Hackett v. Barnhart

• Decision Date: 17 January 2007
• Docket Number: No. 06-1066.,06-1066.
• Citation: 475 F.3d 1166
• Parties: Elizabeth HACKETT, Plaintiff-Appellant, v. Jo Anne B. BARNHART, Commissioner of Social Security, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

475 F.3d 1166

Elizabeth HACKETT, Plaintiff-Appellant, v. Jo Anne B. BARNHART, Commissioner of Social Security, Defendant-Appellee.

No. 06-1066.

United States Court of Appeals, Tenth Circuit.

January 17, 2007.

Submitted on the briefs:^* Ann J. Atkinson, Aurora, Colorado, for Plaintiff-Appellant.

William J. Leone, United States Attorney, Kurt J. Bohn, Assistant United States Attorney, Michele M. Kelley, Special Assistant United States Attorney, Office of the General Counsel, Social Security Administration, Region VIII, Denver, Colorado, for Defendant-Appellee.

Before BARRETT, BRORBY, and EBEL, Circuit Judges.

EBEL, Circuit Judge.

ORDER

This matter is before the court on the Commissioner of Social Security's petition for panel rehearing. The panel grants the petition for rehearing, and, as requested by the Commissioner, the panel has modified the opinion previously filed on November 21, 2006. Specifically, the panel has modified footnote 1, and a copy of the amended opinion is attached to this order.

Plaintiff Elizabeth Hackett is appealing the order entered by the district court denying her application for an award of reasonable attorney fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse and remand for further proceedings.

A. Introduction.

In this social security case, plaintiff obtained a district court remand to the Commissioner of Social Security under the fourth sentence in 42 U.S.C. § 405(g), and she is therefore a prevailing party for purposes of EAJA. As such, plaintiff is entitled to recover reasonable attorney fees from the United States "unless the court finds that the position of the United States was substantially justified." 28 U.S.C. § 2412(d)(1)(A).

In the EAJA application that she submitted to the district court, plaintiff requested fees for: (1) her merits appeal to the district court; (2) her merits appeal to this court; and (3) the filing of her EAJA application in the district court. In her opening brief in this appeal, plaintiff has also requested that she be awarded fees for the time spent prosecuting this appeal. The total amount of fees being requested is $13,909.05, and the hourly rates are based on the fixed starting hourly rate under EAJA of $125.00, plus a cost of living adjustment calculated pursuant to the Consumer Price Index. See 28 U.S.C. § 2412(d)(2)(A).

In the underlying administrative decision denying plaintiff's application for social security disability benefits, the Administrative Law Judge (ALJ) mischaracterized the hearing testimony of the vocational expert (VE) when he attempted to satisfy his step-five duties under Haddock v. Apfel, 196 F.3d 1084, 1087 (10th Cir.1999). The ALJ's error under Haddock was the basis for this court's prior reversal and remand to the district court for a sentence-four remand to the Commissioner. See Hackett v. Barnhart, 395 F.3d 1168, 1174-76 (10th Cir.2005). Because the ALJ's analysis at step five was not substantially justified, we conclude that plaintiff is entitled to recover all of the EAJA fees that she is seeking, subject to possible reductions by the district court on remand based on a reasonableness analysis.

B. Waiver Issue.

In this appeal, plaintiff argues that the district court committed reversible error by failing to consider whether the ALJ's unreasonable ruling in the administrative proceedings could support an award of EAJA fees, standing alone, regardless of the reasonableness of the Commissioner's subsequent litigation position in the proceedings before the district court.

Plaintiff's argument raises a waiver issue, because, while plaintiff referred to the ALJ's error in her EAJA application, she did not explicitly argue for an award of EAJA fees based on the ALJ's error. Instead, plaintiff focused exclusively on the "legal theory" advanced by the Commissioner in the district court proceedings, arguing that the Commissioner's "position in this litigation was . . . not substantially justified." Aplt.App., Vol. 2 at 154. Although plaintiff subsequently raised the ALJ's error as a basis for an EAJA award in the reply brief that she submitted to the district court, the court did not address plaintiff's reply brief argument in its order denying her EAJA application.

