McKinney v. Commissioner of Social Security

Filing 34

ORDER signed by Magistrate Judge Edmund F. Brennan on 9/12/2017 GRANTING 31 Plaintiff's Motion for Attorney Fees; Plaintiff is awarded attorney's fees under the EAJA in the amount of $6,159.31; and defendant shall determine whether plaintiff's EAJA fees are subject to offset; if the U.S. Department of the Treasury determines that plaintiff does not owe a federal debt, the government shall pay fees directly to plaintiff's counsel. (Reader, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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VALERIE LYNN McKINNEY,

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No. 2:14-cv-2414-EFB

Plaintiff,
v.

ORDER

NANCY A. BERRYHILL, Acting
Commissioner of Social Security,
Defendant.

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Plaintiff moves for an award of attorneys’ fees and costs under the Equal Access to Justice

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Act (“EAJA”), 28 U.S.C. § 2412(d)(1). ECF No. 31. She seeks fees based on 3.7 hours of work

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performed by Shellie Lott and 27.2 hours of work performed by Chantal J. Harrington at a rate of

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approximately $190 an hour, for a total of $5,873.89.1 Plaintiff also seeks compensation for 1.5

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hours spent preparing her reply to defendant’s opposition, bringing the total to $6,159.31. ECF

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No. 33 at 4. Defendant does not contend that the hourly rate is unreasonable, nor does she argue

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that the amount of hours claimed is excessive.2 Rather, defendant argues that plaintiff is not

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entitled to reasonable attorneys’ fees under the EAJA because the Commissioner’s position was

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Plaintiff seeks an hourly rate of $190.06 for work performed in 2014, and $190.28 per
hour for work performed in 2015 and 2016. ECF No. 31 at 2.
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The court has independently reviewed the hourly rates sought and number of hours
expended and finds that they are reasonable.
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substantially justified. ECF No. 32. As explained below, the Commissioner’s position was not

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substantially justified and plaintiff’s motion is granted.

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The EAJA provides that a prevailing party other than the United States should be awarded

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fees and other expenses incurred by that party in any civil action brought by or against the United

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States, “unless the court finds that the position of the United States was substantially justified or

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that special circumstances make an award unjust.” 28 U.S.C. § 2412(d)(1). “[T]he ‘position of

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the United States’ means, in addition to the position taken by the United States in the civil action,

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the action or failure to act by the agency upon which the civil action is based.” Gutierrez v.

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Barnhart, 274 F.3d 1255, 1259 (9th Cir. 2001) (citing 28 U.S.C. § 2412(d)(2)(D) and Comm’r,

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INS v. Jean, 496 U.S. 154, 159 (1990) (explaining that the “position” relevant to the inquiry “may

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encompass both the agency’s prelitigation conduct and the [agency’s] subsequent litigation

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positions”)). Therefore, the court “must focus on two questions: first, whether the government

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was substantially justified in taking its original action; and, second, whether the government was

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substantially justified in defending the validity of the action in court.” Kali v. Bowen, 854 F.2d

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329, 332 (9th Cir.1988). The burden of establishing substantial justification is on the

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government. Gutierrez, 274 F.3d at 1258 (9th Cir. 2001).

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A position is “substantially justified” if it has a reasonable basis in law and fact. Pierce v.

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Underwood, 487 U.S. 552, 565-66 (1988); United States v. Marolf, 277 F.3d 1156, 1160 (9th Cir.

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2002). Substantially justified has been interpreted to mean “justified to a degree that could satisfy

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a reasonable person” and “more than merely undeserving of sanctions for frivolousness.”

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Underwood, 487 U.S. at 565; see also Marolf, 277 F.3d at 161. The mere fact that a court

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reversed and remanded a case for further proceedings “does not raise a presumption that [the

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government’s] position was not substantially justified.” Kali, 854 at 335; see also Lewis v.

