The opinion of the court was delivered by: Jean P. Rosenbluth U.S. Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiff seeks review of the Commissioner's final decision denying his application for Social Security Disability Benefits and Supplemental Security Income. The parties filed a Joint Stipulation on November 9, 2011. The Court has taken the Joint Stipulation under submission without oral argument. For the reasons stated below, the Commissioner's decision is reversed and this matter is remanded for further proceedings.
Plaintiff was born on January 6, 1955. (Administrative Record ("AR") 19.) He graduated high school and worked as a letter carrier from October 1987 until his injury on October 17, 2006. (AR 11, 19-20, 156.) He has not worked at all since that date. (AR 20.)
On June 29, 2007, Plaintiff filed an application for Social Security Disability Benefits, alleging that he had been unable to work since October 17, 2006, because of chronic neck and shoulder pain and severe headaches stemming from a shoulder and neck injury. (AR 95, 123.) After Plaintiff's application was denied, he requested a hearing before an Administrative Law Judge ("ALJ"). (AR 89.) It was held on December 17, 2008, at which time Plaintiff appeared with counsel and testified on his own behalf. (AR 16-43.) A Vocational Expert also testified. (AR 30-43.) The ALJ determined that Plaintiff was not disabled. (AR 15.) On January 20, 2011, the Appeals Council denied Plaintiff's request for review. (AR 1--3.) This action followed.
Pursuant to 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. § 405(g); Richardson v. Perales, 402 U.S. 389, 401, 91 S. Ct. 1420, 1427, 28 L. Ed. 2d 842 (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 720-21.
IV. THE EVALUATION OF DISABILITY
People 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 12 months. 42 U.S.C. § 423(d)(1)(A); Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992).
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. § 416.920(a)(4); Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 1995) (as amended Apr. 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. § 416.920(a)(4)(i). If the claimant is not 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 her ability to do basic work activities; if not, a finding of non-disability is made and the claim is denied. § 416.920(a)(4)(ii). 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. § 416.920(a)(4)(iii). 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 ("RFC")*fn1 to perform his past work; if so, the claimant is not disabled and the claim is denied. § 416.920(a)(4)(iv). 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 that burden, a prima facie case of disability is established. Id. If that happens or if the claimant has no past relevant work, 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. § 416.920(a)(4)(iv). That determination comprises the fifth and final step in the sequential analysis. § 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 found that Plaintiff had not engaged in any substantial gainful activity since October 17, 2006, the date of the onset of his alleged disability. (AR 11.) At step two, the ALJ concluded that Plaintiff had the severe impairments of "status post left shoulder repair/clavicle resection and multi-level degenerative disc disease of the cervical spine with neural foraminal narrowing and stenosis." (Id.) At step three, the ALJ determined that Plaintiff's impairments did not meet or equal any of the impairments in the Listing. (Id.) At step four, the ALJ found that Plaintiff retained the RFC to perform a range of "light work"*fn2 "except for limitation to occasional pushing/pulling with the left upper extremity; occasional overhead reaching with the left upper extremity; any concentrated exposure to vibrating tools; or any neck movement to the end ranges of motion (e.g., chin to chest, eyes skyward, or looking back over the shoulders with body static)." (Id.); see 20 C.F.R. § 404.1567(b). The ALJ concluded that Plaintiff was unable to perform his past relevant work as a letter carrier but acquired from that work transferable skills of "effectively communicating with the public, and customer service." (AR 14.) At step five, the ALJ found, based on the Vocational Expert's testimony and application of ...