                                                                          FILED
                            NOT FOR PUBLICATION                            DEC 01 2014

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS



                           FOR THE NINTH CIRCUIT


JAMAL ATALLA, M.D.,              )            No. 12-15309
                                 )
      Plaintiff - Appellee,      )            D.C. No. 2:09-cv-01610-NVW
                                 )
      v.                         )            MEMORANDUM*
                                 )
UNITED STATES CITIZENSHIP        )
AND IMMIGRATION SERVICES; )
JOHN KRAMER, District Director )
of United States Citizenship and )
Immigration Services,            )
                                 )
      Defendants - Appellants.   )
                                 )

                    Appeal from the United States District Court
                             for the District of Arizona
                      Neil V. Wake, District Judge, Presiding

                          Submitted November 18, 2014**
                             San Francisco, California




      *
       This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      **
      The panel unanimously finds this case suitable for decision without oral
argument. Fed. R. App. P. 34(a)(2).
Before: FERNANDEZ and IKUTA, Circuit Judges, and DANIEL,*** District
Judge.

      United States Citizenship and Immigration Services (USCIS) appeals the

district court’s order awarding attorney’s fees to Jamal Atalla pursuant to the Equal

Access to Justice Act (“EAJA”). 28 U.S.C. § 2412(d)(1)(A). We reverse.

      USCIS denied Atalla’s application for naturalization1 and he commenced

this action for review of that decision.2 The district court granted his petition and

we affirmed. See Atalla v. USCIS, 541 F. App’x 760, 761 (9th Cir. 2013) (“Atalla

I”). The district court also granted attorney’s fees pursuant to the EAJA, and this

appeal followed.

      USCIS asserts that based on the record3 the district court abused its



      ***
         The Honorable Wiley Y. Daniel, Senior United States District Judge for
the District of Colorado, sitting by designation.
      1
          See 8 U.S.C. § 1421; 8 C.F.R. §§ 334.1, 335.3.
      2
          See 8 U.S.C. § 1421(c).
      3
       In making its decision regarding fees, the district court was required to
consider “the record (including the record with respect to the action or failure to act
by the agency . . . ).” 28 U.S.C. § 2412(d)(1)(B); see also United States v. 22249
Dolorosa St., 190 F.3d 977, 981 (9th Cir. 1999). That record included a myriad of
instances “that could satisfy a reasonable person” that Atalla was intentionally
untruthful throughout the process. Pierce v. Underwood, 487 U.S. 552, 565, 108 S.
Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988). Throughout the litigation, USCIS took
the position that he was.

                                           2
discretion4 when it granted EAJA fees to Atalla.5 It argues, as it did at the district

court, that it was substantially justified in its position that Atalla had at the time of

his initial interview “failed to truthfully disclose the full extent of his involvement

with GRF [the Global Relief Foundation],” and “failed to volunteer information

about the full extent of his involvement with GRF throughout the administrative

processing of his naturalization application.”6 That assessment of Atalla’s

behavior and testimony when he was questioned by the USCIS adjudication

officers was not ultimately successful. However, it did have strong support in the

record.

       We recognize that USCIS did have “the burden of demonstrating substantial



       4
       See Pierce, 487 U.S. at 559–60, 108 S. Ct. at 2547; see also United States v.
Hinkson, 585 F.3d 1247, 1261–62 (9th Cir. 2009) (en banc); United States v.
Rubin, 97 F.3d 373, 375 (9th Cir. 1996) .
       5
        See 28 U.S.C. § 2412(d)(1)(A); see also Pierce, 487 U.S. at 564–66, 108
S. Ct. at 2550; Shafer v. Astrue, 518 F.3d 1067, 1071 (9th Cir. 2008).
       6
        Atalla suggests that because in opposing fees USCIS did not assert that he
was untruthful, but only that he did not volunteer information before his
interviews, it cannot now assert untruthfulness. See W. Watersheds Project v. U.S.
Dep’t of the Interior, 677 F.3d 922, 925 (9th Cir. 2012); In re Mercury Interactive
Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010). However, while USCIS’s
opposition could have been more expansive, in light of the whole record, it was
sufficient to place the issue of truthfulness before the district court. See
Watersheds, 677 F.3d at 925–26; Simkins v. NevadaCare, Inc., 229 F.3d 729, 736
(9th Cir. 2000).

                                            3
justification,”7 but it carried that burden here because the record showed that its

“‘position [had] a reasonable basis in law and fact.’”8 Of course, the mere fact that

USCIS lost on the merits was not sufficient to show that its position was not

substantially justified. See Renee v. Duncan, 686 F.3d 1002, 1017 (9th Cir. 2012);

see also Al-Harbi v. INS, 284 F.3d 1080, 1084–85 (9th Cir. 2002). Rather, on this

record, our decision in Atalla I, 541 F. App’x at 762, put it well when we declared

that “the Government presents us with a close case” but “the district court’s

account of the evidence [did not fall] below the low threshold of ‘plausib[ility].’”

That underscores our “‘definite and firm conviction’”9 that the district court’s

decision regarding EAJA fees was an abuse of discretion because it improperly

construed USCIS’s position to refer solely to Atalla’s statements before he was

questioned under oath and also failed to consider the overall strength of USCIS’s

case as shown by the record.10 Therefore, we reverse the award of EAJA fees.

        REVERSED.




        7
            Gonzales v. Free Speech Coalition, 408 F.3d 613, 618 (9th Cir. 2005).
        8
            Shafer, 518 F.3d at 1071; see also Pierce, 487 U.S. at 565–66, 108 S. Ct. at
2550.
        9
            Hinkson, 585 F.3d at 1262.
        10
             See id.

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