2010 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 11-12-2010 

# M ari a D i az v

. C omm S o c i al S ecurity P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 10-1471

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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

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w Di git al Reposit ory

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w . vi ll anova . e du . Re c omme nde d C it at ion
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. C omm S oc i al S e c ur ity " (2010). 2010 D e cisio n s . P ape r 264. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2010/264NOT 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- 1471

M AR I A D I AZ, 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

fort he D i s t r i ctof N ew J er s ey ( D . C . C i vi l N o. 2- 07- cv- 00790 ) D i s t r i ctJ udge: H on. St anl eyR . C hes l er

Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

N ovember8, 2010 B efore: M cK E E , C hief J ud ge, S L O V ITE R and C O W E N , C i rcui tJudg es

(F il ed : N o v em b er 1 2 , 2 0 1 0 )

OP I NI ONA l t hough D i az appeal s onl ythe deni al of herm ot i on for 1 rec o n side rati o n , w e c o n stru e n o ti ce s o f a p p ea l l ibera lly , Sm i th v. B arry , 5 0 2 U .S . 2 4 4 , 2 4 8 (1 9 9 2 ), an d m a ye x e rc ise a p p e llate ju risd ictio n “ o v e r o rd e rs n o t sp e c if ied in th e n o ti c e o f

a p p e a l if there is a co n n ec ti o n b etw ee n the sp ec ifi ed an d u n sp ec ifi ed o rde r, t he i nt ent i on t o appea l t he uns peci fi ed or der i s appar ent an d the oppos i ng par t y i s not pr ej udi ced a nd has a ful l oppor tuni t yt o br i ef t he i s s ues . ” W

i l l i am s v. G uz

z ar di , 8 7 5 F . 2 d 4 6 , 4 9 (3d C ir . 1 9 8 9 ). T her e i s a connect i on betw een t he mot i on forr econs i der at i on and the u n sp ec ifi ed u n d erly ing o rde r de n y ing h er a tt o rne yfe es; D iaz’s n o tice o f

a p p e a l r e f

e re n c e s th a t d e n ial, in d ica tin g a n in ten t to appea l t her efr om ; and both par t i es have br i efe d ful l yt he mer i t s of th e u n d e rly in g o rd e r. O u r re v iew o f th a t o r d e r w ill n o t u n f a irly p re ju d ice th e G o v e rn m e n t. T h e D is tr ic t C o u rt h a d ju ri s d ic tio n u n d e r 2 8 U . S .C . § 2 1332. W e have j ur i s di ct i on under28 U . S. C . § 1291. 2 SL O V I T E R , C i r cui tJ udge. T hi s i s t he s econd t i m e thi s m att erhas come befor e us . I n D i azv. C om m ’ rof Soc. Sec. , 5 7 7 F . 3 d 5 0 0 , 5 0 4 (3d C ir . 2 0 0 9 ) (D i az I ) , w e hel d t hatthe D i s t r i ctC our terr ed
w h e n it af

f irm e d th e A L J’s d e ter m in a tio n th a t f a iled to c o n sid e r th e e f

f e c t o f M a ria D i az’ s obes i t yi n combi nat i on w i t h herot heri m pai r m ent s i n deny i ng herappl i cat i on for di s abi l i t ybenef

i t s . Fol l ow i ng ourr emand, the A L J found D i az w as t ot al l ydi s abl ed as of
an ons etdat e more t han tw o y ear s ear l i erthan pr evi ous l yfound. A s the “pr evai l i ng par t y , ” D i az moved i n t he D i s t r i ctC our tforherat t orneyfee s and cos t s underthe Equal A cce s s t o J us t i ce A ct( “EA J A ”) , 28 U . S. C . § 2412( d) ( 1) ( A ) . T he D i s t r i ctC our tdeni ed t hatr eques tand D i az a ppeal s . W e r evi ew thatdeni al foran abus e of di s cr et i on. 1 2

I.3

“[T] he s peci fi c purpos e of the EA J A i s t o el i m i nat e forthe ave r age pe r s on the fi nanci al di s i ncent i ve t o chal l enge unr eas onabl e governm ent al act i ons . ” A str u e v . R a tli ff , 130 S. C t . 2521, 2530 ( 2010) ( i nt ernal quot at i on m arks om i t t ed) . I tr equi r es a courtupon t i m el ym ot i on t o aw ar d t he pr evai l i ng part yi t s fee s and otherexpens es i ncurr ed i n any ci vi l act i on, unl es s t he courtconcl udes thatthe G overnm ent ’ s pos i t i on i n al l phas es of the li ti g ati o n “w as su b stan ti all yjusti fied o r th at sp ec ial circu m stan ce s m ak e a n aw ard unj us t . ” 28 U . S. C . § 2412( d) ( 1) ( A ) . T he G overnm ent ’ s “pos i t i on” i ncl udes i t s pos i t i on ta k e n in litig a tio n a n d th e a g e n c yp o s itio n th a t m a d e th e litig a tio n n e c e s s a ry. H anover P o ta to P ro d

