REPORT AND RECOMMENDATION
KAREN L. STROMBOM, Magistrate Judge.
Plaintiff has brought this matter for judicial review of defendant's denial of her application for disability insurance benefits. This matter has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule MJR 4(a)(4) and as authorized by Mathews, Secretary of H.E.W. v. Weber , 423 U.S. 261 (1976). After reviewing the parties' briefs and the remaining record, the undersigned submits the following Report and Recommendation for the Court's review, recommending that for the reasons set forth below, defendant's decision to deny benefits should be reversed and this matter should be remanded for further administrative proceedings.
FACTUAL AND PROCEDURAL HISTORY
On October 10, 2006, plaintiff filed an application for disability insurance benefits, alleging disability as of June 30, 2005, due to fibromyalgia, severe pain, irritable bowel syndrome, and rhabdomyolysis. See ECF #12, Administrative Record ("AR") 98, 240. That application was denied upon initial administrative review on February 9, 2007, and on reconsideration on June 19, 2007. See AR 98. A hearing was held before an administrative law judge ("ALJ") on May 21, 2009, at which plaintiff, represented by counsel, appeared and testified, and at which a vocational expert also appeared. See id. In a decision dated July 24, 2009, the ALJ determined plaintiff to be not disabled. See AR 98-104.
On July 13, 2010, plaintiff's request for review of the ALJ's decision was granted by the Appeals Council, which remanded the matter for further administrative proceedings. See AR 105-08. A second hearing was held on February 11, 2011, before a different ALJ, at which plaintiff, represented by counsel, appeared and testified, as did a different vocational expert. See AR 31-91. In a decision dated June 14, 2011, that ALJ also determined plaintiff to be not disabled. See AR 12-24. Plaintiff's request for review of that decision was denied by the Appeals Council on November 29, 2012, making the ALJ's decision the final decision of the Commissioner of Social Security (the "Commissioner"). See AR 1; see also 20 C.F.R. § 404.981.
On January 23, 2013, plaintiff filed a complaint in this Court seeking judicial review of the Commissioner's final decision. See ECF #3. The administrative record was filed with the Court on April 16, 2013. See ECF #12. The parties have completed their briefing, and thus this matter is now ripe for the Court's review. Plaintiff argues the ALJ's decision should be reversed and remanded for an award of benefits, or in the alternative for further administrative proceedings, because the ALJ erred: (1) in failing to find plaintiff has a medically determinable impairment consisting of fibromyalgia; (2) in discounting plaintiff's credibility; (3) in rejecting the opinions of Paul B. Nutter, M.D.; and (4) in failing to include in his assessment of plaintiff's residual functional capacity all of the functional limitations found by Dr. Nutter and William Hiltz, M.D. For the reasons set forth below, the undersigned finds the ALJ erred by failing to adequately explain why he did not adopt all of the functional limitations assessed by Dr. Hiltz - and thus in assessing plaintiff's RFC - and therefore in determining her to be not disabled. Also for the reasons set forth below, however, while the undersigned recommends that defendant's decision to deny benefits should be reversed on this basis, this matter should be remanded for further administrative proceedings.
The determination of the Commissioner that a claimant is not disabled must be upheld by the Court, if the "proper legal standards" have been applied by the Commissioner, and the "substantial evidence in the record as a whole supports" that determination. Hoffman v. Heckler , 785 F.2d 1423, 1425 (9th Cir. 1986); see also Batson v. Commissioner of Social Security Admin. , 359 F.3d 1190, 1193 (9th Cir. 2004); Carr v. Sullivan , 772 F.Supp. 522, 525 (E.D. Wash. 1991) ("A decision supported by substantial evidence will, nevertheless, be set aside if the proper legal standards were not applied in weighing the evidence and making the decision.") (citing Brawner v. Secretary of Health and Human Services , 839 F.2d 432, 433 (9th Cir. 1987)).
Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales , 402 U.S. 389, 401 (1971) (citation omitted); see also Batson , 359 F.3d at 1193 ("[T]he Commissioner's findings are upheld if supported by inferences reasonably drawn from the record."). "The substantial evidence test requires that the reviewing court determine" whether the Commissioner's decision is "supported by more than a scintilla of evidence, although less than a preponderance of the evidence is required." Sorenson v. Weinberger , 514 F.2d 1112, 1119 n.10 (9th Cir. 1975). "If the evidence admits of more than one rational interpretation, " the Commissioner's decision must be upheld. Allen v. Heckler , 749 F.2d 577, 579 (9th Cir. 1984) ("Where there is conflicting evidence sufficient to support either outcome, we must affirm the decision actually made.") (quoting Rhinehart v. Finch , 438 F.2d 920, 921 (9th Cir. 1971)).
The Commissioner employs a five-step "sequential evaluation process" to determine whether a claimant is disabled. See 20 C.F.R. § 404.1520. If the claimant is found disabled or not disabled at any particular step thereof, the disability determination is made at that step, and the sequential evaluation process ends. See id. If a disability determination "cannot be made on the basis of medical factors alone at step three of that process, " the ALJ must identify the claimant's "functional limitations and restrictions" and assess his or her "remaining capacities for work-related activities." Social Security Ruling 96-8p, 1996 WL 374184 *2. A claimant's residual functional capacity ("RFC") assessment is used at step four to determine whether he or she can do his or her past relevant work, and at step five to determine whether he or she can do other work. See id.
Residual functional capacity thus is what the claimant "can still do despite his or her limitations." Id . It is the maximum amount of work the claimant is able to perform based on all of the relevant evidence in the record. See id. However, an inability to work must result from the claimant's "physical or mental impairment(s)." Id . Thus, the ALJ must consider only those limitations and restrictions "attributable to medically determinable impairments." Id . In assessing a claimant's RFC, the ALJ also is required to discuss why the claimant's "symptomrelated functional limitations and restrictions can or cannot reasonably be accepted as consistent with the medical or other evidence." Id . at *7.
The second ALJ in this case found plaintiff had the residual functional capacity:
... to perform light work... except: pushing/pulling is unlimited, other than the lifting and carrying limitations associated with light work. She can frequently balance, stoop, knee[l], and crouch, and climb ramps and stairs. She can frequently handle and finger bilaterally.
AR 17 (emphasis in original). As pointed out by plaintiff, in assessing the above RFC the ALJ failed to discuss, or even mention, the functional assessment ...