ORDER
EDMUND F. BRENNAN, Magistrate Judge.
Plaintiff seeks judicial review of a final decision of the Commissioner of Social Security ("Commissioner") denying her application for a period of disability and Disability Insurance Benefits ("DIB") under Title II of the Social Security Act. The parties' cross-motions for summary judgment are pending. For the reasons discussed below, plaintiff's motion is granted, the Commissioner's motion is denied, and the matter is remanded for further proceedings.
I. BACKGROUND
Plaintiff filed an application for a period of disability and DIB, alleging that she had been disabled since December 6, 2010. Administrative Record ("AR") at 118-122. Plaintiff's application was denied initially and upon reconsideration. Id. at 67-71, 75-80. On August 20, 2013, a hearing was held before administrative law judge ("ALJ") Trevor Skarda. Id. at 26-50. Plaintiff was represented by counsel at the hearing, at which she and a vocational expert ("VE") testified. Id.
On September 6, 2013, the ALJ issued a decision finding that plaintiff was not disabled under sections 216(i) and 223(d) of the Act.1 Id. at 12-21. The ALJ made the following specific findings:
1. The claimant last met the insured status requirements of the Social Security Act on December 30, 2011.
2. The claimant did not engage in substantial gainful activity during the period from her alleged onset date of December 6, 2010 through her date last insured of December 30, 2011 (20 CFR 404.1571 et seq.).
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3. Through the date last insured, the claimant had the following severe impairment: chronic pain/fibromyalgia (20 CFR 404.1520(c)).
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4. Through the date last insured, the claimant did not have an impairment or combination of impairments that met or medically equaled the severity of one of the listed impairments in 20 CFR Part 404, Subpart P, Appendix 1 (20 CFR 404.1520(d), 404.1525 and 404.1526).
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5. After careful consideration of the entire record, the undersigned finds that, through the date last insured, the claimant had the residual functional capacity to perform light work as defined in 20 CFR 404.1567(b). The claimant can lift or carry 20 pounds occasionally and 10 pounds frequently. She can sit, stand, and walk six hours during an eight-hour workday. She can occasionally climb, balance, stoop, kneel, crouch, and crawl. She should avoid concentrated exposure to extreme cold, extreme heat, wetness, and humidity.
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6. Through the date last insured, the claimant was capable of performing past relevant work as a buyer and a manager customer service. This work did not require the performance of work-related activities precluded by the claimant's residual functional capacity (20 CFR 404.1565).
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7. The claimant was not under a disability, as defined in the Social Security Act, at any time from December 6, 2010, the alleged onset date, through December 30, 2011, the date last insured (20 CFR 404.1520(f)).
Id. at 14-21.
Plaintiff's request for Appeals Council review was denied on November 26, 2014, leaving the ALJ's decision as the final decision of the Commissioner. Id. at 1-6.
II. LEGAL STANDARDS
The Commissioner's decision that a claimant is not disabled will be upheld if the findings of fact are supported by substantial evidence in the record and the proper legal standards were applied. Schneider v. Comm'r of the Soc. Sec. Admin., 223 F.3d 968, 973 (9th Cir. 2000); Morgan v. Comm'r of the Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 1999); Tackett v. Apfel, 180 F.3d 1094, 1097 (9th Cir. 1999).
The findings of the Commissioner as to any fact, if supported by substantial evidence, are conclusive. See Miller v. Heckler, 770 F.2d 845, 847 (9th Cir. 1985). Substantial evidence is more than a mere scintilla, but less than a preponderance. Saelee v. Chater, 94 F.3d 520, 521 (9th Cir. 1996). "`It means such evidence as a reasonable mind might accept as adequate to support a conclusion.'" Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. N.L.R.B., 305 U.S. 197, 229 (1938)).
"The ALJ is responsible for determining credibility, resolving conflicts in medical testimony, and resolving ambiguities." Edlund v. Massanari, 253 F.3d 1152, 1156 (9th Cir. 2001) (citations omitted). "Where the evidence is susceptible to more than one rational interpretation, one of which supports the ALJ's decision, the ALJ's conclusion must be upheld." Thomas v. Barnhart, 278 F.3d 947, 954 (9th Cir. 2002).
III. ANALYSIS
Plaintiff argues that the ALJ erred by (1) failing to follow the statutory requirements for assessing a mental impairment at step two, (2) failing to give sufficient reasons for rejecting examining physician Dr. Kalman's opinion, (3) determining that plaintiff maintained the residual functional capacity ("RFC") to perform light work, (4) failing to consider lay testimony, and (5) finding that she could perform past relevant work. ECF No. 12 at 14-34.
Plaintiff first argues that the ALJ committed reversible error at step two of the sequential evaluation process by failing to follow the requirements of 20 C.F.R. § 404.1520a in assessing plaintiff's mental impairments. Id. at 14-18. "The step-two inquiry is a de minimis screening device to dispose of groundless claims." Smolen v. Chater, 80 F.3d 1273, 1290 (9th Cir. 1996). The purpose is to identify claimants whose medical impairment is so slight that it is unlikely they would be disabled even if age, education, and experience were not taken into account. Bowen v. Yuckert, 482 U.S. 137 (1987). At step two of the sequential evaluation, the ALJ determines which of claimant's alleged impairments are "severe" within the meaning of 20 C.F.R. § 404.1502(c). A severe impairment is one that "significantly limits" a claimant's "physical or mental ability to do basic work activities." 20 C.F.R. § 404.1520(c). "An impairment is not severe if it is merely `a slight abnormality (or combination of slight abnormalities) that has no more than a minimal effect on the ability to do basic work activities.'" Webb v. Barnhart, 433 F.3d 683, 686 (9th Cir. 2005) (quoting Social Security Ruling ("SSR") 963p).
