Hadden v. Bowen

• Decision Date: 20 July 1988
• Docket Number: No. 87-1469,87-1469
• Citation: 851 F.2d 1266
• Parties: , Unempl.Ins.Rep. CCH 14063A Ruby May HADDEN, Plaintiff-Appellee, v. Otis R. BOWEN, M.D., Secretary of Health and Human Services, Defendant- Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1266

851 F.2d 1266

22 Soc.Sec.Rep.Ser. 341, Unempl.Ins.Rep. CCH 14063A

Ruby May HADDEN, Plaintiff-Appellee, v. Otis R. BOWEN, M.D., Secretary of Health and Human Services Defendant- Appellant.

No. 87-1469.

United States Court of Appeals, Tenth Circuit.

July 20, 1988.

Michael E. Bulson, Utah Legal Services, Inc., Ogden, Utah, for plaintiff-appellee.

Jeffrey Clair, Atty., Appellate Staff, Civ. Div., Dept. of Justice, Washington D.C. (William Kanter, Appellate Staff, Dept. of Justice, Washington, D.C., Richard K. Willard, Asst. Atty. Gen., Washington, D.C. and Brent D. Ward, U.S. Atty., Salt Lake City, Utah, with him on the brief), for defendant-appellant.

Before MOORE and BALDOCK, Circuit Judges, and BOHANON, District Judge ^*.

BALDOCK, Circuit Judge.

The district court awarded plaintiff-appellee Ruby May Hadden (claimant) approximately $1,700 in attorney's fees pursuant to the Equal Access to Justice Act (EAJA) ¹ after she successfully litigated her entitlement to social security disability benefits, 657 F.Supp. 679. The sole issue on appeal is whether the trial court used the correct legal standard in evaluating whether the government's position in the underlying litigation was "substantially justified" within the meaning of the EAJA. The district court held that if the underlying position of the government is not supported by substantial evidence, its position lacks substantial justification for purposes of the EAJA absent extraordinary circumstances. The government contends that the trial court erred as a matter of law by equating a lack of substantial evidence on the merits with a lack of substantial justification warranting an award of attorney's fees under the EAJA. We agree with the government and reverse.

Under the EAJA, the government bears the burden of showing that its position was substantially justified. Kemp v. Bowen, 822 F.2d 966, 967 (10th Cir.1987). To do so, the government must prove that its case had a reasonable basis in law and in fact. See id.; H.R.Rep. No. 1418, 96th Cong., 2d Sess. 10-11, reprinted in 1980 U.S. Code Cong. & Admin.News 4953, 4984, 4989-90. The Supreme Court recently defined the term "substantially justified" as "justified in substance or in the main--that is, justified to a degree that could satisfy a reasonable person." ² Pierce v. Underwood, --- U.S. ----, ---- 108 S.Ct. 2541, 2550, 100 L.Ed.2d 490 (1988). The term means more than "merely undeserving of sanctions for frivolousness." Id. "But a position can be justified even though it is not correct, and ... it can be substantially (i.e., for the most part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact." Id. at n. 2.

In determining whether the government's position was reasonable, the trial judge must make a separate review of the government's position to determine whether it was substantially justified. Weakley v. Bowen, 803 F.2d 575, 579 (10th Cir.1986); Cinciarelli v. Reagan, 729 F.2d 801, 806 (D.C. Cir.1984). The term "position" includes the government's position both in the underlying agency action and during any subsequent litigation. Andrew v. Bowen, 837 F.2d 875, 878 (9th Cir.1988); accord Trahan v. Reagan, 824 F.2d 96, 101 (D.C. Cir.), reh'g granted, 832 F.2d 158 (1987). The government's success or failure on the merits at each level may be evidence of whether its position was substantially justified, but that success or failure alone is not determinative of the issue. See Pierce v. Underwood, --- U.S. at ---- n. 2, 108 S.Ct at 2550 n. 2; H.R.Rep. No. 1418, reprinted in 1980 U.S. Code Cong. & Admin.News at 4989-90. There is no prerequisite that the government's "decision to litigate was based on a substantial probability of prevailing" for the government to defeat a claim for attorney's fees under the EAJA. Id.; United States v. Community Bank & Trust Co., 768 F.2d 311, 314 (10th Cir.1985).