The EAJA statute simply states that a plaintiff's application for fees "shall also allege that the position of the United States was not substantially justified." 28 U.S.C. § 2412(d)(1)(B) (emphasis added). The Supreme Court has held that: (1) this is merely a "pleading requirement"; and (2) a timely filed EAJA application may be amended to satisfy this pleading requirement. See Scarborough v. Principi, 541 U.S. 401, 414, 423, 124 S.Ct. 1856, 158 L.Ed.2d 674 (2004). In Scarborough, the Court explained its reasoning as follows:

Unlike the § 2412(d)(1)(B) prescriptions on what the applicant must show (his "prevailing party" status and "eligib[ility] to receive an award," and "the amount sought, including an itemized statement" reporting "the actual time expended and the rate at which fees and other expenses were computed"), the required "not substantially justified" allegation imposes no proof burden on the fee applicant. It is, as its text conveys, nothing more than an allegation or pleading requirement. The burden of establishing "that the position of the United States was substantially justified," § 2412(d)(1)(A) indicates and courts uniformly have recognized, must be shouldered by the Government.

Id. at 414, 124 S.Ct. 1856.

Although the Court in Scarborough used the term "pleading requirement," the Court made it clear that the purpose of the requirement is not to provide notice to the government of any substantive arguments or theories of recovery. As the Court stated, "the [not substantially justified allegation] does not serve an essential notice-giving function; the Government is aware, from the moment a fee application is filed, that to defeat the application on the merits, it will have to prove its position was substantially justified." Id. at 416-17, 124 S.Ct. 1856. Instead, "EAJA's ten-word `not substantially justified' allegation is a `think twice' prescription that `stem[s] the urge to litigate irresponsibly.'" Id. at 416, 124 S.Ct. 1856 (quoting Edelman v. Lynchburg Coll., 535 U.S. 106, 116, 122 S.Ct. 1145, 152 L.Ed.2d 188 (2002)). As the Court explained:

By allocating the burden of pleading "that the position of the United States was not substantially justified"—and that burden only—to the fee applicant, Congress apparently sought to dispel any assumption that the Government must pay fees each time it loses. Complementarily, the no-substantial-justification-allegation requirement serves to ward off irresponsible litigation, i.e., unreasonable or capricious fee-shifting demands. As counsel for the Government stated at oral argument, allocating the pleading burden to fee applicants obliges them "to examine the Government's position and make a determination . . . whether it is substantially justified or not."

Id. at 415, 124 S.Ct. 1856 (citation omitted).

In sum, according to Scarborough, § 2412(d)(1)(B) requires only that an EAJA application contain a bare ten-word "allegation" stating that the government's position was not substantially justified, and the statute does not require a plaintiff to set forth any substantive arguments to support the allegation. In addition, as discussed below, once an EAJA application is filed, the government is on notice, based on the plain language of the statute, that it must justify both its position in any underlying administrative proceedings and its position in any subsequent district court litigation. See § 2412(d)(2)(D) (providing that phrase "`position of the United States' means, in addition to the position taken by the United States in the civil action, the action or failure to act by the agency upon which the civil action is based"). Accordingly, we conclude that plaintiff's application satisfied the pleading requirement imposed by § 2412(d)(1)(B), and that she did not waive the particular argument she now raises when she failed to identify it with specificity in her application.

C. Underlying Proceedings.

In his decision denying plaintiff's application for disability benefits, the ALJ made the following step-five findings with regard to the hearing testimony of the VE:

The Administrative Law Judge called upon the vocational expert to name jobs a hypothetical person with the claimant's residual functional capacity and vocational factors described above could perform. The vocational expert testified that such a person would be able to perform work as a call-out operator (DOT 237.367-014; 840 jobs in Colorado and 46,150 nationally) and a surveillance system monitor (DOT 379.367-010; 175 jobs in Colorado and 10,000 nationally).

The vocational expert acknowledged these opinions do not directly correspond with information provided in the Dictionary of Occupational Titles (DOT) and adjustments to the numbers of jobs were made on the following basis. At the hearing, the vocational expert testified that to the extent opinions do not correspond to the DOT, reliance was being placed on education, experience and observations of the jobs as actually performed in the economy. . . . No contrary evidence was presented. The opinions are therefore accepted as an accurate description of the occupations listed above.

Aplt.App., Vol. 3 at 34.

Plaintiff challenged the ALJ's step-five rulings in her subsequent appeal to the district court, arguing that "[t]he ALJ's determination that Mrs. Hackett could perform the jobs of surveillance system monitor and call out operator is unsupported by any substantial evidence, and is contrary to the Dictionary of Occupational Titles." Id., Vol. 1 at 35. In addition, plaintiff explained to the district court that the ALJ had mischaracterized the hearing testimony of the VE:

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