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Somkhith Chanthavong v. Michael J. Astrue

December 22, 2011


The opinion of the court was delivered by: Sheila K. Oberto United States Magistrate Judge


(Doc. 26)


Plaintiff Somkhith Chanthavong ("Plaintiff") filed a complaint on September 3, 2009, seeking reversal of the Administrative Law Judge's ("ALJ") decision denying her application for Social Security disability benefits. (Doc. 1.) On March 25, 2011, the Court issued an order finding that the ALJ decision was not supported by substantial evidence. (Doc. 24.) Specifically, the Court determined that the ALJ erred in finding that Dr. Willis' testimony indicated that Plaintiff's impairments did not meet or medically equal a listed impairment. (Doc. 24, 9:4-26.) The Court determined that Dr. Willis' testimony established only that Plaintiff's impairments did not meet a listed impairment, but Dr. Willis did not explicitly discuss whether Plaintiff's impairments equaled a listing. (Doc. 24, 9:4-26.) The Court remanded the matter for further proceedings to clarify the ALJ's determination at the Third Step. (Doc. 24, 10:2-11.) Judgment was issued in Plaintiff's favor on March 25, 2011. (Doc. 25.)

On June 23, 2011, Plaintiff filed an application for an award of fees and expenses pursuant to the Equal Access to Justice Act ("EAJA") in the amount of $9,442.95. (Doc. 26.) On August 8, 2011, Defendant filed an opposition to Plaintiff's request asserting that his litigation position was substantially justified or, alternatively, that the total number of hours expended by Plaintiff's counsel was not reasonable. (Doc. 30.) On August 25, 2011, Plaintiff filed a reply to Defendant's opposition which also requested a supplemental EAJA award of $2,692.65 for 15.0 hours of time spent by Mr. Wilborn drafting the EAJA reply brief. Thus, Plaintiff's total EAJA fee request amounts to $12,135.60. For the reasons set forth below, Plaintiff's application for EAJA fees is GRANTED in the amount of $9,063.86.


A. Legal Standard

Pursuant to 28 U.S.C. § 2412(d)(1)(A), claimants who successfully challenge an agency decision in a civil action are entitled to reasonable fees and other expenses:

[A] court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

Any application for an award of EAJA fees and other expenses must be made within thirty days of final judgment in the action and "must include an itemized statement from any attorney representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed." 28 U.S.C. § 2412(d)(1)(B). The party submitting the application is also required to allege that the position of the United States was not substantially justified. Id. Further, the party applying for an award of EAJA fees must have an individual net worth not greater than $2,000,000 at the time the civil action was filed. Id. § 2412(d)(2)(B).

To be "substantially justified," the position taken must have a reasonable basis in law and fact. Pierce v. Underwood, 487 U.S. 552, 556-66 (1988); United States v. Marolf, 277 F.3d 1156, 1160 (9th Cir. 2002). Substantial justification is interpreted as being "justified to a degree that could satisfy a reasonable person" and "more than merely undeserving of sanctions for frivolousness." Underwood, 487 U.S. at 565; see also Marolf, 277 F.3d at 1161. The fact that a court reverses and remands a case for further proceedings "does not raise a presumption that [the government's] position was not substantially justified." Kali v. Bowen, 854 F.2d 329, 335 (9th Cir. 1988). In considering whether the government's position is "substantially justified," courts consider not only the position of the United States taken in a civil action, but also the action or failure to act by the agency upon which the civil action is based. Gutierrez v. Barnhart, 274 F.3d 1255, 1259-60 (9th Cir. 2001); 28 U.S.C § 2412(d)(2)(D). Thus, courts "must focus on two questions: first, whether the government was substantially justified in taking its original action; and, second, whether the government was substantially justified in defending the validity of the action in court." Kali, 854 F.2d at 33.

In considering the issue of substantial justification in Le v. Astrue, the Ninth Circuit held that the government's position that a doctor whom the claimant had visited five times over three years was not a treating doctor, while incorrect, was substantially justified since a non-frivolous argument could be made that the five visits over three years were not enough under the regulatory standard, especially given the severity and complexity of the claimant's alleged mental problems. 529 F.3d 1200, 1201-02 (9th Cir. 2008).

