Shreves v. Astrue

Filing 33

ORDER - IT IS ORDERED that Plaintiffs Motion for Award of Attorney's Fees under the Equal Access to Justice Act (Doc. 26 ) is GRANTED and that Plaintiff is awarded $8,189.31 in attorney's fees to be mailed (payable to Plaintiff) to Plaintiff's counsel, Mark Caldwell, Caldwell & Ober, PLLC, 1940 East Camelback Road, Suite 150, Phoenix, Arizona 85016. (See document for further details). Signed by Magistrate Judge Bridget S Bade on 8/6/13. (LAD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Rhonda Lynn Shreves,

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No. CV-11-8076-PCT (BSB)

Plaintiff,

ORDER

vs.
Carolyn W. Colvin,
Commissioner of Social Security,

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Defendant.

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Plaintiff Rhonda Lynn Shreves (Plaintiff) has filed a Motion for Award of

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Attorney’s Fees Pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412.

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(Doc. 26.) Defendant, the Commissioner of the Social Security Administration (the

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government), opposes this motion. (Doc. 31.) For the reasons set forth below, the Court

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grants Plaintiff’s motion.

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I.

Procedural History

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On November 22, 2006, Plaintiff applied for Disability Insurance Benefits under

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Title II and Title XVI of the Social Security Act (the Act), 42 U.S.C. § 401-434, alleging

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disability with an onset date of August 4, 2002. (Tr. 19.)1 Plaintiff’s application was

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denied at the initial level of administrative review. After a hearing, on June 23, 2009, an

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Administrative Law Judge (ALJ) denied Plaintiff’s application for benefits finding that

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she was not disabled within the meaning of the Social Security Act. (Tr. 19-33.) The

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ALJ’s decision became the final decision of the Commissioner of Social Security when

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Citations to “Tr.” are to the administrative record located at docket 12.
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the Social Security Appeals Council denied Plaintiff’s request for review on March 16,

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2011. (Id. at 1-5.)

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Plaintiff then brought this action pursuant to 42 U.S.C. § 405(g) for judicial review

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of the Commissioner’s final decision. (Doc. 1.) This Court reversed the decision and

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remanded the case for further consideration. (Doc. 24.) Thereafter, Plaintiff filed the

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pending motion requesting an award of $7,728.51 in attorney’s fees under the EAJA.

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(Doc. 27.) In the Reply in support of her motion, Plaintiff requests an additional $460.80

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in attorney’s fees for time expended preparing her Reply. (Doc. 32.)

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requests that any attorney’s fees awarded be paid by a check sent directly to her

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attorney’s office. (Doc. 27.) The government argues that the motion should be denied

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because it was substantially justified in defending this matter. The government also

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argues, that unless Plaintiff agrees to waive the requirements of the Anti-Assignment Act,

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and there is no debt owed by Plaintiff under the Treasury Offset Program, any award of

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attorney’s fees should be paid directly to Plaintiff, not to her attorney. (Doc. 31.)

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II.

Plaintiff also

Attorney’s Fees under the EAJA

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In any action brought by or against the United States, the EAJA provides that “a

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court shall award to a prevailing party other than the United States fees and other

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expenses . . . unless the court finds that the position of the United States was substantially

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justified or that special circumstances make an award unjust.” 28 U.S.C. § 2412(d)(1)(A)

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(emphasis added); see also Thomas v. Peterson, 841 F.2d 332, 335 (9th Cir. 1988)

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(stating that the EAJA creates a presumption that fees will be awarded to the prevailing

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party unless the government establishes that its position was “substantially justified”).

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“Substantially justified means justified in substance or in the main — that is,

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justified to a degree that could satisfy a reasonable person.” Pierce v. Underwood, 487

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U.S. 552, 565 (1988) (internal citations omitted). A substantially justified position must

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have a reasonable basis both in law and fact. Gutierrez v. Barnhart, 274 F.3d 1255, 1258

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(9th Cir. 2001). The Ninth Circuit applies a reasonableness standard in determining

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whether the government’s position was substantially justified for EAJA purposes. United

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States v. Rubin, 97 F.3d 373, 375 (9th Cir. 1996); Flores v. Shalala, 49 F.3d 562, 569

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(9th Cir. 1995). The government bears the burden of establishing that its position was

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substantially justified. Gutierrez, 274 F.3d at 1258. “The ‘position of the United States’

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includes both the government’s litigation position and the underlying agency action

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giving rise to the civil action.” Meier v. Colvin, 2013 WL 3802382, at *1 (9th Cir. Jul.

