The opinion of the court was delivered by: Magistrate Judge Young B. Kim
MEMORANDUM OPINION and ORDER
On September 1, 2010, this court reversed the Commissioner's decision denying plaintiff Barbara Washington's applications for disability insurance benefits and supplemental security income under the Social Security Act ("SSA") and remanded her case to an administrative law judge ("ALJ") for further consideration. Washington now seeks attorney's fees and costs pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), for the prosecution of her appeal before this court. For the following reasons, Plaintiff's Motion for Attorney's Fees Under the Equal Access to Justice Act and for Entry of Final Judgment Order is granted:
In December 2004, Washington filed applications for SSA benefits, alleging that she was disabled by several physical impairments as of March 2004. (Administrative Record ("A.R.") 69-70.) When the Social Security Administration denied her applications, (id. at 71-80), Washington sought and was granted a hearing before an ALJ, (id. at 392-447). After considering Washington's evidence and consulting medical and vocational experts, the ALJ issued a decision in June 2007, finding that Washington was not disabled. (Id. at 61-68.) Washington then requested a review of the ALJ's decision, (id. at 53), and in September 2007, the Appeals Council granted the request, (id. at 42-44). The Appeals Council vacated the ALJ's decision and remanded the case for a second hearing. (Id. at 43-44.)
The ALJ held a second hearing in October 2008, and after considering Washington's additional evidence and consulting different medical and vocational experts, the ALJ issued a second decision in November 2008, concluding again that Washington was not disabled. (A.R. 23-30.) In reaching this determination, the ALJ applied the required five-step analysis, see 20 C.F.R. §§ 404.1505(a)-(g), 416.920(a)-(g), finding that Washington suffered from severe impairments, which included Meniere's disease and a history of dizziness. (Id. at 25.) At step four, the ALJ assessed Washington's residual functional capacity ("RFC") and determined that she could perform light work with certain restrictions. (Id. at 27.) At step five, the ALJ concluded that Washington could return to her past relevant work as a cashier and security guard. (Id. at 29.)
Washington again requested a review of the ALJ's decision, (id. at 19), however, the Appeals Council denied her request making the ALJ's decision the final decision of the Commissioner, (id. at 8-9). See 20 C.F.R. §§ 404.981, 416.1481. Washington then sought judicial review of the Commissioner's decision and the parties consented to the jurisdiction of this court. See 28 U.S.C. § 636(c). In granting summary judgment to Washington, this court determined that the ALJ made reversible errors in assessing Washington's RFC and credibility, and that the ALJ's hypothetical question to the vocational expert was flawed.
This court may award fees under EAJA if the following four elements are met: (1) the claimant was a "prevailing party"; (2) the government's position was not "substantially justified"; (3) there were no special circumstances that would make an award unjust; and (4) the claimant files a complete and timely application. 28 U.S.C. § 2412(d)(1)(A); Stewart v. Astrue, 561 F.3d 679, 683 (7th Cir. 2009). Here, the only element that the parties contest is whether the Commissioner's position was substantially justified. It is the Commissioner's burden to demonstrate that both its pre-litigation conduct-which includes the decisions of the ALJ and Appeals Council-and its litigation position were substantially justified. Golembiewski v. Barnhart, 382 F.3d 721, 724 (7th Cir. 2004).
As the Seventh Circuit has acknowledged, determining whether the government's position was substantially justified presents a difficult line-drawing task. See United States v. Thouvenot, Wade & Moerschen, Inc., 596 F.3d 378, 381 (7th Cir. 2010). "The case must have sufficient merit to negate an inference that the government was coming down on its small opponent in a careless and oppressive fashion." Id. at 381-82. To negate that inference, the government must show the following: "(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 theory propounded." Conrad v. Barnhart, 434 F.3d 987, 990 (7th Cir. 2006). Put differently, the government must show that its position was "justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565 (1988). Although this determination requires the court to look to both the government's pre-litigation conduct and litigation position, it will "make only one determination for the entire civil action." Conrad, 434 F.3d at 990.
In this case, the government failed to demonstrate that its position was substantially justified. The court remanded the ALJ's decision for three reasons. First, the ALJ failed to properly assess Washington's RFC because he did not discuss what record evidence he relied on when he concluded that Washington could perform her past relevant work as a cashier and security guard. Next, the ALJ erred in his credibility assessment of Washington because the four reasons he gave for rejecting Washington's testimony were flawed and he failed to explain how these reasons led him to reject Washington's testimony. Furthermore, the ALJ summarily discredited Washington's testimony regarding her subjective complaints because her statements were inconsistent with the ALJ's RFC assessment. Finally, the ALJ posed an improper hypothetical question to the vocational expert which failed to take into account the expected frequency of Washington's absenteeism from work.
The Commissioner was not substantially justified in defending the ALJ's RFC finding because the ALJ failed to comply with Social Security Ruling ("SSR") 96-8p, which requires that an ALJ explain the rationale for his assessment of a claimant's RFC. See SSR 96-8p, 1996 WL 374184, at *7 ("The RFC assessment must include a narrative discussion describing how the evidence supports each conclusion, citing specific medical facts (e.g., laboratory findings) and non-medical evidence (e.g., daily activities, observations)."). Here, contrary to SSR 96-8p, the ALJ failed to explain what medical and non-medical evidence supported his finding that Washington was capable of performing light work with certain restrictions. (R. 19, SJ Op. at 23-25.) Instead, the ALJ simply rejected Dr. Rubenfeld's medical opinion and determined that Washington could lift and carry 20 pounds, sit for six hours in an eight-hour workday with a sit/stand option, and balance, stoop, or kneel occasionally, without articulating what evidence he relied on in reaching this conclusion. (Id. at 15.)
Furthermore, the ALJ failed to address Washington's daily activities, the fact that she took college courses online instead of taking courses on campus, or that she needed to be on bed rest one to two days per month. (R. 19, SJ Op. at 24.) The ALJ also did not consider the nature of Washington's Meniere's disease, which produced symptoms that waxed and waned, in assessing her ability to work on a sustained basis. (Id.) The ALJ therefore erred as a matter of law because he failed to include a narrative explanation of how the record evidence supported his RFC assessment that Washington was capable of performing her past relevant work. Stewart, 561 F.3d at 684 ("an ALJ must articulate in a rational manner the reasons for his assessment of a claimant's residual functional capacity"); Samuel v. Barnhart, ...