David W. Christel United States Magistrate Judge

ORDER REVERSING AND REMANDING DEFENDANT'S DECISION TO DENY BENEFITS

Plaintiff Laura Messee has filed this action, pursuant to 42 U.S.C. § 405(g), for judicial review of Defendant's denial of her application for supplemental security income ("SSI") and disability insurance benefits ("DIB"). Pursuant to 28 U.S.C. § 636(c), Federal Rule of Civil Procedure 73 and Local Rule MJR 13, the parties have consented to have this matter heard by the undersigned Magistrate Judge. See Dkt. 8.

After considering the record, the Court concludes the Administrative Law Judge ("ALJ") failed to provide specific, clear, and convincing reasons for finding Plaintiff's subjective symptom testimony not entirely credible. Had the ALJ properly considered Plaintiff's testimony, the residual functional capacity may have included additional limitations. Therefore, the ALJ's error is harmful and this matter is reversed and remanded pursuant to sentence four of 42 U.S.C. § 405(g) to the Acting Commissioner of Social Security ("Commissioner") for further proceedings consistent with this Order.

FACTUAL AND PROCEDURAL HISTORY

On August 27, 2012, Plaintiff filed applications for DIB and SSI, alleging disability as of May 15, 2006. See Dkt. 9, Administrative Record ("AR") 16. The applications were denied upon initial administrative review and on reconsideration. See AR 16. A hearing was held before ALJ Larry Kennedy on May 12, 2014. See AR 40-69. In a decision dated October 3, 2014, the ALJ determined Plaintiff to be not disabled. AR 16-33. Plaintiff's request for review of the ALJ's decision was denied by the Appeals Council, making the ALJ's decision the final decision of the Commissioner. See AR 1-3, 20 C.F.R. § 404.981, § 416.1481.

In the Opening Brief, Plaintiff maintains the ALJ failed to: (1) provide specific, clear, and convincing reasons for finding Plaintiff's subjective testimony not entirely credible; and (2) properly weigh the medical opinion evidence. Dkt. 12, p. 1.

STANDARD OF REVIEW

Pursuant to 42 U.S.C. § 405(g), this Court may set aside the Commissioner's denial of social security benefits if the ALJ's findings are based on legal error or not supported by substantial evidence in the record as a whole. Bayliss v. Barnhart, 427 F.3d 1211, 1214 n.1 (9th Cir. 2005) (citing Tidwell v. Apfel, 161 F.3d 599, 601 (9th Cir. 1999)).

DISCUSSION

I. Whether the ALJ provided specific, clear, and convincing reasons for finding Plaintiff's subjective symptom testimony not entirely credible.

Plaintiff first contends the ALJ erred by failing to provide specific, clear, and convincing reasons for finding Plaintiff's subjective symptom testimony not entirely credible. Dkt. 12, pp. 2- 4. To reject a claimant's subjective complaints, the ALJ must provide "specific, cogent reasons for the disbelief." Lester v. Chater, 81 F.3d 821, 834 (9th Cir. 1996) (citation omitted). The ALJ "must identify what testimony is not credible and what evidence undermines the claimant's complaints." Id.; Dodrill v. Shalala, 12 F.3d 915, 918 (9th Cir. 1993). Unless affirmative evidence shows the claimant is malingering, the ALJ's reasons for rejecting the claimant's testimony must be "clear and convincing." Lester, 81 F.2d at 834.

In determining a claimant's credibility, the ALJ may consider "ordinary techniques of credibility evaluation," such as reputation for lying, prior inconsistent statements concerning symptoms, and other testimony that "appears less than candid." Smolen v. Chater, 80 F.3d 1273, 1284 (9th Cir. 1996). The ALJ may also consider if a claimant's complaints are "inconsistent with clinical observations[.]" Regennitter v. Commissioner of Social Sec. Admin., 166 F.3d 1294, 1297 (9th Cir. 1998). Questions of credibility are solely within the control of the ALJ. Sample v. Schweiker, 694 F.2d 639, 642 (9th Cir. 1982). The Court should not "second-guess" this credibility determination. Allen v. Heckler, 749 F.2d 577, 580 (9th Cir. 1984). In addition, the Court may not reverse a credibility determination where that determination is based on contradictory or ambiguous evidence. Id. at 579.

