Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-00964/USCOURTS-azd-2_11-cv-00964-2/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 42:405 Review of HHS Decision (SSID)

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Karen L. Cowand, 

Plaintiff, 

v. 

Michael J. Astrue, Commissioner of Social 

Security Administration, 

Defendants.

No. CV-11-00964-PHX-DGC

ORDER 

 In an Amended Order dated June 7, 2012, the Court reversed and remanded the 

decision of the Administrative Law Judge (“ALJ”) for further proceedings pursuant to 42 

U.S.C. § 405(g). On August 13, 2012, Plaintiff filed an application for attorneys’ fees 

under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Doc. 30. On 

August 28, 2012, Defendant filed an objection (Doc. 31), and on September 5, 2012, 

Plaintiff filed a reply (Doc. 32). For the reasons that follow the Court will grant the 

application for attorneys’ fees. 

I. Legal Standard. 

28 U.S.C. § 2412(d)(1)(A) provides that “a court shall award to a prevailing party 

other than the United States fees and other expenses . . . unless the court finds that the 

position of the United States was substantially justified or that special circumstances 

made an award unjust.” In appeals of administrative decisions regarding benefits in the 

Ninth Circuit, “attorney’s fees are to be awarded to a party winning a sentence four [of 

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section 405(g)]1 remand unless the commissioner shows that his position with respect to 

the issue on which the district court based its remand was substantially justified.” Lewis 

v. Barnhart, 281 F.3d 1081, 1083 (9th Cir. 2002) (internal citations and quotations 

omitted). The Supreme Court has clarified the statutory text, holding that “a position can 

be justified even though it is not correct, and we believe it can be substantially . . . 

justified if a reasonable person could think it correct, that is, if it has a reasonable basis in 

law and fact.” Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988). 

II. Analysis. 

The Court vacated the decision of the ALJ because it did not provide adequate 

reasons for discounting the testimony of the treating physician and ignored the statement 

of a lay witness. Doc. 31 at 4-6, 10-11. Despite that holding, Defendant contends that 

attorneys’ fees should not be awarded because the government’s position satisfies the 

lower standard of substantial justification even if it fails the more exacting standard of 

being supported by “substantial evidence.” Doc. 31 at 1-2, 4-5; see Robbins v. Soc. Sec. 

Admin., 466 F.3d 880, 882 (9th Cir. 2006) (holding that a decision to deny benefits will 

be vacated “only if it is not supported by substantial evidence or is based on legal 

error.”). The Court will consider each of the issues upon which remand was based to 

determine whether the government’s position had a “reasonable basis in law and fact.” 

Pierce, 487 U.S. at 566 n.2; Lewis, 281 F.3d at 1083. 

A. Testimony of Dr. Douglas Campbell. 

 With respect to Dr. Campbell’s testimony, the ALJ concluded that the physician’s 

opinion was “too restrictive . . . given the clinical notes.” Tr. at 29. The Court held that 

the ALJ reached this conclusion without citing specific statements in the clinical notes 

that tended to show that Campbell’s opinion was actually too restrictive. Doc. 27 at 5. In 

 

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 District Courts may remand under “sentence four” or “sentence six” of section 

405(g). Only sentence four remands – those in which the District Court “makes a 

determination as to the correctness of the Secretary’s position” – qualify plaintiffs as “prevailing parties” for an award of attorneys’ fees. Flores v. Shalala, 49 F.3d 562, 568 

(9th Cir. 1995) (citing Shalala v. Schaefer 509 U.S. 292 (1993)). In this case the Court 

issued a sentence four remand. Doc. 27. 

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defense of the ALJ’s opinion, Defendant cited to “numerous findings not cited by the 

ALJ” which the Court rejected because its analysis must be “based on the reasoning and 

factual findings offered by the ALJ – not post hoc rationalizations that attempt to intuit 

what the adjudicator may have been thinking.” Doc. 27 at 6 (quoting Bray v. Comm’r of 

Soc. Sec. Admin., 554 F.3d 1219, 1225 (9th Cir. 2009)). Ultimately the Court concluded 

that the ALJ “failed to set forth clear and convincing reasons for discounting the opinion 

of Plaintiff’s treating physician.” Doc. 27 at 6. 

