ORDER

DEBORAH BARNES, Magistrate Judge.

This social security action was submitted to the court without oral argument for ruling on plaintiff's motion for summary judgment and defendant's cross-motion for summary judgment.2 Plaintiff's motion argues that the Administrative Law Judge erred by improperly rejecting witness testimony and by finding that plaintiff did not meet a Listing Impairment.

For the reasons explained below, plaintiff's motion is granted, the decision of the Commissioner of Social Security ("Commissioner") is reversed, and the matter is remanded for further proceedings consistent with this order.

PROCEDURAL BACKGROUND

In January of 2015, plaintiff filed applications for Disability Insurance Benefits ("DIB") under Title II of the Social Security Act ("the Act") and for Supplemental Security Income ("SSI") under Title XVI of the Act alleging disability beginning on January 1, 2014. (Transcript ("Tr.") at 19, 221-22, 224-28.) Plaintiff's alleged impairments included major depressive disorder with psychotic features and schizophrenia. (Id. at 253.) Plaintiff's applications were denied initially, (id. at 123-27, 129-33), and upon reconsideration. (Id. at 138-42, 144-49.)

Plaintiff requested an administrative hearing and a hearing was held before an Administrative Law Judge ("ALJ") on December 22, 2016. (Id. at 38-72.) Plaintiff was represented by an attorney and testified at the administrative hearing. (Id. at 38-40.) In a decision issued on April 7, 2017, the ALJ found that plaintiff was not disabled. (Id. at 32.) The ALJ entered the following findings:

(Id. at 22-31.)

On March 12, 2018, the Appeals Council denied plaintiff's request for review of the ALJ's April 7, 2017 decision. (Id. at 1-5.) Plaintiff sought judicial review pursuant to 42 U.S.C. § 405(g) by filing the complaint in this action on May 15, 2018. (ECF. No. 1.)

LEGAL STANDARD

"The district court reviews the Commissioner's final decision for substantial evidence, and the Commissioner's decision will be disturbed only if it is not supported by substantial evidence or is based on legal error." Hill v. Astrue, 698 F.3d 1153, 1158-59 (9th Cir. 2012). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Osenbrock v. Apfel, 240 F.3d 1157, 1162 (9th Cir. 2001); Sandgathe v. Chater, 108 F.3d 978, 980 (9th Cir. 1997).

"[A] reviewing court must consider the entire record as a whole and may not affirm simply by isolating a `specific quantum of supporting evidence.'" Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006) (quoting Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989)). If, however, "the record considered as a whole can reasonably support either affirming or reversing the Commissioner's decision, we must affirm." McCartey v. Massanari, 298 F.3d 1072, 1075 (9th Cir. 2002).

A five-step evaluation process is used to determine whether a claimant is disabled. 20 C.F.R. § 404.1520; see also Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). The five-step process has been summarized as follows:

Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 1995).

The claimant bears the burden of proof in the first four steps of the sequential evaluation process. Bowen v. Yuckert, 482 U.S. 137, 146 n. 5 (1987). The Commissioner bears the burden if the sequential evaluation process proceeds to step five. Id.; Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999).

APPLICATION

Plaintiff's pending motion argues that the ALJ committed the following two principal errors: (1) the ALJ improperly rejected witness testimony; and (2) the ALJ erroneously found that plaintiff did not meet a Listing Impairment.3 (Pl.'s MSJ (ECF No. 16) at 8-21.4)

I. Witness Testimony

A. Plaintiff's Subjective Testimony

Plaintiff's motion for summary judgment challenges the ALJ's treatment of plaintiff's subjective testimony. (Pl.'s MSJ (ECF No. 16) at 16-21.) The Ninth Circuit has summarized the ALJ's task with respect to assessing a claimant's credibility as follows:

Lingenfelter v. Astrue, 504 F.3d 1028, 1035-36 (9th Cir. 2007) (citations and quotation marks omitted). "The clear and convincing standard is the most demanding required in Social Security cases." Moore v. Commissioner of Social Sec. Admin., 278 F.3d 920, 924 (9th Cir. 2002). "At the same time, the ALJ is not required to believe every allegation of disabling pain, or else disability benefits would be available for the asking[.]" Molina v. Astrue, 674 F.3d 1104, 1112 (9th Cir. 2012).