In Lewis v. Barnhart, the court determined that the government's defense of an ALJ's erroneous characterization of the claimant's testimony was substantially justified. 281 F.3d 1081 (9th Cir. 2002). In that case, the ALJ had reviewed the claimant's testimony about her past work at a gas station and resolved ambiguities in her testimony against her. Id. at 1084. Although the district court disagreed with the conclusion reached by the ALJ and remanded the matter, on appeal of the claimant's fee request that was denied by the district court, the appellate court determined that the ALJ had a reasonable basis in fact for the underlying decision because there were facts that cast doubt on the claimant's subjective testimony about her past work. Id. at 1084. Further, the defendant's position to defend the ALJ's error had a reasonable basis in law because an ALJ must assess a claimant's testimony and may use that testimony to define past relevant work as actually performed. Id. The Ninth Circuit, therefore, affirmed the district court's determination that Defendant's position was substantially justified. Id. at 1086.

In contrast, however, where the government violates its own regulations, fails to acknowledge settled circuit case law, or fails to adequately develop the record, its position will not be held to be substantially justified. Gutierrez, 274 F.3d at 1259-60. For example, in Sampson v. Chater, the ALJ's failure to make necessary inquiries of the unrepresented claimant and his mother to determine the onset date of disability, as well as the ALJ's disregard of substantial evidence establishing the onset date of disability, led the court to hold that the ALJ's actions, and the defendant's defense of those actions, were not substantially justified. 103 F.3d 918, 921-22 (9th Cir. 1996); see also Flores v. Shalala, 49 F.3d 562, 570-72 (9th Cir. 1995) (finding ALJ and Commissioner not substantially justified where ALJ ignored a medical report); Crowe v. Astrue, No. CIV S-07-2529 KJM, 2009 WL 3157438, at *1 (E.D. Cal. Sept. 28, 2009) (no substantial justification in law or fact based on improper rejection of treating physician opinions without providing a basis in the record for doing so); Aguiniga v. Astrue, No. CIV S-07-0324 EFB, 2009 WL 3824077, at *3 (E.D. Cal. Nov. 13, 2009) (no substantial justification where ALJ repeatedly mischaracterized the medical record, improperly relied on non-examining physician that contradicted clear weight of medical evidence, and improperly discredited claimant's subjective complaints as inconsistent with the medical record).

B. Neither the Agency Nor Defendant was Substantially Justified

On February 23, 2004, Plaintiff filed applications for Disability Insurance Benefits and Supplemental Security Income, alleging disability beginning on December 1, 2002, due to diabetes, peripheral neuropathy, visual deficits, hypertension, vertigo, and upper extremity osteoporosis. (AR 162-64, 276-79.)

On October 27, 2004, Sadda Reddy, M.D., a state agency medical consultant, reviewed the record and opined that Plaintiff had no exertional limitations in sitting, standing, walking, or pushing/pulling, and no postural or manipulative limitations. (AR 232-41.) Dr. Reddy opined that, because of sensory deficits in Plaintiff's feet, she should avoid walking on uneven terrain and unlighted areas. (AR 236.) Dr. Reddy noted that Plaintiff's diabetic neuropathy did not result in any motor deficits, she had normal gait and ranges of motion, and she had intact fine and dextrous finger control. (AR 233, 240.)

On June 29, 2006, following a hearing, the Administrative Law Judge ("ALJ") found Plaintiff not disabled. (AR 45-54, 314-40.) With respect to whether Plaintiff's impairments met or medically equaled a listed impairment, the ALJ found as follows:

As presented in more detail below, Mr. Changthavong does not have neuropathy demonstrated by significant and persistent disorganization of motor function in two extremities resulting in sustained disturbance of gross and dexterous movements, or gait and station. She does not have acidosis occurring at least on the average of once every two months documented by appropriate laboratory tests; nor does she have retinitis proliferans. Therefore, Ms. Changthavong does not meet section 9.08 of the Listing of Impairments. (AR 50.)

On June 18, 2007, the Appeals Council granted Plaintiff's request for review of the ALJ's decision. (AR 55-58.) On remand, the Appeals Council specifically instructed that the ALJ consider Plaintiff's impairments including vertigo, osteoporosis in the right hand, and her complaints that her right hand was weak and lifting heavy objects with her right dominant hand caused her pain. (AR 56.) Further, the ALJ was instructed to "[o]btain evidence from a neurologist medical expert to clarify the nature and severity of the claimant's impairments" and to discuss "whether the claimant's impairment meets or equals the severity of an impairment" listed in 20 C.F.R. Part 404, Subpart P, Appendix 1 (the "Listing(s)"). (AR 57.)

In a concerted effort to comply with the Appeal Council's remand order, the ALJ held another hearing on remand and solicited testimony from a neurological medical expert, Dr. Judith A. Willis, regarding Plaintiff's neuropathy. Dr. Willis testified that Plaintiff did not have any impairments that "met a listing" or listed impairment. (AR 302.) Dr. Willis did not provide any testimony, however, as to whether Plaintiff's impairments medically equaled a Listing.

