The opinion of the court was delivered by: Paul L. Abrams United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiff filed this action on June 4, 2009, seeking review of the Commissioner's denial of his application for Disability Insurance Benefits. The parties filed Consents to proceed before the undersigned Magistrate Judge on June 16, 2009, and July 10, 2009. The parties filed a Joint Stipulation on January 4, 2010, that addresses their positions concerning the disputed issues in the case. The Court has taken the Joint Stipulation under submission without oral argument.
Plaintiff was born on May 9, 1956. [Administrative Record ("AR") at 143.] He has completed high school, and has past relevant work experience as an air-conditioning mechanic, cashier, maintenance man, and maintenance supervisor. [Id. at 22, 76, 165-71.]
Plaintiff filed his application for Disability Insurance Benefits on October 24, 2005, alleging that he has been unable to work since June 1, 2003, because of issues with his lower back, shoulders, and right knee. [Id. at 88, 143-47, 157-58.] After his application was denied initially and on reconsideration, plaintiff requested a hearing before an Administrative Law Judge ("ALJ"). [Id. at 88-92, 93-97, 102.] A hearing was held on October 18, 2007, at which plaintiff appeared without counsel and testified on his own behalf. Both a medical expert and a vocational expert were present, but only the medical expert testified. [Id. at 68-85.] The ALJ concluded the hearing after the medical expert claimed that he did not have any medical records from September 2002 to March 2004. [Id. at 80-84.] A second hearing was held on February 28, 2008, where plaintiff appeared with counsel. [Id. at 41-67.] On April 25, 2008, the ALJ issued a decision finding plaintiff not disabled. [Id. at 13-22.] When the Appeals Council denied plaintiff's request for review of the hearing decision on March 27, 2009, the ALJ's decision became the final decision of the Commissioner. [Id. at 3-5.] This action 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 if 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, the term "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; see also Drouin, 966 F.2d at 1257. 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; Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989). 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; Andrews v. Shalala, 53 F.3d 1035, 1039-40 (9th Cir. 1995); Drouin, 966 F.2d at 1258.
IV. EVALUATION OF DISABILITY
Persons are "disabled" for purposes of receiving Social Security benefits if they are unable to engage in any substantial gainful activity owing to a physical or mental impairment that is expected to result in death or which has lasted or is expected to last for a continuous period of at least twelve months. 42 U.S.C. § 423(d)(1)(A); Drouin, 966 F.2d at 1257.
A. THE FIVE-STEP EVALUATION PROCESS
The Commissioner (or ALJ) follows a five-step sequential evaluation process in assessing whether a claimant is disabled. 20 C.F.R. §§ 404.1520, 416.920; Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 1995, as amended April 9, 1996). In the first step, the Commissioner must determine whether the claimant is currently engaged in substantial gainful activity; if so, the claimant is not disabled and the claim is denied. Id. If the claimant is not currently engaged in substantial gainful activity, the second step requires the Commissioner to determine whether the claimant has a "severe" impairment or combination of impairments significantly limiting his ability to do basic work activities; if not, a finding of non-disability is made and the claim is denied. Id. If the claimant has a "severe" impairment or combination of impairments, the third step requires the Commissioner to determine whether the impairment or combination of impairments meets or equals an impairment in the Listing of Impairments ("Listing") set forth at 20 C.F.R., Part 404, Subpart P, Appendix 1; if so, disability is conclusively presumed and benefits are awarded. Id. If the claimant's impairment or combination of impairments does not meet or equal an impairment in the Listing, the fourth step requires the Commissioner to determine whether the claimant has sufficient "residual functional capacity" to perform his past work; if so, the claimant is not disabled and the claim is denied. Id. The claimant has the burden of proving that he is unable to perform past relevant work. Drouin, 966 F.2d at 1257. If the claimant meets this burden, a prima facie case of disability is established. The Commissioner then bears the burden of establishing that the claimant is not disabled, because he can perform other substantial gainful work available in the national economy. The determination of this issue comprises the fifth and final step in the sequential analysis. 20 C.F.R. §§ 404.1520, 416.920; Lester, 81 F.3d at 828 n.5; Drouin, 966 F.2d at 1257.
B. THE ALJ'S APPLICATION OF THE FIVE-STEP PROCESS
At step one, the ALJ concluded that plaintiff did not engage in any substantial gainful activity during the period of time between June 1, 2003 (the alleged onset date of disability), and December 31, 2005 (the date the ALJ determined that plaintiff was last insured for Disability Insurance Benefits purposes). [AR at 18.] At step two, the ALJ concluded that plaintiff has the following severe impairments: "[status post] nondisplaced fracture through the posterior aspect of the left iliac wing, left shoulder impingement syndrome, bilateral facet joint syndrome at L5-S1, and right knee chondromalacia." [Id.] At step three, the ALJ concluded that plaintiff's impairments do not, either individually or in combination, meet or equal any of the impairments listed in 20 C.F.R., Part 404, Subpart P, Appendix 1. [Id. at 19.] The ALJ further found that plaintiff retained the residual functional capacity ("RFC")*fn1 "to perform the full range of medium work*fn2 as defined in 20 [C.F.R.] § 404.1567(c)" and noted that "[t]he limitations in this residual functional capacity recognize that [plaintiff] improved following his initial injury, physical therapy, and shoulder surgery sufficiently to ...