MEMORANDUM OPINION GRANTING PLAINTIFF'S PETITION FOR EAJA FEES; AND ORDER THEREON
ROBERT N. BLOCK, Magistrate Judge.
Now pending before the Court and ready for decision is plaintiff's Petition for Attorney Fees and Expenses Under the Equal Access to Justice Act ("EAJA").
In its Opposition ("Opp.") to plaintiff's fee petition, the Government does not contend that the petition was untimely, challenge plaintiff's status as a prevailing party, or contend that the fees should be reduced because the requested amount is unreasonable. Instead, the Government contends that plaintiff's fee petition should be denied in its entirety because the Commissioner's position was substantially justified. (See Opp. at 3-11.) Alternatively, the Government contends, if EAJA fees are to be awarded, they must be paid to plaintiff, not his attorney, under the Supreme Court's decision in Astrue v. Ratliff, ___ U.S. ___ , 130 S.Ct. 2521, 2525, 177 L.Ed.2d 91 (2010). (See Opp. at 11-13.)
The EAJA provides in pertinent part:
"Except as otherwise specifically provided by statute, 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." 28 U.S.C. § 2412(d)(1)(A).
The term "position of the United States" is not limited to the legal position of the Government during litigation, but rather includes "the action or failure to act by the agency upon which the civil action is based. See 28 U.S.C. § 2412(d)(2)(D); Gutierrez v. Barnhart , 274 F.3d 1255, 1259 (9th Cir. 2001); Andrew v. Bowen , 837 F.2d 875, 878 (9th Cir. 1988). Thus, the burden here is on the Government to establish that it was substantially justified on the whole, considering both the underlying administrative decision of the ALJ and the Commissioner's litigation position in defending the ALJ's decision. See Gutierrez , 274 F.3d at 1259; Kali v. Bowen , 854 F.2d 329, 332 (9th Cir. 1988). However, the Ninth Circuit also has observed that "[i]t is difficult to imagine any circumstance in which the government's decision to defend its actions in court would be substantially justified, but the underlying administrative decision would not." See Flores v. Shalala , 49 F.3d 562, 570 n.11 (9th Cir. 1995).
In Pierce v. Underwood , 487 U.S. 552, 565, 108 S.Ct. 2541, 181 L.Ed.2d 490 (1988), the Supreme Court held that the statutory phrase "substantially justified" does not mean "justified to a high degree." Rather, it means "justified in substance or in the main, " or in other words "justified to a degree that could satisfy a reasonable person." The Supreme Court further held that this interpretation of the phrase was equivalent to the formula adopted by the Ninth Circuit Court of Appeals, i.e., "a reasonable basis both in law and fact." There is no presumption that the Government's position was not substantially justified merely because it lost the case. See United States v. Marolf , 277 F.3d 1156, 1162 (9th Cir. 2002); Kali , 854 F.2d at 334. Under the reasonableness standard approved by the Supreme Court in Pierce, the Ninth Circuit has found the Commissioner's position substantially justified even where, for example, an ALJ "badly mischaracterized" evidence and "ignored... clear direct evidence" that the claimant's past work required more than her residual functional capacity limitations would allow her to do. See Lewis v. Barnhart , 281 F.3d 1081, 1083-84 (9th Cir. 2002).
Here, in plaintiff's underlying case, which included a total of six disputed issues, the Court was unable to affirm the ALJ's decision with respect to Disputed Issue Nos. 1-4: (1) whether the ALJ properly evaluated all the medical opinions in the record; (2) whether the ALJ properly determined plaintiff's residual functional capacity; (3) whether the ALJ made a proper adverse credibility determination with respect to plaintiff's son; and (4) whether the ALJ made a proper adverse credibility determination with respect to plaintiff. With respect to Disputed Issue Nos. 5-6, the Court (5) agreed with the Government that the ALJ properly rejected the opinion of plaintiff's treating physician; and (6) determined that it was unnecessary to reach the issue of whether the ALJ posed a proper hypothetical question to the vocational expert, in light of the Court's resolution of the other issues.
A. The Government's position was not substantially justified.
The Government contends that its position was substantially justified, even with respect to Disputed Issue Nos. 1-4. For the reasons discussed hereafter, the Court disagrees.
Disputed Issue No. 1
The ALJ's failure to properly evaluate all of the medical evidence in the record, particularly the opinion of Dr. Angerman, contravened the Commissioner's own regulations. See 20 C.F.R. § 404.1527(c) ("Regardless of its source, we will evaluate every medical opinion we receive."). It follows that the Government's position with respect to this issue was not substantially justified. See Shafer v. Astrue , 518 F.3d 1067, 1069, 1072 (9th Cir. 2008) (government's position was not substantially justified where ALJ contravened SSA regulations by disregarding, without explanation, a medical expert's opinion); see also Gutierrez , 274 F.3d at 1259 (government's position was not substantially justified where ALJ's decision reflected failure to follow SSA regulations); Yang v. Shalala , 22 F.3d 213, 217 (9th Cir. 1994) (same).
The Government contends that its position was substantially justified by merely repeating its litigation position that such evidence was not significant and probative (see Opp. at 4-5), a position that the Court squarely rejected in its Order reversing the ALJ's decision (see Order at 6). Accordingly, the Court declines to find that there was a reasonable basis both in law and fact for the ALJ to have disregarded the evidence. See Flores , 49 F.3d at 570-71 (government's position was not ...