Valdez v. Barnhart , 184 F. App'x 815 ( 2006 )


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  •                                                                         F I L E D
    United States Court of Appeals
    Tenth Circuit
    July 19, 2006
    UNITED STATES CO URT O F APPEALS               Elisabeth A. Shumaker
    Clerk of Court
    FO R TH E TENTH CIRCUIT
    RU BEN VA LDEZ,
    Plaintiff-Appellant,
    v.                                                   No. 05-1056
    (D.C. No. 00-N-1429)
    JO A NN E B. BA RN HA RT,                               (D . Colo.)
    Commissioner of Social Security,
    Defendant-Appellee.
    OR D ER AND JUDGM ENT *
    Before T YM KOV IC H, PO RFILIO, and BALDOCK , Circuit Judges.
    After examining the briefs and appellate record, this panel has determined
    unanimously to grant the parties’ request for a decision on the briefs without oral
    argument. See Fed. R. App. P. 34(f); 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    This order and judgment is not binding precedent, except under the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. The court
    generally disfavors the citation of orders and judgments; nevertheless, an order
    and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
    Plaintiff-appellant Ruben Valdez, who prevailed on appeal in his suit
    challenging the agency’s denial of his application for supplemental security
    income (SSI) benefits, now appeals from the district court’s denial of his
    application for attorney fees under the Equal Access to Justice Act (EAJA),
    
    28 U.S.C. § 2412
    . W e have jurisdiction under 
    28 U.S.C. § 1291
    , and AFFIRM .
    I.
    The EAJA provides:
    Except as otherwise specifically provided by statute, a court shall
    award to a prevailing party other than the United States fees and
    other expenses, in addition to any costs awarded pursuant to
    subsection (a), incurred by that party in any civil action . . . ,
    including proceedings for judicial review of agency action, . . .
    unless the court finds that the position of the United States was
    substantially justified or that special circumstances make an aw ard
    unjust.
    § 2412(d)(1)(A) (emphasis added). A fee award is thus required if (1) appellant
    is a “prevailing party”; (2) the position of the United States w as not “substantially
    justified”; and (3) there are no special circumstances that make an award unjust.
    See Com m’r v. Jean, 
    496 U.S. 154
    , 158 (1990) (quoting statutory language). In
    this appeal, the parties do not dispute that Valdez is a prevailing party and that
    there are no special circumstances that make an award unjust; they dispute only
    whether the government’s position was substantially justified.
    The EA JA explains that the “position of the United States” is “in addition
    to the position taken by the U nited States in the civil action, the action or failure
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    to act by the agency upon which the civil action is based.” § 2412(d)(2)(D). W e
    therefore consider (1) the government’s position on the issues in the underlying
    federal suit challenging the denial of SSI benefits, which, in this case, are the
    same issues appellant raised on appeal, as well as, (2) the action by the
    administrative agency— here, the Social Security Administration— reviewing
    Valdez’s initial applications.
    At the administrative agency level, Valdez applied for both disability
    insurance benefits and SSI benefits. The administrative law judge (ALJ) denied
    both kinds of relief on the basis that Valdez did not prove he was disabled at any
    time during the period under review. Valdez appealed to district court. The
    district court affirmed the denial of both SSI and disability insurance benefits.
    W e affirmed the denial of disability benefits, but reversed the decision denying
    SSI benefits, holding that the ALJ erred in evaluating the medical evidence of
    Valdez’s mental impairments and that he had proved eligibility for SSI benefits.
    Valdez v. Barnhart, 62 F. App’x 838, 840 (10th Cir. Feb. 20, 2003) (per curiam)
    (unpublished).
    Under the EAJA we will determine that the government’s position was
    substantially justified if it was “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); see also Estate of
    Smith v. O’Halloran, 
    930 F.2d 1496
    , 1501 (10th Cir. 1991) (citing Pierce). The
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    position of the government will be deemed to be substantially justified “if there is
    a ‘genuine dispute’ . . . or ‘if reasonable people could differ as [to the
    appropriateness of the contested action].’” Pierce, 
    487 U.S. at 565
     (quotations
    omitted).
