F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
July 18, 2007
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
TO N Y MA D R ID ,
Plaintiff-Appellant,
v. No. 06-2235
(D.C. No. CIV-04-753-LCS)
M ICH AEL J. ASTRU E, * (D . N.M .)
Commissioner of the Social Security
Administration,
Defendant-Appellee.
OR DER
Before L UC ER O, Circuit Judge, BROR BY, Senior Circuit Judge, and
M cCO NNELL, Circuit Judge.
This matter is before the court on appellant Tony M adrid’s Petition for
Panel Rehearing. Upon consideration of the petition, the response submitted by
the Commissioner of the Social Security Administration, and M r. M adrid’s reply,
the panel grants the petition and withdraws its prior order and judgment issued
April 18, 2007. The attached amended order and judgment is issued in its place.
*
Pursuant to Fed. R. App. P. 43(c)(2), M ichael J. Astrue is substituted for
Jo Anne B. Barnhart as the appellee in this action.
OR D ER AND JUDGM ENT **
Plaintiff Tony M adrid appeals from a district court order denying his
motion for attorneys’ fees under the Equal Access to Justice Act (“EAJA”),
28 U.S.C. § 2412(d)(1)(A), based on its finding that the government’s position
was substantially justified. Because the district court acted within its discretion
in making such a finding, we exercise our jurisdiction under 28 U.S.C. § 1291 to
AFFIRM .
I. Background and Procedural History
“The [EA JA] provides for the award of fees and expenses to the prevailing
party in a civil action against the Federal Government, unless the position of the
United States was substantially justified.” Harris v. R.R. Ret. Bd., 990 F.2d 519,
520 (10th Cir. 1993) (quotations omitted). The Supreme Court has held that a
position is substantially justified for purposes of the EAJA if it is “justified in
substance or in the main – that is, justified to a degree that could satisfy a
reasonable person.” Pierce v. Underwood, 487 U.S. 552, 565 (1988) (quotation
omitted). In other words, the government’s position must have had a reasonable
basis both in law and fact. See id.
**
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
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M r. M adrid claims he is entitled to attorneys’ fees under the EAJA because
he was the prevailing party in an appeal of the Commissioner’s denial of his
application for social security disability benefits. He filed his application for
benefits in December 2002, alleging an inability to work since September 2002
due to bilateral carpal tunnel syndrome and pain in his neck, shoulders, elbows,
wrists, back, knees, ankles, and feet. After his application was denied,
M r. M adrid obtained a de novo hearing before an administrative law judge
(“ALJ”), at which he appeared pro se.
The ALJ denied the application because he concluded that despite being
afflicted with severe ailments, M r. M adrid retained the residual functional
capacity to perform light work with certain limitations. The ALJ stated that his
decision was based on a careful consideration of all the evidence in the record.
Absent from the record, however, were the results of M r. M adrid’s rheumatoid
factor (“RF”) test, a test commonly used to diagnose rheumatoid arthritis. The
ALJ acknowledged that M r. M adrid had submitted to a rheumatology work-up and
even mentioned that “[t]here [was] a copy of a bill in the record, which
indicate[d] that a rheumatoid factor test was performed.” Aplt. A pp. at 15-16.
But the test results were not in the record, and the ALJ did not inquire into their
whereabouts. Nonetheless, he went on to conclude that M r. M adrid did not suffer
from any impairments included in the regulatory Listing of Impairments,
including the listing for inflammatory arthritis.
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M r. M adrid appealed the ALJ’s decision to the Appeals Council and
submitted additional evidence, which the Appeals Council made a part of the
administrative record. This evidence consisted of a note dated January 14, 2004,
from M r. M adrid’s treating physician, Dr. Peter Guerin, stating that “M r. M adrid
has A rthritis” and that “he can return to w ork 5-12-04.” Aplt. App., case
no. 05-2176, at 188. Despite Dr. Guerin’s note, the Appeals Council denied
M r. M adrid’s request for review and allowed the ALJ’s determination of non-
disability to stand. M r. M adrid then filed an action in the district court, which
affirmed the Commissioner’s decision that he is not disabled. He then filed an
appeal in this court.
W e reversed with instructions to remand the case to the Commissioner for
further development of the record concerning M r. M adrid’s claim that he suffered
from a rheumatological disorder. W e held that under the circumstances of this
case “the ALJ committed legal error by not requesting M r. M adrid’s rheumatoid
factor test results.” M adrid v. Barnhart, 447 F.3d 788, 791 (10th Cir. 2006)
(citing 20 C.F.R. § 404.1512(e)). W e further explained,
This failure is especially troubling because M r. M adrid was not
represented by counsel at his December 2003 administrative hearing,
the test results were in existence at the time of the hearing and
apparently available, and the ALJ was aware the test was performed.