When a claimant alleges disability due to a mental impairment, the Commissioner's regulations require the ALJ to follow a special Psychiatric Review Technique Form ("PRTF") in reviewing the claim. Id. at 726; 20 C.F.R. § 404.1520a. The ALJ must first determine whether a medically determinable mental impairment exists (20 C.F.R. § 404.1520a(b)), and then rate the degree of functional limitation in four broad areas (activities of daily living; social functioning; concentration, persistence, or pace; and episodes of decompensation) (20 C.F.R. § 404.1520a(c)). The ALJ's "written decision must incorporate the pertinent findings and conclusions based on the technique" and "must include a specific finding as to the degree of limitation in each of the functional areas." 20 C.F.R. § 404.1520a(e). Thus, "the regulations contemplate that written decisions at the ALJ and Appeals Council levels should contain a narrative rationale, instead of the checklist of . . . conclusions found in a PRTF." Keyser v. Comm'r Soc. Sec. Admin., 648 F.3d 721, 725 (9th Cir. 2011) (quotation marks omitted).
In this case the ALJ's decision does not contain any findings, let alone a narrative rationale, addressing the four broad areas of functioning identified in the PRTF. The ALJ acknowledged plaintiff's allegations of depression, but ultimately found that her mental impairments were nonsevere. AR at 15-16. In reaching this conclusion the ALJ rejected an opinion from examining physician Dr. Les P. Kalman, who opined that plaintiff had moderate mental impairments, id. at 322-323, in favor of opinions from two state agency non-examining medical sources, id. at 15-16. Non-examining psychologist Heather Barrons, Psy.D., completed a PRTF and found that there was insufficient evidence to establish that plaintiff experienced episodes of decompensation or was limited in daily living; social functioning; and concentration, persistence or pace. Id. at 55. Dr. Ikawa also reviewed plaintiff's file and agreed with Dr. Barrons's opinion. Id. at 64. Although the ALJ adopted the opinions from these non-examining sources, the ALJ did not complete his own PRTF analysis, which he was required to do. See Keyser, 648 F.3d at 725-726 ("The decision simply references and adopted the PRTF completed earlier by [a non-examining physician] . . . [which] is insufficient to meet the requirements of 20 C.F.R. § 404.1520a(e) and constitutes legal error.").
Furthermore, the ALJ's failure to make specific findings based on the PRTF was not harmless. "An ALJ's failure to comply with 20 C.F.R. § 404.1520a is not harmless if the claimant has `a colorable claim of mental impairment.'" Keyser, 648 F.3d at 726-27 (quoting Gutierrez v. Apfel, 199 F.3d 1048, 1051 (9th Cir. 2000)). A colorable claim of mental impairment is one which is not "wholly insubstantial, immaterial, or frivolous." Cassim v. Bowen, 824 F.2d 791, 795 (9th Cir. 1987).
Here, plaintiff has a colorable claim of mental impairment. In September 2011, plaintiff complained of anxiety and depression. AR at 231-233. Treatment notes indicate that she was diagnosed with depression and anxiety and prescribed Cymbalta. Id. at 232-233. The following month, plaintiff reported having panic attacks and feeling very anxious, and her mood was observed as depressed and anxious. Id. at 228-229. She was diagnosed with depression and anxiety and prescribed Xanax. Id. at 229. In December 2011, plaintiff appeared stressed and depressed and was again diagnosed with depression and anxiety. Id. at 225-226.
The record also contains a Residual Functional Capacity Questionnaire completed by plaintiff's treating physician Dr. Maria Bacay. Id. at 310-315. Dr. Bacay treated plaintiff since 2009 and diagnosed her with, among other things, anxiety and depression. Id. at 310. She also received a GAF score of 52, indicative of moderate symptoms. Id. at 319. Plaintiff also underwent a psychiatric evaluation performed by Dr. Kalman, who diagnosed plaintiff with dysthymia; adjustment disorder; depression, secondary to medical condition; and panic disorder. Id. at 316-320. He opined that plaintiff's mental impairments would moderately impair plaintiff's ability to perform a number of work related functions. Id. at 322-324. Although the ALJ ultimately disagreed with Dr. Kalman's opinion, his assessment nevertheless demonstrates that plaintiff's allegations of mental impairments are not insubstantial, immaterial, or frivolous.
Plaintiff made a colorable claim of mental impairment. Accordingly, the ALJ erred by failing to state findings as to the four broad functional areas as required by 20 C.F.R. § 1520a(e), and by failing to incorporate those specific findings as to the degree of functional limitations in each area in a narrative rationale as required by Keyser v. Comm'r Soc. Sec. Admin., 648 F.3d at 725.2
IV. CONCLUSION
Accordingly, it is hereby ORDERED that:
1. Plaintiff's motion for summary judgment is granted;
2. The Commissioner's cross-motion for summary judgment is denied;
3. The matter is remanded for further consideration consistent with this order; and
4. The Clerk is directed to enter judgment in plaintiff's favor.
