The opinion of the court was delivered by: Marc L. Goldman United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Stacy Olley ("Plaintiff") seeks review of the Commissioner's final decision denying her application for supplemental security income ("SSI") pursuant to Title XVI of the Social Security Act. For the reasons stated below, the Commissioner's decision is reversed, and this action is remanded for further proceedings.
I. Factual and Procedural Background
Plaintiff was born on January 15, 1965. (Administrative Record ("AR") at 25). She has a high school education, but no past relevant work experience. (AR at 25).
Plaintiff originally filed an application for SSI on June 18, 2004, (AR at 31). Plaintiff was found not disabled after a hearing before an administrative law judge. (AR at 31-38). The ALJ's decision was subsequently affirmed by the Appeals Council and this Court. (AR at 19); see Olley v. Astrue, EDCV 08-00018-MLG.
On January 4, 2008, Plaintiff filed a second application for SSI, alleging that she has been disabled since December 9, 2007, due to numbness in her hands, chronic diarrhea, depression, and diabetes. (AR at 19, 65). The Social Security Administration denied Plaintiff's application initially and on reconsideration. (AR at 42-46, 50-54).
An administrative hearing was held before Administrative Law Judge F. Keith Varni ("the ALJ") on January 8, 2010. (AR at 220-34). Plaintiff, who was represented by counsel, testified at the hearing. (AR at 222-34). The ALJ issued a decision on February 10, 2010, finding that Plaintiff had not met her burden of establishing changed circumstances to rebut the presumption of continuing non-disability. (AR at 19); see Chavez v. Bowen, 844 F.2d 691, 693 (9th Cir. 1988) (applying the rule of res judicata to administrative decisions). The ALJ also found that Plaintiff: (1) has not engaged in substantial gainful activity since her alleged onset date (step 1); (2) suffers from severe impairments, including diabetes, gastroesophageal reflux disease with diarrhea, and status post hysterectomy (step 2); (3) does not have any impairments that meet or equal the criteria of a listed impairment (step 3); (4) has a residual functional capacity ("RFC") to perform a range of light work;*fn1 and (5) a finding of "not disabled" is directed by section 202.20 of the grids, 20 C.F.R. Pt. 404, Subpt. P, App. 2 (step 5). (AR at 25-26).
Plaintiff requested that the Appeals Council review the ALJ's decision. (AR at 11). While Plaintiff's request was pending, Plaintiff submitted additional evidence to the Appeals Council. (AR at 11, 196-201). On July 3, 2010, the Appeals Council denied review, leaving the ALJ's decision as the "final decision of the Commissioner." (AR at 5-7). The Appeals Council found that the newly submitted evidence did not provide a basis for changing the ALJ's decision. (AR at 6).
Plaintiff commenced this action for judicial review on September 17, 2010. The parties filed a Joint Stipulation outlining the disputed facts and legal issues on April 20, 2011. Plaintiff contends that the ALJ erred by applying the presumption of continuing non-disability because she presented evidence demonstrating a deterioration in her condition. (Joint Stipulation at 4). Further, Plaintiff asserts the residual functional capacity assessment was not supported by substantial evidence and the ALJ erred in discounting Plaintiff's subjective symptom testimony. (Joint Stipulation at 3-5, 10-13, 16-17). Plaintiff seeks remand for payment of benefits or, in the alternative, remand for further administrative proceedings. (Joint Stipulation at 18). The Commissioner requests that the ALJ's decision be affirmed. (Joint Stipulation at 18). The Joint Stipulation has been taken under submission without oral argument.
Under 42 U.S.C. § 405(g), a district court may review the Commissioner's decision to deny benefits. The Commissioner's or ALJ's findings and decision should be upheld if they are free from legal error and are supported by substantial evidence based on the record as a whole. 42 U.S.C. § 405(g); Richardson v. Perales, 402 U.S. 389, 401 (1971); Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). Substantial evidence means such evidence as a reasonable person might accept as adequate to support a conclusion. Richardson, 402 U.S. at 401; Lingenfelter v. Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007). It is more than a scintilla, but less than a preponderance. Lingenfelter, 504 F.3d at 1035 (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 reasonably support either affirming or reversing," the reviewing court "may not substitute its judgment" for that of the Commissioner. Id. at 720-721.
Plaintiff argues that the medical evidence in the record demonstrates that her condition deteriorated since the prior decision denying benefits in 2006, and that the ALJ's current assessment of her residual functional capacity assessment is not supported by substantial evidence. See Chavez v. Bowen, 844 F.3d 691, 693 (9th Cir. 1988) (explaining that a presumption of continuing non-disability may be rebutted by proving "changed circumstances" indicating a greater disability); Acquiescence Ruling 97-4(9). In particular, Plaintiff argues that the ALJ failed to properly consider the opinion of her treating physician, David Vargas, M.D. (Joint Stipulation at 4).
Dr. Vargas began treating Plaintiff in June 2007. (AR at 120, 201). His records show that Plaintiff suffered from major depression, irritable bowel syndrome, gastroesophageal reflux disease, and poorly controlled diabetes. (AR at 115-20, 181-82, 185, 190, 192, 194). Dr. Vargas prescribed a variety of medications for these conditions. Nevertheless, he noted on one occasion that medication had not helped Plaintiff's ...