Court Opinion

ID: 8940617
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:54:42.496509+00
Date Added: 2024-06-11T17:09:43.632419
License: Public Domain

PREGERSON, Circuit Judge,
concurring in part, and dissenting in part:
I concur in parts 1 and 2 of the majority opinion, but dissent from the majority’s decision in part 3 to reverse the district court’s award of $29,759 in attorneys’ fees to Edwards’s counsel pursuant to 28 U.S.C. § 2412(d)(1)(A). I believe that Edwards is the prevailing party and that the Secretary’s position, when considered in the totality of the circumstances, was not substantially justified.
The plaintiff is a “prevailing party” for attorneys’ fees purposes if she “suceeed[s] on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Hensley v. Eck-erhart, 461 U.S. 424, 433 & n. 7, 103 S.Ct. 1933, 1939 & n. 7, 76 L.Ed.2d 40 (1983) (discussion of 42 U.S.C. § 1988 applicable in all cases where Congress has authorized an award of fees to a “prevailing party.”).
The partnership-in-fact test, on which the parties finally settled, achieves a substantial amount of the benefit Edwards sought in bringing the suit. Edwards objected to the partnership test that the Secretary proposed in the district court because she believed that the extent of the wife’s participation, not the existence of a formal oral or written partnership agreement, should be the determinative factor in deciding whether the wife was self-employed. The agreed-to partnership-in-fact test provides that “[t]he requisite intent is to jointly operate a business. While in most cases there is a conscious intent to form a partnership, such intent is not essential. When the parties are husband and wife ... it may be found that they never saw the need to formally establish a second relationship." Social Security Administration, Programs Operations Manual System, RS 01802.318 (October 1984). The Secretary’s concession that “[t]he parties may be ‘running the family business’ ” and “there need not be conscious recognition of the relationship as a partnership," id., remedies the problems with the partnership test that Edwards raised below. Because Edwards also succeeded on the retroactivity and amendment of earnings records issues, I would find her to be a prevailing party within the meaning of the EAJA.
Moreover, I cannot agree with the majority that the parties’ settlement on the partnership-in-fact test and this court’s reversal of a small part of the district court’s order makes the Secretary’s position substantially justified. My review of the record convinces me that it was Edwards’s persistence in this suit that prompted the Secretary to agree to the partnership-in-fact test. The Secretary did not issue RS 01802.318 until October 1984, two and one-half years after Judge Patel’s decision below, and a month after the parties had submitted their briefs to this court. The Secretary admits that she changed her definition of partnership to include a partnership-in-fact because “[t]he various court decisions on husband and wife business operations prompted a review of husband-wife partnership instructions to correct the implication that a valid husband-wife partnership is a rarity____” See Transmittal No. 8, SSA Pub. No. 68-0301802 (October 1984). The Secretary thus concedes that her prior definition of partnership was insufficient to encompass the typical husband-wife jointly run business.
The fact that the Secretary ultimately settled on reasonable terms does not rectify her prior unreasonableness. The EAJA requires the court to consider the Secretary’s position in the totality of circumstances, both prelitigation and during trial. Rawlings v. Heckler, 725 F.2d 1192, 1196 (9th Cir.1984). “ ‘If the government’s litigation position was the sole consideration, then the government could insulate itself from any liability for attorneys’ fees, no matter how unreasonable the action challenged, simply by conceding error or settling on reasonable terms after a suit has been filed.’ ” Id. at 1196 (quoting Envi*668ronmental Defense Fund, Inc. v. Watt, 554 F.Supp. 36, 41 (E.D.N.Y.1982), aff'd, 722 F.2d 1081 (2d Cir.1983)).
The fact that the Secretary conceded section 411(a)(5)(A)’s unconstitutionality yet, until recently, proposed highly inadequate relief, in addition to the fact that she raised a number of meritless arguments in the district court, such as lack of standing, abandoned on appeal, supports the district court’s finding that the Secretary’s position was not substantially justified.
For these reasons I would uphold the district court’s modest award of attorneys’ fees under the EAJA, and therefore dissent from the majority’s decision to reverse on that issue.