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23, 2013). The EAJA provides that, “‘[t]he position of the United States’ means, in

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addition to the posture taken by the United States in the civil action, the action or failure

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to act by the agency upon which the civil action is based.” 28 U.S.C. § 2412(d)(2)(D).

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In the Social Security context, the Ninth Circuit treats the ALJ’s decision as the

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“action or failure to act by the agency upon which the civil action is based.” Meier, 2013

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WL 3802382, at *2. Thus, when applying the substantial justification test, the court

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determines “(1) whether the [ALJ] was substantially justified in taking [the] original

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action, and (2) whether the government was substantially justified in defending the

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validity of the action in court.” Gutierrez, 274 F.3d at 1258; see also Meier, 2013 WL

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3802382, at *3 (“Applying the substantial justification test [in the Social Security

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context, the court] first consider[s] the underlying agency action, which . . . is the

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decision of the ALJ. [The court] then considers the government’s litigation position.”).

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III.

Analysis

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A.

Prevailing Party

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The Court must first determine whether Plaintiff qualifies as a prevailing party

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under the EAJA. A plaintiff is a prevailing party if he or she succeeds on “any significant

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issue that achieves some of the benefit sought in bringing the suit.” Penrod v. Apfel, 54

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F. Supp. 2d 961, 963 (D. Ariz. 1999) (citing Tex. State Teachers Ass’n. v. Garland Indep.

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School Dist., 489 U.S. 782, 791-92 (1989)). A claimant who obtains a court order

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remanding a Social Security case to the Commissioner either for further proceedings or

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for an award of benefits is a prevailing party under the EAJA. Shalala v. Schaefer, 509

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U.S. 292, 300-01 (1993).

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party because the Court remanded this matter to the ALJ for further consideration. See

Here, the parties do not dispute that Plaintiff is a prevailing

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Gutierrez, 274 F.3d at 1257 (“An applicant for disability benefits becomes a prevailing

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party for purposes of the EAJA if the denial of benefits is reversed and remanded

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regardless of whether disability benefits are ultimately awarded.).

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B.

Underlying Agency Conduct

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The parties disagree as to whether the ALJ’s decision in this case was substantially

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justified. The Order remanding this case for further proceedings was based on the

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Court’s conclusion that the ALJ erred at steps four and five of the sequential evaluation

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process. (Doc. 24 at 20-23.) Specifically, the Court found that the ALJ’s determination

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that Plaintiff retained the mental residual functional capacity to perform “unskilled work”

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was not a substitute for the ALJ’s obligation to assess Plaintiff’s degree of functional

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limitation resulting from her impairment and rendered the ALJ’s decision susceptible to

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“‘overlooking limitations or restrictions that would narrow the ranges and types of work

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an individual may be able to do.’” (Doc. 24 at 20 (citing Social Security Ruling 96-8p,

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1996 WL 374184, at *4 (Jul. 2, 1996).)

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The Court further found that the ALJ erred by applying the Medical-Vocational

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Guidelines (the grids) without sufficiently explaining their applicability despite record

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evidence suggesting that the grids may not encompass Plaintiff’s nonexertional

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limitations.

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regarding Plaintiff’s residual functional capacity and her ability to perform other work

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existing in significant numbers in the national economy, the matter must be remanded to

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the Commissioner for further administrative proceedings. (Id. at 24.)

(Doc. 24 at 23.)

The Court concluded that because issues remained

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The government argues that implicit in the ALJ’s mental residual functional

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capacity finding was a finding that Plaintiff could perform all of the mental demands of

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unskilled work. (Doc. 31.) The government relies on Bayliss v. Barnhart, 427 F.3d 1211

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(9th Cir. 2005), among other cases, to argue that as long as the ALJ took into account

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Plaintiff’s limitations and discussed how evidence supported the residual function

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capacity assessment, the ALJ was not required to engage in a function-by-function

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analysis. As Plaintiff notes, the government essentially reiterates its arguments asserted

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in its Opposition to Plaintiff’s Opening Brief (Doc. 21), but does not explain why the

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ALJ’s position was substantially justified.