s., In c . v. Sh a la la , 9 8 9 F .2 d 1 2 3 , 1 2 8 (3 d C ir . 1 9 9 3 ). A p o s i t i o n i s s u b s t a n t i a l l y j u s t i f i e d i f i ti s “ j u s t i f i e d t o a d e g r e e th a tc o u l d s a t i s f y a r eas onabl e per s on. ” P i er ce v . U nder w ood , 487 U . S. 552, 565 ( 1988) . I ti s the G o v e rn m e n t’s b u rd e n to d e m o n stra te its p o sitio n w a s g ro u n d e d in a re a so n a b le b a sis in f a c t a n d la w w ith a re a s o n a b le c o n n e c tio n b e tw e e n th e tw o . Morga n v. P erry , 142 F. 3d 670, 684 ( 3d C i r . 1998) . A cour tcannotas s um e thatthe G overnm ent ’ s pos i t i on w as not
s u b s ta n tia lly ju s tif

ie d s im p ly b e c a u s e th e G o v e rn m e n t lo s t o n th e m e ri ts . I d. a t 

### 685. A l t hough t he G overnm ent ’ s s ucce s s orfai l ur e on the mer i t s ateac h l evel i s i ndi cat i ve of
w h e th e r i ts p o s itio n w a s s u b s ta n tia lly ju s tif ie d , it is n o t d is p o s itiv e . P i er ce , 487 U . S. at 569. II. I n v a c a t i n g t h e Di s t r i c tCo u r t ’ s a f f i r ma n c e o f

th e AL J ’ s d e n i a l o f

Di a z ’ s c l a i m, we4

concl uded w e w er e unabl e t o as cert ai n “w hetherthe A L J trul ycons i der ed compet i ng evi dence , and w hethera cl ai m ant ’ s condi t i ons , i ndi vi dual l yand col l ect i vel y , i m pact ed her
w or kpl ace per form ance . ” D i az I, 5 7 7 F .3 d a t 5 0 6 . W ith re g a rd to th e A L J’s d isa b ili ty
a n a ly sis a t ste p th re e , w e sta ted th e A L J h a d f a iled to p ro v id e a n e x p lan a tio n o f its
r eas oni ng s uffi ci entt o enabl e meani ngful appel l at e r evi ew . W e s t at ed, [T]he D i s t r i ctC our t ’ s cr i t i cal det erm i nat i on–t hatthe A L J ’ s ci t at i on of re p o rt s b yd o c to rs w h o w e re a w a re o f D ia z ’s o b e s ity su f

f ic e d

– w a s e rr o r. W er e ther e any dis cussi on of the com bined effe ctof D i az’s i m pairm ents , w e mi ghtagr ee w i t h t he D i s tr i ctC our t . H ow ever , abs entanal y s i s of the cumul at i ve i m pactof D i az’ s obes i t yand otheri m pai r m ent s on her funct i onal capa bi l i t i es , w e ar e ata l os s i n ourr evi ew i ng funct i on. I d. at504. W e furt hernot ed thatw e found i t“part i cul ar l ytr oubl i ng” thatthe A L J di s m i s s ed,
w i t ho ut expl anati on , a ph y si ci an’s m edical op i nion regardi ng D i az’s severe ar t hri t i s, b e c a u s e th a t d ia g n o s is w a s s u p p o rt e d b yp ro b a tiv e e v id e n c e in th e re c o rd . I d. a t5 0 6 . We in stru c ted th e A L J o n re m a n d to “ re c o n sid e r th is c o n d iti o n , an d its se v e rity , alo n e a n d in combi nat i on w i t h [D i az’ s ] ot heri m pai r m ent s . ” I d. A s not ed above , ul t i m at el y , D i az p r e v a i l e d o n t h e me r i t s o f h e rc l a i m. I n oppos i ng D i az’ s r eques tforfee s underthe EA J A , the G overnm entar gued that beca us e the D i s t r i ctC our thad i ni t i al l yaff i r m ed the A L J s ’ s deci s i on on t he mer i t s , the C o u rt m u s t h a v e d e te rm in e d th a t th e G o v e rn m e n t’ s p o s itio n w a s s u b s ta n tia lly ju s tif ie d . D i az a r gued t o t he contr ary , i . e. , t hatthi s cour t ’ s deci s i on vaca t i ng and r emandi ng the
cas e forfur t hercons i der at i on demonstr at ed thatthe G overnm ent ’ s pos i t i on w as i n fac t5

