MEMORANDUM AND ORDER REVERSING DECISION OF COMMISSIONER AND REMANDING FOR FURTHER ADMINISTRATIVE PROCEEDINGS

ALEXANDER F. MacKINNON, Magistrate Judge.

I.

BACKGROUND

On September 17, 2012, Plaintiff Amelia Richardson protectively filed her application for a period of disability and disability insurance benefits under Title II of the Social Security Act and supplemental security income under Title XVI of the Social Security Act, alleging disability onset as of August 19, 2011. After denial on initial review and on reconsideration, a hearing took place before an Administrative Law Judge (ALJ) on January 13, 2015. In a written decision dated April 16, 2015, the ALJ found that Plaintiff was not disabled. The Appeals Council declined to set aside the ALJ's unfavorable decision in a notice dated August 11, 2016. Plaintiff filed a Complaint herein on October 10, 2016, seeking review of the Commissioner's denial of his application for benefits.

In accordance with the Court's Order re Procedures in Social Security Appeal, Plaintiff filed a memorandum in support of his complaint on March 30, 2017. The Commissioner filed a memorandum in support of her answer on May 9, 2017. This was untimely by approximately 5 days, but the Court in exercise of its discretion will consider the memorandum. Plaintiff filed a reply on May 18, 2017. This matter now is ready for decision.1

II.

DISPUTED ISSUES

As reflected in the parties' memoranda, the disputed issues that Plaintiff raises are:

III.

STANDARD OF REVIEW

Under 42 U.S.C. § 405(g), this Court reviews the Commissioner's decision to determine whether the Commissioner's findings are supported by substantial evidence and whether the proper legal standards were applied. See Treichler v. Comm'r of Soc. Sec. Admin., 775 F.3d 1090, 1098 (9th Cir. 2014). Substantial evidence means "more than a mere scintilla" but less than a preponderance. See Richardson v. Perales, 402 U.S. 389, 401 (1971); Lingenfelter v. Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson, 402 U.S. at 401. This Court must review the record as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner's conclusion. Lingenfelter, 504 F.3d at 1035. Where evidence is susceptible of more than one rational interpretation, the Commissioner's decision must be upheld. See Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007).

IV.

FIVE-STEP EVALUATION PROCESS

The Commissioner (or ALJ) follows a five-step sequential evaluation process in assessing whether a claimant is disabled. 20 C.F.R. §§ 404.1520, 416.920; Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 1995), as amended April 9, 1996. In the first step, the Commissioner must determine whether the claimant is currently engaged in substantial gainful activity; if so, the claimant is not disabled and the claim is denied. Id. If the claimant is not currently engaged in substantial gainful activity, the second step requires the Commissioner to determine whether the claimant has a "severe" impairment or combination of impairments significantly limiting his ability to do basic work activities; if not, a finding of nondisability is made and the claim is denied. Id. If the claimant has a "severe" impairment or combination of impairments, the third step requires the Commissioner to determine whether the impairment or combination of impairments meets or equals an impairment in the Listing of Impairments ("Listing") set forth at 20 C.F.R. part 404, subpart P, appendix 1; if so, disability is conclusively presumed and benefits are awarded. Id. If the claimant's impairment or combination of impairments does not meet or equal an impairment in the Listing, the fourth step requires the Commissioner to determine whether the claimant has sufficient "residual functional capacity" to perform his past work; if so, the claimant is not disabled and the claim is denied. Id. The claimant has the burden of proving that he is unable to perform past relevant work. Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992). If the claimant meets this burden, a prima facie case of disability is established. Id. The Commissioner then bears the burden of establishing that the claimant is not disabled, because he can perform other substantial gainful work available in the national economy. Id. The determination of this issue comprises the fifth and final step in the sequential analysis. 20 C.F.R. §§ 404.1520, 416.920; Lester, 81 F.3d at 828 n.5; Drouin, 966 F.2d at 1257.

V.

THE ALJ'S APPLICATION OF THE FIVE-STEP PROCESS

At step one, the ALJ found that Plaintiff met the insured status requirements of the Social Security Act and had not engaged in substantial gainful activity from the alleged onset date through December 31, 2016. (AR 34.) At step two, the ALJ found that Plaintiff had the following severe impairment: degenerative disc disease of the cervical spine. (AR 34-36.) At step three, the ALJ found that Plaintiff did not have an impairment or combination of impairments that meets or medically equals the severity of one of the listed impairments. (AR 36-37.) At step four, the ALJ found that Plaintiff had the RFC to perform the following: "occasionally lift and/or carry 20 pounds; frequently lift and/or carry 10 pounds; stand and/or walk for 6 hours in an 8-hour workday; sit for 6 hours in an 8-hour workday; and occasionally perform all posturals." (AR 37-42.) Finally, the ALJ concluded that Plaintiff is capable of performing past relevant work as a sales associate/processor and cashier/food clerk. (AR 42.) Accordingly, the ALJ concluded that Plaintiff was not under a disability at any time from August 19, 2011, the alleged onset date, through the date of the ALJ's decision. (AR 42.)

