United States District Court, W.D. Washington, Seattle
REPORT AND RECOMMENDATION
MARY ALICE THEILER, Chief Magistrate Judge.
Having prevailed in his appeal of a decision by the Commissioner of the Social Security Administration (Commissioner), plaintiff moves for an award of $7, 328.40 in attorney's fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. (Dkts. 26 and 29.) The Commissioner objects to plaintiff's request for an award of attorney's fees and alternatively argues that the number of hours requested is excessive. (Dkt. 32.) Having considered the parties' submissions, the balance of the record, and the governing law, the Court recommends that plaintiff's motion (Dkt. 29) be GRANTED and that plaintiff be awarded $7, 328.40 in attorney's fees.
BACKGROUND AND DISCUSSION
Plaintiff filed applications for Disability Insurance Benefits and Social Security Income in May 2009. Following a hearing, an Administrative Law Judge (ALJ) found plaintiff not disabled. Plaintiff appealed the decision to the Appeals Council, which denied plaintiff's request for review. Plaintiff filed a civil action in this Court for review of the Commissioner's final decision. The Court issued a Report and Recommendation that recommended remanding the matter for further administrative proceedings. (Dkt. 22.) The Court found that the ALJ erred at step two by failing to consider whether plaintiff's anxiety disorder, diagnosed in February 2011 by David Widlan, Ph.D., was severe. ( Id. at 5.) The Court also found that the ALJ erred by giving significant weight to the opinion of Suzanne Canning, M.D., but failing to account for her opinions that plaintiff's attention and focus issues might make it difficult for him to perform simple and repetitive tasks as well as more detailed and complex tasks and might result in him needing special or additional instructions. ( Id. at 11-12.) The Honorable Robert S. Lasnik adopted the Report and Recommendation. (Dkt. 24.)
In moving for attorney's fees, plaintiff asserts that the Commissioner's position in opposing his claim was not substantially justified and that, as the prevailing party, he is entitled to an award of attorney's fees. He seeks attorney's fees for a total of 39.4 attorney hours and requests that the fees be calculated at the hourly rate of $186 per hour. (Dkt. 29 at 2.) The Commissioner opposes both plaintiff's entitlement to fees and the number of hours requested. She requests, if the Court concludes that her position was not substantially justified, that plaintiff's total billable hours be reduced, but she does not specify how many hours should be deducted.
A. Plaintiff's Entitlement to Fees
Under the EAJA, with certain exceptions not applicable here, the Court awards fees and expenses to a prevailing party in a suit against the government unless it concludes that the position of the government was "substantially justified." 28 U.S.C. § 2412(d)(1)(A). The Commissioner's position is deemed substantially justified if it meets the traditional standard of reasonableness, meaning it is "justified in substance or in the main, or to a degree that could satisfy a reasonable person." Lewis v. Barnhart, 281 F.3d 1081, 1083 (9th Cir. 2002) (quoted sources and internal quotation marks omitted). While the Commissioner's position need not be correct, it must have "reasonable basis in law and fact." Id. (citing Pierce v. Underwood, 487 U.S. 552, 566 n. 2 (1988)).
The Commissioner "bears the burden of demonstrating substantial justification." Thangaraja v. Gonzales, 428 F.3d 870, 874 (9th Cir. 2005) (quoting Gonzales v. Free Speech Coalition, 408 F.3d 613, 618 (9th Cir. 2005)). Specifically, the Commissioner's position must be " as a whole, substantially justified." Gutierrez v. Barnhart, 274 F.3d 1255, 1258-59 (9th Cir. 2001) (emphasis in original). That position also must be substantially justified at each stage of the proceedings. Corbin v. Apfel, 149 F.3d 1051, 1052 (9th Cir. 1988); see also Hardisty v. Astrue, 592 F.3d 1072, 1078 (9th Cir. 2010). Accordingly, the Commissioner must establish that she was substantially justified both in terms of (1) "the underlying conduct of the ALJ" and (2) the "litigation position defending the ALJ's error." Gutierrez, 274 F.3d at 1259; see also Meier v. Colvin, 727 F.3d 867, 872 (9th Cir. 2013) ("[W]e first consider the underlying agency action, which... is the decision of the ALJ. We then consider the government's litigation position."). Thus, the Ninth Circuit has stated that "if the government's underlying position was not substantially justified, we [must award fees and] need not address whether the government's litigation position was justified.'" Tobeler v. Colvin, 749 F.3d 830, 832 (9th Cir. 2014) (citing Meier, 727 F.3d at 870).
A district court's "holding that the agency's decision... was unsupported by substantial evidence is... a strong indication that the position of the United States'... was not substantially justified." Id. (quoting Thangaraja, 428 F.3d at 874) ("[I]t will be only a decidedly unusual case in which there is substantial justification under the EAJA even though the agency's decision was reversed as lacking in reasonable, substantial and probative evidence in the record.'") (citation omitted)). Indeed, the Ninth Circuit has commented that "[i]t is difficult to imagine any circumstance in which the government's decision to defend its actions in court would be substantially justified, but the underlying decision would not." Sampson v. Chater, 103 F.3d 918, 922 (9th Cir. 1996) (quoting Flores v. Shalala, 49 F.3d at 562, 570 n. 11 (9th Cir. 1995)).
With respect to the ALJ's step two error-failing to consider whether plaintiff's anxiety disorder was a severe impairment-the Commissioner argues that the ALJ's decision was reasonably based in law and fact because the ALJ properly rejected the opinion Dr. Widlan, the only doctor who diagnosed anxiety disorder. But whether the ALJ properly rejected Dr. Widlan's opinion when assessing plaintiff's RFC says nothing about whether the step two finding was erroneous. Rather, it goes to the harm resulting from the ALJ's error. See Tobeler, 749 F.3d at 834 (government's argument that the ALJ's error was harmless was a litigation position that did not provide substantial justification for the underlying position). Because, as the Court previously found, the ALJ erred at step two, the ALJ's decision was not substantially justified. See Sampson, 103 F.3d at 922.
The Commissioner also contends that she was substantially justified in defending the ALJ's consideration of Dr. Canning's opinion because reasonable minds could differ. As noted above, the Court found that the ALJ erred because the ALJ neither incorporated all of Dr. Canning's opinions into the RFC nor provided specific and legitimate reasons for rejecting those opinions. The Court thus concluded that the ALJ's decision was not supported by substantial evidence. See Meier, 727 F.3d at 872 (ALJ makes a decision not supported by substantial evidence when he fails to offer specific and legitimate reasons for rejecting a physician's opinion); Valentine v. Comm'r of Soc. Sec. Admin., 574 F.3d 685, 690 (9th Cir. 2009) (ALJ makes a decision not supported by substantial evidence when he formulates a RFC that fails to take into account all of claimant's limitations). Because the ALJ's decision was not supported by substantial evidence, it was not substantially justified. See Meier, 727 F.3d at 869.
In sum, the Court concludes that the Commissioner has not met her burden of demonstrating substantial justification. The Court, therefore, finds no basis for the Commissioner's opposition ...