ZOE L. WATT, Plaintiff,
CAROLYN W. COLVIN, ACTING COMMISSIONER OF SOCIAL SECURITY,  Defendant.
MEMORANDUM OPINION AND ORDER OF REMAND
CHARLES F. EICK, Magistrate Judge.
Pursuant to sentence four of 42 U.S.C. section 405(g), IT IS HEREBY ORDERED that Plaintiff's and Defendant's motions for summary judgment are denied and this matter is remanded for further administrative action consistent with this Opinion.
Plaintiff filed a complaint on November 1, 2012, seeking review of the Commissioner's denial of disability benefits. The parties filed a consent to proceed before a United States Magistrate Judge on December 18, 2012. Plaintiff filed a motion for summary judgment on May 2, 2013. Defendant filed a cross-motion for summary judgment on July 3, 2013. The Court has taken the motions under submission without oral argument. See L.R. 7-15; "Order, " filed November 2, 2012.
BACKGROUND AND SUMMARY OF ADMINISTRATIVE DECISION
Plaintiff, a former receptionist, asserts disability since February 11, 2006, based on alleged physical and psychological impairments (Administrative Record ("A.R.") 39-42, 325-345). The Administrative Law Judge ("ALJ") found Plaintiff retains the residual functional capacity to perform light work involving "moderately complex tasks, " including Plaintiff's past relevant work as a receptionist (A.R. 23-28). The Appeals Council considered additional evidence but denied review, which made the ALJ's decision the final decision of the Administration (A.R. 1-3).
The part of the ALJ's decision discussing Plaintiff's residual functional capacity contains no specific mention of the opinions of Dr. William George or Dr. Wayne Hill (A.R. 25-27). Dr. George, Plaintiff's treating physician, opined that Plaintiff's impairments limit her in ways incompatible with the performance of substantial gainful activity (A.R. 520-24). For example, Dr. George opined that Plaintiff's impairments likely would cause her to be absent from work more than three times per month, and a vocational expert testified that a person so limited could not perform any jobs (A.R. 68-69, 523). Dr. Hill, a state agency psychologist, opined Plaintiff is moderately mentally limited in several respects and can perform only work that is "simple in nature" (A.R. 510-12).
STANDARD OF REVIEW
Under 42 U.S.C. section 405(g), this Court reviews the Administration's decision to determine if: (1) the Administration's findings are supported by substantial evidence; and (2) the Administration used proper legal standards. See Carmickle v. Commissioner , 533 F.3d 1155, 1159 (9th Cir. 2008); Hoopai v. Astrue , 499 F.3d 1071, 1074 (9th Cir. 2007). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales , 402 U.S. 389, 401 (1971) (citation and quotations omitted); Widmark v. Barnhart , 454 F.3d 1063, 1067 (9th Cir. 2006).
Where, as here, the Appeals Council considered additional material but denied review, the additional material becomes part of the Administrative Record for purposes of the Court's analysis. See Brewes v. Commissioner , 682 F.3d 1157, 1163 (9th Cir. 2012) ("[W]hen the Appeals Council considers new evidence in deciding whether to review a decision of the ALJ, that evidence becomes part of the administrative record, which the district court must consider when reviewing the Commissioner's final decision for substantial evidence."; expressly adopting Ramirez v. Shalala , 8 F.3d 1449, 1452 (9th Cir. 1993)); Taylor v. Commissioner , 659 F.3d 1228, 1231 (2011) (courts may consider evidence presented for the first time to the Appeals Council "to determine whether, in light of the record as a whole, the ALJ's decision was supported by substantial evidence and was free of legal error"); Penny v. Sullivan , 2 F.3d 953, 957 n.7 (9th Cir. 1993) ("the Appeals Council considered this information and it became part of the record we are required to review as a whole"); see generally 20 C.F.R. §§ 404.970(b), 416.1470(b).
I. The ALJ Erred With Respect to Dr. George.
A treating physician's conclusions "must be given substantial weight." Embrey v. Bowen , 849 F.2d 418, 422 (9th Cir. 1988); see Rodriguez v. Bowen , 876 F.2d 759, 762 (9th Cir. 1989) ("the ALJ must give sufficient weight to the subjective aspects of a doctor's opinion.... This is especially true when the opinion is that of a treating physician") (citation omitted); see also Orn v. Astrue , 495 F.3d 625, 631-33 (9th Cir. 2007) (discussing deference owed to treating physician opinions). Even where the treating physician's opinions are contradicted,  "if the ALJ wishes to disregard the opinion[s] of the treating physician he... must make findings setting forth specific, legitimate reasons for doing so that are based on substantial evidence in the record." Winans v. Bowen , 853 F.2d 643, 647 (9th Cir. 1987) (citation, quotations and brackets omitted); see Rodriguez v. Bowen , 876 F.2d at 762 ("The ALJ may disregard the treating physician's opinion, but only by setting forth specific, legitimate reasons for doing so, and this decision must itself be based on substantial evidence") (citation and quotations omitted).
Furthermore, "[t]he ALJ has a special duty to fully and fairly develop the record and to assure that the claimant's interests are considered. This duty exists even when the claimant is represented by counsel." Brown v. Heckler , 713 F.2d 441, 443 (9th Cir. 1983). Section 404.1512(e) of 20 C.F.R. provides that the Administration "will seek additional evidence or clarification from your medical source when the report from your medical source contains a conflict or ambiguity that must be resolved, the report does not contain all of the necessary information, or does not appear to be based on medically acceptable clinical and laboratory diagnostic techniques." See Smolen v. Chater , 80 F.3d at 1288 ("If the ALJ thought he needed to know the basis of Dr. Hoeflich's opinions in order to evaluate them, he had a ...