P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

____________ N o. 10- 1494

____________ M OD ESTO CRU Z, A ppel l ant

v. CO M M I SS I ON ER O F S OC I AL SECU RI TY

____________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( D
. C
. N o. 2- 08- cv- 00204) D i s tr i ctJ udge: H onor abl e Lynne A
. Si t ar s ki

____________ Subm i tt ed Pur s uantt o T hi r d C i r cui tL A R 34. 1( a)

Sept ember17, 2010 B e f o re : S C IR IC A , R E N D E L L a n d F IS H E R , C i r cui tJudges

.

( Fi l ed: O ct ober22, 2010)

R obertSavoy 3 N es hami nyI nt erpl ex, Sui t e 301 T r evos e, PA 19053 C ouns el f orAppel lant2 L o ri R . K a rim o to Soci al Secur i tyA dm i ni s tr at i on S S A /O G C /R eg ion III P. O
. B ox 41777 Phi l adel phi a, PA 19101 C ouns el f orAppel l ee

____________ OPI NI ON O F THE COURT

____________ F IS H E R , C i r cui tJudge

. M o d e sto C ru z a p p e a ls f ro m a n o rd e r d e n y in g h is m ot i on foratt orney ’ s fee s un d er the E qual A cce s s t o J us t i ce A c t ( “ E A JA ” ), 2 8 U .S .C . § 2 4 1 2 , an d a n o rd e r d e n y in g h is m ot i on t o al t eroramend j udgm ent
. Forthe r eas ons s t at ed h e r e i n , we wi l l a f

f i r m. I. O n A u g u st 2 2 , 1 9 9 7 , M r. C ru z a p p li e d f o r D isa b ili ty In su ra n c e B e n e f

its u n d e r T itl e II o f

th e S o c ial S e c u rityA c t, 42 U
. S. C
. § 401 et

s eq , cl ai m i ng neck and back i m pairm ents
. H i s cl ai m fo r b enef

i t s w as deni ed. T her eaf t er , M r . C ruz t i m el yr eques t ed a hear i ng befor e an A dm i ni s tr at i ve Law Ju d g e (“ A L J”). Fo ll o w ing the h ea ri n g , the A L J d en ied M r. C ru z ’s r e q u e st f

o r re v iew . T h e A p p e a ls C o u n c il d e n ied h is r e q u e s tf o rf u r th e rr e v i e w.3 O n N ovember19, 2001, M r . C ruz fi l ed a c i vi l ac ti on. A fter rev iew ing a m o ti o n fo r sum m aryjud g m en t fi led b yM r. C ruz, the D istr i ctC our tgr ant ed the mot i on i n part , and r emanded the m at t ert o the C om m i s s i onerof the Soci al Secur i tyA dm i ni s tr at i on forcons i derat i on of al l r el evant m edi cal evi den ce i n det erm i ni ng M r . C ruz’ s r es i dual funct i onal capa ci tyand abi l i tyt o r eturn t o pas tr el evantw or k. O n r emand, M r . C ruz s oughtdi s abi l i tybenef i t s fo r the per i od fr om N o v em b er 23, 1996 thr ough N ovember15, 2000. O n N o v e m b e r 1 5 , 2 0 0 0 , M r. C ru z re su m e d w o rk in g f o r h is pr evi ous empl oy erand c ont i nued unt i l 2005 w hen the empl oy err el ocat ed. T he A L J h el d a hea r i ng and det erm i ned th a t M r. C ru z w a s n o t d isa b led a n d th a t h e c o u ld re tu rn to h is pas tr el evantw or k. M r . C ruz ap p eal ed thi s deci s i on t o the A ppeal s C ounci l

. T he A ppeal s C ou nci l decl i ned t o r evi ew the A L J ’ s deci s i on. O n M a rc h 2 , 2 0 0 6 , M r. C ru z f iled a se c o n d c iv il act i on. T he C om m i s s i onerfi l ed an U ncont es t ed M ot i on for R em an d req u es tin g that the A L J: ( 1 ) reev alua te M r. C ruz ’s re si d u a l f

