                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                           FILED
                           FOR THE NINTH CIRCUIT                             MAR 17 2010

                                                                          MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS

KAREN MATTOX,                                   No. 09-15351

             Plaintiff - Appellant,             D.C. No. 2:06-cv-01698-GGH

  v.
                                                MEMORANDUM *
COMMISSIONER OF SOCIAL
SECURITY,

             Defendant - Appellee.


                   Appeal from the United States District Court
                      for the Eastern District of California
                 Gregory G. Hollows, Magistrate Judge, Presiding

                            Submitted March 9, 2010**
                             San Francisco, California

Before: FERNANDEZ, HAWKINS and THOMAS, Circuit Judges.

       Karen Mattox (“Mattox”) appeals the adverse summary judgment upholding the

Commissioner of Social Security’s denial of her application for disability insurance

benefits under Title II of the Social Security Act. We reverse and remand.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      We review a district court’s order affirming denial of social security benefits

de novo, Vasquez v. Astrue, 572 F.3d 586, 590 (9th Cir. 2009), and we may set aside

the Commissioner’s denial of benefits when the administrative law judge’s (“ALJ”)

findings are based on legal error or are not supported by substantial evidence. Id. at

591. However, “where the evidence is susceptible to more than one rational

interpretation,” we must affirm the decision of the ALJ. Andrews v. Shalala, 53 F.3d

1035, 1039-40 (9th Cir. 1995).

      Even assuming Mattox’s waiver of her right to counsel was improper, the ALJ

developed a record in this case that was neither ambiguous nor inadequate to preclude

a proper evaluation of the evidence, see Mayes v. Massanari, 276 F.3d 453, 459-60

(9th Cir. 2001), meaning Mattox was not prejudiced in the proceeding. Vidal v.

Harris, 637 F.2d 710, 714 (9th Cir. 1981).

      The ALJ did, however, fail to provide a clear and convincing reason for

discounting Mattox’s testimony, see Smolen v. Chater, 80 F.3d 1273, 1283-84 (9th

Cir. 1996), and improperly credited testimony of a nontreating, nonexamining

physician over contradictory testimony of both a treating physician and an examining

physician without articulating a legitimate reason, see Lester v. Chater, 81 F.3d 821,

830 (9th Cir. 1995) (ALJ must provide “specific and legitimate” reasons for

discounting treating and examining physicians’ contradicted opinions).


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      As for Mattox’s testimony, the purported inconsistencies in her statements

regarding the weight she could lift, auditory hallucinations she heard, and anxiety she

experienced, are actually consistent with evidence in the record and cannot suffice as

clear and convincing evidence to discount her testimony. Similarly, the ALJ failed

to state whether he credited the lay testimony of Mattox’s boyfriend, and, if he did

not, to provide a clear and convincing justification for failing to do so.

      Considering the medical evidence, the ALJ essentially rejected the conclusions

of Mattox’s treating physician Dr. Hutchinson and Dr. Straehley, an examining

physician, as based on Mattox’s subjective complaints. As we have explained, “[a]

physician’s opinion of disability ‘premised to a large extent upon the claimant’s own

accounts of his symptoms and limitations’ may be disregarded where those complaints

have been ‘properly discounted.’” Morgan v. Comm’r of Soc. Sec. Admin., 169 F.3d

595, 602 (9th Cir. 1999) (quoting Fair v. Bowen, 885 F.2d 597, 605 (9th Cir. 1989)).

Yet, Mattox’s complaints have not been “properly discounted” because there are no

legitimate inconsistencies, no evidence suggesting she is lying, and no evidence of any

malingering. See Smolen, 80 F.3d at 1284. In fact, objective observation and testing

bore out her complaints. Thus, under any standard, the ALJ erred in choosing to

accept a nontreating, nonexamining doctor’s opinion over that of a treating physician




                                           3
with a six-year treatment history with Mattox, as well the opinion of an examining

physician, without a legitimate reason.

      Because the ALJ failed to provide reasons to not credit Mattox’s testimony and

the medical evidence, we must reverse and remand for proper consideration of the

evidence or adequate justification for its exclusion. Because of the failure to provide

adequate justification for not crediting lay testimony and medical evidence, we also

remand for consideration, pending these evidentiary determinations, of whether

Mattox met the requirements of Listing 12.04. See 20 C.F.R. Pt. 404, Subpt. P, App.

1; Schneider v. Comm’r of Soc. Sec. Admin., 223 F.3d 968, 975-76 (9th Cir. 2000)

(remanding a denial of benefits where the fact-finder erred in failing to consider lay

evidence). On remand, the evidentiary questions may also require the ALJ to

reexamine the vocational expert, posing more complete hypotheticals taking Mattox’s

actual limitations, which a proper consideration of the evidence may establish, into

account. Embrey v. Bowen, 849 F.2d 418, 423 (9th Cir. 1988).

      In sum, the ALJ erred in failing to provide clear and convincing reasons for

rejecting Mattox’s testimony regarding the severity of her symptoms, and neglecting

to provide legitimate reasons to reject the opinions of her treating and examining

physicians. These errors resulted in further errors in the consideration of whether

Mattox met a listing and the posing of legally inadequate hypotheticals to the


                                          4
vocational expert. We therefore reverse the judgment of the district court, with

instructions to remand this case to the agency for redetermination of eligibility for

benefits.

      REVERSED and REMANDED WITH INSTRUCTIONS.




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