MEMORANDUM OPINION AND ORDER

MARGARET NAGLE, Magistrate Judge

On March 12, 2009, plaintiff filed a Complaint seeking review of the denial by the Social Security Commissioner ("Commissioner") of her application for disability benefits. On April 14, 2009, the parties consented to proceed before the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). The parties filed a Joint Stipulation on December 8, 2009 ("Joint Stip."), in which: plaintiff seeks an order reversing the Commissioner's decision and remanding for the correction of legal errors and factual errors and defendant seeks an order affirming the Commissioner's decision. The Court has taken the parties' Joint Stipulation under submission without oral argument.

SUMMARY OF ADMINISTRATIVE PROCEEDINGS

Plaintiff previously has been granted disability benefits. She applied for disability benefits on December 12, 2001, claiming disability based on a neck and back injury. (A.R. 353.) The Commissioner denied plaintiff's application initially and upon reconsideration. (A.R. 108.) On June 25, 2001, Administrative Law Judge Mason D. Harrell granted plaintiff benefits for a closed period of disability from May 31, 2001, until February 13, 2003. (A.R. 108-10.)

SUMMARY OF ADMINISTRATIVE DECISION

In determining plaintiff's residual functional capacity ("RFC"), the ALJ relied on the opinion of State agency review physicians and stated that plaintiff has the RFC to:

[P]erform light work as defined in 20 CFR 404.1567(b) except she is limited to occasionally climbing, bending, stooping, kneeling, crouching, crawling and reaching overhead. She should avoid concentrated exposure to extreme cold and vibrations.

(A.R. 358, 360.)

The ALJ weighed plaintiff's subjective complaints in view of the state agency physician's report. He found that her "complaints about a disabling level of pain are not credible and are not reasonably supported by objective medical evidence." (A.R. 360.) The ALJ based this finding on the facts that plaintiff had been receiving effective pain treatments, admitted she could lift 10-15 pounds and walk one block, and was able to perform various physical activities. ( Id.)

The ALJ found that plaintiff is capable of performing her past relevant work as a "teller or bank assistant, a supervisor of cashiers, a new accounts clerk, or as a receptionist." (A.R. 361.) His finding was based upon the testimony of the vocational expert that plaintiff's past work involved "sedentary or light work" and that an individual with "claimant's residual functional capacity could perform the tasks and duties" of such work. ( Id.; see also A.R. 103-04.)

Accordingly, the ALJ concluded that plaintiff was not disabled, as defined in the Social Security Act, from June 17, 2005, through the date of his decision. (A.R. 361.)

STANDARD OF REVIEW

Under 42 U.S.C. § 405(g), this Court reviews the Commissioner's decision to determine whether it is free from legal error and supported by substantial evidence in the record as a whole. Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007). Substantial evidence is "`such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Id. (citation omitted). The "evidence must be more than a mere scintilla but not necessarily a preponderance." Connett v. Barnhart, 340 F.3d 871, 873 (9th Cir. 2003). While inferences from the record can constitute substantial evidence, only those "`reasonably drawn from the record'" will suffice. Widmark v. Barnhart, 454 F.3d 1063, 1066 (9th Cir. 2006) (citation omitted).

Although this Court cannot substitute its discretion for that of the Commissioner, the Court nonetheless must review the record as a whole, "weighing both the evidence that supports and the evidence that detracts from the [Commissioner's] conclusion."Desrosiers v. Sec'y of Health and Human Servs., 846 F.2d 573, 576 (9th Cir. 1988); see also Jones v. Heckler, 760 F.2d 993, 995 (9th Cir. 1985). "The ALJ is responsible for determining credibility, resolving conflicts in medical testimony, and for resolving ambiguities." Andrews v. Shalala, 53 F.3d 1035, 1039-40 (9th Cir. 1995).

The Court will uphold the Commissioner's decision when the evidence is susceptible to more than one rational interpretation.Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005). However, the Court may review only the reasons stated by the ALJ in his decision "and may not affirm the ALJ on a ground upon which he did not rely." Orn, 495 F.3d at 630; see also Connett, 340 F.3d at 874. The Court will not reverse the Commissioner's decision if it is based on harmless error, which exists only when it is "clear from the record that an ALJ's error was `inconsequential to the ultimate nondisability determination.'" Robbins v. Soc. Sec. Admin., 466 F.3d 880, 885 (9th Cir. 2006) ( quoting Stout v. Comm'r, 454 F.3d 1050, 1055-56 (9th Cir. 2006)); see also Burch, 400 F.3d at 679.