u n c tio n a l ca p a c ityc o n sid e rin g th e a p p lica b le s tate agenc yopi ni ons ; ( 2) addr es s the tr eat i ng phy sici an’s opi ni ons thatM r . C ruz w as di s abl ed and pr ovi de a r at i onal e forthe w eigh t assign ed tho se o p inion s; ( 3 ) ob tain v o ca ti o n al ex p ert t es t i m onyt o det erm i ne the phy s i cal an d m ent al demands of M r. C ru z ’s p a st w o rk ; an d ( 4 ) if M r. C ru z w a s u n a b le to per form hi s pas t w or k, det erm i ne i f ther e ar e other j o b s M r. C ruz coul d per form . T he mot i on w as gr ant ed. T he A L J conv ened a t hir d h eari ng t o co nsi der the case fol l ow i ng r emand. A tthi s hear i ng, M r . C ruz s ubm i t t ed4 evi dence fr om D r . M elani e I ce, hi s tr eat i ng phy s i ci an. S ig n if ica n t to th is a p p e a l, M r. C ru z in tro d u c e d D r. Ic e ’s A p ril 2007 M edi cal Sour ce St at ement C oncerni ng N atur e and Sever i tyof Im p ai r m ent s ( “D r . I ce’ s St at ement ”)

. T he s t at ementr efe r r ed t o the cl os ed per i od fr om N ovember23, 1996 t o N ovember 15, 2000, and s uppor t ed a fi ndi ng thatM r. C ruz w as di s abl ed. T he A L J deni ed bene fi t s forthi s cl os ed per i od and gr ant ed bene fi t s fr om N ovember7, 2005 forw ar d. O n J anuary11, 2008, M r . C ruz fi l ed a t hi r d ci vi l act i on s eeki ng j udi ci al r evi ew of the fi nal deci s i on of the C om m i s s i onerof the Soci al Secur i tyA dm i ni s tr at i on deny i ng hi s cl ai m fo r di s abi l i tybenef i t s forthe cl os ed per i od fr om N ovember23, 19 9 6 t o N ovember15, 2000. B oth part i es c o n s e n ted to ju risd ictio n b e f o re th e M a g istra te J u d g e . In h is claim , M r. C ruz arg u ed th a t th e A L J m isi n terpreted D r. Ice ’s St a t e me n t
. Sp e c i f

i c a l l y , M r . Cru z c o n t e n d e d th a tth e ALJ m ista k e n lya p p lied D r. Ic e ’s S tate m e n t to h is b e n e f its c laim forthe per i od fr om 2 0 0 5 o n w ar d, i ns t ead of the cl os ed per i od fr om N ovember23, 1996 t o N ovember15, 2000. O n J anuary3 0 , 2009, the M agi s tr at e J udge i s s ued an order g ra n tin g i n p artand den y i ng i n p artM r. C ruz’ s r equ est f o r re v iew a n d re m a n d e d th e c a se to th e A L J. A c c o rd in g to the M agi s tr at e J udge, the A L J m i s r ead D r . Ice ’s S t at ementas appl y i ng fr om 2005 o n w ard i ns t ead of the cl os ed per i od fr om 1996 t o 2000. T her efor e, the M agi s tr at e J udge r emanded the cas e t o t he A L J fora det erm i nat i on bas ed on a pr operr eadi ng o f D r. Ic e ’s S tate m e n t. O n M ar ch 17, 2009, M r . C ruz fi l ed a mot i on for att orney ’ s fee s underthe EA J A , 28 U
. S
. C
. § 2412. M r . C ruz5 a l l e g e d t h a th e was e n t i t l e d t o a t t o rn e y ’ s f ees b e c a u s e th e ALJ i m pr oper l ycons i der e d Dr
. I c e’ s St at ement and t he C o mmi s s i o n e r ’ s d e f

e n s e o f th e ALJ ’ s d e c i s i o n was not s ubs t ant i al l yj us t i fi ed. A ccor di ng t o the C om m i s s i oner, the A L J r eal i zed that D r . I ce’ s St at ement appl i ed t o the cl os ed per i od fr om 1996 t o 2000. T he C om m i s s i onerm ai nt ai ned, h o w ev er, thatthe A L J found i tm or e r el evantt o the per i od fr om 2005 onw ar d. O n Ju n e 2 2 , 2 0 0 9 , the M ag istr a te Ju d g e d en ied M r. C ruz’s m o ti o n foratt orney ’ s fee s . V i ew i ng the t ot al i tyof the c i r c u ms t a n c e s , th e M a g i s tr a t e J udge c o n c l u d e d th e ALJ re a s o n a b ly a n a ly z e d th e f a c ts o f th e c a se . F u rth e rm o re , in its e x a m in a tio n o f

th e C o m m iss io n e r’s p o s it io n , the M a g istra te J udge f o c u s e d o n th e i n c o n s i s t e n c i e s i n Dr
. I c e ’ s n o t e s f o rthe cl os ed per i od fr om N ovember 1996 t o N ovember2 000. Co n tr a r y t o Dr
. I c e ’ s S t a t e me n t , h e r o th e r n o t e s f r o m th i s t i me fram e d id no tsupp orta dis abil i tyfi nd i ng . C on si deri ng these not e s a n d o th e rme d i c a l r e c o r d s , th e M a g i s tr a t e J u d g e f o und that th e C o m m issi o n er’s p o sit ion reg ard ing the A L J’s in terp re tatio n o f