"The ALJ must specifically identify what testimony is credible and what testimony undermines the claimant's complaints."5 Valentine v. Commissioner Social Sec. Admin., 574 F.3d 685, 693 (9th Cir. 2009) (quoting Morgan v. Comm'r of Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 1999)). In weighing a claimant's credibility, an ALJ may consider, among other things, the "[claimant's] reputation for truthfulness, inconsistencies either in [claimant's] testimony or between [her] testimony and [her] conduct, [claimant's] daily activities, [her] work record, and testimony from physicians and third parties concerning the nature, severity, and effect of the symptoms of which [claimant] complains." Thomas v. Barnhart, 278 F.3d 947, 958-59 (9th Cir. 2002) (modification in original) (quoting Light v. Soc. Sec. Admin., 119 F.3d 789, 792 (9th Cir. 1997)). If the ALJ's credibility finding is supported by substantial evidence in the record, the court "may not engage in second-guessing." Id.

Here, the ALJ summarized plaintiff's testimony as follows:

(Tr. at 26.)

The ALJ then concluded that plaintiff's medically determinable impairments could reasonably be expected to cause the symptoms alleged, but that plaintiff's statements concerning the intensity, persistence, and limiting effects of those symptoms were "not entirely consistent with the medical evidence and other evidence in the record for the reason explained in [the] decision." (Id.) The ALJ based this determination on two principal findings.

The first reason asserted by the ALJ was that "findings at the time of mental status examinations" did not "correspond to the level of mental health symptoms alleged while [plaintiff's] conditions are controlled and improved with the treatment he receives." (Id.) However, "after a claimant produces objective medical evidence of an underlying impairment, an ALJ may not reject a claimant's subjective complaints based solely on a lack of medical evidence to fully corroborate the alleged severity" of the symptoms. Burch v. Barnhart, 400 F.3d 676, 680 (9th Cir. 2005); see also Putz v. Astrue, 371 Fed. Appx. 801, 802-03 (9th Cir. 2010) ("Putz need not present objective medical evidence to demonstrate the severity of her fatigue."); Lingenfelter, 504 F.3d at 1036 ("the ALJ may not reject subjective symptom testimony . . . simply because there is no showing that the impairment can reasonably produce the degree of symptom alleged."); Bunnell v. Sullivan, 947 F.2d 341, 347 (9th Cir. 1991) ("If an adjudicator could reject a claim for disability simply because a claimant fails to produce medical evidence supporting the severity of the pain, there would be no reason for an adjudicator to consider anything other than medical findings.").

Moreover,

Garrison v. Colvin, 759 F.3d 995, 1017 (9th Cir. 2014). "`[T]he prognosis of chronic schizophrenia may well include periods between acute bouts in which symptoms, while controlled enough to permit life outside an institution, still prevent the patient from pursuing normal employment.'" Esselstrom v. Chater, 67 F.3d 869, 872-73 (9th Cir. 1995) (quoting Pagan v. Bowen, 862 F.2d 340, 343 (D.C. Cir. 1988)).

The second reason offered by the ALJ was that plaintiff's testimony was "challenged by the opinions of record of evaluating physicians." (Id. at 29.) Those physicians, however, were "non-examining" physicians who had "no access to the full medical records[.]" (Tr. at 29.) Nonetheless, the ALJ asserted these opinion were supported, in part, by plaintiff's "conservative treatment[.]" (Id.) However, repeated psychiatric hospitalization is not conservative treatment. See generally Kuharski v. Colvin, No. 2:12-cv-1055 AC, 2014 WL 3385183, at *4 (E.D. Cal. July 10, 2014) ("the Court affirms its finding that the ALJ's reliance on the lack of hospitalization is unreasonable and does not constitute a clear and convincing reason for rejecting plaintiff's credibility regarding his mental limitations").

