Court Opinion

ID: 9486793
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:00:12.105772+00
Date Added: 2024-06-11T17:51:56.210653
License: Public Domain

SILBERMAN, Circuit Judge,
dissenting:
Petitioner sought review of a Board decision refusing to waive recovery of $40,661.24 in disability annuity overpayments. The Board may grant such waivers to the beneficiary of the overpayment “who, in the judgment of the Board, is without fault when, in the judgment of the Board, recovery would be ... against equity or good conscience.” 45 U.S.C. § 231i(e) (1988). In Cooper v. Railroad Retirement Bd., 977 F.2d 647, 651 (D.C.Cir.1992), we held that petitioner was without fault and remanded for the Board to consider whether recovery would impose a “severe hardship” so as to be against equity or good conscience. On remand, the Board determined from financial data submitted by petitioner that repaying $150 per month would not cause him severe hardship and accordingly reduced the recovery amount from $593 to $150 per month. Although the payment would leave Cooper with $55 per month in spending money, we held on the second appeal by unpublished order that the Board failed to explain why that amount was a sufficient margin to cover unanticipated expenses. Since “[t]he law does not require that beneficiaries who are without fault be cut quite so close to the bone,” Peterson v. Railroad Retirement Bd., 780 F.2d 1361, 1365 (8th Cir.1985), we concluded that the Boárd’s decision was “not supported by substantial evidence” and granted the petition for review. See Cooper v. Railroad Retirement Bd., No. 93-1442, Mem.Op. at 3, 1993 WL 515541 (D.C.Cir. Dec. 6, 1993).
Cooper seeks payment of attorney’s fees incurred over the course of both appeals, *1420arguing that, as the prevailing party, he is entitled to such fees under the Equal Access to Justice Act because the Board’s position was not “substantially justified,” 28 U.S.C. § 2412(d)(1)(A) — a formulation which we have interpreted to mean “roughly whether it was reasonable.” Union of Concerned Scientists v. Nuclear Regulatory Comrn’n, 840 F.2d 957, 963-64 (D.C.Cir.1988) (Williams, J., dissenting) (collecting cases). The panel agrees with Cooper, reviewing the evidence that led us to find that the Board’s decision in each case was not supported by substantial evidence. While acknowledging that the EAJA imposes “a distinct legal standard” in awarding attorneys fees, Federal Election Comm’n v. Rose, 806 F.2d 1081, 1089 (D.C.Cir.1986), the panel’s analysis simply equates the reasons for favoring Cooper on the merits — making him a prevailing party under the Act — with those supporting a finding that the government’s position is not substantially justified. That approach would render the latter concept mere surplusage; had Congress so intended, it simply would have stated that fees are to be awarded to the prevailing party — without adding the proviso: “unless the court finds that the position of the United States was substantially justified,” 28 U.S.C. § 2412(d)(1)(A).
Whether the government’s position is substantially justified, of course, depends on what constitutes the government’s position:
“[Pjosition 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) (1988). Thus, in addition to showing that its litigation posture is substantially justified, the government must also establish that the underlying agency action is reasonable. Congress so declared in an amendment to the Act, 99 Stat. 183 (1985), after Spencer v. NLRB, 712 F.2d 539, 557 (D.C.Cir.1983), cert. denied, 466 U.S. 936, 104 S.Ct. 1908, 80 L.Ed.2d 457 (1984), held that the government need only show that its litigation position, not the underlying agency action, was substantially justified. The amendment, however, in no way absolves the court reviewing an EAJA application of its responsibility to consider whether the agency action is reasonable, independent of the court’s decision on the merits. See Rose, 806 F.2d at 1087.
Our opinion in Cooper I was properly circumscribed, and refrained from denouncing the Board’s action as unreasonable:
We do not here question the Board’s reading of its own regulations to cover Cooper’s situation, although it is hard to discern a rationale for requiring someone like Cooper to return payments received during a time when all agree he was disabled. The important point is that we find no substantial evidence to indicate that Cooper’s education and union experience should have led him to the Board’s view.
