Hayes v. SSA
Filing
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MEMORANDUM OPINION AND ORDER: IT IS ORDERED that 17 Motion for Leave to Submit Corrected Motion and Petition, & 18 Motion for Leave to Submit Document are GRANTED; 20 CORRECTED MOTION and Memorandum in Support of Attorney Fee is GRANTED in part and DENIED in part; Pla is awarded $2,225.00 in fees; 14 Motion and Memorandum in Support of An Attorney Fee is DENIED AS MOOT. Signed by Judge Jennifer B. Coffman on 08/14/2012. (DAK)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
CIVIL ACTION NO. 10-401-JBC
ROBERT EVERT HAYES,
V.
PLAINTIFF,
MEMORANDUM OPINION AND ORDER
MICHAEL J. ASTRUE,
COMMISSIONER OF SOCIAL SECURITY,
DEFENDANT.
*************
This matter is before the court on Hayes’s motion for attorney’s fees under
the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, and related motions
to submit a corrected memorandum in support of the motion, and to submit
additional documentation. R. 14, 17, 18. The second and third motions will be
granted, and the first motion will be denied as moot. The corrected motion for an
attorney fee, R.20, will be granted in part.
I. Background
The court remanded the case under Sentence Six of 42 U.S.C. 405(g)
before the answer and administrative transcript were filed because the
Commissioner reported that significant portions of the recording of the
administrative hearing were inaudible. R. 7. Hayes raises two issues in his fee
petition which are contested by the Commissioner. He alleges that without an
audible recording, the Commissioner should have known that the district court
would be compelled to remand the case if he filed a federal appeal. In addition,
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Hayes maintains that the Commissioner violated his regulatory duty to review the
record.
Hayes’s corrected motion for EAJA fees requests a total of $5,785.00 for
17.80 hours of attorney time expended, at a rate of $325.00 per hour. The
Commissioner does not contest an award of $2,225.00 for 17.80 hours under 28
U.S.C. § 2412(d), which provides, in pertinent part, that a prevailing party in an
action against the United States may be awarded fees and expenses where the
position of the government is not substantially justified. The fee is limited to
$125.00 per hour unless the court determines that an increase in the cost of living
or a special factor justifies a higher amount. 28 U.S.C. § 2412(d)(2)(A).
Hayes’s request for $325.00 per hour is based on a different section, 28
U.S.C. § 2412(b), which allows a court to award “reasonable fees and expenses of
attorneys . . . to the prevailing party in any civil action brought against the United
States . . . to the same extent that any other party would be liable under the
common law . . . .” There is a common law “bad faith” exception to the
“American Rule” that each party bears its own attorney’s fees. Griffin Industries,
Inc. v. U.S.E.P.A., 640 F.3d 682, 685 (6th Cir. 2011).
The Sixth Circuit recently described an award of EAJA fees for bad faith as
“extraordinary and punitive,” noting that it requires an explicit finding of
“subjective bad faith” by the district court. Id. at 685-86. The court must find:
(1) that the position advanced or maintained by a party was meritless; (2) that the
meritlessness was known to the party; and (3) that the position was advanced or
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maintained for an improper purpose, such as harassment. Id. at 685. The court
“must find something more than that a party knowingly pursued a meritless claim
or action at any stage of the proceedings . . . . Harassing the opposing party,
delaying or disrupting litigation, hampering the enforcement of a court order, or
making improper use of the courts are all examples of the sorts of conduct that will
support a finding of bad faith or improper purpose.” BDT Products, Inc. v. Lexmark
Int’l, Inc., 602 F.3d 742, 752 (6th Cir. 2010).
II. Discussion
In support of his argument that the Commissioner acted in bad faith, Hayes
relies almost entirely on Baker v. Bowen, 839 F.2d 1075 (5th Cir. 1988), in which
one of the co-plaintiffs alleged bad faith on the part of the Secretary of Health and
Human Services after the recording of her administrative hearing was lost. Id. at
1081. She further alleged, in parallel to the present case, that, as a result, the
Appeals Council violated its duty to review the record under 20 C.F.R. §§
404.976(b) and 404.979, and that the defendant knew or should have known that
the district court would have to remand the case for additional hearings. In Baker,
unlike the present case, “the Secretary [now the Commissioner] attempted to
conceal the error even after the case was in district court, and requested
extensions to ‘develop the record,’ knowing that the tapes could not be located.”
Id. at 1081-82.
The Fifth Circuit held that the Appeals Council failed to fulfill its statutory
duty to base its decisions on “the evidence adduced at the hearing,” as set out in
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42 U.S.C. § 405(b), “when it affirmed the ALJ, perfunctorily and automatically,
without reviewing all the evidence, and that for purposes of awarding attorney’s
fees this constitutes bad faith in cases where the Secretary, after suit is filed,
determines that benefits should have been granted.” Id. at 1082.
In addition to being distinguishable from the present case because the
Commissioner did not attempt to conceal the error after Hayes’s case was in
district court, the Fifth Circuit’s ruling does not appear to be consistent with the
Sixth Circuit’s requirement that a party must show “something more” than
knowingly pursuing a meritless claim or action. BDT Products, 602 F.3d at 752.
Hayes notes that 20 C.F.R. §§ 976(b) and 404.979, cited by the Fifth Circuit,
provide that the Appeals Council will “consider all the evidence in the
administrative law judge [ALJ] hearing record,” and therefore it knew or should
have known that the recording was defective. However, in context, this provision
applies to cases in which the Appeals Council has granted a request for review and
is issuing a new decision. Section 404.967 makes it clear that the Appeals Council
may grant a request for review, or, as here, deny the request for review.1 The
Commissioner argues persuasively that internal procedures in his Hearings, Appeals
and Litigation Law Manual (“HALLEX”) give the Appeals Council wide latitude in
determining whether the recording of the ALJ hearing should be reviewed in
It is not clear whether the Appeals Council had accepted the plaintiff’s request for
review in Baker v. Bowen, although the Fifth Circuit’s reference to “perfunctorily
and automatically” affirming the ALJ could mean that the request for review was
denied. Regardless of this issue, Baker would not control the outcome of this case
for the reasons set out in the body of this decision.
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determining whether to grant or deny a request for review. HALLEX I-3-1-52; I-31-99; I-3-1-100. For all these reasons, the Commissioner did not violate any
regulation in failing to review the recording of the hearing before the case was filed
in this court.
Even assuming, without deciding, that the Commissioner “should have
known” that the recording was defective, it would not constitute bad faith. The
standard required in the Sixth Circuit is “something more” than knowingly pursuing
a meritless action. Hayes must also show that the Commissioner knew the action
was meritless and was advanced for an improper purpose, such as harassment.
BDT Products, 602 F.3d at 752. Hayes has not even alleged that there was an
improper purpose. Therefore, the request for reimbursement at $325.00 per hour
will be denied.
III. Conclusion
Accordingly, IT IS ORDERED that the motions to file a corrected motion for
attorney’s fees, R. 17, and to submit additional documentation, R. 18, are
GRANTED.
The corrected motion for attorney’s fees (R.20) is GRANTED in part
and DENIED in part; the plaintiff is awarded $2,225.00 (17.80 hours x $125.00
per hour) in fees. The prior motion for an attorney fee, R. 14, is DENIED AS
MOOT.
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Signed on August 14, 2012
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