    W e review the district court’s decision that the government’s position was
    substantially justified for abuse of discretion. Estate of Smith, 
    930 F.2d at
    1501
    (citing Pierce, 
    487 U.S. at 562
    ). “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 court’s decision is “arbitrary, capricious, or
    whimsical,” Cox v. Sandia Corp., 
    941 F.2d 1124
    , 1125 (10th Cir. 1991)
    (quotation omitted). This court “must 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 omitted).
    II.
    W e conclude that the district court’s denial of Valdez’s application for
    EAJA fees was within its discretion.
    In the fee application proceedings, the government argued that it was
    reasonable for the ALJ to reject the opinions of Drs. Schmidt, Hurley, and Cox,
    and, by implication, to rely on Dr. W anstrath’s opinion in making his RFC
    finding. See Aplee. Br. at 24-25. W hile w e disagreed with the government’s
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    position and the district court’s decision in the appeal on the merits, that is not
    the test in evaluating whether a fee award is mandated under the EA JA. Instead,
    we look at the government’s position as it was litigated, not with twenty-twenty
    hindsight. At its outset, the government argued that contesting Valdez’s claim
    was justified by the following evidence, which was subsequently accepted by the
    ALJ: (1) that Valdez’s described mental symptoms and functional effects should
    be discounted on the basis of his lack of credibility; (2) that several of
    Dr. Schmidt’s reports should be viewed skeptically because they were not
    supported by objective, clinical evidence, (3) that Valdez was capable of
    performing work at a medium level of exertion; (4) that Valdez was capable of
    performing his past relevant work and other work readily available in the present
    economy.
    In denying the fee application, the district court acknowledged our order
    and judgment, but concluded that the issues had been close and that the
    government’s position in this case was substantially justified for a number of
    reasons, concluding as follow s:
    the Commissioner’s position in this case was reasonable both in law
    and in fact. The ALJ considered the testimony of each of the treating
    physicians and the medical evidence they each provided. The A LJ’s
    rejection of D r. M ichael Schmidt’s opinion was based on Valdez’s
    subjective complaints and was contrary to other evidence, including
    that of the vocational expert. W hile the Tenth Circuit disagrees w ith
    the weight the ALJ afforded to Schmidt’s testimony, the ALJ
    considered the treating and examining medical source opinions in
    determining [Valdez’s] mental limitations. This is not a case w here
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    the initial administrative decision was clearly incorrect. The issues
    presented in this case were close and Valdez made reasonable
    arguments in support of his position. This conclusion is bolstered by
    the fact that the Tenth Circuit affirmed the denial of [Valdez’s] claim
    for disability insurance benefits. W hile the Tenth Circuit determined
    that there was not substantial evidence in the record to deny
    supplemental security income, the Commissioner’s position was
    substantially justified[].
    Aplt. Post Admin. App. at 486–87.
    A.
    W e begin our evaluation of the government’s defense position by
    considering whether the government had a “‘reasonable basis . . . for the facts
    alleged.’” Gatson v. Bowen, 
    854 F.2d 379
    , 380–81 (10th Cir. 1988) (quoting
    United States v. 2,116 Boxes of Boned Beef, 
    726 F.2d 1481
    , 1487 (10th Cir.
    1984)). The closeness of Valdez’s case (the government prevailed at the
    administrative and district court levels), while not conclusive, supports the district
    court’s view that the government had a reasonable basis to allege the facts it did.
    That the government did not prevail on appeal is immaterial. “There is no
    prerequisite that the government’s ‘decision to litigate was based on a substantial
    probability of prevailing’ for the government to defeat a claim for attorney’s fees
    under the EA JA.” Hadden v. Bowen, 
    851 F.2d 1266
    , 1268-69 (10th Cir. 1988).
    The “hazy contours of the substantial evidence rule does not necessarily mean
    that the position of the Government was not substantially justified.” 
    Id. at 1267
    .
    W e are satisfied the government’s (ultimately unsuccessful) factual position as
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    found by the A LJ and adopted by the C ommissioner justified the government’s
    defense position in contesting Valdez’s application.
    B.
