dissenting in part:
I agree with the majority’s finding that the Secretary’s position was substantially justified through the initial remand by our court. I believe, however, that the district court abused its discretion in holding that the Secretary was substantially justified when, after the remand, he again denied benefits. The district court remanded this second denial because “the Secretary had not properly considered [Williams’s] mental condition in determining that she could resume work, improperly weighed medical evidence and selectively disregarded [her] testimony without adequate credibility findings.” The majority does not conclude that those findings were clearly erroneous, yet holds that the Secretary’s position was substantially justified.
I do not believe that the Secretary was justified in failing to properly consider Williams’s mental condition. All of the psychiatric evidence indicated an inability to work during the closed period. Specifically, the mental condition evidence referred to by the Magistrate consisted of reports by Williams’s treating psychiatrist, Dr. Toney, and the only other psychiatric examiner, Dr. Baron. Both doctors diagnosed Williams as schizophrenic. Dr. To-ney observed that she had been hospitalized on several occasions because of “confusion, anxiety, tension and delusions.” In his May 1982 analysis, he concluded that she was “unable to be gainfully employed.” This was during the March 18, 1982 through June 5, 1983 period of disability for which the Secretary later granted benefits.
During this same time, Dr. Baron found that Williams additionally suffered from a dependent personality disorder. He concluded that due to her chronic psychiatric illness, it “would be very difficult for [her] to work in her field as a bookkeeper,” and that her concentration was “very poor” due to her underlying affective illness and psychosis. This evidence was not contradicted. On the basis of the undisputed psychiatric evidence, the decision to deny compensation was not substantially justified.
Moreover, as found by the district court, the Secretary improperly weighed the medical evidence. Although after the initial remand the focus was on Williams’s mental *224condition, the Secretary unreasonably continued to rely on non-psychiatric evidence of Williams’s condition in denying benefits. Finally, it was unreasonable for the Secretary selectively to disregard Williams’s testimony without adequate credibility findings. The written record gives no indication of malingering. In fact, Williams seems to have been an unusually candid witness. She testified to her hopes of being able to further her education so as to become employable. She also unsuccessfully attempted to go back to work during the period in question. Her testimony, which never was found to be incredible, included an incident of passing out on March 19,1982, resulting in hospitalization. At that time she indicated, “I was hearing and seeing things, I used to think the television was talking to me and telling me things. Whatever was on the TV I thought it was involving me, I thought they was talking about me.” Williams stated that she was “afraid of being in the dark at night by myself because I would — things would be on me I thought [in] the bed, and I was — I guess I was just afraid. I guess I panicked; yes, I would agree with that.” Williams testified that she had been hospitalized five times for schizophrenia. During the months from March to July 1982, she testified that she was afraid to go anywhere so she stayed mostly in bed. When asked if she went out at all, Williams answered, “no.” When asked what she did during the months from August through November 1982, she answered that she could not remember. She testified that she tried to work in December 1982, but after working for a week or two, she could not continue because “I wasn’t able to manage the job and I thought I was hearing things. I thought people was there watching me and things.” When asked about her return to work in June 1983, she stated: “I just sort of remember things gradually going back into place where I could finally get back into the work force.” Under these circumstances, the Secretary was not substantially justified in denying the limited benefits.
In applying the abuse of discretion review standard to the district court’s denial of Williams’s fee motion, the majority subtly expands the definition of that standard set forth in Pirus v. Bowen, 869 F.2d 536, 539-40 (9th Cir.1989). The majority correctly quotes Pirus as limiting review to “ ‘assuring that the district court’s determination has a basis in reason.’ ” On the following page, however, the majority states that all that is needed to affirm the district court is “any basis for concluding that the Secretary’s position was reasonable” (emphasis added).
Of course, the district court’s task was to determine whether the Secretary’s decision was substantially justified, which we, on occasion, have equated with having a reasonable basis in fact and law. Kali v. Bowen, 854 F.2d 329, 332 (9th Cir.1988). For us to determine that the district court did not abuse its discretion, however, requires more than ascertaining whether it had “any basis” for concluding that the Secretary’s position was reasonable. For example, a trial court in view of the litigation explosion, could erroneously believe that claims should be discouraged and, on that basis, decide that the Secretary’s decision to disallow compensation was reasonable. Upon our review, we would have to conclude that the district court had a basis for its conclusion and, ergo, it was not an abuse of discretion. Our function, however, is more searching and less deferential.
Even if we were to apply literally the Pirus formulation, limiting review to “assuring that the district court’s determination has a basis in reason,” we would not fulfill our duty. The above example, where the district court’s decision was based on the belief that disability claims should be discouraged, would be based on a reason. The trouble with such a district court decision is that it would be based on an incorrect reason. Thus, the Pirus explanation of abuse of discretion has to be construed as requiring that the district court decision be based on a correct reason. Moreover, decisions often are more complex. There may be multiple reasons for a court’s decision, one being correct and the others incorrect. A balancing is required by the appellate court to determine whether the *225ultimate decision was reasonable and not an abuse of discretion. I believe it was in this context that Pirus intended its formulation.
The Equal Access to Justice Act, 28 U.S.C. § 2412 (1988), was passed not only to reduce or eliminate expense as a legal barrier to individuals who have been victims of unreasonable government action, McGill v. Secretary of Health & Human Services, 712 F.2d 28, 30 (2nd Cir.1983), cert. denied, 465 U.S. 1068, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984), (citing H.R.Rep. No. 418 [1418], 96th Cong., 2d Sess. 9-10, reprinted in 1980 U.S.Code Cong. & Admin. News 4953, 4984, 4988), but also to make those same individuals whole. See Change-All Souls Hous. Corp. v. United States, 1 Cl.Ct. 302, 303 (1982) (citing 125 Cong.Rec. 21,435 (1979)). I believe those purposes are ill served when the undisputed psychiatric evidence supports the claimant’s testimony indicating a disabling mental condition, yet the Secretary unreasonably requires a second appeal before granting benefits for the limited period. Contrary to congressional intent, such results will make it difficult if not impossible for the impecunious with similarly just claims to obtain legal representation.
The district court set forth its basis for denying attorney’s fees as follows:
During the second phase of this case, [Williams] appealed the results of the supplemental hearing to this court. The Magistrate remanded the case for a failure to properly weigh conflicting evidence and make credibility findings. Under these circumstances, an award of attorney’s fees would be inappropriate. Some medical evidence did support the Secretary’s position. In addition, before the second supplemental hearing, [Williams] submitted 83 pages of additional evidence bearing on her disability. The Secretary’s disability determination, based partially on the new medical evidence submitted, should not serve to undermine the reasonableness of the Secretary’s position in the prior proceeding. Therefore, [Williams’s] request for attorneys fees must be denied as the Secretary’s position was substantially justified.
(citations omitted). The rationale does not accurately state the reasons for the prior remand. As I have indicated, the district court, in making that remand, adopted the magistrate’s findings that “the Secretary had not properly considered [Williams’s] mental condition in determining that she could resume work, improperly weighed medical evidence and selectively disregarded [her] testimony without adequate credibility findings.” Thus, the remand was not due to “a failure to properly weigh conflicting evidence,” but because of a complete failure to consider certain evidence, i.e., that of Williams’s mental condition. There is a difference between improperly weighing evidence and completely failing to consider evidence. Similarly, in ordering the second remand, the district court found that the Secretary selectively disregarded Williams’s testimony without adequate credibility findings. This is quite different from saying that there was a mere “failure to make credibility findings.” There thus was not a reasonable basis advanced by the district court for the denial of attorney’s fees, and accordingly the district court’s decision should be reversed as an abuse of discretion.