Samuel Riddle v. Secretary of Health and Human Services

817 F.2d 1238

• Court: Court of Appeals for the Sixth Circuit
• Decided: July 9, 1987
• Docket: 86-5228
• Status: Published

Opinions

NATHANIEL R. JONES, Circuit Judge.

Samuel Riddle appeals from the district court’s denial of attorney’s fees under the Equal Access to Justice Act (“EAJA”), 5 U.S.C. § 504 (1982 & Supp. Ill 1985); 28 U.S.C. § 2412 (1982 & Supp. Ill 1985). The district court based the denial upon its determination that the position of the United States was “reasonable,” and so was substantially justified. This presents us with the question whether the legislative history of the 1985 reenactment of the EAJA obliges us to change our definition of substantially justified to something more than merely “reasonable.” We conclude that a revised definition is called for, and reverse the district court’s order denying attorney’s fees.

I.

The claimant, Samuel Riddle, was born December 22, 1942. He worked as a self-employed farmer until December 1981, when he was injured in a serious automobile accident. Since the accident, Mr. Riddle has suffered from double vision due to a traumatic bilateral sixth cranial nerve paralysis, a ventilatory impairment due to orthopedic problems, neck pain and limited neck flexibility due to a fractured neck,, and residual pulmonary problems.

Mr. Riddle applied for disability benefits on May 6, 1982. The application was denied initially and again on reconsideration. After conducting a hearing and reviewing the evidence, the administrative law judge concluded that the plaintiff could perform sedentary work and, therefore, was not disabled. This determination became the final decision of the Secretary when the Appeals Council denied review on July 1, 1983.

Mr. Riddle appealed this final decision of the Secretary to the district court, and the district court granted summary judgment in claimant’s favor. The district court pointed out that all of Mr. Riddle’s treating physicians documented organic causes for his alleged disability. Dr. O’Bryan, his pulmonary specialist, opined that claimant was severely disabled and without possibility of returning to work within one year. He felt that Mr. Riddle was orthopedically disabled, with a permanent ventilatory impairment of a severe nature. Dr. Binegar, who had performed a muscle transplant on claimant’s right eye, noted that Mr. Riddle could only be comfortable when wearing an eyepatch. He therefore advised claimant not to work around heavy equipment or to perform tasks requiring binocular vision. Another treating physician, Dr. Riherd, recommended that claimant begin range of motion therapy, but said that claimant no longer needed to wear a neck brace. This doctor expressed no opinion regarding Mr. Riddle’s ability to return to work.

The Secretary conceded that claimant could no longer perform his previous work. The Secretary contended that Mr. Riddle nevertheless had the residual functional capacity for sedentary work. The district court rejected this contention as unsupported by substantial evidence:

The record contains only three pieces of evidence favorable to the Secretary, none of which demonstrates the residual functional capacity to perform sedentary work. Those three pieces of evidence are: (1) the examination of Dr. R. Taylor (Tr. 216-217); (2) the examination of Dr. Samuel Weeks (Tr. 226); and (3) the finding of the Administrative Law Judge whereas [sic] plaintiff’s complaints of pain were found not credible (Tr. 75 Finding No. 4).

As previously mentioned the notes of Dr. Taylor are in large part not legible. Plaintiff's various ailments are scribbled on a report, and as far as can be determined there was no medical evidence demonstrating plaintiff’s ability to engage in sedentary employment nor was there a statement by Dr. Taylor that plaintiff possessed the residual functional capacity to engage in sedentary employment. As such this report (the record is unclear as to whether Dr. Taylor actually examined plaintiff) cannot constitute substantial evidence for finding plaintiff able to perform sedentary labor.

The consultative examination rendered by Dr. Weeks without benefit of a personal examination consists of a one sentence report: “Severe now but should not last for 12 months.” The report is not accompanied by medical findings. This statement conflicts with the Secretary’s findings as the Administrative Law Judge concedes plaintiff has a severe impairment which precludes a return to his former employment.

