Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01197/USCOURTS-azd-2_11-cv-01197-1/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 

Kenneth Krauze, 

Plaintiff, 

v. 

Michael J. Astrue, Commissioner of Social 

Security Administration, 

Defendant.

No. CV11-1197-PHX-DGC

ORDER 

 In an order dated June 20, 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). Plaintiff then filed an application for attorneys’ fees under the Equal Access to 

Justice Act (“EAJA”), 28 U.S.C. § 2412. Doc. 26. Defendant filed an objection 

(Doc. 27), and Plaintiff filed a reply (Doc. 28). No party requests oral argument. For the 

reasons that follow the Court will grant Plaintiff’s 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 Ninth Circuit, “attorney’s fees are to be awarded to a party 

winning a sentence four 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 

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quotations omitted).1 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 reversed and remanded the decision of the ALJ because it found that the 

ALJ improperly discounted Plaintiff’s subjective descriptions of pain and failed to 

articulate how a lay person’s statement affected the decision. Doc. 22 at 14, 20. 

Defendant argues that his position with respect to both issues, while not ultimately 

persuasive, was substantially justified. Doc. 27 at 6. Because the Court finds that the 

government’s position with respect to the lay witness testimony is not substantially 

justified, it need not reach the issue of Plaintiff’s subjective pain testimony. 

 A. Lay Witness Testimony. 

The Court found that the ALJ considered the testimony of Plaintiff’s stepfather, 

Mr. Fowler, but that the ALJ’s failure to specify how the testimony affected the decision 

was error. Doc. 22 at 21. The ALJ is required to “consider lay witness testimony 

concerning a claimant’s ability to work.” Stout v. Comm’r, 454 F.3d 1050, 1053 (9th Cir. 

2006); see also 20 C.F.R. §§ 404.1513(d)(4), (e). Such testimony is competent evidence 

that cannot be disregarded without comment. Nguyen v. Chater, 100 F.3d 1462, 1467 

(9th Cir. 1996). If an ALJ disregards the testimony of a lay witness, the ALJ must 

provide reasons “that are germane to each witness.” Id. 

 After discussing Mr. Fowler’s testimony, the ALJ stated that she had “determined 

that the claimant’s limitations are not as disabling as he alleged.” Tr. At 62. The Court 

found that the paragraph discussing Mr. Fowler’s statements, together with this 

 

1

 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 remand under sentence four. Doc. 22. 

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conclusory dismissal of his testimony, demonstrated that “the ALJ considered Mr. 

Fowler’s statement, but the Court is left to guess at how that testimony influenced the 

ALJ’s decision.” Doc. 22 at 20. 

 Defendant argues that because Mr. Fowler’s statement mirrors Plaintiff’s 

subjective complaints about pain, and because the ALJ was substantially justified in 

rejecting those subjective complaints, she must also have been substantially justified in 

rejecting Mr. Fowler’s testimony. See Valentine v. Comm’r Soc. Sec. Admin., 574 F.3d 

685, 694 (9th Cir. 2009) (accepting ALJ’s rejection of lay witness testimony because it 

was similar to Plaintiff’s testimony and the ALJ had already provided clear and 

convincing reasons for discounting Plaintiff’s testimony). The Court rejected this 

argument in its previous ruling. Doc. 22 at 20. 

Valentine is distinguishable from this case. While Mr. Fowler’s testimony may 

have tended to prove the same conclusion as Plaintiff’s subjective testimony – that 

Plaintiff was disabled – its substance was quite different. Doc. 22 at 13-14, 20-21. Mr. 

Fowler testified to Plaintiff’s physical limitations and his inability to help other people, 

while the relevant portion of Plaintiff’s testimony concerned his level of pain and the 

degree to which medication could control it. Id. Moreover, even if the ALJ had reason to 

reject Mr. Fowler’s testimony – a question the Court need not reach – she failed to follow 

the procedures established by Ninth Circuit case law for explaining her decision. See 

Nguyen, 100 F.3d at 1467 (ALJ cannot disregard lay witness testimony without comment, 

and must provide reasons “that are germane to each witness”). Accordingly, the Court 

concludes that the government’s position with respect to Mr. Fowler’s testimony was not 

substantially justified. 

IT IS ORDERED: 

1. Plaintiff’s application for attorneys’ fees (Doc. 26) is granted. 

 

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2. Defendant is ordered to pay attorneys’ fees in the amount of $6,681.82. 

 Dated this 14th day of November, 2012. 

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