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Kidd v. Saul

United States District Court, E.D. Kentucky, Southern Division, Pikeville

October 29, 2019

MARSHA F. KIDD, Plaintiff,
ANDREW SAUL, Commissioner of Social Security, Defendant,


          Danny C. Reeves, Chief Judge.

         This matter is pending for consideration of the plaintiff's motion for attorney fees. [Record No. 46] 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 plaintiff. For the reasons explained below, the motion will be denied.[1" name="FN1" id= "FN1">1]


         Once 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 number of clients through the largest Social Security fraud in the history of the benefits program.

         The 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.[2] 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.[3]

         The 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.

         On May 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.” Id.

         The SSA 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.

         The 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.

         Many of the claimants who lost their benefits, including the plaintiff, 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).

         The 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.[4] 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.[5] 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.


         Following remand to the SSA, the plaintiff seeks attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412.[6] 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.

§ 2412(d)(1)(A).

         Accordingly, the Court must assess the fee petition in light of the following factors: whether the plaintiff was a prevailing party; 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, 1081');">806 F.2d 1081, 1087-90 (D.C. Cir. 1986)).

         In the present case, the plaintiff is a prevailing party 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.

         The 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 Court ...

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