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Willard Downey v. Michael J. Astrue

April 11, 2012

WILLARD DOWNEY,
PLAINTIFF,
v.
MICHAEL J. ASTRUE, COMMISSIONER OF SOCIAL SECURITY,
DEFENDANT.



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

ORDER GRANTING PLAINTIFF'S REQUEST FOR AN AWARD OF ATTORNEYS' FEES PURSUANT TO 28 U.S.C. § 2412 (Docs. 23, 30)

I. INTRODUCTION

On May 5, 2009, Plaintiff Willard Downey ("Plaintiff") filed a complaint seeking to reverse the Administrative Law Judge's ("ALJ") decision denying Plaintiff's claim for Social Security benefits. On August 31, 2010, the Court issued an order reversing the ALJ's decision, remanding the case, and directing that judgment be issued in favor of Plaintiff. (Docs. 21, 22.) Specifically, the Court determined that the Vocational Expert's ("VE") testimony upon which the ALJ relied conflicted with the Dictionary of Occupational Titles ("DOT"), and the ALJ failed to question the VE regarding the conflict or seek from the VE a reasonable explanation for deviating from the DOT.

(Doc. 21, 3:15-9:23.) As a result, the Court determined that there was not substantial evidence in the record on which the ALJ could rely to support the non-disability finding.

On November 15, 2010, as the prevailing party, Plaintiff filed an application pursuant to the Equal Access to Justice Act ("EAJA") seeking $7,719.32 in attorneys' fees. (Doc. 23.) Plaintiff's EAJA application was opposed by the Commissioner of the Social Security Administration ("Commissioner" or "Defendant"). (Doc. 24.) Plaintiff filed a reply brief on December 20, 2010. (Doc. 25.)

On May 16, 2011, the Court issued an order requiring the parties to submit additional briefing regarding whether Plaintiff may recover attorneys' fees for work performed by Mr. Ralph Wilborn, who is not a member of either the California Bar or the Bar of this Court. (Doc. 26.) The parties each filed a supplemental brief addressing this issue. (Docs. 27, 28.) On November 22, 2011, the court ordered that any supplemental request for EAJA fees be submitted within 20 days of the Court's order. (Doc. 29.) On November 28, 2011, Plaintiff filed a supplemental request for EAJA fees seeking an additional $2,670.77 as compensation for work performed by Mr. Wilborn in defending Plaintiff's original EAJA application. (Doc. 30.) The Commissioner filed an opposition to Plaintiff's supplemental application on December 15, 2011.*fn1 (Doc. 32.) For the reasons set forth below, the Court GRANTS Plaintiff's original and supplemental applications for an award of attorneys' fees pursuant to the EAJA in the amount of $7,777.02.

II. DISCUSSION

A. Plaintiff Meets the Requirements for an Award of EAJA Fees

The EAJA provides that "a court shall award to a prevailing party . . . fees and other expenses . . . incurred by that party in any civil action . . . brought by or against the United States . . . unless the court finds that the position of the United States was substantially justified." 28 U.S.C. § 2412(d)(1)(A); see also Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002). "Fees and other expenses" include "reasonable attorney fees." 28 U.S.C. § 2412(d)(2)(A). The prevailing party must apply for attorneys' fees within thirty days of the final judgment in the action. Id. § 2412(d)(1)(B). 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).

A remand pursuant to sentence four of 42 U.S.C. § 405(g) has been found to constitute a final, appealable judgment. Shalala v. Schaefer, 509 U.S. 292, 296-302 (1993). A party who obtains a sentence-four remand in a social security appeal is a prevailing party for purposes of the EAJA. Schaefer, 509 U.S. at 302. Here, Plaintiff asserts that he was a prevailing party for purposes of the appeal in this case because he obtained a sentence-four remand, and Plaintiff argues that the Commissioner was not substantially justified in its underlying action or in its subsequent litigation position. Plaintiff further asserts that his net worth as an individual was not more than $2,000,000 at the time the civil action was filed pursuant to 28 U.S.C. § 2412(d)(1)(D)(2)(B). As it relates to Plaintiff's eligibility for an EAJA award, the parties dispute only whether the Commissioner's litigation position was substantially justified.

