F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

K I M D A N A D E C K E R , Plaintiff-Appellant

,

v.

N A N C Y A. B E R

R Y H I L L , Acting Commissioner of Social Security

,

Defendant-Appellee. No. 14-35373

D.C. No. 6:11-cv-06344-HU

OPI NI ON

A ppeal from the United States District Court for the District of Oreg on Michael W . Mosman, Chief J u dg e, Presiding

A rg ued and Submitted October 3, 2016

Portland, Oreg on

F iled May

9, 2017

B e fore: Richard R. Clifton, Mary H. Murg uia, and J acqueline H. Ng

uy en, Circuit J u d g es.

Opinion by

J udg e CliftonD E C K E R V

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R Y H I L L 2

SUMMARY *

Equal Access to Justice Act / Attorney F ees

The panel affirmed the district court’s denial o f plaintiff’s application f

or attorney fees under the Equa l A c c ess to J ustice Act ( “ E AJ A”) based on the determination that the Commissioner of Social Security ’s l i tig ation position was substantially

justified.

Plaintiff successfully challeng e d the Commissioner’s denial of plaintiff’s application for disa b ility benefits a nd obtained a r emand of her c laim t o t h e ag ency for f urther consideration.

The panel held that the district c ourt d i d not a buse its discretion in determining that the Commissioner ’ s position

was substantially justified because the Commissioner’s opposition to remand of the claim on the me r i t s was reasonable, e ven thoug h it turned out to be unsuccessful. The panel noted that plaintiff’s new evidence s u b m i t t ed to the Appeals Council, thoug h sufficient in the end to p ersuade the district court to remand t h e ca se, d id n ot make that the only reasonable result.

* T h is su m m ary co n stitu

tes n o p art o f th e o pin io n o f th e co u rt. It h as b een p rep ared b y

co urt staf

f f o r th e co n v en i en ce o f

th e read er.D E C K E R V

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R Y H I L L 3

COUNSEL

J effrey H. B aird (arg

u ed), Dellert B a ird L aw Office, Seattle, W a shing ton; Alan Stuart G r a f, Alan Stuart Graf PC, F loy d, Virg inia; for Plaintiff-Appellan t.

J effrey Eric Staples (arg

ued) and Nicole J abaily

, Assistant Reg ional Counsel; David Morado, Reg ional C h ief Counsel, Seattle Reg ion X; Office of the General Counsel

, Social Security Adm i nistration, Seattle, W ashing ton; Adrian L ee B rown, Assistant United States Attorney
, U nit e d States Attorney ’s O ffice, Seattle, W a shing ton; for D efendantAppellee.

OP INION

CL I F TON, Circuit J udg e :

Kim Dana D ecker appeals the district court’s denial of her application for attorney fees. I n earlier proceeding s in the d i s t r i c t c o u r t , D e c k e r s u c c e s s f u l l y c h a l l e n g e d t h e Commissioner’s denial of her application for d isability benefits and obtained a remand o f her claim to the ag ency for further c o n sideration. T h e district court denied her application pursuant to the E qual Access to J ustice Act, 28 U.S.C. § 2412(d), f

or reimbursement of the attorney fees she incurred in l i t ig ating her case, however, because it determined that the Commissioner’s l i t i g ation p osition was substantially justified. That c onclusion precludes a fee award under the EAJ A. Id. § 2412(d)(1)(A).

Th i s i s one of two c a ses before this panel presenting the same question arising out of similar procedural histories. I nD E C K E R V

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each case an Administrative L aw J udg e (AL J ) denied benefits
to a claiman t , t he claimant soug h t review by the Social Security Appeals Council and submitted n e w e vidence in support of the claim, the A ppeals Council declined to r eview the denial of b enefits but incorporated the new evidence into the administrative record, the claimant filed a n a ct i o n in district court to challeng e the denial, and the d istrict court subsequently remanded the case, over the C o m m i ssioner’s ob j e c t i o n , to the AL J for further proceeding s in lig ht of the

new evidence. Each of the two claimants at that point soug ht

an award of fees under the EAJ A

. The district court denied the request for fees in both cases.

I n our opinion in the other case, Gardner v. Berryhill

,

___ F

. 3d ___, No. 14- 3 5 1 6 4 ( 9th Cir. May 9, 2017), filed concurrently w ith this opin i o n , we concluded that the Commissioner’s position was not s ubstantially justified because our precedent clearly required remand o f the merits claim to the AL J for further consideration. Even thoug h the Commissioner’s opposition to Gardner’s disabili t y claim mig ht, in the end, b e justified, the opposition b efore the district c ourt to remand for further proceeding s w as not substantially justifi e d b ecause remand was “a foreg o ne conclusion.” Id. at 12. As a result, w e reversed the denial o f fees under the EAJ A and r emanded to the district court for determination of the appropriate amount of fees.

