The opinion of the court was delivered by: Marc L. Goldman United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Evangelina Castro seeks judicial review of the Commissioner's denial of her application for Supplemental Security Income ("SSI") benefits under the Social Security Act. For the reasons stated below, the decision of the Commissioner is REVERSED and REMANDED for further proceedings consistent with this opinion.
I. Factual and Procedural History
Plaintiff was born on April 12, 1957. (Administrative Record ("AR") 14, 82.) She has a tenth grade education with no other specialized trade or vocational training. (AR 14, 90.) Plaintiff's only work experience is as an assembly line worker from 1987 to 1989. (AR 87.)
Plaintiff filed an application for benefits on May 21, 2007, alleging that she had been disabled since April 1, 2003, due to psychotic disorder not otherwise specified and substance abuse. (AR 9, 36.) Plaintiff's application was denied initially on October 10, 2007, (AR 40-43) and upon reconsideration on February 18, 2008. (AR 46-50.) An administrative hearing was held on April 16, 2009, before Administrative Law Judge ("ALJ") F. Keith Varni, at which Plaintiff, represented by counsel, testified. (AR 22-33.)
On August 4, 2009, ALJ Varni denied Plaintiff's application for benefits. (AR 9-15.) The ALJ found that Plaintiff had not engaged in substantial gainful activity during the time period at issue. (AR 10.) The ALJ further found that the medical evidence established that Plaintiff suffered from the following severe impairments: psychotic disorder NOS and substance abuse. (Id.) However, the ALJ concluded that Plaintiff's impairments did not meet, or were not medically equal to, one of the impairments listed in 20 C.F.R., Part 404, Subpart P, Appendix 1. (AR 11.) The ALJ concluded that Plaintiff retained the residual functional capacity ("RFC") to perform a full range of work at all exertional levels "but with the following non-exertional limitations: she can perform simple, repetitive tasks (20 CFR 416.920(e); SSR 85-15)." (AR 12.) The ALJ found that Plaintiff had no past relevant work. (AR 14.) However, relying on the Medical-Vocational Guidelines (the "grids"), the ALJ found that there were jobs that exist in significant numbers in the national economy that Plaintiff could perform (20 C.F.R. 416.969, 416.969a). (Id.) The ALJ concluded that Plaintiff was not disabled within the meaning of the Social Security Act. (Id.)
On September 21, 2009, the Appeals Council denied review (AR 1-3), and Plaintiff timely commenced this action for judicial review. On May 7, 2010, the parties filed a Joint Stipulation ("Joint Stp.") of disputed facts and issues. Plaintiff contends that the ALJ erred by: (1) improperly evaluating the severity of Plaintiff's physical impairments; (2) failing to properly consider the lay testimony of Plaintiff's friend; (3) failing to re-contact Plaintiff's treating physician and/or secure a psychiatric consultative examination; (4) improperly evaluating Plaintiff's impairments in accordance with the criteria of the Listing of Impairments; and (5) improperly relying on the grids in concluding that there were a significant number of jobs in the national economy that Plaintiff could perform. (Joint Stp. 2-3.) Plaintiff requests that this Court reverse and remand for an award of benefits, or in the alternative, reverse and remand for a new administrative hearing. (Joint Stp. 40-41.) The Commissioner requests that the ALJ's decision be affirmed. (Joint Stp. 41.)
After reviewing the parties' respective contentions and the record as a whole, the Court finds Plaintiff's contention regarding the ALJ's error in relying on the grids to be meritorious and remands this matter for further proceedings consistent with this opinion.*fn1
Under 42 U.S.C. § 405(g), a district court may review the Social Security Commissioner's decision to deny benefits. The Court must uphold the Social Security Administration's disability determination unless it is not supported by substantial evidence or is based on legal error. Ryan v. Comm'r of Soc. Sec., 528 F.3d 1194, 1198 (9th Cir. 2008)(citing Stout v. Comm'r of Soc. Sec. Admin., 454 F.3d 1050, 1052 (9th Cir. 2006)). Substantial evidence means more than a scintilla, but less than a preponderance; it is evidence that "a reasonable person might accept as adequate to support a conclusion." Lingenfelter v. Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007)(citing Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006)). To determine whether substantial evidence supports a finding, the reviewing court "must review the administrative record as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner's conclusion." Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1996). "If the evidence can support either affirming or reversing the ALJ's conclusion," the reviewing court "may not substitute [its] judgment for that of the ALJ." Robbins, 466 F.3d at 882.
Plaintiff contends that the ALJ erred by neglecting to obtain vocational expert testimony on the issue of whether there existed work in the national economy that Plaintiff could perform and instead relying solely on the grids. (Joint Stip. 38.) The Court agrees.
Once a claimant has demonstrated the existence of a severe impairment that precludes her from doing past work, the burden shifts to the Commissioner to demonstrate that there are a significant number of jobs in the national economy that the claimant can perform despite her impairment. Burkhart v. Bowen, 856 F.2d 1335, 1340 (9th Cir. 1988). The Commissioner may satisfy this burden by: (1) taking the testimony of a vocational expert or (2) applying the grids at 20 C.F.R., Part 404, Subpart P, Appendix 2. Id.
The grids provide a system "for disposing of cases that involve substantially uniform levels of impairment." Desrosiers v. Sec'y of Health & Human Servs., 846 F.2d 573, 578 (9th Cir. 1988) (Pregerson, J., concurring). The grids categorize jobs by three physical-exertional requirements: "[m]aximum sustained work capacity limited to sedentary work," "[m]aximum sustained work capacity limited to light work," and "[m]aximum sustained work capacity limited to medium work." Tackett v. Apfel, 180 F.3d 1094, 1101 (9th Cir. 1999). These exertional levels are further divided by a claimant's age, ...