The opinion of the court was delivered by: Stephen J. Hillman United States Magistrate Judge
MEMORANDUM DECISION AND ORDER
This matter is before the Court for review of the decision by the Commissioner of Social Security denying plaintiff's application for Disability Insurance Benefits. Pursuant to 28 U.S.C. § 636(c), the parties have consented that the case may be handled by the undersigned. The action arises under 42 U.S.C. § 405(g), which authorizes the Court to enter judgment upon the pleadings and transcript of the record before the Commissioner. The plaintiff and the defendant have filed their pleadings, the defendant has filed the certified transcript of record, and the parties have filed a Joint Stipulation.
After reviewing the matter, the Court concludes that the decision of the Commissioner should be reversed and remanded.
On April 21, 2006, plaintiff Custodio Meraz filed an application for a period of disability and disability insurance benefits, alleging disability beginning March 8, 2006, due to chronic pain in neck, back, and left shoulder, and left leg injury. (Administrative Record ["AR"] 111). On January 22, 2009, an Administrative Law Judge ("ALJ") determined the plaintiff was not disabled within the meaning of the Social Security Act. (AR 8-18).
Following the Appeals Council's denial of plaintiff's request for a review of the hearing decision (AR 1-3), plaintiff filed an action in this Court.
Plaintiff makes six challenges to the ALJ's Decision denying disability benefits. Plaintiff alleges the ALJ erred in (1) failing to discuss lay witness testimony, (2) failing to properly consider the treating physician's physical residual functional capacity assessment, (3) failing to properly assess the weight given to the treating physician's opinion that plaintiff's physical limitations affected his ability to work, (4) failing to properly consider plaintiff's subjective symptoms and make proper credibility findings, (5) failing to properly evaluate medical equivalency at step 3 of the evaluation process, and (6) failing to pose a complete hypothetical question to the Vocational Expert.
For the reasons discussed below, the Court finds that plaintiff's first, third, and fourth claims of error have merit. Since the matter is remanded for further proceeding based on the plaintiff's first, third, and four claims, the Court will not address the second, fifth, or sixth claims of error.
Plaintiff asserts that the ALJ erred in failing to discuss lay witness testimony in the form of third party function reports completed by plaintiff's daughter, Junia R. Esparza. Defendant argues that any perceived error in the ALJ's failure to discuss the lay witness testimony was harmless error.
Ms. Esparza completed three separate third party function reports, dated July 20, 2006, August 5, 2006, and February 20, 2007. (AR 139, 147, 173). Ms. Esparza's statements in the third party function reports indicate plaintiff cannot sit or stand for long periods of time without feeling severe pain and discomfort. (AR 143, 177, 178). Ms. Esparza's statements also indicate plaintiff can walk the distance of one block, but that he must subsequently rest for 10-30 minutes. (AR 152, 178). Ms. Esparza's statements indicate that, when sitting, plaintiff's pain causes him to change positions every half hour. (AR 152). Ms. Esparza's statements also indicate plaintiff uses a cane prescribed by his doctor when standing and walking. (AR 179).
The ALJ failed to discuss the third party function reports completed by Ms. Esparza. (See AR 8-18). When an ALJ fails to discuss competent lay testimony, "a reviewing court cannot find harmless error unless it can confidently conclude that no reasonable ALJ, when fully crediting the testimony, could have reached a different disability determination." Stout v. Commissioner, 454 F.3d 1050, 1056 (9th Cir. 2006).
Ms. Esparza's statements could have led a reasonable ALJ to reach a different disability determination. Here, the ALJ reached the following disability determination: "the claimant has the residual functional capacity to perform light work as defined in CFR 404.1567(b) and is further limited to occasional climbing of ladders, ropes, and scaffolds, and occasional overhead activity with the dominant left upper extremity." (AR 12-13). Ms. Esparza's statements, however, indicate plaintiff has difficulty performing basic mobility functions, such as standing and walking. A reasonable ALJ, when crediting Ms. Esparza's statements, could have reach the conclusion that "climbing of ladders, ropes, and scaffolds" was beyond the plaintiff's abilities.
A reasonable ALJ could have reached a different disability determination. Thus, the ALJ's failure to discuss Ms. Esparza's ...