DISCUSSION

I. The Opinion Of Dr. Steiger Was Not Properly Considered By The Appeals Council .

The opinion of Dr. Ralph N. Steiger, M.D., which is at issue here, is dated March 9, 2005, and thus, it preceded the ALJ's February 2008 decision. (A.R. 321-30.) Dr. Steiger, an examining physician, opined that plaintiff has "spondylosis . . . with questionable nonunion" and "status post anterior cervical discectomy and fusion at multiple levels"; he also opined that plaintiff's functional limitations include repetitive neck movement, heavy pushing or pulling, and prolonged upward or downward gaze. (A.R. at 327-28.) He confirmed these findings on April 20, 2005; January 10, 2006; and June 21, 2006. (A.R. 331-43.)

Dr. Steiger's opinion was not presented to the ALJ, although plaintiff gives no reason for failing to submit it. The state agency physician reports, on which the ALJ relied in making his decision concerning plaintiff's RFC, do not include the limitations found by Dr. Steiger and concluded that plaintiff was capable of light work activity with occasional limitations including climbing, balancing, stooping, kneeling, crouching, crawling, and overhead reaching. (A.R. 197-200.) Thus, the hypothetical that the ALJ posed to the vocational expert included limitations assessed by the state agency physician reports but did not include all the limitations set forth in Dr. Steiger's belatedly-submitted opinion.

Plaintiff first presented Dr. Steiger's opinion to the Appeals Council. The Appeals Council is required to consider new evidence submitted to it if it relates to the period before the ALJ's decision and if it changes the weight of the evidence in the record. 20 C.F.R. § 404.970(b). The Appeals Council considered Dr. Steiger's opinion and summarily dismissed it, stating only: "We found that [the additional medical evidence from Dr. Steiger] does not provide a basis for changing the Administrative Law Judge's decision." (A.R. 2.) A. Judicial Review Of The Appeals Council's Denial Of Plaintiff's Request For Review Is Proper.

Citing 42 U.S.C. § 405(g), the Commissioner contends that the district court may not review the denial of review by the Appeals Council. The Commissioner asserts that: "Plaintiff is not entitled to judicial review of the Appeals Council's denial of her request to review the ALJ's decision. Judicial review is limited to whether the Commissioner's final decision (i.e., the ALJ's decision) is supported by substantial evidence." (Joint Stip. at 10.) The Commissioner rests his argument on Judge Rymer's concurrence in an unpublished Ninth Circuit decision, in which she states that "the effect of § 405(g) on consideration of evidence not presented to the ALJ remains [an] open [question in the Ninth Circuit]." Angst v. Astrue, 351 Fed. Appx. 227, 229, 2009 WL 3602018 (9th Cir. Nov. 3, 2009) (Rymer, J., concurring). The Commissioner urges, as suggested by Judge Rymer, that this Court follow the Seventh Circuit's approach in Eads v. Sec'y of DHHS, 983 F.2d 815, 817 (7th Cir. 1993), and hold that, "when the decision being reviewed is the decision of the ALJ, `[t]he correctness of that decision depends on the evidence that was before him.'" (Joint Stip. at 11, quoting Angst, 351 Fed. Appx. at 230 (citation omitted).) Additionally, the Commissioner emphasizes that plaintiff has not offered any reason "for not submitting the evidence [Dr. Steiger's opinion] earlier." (Joint Stip. at 11.)

In Ramirez, supra, after an administrative law judge found that Ramirez was not disabled:

[Ramirez] requested that the Appeals Council review his case, and submitted to that body, inter alia, an additional report from his treating psychologist. The Appeals Council declined to review the ALJ's decision, making it final. Ramirez appealed to the district court, which granted summary judgment in favor of the Secretary.

In Bates, the Ninth Circuit observed that:

Social Security regulations provide that where new and material evidence is submitted to the Appeals Council with the request for review, the entire record will be evaluated and review of the ALJ's decision will be granted where the Appeals Council finds that the ALJ's action, finding, or conclusion is contrary to the weight of the evidence currently of record. 20 C.F.R. § 404.970. The Appeals Council shall consider any new and material evidence only where it relates to the period on or before the date of the ALJ's decision. Id.