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Barnhart, 281 F.3d 1081, 1084-86 (9th Cir. 2002) (finding the defense of an ALJ’s erroneous

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characterization of claimant’s testimony was substantially justified because the decision was

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supported by a reasonable basis in law, in that the ALJ must assess the claimant’s testimony and

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may use that testimony to define past relevant work as actually performed, as well as a reasonable

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basis in fact, since the record contained testimony from the claimant and a treating physician that
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cast doubt on the claimant’s subjective testimony); Le v. Astrue, 529 F.3d 1200, 1201-02 (9th Cir.

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2008) (finding that the government’s position that a doctor the plaintiff had visited five times over

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three years was not a treating doctor, while incorrect, was substantially justified since a

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nonfrivolous argument could be made that the five visits over three years were not enough under

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the regulatory standard especially given the severity and complexity of plaintiff’s alleged mental

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problems).

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However, when the government violates its own regulations, fails to acknowledge settled

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circuit case law, or fails to adequately develop the record, its position is not substantially justified.

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See Gutierrez, 274 F.3d at 1259-60; Sampson v. Chater, 103 F.3d 918, 921-22 (9th Cir. 1996)

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(finding that the ALJ’s failure to make necessary inquiries of the unrepresented claimant and his

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mother in determining the onset date of disability, as well as his disregard of substantial evidence

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establishing the same, and the Commissioner’s defense of the ALJ’s actions, were not

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substantially justified); Flores v. Shalala, 49 F.3d 562, 570, 572 (9th Cir. 1995) (finding no

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substantial justification where ALJ ignored medical reports, both in posing questions to the VE

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and in his final decision, which contradicted the job requirements that the ALJ deemed claimant

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capable of performing); Corbin v. Apfel, 149 F.3d 1067, 1053 (9th Cir. 1998) (finding that the

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ALJ’s failure to determine whether the claimant’s testimony regarding the impact of excess pain

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she suffered as a result of her medical problems was credible, and whether one of her doctors’

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lifting restrictions was temporary or permanent, and the Commissioner’s decision to defend that

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conduct, were not substantially justified); Crowe v. Astrue, 2009 WL 3157438, *1 (E.D. Cal.

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Sept. 28, 2009) (finding no substantial justification in law or fact based on ALJ’s improper

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rejection of treating physician opinions without providing the basis in the record for so doing);

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Aguiniga v. Astrue, 2009 WL 3824077, *3 (E.D. Cal. Nov. 13, 2009) (finding no substantial

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justification in ALJ’s repeated mischaracterization of the medical evidence, improper reliance on

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the opinion of a non-examining State Agency physician that contradicted the clear weight of the

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medical record, and improperly discrediting claimant’s subjective complaints as inconsistent with

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the medical record).

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Here, the court granted plaintiff’s motion for summary judgment and remanded the matter

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to the Commissioner for immediate payment of benefits, finding that the ALJ erred in finding that

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plaintiff did not satisfy “paragraph C” of Listing 12.05. That listing is met by showing that the

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claimant (1) has a valid IQ score between 60 and 70, (2) the evidence demonstrates or supports

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onset of the impairment before age 22, and (3) she has a physical or other mental impairment

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imposing an additional and significant work-related limitation of function.

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Testing of plaintiff’s IQ on multiple occasions resulted in scores ranging between 60 and

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70. ECF No. 28 at 6. Although the ALJ’s decision summarized the results of plaintiff’s IQ tests,

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he summarily concluded that plaintiff “does not have an intellectual disability as defined in

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12.05.” Administrative Record (“AR”) 32.
In reversing and remanding, the court found that there was no basis for questioning the

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validly of plaintiff’s IQ scores. ECF No. 28 at 7-8. The court pointed out that the evidence in the

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record showed that plaintiff had diminished intellectual functioning prior to age 22. Id.

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Accordingly, the court concluded that the ALJ erred in finding that plaintiff did not satisfy Listing

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12.05(C), and remanded the matter for immediate payment of benefits. Id. at 11-13. The court

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specifically found that the ALJ failed to address in any meaningful way the evidence indicating

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that plaintiff met Listing 12.05(C), noting that the record contained multiple test scores that

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satisfied the first requirement of 12.05(C) as well as evidence indicating diminished intellectual

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functioning prior to age 22. This ground alone required reversal of the ALJ’s decision.

