United States District Court, E.D. Kentucky, Southern Division, Pikeville
MEMORANDUM OPINION AND ORDER DENYING ATTORNEY'S
C. Reeves, Chief Judge.
matter is pending for consideration of the plaintiffs'
motions for attorney fees.[1" name="FN1"
id="FN1">1][Record Nos. 46, 27] The court has
previously considered similar motions in related cases and
determines that a response from the defendant is not needed
to resolve the issues raised by the plaintiffs. For the
reasons explained below, the motions will be
known as “Mr. Social Security, ” former attorney
Eric Conn assisted thousands of individuals in obtaining
Social Security disability benefits. But Conn's
overwhelming success was too good to be true. His results
were not the product of skill or hard work. Instead, he
obtained benefits for a No. of clients through the largest
Social Security fraud in the history of the benefits program.
scheme was not that elaborate. Beginning in at least 2004 and
continuing through 2011, Conn paid a group of doctors to
provide medical and psychological reports, indicating that
his clients were unable to work, regardless of their actual
abilities. To further ensure his clients' success
in obtaining benefits (and his resulting ability to collect a
fee), Conn paid Administrative Law Judge (“ALJ”)
David Daugherty to assign these cases to himself and then
issue favorable rulings.
Social Security Administration's (“SSA”)
Office of the Inspector General (“OIG”)
eventually caught wind of Conn's scheme and began to
investigate. On July 2, 2014, the OIG notified the SSA's
General Counsel that it had reason to believe that 1, 787
applications submitted by Conn involved fraud. For reasons
unknown, the OIG provided this information with the
understanding that the SSA would not take any action against
these claimants until it received further notice from OIG.
12, 2015, the OIG notified the Commissioner of Social
Security that the Agency could move forward with its
administrative processing of the redeterminations of the 1,
787 individuals whose names were previously provided by the
OIG to the Agency on July 2, 2014. [See, e.g., Pikeville
Civil Action No. 7: 16-051; Record No. 12-1, p. 9.] The OIG
specifically advised that it had “reason to believe
that Mr. Conn or his firm submitted pre-completed
‘template' Residual Functional Capacity forms
purportedly from [the four doctors identified above], dated
between January 2007 and May 2011, in support of the
individuals' applications for benefits.”
sent letters to the affected claimants on May 18, 2015,
informing them that it was required to redetermine their
eligibility for benefits under 42 U.S.C. §§ 405(u)
and 1383(e)(7). The SSA advised them that it was not
permitted to consider any evidence submitted by the
physicians believed to have been involved in the fraud. The
SSA further explained that the Appeals Council had reviewed
the affected cases. Many individuals still qualified for
benefits after the tainted evidence was excluded. However,
the plaintiffs were all informed that, after excluding the
evidence from the doctors involved with Conn, there was
insufficient evidence to support a finding of disability. The
plaintiffs were given time to submit additional evidence to
the Appeals Council, demonstrating that they were disabled at
the time their applications for benefits were initially
approved. And the Appeals Council ultimately determined that
there was insufficient evidence to support the prior
ALJ's findings of disability.
cases were then remanded to new ALJs for redetermination
proceedings. The redetermination proceedings included: (1) a
hearing before a neutral decisionmaker; (2) an opportunity to
testify and submit any evidence that was new, material, and
related to the period at issue (other than evidence from the
four identified providers); and (3) if requested, assistance
developing records that were new, material, and related to
the time period at issue. [See, e.g., Pikeville Civil Action
No. 7: 16-051; Record No. 12-1, p. 3] At this point, many of
the affected claimants were adjudicated disabled and
continued receiving benefits. However, in the plaintiffs'
cases, the new ALJ found that there was insufficient evidence
to support the original disability determination and their
benefits were terminated. The Appeals Council declined to
reconsider the ALJs' decisions, and the denials became
final decisions of the Commissioner.
the claimants who lost their benefits, including the
plaintiffs, filed suit in this Court, claiming that the
SSA's redetermination process was unlawful. The cases
were randomly assigned to various judges. On October 12,
2016, then-United States District Judge Amul R. Thapar issued
an opinion concluding that the SSA's redetermination
procedure violated the Due Process Clause of the Fifth
Amendment to the United States Constitution. Hicks v.
