Wheat v. Heckler, 84-1979

• Decision Date: 11 June 1985
• Docket Number: No. 84-1979,84-1979
• Parties: , Unempl.Ins.Rep. CCH 16,148 Donald F. WHEAT, Appellant, v. Margaret M. HECKLER, Secretary, Health & Human Services, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1025

763 F.2d 1025

10 Soc.Sec.Rep.Ser. 48, Unempl.Ins.Rep. CCH 16,148

Donald F. WHEAT, Appellant, v. Margaret M. HECKLER, Secretary, Health & Human Services, Appellee.

No. 84-1979.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 11, 1985.

Decided June 11, 1985.

Milo Alexander, Omaha, Neb., for appellant.

Douglas R. Semisch, Omaha, Neb., for appellee.

Before LAY, Chief Judge, HEANEY and FAGG, Circuit Judges.

LAY, Chief Judge.

Donald Wheat appeals from the denial of his award of attorney's fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. Sec. 2412 (1982). The district court, the Honorable C. Arlen Beam, presiding, initially granted Wheat's application for attorney's fees. However, after considering a motion to reconsider filed by the Secretary of the Department of Health and Human Services, the court denied the award because "the government's position was sufficiently supported by the medical testimony and was, therefore, substantially justifiable within the meaning of the EAJA." We reverse and remand to the district court to enter judgment for attorney fees in favor of Wheat.

Wheat initially applied for disability benefits on January 20, 1976 and was subsequently awarded benefits based on a period of disability beginning August 3, 1975. Disability was based on a finding that Wheat had "chronic, severe, mixed neurosis, acute lumbar strain, secondary to trauma and osteoarthritis of the cervical spine." The Social Security Administration subsequently notified Wheat that it had determined Wheat was able to do substantial gainful activity as of August 1980, and that his eligibility for disability benefits would therefore terminate in October 1980. At Wheat's request, a hearing was held before an administrative law judge (ALJ) on August 18, 1981. Wheat, his wife, and a vocational expert appeared and testified. On December 8, 1981, the ALJ affirmed the earlier decision that Wheat's disability ceased in August 1980. After considering additional evidence submitted by Wheat, the Appeals Council of the Social Security Administration denied a request for review on April 27, 1982, making the ALJ's decision the final decision of the Secretary.

Wheat sought review of the Secretary's decision to terminate his benefits in federal district court. The case was referred to a magistrate to make findings and recommendations as authorized by 28 U.S.C. Sec. 636(b)(1)(B) (1982). The magistrate recommended reversal of the Secretary's decision and reinstatement of Wheat's benefits. The district court adopted the magistrate's findings and recommendations in an order dated February 29, 1984. The Secretary did not appeal. Wheat then filed an application for attorney's fees pursuant to the EAJA. The district court found the Secretary's position was substantially justified and denied the award of attorney fees.

Background

Wheat's extensive medical record at the time of the Secretary's re-examination of his condition in 1980 revealed Wheat had suffered for 26 years from emotional problems. He had been hospitalized in the years 1957-58, 1960-61, 1971-72, 1974, and 1975. A series of medical reports prepared by two treating physicians (Dr. Bhatia and Dr. Jamison), and three consulting physicians (Drs. O'Neil, Sudduth, and Goldberg) and a psychologist (Mr. Leonard) selected by the Secretary, were submitted to the ALJ for purposes of evaluating Wheat's condition at the time of and subsequent to the July 1980 termination notice. While the medical reports revealed some evidence of arthritis and hiatal hernia with some resultant pain, they indicated Wheat's primary impairment is an emotional or functional nonpsychotic mental disorder. Dr. Bhatia, a psychiatrist who has treated Wheat since July 1978, diagnosed Wheat's condition as: (1) depressive reaction, (2) passive-dependent personality, and (3) hypochondriacal neurosis. Dr. Bhatia examined Wheat again on February 13, 1981, and reported further deterioration in Wheat's personal habits and a greater degree of depression. At that time Dr. Bhatia described Wheat as "angry, agitated, restless and anxious," and concluded it was "doubtful" whether Wheat could ever hold gainful employment.