VI.

DISCUSSION

A. The ALJ's Step Two Determination (Disputed Issue One)

The ALJ found that Plaintiff had a severe impairment of degenerative disc disease of the cervical spine. Plaintiff argues that the ALJ should have found a number of other conditions to be severe impairments. On this issue, the Court agrees with the Commissioner's position. Because the ALJ found at step two that Plaintiff had a severe impairment, it would be harmless error if the ALJ's failure to include other conditions as severe impairments were wrong. As long as the other impairments are considered at the subsequent steps, the lack of inclusion at step two (or a non-severe finding at step two for a particular impairment) does not constitute a basis for reversal. See Carpenter v. Astrue, 537 F.3d 1264, 1266 (10th Cir. 2008). In the present case, the ALJ did not dispose of Plaintiff's claim as groundless at step two; rather, she found that Plaintiff had satisfied the severity requirement and proceeded to consider the combination of Plaintiff's impairments in making the disability determination in the subsequent steps. See Howard ex rel. Wolff v. Barnhart, 341 F.3d 1006, 1010 (9th Cir. 2003). Thus, the ALJ's step two determination did not constitute reversible error.

B. The ALJ's Adverse Credibility Finding (Disputed Issue Two)

An ALJ's assessment of pain severity and claimant credibility is entitled to "great weight." Weetman v. Sullivan, 877 F.2d 20, 22 (9th Cir. 1989). Where the claimant has produced objective medical evidence of an impairment which could reasonably be expected to produce some degree of pain and/or other symptoms, and the record is devoid of any affirmative evidence of malingering, the ALJ may reject the claimant's testimony regarding the severity of the claimant's pain and/or other symptoms only if the ALJ makes specific findings stating clear and convincing reasons for doing so. See Cotton v. Bowen, 799 F.2d 1403, 1407 (9th Cir. 1986); see also Smolen v. Chater, 80 F.3d 1273, 1281 (9th Cir. 1996). Here, since the Commissioner has not argued that there was evidence of malingering and that a lesser standard consequently should apply, the Court will apply the "clear and convincing" standard to the ALJ's adverse credibility determination. See Burrell v. Colvin, 775 F.3d 1133, 1136 (9th Cir. 2014) (applying "clear and convincing" standard where the government did not argue that a lesser standard should apply based on evidence of malingering). "The clear and convincing evidence standard is the most demanding required in Social Security cases." Garrison v. Colvin, 759 F.3d 995, 1015 (9th Cir. 2014).

The ALJ's credibility discussion is found in the final paragraph on AR 40 and the two paragraphs on AR 41. In those paragraphs, the ALJ sets forth two reasons: (1) "The claimant has not generally received the type of medical treatment one would expect for a totally disabled individual." (2) "[T]he claimant's ability to participate in [daily] activities diminishes the credibility of the claimant's allegations of functional limitations." (AR 41.)2

With regard to the first reason — conservative medical treatment — the ALJ states that Plaintiff's treatment has been "routine and/or conservative in nature" and that use of medication did not suggest impairments beyond those found in the decision. At the time of the administrative hearing, however, Plaintiff testified that she was scheduled to have a surgical assessment by an orthopedic surgeon. (AR 58.) On March 31, 2015, Plaintiff underwent a cervical discectomy at C5-6 and cervical fusion at the same level. This predated the ALJ's decision, but the relevant records were not submitted until the Appeals Council review. Although submitted for the first time to the Appeals Council, these records must be considered by the Court as part of the administrative record in determining whether the Commissioner's decision is supported by substantial evidence. See Brewes v. Comm'r of Soc. Sec. Admin., 682 F.3d 1157, 1159-60 (9th Cir. 2012).3 In this case, consideration of the evidence of Plaintiff's March 2015 cervical spine surgery necessarily leads to the conclusion that her treatment has not been limited to medication and has not been conservative. The ALJ's finding to the contrary is not supported by substantial evidence when the surgical records at AR 693-95 are taken into account. The ALJ also referred to "gaps" in Plaintiff's treatment history, but did not offer any specifics. Plaintiff testified that she had relocated from Mississippi and had to get a new doctor after the move. (AR 72-76.) Although that may have caused a gap in treatment, the ALJ did not discuss Plaintiff's move, and that move provides a reasonable explanation of a gap in treatment. In these circumstances, the ALJ's vague reference to a gap in treatment does not constitute the clear and convincing evidence required to discount the credibility of Plaintiff's symptom testimony. Accordingly, the Court concludes that the ALJ's assessment of the type and timing of Plaintiff's medical treatment does not constitute a valid basis for her adverse credibility determination.4

As to the second reason — Plaintiff's daily activities — the ALJ's decision sets out a list of activities that Plaintiff can perform: "personal care, food preparation, shopping, cleaning, sweeping, mopping, dusting, making beds, dishwashing, laundry, reading, keeping up with the news, driving, watching television, reading the Bible, going to the laundromat, grocery shopping, walking, taking the bus, going out to eat, going to the beach, feeding the birds, attending church, socializing with acquaintances and family, and using the telephone." (AR 41.) The decision then states that "[s]ome of the physical and mental abilities and social interactions required in order to perform these activities are the same as those necessary for obtaining and maintaining employment." There are two problems with this assessment of daily activities. First, given the broad manner in which the alleged activities are identified, the decision does not fairly state the extent to which Plaintiff can engage in these activities. For example, the decision states that Plaintiff does "walking," but the record cited in the decision states that Plaintiff can walk only 45-50 feet and can stand only for 2 minutes. (AR 392.) Similarly, the decision states that Plaintiff can take a bus and can drive. Yet the record reflects that Plaintiff can sit for only 5 to 10 minutes, and she does not drive. (Id.)