A. Plaintiff's Subjective Testimony

Plaintiff completed a Function Report -Adult on November 5, 2012. AR 298-305. She reported it is difficult for her to remember things and complete job-related tasks. AR 298. Plaintiff experiences anxiety, which makes it hard to live, and she is afraid of people, especially if she is not familiar with them. AR 298. Plaintiff reported her back problems make it difficult to lift, bend, walk, squat, stand, reach, sit, kneel, and climb stairs. AR 298, 303. Sometimes it is difficult for Plaintiff to dress, care for her hair, shave, and get in and out of bed due to her back pain. AR 299. Plaintiff also has difficulties falling asleep and staying asleep, and she experiences nightmares. AR 299. Her impairments cause difficulties completing tasks, concentrating, and following instructions. AR 303.

Plaintiff reported completing small loads of laundry every day and stated she spent two and a half hours a day doing laundry and showering. AR 300. She also goes to the store for food daily; she buys what she needs to eat, eats at the store, and then leaves. AR 301. Plaintiff uses "self-check-out" and leaves the store as soon as possible. AR 302. Plaintiff reads and listens to music daily because it helps her relax. AR 302. Plaintiff notes it has taken her two weeks to read two chapters of a book because she gets distracted. AR 303. She spends time with friends every six months and text messages three friends when she has minutes. AR 302. Plaintiff reported walking or taking public transportation to get places. AR 301. On a good day, she can walk a few blocks. AR 303, 339.

On August 6, 2013, Plaintiff completed a second Function Report-Adult. AR 334-41. She reported it was difficult to leave her apartment because she was afraid of being killed. AR 334. Plaintiff cooks occasionally and does laundry, although it is difficult to do laundry because she is afraid to go outside and the machines are now located outside her apartment. AR 336. Plaintiff states she goes to the doctor and the hospital to visit a friend, but rarely goes out. AR 338. She occasionally text messages and calls friends. AR 338.

During the ALJ hearing, Plaintiff testified she rides the bus, goes grocery shopping, and speaks on the phone with a few friends. AR 51-52. When Plaintiff does not wake up from night terrors, she makes the bed and takes a shower. AR 52. She continued to report difficulty doing laundry now that the laundry facilities are located outside her apartment. AR 52.

B. ALJ's Findings

The ALJ found Plaintiff's "medically determinable impairments could reasonably be expected to cause some of the alleged symptoms; however, the claimant's statements concerning the intensity, persistence, and limiting effects of these symptoms are not entirely credible[.]" AR 23. The ALJ then recited the medical evidence and explained the weight given to the medical opinion evidence. See AR 23-32. While discounting a medical opinion, the ALJ noted he does not find Plaintiff "to be credible due to [1] the inconsistencies with her subjective reports and the objective findings, as well as [2] inconsistencies in her reports regarding her substance use." AR 26. He also stated [3] Plaintiff's wide range of activities suggest her limitations are not as significant as alleged. AR 30-31.

First, the ALJ found Plaintiff not entirely credible because of inconsistencies between her subjective testimony and the objective findings. See AR 24, 26. Determining a claimant's complaints are "inconsistent with clinical observations" can satisfy the clear and convincing requirement. Regennitter, 166 F.3d at 1297; see also Fisher v. Astrue, 429 F. App'x 649, 651 (9th Cir. 2011). However, "an ALJ does not provide specific, clear, and convincing reasons for rejecting a claimant's testimony by simply reciting the medical evidence in support of his or her residual functional capacity determination." Brown-Hunter v. Colvin, 806 F.3d 487, 489 (9th Cir. 2015). Rather, to discount a claimant's testimony, an ALJ "must state which testimony is not credible and what evidence suggests the complaints are not credible." Dodrill, 12 F.3d at 917 (emphasis added); see also Lester, 81 F.3d at 834.

Here, the ALJ summarized evidence contained in the medical records, but the ALJ did not link the cited medical records to any specific testimony or statements the ALJ found not credible. See AR 23-32. In only providing a recitation of the medical evidence, the ALJ failed to identify which testimony is not credible and why Plaintiff's testimony is not entirely credible based upon the alleged inconsistencies. In fact, the ALJ's finding regarding the alleged inconsistencies between Plaintiff's subjective testimony and the record are buried within the ALJ's recitation of the medical evidence and his consideration of the medical opinion evidence. Accordingly, the ALJ erred in discounting Plaintiff's testimony because her subjective complaints were inconsistent with the objective findings.

Second, the ALJ noted he found Plaintiff not entirely credible because of inconsistencies in her reports regarding her substance use. AR 26. While conflicting or inconsistent testimony concerning drug and alcohol use can contribute to an adverse credibility finding, see, e.g., Verduzco v. Apfel, 188 F.3d 1087, 1089 (9th Cir. 1999) (finding claimant's testimony not credible, in part, because "various statements regarding his drinking were not consistent"), in this case it cannot justify finding Plaintiff not entirely credible without further corroboration or explanation. The ALJ merely noted Plaintiff reported inconsistencies regarding her substance use and a physician questioned Plaintiff's prescription drug use. See AR 24. The ALJ did not explain how Plaintiff's statements regarding her substance use undermined her testimony. See Robbins v. Soc. Sec. Admin., 466 F.3d 880, 884 (9th Cir. 2006). Therefore, this is also not a valid reason for finding Plaintiff's testimony not entirely credible.

