United States District Court, D. Arizona
BERNARDO P. VELASCO, Magistrate Judge.
This action commenced when Plaintiff Rick Derr sought judicial review of Defendant's decision denying his applications for disability insurance benefits and supplemental security income. Upon consideration of the parties' briefs on the issue, this Court entered an Order reversing the Commissioner's decision and remanding the matter for: (1) an award of benefits based upon a finding of disability commencing November 1, 2007; and (2) further proceedings to determine whether Plaintiff's disability onset date occurred prior to November 1, 2007. (Amended Order (Doc. 41)). Pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), Plaintiff now seeks attorneys' fees in the amount of $10, 541.16 for time that attorneys Phillip B. Verrette, Patrick R. McNamara, and Eric Schnaufer spent working on his case. (Plaintiff's Motion & Memorandum for Attorneys' Fees (Docs. 43, 44; see also Plaintiff's Reply (Doc. 46)). Defendant has filed a Response in opposition to Plaintiff's EAJA Petition (Doc. 45) and Plaintiff has filed a Reply (Doc. 46). For the following reasons, the Court grants in part Plaintiff's Motion for Attorney's Fees.
I. PROCEDURAL HISTORY
The Court initially entered an order revers[ing] the Commissioner's final decision with a remand for further proceedings consistent with this opinion. The ALJ shall, on remand, credit [treating] Dr. Mittleman's opinion as true, and credit Plaintiff's statements as true. On remand the ALJ shall make a determination regarding onset date and reviewable findings regarding substance use.
(Doc. 36, p. 23) (citation omitted). Thereafter, Defendant filed a motion to alter or amend the judgment (Doc. 38), which the Court granted, in part, to the extent that it clarified its holding (Doc. 40) and issued an Amended Order (Doc. 41; see also Amended Judgement). In pertinent part, the Amended Order and Judgment reflected that the Commissioner's decision was reversed and the matter was remanded for: (1) an award of benefits based upon a finding of disability commencing November 1, 2007; and (2) further proceedings to determine whether, in light of Plaintiff's alleged disability onset date of October 1, 2006, his disability onset date occurred prior to November 1, 2007. (Amended Order (Doc. 41, p. 23); see also Doc. 42)).
The EAJA authorizes federal courts to award reasonable attorney's fees, court costs, and other expenses when a party prevails against the United States, unless the court finds that the government's position was substantially justified or that special circumstances make an award unjust. 28 U.S.C. § 2412(d)(1)(A); see also Tobler v. Colvin, 749 F.3d 830, 832 (9th Cir. 2014); Meier v. Colvin, 727 F.3d 867, 870 (9th Cir. 2013). Defendant does not contest that Plaintiff is a prevailing party. See e.g. Akopyan v. Barnhart, 296 F.3d 852, 854-55 (9th Cir. 2002); Gutierrez v. Barnhart, 274 F.3d 1255, 1257 (9th Cir. 2001). However, Defendant contends that Plaintiff is not entitled to fees under the EAJA because Defendant's position was substantially justified. Defendant, alternatively, argues that the fees requested should be reduced as unreasonable.
A. SUBSTANTIAL JUSTIFICATION
Defendant argues that an award of attorneys' fees should be denied because her position was substantially justified. (Doc. 45, pp. 1-4). "Substantially justified" means "justified in substance or in the main'-that is, justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565, (1988); see also Lewis v. Barnhart, 281 F.3d 1081, 1083 (9th Cir. 2005). "Put differently, the government's position must have a reasonable basis both in law and fact.'" Meier, 727 F.3d at 870 (9th Cir. 2013) (quoting Pierce, 487 U.S. at 565). Furthermore, the EAJA's reference to the government's position encompasses "both the government's litigation position and the underlying agency action giving rise to the civil action." Meier, 727 F.3d at 870 (citations omitted). Thus, if the government's underlying position was not substantially justified, the Court must award fees and need not address whether the government's litigation position was justified. Tobler, 749 F.3d at 832 (citation omitted). The government bears the burden of showing that its position was substantially justified. Id.
In the context of a Social Security disability determination, "district courts should focus on whether the government's position on the particular issue on which the claimant earned remand was substantially justified, not on whether the government's ultimate disability determination was substantially justified." Hardisty v. Astrue, 592 F.3d 1072, 1078 (9th Cir. 2010) (citing Flores v. Shalala, 49 F.3d 562, 569 (9th Cir. 1995)); see also Tobler, 749 F.3d at 834-35 n.1). A position can be substantially justified pursuant to the EAJA even when the position is ultimately incorrect. Pierce, 487 U.S. at 566 n.2 ("a position can be justified even though it is not correct, and we believe 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."). The test for determining whether a position was substantially justified, therefore, focuses on whether "a reasonable person could think it correct[.]" Id. If "there is a genuine dispute..." between reasonable minds then the position is "substantially justified" pursuant to the EAJA. Id. at 565 (internal quotation marks omitted). However, the government's defense of "basic and fundamental errors" cannot be considered as substantially justified. Shafer v. Astrue, 518 F.3d 1067, 1071-72 (9th Cir. 2008).