If new and material evidence is submitted, the Appeals Council shall consider the additional evidence only where it relates to the period on or before the date of the administrative law judge hearing decision. The Appeals Council shall evaluate the entire record including the new and material evidence submitted if it relates to the period on or before the date of the administrative law judge hearing decision. It will then review the case if it finds that the administrative law judge's action, findings, or conclusion is contrary to the weight of the evidence currently of record.

In Bates, the Ninth Circuit concluded that the Appeals Council did not err in rejecting a psychiatric opinion submitted for the first time in connection with the request for review, because the two reasons the Appeals Council cited for rejecting the opinion were correct. First, the psychiatrist who authored the new opinion was not contacted until after the adverse ALJ decision in issue and several years after the disability period in issue concluded. His opinion, thus, was not relevant to the period of disability. Second, the psychiatrist's opinion was inconsistent with the medical evidence of record pertinent to the period of disability.Bates, 894 F.2d at 1064. In Ramirez, the Ninth Circuit reviewed the validity of an Appeals Council denial of a request for review by considering not only the evidence presented to the ALJ but also the additional evidence presented only to the Appeals Council. 8 F.3d at 1454. In short, in both published decisions, the Ninth Circuit expressly considered additional evidence submitted to and considered by the Appeals Council, notwithstanding that review had been denied by the Appeals Council. Regardless of the unpublished Angst concurrence, Ramirez and Bates establish that, in the Ninth Circuit, courts will review the propriety of the Appeals Council's action with respect evidence newly submitted to it.

The Commissioner argues further that this Court's review is foreclosed, because under 42 U.S.C. § 405(g), a federal court may order an administrative law judge to consider evidence newly presented to the Appeals Council only if such new evidence is material and good cause has been shown for the failure to present it to the administrative law judge prior to his or her decision. The Commissioner emphasizes that plaintiff has offered no reason for her failure to timely submit Dr. Steiger's opinion to the ALJ and argues, therefore, that she has not satisfied Section 405(g). The Commissioner's argument misapprehends both the law and the issue under review here.

Plaintiff is not alleging a claim based on error by the ALJ; rather, plaintiff contends that the Appeals Council erred in summarily rejecting Dr. Steiger's opinion without articulating any reason for doing so. Thus, the Court must assess the propriety of the Appeals Council's action under 20 C.F.R. § 404.970(b). Section 404.970(b) — on which the Ninth Circuit relied in Bates and Ramirez — does not impose the "good cause" requirement of Section 405(g) on the actions of the Appeals Council. While Section 404.970(b) dictates the proper procedure for the Appeals Council to follow in deciding whether to review a case in the light of the submission of new evidence, Section 405(g) — which, unlike the aforementioned regulation, requires a showing of "good cause" for the belated submission of new evidence — governs "judicial review" of new evidence submitted for the first time to the district court. Section 405(g) does not provide the standard for assessing the propriety of the actions undertaken by the Appeals Council with respect to new evidence. See Booz v. Sec'y of Health and Human Servs., 734 F.2d 1378, 1380 (9th Cir. 1983) (applying Section 405(g) to a submission of new evidence to the district court, not to the Appeals Council); see also Clem v. Sullivan, 894 F.2d 328, 332 (9th Cir. 1990) (applying Section 405(g) in connection with a submission of new evidence to the district court). This Court is disinclined to superimpose the "good cause" requirement of Section 405(g) onto the Appeals Council's review of new evidence pursuant to Section 404.970(b).

B. The Appeals Council's Summary Rejection Of Dr. Steiger's Opinion Was Improper.

The Commissioner argues that Dr. Steiger's opinion properly may be disregarded, because substantial evidence supports the ALJ's decision and the ALJ is responsible for resolving conflicts in the medical opinion evidence. (Joint Stip. at 12.) The Commissioner, thus, implicitly acknowledges that Dr. Steiger's opinion materially differed from that of the non-examining state agency physicians on which the ALJ relied, yet fails to acknowledge the import of that variance in opinion.