Colvin, 14 F.Supp.3d 627');">214 F.Supp.3d 627 (E.D. Ky. 2016). The
undersigned issued a conflicting decision on November 15,
2016, rejecting the plaintiffs' claims that the
redetermination procedure violated the Equal Protection and
Due Process clauses, the Social Security Act, and the
Administrative Procedure Act (“APA”). Carter
v. Colvin, 220 F.Supp.3d 789 (E.D. Ky. 2016).
Approximately one month later, United States District Judge
Joseph M. Hood issued an opinion consistent with that of the
undersigned. Perkins v. Colvin, 224 F.Supp.3d 575
(E.D. Ky. 2016).
plaintiffs in Carter and Perkins were permitted to take an
interlocutory appeal of this Court's decisions in favor
of the SSA. Shortly thereafter, the SSA filed a notice of
appeal in Hicks. These cases were consolidated in the United
States Court of Appeals for the Sixth Circuit, which issued a
decision on November 21, 2018. Hicks v. Comm'r of Soc.
Sec., 909 F.3d 786 (6th Cir. 2018). A majority of the
panel concluded that the SSA's redetermination process
violated the plaintiffs' due process rights because it
did not disclose the evidence of fraud to the plaintiffs and
give them an opportunity to rebut it. Id. at 797. It also
determined that the redetermination procedure was arbitrary
and capricious and violated the APA's formal-adjudication
requirements. Accordingly, the Sixth Circuit reversed this
Court's decisions in Carter and Perkins and remanded the
cases for further proceedings. In turn, this Court remanded
the affected cases to the SSA under sentence four of 42
U.S.C. § 405(g) for redetermination consistent with the
Sixth Circuit's ruling.
remand to the SSA, the plaintiffs seek attorney fees under
the Equal Access to Justice Act (“EAJA”), 28
U.S.C. § 2412. The EAJA provides, in relevant part:
Except as otherwise specifically provided by statute, 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 (other than cases sounding in tort),
including proceedings for judicial review of agency 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.
the Court must assess the fee petition in light of the
following factors: whether the plaintiffs was prevailing
parties; whether the government's position was
substantially justified; and whether any special
circumstances exist that make an award unjust. I.N.S. v.
Jean, 154');">496 U.S. 154, 158 (1990); DeLong v. Comm'r of Soc.
Sec., 748 F.3d 723, 725 (6th Cir. 2014). In analyzing whether
the requested fee is appropriate, the Court takes a
“fresh look at the case from an EAJA perspective, and
reach a judgment on fees and expenses independent from the
ultimate merits decision.” Phillips v. Astrue, No.
2:08-CV-048, 2010 WL 625371 (E.D. Tenn. Feb. 17, 2010)
(citing Fed. Election Comm'r v. Rose, 806 F.2d
1081, 1087-90 (D.C. Cir. 1986)).
undisputed that the plaintiffs are prevailing parties within
the meaning of the EAJA. A prevailing party is one who
obtains a “material alteration of the legal
relationship of the parties” through a “judgment
on the merits.” Buckhannon Bd. & Care Home,
Inc. v. W.Va. Dep't of Health & Human Res., 532
U.S. 598, 604 (2001). A remand to the SSA under sentence four
of 42 U.S.C. § 405(g) satisfies this definition. See
Turner v. Comm'r of Soc. Sec., 1');">680 F.3d 721, 723
(6th Cir. 2012) (citing Shalala v. Schaefer, 509
U.S. 292, 300 (1993)). However, this is only a threshold
determination; the Court must next determine whether the
SSA's position was substantially justified.
government has the burden of establishing substantial
justification. Scarborough v. Principi, 541 U.S.
401, 408 (2004). “Substantially justified means
justified in substance or in the main-that is, justified to a
degree that could satisfy a reasonable person.”
Marshall v. Comm'r of Soc. Sec., 444 F.3d 837,
842 (6th Cir. 2006) (quoting Pierce v. Underwood,
487 U.S. 552, 565 (1988)). In other words, a “[a]
position can be justified even though it is not correct and
can be justified if a reasonable person could think it
correct, that is, that it has a reasonable basis in law and
fact.” Gray v. Comm'r of Soc. Sec., 23
Fed.Appx. 436, 436 (6th Cir. 2001); Noble v.
Barnhart, 17');">230 Fed.Appx. 517, 518 (6th Cir. 2007) (An
erroneous position is substantially justified “if there
is a genuine dispute, or if reasonable people could differ as
to the appropriateness of the contested action.”). The