Id. Following our remand, M r. M adrid filed a motion in the district court for
attorneys’ fees as the prevailing party under the EAJA.
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The district court denied M r. M adrid’s request for fees because it
determined that the Commissioner’s position was substantially justified. The
court reasoned that an ALJ’s duty to develop the record “does not transform the
A.L.J. into a pro se plaintiff’s advocate.” Aplt. App. at 24 (citing Henrie v. HH S,
13 F.3d 359, 361 (10th Cir. 1993)). It held that the ALJ had satisfied his duty of
inquiry in this case by considering M r. M adrid’s extensive testimony about the
nature of his impairments and their impact on his physical abilities. The court
also noted that the results of M r. M adrid’s RF test would not necessarily be
dispositive because “disability determinations turn on the functional
consequences, not the causes, of a claimant’s condition.” Id. (quotation omitted).
The court went on to explain that “the mere diagnosis of a medical condition . . .
says nothing about the severity of the condition.” Id. (quotation and alterations
omitted). Thus, it reasoned, even without the results of the RF test, reasonable
minds could disagree as to whether M r. M adrid could perform the essential
functions of light work. The court therefore concluded that the C ommissioner’s
position was substantially justified and attorneys’ fees were not warranted under
the EA JA. This appeal followed.
II. Substantial Justification Analysis
Standard of Review
W e review the district court’s determination that the government’s position
was substantially justified for an abuse of discretion. Pierce, 487 U.S. at 559;
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Gilbert v. Shalala, 45 F.3d 1391, 1394 (10th Cir. 1995). “An abuse of discretion
occurs when the district court bases its ruling on an erroneous conclusion of law
or relies on clearly erroneous fact findings,” Kiowa Indian Tribe of Okla. v.
Hoover, 150 F.3d 1163, 1165 (10th Cir. 1998), or when the district court’s
decision is “arbitrary, capricious or whimsical, or results in a manifestly
unreasonable judgment,” M oothart v. Bell, 21 F.3d 1499, 1504-05 (10th Cir.
1994) (quotations omitted). Our obligation is to “carefully scrutinize the district
court’s exercise of its discretion, but we may not substitute our own judgment for
that of the trial court.” Kiowa Indian Tribe, 150 F.3d at 1165 (quotation and
alteration omitted).
Scope of the Government’s Position
In determining whether the government’s position was substantially
justified under the EAJA, we must examine “the government’s present and past
stances on the basis of both the court and agency records.” Cummings v. Sullivan,
950 F.2d 492, 496 (7th Cir. 1991). W e therefore look to “the litigating position
of the [Commissioner] before the district court and the agency’s prelitigation
conduct, its action or inaction, the position that gave rise to the litigation in the
district court.” Id. The scope of the analysis is mandated not only by the text of
the statute itself, see 28 U.S.C. § 2412(d)(1)(B) (explaining that substantial
justification question “shall be determined on the basis of the record (including
the record with respect to the action or failure to act by the agency upon which
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the civil action is based),” but also by Commissioner, INS v. Jean, 496 U.S. 154,
159 (1990), where the Court clarified the parameters of the term “position”:
The fact that the “position” is . . . denominated in the singular,
although it may encompass both the agency’s prelitigation conduct
and the [government’s] subsequent litigation positions, buttresses the
conclusion that only one threshold determination for the entire civil
action is to be made.
The Court further reasoned that “the EAJA–like other fee-shifting statutes–favors
treating a case as an inclusive whole, rather than as atomized line-items.” Id. at
161-62.
W e recently applied this comprehensive analysis to the C ommissioner’s
position in another case involving a successful appeal of an adverse social
security ruling and resultant request for attorneys’ fees under the EAJA. See
Hackett v. Barnhart, 475 F.3d 1166 (10th Cir. 2007). In the merits phase of that
case, we remanded to the Commissioner because w e concluded that the A LJ’s
determination of non-disability was based on a mischaracterization of the
vocational expert’s testimony. W e then held that the claimant’s motion for
attorneys’ fees should have been granted because “the ALJ’s attempt to satisfy his
step-five duties . . . was not substantially justified.” Id. at 1175. W e reached this
conclusion despite the Commissioner’s reasonable litigation argument, explaining
that, under the facts of that case, the Commissioner’s litigation position could not
“cure” its prior unreasonable conduct. Id. at 1174-75. A cure was impossible
because the Commissioner’s litigation position was based on entirely new legal
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theories meant to justify the ALJ’s decision. This, we concluded, violated a
fundamental rule of administrative law – “that we may not properly affirm an
administrative action on grounds different from those considered by the agency.”
