# United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted December 22, 2011

Decided December 22, 2011

Before

DIANE P. WOOD, Circuit Judge

ANN CLAIRE WILLIAMS, Circuit Judge

DAVID F. HAMILTON, Circuit Judge

No. 11

‐ 1467

BARBARA SUIDE,

Plaintiff

‐ Appellant

,

v.

MICHAEL J. ASTRUE,

COMMISSIONER OF SOCIAL

SECURITY,

Defendant

‐ Appellee

. Appeal from the United States District

Court for the Northern District

of Illinois, Eastern Division

No. 1:08

‐ cv

‐ 02967

Charles R. Norgle, Sr.,

Judge

.

O R D E R

Plaintiff

‐ appellant Barbara Suide applied for disability insurance benefits and supplemental

security income under the Social Security Act. An administrative law judge denied benefits,

and the Appeals Council of the Social Security Administration and the district court affirmed.

We affirmed in part and reversed in part, finding no error in the conclusion that Suide did not

qualify for benefits before her December 2006 stroke, but reversing and remanding the denial

of benefits from that time forward because one of the ALJ’s key findings on Suide’s residual 

### NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

Fed. R. App. P. 32.1

### No. 11

‐ 1467 Page 2

functional capacity simply was not supported by substantial evidence. Suide v. Astrue

, 371 Fed.

App’x 684 (7th Cir. 2010).

After our partial remand, plaintiff sought an award of attorney fees under the Equal Access

to Justice Act, 28 U.S.C. § 2412(d). The district court denied fees, finding that the position of

the Commissioner was substantially justified. Suide appeals from that denial. We find no

abuse of discretion and therefore affirm.

The EAJA provides in relevant part:

Except as otherwise specifically provided by statute, a court shall award to a prevailing

party other than the United States fees and other expenses

. . . incurred by that party in any

civil action

. . . , including proceedings for judicial review of agency action, brought by or

against the United States in any court having jurisdiction of that action, 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). In general, to be eligible for a fee award under this provision, four

elements must be satisfied: (1) the claimant was a “prevailing party”; (2) the Commissioner’s

position was not “substantially justified”; (3) no “special circumstances make an award unjust”;

and (4) pursuant to 28 U.S.C. § 2412(d)(1)(B), any fee application was submitted to the court

within 30 days of final judgment in the action and was supported by an itemized application.

See Commissioner, I.N.S. v. Jean

, 496 U.S. 154, 158 (1990). (The EAJA also uses financial means

tests for award eligibility, see 28 U.S.C. § 2412(d)(2)(B), but those tests rarely come into play for

a person seeking disability benefits under the Social Security Act. See, e.g.

, Sosebee v. Astrue

, 494

F.3d 583 (7th Cir. 2007) (reversing denial of EAJA fees where district court had found that

applicant failed to show his net worth was less than $2 million).)

Because Suide obtained a remand for further consideration of her claim, she is a “prevailing

party” for purposes of the EAJA. See Shalala v. Schaefer

, 509 U.S. 292, 302 (1993) (remand under

sentence four of 42 U.S.C. § 405(g) makes the plaintiff a prevailing party under the EAJA). The

only eligibility issue the Commissioner has raised is whether his position was “substantially

justified.”

The Commissioner has the burden of proving that his position was substantially justified.

Stewart v. Astrue

, 561 F.3d 679, 683 (7th Cir. 2009); Cunningham v. Barnhart

, 440 F.3d 862, 864 (7th

Cir. 2006). To be “substantially justified,” the Commissioner’s position must have a reasonable

basis in law and fact. Pierce v. Underwood

, 487 U.S. 552, 565 (1988); Cunningham

, 440 F.3d at 864.

It must be stronger than merely non

‐ frivolous. Pierce

, 487 U.S. at 566. On the other hand, the

Commissioner’s position need not have been correct. See Jackson v. Chater

, 94 F.3d 274, 278 (7th

Cir. 1996), quoting Pierce

, 487 U.S. at 566 n.2. “Substantially justified” does not mean “justified

### No. 11

‐ 1467 Page 3

to a high degree.” The standard is satisfied if there is a “genuine dispute” or if “reasonable

persons could differ as to the appropriateness of the contested action.” Stein v. Sullivan

, 966

F.2d 317, 320 (7th Cir. 1992), citing Pierce

, 487 U.S. at 565.

The standard of review that applies to the merits of benefits decisions is deferential to the

Commissioner. If the court has remanded the denial of benefits, that deferential standard of

review does not automatically mean that the Commissioner’s position could not have been

substantially justified for purposes of the EAJA. See, e.g.

, Kolman v. Shalala

, 39 F.3d 173, 177 (7th

Cir. 1994). Under the EAJA, the test is whether the Commissioner had a rational ground for

thinking that he had a rational ground for denying benefits. See id

.

One of the challenges in EAJA litigation, especially in Social Security cases, is that there are

so many aspects of “the Commissioner’s position.” The Commissioner takes a position through

the decision of the ALJ and possibly the Appeals Council, and the Commissioner then defends

that decision in the federal courts. Under the statute, “‘position of the United States’ means,

in addition to the position taken by the United States in the civil action, the action or failure to

act by the agency upon which the civil action is based.” 28 U.S.C. § 2412(d)(2)(D).

In deciding substantial justification, therefore, the court must consider both the agency’s pre

‐ litigation conduct and its litigation position, but the court ultimately must make one binary

decision

— yes or no

— as to the entire civil action. Conrad v. Barnhart

, 434 F.3d 987, 990 (7th

Cir. 2006); Golembiewski v. Barnhart

, 382 F.3d 721, 724 (7th Cir. 2004); see also Commissioner v.

Jean

, 496 U.S. at 159 (court must make only one threshold determination on substantial

justification for the entire civil action).

On appeal, we review a district court’s determination under the EAJA only for an abuse of

discretion. E.g.

, Bassett v. Astrue

, 641 F.3d 857, 859 (7th Cir. 2011). Still, review for an abuse of

discretion is not toothless. If the court to which discretion is entrusted acts on the basis of a

serious misunderstanding of the applicable law or relevant facts, the resulting decision may

well reflect an abuse of discretion. E.g.

, Sosebee

, 494 F.3d at 586 (reversing denial of EAJA fees

to Social Security disability applicant where district court acted on erroneous view of applicable

law); see also Ericksson v. Commissioner

, 557 F.3d 79, 82 (2d Cir. 2009) (reversing denial of EAJA

fees); Clark v. Astrue

, 529 F.3d 1211, 1214 (9th Cir. 2008) (same). But the ultimate finding on the

issue of substantial justification is “not susceptible to a firm rule or even a ‘useful

generalization.’” Bassett

, 641 F.3d at 859, quoting Pierce

, 487 U.S. at 562.

The deferential standard of review and the requirement that substantial justification be

decided on an all

‐ or

‐ nothing basis are decisive here. In finding that the Commissioner’s

decision was substantially justified, the district court relied heavily on the fact that we affirmed

the denial of benefits for the years up to the time of Suide’s second stroke, in 2006. The district

court properly took into account that major aspect of the case in finding substantial justification.

### No. 11

‐ 1467 Page 4

If we narrowed our focus to only the Commissioner’s denial of benefits after the 2006 stroke,

it would be difficult to find that the Commissioner’s position was substantially justified. The

ALJ’s error was not merely a failure to articulate her thinking adequately. Cf. Bassett

, 641 F.3d

at 859

‐ 60 (affirming denial of fees where basis for reversal was ALJ’s failure to articulate

analysis adequately); Cunningham v. Barnhart

, 440 F.3d 862, 865 (7th Cir. 2006) (same). The

problem here was more fundamental: the key factual finding on Suide’s residual functional

capacity was that she could stand or walk for up to six hours per day. There simply was no

substantial evidence in the record to support that finding, and it appeared that the ALJ filled

the evidentiary gap by relying on her own lay opinions. That approach is contrary to well

‐

established law governing the work of Social Security Administration administrative law

judges, as we explained in our decision on the merits. 371 Fed. App’x at 690; see also Stewart v.

Astrue

, 561 F.3d at 684

‐ 85 (reversing denial of fees where remand on merits was required by

ALJ’s disregard of established regulations and case

‐ law); Golembiewski

, 382 F.3d at 724

‐ 25

(reversing denial of fees where ALJ had violated long

‐ standing precedent and regulations, and

had mischaracterized and overlooked key evidence).

The issue of residual functional capacity after Suide’s second stroke in 2006 was important,

but it simply was not the entire case. Although the court should not mechanically “count

arguments,” a court deciding a substantial justification issue under the EAJA certainly may

consider issues on which the government prevailed. See Stewart

, 561 F.3d at 683

‐ 84.

Suide also argues that the Commissioner’s position was not substantially justified based on

a number of errors that she argued and that were not addressed on the merits or in the district

court’s denial of EAJA fees. We are not persuaded that there was an abuse of discretion. The

district court reasonably focused on the principal disputed issues in the case, including the fact

that the Commissioner prevailed on the portion of the case running from the date of claimed

onset of disability in 2000 until Suide’s second stroke in 2006.

The plaintiff argues that the district court abused its discretion by failing to address every

issue that was argued on the merits. We disagree. In making the fee decision, it was not

necessary to retrace every page of the briefing on the merits, nor to reach a conclusion on

whether the Commissioner’s position was correct or substantially justified as to every

subsidiary issue raised in the case, including ones that did not need to be addressed on the

merits. The overall result of this case was mixed. Plaintiff obtained a remand for the period

after her second stroke, and the Commissioner prevailed on the earlier portion. It was not an

abuse of discretion to find that, overall, the Commissioner’s position was substantially justified.

The district court’s denial of fees under the Equal Access to Justice Act is AFFIRMED.