D r. Ic e ’s S tate m e n t w a s s u b sta n tially just i fi ed. A ccor di ngl y , the M agi s tr at e J udge deni ed M r. C ruz’ s m oti on for at t orney ’s fees. O n J ul y7, 2009, M r . C ruz fi l ed a mot i on t o al t eror amend j udgm ent
. M r. C ruz al l eged thatthe M agi s tr at e J udge i m pr oper l ydeni ed hi s m ot ion for c os t s , i m pr oper l yi ntruded upon t he C om m i s s i oner ’ s r ol e i n the fa ct
- fi ndi ng pr oces s by m a k in g a c re d ib ili tyd e ter m in a tio n a s to D r. Ic e ’s S tate m e n t, a n d e rre d b yf

a ili n g to a p p lyT h ird C irc u it p re c e d e n t.6 O n D ece m b er 1 8, 2009, the M agi s tr at e J udge deni ed the mot i on. Fi r s t , addre s s i ng M r . C ruz’ s cl ai m forcos t s , the M agi s tr at e J udge i nt erp ret ed the appl i cabl e s t atut oryl anguage a n d e x p lain e d th a t, giv e n th e b ro a d sta tu to ryd isc re tio n in a wa r d i n g c o s t s , i td i d n o tc o mm i t c l e a re rr o ro f l a w. Fur therm or e, the M agi s tr at e J udge found i thad n o tm ade a cr edi bi l i tydet erm i nat i on as t o D r . I ce’ s St at ement
. I ns t ead, the M ag istra te Ju d g e c o n clud ed itco rrectl yap p li ed T h ir d C i rcui tpreceden tfor asses si ng E A JA cl ai m s. O n A pr i l 21, 2010, M r. C ruz t i m el yfi l ed the i ns t ant appeal al l egi ng thatthe M agi s tr at e J udge abus ed i t s di s cr et i on b y de ny i ng h i s c l a i m f

o ra t t o rn e y ’ s f

e e s p u r s u a n tt o 2 8 U. S
. C. § 2 4 1 2 (d)(1 )(A ) an d co sts pu rsua n t t o 2 8 U
. S
. C
. § 2 4 1 2 (a)(1). II. T h e M a g istra te J u d g e e x e rc ise d ju risd ictio n p u rsu a n t to 42 U
. S. C
. § 405( g)

. W e have juri sd i ct i on overthi s appea l p u rsua n t to 2 8 U
. S
. C
. § 1 2 9 1
. “T h e d istri ct co u rt ’s det erm i nat i on of s ub stan t i al j us t i fi cat i on i n a s ui tunderthe E A JA is revi ew ed forabus e of di s cr et i on. ” Morga n v. P erry , 142 F. 3d 670, 682 ( 3d C i r . 1998) ( ci t i ng P i er ce v . U nder w ood , 4 8 7 U .S . 5 5 2 , 5 6 0 ( 1 9 8 8 )). A c c o rd in g to th is s t andar d, “[a ] n abus e of di s cr et i on ar i s es w hen the di s tr i ct c o u r t ’ s d e c i s i o n ‘ r e s t s u p o n a c l e a r l y e rr o n e o u s f i n d i ng of fac t , an err antconcl us i on of l aw oran i m pr operappl i cat ion of l aw t o fac t
. ’ ” Mor

gan , 142 F. 3d at682 ( quot i ng H anover P o ta to P ro d

s., In c . v. Sh a la la , 989 F. 2d 123, 127 ( 3d C ir

. 1993) )

. L i kew i s e, “[a ]n ab us e of di s cr et i on can a l s o occur ‘w h en n o rea so n ab le pe rson w o u ld ad o p t th e d istri ct co u rt ’s vi ew . ’ ” Mor

gan , 14 2 F
. 3 d at68 3 (ci t at i on om i t t ed). A s a7 res ult , “w e w i l l no ti nter fere w ith the di stri ctcou rt ’s exerci se of d iscret i on ‘ unl es s ther e i s a def i ni t e and f

i r m convi ct i on thatthe court
. . . comm i t t ed a c l earerror o f j udgm enti n the co n clus io n re ac h ed u p o n a w eigh ing o f th e re leva n t fac tors. ’” Id