Id. at 1175 (quotation omitted). Ultimately, we held in Hackett that the
government’s position, considered as a whole w as unreasonable, even though its
“posture[] on individual matters may [have] be[en] more or less justified.” Jean,
496 U.S. at 161.
The Commissioner’s Position
Finally, we turn to the record and what it reveals of the C ommissioner’s
position in this case. M r. M adrid argues that because the merits panel, like the
merits panel in Hackett, found legal error in the ALJ’s analysis, the
Commissioner’s position a fortiori was not substantially justified. But this case
differs from Hackett in two crucial respects. First, the Commissioner’s position
at the administrative level was not wholly unreasonable even though the ALJ
erred in failing to request the results of M r. M adrid’s RF test. Second, the
Commissioner’s basic legal argument has remained unchanged, from the outset of
this case to now.
W e do not disagree with M r. M adrid’s contention that there was significant
evidence before the Commissioner supporting his claims of multiple joint pain.
Indeed, the medical record underlying the merits decision is replete with such
evidence. According to the records M r. M adrid provided this court, he began
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complaining of joint pain in late 2002, not just in his hands and wrists, but in his
elbows, shoulders, knees, and feet. He was diagnosed with mild degenerative
joint disease in his knees, and on examination other joints were tender as well. In
June 2003, he was sent for a rheumatology work-up and the RF test was
performed.
All of this evidence was in the record before the A LJ, who nonetheless
determined, because the test results were not before him, that M r. M adrid did not
suffer from a rheumatological disorder. In denying benefits, however, the ALJ
acknowledged M r. M adrid’s non-exertional impairments, including pain, and
found that they prevented him from performing the full range of light or even
sedentary work. Ultimately, the A LJ concluded that despite M r. M adrid’s
impairments, which, he concluded, prevent M r. M adrid from resuming any of his
past work, there remain a number of jobs at the light exertional level that he can
still perform. This decision was based, in part, on M r. M adrid’s own testimony,
which the ALJ was uniquely positioned to accept or reject. See Casias v. Sec’y of
Health & H um an Servs., 933 F.2d 799, 801 (10th Cir. 1991) (recognizing that the
ALJ is “the individual optimally positioned to observe and assess witness
credibility.”). The ALJ also took note of M r. M adrid’s job as a busboy, which he
was engaging in part-time at the time of the hearing, and which is categorized at
the medium exertional level. As we mentioned earlier, in challenging the A LJ’s
decision, M r. M adrid provided the Appeals Council with a note from his doctor
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stating that he has arthritis, but that despite this evidence, the Appeals Council
denied M r. M adrid’s request for review.
W ith respect to his litigation position, the Commissioner has consistently
argued that a diagnosis of arthritis does not mean that M r. M adrid is disabled
within the meaning of the Social Security Act and that despite the ALJ’s failure to
request the results of the RF test, his determination of non-disability was
substantially justified based on the record as a whole.
W e conclude that the Commissioner’s position in this case, considered “as
an inclusive whole,” Jean, 496 U.S. at 162, was reasonable in law and fact. Our
case law makes clear that a diagnosis of a condition does not establish disability.
The question is w hether a person’s impairment significantly limits his ability to
engage in substantial gainful activity. Bernal v. Bowen, 851 F.2d 297, 301
(10th Cir. 1988). Here, the ALJ clearly erred in rejecting M r. M adrid’s claim of
arthritis without obtaining the results of the RF test, and that action, standing
alone, may not have been substantially justified. But the ALJ made a number of
other findings leading to his ultimate conclusion that M r. M adrid has the capacity
to perform a limited range of light work, none of which were disturbed on appeal.
In addition, the Commissioner’s legal theory is supported by the facts. The
record reveals that in December 2003, M r. M adrid was engaging in fairly
strenuous physical labor, albeit part-time, even though he was suffering from
arthritis. It appears from Dr. Guerin’s note that he may have taken time off after
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receiving the diagnosis, but even so, Dr. Guerin opined that he could return to
work within four months. Thus, rather than bolster his case, the additional
evidence that M r. M adrid submitted to the Appeals Council undermined his
contention that he is disabled w ithin the meaning of the Social Security Act. It
defines disability as the “inability to engage in any substantial gainful activity by
reason of any . . . physical . . . impairment which . . . has lasted or can be
expected to last for a continuous period of not less than 12 months.” 42 U.S.C.
§ 423(d)(1)(A). W e assume, based on the nature of his condition, that M r.
M adrid’s arthritis was expected to last more than 12 months. W e must also
acknowledge, however, that M r. M adrid’s own doctor apparently believed he
could work with the condition even though his work at the time was bussing
tables at a restaurant.
The purpose of the EA JA “is to eliminate for the average person the
financial disincentive to challenge unreasonable governmental actions.” Jean,
496 U.S. at 163. Based on the foregoing, we simply cannot conclude that the
district court abused its discretion in concluding that the Commissioner acted
reasonably in this case.
The judgment of the district court is therefore AFFIRMED.
Entered for the Court
W ade Brorby
Senior Circuit Judge
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Madrid v. Astrue
Combined Opinion