1. Legal Standard -- Substantial Justification

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.

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. However, "[w]here . . . the ALJ's decision was reversed on the basis of procedural errors, the question is not whether the government's position as to the merits [of the plaintiff's disability claim] was substantially justified . . . [but] whether the government's decision to defend on appeal the procedural errors committed by the ALJ was substantially justified." Shafer v. Astrue, 518 F.3d 1067, 1071 (9th Cir. 2008).

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).

2. The Commissioner's Position Was Not Substantially Justified

a. The Court's Underlying Decision on the Merits

On March 13, 2006, Plaintiff filed an application for disability insurance benefits ("DIB"), alleging disability beginning on March 10, 2006, due to heart-valve replacement and shoulder pain. (Administrative Record ("AR") 9, 11, 97.) On January 15, 2008, an ALJ held a hearing regarding Plaintiff's DIB application. (AR 20-44.) A Vocational Expert ("VE") testified at the hearing, and the ALJ posed a hypothetical to the VE for consideration. Specifically, the ALJ asked the VE to consider a hypothetical person of Plaintiff's age, education, and work experiencewho was limited to lifting 20 to 30 pounds occasionally, 15 pounds frequently, and could only occasionally reach, handle, feel, push, pull, and grasp. (AR 39.) The VE testified that such a hypothetical person could not perform Plaintiff's past work, but such a person was able to perform the light, unskilled jobs of parking lot attendant and sales attendant. (AR 40-41.)The VE testified that 15,200 unskilled parking lot and sales attendant jobs accommodated Plaintiff's limitation for only occasional use of the upper extremities. The VE explained that he had eroded the total available jobs in these categories by 50 percent to account for Plaintiff's non-exertional limitations that prevented Plaintiff from using his hands more than occasionally. The VE testified that the reduced number of parking lot and sales attendant jobs accommodated "limited arm usage" in that the jobs "fit the hypothetical of light work with only occasional hand and arm usage." (AR 40, 41.) The ALJ did not, however, ask the VE the basis for his testimony or whether his testimony was consistent with the DOT.

On June 11, 2008, the ALJ issued a decision, finding Plaintiff not disabled since March 10, 2006. (AR 6-19.) Plaintiff appealed that decision, arguing that the ALJ erred in relying on the VE's testimony that conflicted with the DOT and in failing to comply with Social Security Rulings ("SSRs") 83-12 and 83-14.

On August 31, 2010, the Court issued a decision reversing the ALJ's decision and remanding the case. (Doc. 21.) The Court explained that the ALJ found Plaintiff could only occasionally reach, handle, feel, push, pull, and grasp. (AR 12; Doc. 21, 6:14-16.) Nevertheless, the ALJ determined that Plaintiff could perform work in the national economy and was therefore not disabled. The ALJ's determination was predicated on the VE's testimony that, despite Plaintiff's limitation for only occasional reaching and handling, 15,200 parking lot and sales attendant jobs could be performed by Plaintiff. According to the DOT, however, the jobs in the categories of parking lot and sales attendant require "frequent" reaching and handling. See DICOT 915.473-010, 1991 WL 687865; DICOT 299.677-010, 1991 WL 672643. Because the ALJ determined that Plaintiff could reach and handle only occasionally, Plaintiff could not perform these jobs as described in the DOT. The VE did not provide any basis for testifying that Plaintiff, despite his limited ability to use his hands, could nonetheless perform 15,200 jobs in the category of parking lot attendant and sales attendant, as all the jobs in these categories require frequent reaching and handling.