. (cit ati o n o m itted). III
. M r. C ruz adv ances t w o argum ents on app eal

. F i rs t, M r. C ru z c o n ten d s th a t th e M a g istra te J u d g e a b u se d its di s cr et i on byfi ndi ng thatthe C om m i s s i oner ’s p os i t i on w as su b sta n tially ju stif

ied , an d th e re f

o re h e is e n tit led to atto rne y ’s fe es u n d er the E A JA , 2 8 U
. S
. C
. § 2 4 1 2 (d)(1 )(A ). S e c o n d , M r. C ru z a rg u e s th a t th e M a g istra te J u d g e a b u s e d its d iscreti o n in d en y ing h is cl aim fo r co s ts o ther tha n att o rne y ’s fee s pur s uantt o 28 U
. S. C
. § 2412( a) ( 1)

. W e a d d ress eac h ar gum enti n turn. A. Pur s uan t t o the EA J A , “a c our ts hal l aw ar d t o a pr evai l i ng party. . . fees an d otherexpens es . . . i ncurr ed by thatparty. . . unl es s the co u rt fi nds thatthe pos i t i on of the U ni t ed St at es w as s ubs tantia l l yj us t i fi ed orthats peci al c i r c u m s ta n c e s m a k e a n a w a rd u n ju s t.” 2 8 U .S .C . § 2412 (d)( 1) ( A ) ( 2006)

. T he Supr eme C our thas defi ned su b st anti al j ust i fi cat i on un der the E A JA as “j ust i fi ed in s ub s t a n c e o ri n th e ma i n – th a ti s , j u s t i f i e d t o a d e g r e e th at c o u l d s a t i s f

y a r e a s o n a b l e p e r s o n . ” P ier ce , 487 U
. S. at565. I n E A J A cl ai m s , the governm entbear s the bur den of d e m o n s tr a tin g s u b s ta n tia l ju s tif ic a tio n . See H

anover , 989 F. 2d at1 28 ( ci t at i on om i t t ed)

. T o s at i s fythi s bur den and8 defe ata prev ai l i ng party ’ s appl i cat i on forfee s , the gover nm entm u s t e s t a b l i s h t hatt her e i s s ubs t ant i al jus t i fi cat i on for i t s pos i t i on by demonstr at i ng “( 1 ) a re a so n a b le b a si s in tru th f o r th e f a c ts a lleg e d ; (2 ) a re a so n a b le b a sis in law f

o r th e th e o ryit p ro p o u n d e d ; a n d (3 ) a re a so n a b le co n n ec ti o n b etw ee n the fa cts all eg ed an d the le g a l the o ry advan ce d

. ” Mor

gan , 1 4 2 F
. 3 d at 68 4 (cit ati o n o m itted). F u rth erm o re , “a co u rtca n n o t assu m e tha t th e g o v ern m en t’ s pos i t i on w as not su b sta nt i al l yj us t i fi ed s i m pl ybeca us e the g o v e r n me n tl o s to n th e me r i t s . ” Id

. at685. R ather , w hen deci di ng w hethert he governm enti s s ubs t ant i al l yj us t i fi ed, court s s houl d det erm i ne w hetherthe governm ent ’ s posit i on h a s a re a s o n a b le b a s is in b o th f a c t a n d la w . S e e id

. at684. M r. C ru z a rg u e s th a t th e M a g istra te J u d g e a b u se d its di s cr et i on w hen i tfound the C om m is s i oner ’ s pos i t i on w as subst anti al l yj ust i fi ed an d d enied hi s cl ai m for a tt orney ’s fees. S p ec ifi ca ll y , M r. C ruz claim s that th e C o m m issi o n er’s defe ns e of the A L J ’ s tr eatm entof D r . Ice ’s S t at ementhad no b a sis in f