Lastly is the conclusion of the Administrative Law Judge that plaintiff’s pain is not credible. Although the Administrative Law Judge’s conclusions are to be given deference whereas plaintiff’s credibility is concerned, Beavers v. Secretary of Health, Education and Welfare, 577 F.2d 383 (6th Cir.1978), this finding must be supported by some evidence. Weaver v. Secretary of Health and Human Services, 722 F.2d 310 (6th Cir.1983). Here there is no evidence of record which conflicts with plaintiff's complaints of pain. Conversely, the evidence overwhelmingly documents their organic source.

As such the Secretary has failed to establish by substantial evidence that plaintiff has the residual functional capacity to engage in sedentary employment.

Riddle v. Heckler, No. C83-0238-O(B), slip op. at 8-10 (W.D. Ky. Oct. 23, 1985).

Following this reversal of the Secretary's denial of benefits, claimant petitioned for an award of $1,350 in attorney’s fees under the EAJA. The district court denied the petition, briefly stating that although the Secretary’s decision was not supported by substantial evidence, the Secretary’s position was reasonable and, therefore, substantially justified. Claimant appeals, arguing in part that subsequent to the 1985 reenactment of the EAJA the Secretary’s position should not be deemed substantially justified merely because it is reasonable.

II.

Congress, recognizing the economic deterrents to contesting governmental action, passed in 1980 the Equal Access to Justice Act. See 28 U.S.C. § 2412(d). The EAJA specifically provides that a court “shall award” to a prevailing party in a civil suit (other than a tort action) brought by or against the United States the fees and other expenses incurred by that party 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).

Had this statute not yet been interpreted, we would begin our interpretation of the 1980 statute by following the canons of statutory construction and reading the plain language while ignoring momentarily the legislative history of the statute. See, e.g., United States v. Apfelbaum, 445 U.S. 115, 121-23, 100 S.Ct. 948, 952-53, 63 L.Ed.2d 250 (1980). Applying this hypothetical de novo construction, we note at the outset that the syntax of the statute suggests that the presumption is that a prevailing party will receive attorney’s fees unless and until the government demonstrates that it falls within the exception set forth — that its position was substantially justified or special circumstances exist. This leads to the question of what the term “substantially justified” would mean if unexplicated by legislative history. The adjective “substantial,” while connoting various meanings, generally indicates something that is “sturdy,” “solid,” or “firm,” something that is not “imaginary” or “illusive.” 2 Webster’s Third New International Dictionary Unabridged 2280 (1965). Thus, if we were to read the term “substantially justified” outside of any context, we might assume that it indicated something firmly grounded or solidly based.

The courts, however, were not faced with the task of defining “substantially justified” in a vacuum. The legislative history behind the 1980 enactment of the EAJA suggested how that term might be interpreted — albeit the history pointed to two different interpretations. The House Report proposed that:

The test of whether or not a Government action is substantially justified is essentially one of reasonableness. Where the Government can show that its case had a reasonable basis both in law and fact, no award will be made.

H.R.Rep. No. 96-1418, 96th Cong., 2nd Sess. 10, reprinted in 1980 U.S. Code Cong. & Admin. News 4984, 4989. This legislative history appears to have been the basis for this circuit’s current definition of “substantially justified.” See Trident Marine Const., Inc. v. District Engineer, 766 , 980 (6th Cir.1985) (“Whether or not the government’s position is substantially justified is basically a question of reasonableness.”). However, the Court of Appeals for the District of Columbia held that another aspect of the legislative history called for a “test ... more stringent than ‘one of reasonableness.’ ” Spencer v. NLRB, 712 F.2d 539, 558 (D.C.Cir.1983) (citation omitted). This legislative history consisted of the Senate Judiciary Committee’s rejection of an amendment that would have changed the pertinent language from “substantially justified” to “reasonably justified,” S.Rep. No. 253, 96th Cong., 1st Sess. 1, 4 (1979). In light of the ambiguous legislative history, both the Sixth Circuit’s test and the D.C. Circuit’s test were supportable, although the D.C. Circuit’s standard might have comported more with the plain language of the statute.