Third, the ALJ found Plaintiff's "wide range of activities suggests that her limitations are not as significant as alleged." AR 30. The Ninth Circuit has recognized two grounds for using daily activities to form the basis of an adverse credibility determination: (1) whether the activities contradict the claimant's other testimony and (2) whether the activities of daily living meet "the threshold for transferable work skills." Orn v. Astrue, 495 F.3d 625, 639 (9th Cir. 2007). Here, the ALJ recounted portions of Plaintiff's testimony regarding her daily activities. AR 30-31. He, however, failed to explain how Plaintiff's daily activities were inconsistent with her subjective testimony, nor did he assert Plaintiff's activities met the threshold for transferable work skills. See AR 30-31. As the ALJ did not explain "which daily activities conflicted with which part of [Plaintiff's] testimony," the ALJ erred in rejecting Plaintiff's subjective symptom testimony because of her "wide range of activities." See Burrell, 775 F.3d at 1138; see also Blakes v. Barnhart, 331 F.3d 565, 569 (7th Cir. 2003) ("We require the ALJ to build an accurate and logical bridge from the evidence to her conclusions so that we may afford the claimant meaningful review of the SSA's ultimate findings.").

For the above stated reasons, the Court finds the ALJ failed to provide a specific, clear, and convincing reason for finding Plaintiff's subjective symptom testimony not entirely credible. Accordingly, the ALJ erred.

"[H]armless error principles apply in the Social Security context." Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012). An error is harmless, however, only if it is not prejudicial to the claimant or "inconsequential" to the ALJ's "ultimate nondisability determination." Stout v. Commissioner, Social Security Admin., 454 F.3d 1050, 1055 (9th Cir. 2006); see Molina, 674 F.3d at 1115. The determination as to whether an error is harmless requires a "case-specific application of judgment" by the reviewing court, based on an examination of the record made "'without regard to errors' that do not affect the parties' 'substantial rights.'" Molina, 674 F.3d at 1118-1119 (quoting Shinseki v. Sanders, 556 U.S. 396, 407 (2009)).

Plaintiff testified to greater limitations than the limitations included in the residual functional capacity ("RFC") determination. For example, Plaintiff testified it was very difficult for her to leave her home, concentrate, follow instructions, and remember. Had the ALJ properly considered Plaintiff's subjective testimony, he may have included additional limitations in the RFC and in the hypothetical questions posed to the vocational expert, Mark Harrington, regarding Plaintiff's mental health impairments and her ability to attend work on a consistent basis. As the ultimate disability determination may have changed, the ALJ's error is not harmless and requires reversal.

II. Whether the ALJ properly weighed the medical opinion evidence.

The ALJ's error in assessing Plaintiff's subjective symptom testimony requires remand to the Commissioner for proper consideration of Plaintiff's RFC and to reconsider each of the remaining steps in the administrative process. As the ALJ's re-evaluation of Plaintiff's testimony may impact all aspects of the ALJ's decision, the ALJ is instructed to re-evaluate this entire matter on remand, completing each step of the sequential evaluation process.

When re-evaluating this entire matter on remand, the ALJ must correct the errors included in his evaluation of the medical opinion evidence. Specifically, the ALJ erred by: (A) discrediting medical opinion evidence because the opinions were based on Plaintiff's subjective reports; (B) relying on Plaintiff's alleged inconsistent statements regarding her substance abuse; (C) failing to adequately explain his findings; (D) finding the medical opinion evidence was entitled to little weight because the doctors did not review the record; (E) finding Plaintiff's activities of daily living were inconsistent with the medical opinion evidence; and (F) giving great weigh to non-examining physicians after failing to give specific and legitimate reasons for discounting treating and examining physicians.