Dr. Willis opined that, other than the extremity numbness, the symptoms to which Plaintiff testified were not supported by objective findings. (AR 303-04.) Dr. Willis testified that Plaintiff retained the functional capacity for work that did not require walking on uneven terrain or in unlighted areas. (AR 306.) When asked whether Plaintiff had any manipulative restrictions due to upper extremity numbness, Dr. Willis testified that there were "no abnormalities" in function. (AR 306.)

On February 19, 2009, the ALJ issued a decision finding Plaintiff not disabled. (AR 15-24.) While the ALJ determined that Plaintiff had severe impairments including diabetes, hypertension, and peripheral neuropathy, the ALJ also determined that Plaintiff had only a mild to moderate osteoporosis of the right hand. (AR 20-21.) The ALJ found that Plaintiff's fine and dexterous finger control was intact and, while there was some decrease in sensation due to mild sensory diabetic neuropathy, there was no loss of motor function or range of motion. (AR 21.) With regard to whether Plaintiff's impairments met or medically equaled a Listing, the ALJ determined that "Dr. Willis, having reviewed the medical record, testified Ms. Chanthavong does not meet or equal any listing." (AR 21.)

The Court determined that the ALJ's finding as to whether Plaintiff's impairments medically equal a Listing was inadequate because it was specifically predicated on an opinion of Dr. Willis that was not actually contained in the record. Although the ALJ took steps to comply with the Appeal Council's remand order by soliciting hearing testimony from a neurology medical expert, the ALJ did not question Dr. Willis as to whether Plaintiff's impairments medically equaled a Listing, only whether Plaintiff's impairments met a Listing. The ALJ expressly rested his finding as to medical equivalence on Dr. Willis' testimony that Plaintiff's impairments were not medically equivalent to a Listing. Dr. Willis, however, offered no such opinion.

The ALJ's mistaken characterization of Dr. Willis' testimony and subsequent reliance on that mistake in making findings at the Third Step was not substantially justified. The ALJ did not conclude generally that the medical evidence of record did not support a finding that Plaintiff's impairments medically equal a Listing or that Dr. Willis' testimony as a whole did not support a finding of medical equivalence. Rather, the ALJ specifically asserted that Dr. Willis testified that Plaintiff's impairments did not medically equal a Listing, and stated this was the basis for finding that Plaintiff was not disabled at the Third Step. The mistaken characterization of Dr. Willis' testimony is a type of basic and fundamental error that is difficult to justify. The evidence on which the ALJ relied in making his finding simply did not exist.

The ALJ's error in attributing to Dr. Willis testimony that she did not actually provide and then relying on that "testimony" as the specific basis to find that medical equivalency to a Listing was not established is the type of error that is more analogous to the error considered in Sampson than the error found substantially justified in Le. In Sampson the ALJ was found to have not been substantially justified in mischaracterizing the medical evidence and failing to take account of testimony. 103 F.3d at 922. Here, the ALJ mischaracterized the evidence to include an opinion that did not exist and relied exclusively upon that opinion as substantial evidence to support the decision at the Third Step. It is impossible to definitively conclude that the ALJ, when referring to Dr. Willis' testimony about medical equivalence with a Listing, meant all of Dr. Willis' testimony considered collectively. This is particularly so because Dr. Willis expressly testified that Plaintiff did not "meet" a Listing. (AR 302.) Thus, when the ALJ rested his Third Step finding on the basis that "Dr. Willis, having reviewed the medical record, testified Ms. Chanthavong does not meet or equal any [L]isting" (AR 21), it appears the ALJ determined that Dr. Willis actually provided direct testimony on medical equivalence in the same way Dr. Willis did regarding whether Plaintiff met a Listing. Under these circumstances, it appears that the ALJ's decision rested on particular testimony that did not exist. In light of the Appeals Council's remand order specifically directing the ALJ to develop expert evidence regarding whether Plaintiff's condition met or equaled a Listing, the misconstruction of Dr. Willis' testimony calls into question whether the ALJ adequately developed the record.

The situation would be different, and much more analogous to Le v. Astrue, if the ALJ had stated that the medical evidence provided by Dr. Willis -- as opposed to her testimony regarding equivalence -- indicated that Plaintiff's condition did not equal a Listing. In Le, while the ALJ's conclusion was found to be erroneous, the ALJ's basis for the reaching the conclusion was reasonable in fact and law. 529 F.3d at 1201-02. Here, if the ALJ had predicated the Third Step finding on the medical evidence provided by Dr. Willis and other physicians, there might have been a reasonable basis in fact and law for that finding. Unfortunately, ...

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