Section 2412(d) as passed in 1980, however, was avowedly experimental. It was subject to a sunset provision; unless it was reenacted before October 1, 1984, it would be repealed. See Pub.L. No. 96-481, tit. II, § 204(c), 94 Stat. 2329 (1980). An amended and permanent version of the Act was passed by both the House and the Senate on October 11, 1984, but it was vetoed by President Reagan in November of 1984 (on grounds not relevant here). Eventually, a permanent version of the Act was passed in 1985. The House Report on this present Act states that it:

extends and improves the Equal Access to Justice Act, which expands the liability of the United States for attorneys fees and other expenses to certain parties who prevail against the United States in certain administrative and court proceedings. Portions of the Act expired on October 1, 1984. H.R. 2378 covers the period between that date and enactment and makes the law permanent.

H.R.Rep. No. 99-120, 99th Cong., 1st Sess. 8, reprinted in 1985 U.S. Code Cong. & Admin. News 132, 136.

The significance of the separate passages of the Act in 1980 and in 1985 is that the legislative history contemporaneous to the 1985 passage indicates that our circuit, as well as other circuits, has incorrectly interpreted the language of section 2412(d). The House Report for the 1985 Act notes that only $3.0 million was awarded under the Act between 1981 and 1984, whereas Congress had expected at least $100 million per year to be awarded. The report then declares that, “[p]art of the problem in implementing the Act has been that agencies and courts are misconstruing the Act. Some courts have construed the ‘position of the United States’ which must be ‘substantially justified’ in a narrow fashion which has helped the Federal Government escape liability for awards.” Id. at 9, 1985 U.S. Code Cong. & Admin.News at 137. Accordingly, the report set forth Congress’ intended definitions of the “position of the United States” and “substantially justified.” The report explicitly approves of the decisions of those courts, such as the D.C. Circuit, which have held that “substantial justification” requires more than mere reasonableness. It then states that:

Because in 1980 Congress rejected a standard of “reasonably justified,” in favor of “substantially justified,” the test must be more than mere reasonableness.

Especially puzzling, however, have been statements by some courts that an administrative decision may be substantially justified under the Act even if it must be reversed because it was arbitrary and capricious or was not supported by substantial evidence. Agency 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.

Id. at 9-10, 1985 U.S.Code Cong. & Admin. News at 138 (emphasis added and footnote omitted).

At first glance, this language in the legislative history would seem to preclude any further discussion as to whether Congress desired a reasonableness standard.¹ But three congressmen expressed on the floor varying degrees of dissatisfaction with a small part of the House Report. Congressman Kindness quoted the portion italicized supra as a “gratuitously authoritarian overstatement [which] appears to be the only error ... in the report.” 131 Cong. Rec. H4763 (daily ed. June 24, 1985). He explained that he disagreed with the quoted statement’s implication that “a finding of an agency action that was not supported by substantial evidence would automatically entitle a prevailing party to fees or would establish a presumption of entitlement to fees.” Id. He nonetheless conceded that:

The committee recognizes the close relationship between the concepts, and the fact that a finding by the Government was not supported by substantial evidence should be accorded careful scrutiny. But indeed the quoted two sentences from the bottom of page 9 and the top of page 10 of the report do not represent a clear or a [sic] appropriately explanatory statement of the intent of the committee in the reporting of H.R. 2378.

Id. (emphasis added). Congressman Moorehead indicated his agreement that there were different standards for substantial evidence and substantial justification. Id. Congressman Kastenmeier followed up these comments with his assurance that the committee report was not intended to suggest that the “Government may only avoid fees by prevailing in litigation.” Id.

