Argued and Submitted, San Francisco, California March
Appeal from the United States District Court for the District of Nevada. D.C. No. 3:09-cv-00309-ECR-RAM. Edward C. Reed, Jr., District Judge, Presiding.
Linda S. Ziskin (argued), Lake Oswego, Oregon; John C. Boyden and John A. Aberasturi, Erickson, Thorpe & Swainston, Ltd., Reno, Nevada, for Plaintiff-Appellant.
Elizabeth Barry (argued), Special Assistant United States Attorney, Daniel G. Bogden, United States Attorney, Donna L. Calvert, Acting Regional Chief Counsel, Social Security Administration, San Francisco, California, for Defendant-Appellee.
Before: Raymond C. Fisher and Marsha S. Berzon, Circuit Judges, and Gordon J. Quist, District Judge.[*]
FISHER, Circuit Judge
Craig Tobeler appeals the district court's order denying his motion for attorney's fees under the Equal Access to Justice Act (EAJA). We have jurisdiction under 28 U.S.C. § 1291, we review for an abuse of discretion, see Meier v. Colvin, 727 F.3d 867, 869-70 (9th Cir. 2013), and we reverse.
" EAJA provides that 'a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action . . . unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.'" Meier, 727 F.3d at 870 (quoting 28 U.S.C. § 2412(d)(1)(A)). " It is the government's burden to show that its position was substantially justified." Id. (citing Gutierrez v. Barnhart, 274 F.3d 1255, 1258 (9th Cir. 2001)). " Substantial justification means 'justified in substance or in the main -- that is, justified to a degree that could satisfy a reasonable person.'" Id. (quoting Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988)) (internal quotation marks omitted). " Put differently, the government's position must have a 'reasonable basis both in law and fact.'" Id. (quoting Pierce, 487 U.S. at 565). " The 'position of the United States' includes both the government's litigation position and the underlying agency action giving rise to the civil action." Id. Thus, if " the government's underlying position was not substantially justified, we [must award fees and] need not address whether the government's litigation position was justified." Id. at 872.
Here, the underlying agency action lacked a reasonable basis in law because the administrative law judge (ALJ) disregarded competent lay witness evidence on Tobeler's symptoms without comment. Under our case law, " [l]ay testimony as to a claimant's symptoms is competent evidence that an ALJ must take into account, unless he or she expressly determines to disregard such testimony and gives reasons germane to each witness for doing so." Lewis v. Apfel, 236 F.3d 503, 511 (9th Cir. 2001); accord Stout v. Comm'r, Soc. Sec. Admin., 454 F.3d 1050, 1053 (9th Cir. 2006). Disregarding competent lay witness testimony without comment, therefore, constitutes " legal error,"
and it " deprive[s] the Commissioner of substantial justification." Sampson v. Chater, 103 F.3d 918, 922 (9th Cir. 1996); see also Li v. Keisler, 505 F.3d 913, 920-21 (9th Cir. 2007) (explaining that an agency's decision lacks substantial justification when it is " contrary to clearly established law" ).
Noting that our case law requiring a reasoned explanation for rejecting lay witness evidence applies solely to competent evidence, the government contends that the evidence at issue here was irrelevant, and hence, that the ALJ would have been ...