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government’s argument that “function-by-function assessments are not always necessary

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because findings about specific limitations can be implicit” (Doc. 24 at 20-21), because

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“Social Security Ruling 96-8p requires more than implicit findings” and “mere citation to

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the regulations does not fulfill the function-by-function and narrative requirements under

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SSR 96-8p.” (Id. at 21 (internal citations omitted).) The ALJ found that Plaintiff’s

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mental impairments would “cause mild limitations in her daily living activities, mild

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restrictions in social functions, and moderate restrictions in her concentration,
(Tr. 31.)

The Court has already rejected the

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persistence, or pace.”

The ALJ, however, did not consider how those

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restrictions would limit specific work-related functions. Thus, the ALJ did not satisfy his

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obligations under SSR 96-8p and the government has not met its burden of showing that

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ALJ’s assessment of Plaintiff’s mental residual functional capacity was substantially

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justified.

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The government agrees that the ALJ’s finding that Plaintiff was not disabled was

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based on the grids. (Doc. 31 at 6.) The government also acknowledges that the grids do

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not direct a finding of “disabled” or “not disabled” when a claimant suffers from

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nonexterional limitations that have a material effect on his work abilities. (Id. at 7.)

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Then, the government argues that Plaintiff’s nonexertional impairments did not rise to

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that level. The Court has already found that “[t]he ALJ erred by applying the grids

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without providing sufficient explanation of their applicability despite record evidence

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suggesting that the grids may not encompass Plaintiff’s nonexertional limitations . . . .”

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(Doc. 24 at 23.) Again, the government does not explain why the ALJ’s step-five

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determination was substantially justified. Therefore, the Court finds that the

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government’s underlying action was not substantially justified in this case.

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C.

Litigation Position

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Because the government’s underlying position was not substantially justified, the

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Court need not address whether the government’s litigation position was justified. Meier,

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2013 WL 3802382, at *4 (citing Shafer v. Astrue, 518 F.3d 1067, 1071 (9th Cir. 2008)

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(“The government’s position must be substantially justified at each stage of the

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proceedings.”)). Moreover, even if the Court considered the government’s position in

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this litigation, the Court would find that it was not substantially justified. See Sampson v.

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Chater, 103 F.3d 918, 922 (9th Cir. 1996) (stating that “[i]t is difficult to imagine any

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circumstance in which the government’s decision to defend its actions in court would be

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substantially justified, but the underlying administrative decision would not.”).

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Plaintiff points out, the government’s defense of the ALJ’s decision mainly restates its

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arguments that the Court previously rejected in its order remanding this matter for further

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proceedings. (Doc. 24.) In view of the errors in the ALJ’s analysis, the Court cannot

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find that the government was substantially justified in defending the ALJ’s decision in

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this case. Accordingly, the Court will award Plaintiff attorney’s fees under the EAJA.

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IV.

As

Award of Attorney’s Fees

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Plaintiff requests attorney’s fees in the amount of $8,189.31. This amount is based

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on the following hourly rates and hours worked: (1) 2011, hourly rate $180.59 and 37.2

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hours; and (2) 2012, hourly rate $183.73 and 5.5 hours. (Doc. 28. Ex. 1.) The fee request

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also includes 2.5 hours at an hourly rate of $184.32 for time spent preparing Plaintiff’s

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reply in 2013.

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requested.

(Doc. 32.)

The government does not oppose the amount of fees

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Attorney’s fees and expenses under the EAJA must be reasonable. See 28 U.S.C.

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§§ 2412(d)(2)(A). Counsel for the prevailing party has an ethical duty to make a good

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faith effort to exclude “excessive, redundant, or otherwise unnecessary” hours from

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counsel’s fee petition. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The district court

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has discretion to determine a reasonable fee award. See 28 U.S.C. § 2412(b); Pierce v.

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Underwood, 487 U.S. 552, 571 (1988).

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The EAJA limits attorney’s fees to $125.00 per hour “unless the court determines

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that an increase in the cost of living or a special factor, such as the limited availability of

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qualified attorneys for the proceeding involved, justifies a higher fee.”

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28 U.S.C.