    Having found a reasonable basis in fact for the government’s decision to
    oppose Valdez’s SSI application, we next consider whether there was a
    reasonable basis in law to support the government’s case. Gatson, 
    854 F.2d at
    380–81. Again, the closeness of this case weighs in the government’s favor.
    In upholding the ALJ’s fact-finding on the basis of Valdez’s credibility, the
    district court noted that:
    in making a credibility assessment, the ALJ should consider such
    factors as: “. . . the extensiveness of the attempts (medical or
    nonmedical) to obtain relief, the frequency of medical contacts, . . .
    subjective measures of credibility that are peculiarly within the
    judgment of the ALJ, the motivation of and the relationship between
    the claimant and other witnesses, and the consistency or
    compatibility of nonmedical testimony with objective medical
    evidence.” Kepler v. Chater, 
    68 F.3d 387
    , 391 (10th Cir. 1995).
    Aplt. Post A dmin. App. at 440. The ALJ took these factors into account in
    arriving at the findings of facts relied upon by the government. Specifically, the
    ALJ found:
    M r. Valdez’s statements concerning his impairments and their impact
    on his ability to work are not credible in light of the degree of
    medical treatment received. [Valdez] did not receive any significant
    physical or psychological treatment until 1996[,] but alleged at the
    hearing that he has decades old severe problems. [V aldez] also
    alleges a worsening of his physical limitations since 1990[,] but
    received no treatment between 1990 and 1996 and very little
    treatment since 1996. If [Valdez] were having so much difficulty the
    -7-
    [ALJ] would expect to find the claimant seeking some type of
    significant treatment.
    
    Id.
     at 25–26. The ALJ further found, after a discussion of extensive
    inconsistencies in Valdez’s reports of hallucinations and suicide attempts to
    different treating physicians, that it “appears that [Valdez] is increasing his
    complaints with every evaluation in order to make himself seem w orse than he
    really is.” Id. at 26. “The [ALJ] finds [Valdez’s] statements regarding his
    allegations of increasingly worse symptoms unsupported by the record and
    exaggerated.” Id. The ALJ also noted that treatment notes from various
    physicians appeared to indicate that Valdez’s primary motivation in seeking
    treatment was to “prove he is ‘disabled’ in order to receive benefits.” Id.
    In reaching these conclusions, the ALJ clearly took into account “the
    extensiveness of the attempts to obtain relief,” the “frequency of medical
    contacts,” “subjective measures of credibility,” “the motivation of and the
    relationship between the claimant and other witnesses,” and “the consistency or
    compatibility of nonmedical testimony with objective medical evidence” as
    required under our law. On appeal, we disagreed with the district court’s (and
    thereby the A LJ’s) weighing of these legal factors and the conclusions found as a
    result of that weighing. Valdez, 62 F. App’x at 840. But this does not mean that
    the government’s position and the ALJ’s ruling did not have a reasonable basis in
    law at the time they were made.
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    C.
    Finally, we must determine w hether the facts alleged reasonably support
    the legal theory advanced by the government. Gatson, 845 F.2d at 380. W e
    conclude that they do. Despite our determination on appeal that the ALJ
    improperly weighed the evidence, the disputed facts reasonably supported the
    government’s legal theory that Valdez was not entitled to SSI and disability
    benefits.
    *    *    *
    Given our deferential standard of review, we cannot conclude the district
    court abused its discretion. If we had held on the merits that the ALJ’s action had
    been arbitrary and capricious and the government had nevertheless defended the
    agency’s position, this might be a different case. Cf. Estate of Smith, 
    930 F.2d at 1501-02
     (holding that appellate court’s determination that agency’s failure to
    promulgate certain regulations was arbitrary and capricious foreclosed district
    court’s subsequent finding that government’s position was substantially justified).
    But such is not the case here.
    Accordingly, the judgment of the district court is AFFIRM ED.
    The district court denied M r. Valdez’ request to proceed in forma pauperis
    via an order dated February 15, 2005. See Fed. R. App. P. 24(a)(3)(A). Upon
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    review, we grant the appellant leave to proceed without the prepayment of fees or
    costs.
    Entered for the Court
    Timothy M . Tymkovich
    Circuit Judge
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