United States District Court, D. Oregon
OPINION AND ORDER
F. BECKERMAN United States Magistrate Judge.
matter comes before the Court on Theresa Knight's
(“Knight”) application pursuant to the Equal
Access to Justice Act (“EAJA”), 28 U.S.C. §
2412(d), for reimbursement of attorney's fees she
incurred in litigating her case. The Commissioner of the
Social Security Administration (“Commissioner”)
opposes Knight's application on the ground that the
Commissioner's litigation position was
“substantially justified, ” a finding which would
preclude a fee award under the EAJA. See Decker
v. Berryhill, 856 F.3d 659, 661 (9th Cir. 2017); 28
U.S.C. § 2412(d)(1)(A). For the reasons that follow, the
Court grants Knight's application for fees under the
applied for disability insurance benefits and supplemental
security income under Titles II and XVI of the Social
Security Act. She alleged that her ability to work was
limited by a variety of ailments, including bipolar disorder,
posttraumatic stress disorder (“PTSD”),
depression, and arthritis. An Administrative Law Judge
(“ALJ”) determined that Knight had the
residential functional capacity (“RFC”) to
perform a modified version of the light exertion work, and
that there were jobs existing in sufficient numbers in the
national economy that Knight could perform. The ALJ therefore
concluded that Knight was not disabled and denied her
applications for benefits.
the Social Security Appeals Council denied Knight's
petition for review, thereby making the ALJ's decision
the Commissioner's final decision, Knight timely appealed
to federal court. On appeal, Knight argued that the ALJ erred
by, inter alia, failing to: (1) offer legally
sufficient reasons for discounting the opinion evidence
provided by her treating doctor, Diane Powell (“Dr.
Powell”),  (2) properly account for the lay witness
testimony provided by Knight's partner, Jay Dee Barry
(“Barry”), (3) conclude that Knight meets or
equals listings 12.04 and 12.06, (4) offer specific, clear,
and convincing reasons for discrediting Knight's symptom
testimony, and (5) formulate an RFC and VE hypothetical that
accounted for all credible limitations.
Opinion and Order dated January 10, 2017, the Court reversed
the Commissioner's decision and remanded for an award of
benefits. In concluding that the Commissioner's decision
should be reversed, the Court agreed with Knight that the ALJ
had failed to offer legally sufficient reasons for
discounting the opinion evidence provided by her treating
doctor, Dr. Powell, and noted that another treating provider
had drawn a diagnostic picture similar to Dr. Powell.
Knight v. Colvin, No. 1:15-cv-02402-SB, 2017 WL
89573, at *8-10 & n.6 (D. Or. Jan. 17, 2017). The Court
also agreed that the ALJ had failed properly to account for
the lay witness testimony provided by Barry. Id. at
*10. Specifically, the Court observed that the ALJ
assigned Barry's testimony “great weight, ”
yet the ALJ failed to account for Barry's testimony
regarding Knight in assessing Dr. Powell's opinion
evidence or in formulating the RFC. See id.
(“explaining that if an ALJ finds lay testimony
credible, ‘the ALJ errs by failing to incorporate the
limitations found in that testimony into the claimant's
RFC' and the hypothetical posed to the VE” (quoting
Hughes v. Colvin, No. 13-cv-00480-SI, 2014 WL
3546861, at *4 (D. Or. July 16, 2014))).
Opinion and Order, the Court also addressed a dispute about
whether Knight met or equaled listing 12.04(C)(2), which is
satisfied when there is a “[m]edically documented
history of a chronic affective disorder of at least [two]
years' duration that has caused more than a minimal
limitation of ability to do basic work activities, with
symptoms or signs currently attenuated by medication or
psychosocial support, ” as well as “[a] residual
disease process that has resulted in such marginal adjustment
that even a minimal increase in mental demands or change in
the environment would be predicted to cause the
individual to decompensate[.]” Id. (citation
omitted). The Court found that the ALJ erred in concluding
that Knight was not presumptively disabled under listing
12.04(C)(2) because (1) Dr. Powell opined that Knight
satisfied the criteria referenced above and the ALJ had
failed to provide sufficient reasons for discounting her
opinion, which was entitled to great deference under Ninth
Circuit case law; (2) the Commissioner relied on post
hoc rationalizations for the ALJ's decision; and (3)
a sister district court had observed that listing 12.04(C)(2)
does not require evidence of past decompensation.
Id. at *10-11.
on the above errors, the Court found that the RFC, and the VE
hypothetical derived therefrom, was defective. Id.
at *11. Thus, even if the Court were incorrect in finding
that the Knight was presumptively disabled under listing
12.04, remand was necessary because an RFC that fails to take
into account a claimant's credible limitations is
defective. See id. Ultimately, the Court
concluded that a remand for an immediate award of benefits
was appropriate because if the improperly discredited
evidence were credited as true (the only credit-as-true
criteria at issue on appeal), the ALJ would have been
required to find Knight disabled. Id. at *12.
Court entered judgment on January 10, 2017, remanding to the
ALJ for an award of benefits. The Commissioner did not appeal
the decision. Knight then moved for attorney's fees
pursuant to the EAJA, which the Commissioner opposed. The
motion was taken under advisement on June 7, 2017.
EAJA provides, in relevant part:
[A] court shall award to a prevailing party other than the
United States fees and other expenses . . . incurred by that
party in any civil action . . . brought by or against the
United States . . ., unless the court finds that the position
of the United States was substantially justified or that
special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A). The phrase “fees and
other expenses” is defined to include “reasonable
attorney fees.” Id. § 2412(d)(2)(A).
“When the Commissioner seeks to avoid paying attorney
fees for a prevailing party in a Social Security case, it is
the Commissioner's burden to ‘show[ ] that her
position with respect to the issue on which the court based
its remand was ‘substantially justified.'”
Decker, 856 F.3d at 664 (quoting Flores v.
Shalala, 49 F.3d 562, 569 (9th Cir. 1995)).
“Substantially justified” means that the
Commissioner's litigation position had a
“reasonable basis both in law and fact, ” and was
“justified to a degree that could satisfy a reasonable
person.” Id. (citation and quotation marks
omitted). However, a claimant's “success on the
merits is not dispositive of an EAJA application, ” nor
is the Commissioner substantially justified in opposing the
merits simply because precedent did not squarely foreclose
her litigation position. Id.