 21).
At step two, the ALJ determined that Plaintiff had the severe impairments of spinal disc disease, history of osteomyelitis, thoracic radiculopathy, chronic back pain, diabetes mellitus, and hypertension. (Id.).
At step three, the ALJ concluded that Plaintiff did not have an impairment or combination of impairments that met or medically ...