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NELSON v. SULLIVAN

October 4, 1991

EDWARD NELSON, Plaintiff,
v.
LOUIS W. SULLIVAN, Secretary of Health and Human Services, Defendant



The opinion of the court was delivered by: SHADUR

 MILTON I. SHADUR, UNITED STATES DISTRICT JUDGE

 This case (originally assigned to the calendar of this Court's then colleague, Honorable George Leighton) was first brought before this Court when counsel for plaintiff Edward Nelson ("Nelson") applied for an award of attorneys' fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. *fn1" This Court's August 13, 1991 opinion found that the merits of the issues posed by the parties in that respect could not be dealt with because of the absence of a necessary precondition: the existence of a final judgment in Nelson's favor. In accordance with this Court's direction, Secretary of Health and Human Services Louis Sullivan ("Secretary") has since applied for, and this Court has entered, the necessary final judgment in Nelson's favor based upon Secretary's decision awarding benefits to Nelson.

 At this point the EAJA issues are ripe for determination. Secretary does not quarrel with Nelson's potential entitlement to EAJA coverage -- he was clearly a "prevailing party" and has less than $ 2 million in net worth -- but instead argues that:

 
1. Secretary's position was "substantially justified," which if true would defeat Nelson's claim entirely.
 
2. As a second line of defense, the fees request is excessive in amount.

 This opinion treats those issues in turn.

 Substantial Justification

 Pierce v. Underwood, 487 U.S. 552, 565-66, 101 L. Ed. 2d 490, 108 S. Ct. 2541 (1988) (citations omitted) defines the "substantially justified" defense under Section 2412(d)(1)(A) in these terms:

 Thus EAJA does not enact an automatic fee-shifting regime, which would come into play whenever Secretary (or any governmental agency) had lost on the merits.

 In this instance Secretary advances two levels of asserted "substantial justification" for the legal position that was advanced by his predecessor Otis Bowen but was rejected by Judge Leighton and then by our Court of Appeals ( Nelson v. Bowen, 855 F.2d 503 (7th Cir. 1988)). Neither is persuasive.

 For one thing, Secretary argues that there was substantial justification for the government's contention that the determination of Secretary's Appeals Council was subject to review only under a "substantial evidence" standard, rather than de novo as our Court of Appeals held (855 F.2d at 506). But that is simply wrong: What the Court of Appeals applied was the well-established rule that a purely legal question -- whether or not Nelson's additional evidence was material -- is for the court to decide as an original matter. For that proposition Nelson, id. cited not only the Ninth Circuit's decision in Booz v. Secretary, 734 F.2d 1378, 1380 (9th Cir. 1984) but our Court of Appeals' own earlier decision in Godsey v. Bowen, 832 F.2d 443, 444 (7th Cir. 1987). No contention to the contrary can be viewed as "reasonable" in Pierce terms (and hence as "substantially justified" for EAJA purposes).

 Secretary's other contention fares no better. Essentially he seeks to convert the Court of Appeals decision into one of weighing evidence, as to which he urges that the view of the Administrative Law Judge ("ALJ"), which became Secretary's own, was reasonable. That however mischaracterizes the issue. What the Court of Appeals did not to was to make a factual determination -- instead it looked at the other evidence before the ALJ to determine the question of ...


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