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March 29, 2001


The opinion of the court was delivered by: Morton Denlow, U.S. Magistrate Judge


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.


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.

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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