Flores v. Shalala

• Decision Date: 05 June 1995
• Docket Number: No. 92-56039,92-56039
• Citation: 49 F.3d 562
• Parties: , Unempl.Ins.Rep. (CCH) P 14550B Thomas FLORES, Plaintiff-Appellant, v. Donna E. SHALALA, Secretary, Health and Human Services, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 562

49 F.3d 562

47 Soc.Sec.Rep.Ser. 129, Unempl.Ins.Rep. (CCH) P 14550B

Thomas FLORES, Plaintiff-Appellant, v. Donna E. SHALALA, Secretary, Health and Human Services Defendant-Appellee.

No. 92-56039.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 31, 1994.

Decided March 9, 1995.

As Amended on Denial of Rehearing June 5, 1995.

Lawrence D. Rohlfing, Santa Fe Springs, CA, for plaintiff-appellant.

Dennis J. Mulshine, Dept. of Health and Human Services, San Francisco, CA, for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before: D.W. NELSON, REINHARDT and BRUNETTI, Circuit Judges.

REINHARDT, Circuit Judge:

Plaintiff-appellant Thomas Flores appeals the district court's denial of his motion for attorney's fees, costs and expenses pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. Sec. 2412(d), in his action against the Secretary of Health and Human Services ("the Secretary"). ¹ Flores contends that he is entitled to the attorney's fees, costs and expenses incurred in challenging the denial of his application for disability benefits in the district court, and in pursuing benefits at the administrative level after the district court remanded his case to the Secretary. We reverse the district court's order denying attorney's fees for the litigation in the district court, because the Secretary's position on the procedural issues that led to remand was not substantially justified. We also conclude that Flores is entitled to attorney's fees for expenses incurred during the post-remand administrative proceedings.

I.

Determining whether Flores is entitled to attorney's fees requires us to retrace the tortured procedural history of this case. This history spans several years and includes two administrative hearings, each of which was followed by a challenge to the ALJ's decision in district court.

Flores injured his back on the job in June 1985. He was 47 years old at the time of his injury and had worked as a journeyman plumber since the age of 15. In July 1988, he filed for disability insurance benefits under Title II of the Social Security Act, claiming that he had been unable to work since June 10, 1985 due to his lower back injury. After his application was denied both initially and upon reconsideration, Flores made a timely request for an administrative hearing, which was held in September 1989.

The evidence submitted at this hearing included medical records describing his back injury. In addition, Flores submitted a vocational evaluation report from the Testing, Evaluation and Management Work Evaluation Center ("the TEAM report"). The TEAM report assessed Flores' aptitudes, interests, and prospects for future employment. The results were compiled from approximately ten days of testing and interviewing, during which Flores completed several standardized tests evaluating his mathematical ability, mechanical ability, reading skills, dexterity, and visual ability. Among the findings of this report were that Flores demonstrated "an approximate fifth grade math level" and that he "does not appear able to return to work at this time."

The Administrative Law Judge ("the ALJ") issued a decision on December 19 1989. In this decision, the ALJ concluded that Flores back injury did not meet the requirements set forth in Section 1.05(C) of the medical listings and, therefore, that he was not presumptively disabled. ² The ALJ then found that Flores' back injury precluded him from returning to his past relevant work as a journeyman plumber, shifting the burden to the Secretary to demonstrate the existence of jobs that Flores could perform. The ALJ concluded, however, that Flores was not disabled under the statute, because there were a significant number of jobs in the national economy that he could still do, despite his condition. Specifically, the ALJ found that Flores could work as a "sales person in a discount or hardware store." In support of this conclusion, the ALJ relied on the testimony of a vocational expert who appeared at Flores' hearing and was asked by the ALJ whether someone of Flores' age, education, and skills, who was capable of walking or standing for extended periods with some alternation of walking/standing/sitting, would be able to perform any jobs in the national economy. The vocational expert replied that a person with those characteristics would be capable of performing semiskilled sales work at a discount or hardware store. Neither the question posed to the vocational expert nor the ALJ's ultimate decision took into account the impact that Flores' cognitive limitations, documented in the TEAM report, would have on his ability to work. In fact, the hypothetical questions asked by the ALJ did not include any reference to the TEAM report and the ALJ's decision did not even mention it.