The Ninth Circuit has repeatedly set forth the standards governing the weight to be accorded the opinions of treating physicians versus examining physicians versus non-examining physicians when conflicts in the medical evidence exist. See, e.g., Holohan v. Massanari, 246 F.3d 1195, 1202 (9th Cir. 2001). It is well-established that the Commissioner should give more weight to treating and examining physicians' opinions than to those of non-examining physicians. See Andrews, 53 F.3d at 1040-41 (explaining that more weight is given to opinions of treating and examining physicians because they have greater opportunity to know and observe patient); see also Lester v. Chester, 81 F.3d 821, 831-32 (9th Cir. 1995) (stating that if a physician does not examine plaintiff, his opinion, based only on documentary history and objective laboratory tests cannot, standing alone, be afforded substantial weight). The Ninth Circuit has made clear that, with respect to examining physicians such as Dr. Steiger, the "Commissioner must provide clear and convincing reasons for rejecting the uncontradicted opinion of an examining physician. . . . [T]he opinion of an examining doctor, even if contradicted by another doctor, can only be rejected for specific and legitimate reasons that are supported by substantial evidence in the record." Widmark, 454 F.3d at 1066 ( quoting Lester, 81 F.3d at 830-31).

The Commissioner's argument ignores these governing rules. Assuming — as plaintiff argues and the Commissioner implicitly admits — that Dr. Steiger's opinion contradicted that of the state agency physician with respect to plaintiff's functional limitations and, thus, her RFC, the Commissioner was required to articulate specific and legitimate reasons, supported by substantial evidence of record, for disregarding Dr. Steiger's examining physician opinion and deferring, instead, to the non-examining state agency physician's opinion adopted by the ALJ. The Appeals Council plainly failed to meets its obligation. While the Appeals Council stated that it had considered Dr. Steiger's opinion, it then summarily rejected it by cursorily stating that the opinion did not "provide a basis for changing the Administrative Law Judge's decision." (A.R. 2.) This conclusory rejection of an examining physician's opinion, without articulating any reason for its rejection in favor of the state agency reviewing physician opinion on which the ALJ relied, is contrary to the foregoing well-established rules and constitutes reversible error.

II. Remand Is Required.

The decision whether to remand for further proceedings or order an immediate award of benefits is within the district court's discretion. Harman v. Apfel, 211 F.3d 1172, 1175-78 (9th Cir. 2000). Where no useful purpose would be served by further administrative proceedings, or where the record has been fully developed, it is appropriate to exercise this discretion to direct an immediate award of benefits. Id. at 1179 ("the decision of whether to remand for further proceedings turns upon the likely utility of such proceedings"). However, where there are outstanding issues that must be resolved before a determination of disability can be made, and it is not clear from the record that the ALJ would be required to find the claimant disabled if all the evidence were properly evaluated, remand is appropriate. Id.; see also Benecke v. McCarthy, 379 F.3d 587, 593 (9th Cir. 2004) (discussing the requirements for ordering an immediate payment of benefits rather than a remand for further proceedings). Here, there are outstanding issues that must be resolved before a determination regarding plaintiff's claimed disability can be made.

When the Commissioner improperly rejects an examining physician's opinion, that opinion is credited "as a matter of law." Lester, 81 F.3d at 834 ( quoting Hammock v. Bowen, 879 F.2d 498, 502 (9th Cir. 1989) (citations omitted). Consequently, Dr. Steiger's opinion must be credited. Plaintiff does not contend that, even if Dr. Steiger's opinion is credited, there are no outstanding issues that must be resolved before a determination of disability can be made. Remand is appropriate here to permit the Commissioner to assess the effect of Dr. Steiger's opinion on plaintiff's claim of disability.

On remand, the Commissioner must conduct such further administrative proceedings as are necessary to determine the effect of Dr. Steiger's opinion on plaintiff's RFC and her ability to perform her past relevant work or any other work. The Court expresses no opinion on whether that assessment should occur at the Appeals Council level or whether the matter should be remanded to the ALJ.

CONCLUSION

IT IS FURTHER ORDERED that the Clerk of the Court shall serve copies of this Memorandum Opinion and Order and the Judgment on counsel for plaintiff and for defendant.

LET JUDGMENT BE ENTERED ACCORDINGLY.

DATED: September 7, 2010