Craig Tobeler v. Carolyn W. Colvin, 2014 U.S. App. LEXIS 7298

Background

Craig Tobeler sought attorney’s fees under the Equal Access to Justice Act (EAJA) after prevailing on a Social Security disability appeal; the district court denied his fee request and Tobeler appealed.
The court reviewed whether the government’s position was “substantially justified” at the agency level and in litigation; EAJA shifts the burden to the government to show substantial justification.
The administrative law judge (ALJ) had failed to address or explain the rejection of competent lay-witness statements from Tobeler’s friend/former employer (George Bandy) and his wife (Kimberli Tobeler) about his symptoms and work limitations.
The government argued the lay-witness evidence was irrelevant or incompetent because much of it postdated the relevant 1999 period; it relied in part on precedent permitting omission when lay witnesses offer medical diagnoses.
The Ninth Circuit held that the ALJ’s unexplained disregard of competent lay-witness testimony was legal error, that the government’s underlying position was not substantially justified, and reversed the district court’s denial of EAJA fees, remanding for determination of the fee amount.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the government’s position was substantially justified for EAJA purposes	Tobeler: ALJ erred by ignoring competent lay-witness evidence; the government therefore lacked substantial justification and fees should be awarded	Government: Evidence was irrelevant or incompetent (postdated the period; amounted to medical diagnosis), so ALJ was substantially justified in disregarding it	Court: Government’s underlying position not substantially justified because ALJ disregarded competent lay testimony without germane reasons; EAJA fees awarded
Whether lay-witness statements about symptoms and work limitations are competent evidence	Tobeler: Lay testimony about symptoms/functional limits is competent and must be considered or specifically discounted with germane reasons	Government: The statements were irrelevant to the 1999 period or constituted improper medical opinion by lay witnesses	Court: These statements were competent (not medical diagnoses) and relevant enough that ALJ’s failure to address them was legal error
Whether post-dated statements (2001, 2006) are irrelevant to 1999 condition	Tobeler: Post-dated observations are at least minimally relevant in absence of evidence of change; ALJ could seek clarification	Government: Statements dated after 1999 are irrelevant to the relevant period	Court: Post-dated statements can be relevant; government offered no legal basis to treat them as irrelevant and ALJ could probe for timing clarity
Whether the government’s litigation arguments in district court (harmless-error claim) can prevent EAJA fees	Tobeler: Substantial justification must be shown for agency action, regardless of later litigation positions	Government: Its district-court harmlessness argument made its position substantially justified	Court: Substantial justification must be shown at each stage; an unjustified agency position entitles claimant to EAJA fees even if litigation arguments were reasonable

Key Cases Cited

Meier v. Colvin, 727 F.3d 867 (9th Cir. 2013) (EAJA standard and burden on government)
Pierce v. Underwood, 487 U.S. 552 (1988) (definition of "substantially justified")
Lewis v. Apfel, 236 F.3d 503 (9th Cir. 2001) (requirement to give germane reasons for rejecting lay witness testimony)
Nguyen v. Chater, 100 F.3d 1462 (9th Cir. 1996) (distinguishing lay symptom testimony from inadmissible lay medical diagnoses)
Sampson v. Chater, 103 F.3d 918 (9th Cir. 1996) (agency error in disregarding lay testimony deprives Commissioner of substantial justification)
Flores v. Shalala, 49 F.3d 562 (9th Cir. 1995) (EAJA fees analyzed based on the issue that led to remand)
Lingenfelter v. Astrue, 504 F.3d 1028 (9th Cir. 2007) (post-event evidence can be probative of earlier condition)
Tonapetyan v. Halter, 242 F.3d 1144 (9th Cir. 2001) (ALJ may seek to clarify ambiguous lay statements)