We review the district court's application of the EAJA under an abuse of discretion standard. Pierce v. Underwood, --- U.S. at ----, 108 S.Ct. at 2546. The issue of whether the district court relied on the correct legal standard in applying the EAJA, however, is a matter of law which we review de novo. In formulating its legal standard, the district court focused primarily on the legislative history of the 1985 reenactment of the EAJA in deciding that a lack of substantial evidence is equivalent to a lack of substantial justification. The district court relied on another portion of the House Judiciary Committee Report:

[a]gency action found to be arbitrary and capricious or unsupported by substantial evidence is virtually certain not to have been substantially justified under the Act. Only the most extraordinary special circumstances could permit such an action to be found to be substantially justified under the Act.

H.R.Rep. No. 99-120, 99th Cong., 1st Sess. 9-10, reprinted in 1985 U.S.Code Cong. & Admin.News 132, 138.

This language is contained in the very next paragraph of the House Judiciary Committee Report which the Supreme Court declined to follow in Pierce v. Underwood, --- U.S. at ---- - ----, 108 S.Ct. at 2551. We decline to follow the instant language for substantially the same reasons identified in Pierce v. Underwood, namely (1) it is for the court, not the legislature, to interpret and apply the statutory test, and (2) the 1985 reenactment simply does not indicate that the 1980 statutory test was to be changed to equate the lack of substantial evidence with a lack of substantial justification under the EAJA. Also, the appellate authority declining to modify the 1980 test is persuasive.

We acknowledge that the legislative history, including the House Judiciary Committee Report, is entitled to consideration. Miller v. Comm'r, 836 F.2d 1274, 1282-83 (10th Cir.1988). The weight given an item of legislative history, however, depends upon whether it is a contemporaneous expression of legislative intent and "is sufficiently specific, clear and uniform to be a reliable indicator of intent." Id. at 1282. When the legislative history as a whole is capable of differing interpretations, it may be accorded less weight in interpreting the statute. Id. When the legislative history and the words of the statute plainly conflict, the statutory language will be modified by the legislative history only where there is "unequivocal evidence" of legislative purpose. Id. at 1283.

The legislative history cited above is not contemporaneous with the drafting of the language enacted in 1980 and reenacted in 1985. See Pierce v. Underwood, --- U.S. at ----, 108 S.Ct. at 2550. Moreover, it is inconsistent with the plain meaning of the statute and does not express a clear legislative intent which unequivocally modifies the statutory language. As stated by the Fourth Circuit upon examining the same legislative history: "Congress never intended to adopt this standard.... If Congress had wanted this broad standard, which exceeds any judicial interpretation of the EAJA, it would have amended the statute,..." Pullen v. Bowen, 820 F.2d 105, 108 (4th Cir.1987). Consequently, we find that the district court erred in relying on this portion of the committee report history to interpret the meaning of the term "substantially justified."

This circuit has yet to address the issue of whether a court's determination that there is a lack of substantial evidence supporting the government's position alone establishes that the government's position was not substantially justified under the EAJA. Two previous cases have discussed a substantial evidence determination in deciding whether the claim at issue was substantially justified. In Fulton v. Heckler, 784 F.2d 348 (10th Cir.1986), and Weakley v. Bowen, 803 F.2d 575 (10th Cir.1986), this court reviewed the reasonableness of the government's claim that substantial evidence supported the government's denial of social security benefits. In each case, an independent review of the evidence preceded our finding that the government had not presented enough evidence to substantiate its claim factually and, therefore, the claim was unreasonable and not substantially justified under the EAJA. See Fulton v. Heckler, 784 F.2d at 349; Weakley v. Bowen, 803 F.2d at 578-79. The court did not award fees merely because the trial court or the ALJ had determined that the government's position was not supported by substantial evidence on the merits.

There is agreement among the circuits which have directly addressed this issue. The Second, Fourth, Fifth, Sixth and Eighth Circuits have all concluded that a lack of substantial evidence indicates, but does not conclusively establish, that the government's position concerning a claim was not...