The opinion of the court was delivered by: HERMAN
On October 5, 1984, we issued an order and judgment adopting the Magistrate's September 14, 1984, Report and Recommendation in the above-captioned action. The essence of this order was that plaintiff was found to be entitled to supplemental security income (SSI) benefits as of April 1982. Thereafter, plaintiff filed a timely motion for attorney fees pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (Supp. 1984).
The noticeable increase in motions for attorney fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, causes us to review this fee-shifting statute. The pertinent provision 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 . . . brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). Thus, the EAJA mandates an award of counsel fees to a qualified prevailing party. TRESSLER v. HECKLER, 748 F.2d 146, 148-149 (3d Cir. 1984).
In BROWN v. SECRETARY OF HEALTH & HUMAN SERVICES OF THE UNITED STATES, 747 F.2d 878 (3d Cir. 1984), the Third Circuit aptly noted the EAJA's purpose as follows:
In enacting the EAJA, Congress sought to remove the financial barrier faced by individuals litigating valid claims against the government. The award of attorney's fees to prevailing parties was intended to overcome the harsh reality that in many cases it was "more practical to endure an injustice than to contest it." H.R. Rep. No. 1418, 96th Cong., 2d Sess. 9, reprinted in 1980 U.S. Code Cong. & Ad. News 4984, 4988. The legislation rested "on the premise that a party who chooses to litigate an issue against the Government is not only representing his or her own vested interest," id. at 10, reprinted in 1980 U.S. Code Cong. & Ad. News at 4988, but is also "serving a public purpose." Id., reprinted in 1980 U.S. Code Cong. & Ad. News at 4989. The EAJA was also designed to encourage government agencies to act in an equitable manner towards citizens and not be unreasonable in creating the necessity for, and in conducting, litigation. The Act thus "helps assure that administrative decisions reflect informed deliberation." Id. at 12, reprinted in 1980 U.S. Code Cong. & Ad. News at 4991.
In an action to obtain disability benefits under the Social Security Act, a claimant is a prevailing party if the final determination is that the claimant is entitled to benefits. A finding by the court that the Secretary's decision is not supported by substantial evidence and an order remanding the case to the Secretary for further consideration does not entitle the claimant to a finding that he or she has prevailed. BROWN, supra. "Rulings granting new administrative hearings to the usual Social Security claimants 'may affect the disposition on the merits, but are themselves not matters on which a party could 'prevail' for purposes of shifting his counsel fees to the opposing party. '" BROWN, 747 F.2d at 883, quoting, HANRAHAN v. HAMPTON, 446 U.S. 754, 759, 64 L. Ed. 2d 670, 100 S. Ct. 1987 (1980) (per curiam).
In the second prong, the Government carries the burden of proving that its position was substantially justified.
TRESSLER, supra. Indeed, the Government must make a "strong showing" of the justification of its position, with the Government's "position" including the agency action that made it necessary for the claimant to file suit. NATURAL RESOURCES DEFENSE COUNCIL v. U.S.E.P.A., 703 F.2d 700, 707 & 712 (3d Cir. 1983).
The "substantial justification" standard "has been interpreted as 'a middle ground between an automatic award of fees to a prevailing party and an award made only when the government's position was frivolous. '" TRESSLER, 748 F.2d at 149, quoting, DOUGHERTY v. LEHMAN, 711 F.2d 555, 563 (3d Cir. 1983). In DOUGHERTY, the court held the following:
The standard, however, should not be read to raise a presumption that the Government position was not substantially justified, simply because the Government lost the case. Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevailing.
DOUGHERTY, 711 F.2d at 563 (emphasis in original). Nevertheless, the Government cannot satisfy its burden in a Social Security action by showing only "some evidence" to support its conclusion that a claimant could do some work. TRESSLER, 748 F.2d at 150.
Accordingly, the substantial justification standard is one of reasonableness in terms of the Government's position and not in terms of the result. Id. 748 F.2d at 149; DOUGHERTY, 711 F.2d at 561. The triparte showing the Government must make to meet its burden of proving substantial justification is "First, . . . that there is a reasonable basis in truth for the facts alleged in the pleadings . . . Second, . . . that there exists a reasonable basis in law for the theory which it propounds . . . Finally, . . . that the facts alleged will reasonably support the legal theory advanced. " TRESSLER, 748 F.2d at 150, quoting, DOUGHERTY, 711 F.2d at 564. Thus, no award is given to a prevailing party where the Government shows that its case had a reasonable basis both in law and fact.
WASHINGTON URBAN LEAGUE v. FEDERAL ENERGY REGULATORY COMMISSION, 743 F.2d 166, 168 (3d Cir. 1984) (rejecting Fed. R. Civ. P. 37 "substantially justified" language for EAJA fee awards).