The ALJ also asserted that the non-examining physician opinions were supported by plaintiff's "rather ordinary range of activities of daily living[.]" (Tr. at 29.) However,

Bjornson v. Astrue, 671 F.3d 640, 647 (7th Cir. 2012). The Ninth Circuit "has repeatedly asserted that the mere fact that a plaintiff has carried on certain daily activities, such as grocery shopping, driving a car, or limited walking for exercise, does not in any way detract from her credibility as to her overall disability. One does not need to be utterly incapacitated in order to be disabled." Vertigan v. Halter, 260 F.3d 1044, 1050 (9th Cir. 2001); see also Garrison, 759 F.3d at 1016 (citation omitted) ("[I]mpairments that would unquestionably preclude work and all the pressures of a workplace environment will often be consistent with doing more than merely resting in bed all day.").

In this regard, the "nonexamining physicians' conclusion, with nothing more, does not constitute substantial evidence[.]" Pitzer v. Sullivan, 908 F.2d 502, 506 (9th Cir. 1990). Perhaps most importantly, plaintiff's testimony was supported by ample evidence in the record. The ALJ's decision noted as much, stating:

(Tr. at 26.) The ALJ's decision repeatedly misstates that plaintiff was hospitalized as a result of mental health impairments on two occasions. (Id. at 25, 26, 29.) Plaintiff was, in fact, admitted for psychiatric hospitalization on four separate occasions.

On November 14, 2014, plaintiff was "admitted on a 5150 for danger to self, danger to others." (Id. at 319.) The Woodland Police Department reported that plaintiff was "threatening to batter his family members," and "tried to cut himself with a blade superficially and then reported he wanted to kill himself by cutting his wrist." (Id. at 319.) Family members reported that plaintiff believed there were "cameras in his room and that they were selling his information." (Id.) Plaintiff was discharged on November 19, 2014. (Id. at 324.)

On December 4, 2014, plaintiff "was admitted on a 5150 due to danger to self." (Id. at 362.) Plaintiff "was having thoughts of suicide and complaining of auditory hallucinations. He was very confused, scared, making bizarre statements, `I feel my mouth move.'" (Id.) Plaintiff was discharged on December 13, 2014. (Id. at 365.)

Plaintiff was again admitted on December 21, 2015. (Id. at 544.) Plaintiff "was not able to manage his symptoms of depression or anger," and was experiencing "severe impairment in functioning." (Id.) Plaintiff "was disorganized, agitated, and has been diagnosed with psychosis, schizophrenia, schizoaffective disorder." (Id.) Plaintiff was discharged on December 30, 2015. (Id. at 546.) Plaintiff was once again admitted "on a 5150 hold do (sic) to erratic behavior at his family's home" on November 29, 2016. (Id. at 749.) Plaintiff exhibited "erratic, disorganized, delusional, and pressured behavior[.]" (Id.) Plaintiff was discharged on December 8, 2016. (Id.)

And the record establishes that plaintiff experienced considerable impairment when not hospitalized. On February 10, 2015, plaintiff reported that "he is still feeling like they are talking about him[.]" (Id. at 459.) On June 23, 2015, plaintiff acknowledged experiencing suicidal and homicidal ideation. (Id. at 609.) An October 21, 2015 mental status examination found plaintiff to be "sad, irritable," with suicidal ideation," and "paranoid delusions that people talk about him." (Id. at 605.) On December 20, 2015, plaintiff was "escorted by Woodland PD and placed on a 5150 hold," after "having auditory hallucinations and recent suicidal ideation[.]" (Id. at 563.)

For the reasons stated above, the court finds that the ALJ failed to provide a clear and convincing reason for rejecting plaintiff's testimony concerning plaintiff's mental impairments. Plaintiff, therefore, is entitled to summary judgment as to this claim.

B. Lay Witness Testimony

Plaintiff's motion for summary judgment also assert that the ALJ improperly rejected the lay witness testimony offered by plaintiff's mother. (Pl.'s MSJ (ECF No. 16) at 14-16.) The testimony of lay witnesses, including family members and friends, reflecting their own observations of how the claimant's impairments affect his activities must be considered and discussed by the ALJ. Robbins, 466 F.3d at 885; Smolen, 80 F.3d at 1288; Sprague v. Bowen, 812 F.2d 1226, 1232 (9th Cir. 1987). Persons who see the claimant on a daily basis are competent to testify as to their observations. Regennitter, 166 F.3d at 1298; Dodrill v. Shalala, 12 F.3d 915, 918-19 (9th Cir. 1993). If the ALJ chooses to reject or discount the testimony of a lay witness, he or she must give reasons germane to each particular witness in doing so. Regennitter, 166 F.3d at 1298; Dodrill, 12 F.3d at 919.

