The opinion of the court was delivered by: Joyner, J.
Presently before the Court is Plaintiff's Application for Award of Attorney's Fees Pursuant to 28 U.S.C. §2412, Defendant's opposition thereto, including, in the alternative, Defendant's request to reduce as unreasonable the number of hours requested by Plaintiff's counsel, and Plaintiff's reply. For the reasons set forth below, the Court grants Plaintiff's Application, but finds that the amount requested is unreasonable and therefore reduces the amount of the award to $12,275.21, inclusive of fees and expenses.
In 2004, Mary Magwood ("Magwood") applied for Supplemental Security Income benefits. The Administrative Law Judge ("ALJ") found that Magwood's major depression and alcohol abuse disorder, in remission, were not severe impairments at step two in the sequential analysis as set out in 20 C.F.R. § 404.920.*fn2 Magwood appealed and this Court adopted the Magistrate Judge's Report and Recommendation (R&R) affirming the ALJ's decision. Magwood again appealed. The Third Circuit reversed this Court's decision and found that the ALJ erred in its analysis at step two and that the ALJ's determination at step two that Magwood did not have a severe impairment was not supported by substantial evidence.
As the prevailing party, Magwood now requests an award of attorney's fees pursuant to The Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. The Commissioner opposes the request, asserting that Magwood is not entitled to an award of fees under the EAJA because its position was substantially justified. In the alternative, the Commissioner requests that the amount of the requested award be reduced because the fee petition is unreasonable.
I. Award of Attorney's Fees Pursuant to the EAJA
Pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. §2412, prevailing parties*fn3 in civil actions (other than tort actions) brought by or against the United States are entitled to an award of attorneys fees and expenses "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) (2006).*fn4 The "position of the United States" includes the United States' litigation position as well as "the agency position that made the lawsuit necessary." Washington v. Heckler, 756 F.2d 959, 961 (3d Cir. 1985); see also 28 U.S.C. §2412(d)(2)(C) (defining "United States" to include, inter alia, any agency of the United States). Thus, both the litigation position and the agency position must be substantially justified in order to merit a denial of attorney's fees under the EAJA. Taylor v. Heckler, 835 F.2d 1037, 1040 (3d Cir. 1987).
Substantial justification represents a middle ground between automatically awarding attorney's fees and awarding attorney's fees only when the government's position was frivolous. Washington, 756 F.3d at 961. The Supreme Court has interpreted "substantially justified" to mean "'justified in substance or in the main'--that is, justified to a degree that could satisfy a reasonable person" rather than "'justified to a high degree.'" Pierce v. Underwood, 487 U.S. 552, 565 (1988). In other words, to be "substantially justified" the government's position must have a "reasonable basis both in law and fact." Id.
The Government has the burden to establish substantial justification. Stokes v. Bowen, 811 F.2d 814, 816 (3d Cir. 1987); Washington, 756 F.2d at 961. To meet its burden, the government must establish:
(1) a reasonable basis in truth for the facts alleged; (2) a reasonable basis in law for the theory it propounds; and (3) a reasonable connection between the facts alleged and the legal theory advanced. Washington, 756 F.2d at 961. Agency action that is found to be "unsupported by substantial evidence is virtually certain not to have been substantially justified under the [Social Security] Act." Stokes, 811 F.2d at 816.
In the present case, the Third Circuit found that the Administrative Law Judge (the"ALJ") erred by ignoring instructions set out in McCrea v. Commissioner, 370 F.3d 357 (3d Cir. 2004), and incorrectly weighing medical evidence adduced by Magwood against consultive evidence of a psychiatrist and psychologist at step two of the sequential analysis for determining social security disability benefits under 20 C.F.R. § 404.1520. See Magwood v. Commissioner, No. 07-3787, slip op. at 3 (E.D. Pa. Sept. 9, 2008). The Court found that Third Circuit precedent requires that the determination of whether an applicant meets her burden at step two should focus on the evidence put forth by the applicant. Id. at 2-3. The Court concluded that the ALJ's determination that Magwood did not have a severe impairment at step two was thus not supported by substantial evidence and remanded the case for further proceedings consistent with its opinion. Id. at 3.
The government argues that it was nonetheless justified in its position, and thus Magwood is not entitled to an award of attorney's fees, because both Magistrate Judge Perkin and this Court affirmed the ALJ's decision. The government also argues that the Agency's defense of the ALJ's decision was reasonable because evidence existed to support the ALJ's finding that the Plaintiff's mental impairment was not severe and cites several facts from the record in support of its assertion.
Magwood, on the other hand, argues that the government's position was not substantially justified because the Third Circuit found that the ALJ erred as a matter law by ignoring instructions set forth in McCrea and as a matter of fact when evaluating step two of the sequential analysis. Magwood asserts that the government's position thus cannot be "solid and well ...