The ambiguities and omissions in the decision's list of Plaintiff's daily activities are compounded when the ALJ then states that "some" of the abilities necessary to perform these activities are same as those used in getting and maintaining employment. But that statement begs the key questions: what abilities and what types of employment. Accordingly, the ALJ's finding about daily activities is not specific and is insufficient as a basis for the adverse credibility finding: A "reviewing court should not be forced to speculate as to the grounds for an adjudicator's rejection of a claimant's allegations of disabling pain." Bunnell v. Sullivan, 947 F.2d 341, 346 (9th Cir. 1991) (en banc); see also Brown-Hunter v. Colvin, 806 F.3d 487, 493-94 (9th Cir. 2015) (ALJ's failure to link claimant's testimony to particular parts of the record is insufficient support for adverse credibility finding); Dodrill v. Shalala, 12 F.3d 915, 918 (9th Cir. 1993) ("It's not sufficient for the ALJ to make only general findings; he must state which pain testimony is not credible and what evidence suggests the complaints are not credible.").

Finally, the Commissioner's attempt to add other grounds to support the ALJ credibility determination fails. For each of these purported reasons — a function report by Plaintiff's husband, the ALJ's observation of Plaintiff at the hearing, and Plaintiff's voluntarily stopping work — the Commissioner cites to statements in the decision from pages AR 36 and 37. As reflected by their placement and context in the decision, these statements were not made in connection with the adverse credibility finding — which took place at AR 40-41. Under the law in this Circuit, the Court is not permitted to comb through the decision looking for other facts and reasoning that could be (but were not) applied to support the credibility determination: "Long-standing principles of administrative law require us to review the ALJ's decision based on the reasoning and factual findings offered by the ALJ — not post hoc rationalizations. . . ." Bray v. Comm'r of Soc. Sec. Admin, 554 F.3d 1219, 1225 (9th Cir. 2009). Moreover, the Commissioner urges that Plaintiff's symptom testimony was inconsistent with unsupported by the objective medical evidence. Again, this was not part of the ALJ's stated reasons, but even if it were, it could not be the sole basis for discounting credibility when the other reasons were legally sufficient. See Robbins v. Social Sec. Admin., 466 F.3d 880, 884 (9th Cir. 2006) (where ALJ's initial reason for adverse credibility determination was legally insufficient, his sole remaining reason premised on lack of medical support for claimant's testimony was legally insufficient); Light v. Social Sec. Admin., 119 F.3d 789, 792 (9th Cir. 1997) ("[A] finding that the claimant lacks credibility cannot be premised wholly on a lack of medical support for the severity of his pain.").5

VII.

DECISION TO REMAND

The law is well established that the decision whether to remand for further proceedings or simply to award benefits is within the discretion of the Court. See, e.g., Salvador v. Sullivan, 917 F.2d 13, 15 (9th Cir. 1990); McAllister v. Sullivan, 888 F.2d 599, 603 (9th Cir. 1989); Lewin v. Schweiker, 654 F.2d 631, 635 (9th Cir. 1981). Before a case may be remanded for an immediate award of benefits, three requirements must be met: "(1) the record has been fully developed and further administrative proceedings would serve no useful purpose; (2) the ALJ has failed to provide legally sufficient reasons for rejecting evidence, whether claimant testimony or medical opinion; and (3) if the improperly discredited evidence were credited as true, the ALJ would be required to find the claimant disabled on remand." Garrison, 759 F.3d at 1020; see also Brown-Hunter, 806 F.3d at 495. If the record is "uncertain and ambiguous, the proper approach is to remand the case to the agency" for further proceedings. See Treichler, 775 F.3d at 1105. Here, further proceedings would be useful to resolve conflicts and ambiguities in the record. Id. at 1103-04 (in evaluating whether further administrative proceedings would be useful, the reviewing court should consider "whether the record as a whole is free from conflicts, ambiguities, or gaps, whether all factual issues have been resolved, and whether the claimant's entitlement to benefits is clear under the applicable legal rules"); Burrell, 775 F.3d at 1141-42. Plaintiff has not shown that this case presents the rare circumstances that would warrant an immediate award of benefits.

* * * *

IT THEREFORE IS ORDERED that Judgment be entered reversing the decision of the Commissioner of Social Security and remanding this matter for further administrative proceedings consistent with this Order.