When questioned in the Senate about the same two sentences, Senator Grassley explained:

I want to make it clear that the EAJA case over the fees issue is a separate and distinct inquiry. Just because an agency loses on the merits of the case doesn’t mean that it is automatically going to be liable for a fee award. The EAJA does not provide for automatic fee shifting. However, I would say that where the agency action is found by a court to be arbitrary and capricious or where there is little or no factual support for the agency action, the Government — as a practical matter — has its work cut out for it to prove substantial justification. Indeed, in the case of an arbitrary and capricious finding, I believe the plain meaning of the words strongly suggest [sic] that the Government was not substantially justified. I believe that this view is consistent with the committee report on S. 919, a bill we passed unanimously in the closing days of the 98th Congress.

131 Cong.Rec. S9993 (daily éd. July 24, 1985) (emphasis added). Senator Thurmond expressed his agreement with Senator Grassley, although he differed on the effect of an “arbitrary and capricious” finding. Id.

We have detailed these comments on the 1985 legislative history because they demonstrate that no official in Congress expressed displeasure with the House Report’s rejection of the reasonableness standard.² Instead, the congressmen and senators rather carefully limited their criticism to the part of the House Report suggesting that “agency action found to be ... unsupported by substantial evidence is virtually certain not to have been substantially justified under the Act.”

The courts which have taken into account this 1985 legislative history have not equated the term “substantially justified” with the term “substantial evidence;” but neither have most courts ignored Congress’ rejection of the reasonableness standard. The Eighth Circuit, in United States v. 1,378.65 Acres of Land, 794 F.2d 1318 (8th Cir.1986), reconciled the 1980 legislative history with the 1985 legislative history by requiring the government now to show “not merely that its position was marginally reasonable; its position must be clearly reasonable, well founded in law and fact, solid though not necessarily correct.” Id. at 1318. The Federal Circuit, in Gavette v. Office of Personnel Management, 785 F.2d 1568 (Fed.Cir.1986) (en banc), declared that “it is clear that substantial justification is not simply equivalent to reasonableness.” Id. at 1579. The court went on to hold that the government must show that it was clearly reasonable:

The Government must show that it has not “persisted in pressing a tenuous factual or legal position, albeit one not wholly without foundation.”

Id. (quoting Gava v. United States, 699 F.2d 1367, 1375 (Fed.Cir.1983) (Baldwin, J., dissenting)). See also Lee v. Johnson, 799 F.2d 31, 38 & n. 7 (3rd Cir.1986) (recognizing 1985 Congress’ requirement of a test more stringent than reasonableness, but asserting that Third Circuit already has a more stringent test). Cf. Federal Election Commission v. Rose, 806 F.2d 1081 (D.C.Cir.1986) (refusing to equate “arbitrary and capricious” or "lack of substantial evidence” with “lack of substantial justification,” but continuing to use a “slightly more than reasonable” standard rather than a mere “reasonableness” standard). But see Russell v. National Mediation Board 775 F.2d 1284, 1289 (5th Cir.1985) (finding 1985 legislative history conflicting and inconclusive and so adhering to standard of reasonableness); Phil Smidt & Son, Inc. v. NLRB, 810 F.2d 638, 642 n. 5 (7th Cir.1987) (agreeing with Fifth Circuit that floor comments conflicted with the House Report).³

Unlike the Fifth and Seventh Circuits, we do not consider the 1985 legislative history to be inherently conflicting. In toto, the report and the statements on the floor indicate that in 1985 Congress was merely attempting to achieve the “middle ground” it had hoped to delineate in 1980. It did not want fees to be awarded each time a party prevailed against the government; nor did it want fees to be awarded only when the government’s position was frivolous. See H.R.Rep. No. 96-1418 at 13-14, 1980 U.S. Code Cong. & Admin. News at 4953, 4992-93. The problem with a reasonableness test is that it may lead to awards being given only when the government’s position is frivolous, for “reasonable” simply means “not absurd,” “not ridiculous,” “not conflicting with reason.” 2 Webster’s Third New International Dictionary Unabridged 1892 (1965).

