Cowand v. Astrue

Filing 33

ORDER, granting Plaintiff's 30 Motion for Attorney Fees; Defendant is ordered to pay attorneys' fees in the amount of $6,844.36. Signed by Judge David G Campbell on 10/15/12.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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No. CV-11-00964-PHX-DGC

Karen L. Cowand,
Plaintiff,

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v.

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ORDER

Michael J. Astrue, Commissioner of Social
Security Administration,

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Defendants.

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In an Amended Order dated June 7, 2012, the Court reversed and remanded the

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decision of the Administrative Law Judge (“ALJ”) for further proceedings pursuant to 42

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U.S.C. § 405(g). On August 13, 2012, Plaintiff filed an application for attorneys’ fees

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under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Doc. 30. On

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August 28, 2012, Defendant filed an objection (Doc. 31), and on September 5, 2012,

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Plaintiff filed a reply (Doc. 32). For the reasons that follow the Court will grant the

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application for attorneys’ fees.

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I.

Legal Standard.

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28 U.S.C. § 2412(d)(1)(A) provides that “a court shall award to a prevailing party

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other than the United States fees and other expenses . . . unless the court finds that the

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position of the United States was substantially justified or that special circumstances

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made an award unjust.” In appeals of administrative decisions regarding benefits in the

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Ninth Circuit, “attorney’s fees are to be awarded to a party winning a sentence four [of

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section 405(g)]1 remand unless the commissioner shows that his position with respect to

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the issue on which the district court based its remand was substantially justified.” Lewis

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v. Barnhart, 281 F.3d 1081, 1083 (9th Cir. 2002) (internal citations and quotations

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omitted). The Supreme Court has clarified the statutory text, holding that “a position can

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be justified even though it is not correct, and we believe it can be substantially . . .

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justified if a reasonable person could think it correct, that is, if it has a reasonable basis in

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law and fact.” Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988).

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II.

Analysis.

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The Court vacated the decision of the ALJ because it did not provide adequate

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reasons for discounting the testimony of the treating physician and ignored the statement

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of a lay witness. Doc. 31 at 4-6, 10-11. Despite that holding, Defendant contends that

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attorneys’ fees should not be awarded because the government’s position satisfies the

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lower standard of substantial justification even if it fails the more exacting standard of

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being supported by “substantial evidence.” Doc. 31 at 1-2, 4-5; see Robbins v. Soc. Sec.

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Admin., 466 F.3d 880, 882 (9th Cir. 2006) (holding that a decision to deny benefits will

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be vacated “only if it is not supported by substantial evidence or is based on legal

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error.”). The Court will consider each of the issues upon which remand was based to

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determine whether the government’s position had a “reasonable basis in law and fact.”

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Pierce, 487 U.S. at 566 n.2; Lewis, 281 F.3d at 1083.

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A.

Testimony of Dr. Douglas Campbell.

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With respect to Dr. Campbell’s testimony, the ALJ concluded that the physician’s

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opinion was “too restrictive . . . given the clinical notes.” Tr. at 29. The Court held that

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the ALJ reached this conclusion without citing specific statements in the clinical notes

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that tended to show that Campbell’s opinion was actually too restrictive. Doc. 27 at 5. In

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District Courts may remand under “sentence four” or “sentence six” of section
405(g). Only sentence four remands – those in which the District Court “makes a
determination as to the correctness of the Secretary’s position” – qualify plaintiffs as
“prevailing parties” for an award of attorneys’ fees. Flores v. Shalala, 49 F.3d 562, 568
(9th Cir. 1995) (citing Shalala v. Schaefer 509 U.S. 292 (1993)). In this case the Court
issued a sentence four remand. Doc. 27.
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defense of the ALJ’s opinion, Defendant cited to “numerous findings not cited by the

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ALJ” which the Court rejected because its analysis must be “based on the reasoning and

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factual findings offered by the ALJ – not post hoc rationalizations that attempt to intuit

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what the adjudicator may have been thinking.” Doc. 27 at 6 (quoting Bray v. Comm’r of

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Soc. Sec. Admin., 554 F.3d 1219, 1225 (9th Cir. 2009)). Ultimately the Court concluded

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that the ALJ “failed to set forth clear and convincing reasons for discounting the opinion

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of Plaintiff’s treating physician.” Doc. 27 at 6.

