Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-01363/USCOURTS-ca8-04-01363-0/pdf.json

Parties Involved:
Jo Anne B. Barnhart
Appellee
Charles E. Goad
Appellant

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 04-1363

___________

Charles E. Goad, *

*

Plaintiff-Appellant, * Appeal from the United States

* District Court for the District of

v. * Minnesota.

*

Jo Anne B. Barnhart, Commissioner *

of Social Security, *

*

Defendant-Appellee. *

___________

 Submitted: November 17, 2004

 Filed: February 17, 2005 

___________

Before MURPHY, HANSEN, and MELLOY, Circuit Judges.

___________

MELLOY, Circuit Judge.

Plaintiff-Appellant Charles E. Goad appeals the district court’s denial of fees

and costs under the Equal Access to Justice Act, codified in part at 28 U.S.C. §

2412(d) (“EAJA”). We vacate and remand to the district court for consideration of

whether the Commissioner’s position regarding the initial denial of benefits was

substantially justified.

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I.

Mr. Goad filed a claim for social security disability benefits on March 27,

1996, alleging disability prospectively as of March 29, 1996. Mr. Goad’s alleged

disability related to various cardiovascular ailments including persistent angina. On

November 18, 1997, an administrative law judge (“ALJ”) denied Mr. Goad’s claim,

finding that he was not disabled and that he retained the residual functional capacity

to perform available work in the light exertional range. The Appeals Council

considered additional evidence, but ultimately denied Mr. Goad’s request for further

review, making the ALJ’s decision the Commissioner’s final decision. Mr. Goad

appealed to the district court. 

On July 28, 2000, Mr. Goad filed a second claim for benefits. In the second

claim, he alleged a disability onset date of November 19, 1997. In March 2001, the

Commissioner ruled in favor of Mr. Goad on the second claim, finding him disabled

as of November 19, 1997.

On September 30, 2001, the district court remanded the first claim to the

Commissioner. The district court found that the Commissioner had failed to

adequately develop the administrative record. The district court stated that it was

troubled by evidence that suggested Mr. Goad suffered from non-exertional angina

which “could alter the ALJ’s residual functional capacity determination, hypothetical

to the vocational expert, and ultimate disability determination.” The district court

also found the Commissioner should consider certain additional evidence on remand.

Mr. Goad did not make the district court aware of the second claim or the grant of

benefits on the second claim.

On December 11, 2001, Mr. Goad filed a motion with the district court for

attorneys’ fees and costs under the EAJA for legal work related to the district court

action involving the first claim. On January 23, 2003, a United States Magistrate

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Judge issued a report and recommendation in which she found that Mr. Goad was

entitled to attorneys’ fees under the EAJA. She assessed the merits of the

Commissioner’s position on the denial of benefits under the first claim and found that

position not substantially justified.

The remanded disability claim apparently languished for some time.

Ultimately, the Commissioner set an April 9, 2003 hearing to reconsider the

remanded claim. The Notice of Hearing stated that the issues to be considered

included not only the limited issue of whether Mr. Goad was disabled and entitled to

benefits for the period between March 29, 1996 (as alleged in the first claim) and

November 19, 1997 (as determined by the Commissioner on the second claim), but

also the issue of whether he was entitled to continue receiving benefits at all, i.e.,

whether he was entitled to continue receiving benefits in accordance with the existing

award on his second claim.

On April 2, 2003, Mr. Goad notified the Commissioner that he had decided to

drop the first claim and no longer desired the hearing. Shortly thereafter, on April 23,

2003, an ALJ issued an opinion on the remanded and abandoned, first claim, stating

that Mr. Goad’s election to withdraw the claim implied that “[Mr. Goad] now agrees

with the hearing decision of November 18, 1997 . . . that he was not disabled as of

that date.” The ALJ also stated that the question of whether Mr. Goad became

disabled prior to November 19, 1997 was moot, and further administrative

proceedings were unnecessary. The ALJ proceeded to adopt the Commissioner’s

original decision—the November 18, 1997 decision that the district court had

rejected—and found that Mr. Goad was not disabled as of March 29, 1996. Mr. Goad

neither appealed the ALJ’s April 23, 2003 ruling nor notified the district court of the

ruling and his withdrawal of the remanded claim.

As of April 23, 2003, the district court had not ruled on the Commissioner’s

objections to the Magistrate Judge’s recommendation to grant EAJA fees to Mr.