977 F.2d at 651. An agency decision not supported by substantial evidence does not perforce give rise to liability for attorney’s fees under EAJA, for an agency action could be substantially (reasonably) justified although not substantially correct. See Pierce v. Underwood, 487 U.S. 552, 566 n. 2, 108 S.Ct. 2541, 2550 n. 2, 101 L.Ed.2d 490 (1988). In Pierce, the Court specifically relied on the meaning of “substantial” in the APA to inform its definition of the same word in the EAJA and concluded that both approximated the meaning of “reasonable.” See id. at 565-66, 108 S.Ct. at 2550-51. But that is only half of the formulation. The Court explained that “a position can be justified even though it is not correct, and we believe it can be substantially (i.e., for the most part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.” Id. at 566 n. 2, 108 S.Ct. at 2550 n. 2. And we have specifically explained that an agency position may be substantially justified even if the action taken by the agency is deemed to be arbitrary and capricious. See Rose, 806 F.2d at 1089.
We granted the petition for review in Cooper I because the record did not support the Board’s finding that a person with Cooper’s union experience should have known of the requirements applicable to his pension plan. 977 F.2d at 650. But a reasonable person surely could think it justifiable that the Board expected a person whose pension benefits are his sole source of income to keep *1421apprised of the conditions of those benefits. The panel would sidestep this subtlety by focussing on the statement in Cooper I that “nothing” in the record indicated that Cooper should have known the “intricacies” of the laws and regulations governing his annuity. Of course, Cooper I itself belies the hyperbole, for it was uncontested that Cooper received and read periodical literature about retirement annuities and annual reporting notices mailed to him by the Board. In any event, our conclusion that the complexity of applicable regulations rendered Cooper “without fault” for his violations does not speak to whether the Board reasonably expected Cooper (and all other annuitants) to understand and follow the law. After all, Cooper conceded that his actions were unlawful, and the familiar maxim that ignorance of the law is not an excuse alone suffices to justify the Board’s position.
The case for the government is even stronger in Cooper II, where we decided that the Board’s gradual recovery of the money unlawfully paid to Cooper would be “against equity and good conscience.” I went along with the disposition because I, like most judges, do not think it wise to dissent in every ease that I think is wrongly decided, but only where the legal and practical consequences of the jurisprudential error justify comment. Now that Cooper has parlayed his recovery into an additional award of attorney’s fees, I regret my initial acquiescence.
The panel concluded in Cooper II that the Board had failed to explain how a $55 per month allowance for unanticipated expenses was adequate. In deciding that paying back $150 per month of money Cooper had received erroneously would not cause him a severe hardship, the Board relied on statements submitted by Cooper himself as to expenses he had incurred in the past. Those submissions accounted for actual expenditures and included both ordinary and unanticipated expenses. The Board gave Cooper the benefit of the doubt on two contingent items, monthly rent of $450 from his children and credit card payments for past consumer debt; the former was not counted in Cooper’s income, and the latter was included as an expenditure. Even with such generous accounting, the recovery ordered by the Board still left Cooper with at least $55 in unencumbered income per month. The decision in Cooper II argued that the allowance may not be adequate for future expenses, but gives scant reason as to the relevance of that analysis. The past data that Cooper submitted predicts his future expenses, and the reasons Cooper later offers to defeat the reliability of such submissions — his “increasing debt, advancing age, deteriorating health and imminent major expenses” — were all accounted for in the previous statements, which included credit card payments, deductions for a union health plan and another plan which Cooper intended to join, medicine costs, and car and house repairs. Of course, it is just as plausible that his future unanticipated expenditures (say, for consumer debt, which was included in his expenses) would fall, thereby leaving Cooper with even more discretionary income. And the Board’s failure to make adequately explicit this intuitive assumption — even if unacceptable in the panel’s judgment — does not mean that, a reasonable person would think that the Board’s position is not justifiable.