nots ubs t ant i al l yj us t i fi ed. T he D i s tr i ctC our ts t at ed that“both s i des ha[d] a poi nt ” and exami ned ourdeci s i on t o deci de the i s s ue. A pp. at28. T he C our tcons trued ourdeci s i on as fol l ow s: W ith o u t a d o u b t, th e T h ird C irc u it state d th a t th is C o u rt e rre d . B u t th is C our t ’ s havi ng err ed does notm ean thatthe C om m i s s i onererr ed, orthatthe G overnm enterr ed as a l i t i gant . A nd the Thi r d C i r cui tdi d nots aythatthe C o m m iss io n e r e rre d . R a th e r . . . th e T h ird C irc u it co n c lu d e d th a t itc o u ld notas cert ai n fr om t he A L J ’ s w r i t t en dec i s i on w hetherhe had e r r ed. A pp. at29. T he D i s t r i ctC our tt hus concl uded thatthe fa ctthatthe D i s t r i ctC our thad pr evi ous l yaff

i r m ed the A L J ’ s deci s i on demonstr at ed thatthe G overnm ent ’ s pos i t i on w as s ubs t ant i al l yj us t i fi ed. T he D i s t r i ctC our tm i s r ead ourdeci s i on i n D i az I w her e w e conc l uded i n s t r ong lan g u a g e th a t th e A L J e rre d a s a m a tter o f law in f a ili n g to d e v e lo p th e re c o rd . T h is is h ig h ly re le v a n t to th e in q u ir yin to s u b s ta n tia l ju s tif ic a tio n . See G ol em bi ew s kiv. B arnh art , 382 F. 3d 721, 725 ( 7t h C i r . 2004) ( s t r ong l anguage i n m er i t s opi ni on i s r el evant to e s ta b lis h in g la c k o f

s u b s ta n tia l ju s tif

ic a tio n ). In o u r prior d ec isi o n w e h eld th at th e A L J fa il ed to ex p li cit lyd iscu ss D iaz’s
o b e s i t y a ts t e p t h r e e a s r e q u i r e d b y B u rn e tt v. C o m m ’r o f So c . Se c . A dm in . , 220 F. 3d 112, 1 1 9 (3 d C ir. 2 0 0 0 ) (“ th is C o u rt re q u ire s th e A L J to se t f o rth th e re a so n s f

o r h is d e c isio n ;” A L J m u st p ro v id e “ d isc u ss io n o f th e e v id e n c e a n d a n e x p lan a tio n o f re a so n in g ” to e n a b le
m e a n in g f

u l ju d ic ia l r e v ie w ). D i az I, 5 7 7 F . 3 d at 50 3 -04 . W e re jected the G o v ern m en t’ s6

defe ns e of the A L J ’ s err orbas ed on R utherf ord v. Ba rnha rt , 3 9 9 F .3 d 5 4 6 (3 d C ir . 2 0 0 5 ). W e not ed i n D i az I, t he cl ai m anti n R utherf ord“ d id n o t as se rt o b e sitya s a n im p a irm e n t,
nordi d t he A L J not e, ordi s cus s , i t . ” D i az I, 577 F. 3d at504. W e not ed i n D i az I that D ia z c o n s is te n tly a s s e rt e d h e r o b e s ity in c o n n e c tio n w ith h e r c la im . I d. W e f u rth er c o n clud ed that the A L J im p rop erlyd ism issed ev iden ce o f D iaz’s se v ere ar t hr i t i s w i t houtexpl anat i on i n vi ol at i on of P l um m erv. Apf el , 1 8 6 F . 3 d 4 2 2 , 4 2 9 (3d C ir . 1999) ( “W hen a c onfl i cti n evi dence exi s t s , the A L J m aychoos e w hom t o cr edi tbut ‘c a n n o t re

jec t ev id e n c e f

o r n o re a so n o r th e w ro n g re a so n .’ T h e A L J m u st c o n sid e r a ll t he evi dence and gi ve s om e r eas on fordi s count i ng the evi dence s he r ej ect s . ”) ( i nt ernal
c ita tio n o m itte d ). I

d. at505- 06. W e found the A L J ’ s err or“part i cul ar l ytr oubl i ng, ” and
w e d ir e c te d th e A L J o n re m a n d to re c o n s id e r t h e is s u e . I d. at506. W e al s o not ed thatt he G overnm ent ’ s ar gum enti n s uppor tof the A L J ’ s err orw as bas ed upon fa ct s notr el i ed
u p o n b yth e A L J . I