Accordingly, we see no reason to ignore the clear legislative intent to reject the reasonableness test. To construct the standard most likely to accord with Congress’ intentions, we return to the plain language of the statute — language which requires not that the government’s position be reasonably justified, but that it be substantially justified. We hold that in order to be substantially justified, the government’s position must have more than a “reasonable basis” in law and fact. Instead, the government’s position must be firmly grounded or solidly based in law and fact. Such a standard in no way equates the “substantial evidence” test with the “substantially justified” test, but at the same time it does require government agencies to have more than a modicum of support for the positions they take against private individuals. We believe this is what Congress intended.

At last returning to the case before us, we note that the district court found that none of the evidence contributed to the Secretary's burden of proving that Mr. Riddle was capable of performing sedentary work. Given that the Secretary had conceded that Mr. Riddle could not return to his previous work, the absence of any evidence demonstrating the claimant’s ability to perform other work leads us to conclude that there was not a solid factual basis for the Secretary’s position.

We therefore REVERSE the district court’s order and REMAND for the award of attorney’s fees.

1 . I would note that the legislative history discussed here was indeed contemporaneous to the 1985 enactment of the EAJA, and so the.dissent’s criticism of reliance on "legislative observations’’ of a "subsequent Congress” do not render this 1985 legislative history irrelevant. Not even those courts, discussed infra, which chose to retain their former reasonableness standard considered the 1985 legislative history to be irrelevant.

2 . Contrary to the dissent’s apparent belief, an analysis of both the House Report and' comments on the floor is a somewhat standard means of interpreting legislative history. See e.g., Train v. Colorado Pub. Int. Research Group, 426 U.S. 1, 9-23, 96 S.Ct. 1938, 1942-48, 48 L.Ed.2d 434 (1976); Mills v. United States, 713 F.2d 1249, 1252-53 (7th Cir.1983), cert. denied, 464 U.S. 1069, 104 S.Ct. 974, 79 L.Ed.2d 212 (1984).

3 . I do not consider persuasive the other circuit decisions cited by the dissent since none of those opinions indicated even an awareness of the 1985 legislative history at issue here. The decisions in United States v. Yoffe, 775 F.2d 447, 450 (1st Cir.1985) (reasonableness standard); Weakley v. Bowen, 803 F.2d 575, 577 (10th Cir.1986) (reasonableness standard); and Haitian Refugee Center v. Meese, 791 F.2d 1489, 1497 (11th Cir.) (more than reasonableness standard), rev’d in part on other grounds, 804 F.2d 1573 (1986), all indicated an awareness that the EAJA had been reenacted in 1985, but none gave any indication that the decision-makers were aware of the relevant 1985 legislative history. Therefore, rather than analyze in any depth the test for “substantially justified,” those courts simply continued to use the definitions formulated under the 1980 EAJA. The decisions in Sierra Club v. United States Army Corps of Engineers, 776 F.2d 383, 393 (2d Cir.1985), cert. denied, _ U.S. _, 106 S.Ct. 1464, 89 L.Ed.2d 720 (1986), and League of Women Voters v. FCC, 798 F.2d 1255, 1257 (9th Cir.1986), gave no indication that those courts were even aware that the EAJA had been reenacted in 1985. Similarly, the "intra-circuit conflicts" in the Third, Eighth and D.C. Circuits, pointed out by the dissent, arise not from differing interpretations of the 1985 legislative history, but from one panel’s consideration of that history while another panel appeared to be unaware of that history’s existence. In such circumstances, the decisions of the panels which failed to note the 1985 reenactment should not diminish the persuasiveness of the opinions taking into account the 1985 legislative history.