Madrid v. Astrue

• Court: Court of Appeals for the Tenth Circuit
• Decided: July 18, 2007
• Docket: 06-2235
• Status: Unpublished

Opinion

F I L E D United States Court of Appeals Tenth Circuit UNITED STATES CO URT O F APPEALS July 18, 2007 FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court

TO N Y MA D R ID ,

Plaintiff-Appellant,

v. No. 06-2235 (D.C. No. CIV-04-753-LCS) M ICH AEL J. ASTRU E, * (D . N.M .) Commissioner of the Social Security Administration,

Defendant-Appellee.

OR DER

Before L UC ER O, Circuit Judge, BROR BY, Senior Circuit Judge, and M cCO NNELL, Circuit Judge.

This matter is before the court on appellant Tony M adrid’s Petition for

Panel Rehearing. Upon consideration of the petition, the response submitted by

the Commissioner of the Social Security Administration, and M r. M adrid’s reply,

the panel grants the petition and withdraws its prior order and judgment issued

April 18, 2007. The attached amended order and judgment is issued in its place.

* Pursuant to Fed. R. App. P. 43(c)(2), M ichael J. Astrue is substituted for Jo Anne B. Barnhart as the appellee in this action. OR D ER AND JUDGM ENT **

Plaintiff Tony M adrid appeals from a district court order denying his

motion for attorneys’ fees under the Equal Access to Justice Act (“EAJA”),

28 U.S.C. § 2412(d)(1)(A), based on its finding that the government’s position

was substantially justified. Because the district court acted within its discretion

in making such a finding, we exercise our jurisdiction under 28 U.S.C. § 1291 to

AFFIRM .

I. Background and Procedural History

“The [EA JA] provides for the award of fees and expenses to the prevailing

party in a civil action against the Federal Government, unless the position of the

United States was substantially justified.” Harris v. R.R. Ret. Bd., 990 F.2d 519,

520 (10th Cir. 1993) (quotations omitted). The Supreme Court has held that a

position is substantially justified for purposes of the EAJA if it is “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) (quotation

omitted). In other words, the government’s position must have had a reasonable

basis both in law and fact. See id.

** After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.

-2- M r. M adrid claims he is entitled to attorneys’ fees under the EAJA because

he was the prevailing party in an appeal of the Commissioner’s denial of his

application for social security disability benefits. He filed his application for

benefits in December 2002, alleging an inability to work since September 2002

due to bilateral carpal tunnel syndrome and pain in his neck, shoulders, elbows,

wrists, back, knees, ankles, and feet. After his application was denied,

M r. M adrid obtained a de novo hearing before an administrative law judge

(“ALJ”), at which he appeared pro se.

The ALJ denied the application because he concluded that despite being

afflicted with severe ailments, M r. M adrid retained the residual functional

capacity to perform light work with certain limitations. The ALJ stated that his

decision was based on a careful consideration of all the evidence in the record.

Absent from the record, however, were the results of M r. M adrid’s rheumatoid

factor (“RF”) test, a test commonly used to diagnose rheumatoid arthritis. The

ALJ acknowledged that M r. M adrid had submitted to a rheumatology work-up and

even mentioned that “[t]here [was] a copy of a bill in the record, which

indicate[d] that a rheumatoid factor test was performed.” Aplt. A pp. at 15-16.

But the test results were not in the record, and the ALJ did not inquire into their

whereabouts. Nonetheless, he went on to conclude that M r. M adrid did not suffer

from any impairments included in the regulatory Listing of Impairments,

including the listing for inflammatory arthritis.

-3- M r. M adrid appealed the ALJ’s decision to the Appeals Council and

submitted additional evidence, which the Appeals Council made a part of the

administrative record. This evidence consisted of a note dated January 14, 2004,

from M r. M adrid’s treating physician, Dr. Peter Guerin, stating that “M r. M adrid

has A rthritis” and that “he can return to w ork 5-12-04.” Aplt. App., case

no. 05-2176, at 188. Despite Dr. Guerin’s note, the Appeals Council denied

M r. M adrid’s request for review and allowed the ALJ’s determination of non-

disability to stand. M r. M adrid then filed an action in the district court, which

affirmed the Commissioner’s decision that he is not disabled. He then filed an

appeal in this court.

W e reversed with instructions to remand the case to the Commissioner for

further development of the record concerning M r. M adrid’s claim that he suffered

from a rheumatological disorder. W e held that under the circumstances of this

case “the ALJ committed legal error by not requesting M r. M adrid’s rheumatoid

factor test results.” M adrid v. Barnhart, 447 F.3d 788, 791 (10th Cir. 2006)

(citing 20 C.F.R. § 404.1512(e)). W e further explained,

This failure is especially troubling because M r. M adrid was not represented by counsel at his December 2003 administrative hearing, the test results were in existence at the time of the hearing and apparently available, and the ALJ was aware the test was performed.