I n contrast, in this case we c onclude that the district court did not abuse its d i scretion in determining that the Commissioner’s position w as substantially justified because the Commissioner’s opposition to remand of the c laim on the merits was reasonable, even thoug h it turned out to be unsuccessful. According l y , we affirm the district court’s denial of Decker’s application for attorney fees.D E C K E R V

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I. Background

Decker applied for d isability insurance ben e f i t s a nd supplemental security

income under Titles I I and XVI of the Social Security Act, alleg ing that h er ability to wor k was limited by a variety

of ailments, including arthritis. An AL J determined that Dec k er had the residual functional capacity
to perform lig ht w ork with certain specifications. The AL J also concluded that there were jobs e x isting in sig nificant numbers in t h e national economy that were available to a person of Decker’s ag e, e d ucation, a n d ex perien ce a n d that D e cker had the capacity to perform. The AL J therefo r e concluded that she was not disabled and denied h er application for benefits.

Decker then requested that t h e Appeals Council r eview the AL J ’s decision. Decker suppl i e d the Appeals Council with the r e s u l t s of blood tests that w ere not available a t the time the AL J issued his decision. The new evidence, presented in the form of two pag es o f a pr i n t

- o u t f rom a medical laboratory

, listed the results of several different tests. The report identified some r esults as “abnormal” as compared
to a stated “referenc e rang e,” including that D ecker’s rheumatoid factor was 73 I U/ml, as compared to a reference
rang e of 0–15 I U/ml, her “Sed Rate, W esterg ren” was 76 mm/hr, a s compared to a reference rang e of 0–25 mm/hr, her “RDW ” was 14.5%, as compared to a reference rang e o f 11.5–14.2%, and her “PL T CT” was 406,000/mm 3

, a s compared to a r e ference rang e of 150,000–400,000/mm 3

. 1

1 W h ile n o t ap p aren t f

ro m th e rep o rt i t s e l f, D e c k er ex plain s i n h er b rief in g o n ap peal th at “ Sed R ate, Westerg ren ” ref ers to sed im e n t a t i on rate (W esterg ren m e th od ), “ RDW ” ref ers to red cell d istrib u tio n w id th

, an d “ P L T CT ” ref

ers to p latelet co un t.D E C K E R V

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R Y H I L L 6

Decker did n ot supply a

ny doctor’s opinion o r other evidence interpreting these raw results. D ecker’s me d ical record
sug g ested that she had previously h ad at different times both

“ normal” and “abnormal” results in similar tests. T h e A ppeals Council incorporated the new test results int o t h e record but nonetheless denied review, and the AL J ’s decision became the Commissioner’s final decision.

Decker proceeded to file a complaint in the district court seeking review of the Commiss i oner’s decision and arg uing that the new blood test r esults sug g ested that she suffered from rh e u matoid a

r thritis. The mag istrate judg e issued F indi n g s and Recommendations (F & R) concluding that, in lig ht of the new results, the Commissioner’s decision was not supported by substantial evidence. The F & R ex plained:

W ithout k

now i ng [ Decker’s doctor’s] interpr etation o f these results, the Court is essentially being

. . . asked to rule that substantial evidence supports the AL J ’s disa b i lity determination, even thoug h the [ new] laboratory r esults c ould conceivably

s u gge st the onset of a far g reater deg ree o f impairment than that which had previously been contemplated. Certainly there is at least

a p ossibility that [ D eck e r’s doctor] could interpret these results in a w ay that warrants a departure from the AL J ’s decision. F or the Court to say otherwise w ould be particularly misg uided g iven its lack of medical ex pertise.

The district court ag reed, adopted the F & R in its entirety

, a nd

r e versed a

nd remanded for f

urther proceeding s. The Commissioner did not appeal that decision to this court.D E C K E R V

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Decker then filed an a p p l i c ation for fees pursuant to the EAJ A. The m a gistrate judg e issued a n e w F & R concluding that the Commissioner’s position was not su b s tantially justified and recommending t h at the a p p lication for f

ees be
g ranted in part and denied in part. Neither p arty objected to the F & R.

The district court disag reed with the recommendation b y the mag istrate judg e, stating that it was unclear under this court’s d ecision in Brewes v. Commissioner of Social Sec u r i ty Administration

, 682 F .3d 1157 (9th Cir. 2012), w h e t her the

new evidence considered b y the Appeals Council in this case required remand. I n l i gh t of the evidence in the record supporting the AL J ’s decision to deny benefits to Decker, the district court concluded th a t the Commissioner was

su b s t antially justified in arg uing that the new evidence did
not warrant remand. The district c o u rt therefore denied Decker’s application for attorney f ees. D ecker filed a timely notice of appeal.

