The opinion of the court was delivered by: Mihm, District Judge.
In December of 1982, the Plaintiff, Harold Shepard (hereafter
Shepard), filed an application for Social Security disability
benefits claiming an inability to work due to a collapsed lung,
difficulty breathing, and removal of part of his colon (Tr.
72-75, 76-85). At the hearing held before the ALJ on his
applications, Shepard testified that he had been an alcoholic all
of his life (Tr. 63). Shepard's brother testified that Shepard
had always maintained the ability
to support himself and was not likely to spend all of his money
on alcohol (Tr. 61-65, 68). In summation, Shepard's counsel
argued that Shepard's principle problem was difficulty breathing,
with drinking as a contributing collateral problem (Tr. 64-65).
The Administrative Law Judge (hereafter ALJ) considered
Shepard's claim and denied it on December 15, 1983 (Tr. 11-16).
The Appeals Council declined review on March 30, 1984 (Tr. 3-4).
Shepard commenced a civil suit in May 1984 pursuant to § 205(g)
of the Social Security Act, 42 U.S.C. § 405(g).
In October 1984, Shepard moved for summary judgment alleging a
lack of articulation in support of the ALJ's finding that he did
not "have an impairment or combination of impairments" which
matched the impairments set forth by the Secretary (Tr. 15,
Finding No. 3). Alternatively, Shepard asserted that he met the
following listings: (1) § 2.09 (organic loss of speech); (2)
§ 3.02 (chronic obstructive airway disease); (3) § 3.09 (mycotic
infection of lung); (4) § 3.11 (cor pulmonale); (5) § 4.02(D)
(cor pulmonale); and (6) § 12.04 (functional non-psychotic
disorders). Shepard also asserted that the ALJ did not articulate
a rationale for rejecting his claim that a combination of his
impairments constituted disability. Finally, Shepard contended
that the ALJ improperly applied the Medical-Vocational Guidelines
(hereafter grid) to direct a conclusion that Shepard was not
disabled under the Act.
The Secretary found that the evidence did not establish that
any listing was met or equaled, Shepard did not establish an
exacerbation of his longstanding alcoholism, Shepard's testimony
and medical evidence supported the Secretary's conclusion that
Shepard's impairments did not significantly affect his ability to
perform a full range of sedentary work, and implicitly that the
ALJ's written decision adequately informed the Court of the basis
for the Secretary's final decision.
Shepard brought his claim before this Court and in a slip
opinion entered on May 21, 1985, the Court rejected his
contention that his impairments met or equaled the listings set
forth in §§ 2.09, 3.02, 3.09, 3.11, and 4.02(D). Shepard v.
Heckler, No. 84-1139, slip op. at 9-10 (C.D.Ill., May 21, 1985).
This Court rejected Shepard's contention that he had demonstrated
the applicability of listing subsections 12.04(A)(2), (6), or
(7). Id. at 11. However, the Court held that some of the evidence
in the record could possibly support a finding that Shepard's
chronic alcoholism equaled the listing of subsections 12.04(A)(1)
and (B). Id. at 11-12.
This Court remanded the case to an ALJ so that the Secretary
could articulate its reasons in support of its finding that
Shepard had not established that his impairments met or equaled
any of the listings in Appendix 2. Id. Further, the Court stated
that the ALJ had failed to consider the combined effects of
Shepard's complaints and had inappropriately applied the grid
where evidence of a non-exertional impairment existed. Id. at
During the period of time that this Court had the parties'
motions under consideration, Shepard filed a new application for
benefits on April 10, 1984, in which he alleged disability due to
difficulty breathing, pain and stiffness in his legs, bowel
impairment, irritation of the eyes, and a heart condition (Tr.
289). On July 15, 1985, pursuant to this Court's order, the
Appeals Council vacated its denial of review of the original set
of applications and remanded the case to an ALJ for further
proceedings (Tr. 280). A new ALJ considered the entire case, on
remand, including the second set of applications, and on August
6, 1985, recommended that Shepard be found disabled (Tr.
393-395). As part of his recommended decision, the ALJ found that
Shepard had not established an impairment or combination of
impairments listed by the Secretary. He found that Shepard's
residual functional capacity for a full range of sedentary work
was reduced by constant disabling shortness of breath, which in
combination with his other vocational factors would render him
unable to work (Tr. 398, Findings No. 7 and 11).
The remand ALJ obtained new evidence, including evaluations by
a clinical psychologist and a psychiatrist and heard testimony
from a board certified psychiatrist (Tr. 261, 262). The ALJ
applied the new regulations and recommended that Shepard be found
to have established a listed mental impairment; specifically,
listing 12.02 (Tr. 264, Finding No. 4).
The parties are in dispute as to whether Shepard would have
been found disabled under the old listing had the case properly
been considered under that section of the Act. However, this
Court finds that listing 12.02 (August 28, 1985) differs
significantly enough from former listing 12.04(A)(1) that in its
opinion Shepard would not have been found disabled under the
The Appeals Council adopted the recommended decision of the ALJ
as the final decision of the Secretary on January 9, 1987
modifying recommended Finding No. 4 to show that as of July 23,
1982 Shepard's impairments met the requirements of listing
12.02(A)(2), (3), (4), (5), (6), and (B)(1), (2), (3), (4) (Tr.
256). The Court entered judgment in favor of Shepard on April 23,
1987. Shepard v. Heckler, sub. nom., Shepard v. Bowen, No.
84-1139 (S.D.Ill. April 23, 1987).
Pursuant to 28 U.S.C. § 2412, the Equal Access to Justice Act
(hereafter EAJA), Shepard's attorney petitioned the Court for
attorney's fees. The Secretary opposed the Petition on the
grounds that Shepard did not "prevail" within the meaning of the
EAJA because his receipt of benefits resulted from a change in
circumstance, rather than litigation of the merits. After holding
oral argument on Shepard's petition under EAJA, the Court found
that the benefits awarded to Shepard were the result of a change
in circumstance rather than the litigation of the merits in that
the change in the regulations, in addition to, new evidence in
the record, singly and in combination, constituted a change in
circumstance which caused the receipt of Shepard's benefits in
this case. Therefore, the Court held that Shepard did not prevail
within the meaning of the EAJA because of an intervening change
in circumstance, rather than his litigation. The Court does not
assert that the record before remand and the record after remand
were totally unrelated to one another. However, the Court does
find that an intervening variable, the mental impairment
regulation modification, was a significant factor in the award of
benefits to Shepard rather than Shepard's litigation.
It is ordered that Shepard's Petition for Attorney's Fees
pursuant to 28 U.S.C. § 2412, the Equal Access ...