In this case, the Court found that Defendant's final decision merited remand because the ALJ erroneously rejected the opinion of Plaintiff's treating psychiatrist Dr. Mittleman. In this regard, the Court found that: substantial evidence of record did not support the ALJ's invalidation of Plaintiff's December 2008 statement to Dr. Mittleman "that he had been drug and alcohol free for over a year" (Doc. 41, p. 13); the ALJ unreasonably concluded "that Plaintiff was not forthright with Dr. Mittleman in an effort to mislead' or dupe' Dr. Mittleman into prescribing a stimulant replacement for methamphetamine" in light of the fact that the ALJ expressly found that Plaintiff suffered from ADHD, a medical impairment for which a stimulant is an established treatment ( Id. (the Court also stated that "Plaintiff could not have been more forthcoming with his treating providers about his substance abuse.")); the ALJ erred "by speculating that Dr. Mittleman did not know that Plaintiff worked part-time..." in light of record evidence indicating Dr. Mittleman was aware of this fact and knew, as well, that Plaintiff lived in an "RV" at his place of employment ( Id. at p. 14); and in contravention of Ninth Circuit case law advising that a physician's statements of improvement must be read in context of the overall diagnostic picture that he draws and that it is error for an ALJ to rely on isolated instances of improvement over a period of time to rule against a claimant, "[t]he ALJ erroneously relied on a few select notations that Plaintiff was feeling better' or pretty good', was doing well' or was stable' on current meds', or was getting eight to nine hours of interrupted sleep a night as evidence that his functioning was inconsistent with allegations of disability" ( Id. at pp. 14 (citing Garrison v. Colvin, 759 F.3d 995, 1017 (9th Cir. 2014); Holohan v. Massanari, 246 F.3d 1195, 1205 (9th Cir. 2001)). Moreover, as to this last error, the Ninth Circuit has pointed out that reports of improvement "must also be interpreted with an awareness that improved functioning while being treated and while limiting environmental stressors does not always mean that a claimant can function effectively in a workplace." Garrison, 759 F.3d at 1017-18 (9th Cir. 2014) (citing Hutsell v. Massanari, 259 F.3d 707, 712 (8th Cir. 2001); Scott v. Astrue, 647 F.3d 734, 739-40 (7th Cir. 2011)) (footnote omitted). As discussed in the Court's Amended Order (Doc. 41, pp. 14-15) any notation of improvement from time to time in no way vitiated Dr. Mittleman's opinion.
The Court also held that the ALJ erred in finding that Plaintiff's testimony with regard to the severity and functional consequences of his symptoms was "not very credible.'" (Doc. 41, p. 17 (citing Tr. 30)). In this regard, the Court found that: records cited by the ALJ did not rationally support his decision ( Id. at pp. 18-19); the ALJ failed to cite to any specific instances in the record to support his conclusion that Plaintiff's non-compliance with the prescribed medical regimen "does not support the alleged intensity and duration of pain and subjective complaints" ( Id. at p. 19); despite the ALJ's finding to the contrary, Plaintiff's described activities did not contradict his testimony regarding his limitations ( Id. at p. 21); contrary to the ALJ's finding otherwise, on the instant record, Plaintiff's part-time work did not correlate to the ability to work full-time ( Id. ); no evidence of record supported a conclusion that Plaintiff's past work as an auto body repairman, as actually performed, required a reading level above the fourth grade ( Id. at p. 21); and Plaintiff's statements about exercising did not support the ALJ's negative credibility finding ( Id. a pp. 21-22).
The Court credited Dr. Mittleman's opinion and Plaintiff's testimony as true. ( Id. at p. 23). However, the Court acknowledged that
even crediting Dr. Mittleman's testimony as true regarding Plaintiff's alcoholism and substance abuse, it is not clear that Plaintiff would be disabled from his alleged [October 1, 2006] date of onset because there is no medical evidence in the record reflecting any medical treatment between the October 2006 alleged onset of disability and his first presentation to the Marana Health Clinic for an initial appointment on August 30, 2007. See Tr. 350-370. Additionally, Dr. Mittleman stated in July 2009 that alcohol or substance abuse did not contribute to any of Plaintiff's limitations, and that Plaintiff had been drug free for "around" two ...