d. at506 n. 5. T he cl ear l yes t abl i s hed ca s e l aw of B u rn e tt and P l um m er re q u ire d th e A L J to devel op t he r ecor d s uffi ci entt o perm i tm eani ngful appel l at e r evi ew . A nd “gene r al pr i nci pl es of admi ni s t r at i ve l aw pr ecl ude the C om m i s s i oner ’ s l aw y er s fr om advanc i ng g ro u n d s in s u p p o rt o f

th e a g e n c y ’s d e c is io n th a t w e re n o t g iv e n b yth e A L J .” G olem biew skiv. B arnh art , 3 2 2 F .3 d 9 1 2 , 9 1 6 (7 th C ir. 2 0 0 3 ); see Fargn oliv. Massana ri , 247 F. 3d 34, 44 n. 7 ( 3d C i r . 2001) ( “[T] he gr ounds upon w hi ch an a dm i ni s t r at i ve or der
m us tbe j udged ar e thos e upon w hi ch the r ecor d di s cl os es thati t s act i on w as bas ed. ”)

### The EAJA pe rmi t s r e c ove r y for att orne y fe e s at a r at e of 3 

### $ 1 2 5 p er h o ur w itha co st o f liv in g ad j u stm ent. It p ro v id es:

“ [ F ]e e s an d o th e r e x p e n se s” in c lu d e s th e re a so n a b le expens es of exper tw i t nes s es , the r eas onabl e cos tof anys tudy , anal y s i s , engi neer i ng r epor t , te s t , or p roj e c t w h ich is fo u n d b ythe c o u rtto b e n ec essa ry for t he pr epar at i on of t he par t y ’ s case , and r eas onabl e att orneyfee s ( T he amo untof fe es aw ar ded under thi s s ubs ect i on s hal l be bas ed upon pr evai li n g m arketr at es forthe ki nd and qual i t yof 7 (i n terna l qu o tat ion m ark s o m itted). A s a re su lto f th e A L J’s fa il u re to d ev elop the re co rd her e and t o fol l ow ourpr ece dent , D i az w as obl i ged t o l i t i gat e hercl ai m thr ough t he agenc yand the court s . T he G overnm enthas notpr ovi ded a pe r s uas i ve r eas on that ju s tif ie s th e a g e n c y ’s p o s itio n a n d its d e f e n s e th e re o f. 

### W e thus c onc lude that the Gove rnm e nt

l a c ke d s ubs t ant i a ljus t i fi c at i on fori t s deci s i on. J us t i ce Bre nnan s t at ed i n hi s concurr i ng opi ni on i n P i er ce , C oncerned thatt he G overnm ent , w i t h i t s vas tr es our ces , coul d for ce ci t i zens i nt o acqui es ci ng t o adver s e G overnm entact i on, r atherthan vi ndi cat i ng t hei rr i ght s , s i m pl ybythr eat eni ng them w i t h cos t l yl i t i gat i on, C ongr es s enac t ed the EA J A , w ai vi ng the U ni t ed St at es ’ s over ei gn and g e n e ra l sta tu to ryim m u n ityto f e e a w a rd s a n d c re a tin g a lim ited e x c e p tio n to th e “ A m e ri c a n R u le ” a g a in s t a w a rd in g a tto rn e y s f e e s to p re v a ilin g p a rt ie s . S . R ep . N o . 9 6 -25 3 , p p . 1 -6 (1 9 7 9 ) (S. R ep . ). 4 8 7 U .S . at 5 7 5 . B a se d o n o u r re v iew o f th e re c o rd , w e c o n c lu d e th a t D iaz is e n tit led to
r ecove rherfee s and cos t s . T he D i s t r i ctC our tabus ed i t s di s cr et i on i n concl udi ng ot herw i s e. A ccor di ngl y , w e w i l l r ever s e the D i s t r i ctC our t ’ s j udgm entdeny i ng D i az’ fee s and w e w i l l r emand fort he C our tt o aw ar d an appr opr i at e att orney s fee . 3t he s ervi ces furni s hed, exce p t tha t . . . ( i i ) at t orney fee s s hal l not be aw ar ded i n exce s s of $125 perhour unl es s t he courtdet erm i nes t hatan i ncr ease i n the cos tof l i vi ng ora s peci al fac t or , s uch as t he l i m i t ed av ail ab il ityo f q u ali fied att o rne y s fo r th e p r ocee di ngs in v o lv e d , ju s tif

ie s a h ig h e r f

e e .)[ .] 

### 28 U. S. C. § 2 41 2( d) ( 2) ( A)
. III . F o r th e f o re g o in g re a so n s, w e w ill re v e rse th e ju d g m e n t o f th e D istric t C o u rt.