The mere fact that a lay witness is a relative of the claimant cannot be a ground for rejecting the witness's testimony. Regennitter, 166 F.3d at 1298; Smolen, 80 F.3d at 1289. Moreover, "the reasons `germane to each witness' must be specific." Bruce v. Astrue, 557 F.3d 1113, 1115 (9th Cir. 2009) (quoting Stout v. Comm'r, 454 F.3d 1050, 1054 (9th Cir. 2006)). However, the ALJ may cite the same reasons for rejecting plaintiff's statements to reject third-party statements where the statements are similar. See Valentine, 574 F.3d at 694 (approving rejection of a third-party family member's testimony, which was similar to the claimant's, for the same reasons given for rejection of the claimant's complaints).

Here, the ALJ acknowledged the lay witness testimony, characterizing it as "similar to the claimant's allegations." (Tr. at 30.) The ALJ, however, accorded the testimony "no weight" for two reasons. One reason was the ALJ's finding that plaintiff's mother was not "an acceptable medical source." (Id.) "This statement is clearly erroneous. Lay witness testimony is by definition testimony not provided by an acceptable medical source." Gonzales v. Berryhill, No. 2:15-cv-1771 DB, 2017 WL 1079913, at *9 (E.D. Cal. Mar. 21, 2017).

The other reason offered by the ALJ for affording no weight to the lay witness testimony was the finding that the testimony was "not fully supported by the evidence" reviewed in connection with the ALJ's analysis of plaintiff's testimony. (Tr. at 30.) As noted above, the ALJ erroneously rejected plaintiff's testimony concerning plaintiff's mental limitations. That erroneous analysis cannot serve as a germane reason to reject the lay witness testimony concerning plaintiff's mental limitations. See generally Robbins v. Social Sec. Admin., 466 F.3d 880, 885 (9th Cir. 2006) ("Because the ALJ did not make a legally sufficient adverse credibility finding with regard to Robbins's own testimony, we cannot say with respect to Rodney's testimony that no reasonable ALJ, when fully crediting the testimony, could have reached a different disability determination.").

Accordingly, the ALJ failed to provide a germane reason for rejecting the lay witness testimony. Plaintiff, therefore, is also entitled to summary judgment on this claim.

II. Listing Impairment

At step three of the sequential evaluation, the ALJ must determine whether a claimant's impairment or impairments meet or equal one of the specific impairments set forth in the Listings. 20 C.F.R. §§ 404.1520(a)(4)(iii), 416.920(a)(4)(iii). The physical and mental conditions contained in the Listings are considered so severe that "they are irrebuttably presumed disabling, without any specific finding as to the claimant's ability to perform his past relevant work or any other jobs." Lester, 81 F.3d at 828. The Listings were "designed to operate as a presumption of disability that makes further inquiry unnecessary." Sullivan v. Zebley, 493 U.S. 521, 532 (1990); see also Lewis v. Apfel, 236 F.3d 503, 512 (9th Cir. 2001). If a claimant shows that his impairments meet or equal a Listing, he will be found presumptively disabled. 20 C.F.R. §§ 404.1525-404.1526, 416.925-416.926.

The claimant bears the burden of establishing a prima facie case of disability under the Listings. See Thomas v. Barnhart, 278 F.3d 947, 955 (9th Cir. 2002). To "meet" a listed impairment, the claimant must establish that his condition satisfies each element of the listed impairment. See Zebley, 493 U.S. at 530; Tackett v. Apfel, 180 F.3d 1094, 1099 (9th Cir. 1999). To "equal" a listed impairment, the claimant "must establish symptoms, signs, and laboratory findings" at least equal in severity and duration to each element of the listed impairment. Id.

"An ALJ must evaluate the relevant evidence before concluding that a claimant's impairments do not meet or equal a listed impairment." Lewis, 236 F.3d at 512 (citing Marcia v. Sullivan, 900 F.2d 172, 176 (9th Cir. 1990) ("We hold that, in determining whether a claimant equals a listing under step three of the Secretary's disability evaluation process, the ALJ must explain adequately his evaluation of alternative tests and the combined effects of the impairments.")).