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In arguing substantial justification, the Commissioner focuses on the court’s additional

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observation that several circuits have found that an adult IQ score evidencing diminished

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intellectual functioning creates a rebuttable presumption that impairment existed before the age of

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22. Id. at 9. The court pointed out that the Ninth Circuit has not addressed the rebuttable

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presumption issue and that district courts within the circuit are split on whether a rebuttable

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presumption applies. Id. at 10. This court adhered to the line of cases applying the presumption

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and ultimately concluded that the ALJ failed to rebut the presumption created by plaintiff’s adult

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IQ scores ranging between 60 and 70. Id. The Commissioner argues that given the split on

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whether there is a rebuttable presumption, and the lack of “binding precedent on this issue, there
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is still a ‘genuine dispute’ about the issue in this circuit.” ECF No. 32 at 4. Accordingly, the

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Commissioner argues that she and the ALJ had a reasonable basis in law and fact to find and

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argue that plaintiff did not meet the listing. Id.

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While a split in authority might provide sufficient justification to avoid an EAJA fee

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award, the Commissioner’s argument unduly focuses on the split of authority and fails to fully

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appreciate the court’s holding in this case. Although the court did find that the presumption

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applies and that the ALJ failed to rebut it, the court’s primary concern was the ALJ’s failure to

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address in any meaningful way evidence in the record that supported the finding that plaintiff met

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Listing 12.05(C). As the court previously explained, multiple test scores in the record satisfied

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the first requirement of 12.05(C) and there was evidence showing diminished intellectual

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functioning prior to age 22.3 Without explaining why such evidence was rejected, the ALJ

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concluded that plaintiff “does not have an intellectual disability as defined in 12.05.” ECF No. 28

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at 7; see AR 32.

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There is no split in authority as to whether the ALJ may disregard probative evidence

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without explanation. Vincent v. Heckler, 739 F.2d 1393, 1395 (9th Cir. 1984) (holding that the

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ALJ must explain why “significant probative evidence has been rejected”). Thus, even had the

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court ultimately found that no presumption applied, the ALJ’s wholesale failure to explain why

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plaintiff did not satisfy the listing—given the multiple valid IQ scores and evidence of poor

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academic performance prior to age 22—left the court without a sufficient basis for sustaining the

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step-three determination. See Thresher v. Astrue, 283 F. App’x 473, 475 (9th Cir. 2008)

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(remanding the case where the ALJ failed to address, among other things, the validity of the

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plaintiff’s IQ score); Flores v. Astrue, No. CV 11–10714–MAN, 2013 WL 146190 (C.D. Cal.

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Jan.11, 2013) (remanding case where ALJ’s decision provided “absolutely no guidance as to how

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the ALJ wrestled with” Listing 12.05(C) criteria).

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Thus, regardless of whether the presumption applies, the ALJ rejected probative evidence
of plaintiff’s diminished intellectual functioning without explanation in direct contravention of
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The record contains plaintiff’s high school records, which demonstrate that plaintiff
received mostly D’s and F’s prior to dropping out of school in the 11th grade. AR 260-267.
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established Ninth Circuit authority. Vincent, 739 F.2d at 1395. Accordingly, the split among the

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district courts in applying a presumption to adult IQ scores does not show that the

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Commissioner’s position was substantially justified.

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Accordingly, it is hereby ORDERED that:

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1. Plaintiff’s motion for attorney’s fees (ECF No. 31) is granted;

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2. Plaintiff is awarded attorney’s fees under the EAJA in the amount of $6,159.31; and

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3. Pursuant to Astrue v. Ratliff, 560 U.S. 586 (2010), defendant shall determine whether

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plaintiff’s EAJA fees are subject to offset. If the United States Department of the Treasury

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determines that plaintiff does not owe a federal debt, the government shall pay fees directly to

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plaintiff’s counsel.

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DATED: September 12, 2017.

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