II. Discussion

W e review a denial of a n EAJ A application for attorney fees for an abuse of discre t i o n

. M eier v. Colvin

, 727 F .3d 867, 869 ( 9th Cir. 2013). This policy supports the “view that

a ‘request f

o r a t t orney ’s fees should n ot result in a second major litig ation.’” Pierce v. Underwood , 487 U.S. 552, 563 (1988) (quoting Hensley v. Ecker hart

, 461 U.S. 424, 437 (1983)). “A district c ourt a b u s e s its discretion when it f ails
to a pply the c orrect leg a l rule or its application of the correct leg al rule is illog ical, im p l a u s i b le or without support in inf e rences that may be drawn from the facts in the record.” Meier , 727 F .3d at 869–70.D E C K E R V

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As a preliminary matter, Decker contends that, because no p a r t y objected to the mag istrate judg e’s F & R reg arding h e r EAJ A application, the district court abused i t s discretion in reviewing the F & R. This arg ument is without merit

. A district court’s authority to review a mag istrate judg e’s F & R is not conditioned on a p a r ty ’s making an objection. Under 28 U.S.C. § 6 36(b)(1), a district court “may accept, reject, o r modify

, in whole or in part, the f inding s or recommendations made by the mag istrate judg e.” Altho u gh a d i strict court is required to “make a d e novo determination o f those portions

o f t h e r eport o r s p e c i f i ed p r o p o s e d fi n d i n gs o r recommendations to w hich objection is made,” id.

, nothing in the statute p recludes the district court from r eviewing other finding s or recommendations de novo if it chooses to do s o, Thomas v. Arn
, 474 U.S. 140, 154 ( 1 985) (“[ W ] hile [ 28 U.S.C. § 636] does not require t h e j u d ge to review an issue de novo if no o b

jections are filed, it does not preclude further review by the district judg e, su a s p o n t e or a t the request of a party , under a de novo or any other standard.”).

Moving to the primary issue, the EAJ A provides, subject
to ex ceptions not relevant here:

[ A] c ourt shall award to a prevaili ng party other than the Unite d States fees and other

ex p enses

. . . incurred by that part y i n any civil a ction

. . . b r o ug ht by or ag ainst the United States

. . . , unless the court finds that
t h e position of the United States was

s u b s t a n t i a l l y j u s t i f

i e d o r t h a t s p e c i al circumstances make an award unjust.

28 U.S.C. § 2 412(d)(1 ) ( A )

. “F ees and other ex penses” include “reasonable attorney fees.” I d. § 2412(d)(2) (A).D E C K E R V

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W h en the Commissioner seeks to avoid pay ing a ttorney fees for a prevailing party in a Social S e c u r ity case, it is the Commissioner’s bu rden to “show[ ] that her position with respect to the issue on which the court based its remand was ‘substantially justified.’” Flores v. Shalala

, 49 F .3d 562, 569 (9th Cir. 1995); see also Me i e r , 7 27 F .3d at 870. “Substantially justified” means “justified to a d e g ree that could satisfy a reasonable p erson.” P ierce , 487 U.S. at 565. The g overnment’s p osition is not substantially justified simply b ecause our precedents h ave not squarely foreclosed the position. See id. at 566 (“To b e ‘ s u b s tantially justified’
means, of course, more than merely undeserving of sanctions for frivolousness

. . . .”). Rather, “the g overnment’s position
must have a ‘reasonable basis both in law and fact.’” Meier
, 727 F .3d at 870 (quoting P ierce , 487 U.S. at 565).

I n Campbell v. Astrue , 736 F .3d 867 (9th Cir. 2013), we

ex p lained:

W h ile this circuit has been clear that when an

a g e n c y ’ s d e c i s i o n i s u n s u p p o rt ed b y substantial evidence i t i s a strong indication
t h a t the position of the U nited States is n o t substantially justified, this circuit has never stated that every time this court reverses a n d remands the AL J ’s d eci s i on for lack o f substantial evidence the claimant s hould be awarded attorney ’s fees.

Id. at 869. W e are mindful of the fact that Decker succeeded

on the merits, and we consider that success ag ainst our observation that “it ‘will be only a decidedly unusual case in which there is substantial justification under the EAJ A even thoug h the ag ency ’s decision was reversed as lacking in

. . .D E C K E R V

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s u b s t a n tial

. . . evidence in the record.’” Id. at 868 (quoting Thangaraja v

. Gonzales

, 428 F .3d 870, 874 (9th Cir. 2005)). Neverth e l e ss, success on the merits is not dispositive of an EA J A a pplication, id. a t 8 69, a nd w e must assess the justification o f the Com missioner’s position based on its reasonableness before the district court made its decision on the merits.

