The opinion of the court was delivered by: Alicia G. Rosenberg United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Carmen Luz Marcano filed this action on September 26, 2011. Pursuant to 28 U.S.C. § 636(c), the parties consented to proceed before the magistrate judge on October 25 and 26, 2010. (Dkt. Nos. 7, 8.) On June 14, 2012, 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 reverses the decision of the Commissioner and remands for further proceedings consistent with this opinion.
On December 9 and 12, 2008, Marcano filed applications for disability insurance benefits and supplemental security income, alleging a disability onset date of January 1, 1999. Administrative Record ("AR") 18, 121-31. The applications were denied initially and upon reconsideration. AR 18, 56-59. Marcano requested a hearing before an Administrative Law Judge ("ALJ"). AR 77. On August 4, 2010, the ALJ conducted a hearing at which Marcano and a vocational expert ("VE") testified. AR 32-55. On November 30, 2010, the ALJ issued a decision denying benefits. AR 18-28. On July 22, 2011, the Appeals Council denied the request for review. AR 1-3. This action followed.
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 susceptible to more than one rational interpretation, the court must defer to the Commissioner's decision. Moncada, 60 F.3d at 523.
A person qualifies as disabled, and thereby eligible for such benefits, "only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy." Barnhart v. Thomas, 540 U.S. 20, 21-22, 124 S. Ct. 376, 157 L. Ed. 2d 333 (2003).
The ALJ found that Marcano had the severe impairments of obesity and osteoarthritis of both knees. AR 20. She did not meet or equal a listed impairment. AR 23. Marcano had the residual functional capacity ("RFC") to perform a range of light work. She can "lift and/or carry 10 pounds frequently and 20 pounds occasionally; stand and/or walk six hours out of an eight-hour workday; sit for six hours out of an eight-hour workday; climb, kneel, and squat occasionally; and use a cane as needed." AR 23. However, the Commissioner concedes that the ALJ's reference to Marcano's ability to stand and/or walk six hours out of an eight-hour day is a transcription error. JS 23. The ALJ's hypothetical to the VE assumed that a claimant could stand/walk two hours out of an ...