The case is Padula v. Colvin, a summary order decided on May 7. In 2013, the Second Circuit ruled in Padula's favor after the ALJ denied his benefits. The Court said the ALJ had not considered all relevant medical and other evidence in deciding that Padula's reported symptoms of fatigue and nausea were not credible. As a prevailing party, Padula then moved for attorneys' fees under the Equal Access to Justice Act. The district court said no to the fees. The Court of Appeals (Calabresi, Pooler and Raggi) says yes.
A body of case law tells us what "substantially justified" means under the EAJA. The government must make a strong showing that its position in the case was "justified to a degree that could satisfy a reasonable person." The problem for Padula and other plaintiffs is the standard of review on appeal is "abuse of discretion," which is another way of saying the Court of Appeals defers to the district court's ruling. But not all deference is limitless.
On the record before us, the [Social Security] Commissioner has not carried her burden of showing that her position was substantially justified. To be sure, the Commissioner continues to urge a view of the evidence suggesting that it should have prevailed on the merits of the prior appeal, but this reprise of arguments we previously found unavailing is insufficient on its own to show that her “position . . . had a reasonable basis in both law and fact.” In her submissions to the district court and this Court, the Commissioner makes no attempt to defend the ALJ’s failure to consider the treatment notes of Padula’s psychiatrist, which recounted Padula’s complaints of fatigue and nausea, and revealed that he was being prescribed medication to alleviate precisely these documented symptoms. The Commissioner’s sole defense of its prior litigation position is its contention that the ALJ reasonably relied on the treatment notes for several individual visits, where Padula failed to report nausea, fatigue, or side effects of his medication.While Padula gets fees, the Court of Appeals cuts them by 40 percent. Counsel spent about 81 hours on the case. The Court says it usually awards fees in cases where the lawyers expended 20 to 40 hours on the case.