Flores appealed the ALJ's denial of benefits to the Social Security Appeals Council. The Appeals Council affirmed, making the ALJ's determination the final decision of the Secretary. Flores then filed an action in district court, asserting that the Secretary's decision was not supported by substantial evidence. Flores argued that the evidence showed that he "is disabled and has been continuously disabled as that term is defined in the Social Security Act."

The parties agreed to proceed before a United States Magistrate Judge, pursuant to 28 U.S.C. Sec. 636(c). Upon summary judgment motions from both Flores and the Secretary, Magistrate Judge Venetta S. Tassopulos entered a Memorandum Opinion and Order of Remand on May 16, 1991. The court affirmed the ALJ's finding that Flores had not shown that he was presumptively disabled under Section 1.05(C). Nevertheless, it remanded Flores' case to the Secretary for further proceedings because the ALJ had improperly disregarded the TEAM report, both in the hypothetical question posed to the vocational expert and in the ALJ's ultimate decision. The court instructed the ALJ to consider the TEAM report on remand in determining whether there were any jobs that Flores was capable of performing despite his impairments.

At the second ALJ hearing, Flores testified that he was getting more exercise, taking less medication, and working three to four days per week managing his brother's apartment. This time, the ALJ considered the cognitive limitations documented in the TEAM report. In a decision dated March 27, 1992, the ALJ found that Flores was disabled for a closed period beginning June 10, 1985 and ending March 7, 1988, but was not disabled thereafter. The Appeals Council affirmed the second ALJ decision, and Flores again sought to have the district court review the Secretary's decision. The parties again agreed to proceed before a magistrate and again the district court determined that the Secretary had erred with respect to Flores' case. In a decision dated February 14, 1994, Magistrate Judge Elgin Edwards found that Flores had indeed been disabled at all times since June 10, 1985 and not just during the closed period.

During the time between Magistrate Judge Tassopulos' remand order and the second ALJ decision, Flores filed a motion for attorney's fees with the district court. At Flores' request, the motion was stayed pending a decision in the second ALJ hearing on the merits of his application. After the second ALJ decision (but before Magistrate Judge Edwards' decision finding that Flores was still disabled), the district court entered an order denying the fee motion. In that decision, dated July 31, 1992, Magistrate Judge Tassopulos reasoned that the Secretary's position was "substantially justified," because Flores had not raised the issue of the closed period of disability--the issue on which he prevailed in his second ALJ hearing--at the time of his initial hearing before the ALJ. ³ Flores timely appealed the fee ruling to this court.

II.

Initially, we must decide whether Flores is entitled to attorney's fees for the first proceeding before the district court, the proceeding that resulted in a remand to the ALJ for purposes of considering the TEAM report. Resolution of this issue requires us to reconsider the rules that govern our determination regarding whether the Secretary's position is "substantially justified," in light of the Supreme Court's recent decisions in Melkonyan v. Sullivan, 501 U.S. 89, 111 S.Ct. 2157, 115 L.Ed.2d 78 (1991) and Shalala v. Schaefer, --- U.S. ----, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993). ⁴ We conclude that we may resolve the question of Flores' entitlement to attorney's fees by considering only the procedural issues on which the district court reversed--specifically, the Secretary's failure to take into account the vocational report discussing the claimant's cognitive limitations. In this case, we need not consider the Secretary's position on any other questions, including the ultimate issue of disability.

In denying attorney's fees, the district court focused on whether, ultimately, the Secretary was substantially justified in its conclusion on the question of disability. The denial of fees was based in part on the now-reversed results of the post-remand administrative hearing in which Flores was found disabled only for a closed period. The court did not consider whether the Secretary was substantially justified in her position on the procedural issue that caused it to remand. In view of Schaefer, we conclude that the district court's focus on the post-remand proceedings concerning the ultimate issue of disability was erroneous. Instead, the district court should, at least initially, have considered whether the Secretary was substantially justified with respect to the procedural issue on which Flores prevailed in district court. Because the Secretary's position on the procedural issue was not substantially justified, Flores is entitled to recover attorney's fees. ⁵

A.

A party that prevails against the United States in a civil...