The issue present e d t o the district court by D ecker’s appeal of the denial of benefits was the question of whether the new evidence Decker submitted to the Appeals Council required remand to the AL J for consideration of how the new data mig ht impact Decker’s disab i l i t y determination. The district c ourt determined that remand was appropriate bas ed

on our opinion in Brewes v. Commissioner of Social Security Administration

, 682 F .3d 1157 (9th Cir. 2012), reg a rding the
treatment of additional e v idence n ot before the A L J but added
to the record when the case was pres e n ted to the Appeals Council. W e h eld “that when the Appeals Council considers

new evidence in d e c iding whether to review a decision of the AL J
, that evidence becomes p art of the administrative record, which the district court must consider wh e n reviewing the Commissioner’s final d ecision for substantial evidence.” Id. at 1163.

I n Brewes the AL J had determined that the claimant was not d isabled b ecause she co u ld perform jobs ex isting in sig nificant numbers in the nat i o n a l economy

. Id. a t 1163. The vocational ex pert who testified b e f o r e the AL J acknowledg ed, ho w ev e r , “ that if a person with B rewes’[ s] characteristics were to miss two or more day s of w o rk per month,

. . . she would be unemploy a b le.” Id. After the AL J ’s decision was issued, B rewes submitted new evidence to the Appeals Council: a letter in which her treating psy cholog istD E C K E R V

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and her mental health nurse practitioner “opined that ‘it is likely B rewes would miss quite a few d a y s a month from

even a simple job.’” Id. (brackets omitted )

. Be c ause B rewes’s new evidence directly undermined the basis of the AL J ’s analy si s , we concluded that the Commissioner’s decision was “not supported by substantial evidence.” Id. at 1164.

Gardner

, the companion to this case, is similar to Brewes

. The AL J in Gardn e r reviewed an ex a mining phy sician’s interim report that, if fully c redited, would hav e required a finding of disability

. The AL J discredite d t h e report purely becau se it was an interim, not final, report. Gardner submitted the p hy sician’s final report to the Appeals Council, which declined review. The phy sician’s final report stated a

co n c l u sion similar to that of the interim report, supporting Gardner’s disability c laim. G ardner at 7. J ust as in Brewes
, the n ew evidence directly undermined the basis for the AL J ’s decision: since the report had been finaliz ed, the phy sician’s opinion could no long er be disreg arded on the g r ounds that it

was only interim. W ith nothing left to s u p port the AL J ’s rejection of the phy sician’s o p inion, remand was “a foreg o ne conclusion.” Id

. at 12. B e c ause the Comm i s s i o n er lacked substantial justification t o oppose the remand, Gardner was entitled to fees pursuant to the EAJ A.

I t was not so obvious, thoug h, w hether Decker’s c a se required r e m and. Decker’s new evidence consisted of two pag es of blood test results, without further ex planation. A medical laboratory report that identifies certain test results a s “abnormal” w hen compared to stated reference rang es is not very meaning ful by itself. A report of o n e or more “abnormal” test results mig h t be evidence that suppo rts a finding o f long -term disability

, b u t it does not on its faceD E C K E R V

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R Y H I L L 12

compel it. D ecker failed to submit e vidence interpreting the added tes t r esults that w ould have made them more meaning ful to the district court and to u s. She also failed to

ex p lain why her new r esults meaning f ully differed from her previous r esults, some o f which were a lso abnormal. Noting that the n ew test results were not accompanied by an y thing stating how they were interpreted by Decker’s phy sician, the district court e x plained the decision to remand the merits case to the ag e ncy by observing that there was “a p ossibility ” that the r esults could be interpreted by Decker’s doctor to support

a result different from that reached by the AL J

. T h a t r e s ult was not inevitable, however.

J udg e s are not phy sicians, thoug h too many lawy ers w ho practice in the Social Security disab i l i t y benefits field seem to think otherwise. The district court was not req u ired to interpret for itself test results in the way that Decker wanted. Decker’s new evidence, thoug h sufficient i n the end to persuade the district court to remand the case, d i d not make that the only reasonable result. We canno t say , in that circumstance, that the district court abused i ts discretion in reaching the conclusion that the Commissioner’s position in opposing remand was substantially justified.

III. Conclusion

B e cause the district court did n o t abuse its discretion in

c o n c l u d i n g t h a t t h e C o m m i s s i o n e r ’ s p o s i t i o n w a s substantially justified, we affirm the district court’s denial o f Decker’s application for attorney fees under the EAJ A.

AF F IRMED.