The opinion of the court was delivered by: Alicia G. Rosenberg United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Patricia Estrada filed this action on June 3, 2009. Pursuant to 28 U.S.C. § 636(c), the parties consented to proceed before Magistrate Judge Rosenberg on July 8 and 13, 2009. (Dkt. Nos. 12-13.) On February 2, 2010, the parties filed a Joint Stipulation ("JS") that addressed the disputed issues. The Court has taken the matter under submission without oral argument.
Having reviewed the entire file, the Court remands this matter to the Commissioner for proceedings consistent with this opinion.
On September 11, 2000, Estrada filed an application for Supplemental Security Income ("SSI") benefits alleging a disability onset date of January 1, 1995. Administrative Record ("AR") 124-26. The application was denied initially and on reconsideration. AR 76-79, 82-85. An Administrative Law Judge ("ALJ") conducted a hearing on April 28, 2003, at which a vocational expert ("VE") and Estrada testified. AR 673-96. On July 22, 2003, the ALJ issued a decision denying benefits. AR 52-63. On September 10, 2003, Estrada sought review by the Appeals Council ("Council"). AR 97.
Also on September 10, 2003, Estrada filed a second application for SSI benefits alleging a disability onset date of August 1, 1995. AR 533-545. On December 23, 2003, Estrada's second application was granted. AR 114.*fn1
On February 12, 2004, Estrada requested the withdrawal of her "appeals council claim" based on her August 23, 2000 application.*fn2 AR 104. On December 12, 2005, the Council responded to Estrada's request for review of the July 22, 2003 unfavorable decision by the ALJ and the December 23, 2003 favorable determination by the Agency. AR 114-18. The Council found there was no basis for Estrada's request to withdraw her request for review. AR 114. The Council reviewed the ALJ's unfavorable decision and found that it was not supported by substantial evidence. AR 114-15. The Council found that the favorable determination was "based on 'error on the face' as the State Agency improperly invaded the period ruled on by the Administrative Law Judge by finding a disability onset of August 1, 2000 prior to the date of the unfavorable decision issued by the Administrative Law Judge on July 22, 2003." AR 115. The Council set aside the ALJ's decision, combined the two claims, and remanded the matter back to the ALJ "for more action and a new decision." AR 116.
The Council stated that the ALJ had found that Estrada could perform simple work at any exertional level based on an opinion by a consultative psychiatric examiner. Id. By contrast, in granting the second application, the Agency medical consultant found Estrada disabled as of August 1, 2000, because she met two listings. Id. The decision on the second application was apparently based on a mental disorder questionnaire completed by Estrada's treating phsyician, El-Gabalawy, on December 18, 2003. Id.*fn3 El-Gabalawy reported that Estrada heard voices that sometimes told her to hurt herself and that Estrada had been receiving outpatient treatment from Pacific Clinics since February 17, 2000. Id. El-Gabalawy diagnosed Estrada with "major depression, recurrent with psychotic features, methamphetamine dependence in early remission." Id. El-Gabalawy concluded that Estrada's ability to hold a job was "limited" and it was not expected that she could be gainfully employed. Id. He also concluded that Estrada "could be symptom free with minimal treatment, if [she complied] with medication and avoid[ed] use of illicit drugs." Id. However, the Council also noted that the ALJ had provided a "detailed rationale for rejecting Dr. Gabalawy's opinions." Id. In addition, the State Agency medical consultant, when making a favorable determination, did not have the record on which the ALJ based his denial of benefits. Id. Accordingly, the Council concluded that "further review/development is needed to resolve the discrepancies of record and to determine the severity of your medical condition." Id. The Council remanded the case "for updated medical evidence to reassess your residual functional capacity and to obtain medical expert evidence." Id.
On January 18, 2006, Estrada's counsel sent a letter to the Council arguing that the Council "lack[ed] the discretion" to deny Estrada's request to withdraw her request for review of the July 22, 2003 decision. AR 119. On March 8, 2006, the Council issued an order remanding the case to an ALJ. AR 73-75. The Council acknowledged that it had received and considered comments regarding its December 12, 2005 notice, and found that "the comments do not warrant a change in the Council's action." AR 74.
On January 8 and March 17, 2008, the same ALJ conducted hearings at which a Medical Expert ("ME"), a VE, and Estrada testified. AR 697-752. On July 22, 2008, the ALJ issued an unfavorable decision. AR 23-31. On April 22, 2009, the Council denied Estrada's request for review. AR 9-12. The Council designated the ALJ's decision as "the final decision of the Commissioner." AR 9.
Pursuant to 42 U.S.C. § 405(g), this Court reviews 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).
"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. In 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. When the evidence is ...