A. Plaintiff's Subjective Reports

The ALJ gave little weight to the opinions of Dr. Melanie Mitchell, Psy.D. and Dr. David Rolett, M.D., in part, because the opinions appeared to rely on Plaintiff's subjective self-reports. AR 27, 30. An ALJ may reject a physician's opinion "if it is based 'to a large extent' on a claimant's self-reports that have been properly discounted as incredible." Tommasetti v. Astrue, 533 F.3d 1035, 1041 (9th Cir. 2008) (quoting Morgan v. Comm'r. Soc. Sec. Admin., 169 F.3d 595, 602 (9th Cir. 1999)). This situation is distinguishable from one in which the doctor provides his own observations in support of his assessments and opinions. See Ryan v. Comm'r of Soc. Sec. Admin., 528 F.3d 1194, 1199-1200 (9th Cir. 2008). "[W]hen an opinion is not more heavily based on a patient's self-reports than on clinical observations, there is no evidentiary basis for rejecting the opinion." Ghanim v. Colvin, 763 F.3d 1154, 1162 (9th Cir. 2014) (citing Ryan, 528 F.3d at 1199-1200).

Here, the ALJ did not properly discount Plaintiff's self-reports as incredible. See Section I, supra. Therefore, this is not a valid reason for giving little weight to the opinions of Drs. Mitchell and Rowlett. Further, the opinions of Drs. Mitchell and Rowlett are not based more heavily on Plaintiff's subjective complaints than on clinical observations. Dr. Mitchell based her opinion on an interview with Plaintiff, a mental status examination of Plaintiff, her general observations, and Plaintiff's subjective reports. See AR 572-76. Dr. Rowlett based his opinion on treating notes, mental status examinations, and observations. AR 672-75, 679-80. Thus, even if the ALJ had properly discounted Plaintiff's subjective testimony, the evidence does not support finding the opinions of Drs. Mitchell and Rowlett were more heavily based on Plaintiff's subjective self-reports than clinical observations.

As the ALJ failed to properly discount Plaintiff's subjective testimony and as Drs. Mitchell and Rowlett did not more heavily base their opinions on Plaintiff's self-reports than on clinical observations, this is not a valid reason for giving little weight to the opinions of Drs. Mitchell and Rowlett.

B. Plaintiff's Substance Use

The ALJ gave little weight to Dr. Mitchell's opinion, in part, because Plaintiff was not honest regarding her substance abuse. AR 27. The evidence shows Plaintiff was prescribed high doses of narcotic pain medication to treat her chronic pain. See e.g. AR 529-30. The ALJ fails to cite any records showing Plaintiff abused the prescription drugs. In fact, records show Plaintiff did not have substance abuse problem. See e.g. AR 371 ("patient gives no history consistent with misuse or abuse of any medication, illegal substance, or alcohol"). As the Court finds the ALJ has failed to show Plaintiff had a substance abuse problem, the Court finds Plaintiff's failure to disclose her alleged substance abuse is not a specific and legitimate reason supported by substantial evidence for giving little weight to Dr. Mitchell's opinion.

The ALJ gave little weight to the opinion of Dr. Wayne Dees, Psy.D., in part, because Plaintiff was not honest regarding her last use of prescription drugs. AR 28. At the time of Dr. Dees' opinion, the evidence shows Plaintiff was no longer taking prescription pain medication. See AR 61-62, 530, 640. The ALJ fails to explain how Plaintiff's statements regarding when she stopped taking prescription drugs discredits Dr. Dees' opinion regarding Plaintiff's mental limitations. The Court finds Plaintiff's alleged dishonesty regarding her last use of prescription pain medication is not a specific and legitimate reason for giving little weight to Dr. Dees' opinion.

The ALJ also gave little weight to Dr. Rowlett's opinion, in part, because Dr. Rowlett did not mention Plaintiff's history of substance abuse in his opinion. AR 30. However, the ALJ fails to explain why Dr. Rowlett's failure to mention Plaintiff's alleged history of substance abuse undermines his opinion. See AR 30. Further, as discussed above, the ALJ failed to show Plaintiff has a history of substance abuse. In discussing Dr. Dees' findings, the ALJ noted Plaintiff reported she had been addicted to prescription pain medication. See AR 27-28. The ALJ, however, cites to no evidence showing Plaintiff was abusing her prescription pain medication or taking the medication incorrectly. Accordingly, the Court finds this is not a specific and legitimate reason supported by substantial evidence for giving little weight to Dr. Rowlett's opinion.

C. Failure to Explain Decision

The ALJ gave little weight to Dr. Dees' opinion because it was not consistent with the overall record. AR 28. He also gave little weight to Dr. Rowlett's opinion because it was not consistent with objective findings in Plaintiff's treatment notes. AR 30.

As the Ninth Circuit has stated:

To say that medical opinions are not supported by sufficient objective findings or are contrary to the preponderant conclusions mandated by the objective findings does not achieve the level of specificity our prior cases have required, even when the objective factors are listed seriatim. The ALJ must do more than offer his conclusions. He must set forth his own interpretations and explain why they, rather than the doctors', are correct.