Id. Following our remand, M r. M adrid filed a motion in the district court for

attorneys’ fees as the prevailing party under the EAJA.

-4- The district court denied M r. M adrid’s request for fees because it

determined that the Commissioner’s position was substantially justified. The

court reasoned that an ALJ’s duty to develop the record “does not transform the

A.L.J. into a pro se plaintiff’s advocate.” Aplt. App. at 24 (citing Henrie v. HH S,

13 F.3d 359, 361 (10th Cir. 1993)). It held that the ALJ had satisfied his duty of

inquiry in this case by considering M r. M adrid’s extensive testimony about the

nature of his impairments and their impact on his physical abilities. The court

also noted that the results of M r. M adrid’s RF test would not necessarily be

dispositive because “disability determinations turn on the functional

consequences, not the causes, of a claimant’s condition.” Id. (quotation omitted).

The court went on to explain that “the mere diagnosis of a medical condition . . .

says nothing about the severity of the condition.” Id. (quotation and alterations

omitted). Thus, it reasoned, even without the results of the RF test, reasonable

minds could disagree as to whether M r. M adrid could perform the essential

functions of light work. The court therefore concluded that the C ommissioner’s

position was substantially justified and attorneys’ fees were not warranted under

the EA JA. This appeal followed.

II. Substantial Justification Analysis

Standard of Review

W e review the district court’s determination that the government’s position

was substantially justified for an abuse of discretion. Pierce, 487 U.S. at 559;

-5- Gilbert v. Shalala, 45 F.3d 1391, 1394 (10th Cir. 1995). “An abuse of discretion

occurs when the district court bases its ruling on an erroneous conclusion of law

or relies on clearly erroneous fact findings,” Kiowa Indian Tribe of Okla. v.

Hoover, 150 F.3d 1163, 1165 (10th Cir. 1998), or when the district court’s

decision is “arbitrary, capricious or whimsical, or results in a manifestly

unreasonable judgment,” M oothart v. Bell, 21 F.3d 1499, 1504-05 (10th Cir.

1994) (quotations omitted). Our obligation is to “carefully scrutinize the district

court’s exercise of its discretion, but we may not substitute our own judgment for

that of the trial court.” Kiowa Indian Tribe, 150 F.3d at 1165 (quotation and

alteration omitted).

Scope of the Government’s Position

In determining whether the government’s position was substantially

justified under the EAJA, we must examine “the government’s present and past

stances on the basis of both the court and agency records.” Cummings v. Sullivan,

950 F.2d 492, 496 (7th Cir. 1991). W e therefore look to “the litigating position

of the [Commissioner] before the district court and the agency’s prelitigation

conduct, its action or inaction, the position that gave rise to the litigation in the

district court.” Id. The scope of the analysis is mandated not only by the text of

the statute itself, see 28 U.S.C. § 2412(d)(1)(B) (explaining that substantial

justification question “shall be determined on the basis of the record (including

the record with respect to the action or failure to act by the agency upon which

-6- the civil action is based),” but also by Commissioner, INS v. Jean, 496 U.S. 154,

159 (1990), where the Court clarified the parameters of the term “position”:

The fact that the “position” is . . . denominated in the singular, although it may encompass both the agency’s prelitigation conduct and the [government’s] subsequent litigation positions, buttresses the conclusion that only one threshold determination for the entire civil action is to be made.

The Court further reasoned that “the EAJA–like other fee-shifting statutes–favors

treating a case as an inclusive whole, rather than as atomized line-items.” Id. at

161-62.

W e recently applied this comprehensive analysis to the C ommissioner’s

position in another case involving a successful appeal of an adverse social

security ruling and resultant request for attorneys’ fees under the EAJA. See

Hackett v. Barnhart, 475 F.3d 1166 (10th Cir. 2007). In the merits phase of that

case, we remanded to the Commissioner because w e concluded that the A LJ’s

determination of non-disability was based on a mischaracterization of the

vocational expert’s testimony. W e then held that the claimant’s motion for

attorneys’ fees should have been granted because “the ALJ’s attempt to satisfy his

step-five duties . . . was not substantially justified.” Id. at 1175. W e reached this

conclusion despite the Commissioner’s reasonable litigation argument, explaining

that, under the facts of that case, the Commissioner’s litigation position could not

“cure” its prior unreasonable conduct. Id. at 1174-75. A cure was impossible

because the Commissioner’s litigation position was based on entirely new legal

-7- theories meant to justify the ALJ’s decision. This, we concluded, violated a

fundamental rule of administrative law – “that we may not properly affirm an

administrative action on grounds different from those considered by the agency.”