a c t o r la w a n d , the re f o re , w a s n o t su b sta n tially j us t i fi ed. W e di s agr ee. In p ro c e e d in g s b e lo w , the M a g istra te J u d g e c o rre c tly anal y zed the C o m m iss i oner ’ s pos i t i on underthe thr ee- s t ep s ubs t ant i al j us t i fi cat ion t es ts etfor th i n Mor gan . Fi r s t , the M agi s tr at e J udge not ed thatthe C om m i s s i oner d id notbel i eve that the A L J m isr ea d the d ates o f D r. Ice ’s S tat em en t. R athe r, the C om m i s s i onerr eas onabl ym ai nt ai ned thatth e A L J knew t h a tDr
. I c e ’ s St a t e me n ta p p l i e d t o th e p e r i o d f r o m N o v e mbe r 1996 t o N ovember2000, butdet erm i ned thati tbett er r epr es ent ed the per i od fr om 2005 onw ar d. S econd, the M agi s tr at e J udge r evi ew ed the r ecor d as a w hol e, i ncl udi ng1 I n Mor gan , w e br i efl y di s cus s ed a cl ai m forcos t s under 2 8 U .S .C . § 2 4 1 2 (a )(1 ). 1 4 2 F .3 d a t 6 8 9 -9 0 . W e d e c lin e d to 9 D r . I ce’ s i ncons i s t entn ot es and otherm edi cal r ecor ds , and det erm i ned thati ts uppor t ed a f i ndi ng of no d isab il i tyforthe cl os ed per i od. A s s uch, the M agi s tr at e J udge found tha tthe Co mm i s s i o n e r ’ s p o s i t i o n h a d a r e a s o n a b l e b a s i s i n l a w. T hi r d, aft erexami ni ng the C om m i s s i oner ’ s p o si t i on and the r ecor d, the M agi s tr at e J udge found a r eas onabl e con n ec ti on b e tw ee n the f

ac ts an d the C o m m issi o n er’s leg al th eo ry . In concl udi ng thatth e C om m i s s i onerw as s ubs t ant i al l yj us t i fi ed, the M agi s tr at e J udge corr ect l yappl i ed the r el evantfac t s t o the la w a n d th e re f

o re d id n o t “ c o m m it a c le a r e rr o r o f ju d g m e n t.” I d. at68 3. A ccordi ng l y , th e M agis trat e Judg e did not abuse i t s di s cr et i on. B. Second, M r. C ruz ar gues thatthe M agi s tr at e J udge abus ed i t s di s cr et i on bydeny i ng his c lai m forcos t s otherthan a tto rn e y ’s f

e e s. T h e p e rtin e n t lan g u a g e o f th e E A JA in stru c ts th a t, “ [ e ]x c e p t a s o th e rw is e s p e c if ic a lly p ro v id e d b ys ta tu te , a ju d g m e n t f

o r c o sts
. . . m a yb e a w a r d e d to th e p re v a ili n g p a rty i n anyci vi l act i on br oughtbyoragai ns tthe U ni t ed St at es or anyagenc yoranyoffi ci al of the U ni t ed St at es act i ng i n hi s or heroffi ci al capa ci tyi n anycourthavi ng j ur isdicti on of s uch ac ti o n . ” 2 8 U
. S
. C
. § 2 4 1 2 (a)(1). A l though w e have notaddr es s ed th e iss ue of a di s tr i ct court ’ s di s cr et i on t o aw ar d ordenycos t s underthe E A J A , the deci s i on o f the Feder al C i r cui ti n N eal & Com pany, I nc. , v. U ni t ed Stat es i s i ns truct ive. I n N eal , the courtnot ed that28 1reach a decis i on on th e m e ri t s of t he clai m , ho w ever, becau se the partyas ki ng forco sts fai l ed t o pr oper l yappea l fr om the d istri ct co u rt = s d e c is io n n o t to a w a rd c o s ts
. S e e id

. 10 U
. S. C
. § 2412( a) ( 1) “does notcr eat e a pr es um pt i on i n favor of a n aw ard of cos t s t o the pr evai l i ng party . ” 121 F. 3d 683, 687 ( Fed. C i r . 1997)

. I ns t ead, br oad di s cre ti o n r es t s w i th the tr ia l c o u rt in a w a rd in g c o s ts
. See id

. W e agr ee w i th the re a so n in g o f th e F e d e ra l C irc u it in th is reg a rd

. T h e p lain la n g u a g e o f

t h e s ta tu te p ro v id e s th a t c o s ts “ m a yb e a w a rd e d .” 2 8 U
. S
. C
. § 2 4 1 2 (a )( 1 ). A cc o rdin g ly , itis ap p rop ri ate f o r a di s tr i ctcourtt o exer ci s e di s cr et i on i n aw ar di ng ordeny i ng cost s depen ding on th e part i cularci rcum st ances. In the case athand, the M agi s tr at e J u d ge cons i der ed al l the fa ct s and ci r cumst ance s s urr oundi ng M r . C ruz’ s cl ai m s . A ft ercar eful deli berat i on , the M agis trat e Judg e d e c li ned t o aw ard cost s. G iv e n th is re a so n in g , the M a g istra te J u d g e d id n o t ab u se its dis cret i on i n d eny i ng M r. C ruz’ s m oti on for cost s. I V. Forthe for egoi ng r eas ons , w e w i l l aff i r m the or der s of the M agi s tr at e J udge.