The ALJ provided only conclusory statements finding the evidence does not support the opinions of Drs. Dees and Rowlett. See AR 28, 30. The ALJ failed to identify any specific evidence contained within the record or treatment notes which is inconsistent with these two doctors' opinions. Without more, the ALJ has failed to meet the level of specificity required to reject a physician's opinion. The ALJ's conclusory statements finding the opinions of Drs. Dees and Rowlett are inconsistent with the record and treatment notes are insufficient to reject these opinions. See Embrey, 849 F.2d at 421-22 (conclusory reasons do "not achieve the level of specificity" required to justify an ALJ's rejection of an opinion); McAllister v. Sullivan, 888 F.2d 599, 602 (9th Cir. 1989) (an ALJ's rejection of a physician's opinion on the ground that it was contrary to clinical findings in the record was "broad and vague, failing to specify why the ALJ felt the treating physician's opinion was flawed"). Accordingly, on remand, if the ALJ intends to reject the opinions of Drs. Dees and Rowlett as inconsistent with the record and/or treatment notes, he must provide specific record citations which support his conclusion.

D. Failure to Review Records

The ALJ gave little weight to the opinions of Drs. Mitchell and Dees because they did not review the longitudinal record. See AR 27-28. The ALJ failed to explain why these two doctors' failure to review records discredits their opinions. See AR 27-28. Further, Drs. Mitchell and Dees interviewed and observed Plaintiff and administered mental status examinations of Plaintiff. See AR 572-76, 639-44. Defendant does not cite, nor does the Court find, authority holding an examining physician's failure to supplement his or her own examination and observations with additional records is a specific and legitimate reason to give less weight to the opinions. See Dkt. 13.

E. Activities of Daily Living

The ALJ also gave little weight to Dr. Dees' opinion because Plaintiff's reported activities to Dr. Dees are inconsistent with the record. AR 28. The ALJ found

the claimant's reports to Dr. Dees are inconsistent with the longitudinal record. For example, she stated she reported having difficulty interacting with others socially, and being in groups of people. Yet she testified to talking with friends on the phone. In the medical records, she indicates she was helping a friend with cancer. She walks to the store and utilizes public transportation.

The Court finds Plaintiff's reports to Dr. Dees are consistent with the examples provided by the ALJ. Plaintiff reported to Dr. Dees she socializes once a week, shops independently, and goes to the library several times per week. AR 641. She also reported she walked to her appointment with Dr. Dees and uses the bus if it is not too crowded. AR 641. These activities are consistent with talking on the phone with friends, walking to the store, and riding the bus. The ALJ also noted Plaintiff helped a friend with cancer. AR 28. However, the record citation provided by the ALJ states only that Plaintiff was "helping friend at Bailey-Boushay." AR 674. There is no information showing how Plaintiff was helping the friend or if she helped on more than one occasion. See AR 674. The Court, therefore, does not find this single record citation inconsistent with Plaintiff's reports to Dr. Dees. As the ALJ has failed to show Plaintiff's reported activities to Dr. Dees are inconsistent with record, this is not a specific and legitimate reason supported by substantial evidence for giving little weight to Dr. Dees' opinion.

F. Non-examining Doctors' Opinions

Plaintiff also argues the ALJ erred by giving great weight to the opinions of two non-examining doctors because the opinions were not consistent with the objective medical evidence or supported by Plaintiff's "wide range of activities." Dkt. 12, pp. 11-12. A non-examining physician's opinion may constitute substantial evidence when it is consistent with other independent evidence in the record. Tonapetyan v. Halter, 242 F.3d 1144, 1149 (9th Cir. 2001). However, "[i]n order to discount the opinion of an examining physician in favor of the opinion of a non[-]examining medical advisor, the ALJ must set forth specific, legitimate reasons that are supported by substantial evidence in the record." Van Nguyen v. Chater, 100 F.3d 1462, 1466 (9th Cir. 1996) (citing Lester, 81 F.3d at 831). As the ALJ did not provide specific and legitimate reasons for discounting the opinions of Drs. Mitchell, Dees, and Rowlett, he erred when he discounted these three opinions in favor of the opinions of two non-examining doctors. On remand, the ALJ should re-evaluate all the medical opinion evidence.

CONCLUSION

Based on the foregoing reasons, the Court hereby finds the ALJ improperly concluded Plaintiff was not disabled. Accordingly, Defendant's decision to deny benefits is reversed and this matter is remanded for further administrative proceedings in accordance with the findings contained herein.

Dated this 20th day of January, 2017.

/s/_________

David W. Christel

United States Magistrate Judge