Although the Commissioner argued that any error by the ALJ was harmless because the VE fully explained the deviation for the DOT by discounting the total number of jobs available to Plaintiff in the categories of parking lot attendant and sales attendant by 50 percent, the Court concluded that the VE did not provide a reasonable explanation for the deviation from the DOT. (Doc. 21, 8:22.) The Court also determined that the ALJ further erred by not explaining in her written decision how the apparent conflict between the VE's testimony and the DOT was resolved. (Doc 21, 9:5-6.) Instead, the ALJ noted the VE's testimony and concluded that based on the VE's testimony, Plaintiff was "capable of making a successful adjustment to other work that exists in significant numbers in the national economy." (See Doc. 21, 9:6-11.) The Court ultimately concluded that because the VE offered no explanation for the deviation from the DOT and the ALJ failed to consider the conflict between the DOT and the VE's testimony, it could not be determined whether substantial evidence supported the ALJ's Fifth-Step Finding. (Doc. 21, 9:17-23.)

b. Analysis

The Commissioner asserts that he was substantially justified in arguing that the ALJ's error was harmless because the VE acknowledged Plaintiff's hand usage limitation and discounted the number of parking lot attendant and sales attendant jobs that Plaintiff could perform. (Doc. 24, 3:2-4:28.) The Commissioner's argument, however, is not persuasive.

The Social Security Administration has issued Social Security Ruling ("SSR") 00-4p, which provides a policy interpretation as to the agency's use of expert and vocational specialist evidence. Social Security Ruling 00-4p provides the following guidance, in relevant part:

Occupational evidence provided by a VE or VS generally should be consistent with the occupational information supplied by the DOT. When there is an apparent unresolved conflict between the VE or the VS evidence and the DOT, the adjudicator must elicit a reasonable explanation for the conflict before relying on the VE or VS evidence to support a determination or decision about whether the claimant is disabled. At the hearings level, as part of the adjudicator's duty to fully develop the record, the adjudicator will inquire, on the record, as to whether or not there is such consistency.

Neither the DOT nor the VE or VS evidence automatically "trumps" when there is a conflict. The adjudicator must resolve the conflict by determining if the explanation given by the VE or the VS is reasonable and provides a basis for relying on the VE or VS testimony rather than on the DOT information.

Here, the VE's testimony that the job categories of parking lot and sales attendant were eroded by 50 percent due to Plaintiff's limitation to only occasional reaching and handling does not explain why a 50 percent reduction adequately accounts for Plaintiff's limitation. The DOT provides that the jobs in the category of parking lot and sales attendant require frequent handling and reaching. Given Plaintiff's limitation to only occasionally handling and reaching, the VE's testimony was not consistent with the DOT's description of the requirements of parking lot and sales attendant jobs.

While the VE, as an expert, is entitled to provide testimony that differs from the DOT, the ALJ is required to consider whether the VE may be credited over the DOT. As stated in SSR 00-4p, when there is such a conflict,"[n]either the DOT nor the VE or VS evidence automatically 'trumps.'" SSR-00-4p, at *2. Rather, it is up to the adjudicator to resolve the conflict by determining if the explanation given by the VE or VS is reasonable and provides a basis for relying on the VE or VS testimony rather than the DOT information. The ALJ cannot resolve the conflict if the VE provides no basis as to why the VE's testimony conflicts with the DOT. See Massachi v. Astrue, 486 F.3d 1149, 1154 n. 19 (9th Cir. 2007)

Here, as explained in the Court's underlying decision on this matter, the VE offered no explanation why Plaintiff, limited to only occasional reaching and handling, could nonetheless perform 50 percent of the parking lot and sales attendant jobs the DOT defines as requiring frequent reaching and handling. Simply discounting the number of jobs in the parking lot and sales attendant categories does not explain why 50 percent of those jobs require something less than frequent reaching and handling. The ALJ neither resolved the apparent conflict nor acknowledged it. Moreover, even if the ALJ had somehow attempted to resolve the conflict, the VE provided no basis for his testimony, and the ALJ had nothing whatsoever to rely upon in resolving the conflict. The Commissioner's argument that the VE explained the discrepancy by testifying that the reduced number of parking lot and sales attendant job titles accommodated the ...


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