Moreover, an "ALJ must provide a discussion of the evidence and an explanation of reasoning for his conclusion sufficient to enable meaningful judicial review." Diaz v. Commissioner of Social Sec., 577 F.3d 500, 504 (3rd Cir. 2009) (quotation omitted); see also Radford v. Colvin, 734 F.3d 288, 295 (4th Cir. 2013) ("The ALJ's decision regarding the applicability of Listing 1.04A is devoid of reasoning. . . . This insufficient legal analysis makes it impossible for a reviewing court to evaluate whether substantial evidence supports the ALJ's findings.").

Here, at step three of the sequential evaluation the ALJ found that plaintiff's "mental impairments, considered singly and in combination, do not meet or medically equal the criteria of listings 12.03, 12.04, and 12.11."6 (Tr. at 24.) In this regard, the ALJ found as follows:

(Tr. at 24-25.)

An ALJ's step three finding is based, in part, on "[e]vidence from [plaintiff] and people who know [the plaintiff]." 12.00(C)(3). 20 C.F.R. Pt. 404, Subpt. P, App. 1, 12.00(C)(3) (Mar. 27, 2017). Here, the ALJ erroneously rejected plaintiff's testimony and the testimony of plaintiff's mother. And, as noted above, it appears the ALJ misunderstood the evidence as it relates to the number of times plaintiff was hospitalized.

Moreover, it is difficult understand how the ALJ reached some findings in light of the evidence of record. For example, the ALJ found that plaintiff experienced only "moderate limitations" in adapting or managing oneself because plaintiff "sustains ordinary life activities in and about his home" while admitting that plaintiff experienced "two episodes of decompensation . . . necessitating hospitalization[.]" (Tr. at 24). The ALJ also found that plaintiff had only "moderate limitations" in interacting with others. (Id.) The ALJ based this finding on plaintiff's ability to live with and spend time with family but acknowledged that plaintiff "has hallucinations about people hacking his computer, is paranoid about other people in class, or neighbors and anger which cause problems with others." (Id.)

A "moderate limitation" equates to a finding that plaintiff's "functioning in this area independently, appropriately, effectively, and on a sustained basis is fair." 20 C.F.R. Pt. 404, Subpt. P, App. 1 12.00(F)(2)(c). It is not clear how plaintiff's symptoms of hallucinations, paranoia, suicidal, and homicidal ideation can be properly characterized as allowing for "fair" functioning on a sustained basis—even assuming plaintiff had only experienced two hospitalizations, let alone four. Again, this seeming incongruity may be the result of the ALJ's erroneous rejection of the testimony offered by plaintiff and plaintiff's mother.

Nonetheless, on this record the court cannot say that the ALJ's step three finding is free from error and supported by substantial evidence in the record. Accordingly, plaintiff is also entitled to summary judgment on this claim.

CONCLUSION

After having found error, "`[t]he decision whether to remand a case for additional evidence, or simply to award benefits[,] is within the discretion of the court.'" Trevizo, 871 F.3d at 682 (quoting Sprague v. Bowen, 812 F.2d 1226, 1232 (9th Cir. 1987)). A case may be remanded under the "credit-as-true" rule for an award of benefits where:

Garrison, 759 F.3d at 1020.

Even where all the conditions for the "credit-as-true" rule are met, the court retains "flexibility to remand for further proceedings when the record as a whole creates serious doubt as to whether the claimant is, in fact, disabled within the meaning of the Social Security Act." Id. at 1021; see also Dominguez v. Colvin, 808 F.3d 403, 407 (9th Cir. 2015) ("Unless the district court concludes that further administrative proceedings would serve no useful purpose, it may not remand with a direction to provide benefits."); Treichler v. Commissioner of Social Sec. Admin., 775 F.3d 1090, 1105 (9th Cir. 2014) ("Where . . . an ALJ makes a legal error, but the record is uncertain and ambiguous, the proper approach is to remand the case to the agency.").

Here, the court cannot say that further proceedings would serve no useful purposes. This is especially true as the record appears to lack an opinion from a treating or examining physician.

Accordingly, IT IS HEREBY ORDERED that: