decision on remand). Therefore, the government's position was not substantially justified
because it did not have a reasonable basis in law or fact.

We now turn to the question of whether the fees and costs submitted by Plaintiff are
reasonable. The EAJA provides that a court may award costs and reasonable attorney's fees
based on prevailing market rates, but not to exceed $125 per hour unless the cost of living
justifies a higher fee. 28 U.S.C. § 2412(d)(2)(A)(ii). We find that cost of living increases as
calculated according to the Consumer Price Index justify a higher hourly rate for attorney's fees.
We additionally find that the time spent by Plaintiff's attorney on this case is reasonable and
proper.

Thus, we grant Plaintiff's motion for an award of fees pursuant to the EAJA in the amount
of $4,504.37, and costs for the filing fee in this action in the amount of $150.00. The total
amount of $4,654.37 should be paid directly to Plaintiff's attorney, Eric Schnaufer.

ENTER ORDER:

MARTIN C. ASHMAN
Dated: November 13, 2003. United States Magistrate Judge



can be justified even if it is not correct, and it can be substantially justified if a reasonable person
could think it to be correct, such that it has a reasonable basis in law and fact. Jd. at 566 n.2. In
applying this standard, the Court must examine the government's conduct in both the prelitigation
and the litigation contexts. See Hallmark, 200 F.3d at 1080. The ALJ's decision constitutes
prelitigation conduct. Cummings y. Sullivan, 950 F.2d 492, 497 (7th Cir. 1991); Steele v.
Barnhart, No. 99 C 5455, 2002 WL 31478268, at *1 (N.D. Ill. Nov. 5, 2002).

Considering the government's position as a whole, we find that a reasonable person could
not find that the government's position was substantially justified. As we noted in our prior
decision, the HALLEX’ provides: "The ALJ must not cite medical texts and medical publications
as the authority for resolving any issue. If it is necessary to refer to a medical text or medical
publication, the ALJ must submit the material to the claimant or the representative for review and
comment, and make the material part of the record." HALLEX, I-2-825. The ALJ erred in using
THE PILL Book as substantive evidence without giving Plaintiff notice and the opportunity to
rebut this evidence. Of course, one simple error does not automatically mean that the
government's position was not substantially justified. Jackson, 94 F.3d at 279-80. But in this
case, we found that although the ALJ had not erred in his decision on other objections raised by
Plaintiff, his finding regarding Plaintiffs lack of credibility as a whole should be reevaluated in
accordance with the Court's opinion. See c.f Godbey v. Massanari, No. 99 C 2690, 2001 WL
1035205, at *3 (N.D. Ill. Sept. 4, 2001) (government's position was not substantially justified

where ALJ possibly failed to consider crucial evidence which might cause him to change his

° The HEARINGS, APPEALS AND LITIGATIONS LAW MANUuAL ("HHALLEX") is a policy
manual.

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“

Copies have been mailed to:

ERIC SCHNAUFER, Esq.
15555 Sherman Avenue
Suite 303

Evanston, [IL 60201

Attorney for Plaintiff

ANNE LIPNITZ, Esq.
200 West Adams Street
30th Floor

Chicago, IL 60606

Attorney for Defendant


7 Sonate Order firm (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge
or Magistrate Judge

Sitting Judge if Other
than Assigned Judge

Martin C. Ashman

CASE NUMBER 02 C3195 DATE 11/13/2003
CASE Carroll M. Baker vs. Jo Anne B. Barnhart
TITLE
[In the fotlowing box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
(60) Oo Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support of motion due
3) oOo Answer brief to motion due . Reply to answer brief due.
(4) im Ruling/Hearing on set for at.
(5) oO Status hearing[held/continued to] [set for/re-set for] on set for at
(6) oO Pretrial conference[held/continued to] [set for/re-set for] on set for at
(7) Oo Trial[set for/re-set for] on at
(8) im} [Bench/Jury trial] [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) OlLocal Rule 41.1 [CI FRCP41(a)(1) O FRCP41(a)(2).

ao) i [Other docket entry] Enter memorandum opinion and order. Plaintiff's motion for attorney’s fees

[19-1] and costs pursuant to the Equal Access to Justice Act [19-2] is granted in the amount of $4,504.37,

and costs for the filing fee in this action in the amount of $150.00. The total amount of $4,654.37 should

be paid directly to plaintiff's attorney, Eric Schnaufer.
a1) [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.

Y | Notices mailed by judge's staff,

Notified counsel by telephone,

Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom
Is deputy’s
initials

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NOV 17

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
CARROLL M. BAKER, )
)
Plaintiff, ) Case No. 02 C 3195
)
v. ) Magistrate Judge
) Martin C. Ashman
JO ANNE B. BARNHART, ) DOCKETED
Commissioner of Social Security, .
% } NOV 1 7 2003
Defendant. )
Revere
MEMORANDUM OPINION AND ORDER “6 17 2003

Plaintiff, Carroll M. Baker, brings this motion for attorney's fees and costs pursuant to the
Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), for the prosecution of her Social
Security appeal before the District Court and for this motion for fees and costs. For the
following reasons, the motion is granted.'

Plaintiff applied for Disability Insurance Benefits in February 2000 but her application
was denied both initially and on reconsideration. Thereafter, an Administrative Law Judge
("ALJ") held a hearing and determined that Plaintiff was not disabled. The Appeals Council
denied Plaintiff's request for review. Plaintiff appealed to this Court, alleging that the ALJ erred
in several aspects of his decision. We held that the ALJ erred in his reliance on THE PILL BooK

without first submitting the book to Plaintiff and making it a part of the record before using it to

' The parties have consented to have this Court conduct any and all proceedings in this
case, including the entry of final judgment. See 28 U.S.C. § 636(c); Local R. 73.1(b).



resolve issues relating to Plaintiff's credibility. We therefore reversed the Commissioner's final
decision and remanded this case for further action

Under the EAJA, fees may be awarded where 1) the plaintiff is the "prevailing party";
2) the government's position was not substantially justified; 3) no "special circumstances make
an award unjust"; and 4) the fee petition is submitted within thirty days of final judgment and is
accompanied by an itemized statement. 28 U.S.C. § 2412(d)(1)(A) & (B); United States v.
Hallmark Constr. Co., 200 F.3d 1076, 1078-79 (7th Cir. 2000). In this case, the parties do not
dispute, and this Court agrees, that Plaintiff was the "prevailing party,” her timely-filed motion
was accompanied by an itemization of fees and costs, and no special circumstances exist which
would make an award of fees unjust. The only issue for us to resolve is whether the
government's position was substantially justified.

Plaintiff argues that the government's position was not substantially justified because the
ALJ violated Plaintiff's due process rights by failing to provide Plaintiff with substantive
evidence (THE PILL Book) on which he intended to rely in issuing his decision. The government
argues that its position was substantially justified because this Court overruled all of Plaintiff's
objections to the ALJ's decision except for the ALJ's use of THE PILL BOOK.

The government bears the burden of proving that its position was substantially justified.
Jackson v. Chater, 94 F.3d 274, 278 (7th Cir. 1996). The government's position is substantially
justified if it is "justified in substance," i.e., "justified to a degree that could satisfy a reasonable

person." Pierce v. Underwood, 487 U.S. 552, 565 (1988). The position taken by the government

> Other background facts were set forth at some length in this Court's memorandum
opinion and order dated May 7, 2003, and familiarity with these facts is presumed.

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