Id. at 1175 (quotation omitted). Ultimately, we held in Hackett that the

government’s position, considered as a whole w as unreasonable, even though its

“posture[] on individual matters may [have] be[en] more or less justified.” Jean,

496 U.S. at 161.

The Commissioner’s Position

Finally, we turn to the record and what it reveals of the C ommissioner’s

position in this case. M r. M adrid argues that because the merits panel, like the

merits panel in Hackett, found legal error in the ALJ’s analysis, the

Commissioner’s position a fortiori was not substantially justified. But this case

differs from Hackett in two crucial respects. First, the Commissioner’s position

at the administrative level was not wholly unreasonable even though the ALJ

erred in failing to request the results of M r. M adrid’s RF test. Second, the

Commissioner’s basic legal argument has remained unchanged, from the outset of

this case to now.

W e do not disagree with M r. M adrid’s contention that there was significant

evidence before the Commissioner supporting his claims of multiple joint pain.

Indeed, the medical record underlying the merits decision is replete with such

evidence. According to the records M r. M adrid provided this court, he began

-8- complaining of joint pain in late 2002, not just in his hands and wrists, but in his

elbows, shoulders, knees, and feet. He was diagnosed with mild degenerative

joint disease in his knees, and on examination other joints were tender as well. In

June 2003, he was sent for a rheumatology work-up and the RF test was

performed.

All of this evidence was in the record before the A LJ, who nonetheless

determined, because the test results were not before him, that M r. M adrid did not

suffer from a rheumatological disorder. In denying benefits, however, the ALJ

acknowledged M r. M adrid’s non-exertional impairments, including pain, and

found that they prevented him from performing the full range of light or even

sedentary work. Ultimately, the A LJ concluded that despite M r. M adrid’s

impairments, which, he concluded, prevent M r. M adrid from resuming any of his

past work, there remain a number of jobs at the light exertional level that he can

still perform. This decision was based, in part, on M r. M adrid’s own testimony,

which the ALJ was uniquely positioned to accept or reject. See Casias v. Sec’y of

Health & H um an Servs., 933 F.2d 799, 801 (10th Cir. 1991) (recognizing that the

ALJ is “the individual optimally positioned to observe and assess witness

credibility.”). The ALJ also took note of M r. M adrid’s job as a busboy, which he

was engaging in part-time at the time of the hearing, and which is categorized at

the medium exertional level. As we mentioned earlier, in challenging the A LJ’s

decision, M r. M adrid provided the Appeals Council with a note from his doctor

-9- stating that he has arthritis, but that despite this evidence, the Appeals Council

denied M r. M adrid’s request for review.

W ith respect to his litigation position, the Commissioner has consistently

argued that a diagnosis of arthritis does not mean that M r. M adrid is disabled

within the meaning of the Social Security Act and that despite the ALJ’s failure to

request the results of the RF test, his determination of non-disability was

substantially justified based on the record as a whole.

W e conclude that the Commissioner’s position in this case, considered “as

an inclusive whole,” Jean, 496 U.S. at 162, was reasonable in law and fact. Our

case law makes clear that a diagnosis of a condition does not establish disability.

The question is w hether a person’s impairment significantly limits his ability to

engage in substantial gainful activity. Bernal v. Bowen, 851 F.2d 297, 301

(10th Cir. 1988). Here, the ALJ clearly erred in rejecting M r. M adrid’s claim of

arthritis without obtaining the results of the RF test, and that action, standing

alone, may not have been substantially justified. But the ALJ made a number of

other findings leading to his ultimate conclusion that M r. M adrid has the capacity

to perform a limited range of light work, none of which were disturbed on appeal.

In addition, the Commissioner’s legal theory is supported by the facts. The

record reveals that in December 2003, M r. M adrid was engaging in fairly

strenuous physical labor, albeit part-time, even though he was suffering from

arthritis. It appears from Dr. Guerin’s note that he may have taken time off after

-10- receiving the diagnosis, but even so, Dr. Guerin opined that he could return to

work within four months. Thus, rather than bolster his case, the additional

evidence that M r. M adrid submitted to the Appeals Council undermined his

contention that he is disabled w ithin the meaning of the Social Security Act. It

defines disability as the “inability to engage in any substantial gainful activity by

reason of any . . . physical . . . impairment which . . . has lasted or can be

expected to last for a continuous period of not less than 12 months.” 42 U.S.C.

§ 423(d)(1)(A). W e assume, based on the nature of his condition, that M r.

M adrid’s arthritis was expected to last more than 12 months. W e must also

acknowledge, however, that M r. M adrid’s own doctor apparently believed he

could work with the condition even though his work at the time was bussing

tables at a restaurant.

The purpose of the EA JA “is to eliminate for the average person the

financial disincentive to challenge unreasonable governmental actions.” Jean,

496 U.S. at 163. Based on the foregoing, we simply cannot conclude that the

district court abused its discretion in concluding that the Commissioner acted

reasonably in this case.

The judgment of the district court is therefore AFFIRMED.

Entered for the Court

W ade Brorby Senior Circuit Judge

-11-