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Defendant emphasizes that the Court does not “dispute” the ALJ’s findings with

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respect to Campbell’s testimony and suggests that providing the specific citations to the

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portions of the clinical notes that the ALJ mentioned did not “create” the basis for the

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ALJ’s conclusion, but rather “bolstered” a basis that already existed. Doc. 31 at 4. In

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order to hold that the government’s position was substantially justified, however, the

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Court must find that the government’s position had a reasonable basis in fact and law.

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Pierce, 487 U.S. at 566 n.2. The Court need not consider whether the government’s

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ultimate position on disability was correct, but rather whether the government was

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substantially justified with respect to the procedural errors that led to remand. Flores v.

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Shalala, 49 F.3d 562, 572 (9th Cir. 1995).

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The procedure the ALJ must follow in order to reject the opinion of a treating

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physician is well settled. Thomas v. Barnhart, 278 F.3d 947, 957 (9th Cir. 2002). The

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ALJ is required to make “findings setting forth specific legitimate reasons for [rejecting

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the testimony] that are based on substantial evidence in the record . . . The ALJ can meet

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this burden by setting out a detailed and thorough summary of the facts and conflicting

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clinical evidence, stating his interpretation thereof, and making findings.” Id. (citation

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omitted). The ALJ’s conclusory assertion regarding the treating physician’s testimony

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does not meet this requirement. Doc. 27 at 4. The government tried to ameliorate the

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problem by citing specific evidence that the ALJ might have relied upon (Doc. 27 at 5),

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but the law requiring the Court to rely solely on the ALJ’s reasoning and factual findings

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is based on “[l]ong-standing principles” of law. Bray, 554 F.3d at 1225. The Court
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cannot find that the ALJ’s opinion or Defendant’s arguments in this Court have a

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“reasonable basis in law.” Pierce, 487 U.S. at 566 n.2. Accordingly, the government’s

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position is not substantially justified with respect to the discounted testimony of Dr.

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Campbell.

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B.

Lay witness testimony.

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The record contained a report of a statement by Plaintiff’s husband James Cowand

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related to Plaintiff’s activities and functioning. Tr. at 185-92; Doc. 27 at 10. The ALJ

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did not address the report in her findings, and the Court found the failure to be clear legal

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error. Doc. 27 at 10. The ALJ “must consider lay witness testimony concerning a

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claimant’s ability to work.” Stout v. Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1053 (9th

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Cir. 2006) (citing Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir. 1993); 20 C.F.R.

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§ 404.1513(d)(4) & (e)). Such testimony “is competent evidence and therefore cannot

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be disregarded without comment.” Id. (emphasis in original; citation and alteration

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omitted); see 20 C.F.R. § 404.1545(a)(3).

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The ALJ did not set forth specific, legitimate reasons for discounting Mr.

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Cowand’s assertions, and the government does not offer any justification as to why that

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such an omission was reasonable. Instead, the government again argues that the Court

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did not “dispute” that Mr. Cowand’s testimony “merely echoed Plaintiff’s subjective

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complaints,” which the ALJ properly discounted.

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Defendant calls the failure to consider the testimony “harmless error,” but that misstates

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the relevant legal test. Doc. 31 at 5. The Court must decide if the procedural error was

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substantially justified: if it had a reasonable basis in law and fact. Pierce, 487 U.S. at

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566 n.2. Because Defendant does not dispute the law regarding the treatment of lay

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witness testimony, nor offer any justification for the ALJ’s failure to comply with that

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law, the Court cannot find that the government’s position was substantially justified.

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III.

Doc. 31 at 4; Doc. 27 at 7-10.

Conclusion.

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The Court finds that the position of the United States was not substantially

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justified. Pursuant to 28 U.S.C. § 2412(d)(1)(a) the Court awards Plaintiff the undisputed
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amount of $6,844.36. Doc. 32 at 8.

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IT IS ORDERED:

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Plaintiff’s application for attorneys’ fees (Doc. 30) is granted.

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Defendant is ordered to pay attorneys’ fees in the amount of $6,844.36.

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Dated this 15th day of October, 2012.

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