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Goad. On an ex parte basis, counsel for the Commissioner provided the district court

with a copy of the April 23, 2003 ruling and notified the district court that Mr. Goad

had withdrawn the remanded claim. Subsequently, on August 14, 2003, the district

court rejected the Magistrate Judge’s January 23, 2003 Report and Recommendation

and ruled that Mr. Goad was not entitled to attorneys’ fees. The district court held

that, although Mr. Goad was a prevailing party due to the remand order from the

initial district court proceedings, the Commissioner was “substantially justified” in

her losing position. In explaining this result, the district court provided no comments

regarding the merits of the Commissioner’s decision, but noted only the facts that Mr.

Goad withdrew his initial claim for benefits and failed to appeal the ALJ’s April 23,

2003 ruling. The district court stated that these actions by Mr. Goad made “it . . .

abundantly clear that ‘at least one permissible view of the evidence’ shows a

reasonable basis in law and fact for the Commissioner’s decision to deny benefits.”

(Internal citation omitted).

Mr. Goad then moved to alter or amend the district court’s judgment on the fee

issue. Mr. Goad argued that the district court improperly relied on information

outside the district court’s record—the withdrawal of the claim following remand and

the administrative law judge’s opinion on remand. He argued further that reliance on

such information comprised a due process violation, and that if he had received notice

that the district court was going to consider such information, he would have

presented affidavits to explain why he dropped the first claim on remand. 

The district court refused to amend the judgment. In an order dated February

4, 2004, the district court again stated that when Mr. Goad withdrew his first claim,

he conceded the issue of disability regarding the earlier date of March 29, 1996. The

district court stated that reliance on information known to Mr. Goad but outside the

record was not a due process violation because, “[a] plaintiff who failed to supply the

Court with information relevant to the matter pending cannot later be heard to

complain of a violation of due process rights when the Court is made aware of such

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information. [Mr. Goad’s] failure to supply known and relevant information in a

timely fashion waives his opportunity to explain that information at a later date.”

Mr. Goad appeals to our court. He argues on appeal that the Commissioner

was not substantially justified in the initial denial of benefits that led to the initial

appeal in the district court. He also argues that the district court should not have

relied on his withdrawal of the first claim following remand and the ALJ’s subsequent

ruling because (1) these matters were not in the record before the district court, (2)

they were provided to the court on en ex parte basis, and (3) his decision to withdraw

the first claim did not necessarily constitute a concession as to the validity of the

Commissioner’s position on that claim. Mr. Goad characterizes his decision to drop

the first claim as a strategic, risk-benefit decision based on the fact that his benefits

under the second claim would have been subject to review, and therefore placed

potentially at risk, had he followed through with the April 9, 2003 administrative

hearing. Ultimately, Mr. Goad argues that the district court should have considered

only the merits of the first claim as reflected in the record that existed at the time of

the district court’s remand order, September 30, 2001. 

II.

We review a district court’s decision to deny a fee request under the EAJA for

abuse of discretion. Pierce v. Underwood, 487 U.S. 552, 562 (1988); Yarbrough v.

Cuomo, 209 F.3d 700, 703 (8th Cir. 2000). Although a social security claimant may

be a prevailing party for purposes of the EAJA, a fee award under the EAJA is not

available unless the Commissioner lacked substantial justification for her position.

28 U.S.C. § 2412(d)(1)(A). A position enjoys substantial justification if it has a

clearly reasonable basis in law and fact. Brouwers v. Bowen, 823 F.2d 273, 275 (8th

Cir. 1987). Accordingly, the Commissioner can advance a losing position in the

district court and still avoid the imposition of a fee award as long as the

Commissioner’s position had a reasonable basis in law and fact. Id. Further, a loss

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on the merits by the Commissioner does not give rise to a presumption that she lacked

substantial justification for her position. Keasler v. United States, 766 F.2d 1227,

1231 (8th Cir. 1985). The Commissioner does, however, at all times bear the burden

to prove substantial justification. Id.

During oral arguments in this case, the Commissioner conceded the

impropriety of her ex parte communication concerning Mr. Goad’s withdrawn claim.

As noted above, withdrawal of the remanded claim may or may not have been related

to the merits of the Commissioner’s position in the prior litigation. We believe then,

that at a minimum, reliance on the ex parte communication improperly deprived Mr.

Goad of the opportunity to explain his reasons for withdrawal. Also, we note that

because it was the Commissioner’s burden to prove substantial justification, Mr.

Goad was under no duty to supplement the record by notifying the district court of

the outcome on remand. Accordingly, his failure to do so cannot serve as a waiver

of his right to rebut evidence presented by the Commissioner.

We reverse the judgment of the district court and remand for consideration of

whether the Commissioner proved substantial justification. We express no opinion

as to whether the Commissioner’s position in the prior litigation enjoyed a reasonable

basis in law and fact.

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