 Defendant emphasizes that the Court does not “dispute” the ALJ’s findings with 

respect to Campbell’s testimony and suggests that providing the specific citations to the 

portions of the clinical notes that the ALJ mentioned did not “create” the basis for the 

ALJ’s conclusion, but rather “bolstered” a basis that already existed. Doc. 31 at 4. In 

order to hold that the government’s position was substantially justified, however, the 

Court must find that the government’s position had a reasonable basis in fact and law. 

Pierce, 487 U.S. at 566 n.2. The Court need not consider whether the government’s 

ultimate position on disability was correct, but rather whether the government was 

substantially justified with respect to the procedural errors that led to remand. Flores v. 

Shalala, 49 F.3d 562, 572 (9th Cir. 1995). 

The procedure the ALJ must follow in order to reject the opinion of a treating 

physician is well settled. Thomas v. Barnhart, 278 F.3d 947, 957 (9th Cir. 2002). The 

ALJ is required to make “findings setting forth specific legitimate reasons for [rejecting 

the testimony] that are based on substantial evidence in the record . . . The ALJ can meet 

this burden by setting out a detailed and thorough summary of the facts and conflicting 

clinical evidence, stating his interpretation thereof, and making findings.” Id. (citation 

omitted). The ALJ’s conclusory assertion regarding the treating physician’s testimony 

does not meet this requirement. Doc. 27 at 4. The government tried to ameliorate the 

problem by citing specific evidence that the ALJ might have relied upon (Doc. 27 at 5), 

but the law requiring the Court to rely solely on the ALJ’s reasoning and factual findings 

is based on “[l]ong-standing principles” of law. Bray, 554 F.3d at 1225. The Court 

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cannot find that the ALJ’s opinion or Defendant’s arguments in this Court have a 

“reasonable basis in law.” Pierce, 487 U.S. at 566 n.2. Accordingly, the government’s 

position is not substantially justified with respect to the discounted testimony of Dr. 

Campbell. 

B. Lay witness testimony. 

The record contained a report of a statement by Plaintiff’s husband James Cowand 

related to Plaintiff’s activities and functioning. Tr. at 185-92; Doc. 27 at 10. The ALJ 

did not address the report in her findings, and the Court found the failure to be clear legal 

error. Doc. 27 at 10. The ALJ “must consider lay witness testimony concerning a 

claimant’s ability to work.” Stout v. Comm’r, Soc. Sec. Admin., 454 F.3d 1050, 1053 (9th 

Cir. 2006) (citing Dodrill v. Shalala, 12 F.3d 915, 919 (9th Cir. 1993); 20 C.F.R. 

§ 404.1513(d)(4) & (e)). Such testimony “is competent evidence and therefore cannot

be disregarded without comment.” Id. (emphasis in original; citation and alteration 

omitted); see 20 C.F.R. § 404.1545(a)(3). 

 The ALJ did not set forth specific, legitimate reasons for discounting Mr. 

Cowand’s assertions, and the government does not offer any justification as to why that 

such an omission was reasonable. Instead, the government again argues that the Court 

did not “dispute” that Mr. Cowand’s testimony “merely echoed Plaintiff’s subjective 

complaints,” which the ALJ properly discounted. Doc. 31 at 4; Doc. 27 at 7-10. 

Defendant calls the failure to consider the testimony “harmless error,” but that misstates 

the relevant legal test. Doc. 31 at 5. The Court must decide if the procedural error was 

substantially justified: if it had a reasonable basis in law and fact. Pierce, 487 U.S. at 

566 n.2. Because Defendant does not dispute the law regarding the treatment of lay 

witness testimony, nor offer any justification for the ALJ’s failure to comply with that 

law, the Court cannot find that the government’s position was substantially justified. 

III. Conclusion.

 The Court finds that the position of the United States was not substantially 

justified. Pursuant to 28 U.S.C. § 2412(d)(1)(a) the Court awards Plaintiff the undisputed 

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amount of $6,844.36. Doc. 32 at 8. 

 IT IS ORDERED: 

 1. Plaintiff’s application for attorneys’ fees (Doc. 30) is granted. 

 2. Defendant is ordered to pay attorneys’ fees in the amount of $6,844.36. 

 Dated this 15th day of October, 2012. 

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