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CROSBY v. HALTER
March 29, 2001
CLIDE R. CROSBY, PLAINTIFF,
WILLIAM A. HALTER, COMMISSIONER OF SOCIAL SECURITY, DEFENDANT.
The opinion of the court was delivered by: Morton Denlow, U.S. Magistrate Judge
MEMORANDUM OPINION AND ORDER
This case is before the Court on Plaintiff's application for attorney's
fees pursuant to the Equal Access to Justice Act ("EAJA"),
28 U.S.C. § 2412. The Seventh Circuit Court of Appeals reversed and
remanded for further consideration this Court's decision which had
affirmed the Administrative Law Judge's decision denying disability
benefits to Plaintiff. The principal issue presented is whether the
Commissioner was substantially justified in its legal and factual
positions. The Court grants Plaintiff's application in the amount of
$24,827.86, because the Court
finds the Commissioner's position was not substantially justified and
because Plaintiff's application for attorney's fees is reasonable.
On January 26, 1995, Plaintiff filed concurrent applications for Social
Security Disability Insurance Benefits and Supplemental Security Income
under Titles II and XVI of the Social Security Act, 42 U.S.C. § 416(i),
423, and 1381a. Plaintiff claimed he was disabled because he suffered
from back and shoulder pain that prevented him from working. Plaintiff
alleged the onset of his disability on January 21, 1994. An
Administrative Law Judge ("ALJ") found the Plaintiff was not disabled and
denied his claims. Plaintiff requested a review of the ALJ's decision,
which the Appeals Council denied.
Plaintiff sought judicial review. This Court granted the
Commissioner's motion for summary judgment and affirmed the ALJ's
decision. Crosby v. Apfel, 76 F. Supp.2d 928 (N.D.Ill. 1999). Plaintiff
appealed to the Seventh Circuit. On appeal, Plaintiff argued the ALJ
applied an incorrect legal standard and that the decision was not
supported by substantial evidence. Specifically, Plaintiff claimed the
ALJ applied an incorrect legal standard, improperly rejected the
Plaintiff's testimony regarding his disability, did not consider
significant evidence which conflicted with the decision, did not offer
sufficient explanations supporting his conclusions, made independent
medical determinations, and improperly relied upon Plaintiff's testimony
describing his daily activities to support a finding that he was not
disabled. In agreeing with Plaintiff, the Seventh Circuit reversed and
remanded for further administrative proceedings holding the ALJ's
decision was not supported by substantial evidence. Crosby v. Apfel,
2000 WL 1909641 (7th Cir. Dec. 29, 2000).
Plaintiff submitted an EAJA fee application in the amount of
$9,226.79, for the work performed by his attorney, Frederick J. Daley and
his associates, at the district court level; and $15,601.17, for the
services of Barry A. Schultz, who represented Plaintiff before the
Seventh Circuit Court of Appeals. These fee applications also
included time spent on their fee applications and cost
reimbursements. The Commissioner has challenged Plaintiff's entitlement
to fees and, alternatively, the reasonableness of the requested fees.
Plaintiff has assigned his EAJA fees to counsel.
II. STANDARD FOR FEE AWARD UNDER THE EAJA
This Court has recently dealt with similar issues under EAJA. Smith
v. Apfel, 2001 WL 199505 (N.D.Ill., Feb. 27, 2001). The EAJA directs a
court to award attorney's fees and other expenses to private parties
who prevail in litigation against the United States if, among other
conditions, the Government's position was not "substantially justified."
28 U.S.C. § 2412(d)(1)(A) and (B). The position of the United States
includes both its position during litigation and its position during the
administrative proceedings. 28 U.S.C. § 2412(d)(2)(D). The
substantial justification standard requires the government to show its
position was grounded in "(1) a reasonable basis in truth for the facts
alleged; (2) a reasonable basis in law for the theory propounded; and (3)
a reasonable connection between the facts alleged and the legal theory
advanced." United States v. Hallmark, 200 F.3d 1076, 1080 (7th Cir.
2000). This Court is required to examine the government's position in
both the prelitigation and litigation contexts. Id. When errors are
made by the ALJ, the Commissioner
is held accountable. Cummings v. Sullivan, 950 F.2d 492, 496
(7th Cir. 1991).
The standard of "substantially justified" is satisfied if there is a
genuine dispute or if reasonable people could differ as to the
appropriateness of the contested action. Pierce v. Underwood, 487 U.S. 552,
565, 108 S.Ct. 2541, 2550 (1988). "While the parties' postures on
individual matters may be more or less justified, the EAJA — like
other fee-shifting statutes — favors treating a case as an
inclusive whole, rather than as atomized line items." Commissioner, INS
v. Jean, 496 U.S. 154, 161-162, 110 S.Ct. 2316, 2320-2321 (1990). This
Court is required to make a global assessment to determine whether the
government was substantially justified in continuing to push forward at
each stage. Hallmark, 200 F.3d at 1081.
The Government's success on the merits is relevant to the "substantial
justification" determination. In Pierce, the Supreme Court observed:
"Conceivably, the Government could take a position that is not
substantially justified, yet win; even more likely, it could take a
position that is substantially justified, yet lose. Nevertheless, a string
of losses can be indicative; and even more so a string of successes."
Pierce, 487 U.S. at 568, 108 S.Ct. at 2551. When considering the issue
of EAJA fees, this Court must reexamine the factual and legal
circumstances of the case from a different perspective than used at any
other stage of the proceeding. Hallmark, 200 F.3d at 1080.
III. THE COMMISSIONER HAS NOT MET ITS BURDEN OF PROOF THAT ITS
POSITION WAS SUBSTANTIALLY JUSTIFIED
A. Substantial Evidence vs. Substantial Justification
Two different standards apply at the merits stage and the EAJA stage.
During the merits portion of a case, the court's determination must be
supported by "substantial evidence" in the record "which is evidence a
reasonable mind might accept as adequate to support a conclusion." Smith
v. Apfel, 231 F.3d 433, 437 (7th Cir. 2000). At the EAJA stage, fees are
to be awarded unless the government's position was substantially
justified. The position of the Commissioner is "substantially justified"
if it is "justified to a degree that could satisfy a reasonable person"
and have a "reasonable basis in law and fact." Pierce, 487 U.S. at 565,
108 S.Ct. at 2550. Although the language defining the substantial
evidence standard is strikingly similar to the standard for substantial
justification, the two are not the same. However, an examination of the
decision on the merits is important in the EAJA determination. For
example, a finding that the government's position on the merits was
"arbitrary and capricious" may be at odds with a later conclusion that
the government's position was "substantially justified." Hallmark, 200
F.3d at 1081 (remanding case for re-examination of ...
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