Heather Rounds v. Nancy Berryhill, 697 F. App'x 511

Heather Rounds appealed the ALJ’s denial of Supplemental Security Income; this court previously affirmed in part, vacated in part, and remanded for the ALJ to resolve an apparent conflict between a vocational expert’s (VE) testimony and the Dictionary of Occupational Titles (DOT).
On remand Rounds sought attorneys’ fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d)(1)(A), claiming the Commissioner’s position was not substantially justified.
The district court denied the EAJA fee application, finding the Commissioner’s position substantially justified both before the ALJ and in subsequent litigation.
The Ninth Circuit reviews EAJA fee denials for abuse of discretion and applies the ‘‘substantially justified’’ standard established in Pierce v. Underwood.
Circuit precedent was divided before Zavalin v. Colvin on whether an ALJ must reconcile conflicts between a VE’s testimony and DOT General Educational Development (GED) reasoning levels at Step Five.
Because the law was unsettled (and Zavalin issued after briefing closed), the Ninth Circuit concluded the Commissioner’s positions were reasonable and affirmed the denial of fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commissioner’s position was "substantially justified" for EAJA fees	Rounds: Commissioner’s ALJ decision and litigation position were not substantially justified because the ALJ failed to reconcile VE/DOT conflict	Commissioner: Position was reasonable given circuit split and prevailing law at the time	Court: Substantially justified; denial of EAJA fees affirmed
Whether ALJ was required to reconcile VE testimony with DOT GED Reasoning Level conflicts	Rounds: ALJ should have reconciled conflicts between VE and DOT at Step Five	Commissioner: No clear requirement under then-existing law due to circuit split	Court: Given pre-Zavalin division, Commissioner’s position was reasonable
Whether the Commissioner’s litigation position was unreasonable after Zavalin	Rounds: Zavalin clarified the law, making Commissioner’s position indefensible	Commissioner: Zavalin issued after briefing closed; litigation position was reasonable during proceedings	Court: Because Zavalin postdated briefing, Commissioner’s litigation position not unreasonable
Whether district court abused its discretion in denying EAJA fees	Rounds: Denial was erroneous because underlying ALJ error removed substantial justification	Commissioner: District court properly found substantial justification based on unsettled law	Court: No abuse of discretion; affirmed

Pierce v. Underwood, 487 U.S. 552 (1988) (defines "substantially justified" standard for EAJA fees)
Gutierrez v. Barnhart, 274 F.3d 1255 (9th Cir. 2001) (frames two-part inquiry on government’s substantial justification before and during litigation)
Zavalin v. Colvin, 778 F.3d 842 (9th Cir. 2015) (clarified ALJ’s duty to reconcile VE testimony with DOT GED Reasoning Levels)