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§ 2412(2)(d)(A). The Supreme Court has suggested that an increase based on the cost of

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living is “next to automatic.” Meyer v. Sullivan, 958 F.2d 1029, 1035 n.9 (11th Cir.

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1992) (quoting Pierce, 487 U.S. at 571 (1988)).

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determined by multiplying the base EAJA rate ($125.00) by the current Consumer Price

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Index for all Urban Consumers (CPI-U) and then dividing the product by the CPI-U in

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the month that the cap was imposed ($155.70). See Sorenson v. Mink, 239 F.3d 1140,

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1148 (9th Cir. 2001) (citing Ramon-Sepulveda v. INS, 863 F.2d 1458, 1463) (9th Cir.

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1988)). Plaintiff has calculated the attorney’s fees award based on hourly rates that are

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slightly less than or equal to the statutory maximum hourly rate under the EAJA. See

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‘Statutory Maximum Rates Under the Equal Access to Justice Act,” available at

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http://www.ca9.uscourts.gov/content/view.php?pk_id=0000000039 (last visited Aug. 6,

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2013).2 Additionally, the Court finds that counsel expended a reasonable number of

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hours on this matter. Accordingly, the Court awards Plaintiff the requested amount of

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attorney’s fees, $8,189.31.

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The cost of living adjustment is

Plaintiff requests that the Court order that “any check be sent to Plaintiff’s

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counsel’s office.” (Doc. 27.)

The government argues that any award of attorney’s fees

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should be made payable to Plaintiff, not her attorney. (Doc. 31.) In Astrue v. Ratliff, 560

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U.S. ___, 130 S. Ct. 2521 (2010), the Supreme Court held that EAJA fees are payable to

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the prevailing party, not his attorney. Although Plaintiff recognizes Ratliff’s holding, she

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states that the fee agreement with counsel provides that any EAJA fees are assigned to

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Plaintiff’s counsel. Plaintiff states that, “while any EAJA fees are payable to Plaintiff, it

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is respectfully submitted this Court should order any check sent to Plaintiff’s counsel’s

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office.” (Doc. 27.) Plaintiff does not request that the check be made payable to her

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attorney.

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As previously stated, the Court in Ratliff held that EAJA fees are payable the

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prevailing party, not his attorney. 130 S. Ct. at 2525. In so holding, the Court noted the

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The applicable statutory maximum hourly rates under the EAJA, adjusted for
increases in the cost of living, are as follows: first half of 2013 - $186.55; 2012 - $184.32;
and 2011 - $180.59.
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“practical reality that attorneys are the beneficiaries and, almost always, the ultimate

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recipients of the fees that the statute awards to the ‘prevailing part[ies]’” because of

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“nonstatutory (contractual and other assignment-based) rights that typically confer upon

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the attorney the entitlement to payment of the fees award the statute confers on the

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prevailing litigant.” Id. at 2529 (quoting Venegas v. Mitchell, 495 U.S. 82, 86 (1990)).

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The Court further noted that such “arrangements would be unnecessary if . . . statutory

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fees language like that in . . . EAJA provide[d] attorneys with a statutory right to direct

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payment of awards.” Id. Thus, although Ratliff clarifies that EAJA awards of attorney’s

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fees are payable directly to the prevailing party, it does not preclude the contractual

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assignment of the fee award to Plaintiff’s attorney.3 In view of Ratliff, the Court declines

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to order direct payment to Plaintiff’s attorney.

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government to mail the attorney’s fee award, made payable to Plaintiff, to the office of

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Plaintiff’s attorney.

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Accordingly,

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IT IS ORDERED that Plaintiff’s Motion for Award of Attorney’s Fees under the

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Equal Access to Justice Act (Doc. 26) is GRANTED and that Plaintiff is awarded

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$8,189.31 in attorney’s fees to be mailed (payable to Plaintiff) to Plaintiff’s counsel,

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Mark Caldwell, Caldwell & Ober, PLLC, 1940 East Camelback Road, Suite 150,

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Phoenix, Arizona 85016.

However, the Court will direct the

Dated this 6th day of August, 2013.

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See Brown v. Astrue, 271 Fed. Appx. 741, 744 (10th Cir. 2008) (stating that “the
private contractual arrangement between [Plaintiff] and his counsel [is] a collateral matter
that the [Court] need not address when considering the EAJA fees motion.”).

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