The opinion of the court was delivered by: John E. Mcdermott United States Magistrate Judge
MEMORANDUM OPINION AND ORDER REVERSING DECISION OF THE COMMISSIONER OF SOCIAL SECURITY AND REMANDING FOR FURTHER PROCEEDINGS
On December 2, 2009, Victor Murphy ("Plaintiff" or "Claimant") filed a complaint seeking review of the decision by the Commissioner of Social Security ("Commissioner") denying Plaintiff's application for Supplemental Security Income ("SSI") benefits. The Commissioner filed an Answer on April 19, 2010. On July 20, 2010, the parties filed a Joint Stipulation ("JS"). The matter is now ready for decision.
Pursuant to 28 U.S.C. -§ 636(c), both parties consented to proceed before the Magistrate Judge. After reviewing the pleadings, transcripts, and administrative record ("AR"), the Court concludes that the Commissioner's decision should be reversed and the case remanded for further proceedings in accordance with law and with this Memorandum Opinion and Order.
Plaintiff is a 48 year old male who was found to have the medically determinable severe combination of impairments of uncontrolled diabetes mellitus with foot ulcer, dysthymic disorder, polysubstance abuse in remission, and antisocial personality disorder. (AR 14.) Plaintiff has not engaged in substantial gainful activity since June 26, 2007, the application date. (AR 14.)
Plaintiff's claim for SSI benefits was denied initially on November 16, 2007, and on reconsideration on March 12, 2008. (AR 9.) Plaintiff filed a written request for hearing, which was held before Administrative Law Judge ("ALJ") Robert Evans on June 2, 2009, in Palmdale, California. (AR 9.) Claimant did not appear but his attorney Bill Latour did. (AR 9.) Ruth A. Arnush, a vocational expert, appeared and testified. (AR 9.)
The ALJ issued an unfavorable decision on August 24, 2009. (AR 9-15.) Plaintiff filed a Request for Review of Hearing Decision which the Appeals Council denied on September 25, 2009. (AR 1-3.)
As reflected in the Joint Stipulation, Plaintiff raises the following disputed issues as grounds for reversal:
1. Whether the ALJ properly relied upon the vocational expert's testimony in determining that Plaintiff could perform other work.
2. Whether the ALJ properly considered the psychiatric consultative examiner's opinion regarding the claimant's limited ability to carry out instructions.
2. Whether the ALJ properly considered lay witness testimony.
Under 42 U.S.C. -§ 405(g), this Court reviews the ALJ's decision to determine whether the ALJ's findings are supported by substantial evidence and free of legal error. Smolen v. Chater, 80 F.3d 1273, 1279 (9th Cir. 1996); see also DeLorme v. Sullivan, 924 F.2d 841, 846 (9th Cir. 1991) (ALJ's disability determination must be supported by substantial evidence and based on the proper legal standards).
Substantial evidence means "'more than a mere scintilla'. . . but less than a preponderance." Saelee v. Chater, 94 F.3d 520, 521-22 (9th Cir. 1996) (quoting Richardson v. Perales, 402 U.S. 389, 401 (1971)). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson, 402 U.S. at 401 (internal quotations and citation omitted).
This Court must review the record as a whole and consider adverse as well as supporting evidence. Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006). Where evidence is susceptible to more than one rational interpretation, the ALJ's decision must be upheld. Morgan v. Comm'r, 169 F.3d 595, 599 (9th Cir. 1999). "However, a reviewing court must consider the entire record as a whole and may not affirm simply by isolating a 'specific quantum of supporting evidence.'" Robbins, 466 F.3d at 882 (quoting Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989)); see also Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007).
The Social Security Act defines disability as the "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or . . . can be expected to last for a continuous period of not less than 12 months." 42 U.S.C. -§-§ 423(d)(1)(A), 1382c(a)(3)(A). The Commissioner has established a five-step sequential process to determine whether a claimant is disabled.
20 C.F.R. -§-§ 404.1520, 416.920.
The first step is to determine whether the claimant is presently engaging in substantial gainful activity. Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). If the claimant is engaging in substantial gainful activity, disability benefits will be denied. Bowen v. Yuckert, 482 U.S. 137, 140 (1987). Second, the ALJ must determine whether the claimant has a severe impairment or combination of impairments. Parra, 481 F.3d at 746. Third, the ALJ must determine whether the impairment is listed, or equivalent to an impairment listed, in Appendix I of the regulations. ...