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In re Fee Motions In Various Social Security Cases

United States District Court, E.D. Kentucky

January 9, 2020



          Joseph M. Hood Senior U.S. District Judge

         These matters come before the Court on Motions for Attorneys' Fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412, filed in the above-referenced actions. The Motions have been fully briefed, or the time for filing of replies has expired, and all are now ripe for the Court's review. For the reasons set forth herein, the motions are DENIED.


         All the Plaintiffs before the Court were victims of attorney Eric Conn's scheme to defraud the Social Security Administration (“SSA”). Hicks v. Comm'r of Soc. Sec., 909 F.3d 786, 792 (6th Cir. 2018). Each Plaintiff retained Conn to appeal the initial denial of their Social Security Disability Insurance (“SSDI”) or Supplemental Security Income (“SSI”) benefits. Id. Conn would include medical records from one of four examining doctors as part of the record, and in each case “ALJ David Daugherty rel[ying] exclusively on the doctors' medical opinions [would] conclude on the record ... that plaintiffs were disabled and thereby entitled to either SSI or SSDI benefits.” Id. In reality, Conn worked with the doctors to use template Residual Function Capacity forms, which conveyed that each Plaintiff was disabled. Id. at 793. Conn then bribed Daugherty to “issue[ ] favorable rulings to Conn's clients.” Id.

         Ultimately, in July 2014, the Office of the Inspector General at the SSA determined that there were 1, 787 individuals-including Plaintiffs-who were represented by Conn and whose applications were potentially “tainted by fraud.” Id. at 794. As required by the Social Security Act, in May 2015, the SSA began the process of redetermining each Plaintiff's eligibility for SSDI or SSI benefits. Id. The SSA explained that it was required to “disregard any evidence from one of the medical providers [ ] when the information was submitted by representative Eric C. Conn or other representatives associated with Mr. Conn's law office.” Id. at 794-95. In each case, after ignoring that allegedly-fraudulent evidence submitted by Conn, the SSA determined that there was not enough evidence in the record to find the Plaintiffs disabled. Id. at 795. Thus, the cases were remanded for new hearings before an ALJ; at those hearings, Plaintiffs were permitted to submit additional evidence, which was considered if “it was ‘new and material' and concerned plaintiffs' disabilities on or before the date of Daugherty's initial decision.” Id. If requested, Plaintiffs could receive assistance developing the record. Id.

         During the hearings, the ALJs ignored the medical reports from the doctors working with Conn, but considered all the other medical evidence (both old and new) in the files. Id. In Plaintiffs' cases, the ALJs determined that each Plaintiff had not been entitled to benefits, and any benefits payed were to be treated as “overpayment.” Id. Each Plaintiff exhausted administrative remedies and then sought relief in federal district court challenging the SSA's redetermination process as violating the Social Security Act, the Due Process Clause of the Fifth Amendment, and the Administrative Procedure Act (“APA”). Id. District judges in this District issued conflicting decisions and the consolidated cases were appealed to the Sixth Circuit. Id. The Sixth Circuit found that the SSA's redetermination process violated both the Due Process Clause and the Administrative Procedure Act and remanded the cases for proceedings consistent with its opinion. Id. at 813.

         On July 5, 2019, the undersigned remanded the above cases to the SSA for redetermination consistent with Hicks and pursuant to sentence four of 42 U.S.C. § 405(g). Now before this Court are Plaintiffs' ripe Motions for Attorneys' Fees under the Equal Access to Justice Act (“EAJA”).


         Following remand to the SSA, the plaintiffs seek attorney fees under the Equal Access to Justice Act (“EAJA”).[1] 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, 496 U.S. 154, 158, 110 S.Ct. 2316, 110 L.Ed.2d 134 (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)).

         It is undisputed that the plaintiffs are prevailing parties within the meaning of the EAJA. Howard v. Saul, No. 7:16-cv-51-DCR, 2019 WL 5191831, at *3 (E.D. Ky. Oct. 15, 2019). 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, 121 S.Ct. 1835, 149 L.Ed.2d 855 (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., 680 F.3d 721, 723 (6th Cir. 2012) (citing Shalala v. Schaefer, 509 U.S. 292, 300, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993)). However, this is only a threshold determination; the Court must next determine whether the SSA's position was substantially justified.


         The Plaintiffs' Motions fail, however, because the Government's position was substantially justified, so the requirements of the EAJA are not met. Under the EAJA, “[a] position is substantially justified when it is justified in substance or in the main-that is, justified to a degree that could satisfy a reasonable person.” Howard v. Barnhart, 376 F.3d 551, 553 (6th Cir. 2004) (internal quotation marks omitted) (quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988)). A court must determine if the government's position, “as a whole, ” including “both the underlying agency action and the current litigation” is justified. Amezola-Garcia v. Lynch, 835 F.3d 553, 555 (6th Cir. 2016) (quoting E.E.O.C. v. Memphis Health Ctr., Inc., 526 Fed.Appx. 607, 615 (6th Cir. 2013)). The government has the burden of establishing substantial justification. Scarborough v. Principi, 541 U.S. 401, 408, 124 S.Ct. 1856, 158 L.Ed.2d 674 (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, 108 S.Ct. 2541, 101 L.Ed.2d 490 (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, 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 reviews the SSA's position in its entirety. The position of the Commissioner “may be substantially justified even if a district court rejects it, ” id. (citing Couch v. Sec. of Health & Human Servs., 749 F.2d 359, 360 (6th Cir. 1984)), and even if a court found the Commissioner's position to not be supported by substantial evidence, Howard, 376 F.3d at 554 (citing Pierce, 487 U.S. at 569 (“The fact that we found the Commissioner's position was unsupported by substantial evidence does not foreclose the possibility that the position was substantially justified.”). “Congress did not ... want the substantially justified standard to be read to raise a presumption that the Government position was not substantially justified simply because it lost the case.” Scarborough, 541 U.S. at 415 (citations and internal quotations ...

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