Unpublished Disposition, 924 F.2d 1064 (9th Cir. 1990)

MEMORANDUM^** 

Appellant, Lisa R. Willis, appeals the district court's order denying her attorney's fees and expenses under the Equal Access to Justice Act ("EAJA"), 29 U.S.C. § 2412. Willis prevailed in her claim for Social Security disability benefits after an administrative law judge's ("ALJ's") initial denial of benefits was reversed and remanded by the district court. The district court subsequently denied Willis' motion for attorney's fees. Because the district court did not abuse its discretion in finding that the Secretary's initial denial of benefits was substantially justified, we affirm.

Willis has a history of chronic, recurring patellar dislocations which she contends causes her pain in her legs. She also contends that she has constant back pain; swelling and stiffness in the joints of her wrists and hands; and numbness and tingling in a number of areas of her body. She asserts that the pain is so severe that she cannot work. The record contains a number of medical reports that diagnose Willis' problems with her knees as stemming from patellar dislocations. None have diagnosed the cause of her other pain, numbness, and tingling.

Based on Willis' medical record and testimony at the hearing, on March 30, 1987, the ALJ denied her claims for supplemental security income. The ALJ found that the instability in Willis' knees would still allow her to perform sedentary work and that Willis' nonexertional limitations (i.e., the pain appellant claimed she experienced)¹  were not so great as to preclude her from all work activity. On the basis of these findings, the ALJ applied the relevant medical-vocational guidelines ("the grids") found at 20 C.F.R. Sec. 404, Appendix 2 to Subpart P, and determined that Willis could not be classified as disabled. The Appeals Council affirmed the ALJ's decision.

On May 17, 1988, the district court remanded the case to the Secretary for reconsideration. The court held that because the ALJ failed properly to take into account Willis' nonexertional limitations, the denial of benefits rested on less than substantial evidence. On remand, on November 30, 1988, another ALJ recommended that Willis be found disabled for supplementary security income purposes. The Appeals Council adopted this recommendation as the final decision of the Secretary.

On August 3, 1989, the district court entered an order denying Willis' motion for an award of attorney's fees and expenses under the EAJA. We subsequently remanded the case to the district court to allow it to enter specific findings in support of its order. On remand, the district court stated that it "was unable to conclude the Secretary's decision lacked a reasonable basis in either law or fact" because "the Secretary's position regarding the plaintiff's nonexertional limitations was arguably supported by medical and other evidence in the record, and did not violate clearly established law in this circuit." June 19, 1990 Order at 3-4.

Whether the district court relied on the correct legal standard in applying the EAJA is a matter of law reviewable de novo. Oregon Environmental Council v. Kunzman, 817 F.2d 484, 496 (9th Cir. 1987). However, provided that the district court applied the correct standard, a district court's decision to grant or deny attorney fees under the EAJA will be reversed only for an abuse of discretion. Pierce v. Underwood, 487 U.S. 552, 557-63 (1988); Oregon Environmental Council v. Kunzman, 817 F.2d at 496; Petition of Hill, 775 F.2d 1037, 1040 (9th Cir. 1985). An abuse of discretion occurs if the district court based its decision on an erroneous legal conclusion or a clearly erroneous finding of fact. Oregon Environmental Council v. Kunzman, 817 F.2d at 496.

As an initial matter, Willis argues that the district court, by denying fees on the basis that the ALJ's denial of benefits was only "arguably" supported by the record, applied an incorrect legal standard. The EAJA provides that a court shall award to a prevailing party fees and expenses incurred in any civil action unless the court finds that the position of the United States was "substantially justified" or "special circumstances make an award unjust." 28 U.S.C. § 2412(d) (1) (A). A decision that has a "reasonable basis both in law and fact" will satisfy the "substantially justified" standard. Pierce v. Underwood, 487 at 565.

While the district court's use of the term "arguably," taken by itself, could raise doubts regarding whether the correct standard was applied, the initial order denying fees makes clear that the judge denied Willis' motion for fees on the ground that the ALJ's decision was substantially justified. As the second order simply explained the initial order, it is clear that the district judge applied the appropriate standard. It appears that the court intended "arguably" only as a synonym for "reasonably," a term consistent with application of the "substantially justified" standard.

Willis also argues that the district court erred as a matter of law in finding the Secretary's position to be substantially justified on the ground that, in the district court's words, "allegations of disabling pain, by their very nature, are difficult to assess." June 18, 1990 Memorandum & Order at 4. From this statement, Willis argues, it may be inferred that the district court believes that the Secretary will always be substantially justified in denying claims of pain simply because they are difficult to assess. However, the district court had previously stated in that order that it considered both the medical and non-medical evidence regarding pain in determining the Secretary's position to be substantially justified. Therefore, the court could not have intended to state that the difficulty in assessing claims of excess pain, alone, is sufficient to make the Secretary's position substantially justified.