Dr. Jamison, who saw Wheat approximately fourteen times in 1981, diagnosed Wheat's condition as a personality disorder with multiple psychiatric problems, depression, arthritis, and a hiatal hernia. Dr. Jamison stated that although Wheat's osteoarthritis would not, by itself, prevent him from being gainfully employed, his psychiatric impairment did foreclose such employment. Two consulting psychiatrists and an orthopedic surgeon who examined Wheat at the Secretary's request confirmed that Wheat suffered from a personality disorder. Dr. Sudduth examined Wheat on August 18, 1980 and reported that Wheat's behavior was consistent with histrionic personality disorder which is characterized by a tendency to exaggerate physical symptoms. Dr. Goldberg examined Wheat on October 1, 1981 and concurred in the earlier diagnoses of an "over-anxious individual with a reactive depression with an underlying personality structure of passive dependency and inadequacy." Dr. O'Neil, an orthopedic surgeon, examined Wheat on August 4, 1980 for evaluation of low back pain. He reported that Wheat "has degenerative lumbar disc disease by history and findings," but "his major disability is a psychiatric problem with severe anxiety and functional overlay." Dr. O'Neil concluded: "I do not feel that he is capable of any employment at the present time." Two additional reports were submitted to the Appeals Council following the ALJ's decision. After examining Wheat on January 28, 1982, Dr. Sun reported: "his psychiatric disturbance is severe enough to make him a non-functioning individual in terms of working and supporting himself in his work." After examining Wheat on January 13, 1982, Dr. Yadalam and Dr. Swanson reported that he "gives a long history of crying spells, alteration in sleep rhythm, lack of enthusiasm and interest in his daily activities, decrease in energy and sex drive, and recently suicidal ideations."

At the administrative hearing in August 1981, Wheat testified he was unable to work because of arthritis and nerves. He described pain in his lower back and legs which he attributed to arthritis; he also related he takes medication, wears support stockings, and walks with a cane. His last job was as a laborer/steel press operator in 1974-75; he also previously worked as a steel cutter, loader, truck driver, farm laborer, and gas station attendant. He described a number of on-the-job accidents caused by pressure which allegedly makes him accident prone. Wheat testified he can sit for one hour, stand or walk for 15 to 20 minutes, and lift 10 to 15 pounds. His daily routine consists of watching television, listening to music, visiting friends, maintaining his car, and doing housework. Mrs. Wheat corroborated her husband's testimony regarding his complaints of pain and restless sleep. A vocational expert also testified at the ALJ hearing by responding to hypothetical questions phrased by the ALJ. The ALJ asked the vocational expert to assume as true the findings contained in the medical evidence and to consider Wheat's age, education, work experience, and transferable skills. The expert responded that in his opinion Wheat could not perform his past work nor were there any other jobs in the area he could perform. He reasoned that the evidence revealed Wheat's condition has remained relatively unchanged since 1975. The ALJ then changed the hypothetical by instructing the expert to consider only the medical evidence since August 1980. In response, the vocational expert stated Wheat could perform some unskilled light or sedentary work such as packaging, cleaning, or janitorial work. The ALJ then asked the vocational expert to assume Wheat and his wife's testimony as true; the expert responded there would be no jobs Wheat could perform.

The ALJ reviewed the "current" medical evidence (dating from July 1980), the hearing testimony, and his personal observations of Wheat at the hearing, and found Wheat's disability ceased in August 1980. The ALJ recognized Wheat did suffer from the physical and mental impairments described in the medical reports; however, those impairments were "not of such severity as would preclude the performance of substantial gainful activity." The ALJ found no medical evidence supporting Wheat's physical complaints, and therefore focused on Wheat's primary limitation--his emotional condition. The ALJ related the required manifestation findings for functional nonpsychotic disorders that are considered disabling as set forth in the Secretary's regulations. Finding Wheat was only "moderately" restricted in his ability to respond appropriately to supervision, co-workers and customary work pressures, and to perform simple, complex, repetitive and varied tasks, the ALJ concluded that Wheat's "emotional impairment has not been of such severity as would have precluded the performance of all types of substantial gainful activity."

Analysis

Under the EAJA a prevailing party may be awarded attorney's fees if the position of the United States was not "substantially justified." ¹ The test of whether the government's position is substantially justified is one of reasonableness in law and fact ² and the United States has the burden of showing the substantial justification of its position. Cornella v. Schweiker, 728 F.2d 978, 981-82 (8th Cir.1984).

We note at the outset that the burden of proof in the benefit termination proceeding rested with Wheat to show that his disability continued and that he remained entitled to benefits. Weber v. Harris, 640 F.2d 176, 177 (8th Cir.1981). In Weber, this court considered whether the Secretary could properly terminate benefits, after having earlier found a disability. In doing so, the court quoted Miranda v. Secretary of Health, Education and...