Further, Willis argues that the finding in the district court's May 17, 1988 Order that the Secretary's decision rested on less than substantial evidence establishes or, at the very least, persuasively indicates, that the Secretary's position was not substantially justified under the EAJA. This circuit has never equated the "substantially justified" and "substantial evidence" standards. See, e.g., Hammock v. Bowen, 879 F.2d 498, 504 (9th Cir. 1989). Moreover, the legislative history of the EAJA indicates that Congress did not intend the two standards to be interpreted as identical. According to the House Report on the passage of the EAJA, the substantial justification standard is not intended to "raise a presumption that the Government position was not substantially justified, simply because it lost the case." H.R.Rep. No. 96-1418, 96th Cong., 2d Sess., 11 (1980), reprinted in 1980 U.S.Code Cong. & Admin.News, 4984, 4990. As noted by the Second Circuit:

[S]ince a social security appeal usually will be reversed only if the court finds the Secretary's position to lack substantial evidence, the practical effect of viewing 'substantial evidence' and 'substantially justified' as synonymous would be that attorney fee awards would become automatic in virtually all successful social security appeals. This would be contrary to the clearly expressed intent of Congress that fees under the EAJA not be awarded automatically whenever the plaintiff prevails against the Government.

Cohen v. Bowen, 837 F.2d 582, 586 (2d Cir. 1988).

While Willis points out that language in the House Judiciary Committee Report of the 1985 reenactment of the EAJA indicates that Congress intended to equate the "substantial justification" and "substantial evidence" standards, see H.R.Rep. No. 99-120, 99th Cong., 1st Sess. 9-10, reprinted in 1985 U.S.Code Cong. & Admin.News 132, 138, we reject that language as an authoritative interpretation of the EAJA. First, it is not legislative history contemporaneous with the drafting of the language enacted in 1980. Second, despite the report, Congress did not change the language of the statute originally enacted and therefore demonstrated no intent to overturn its original meaning. Third, the report itself does not express a clear legislative intent that unequivocally modifies the statutory language. As stated by the Fourth Circuit in reviewing this report, "Congress never intended to adopt this standard.... If Congress had wanted this broad standard, which exceeds any judicial interpretation of the EAJA, it would have amended the statute." Pullen v. Bowen, 820 F.2d 105, 108 (4th Cir. 1987); see also Hadden v. Bowen, 851 F.2d 1266 (10th Cir. 1988); cf. Pierce v. Underwood, 487 U.S. at 566-67 (rejecting on similar grounds previous paragraph of same House report as authoritative interpretation of EAJA). Accordingly, we hold that the district court's determination that the Secretary's decision was not based on substantial evidence does not establish that the government's position was not substantially justified pursuant to the EAJA. Accord Hadden v. Bowen, 851 F.2d at 1269; Cohen v. Bowen, 837 F.2d 582 at 585-86; Pullen v. Bowen, 820 F.2d at 108.

Willis also contends that the district court abused its discretion in determining that the Secretary's position regarding Willis' nonexertional limitations was substantially justified. Specifically, Willis argues that her nonexertional limitations, were sufficiently severe to preclude the Secretary's use of the grids. See Burkhart v. Bowen, 856 F.2d 1335, 1340-41 (9th Cir. 1988); Desrosiers v. Secretary of Health & Human Servs., 846 F.2d 573, 577-79 (9th Cir. 1988) (Pregerson, J., concurring). However, the mere allegation of pain does not automatically preclude application of the grids; instead, the ALJ must first determine that the nonexertional limitations significantly limit the range of work that could be performed by the claimant. Fair v. Bowen, 885 F.2d 597, 602 (9th Cir. 1989); Desrosiers, 846 F.2d at 577 (Pregerson, J., concurring).

In this case, although the government's position on this issue did not ultimately prevail, sufficient evidence in the record supports the ALJ's initial position on Willis' exertional limitations so as to make the district court's denial of fees permissible. As the ALJ noted, Willis lives alone with her three-year old daughter and, except for the three times each week that Willis' mother assisted her with child care, was responsible for care of her daughter, shopping, cooking, and the cleaning of her apartment. In addition, Willis was able to take classes at a local community school during the period for which she sought benefits. The daily activities she was capable of performing, in concert with the lack of medical findings that would indicate a condition that would cause the type of pain asserted by Willis, provide a basis for the ALJ's belief that Willis' nonexertional limitations were not so significant as to preclude application of the grids. See Fair v. Bowen, 885 F.2d at 603. The district court did not abuse its discretion in determining that the ALJ's decision on this issue was substantially justified.

AFFIRMED.