Ramey v. SSA
Filing
40
MEMORANDUM OPINION AND ORDER: re 36 Fee Motions in above-referenced cases pursuant to the EAJA are DENIED. Signed by Judge David L. Bunning on 11/18/2019. (RCB)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
IN RE: Fee Motions in Various Social Security Cases Affected by the Sixth Circuit
Decision in Hicks v. Comm’r of Soc. Sec., No. 17-5206
5:16-cv-130
5:16-cv-375
6:16-cv-62
7:16-cv-73
7:16-cv-77
7:16-cv-90
7:16-cv-140
7:16-cv-149
7:16-cv-163
7:16-cv-209
7:16-cv-212
7:16-cv-248
5:17-cv-262
7:17-cv-5
7:17-cv-116
7:17-cv-130
7:17-cv-158
7:18-cv-33
7:18-cv-47
7:18-cv-122
Clinton Ryan Mullins v. Comm’r of Soc. Sec.
Danny Lenn Reed v. Comm’r of Soc. Sec.
Robert L. Muncy, II v. Comm’r of Soc. Sec.
Carolyn Lynn Bates v. Comm’r of Soc. Sec.
Brenda Stewart v. Comm’r of Soc. Sec.
Janie Shepherd v. Comm’r of Soc. Sec.
Kathy Ramey v. Comm’r of Soc. Sec.
Lenny Newsome v. Comm’r of Soc. Sec.
Kathleen Campbell Curtis v. Comm’r of Soc. Sec.
Ricky Casebolt v. Comm’r of Soc. Sec.
Mary Sexton v. Comm’r of Soc. Sec.
Eddie Reed v. Comm’r of Soc. Sec.
Chessie Gray v. Comm’r of Soc. Sec.
Chad Shepherd v. Comm’r of Soc. Sec.
Margaret C. Copley v. Comm’r of Soc. Sec.
Joann Holbrook v. Comm’r of Soc. Sec.
Ranie Jo Coleman v. Comm’r of Soc. Sec.
Martin Lee Gillespie v. Comm’r of Soc. Sec.
Betty Robinson v. Comm’r of Soc. Sec.
Tracy Ann Hannah v. Comm’r of Soc. Sec.
MEMORANDUM OPINION AND ORDER
********
This matter is before the Court on Motions for Attorneys’ Fees pursuant to the
Equal Access to Justice Act filed in the above-referenced cases. The Motions have been
fully briefed, or the time for filing of replies has expired, see L.R. 7.1(c), and all are now
ripe for the Court’s review. For the reasons set forth herein, the pending Motions are
denied.
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I.
FACTUAL AND PROCEDURAL BACKGROUND1
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
In the interest of judicial efficiency, the Court will briefly re-summarize the factual and
procedural background of these cases. A more detailed summary can be found in Hicks v.
Comm’r of Soc. Sec. 909 F.3d 786, 791–96 (6th Cir. 2018).
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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,2 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 12, 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”).
This includes the Residual Function Capacity forms as well as “evidence detailing their
examinations of plaintiffs, including any testing that they had performed and behavioral
observations they had made.” Id.
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II.
ANALYSIS
A.
Standard Under the EAJA
The EAJA provides that:
[A] court should award to a prevailing party other than the United States
fees and other expenses, in addition to any costs awarded pursuant to
subsection (a), 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 the position of the United States was
substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A). The purpose of the law is “to eliminate the barriers that
prohibit small businesses and individuals from securing vindication of their rights in civil
actions and administrative proceedings brought by or against the Federal Government.”
Scarborough v. Principi, 541 U.S. 401, 406 (2004) (quoting H.R. Rep. No. 96–1005, p. 9).
Four requirements must be satisfied in order for a plaintiff to be awarded fees under the
EAJA—(1) “the fee applicant [must] be a prevailing party,” (2) “the government’s position
[was not] substantially justified,” (3) “no special circumstances make an award unjust,”
and (4) the application for fees was filed “within thirty days of final judgment.” Townsend
v. Soc. Sec. Admin., 486 F.3d 127, 129–30 (6th Cir. 2007) (citing Comm’r, INS v. Jean,
496 U.S. 154, 158 (1990)). “[T]he district court at the EAJA stage must take 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, at *2 (E.D. Tenn. Feb. 17, 2010) (citing Fed. Election Comm’r v. Rose, 806
F.2d 1081, 1087–90 (D.C. Cir. 1986)).
There appears to be no dispute that the Plaintiffs were the prevailing party, see,
e.g., 7:16-cv-90 (Doc. # 32) (not disputing that Plaintiff was the prevailing party); Howard
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v. Saul, No. 7:16-cv-51-DCR, 2019 WL 5191831, at *3 (E.D. Ky. Oct. 15, 2019) (“It is
undisputed that the plaintiffs are prevailing parties within the meaning of the EAJA.”), and
the request seems to have been timely filed.3 Additionally, it does not appear that the
Commissioner is arguing the presence of special circumstances that make an award of
attorneys’ fees unjust. See, e.g., 7:16-cv-90 (Doc. # 32). The Plaintiffs’ Motions fail,
however, because the Government’s position was substantially justified, see infra, so the
requirements of the EAJA are not met.
B.
The Government’s Position was Substantially Justified
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 F. App’x 607,
615 (6th Cir. 2013)). The government has the burden of making that showing “and it
discharges that burden by demonstrating that the position had a ‘reasonable basis both
Pursuant to the EAJA, parties have thirty days from the date of final judgment to file their
fee motions. Townsend, 486 F.3d at 130. The Sixth Circuit has held, however, that prevailing
parties actually have thirty days from the expiration of the appeal period to timely file. Feldpausch
v. Heckler, 763 F.2d 229, 232 (6th Cir. 1985) (“[W]e therefore hold that [an] application for attorney
fees within 30 days of the expiration of the time to appeal [is] timely.”). When a government
agency is a party to the action, either party has sixty days to appeal a final judgment. Fed. R.
App. P. 4(a)(1)(B)(ii). In effect, the parties had ninety days from the final judgment to file their fee
motion. See Townsend v. Comm’r of Soc. Sec., 415 F.3d 578, 581 (6th Cir. 2005). As the
Judgments were filed on July 12, 2019, see, e.g., 7:16-cv-90, the ninety-day deadline expired on
October 10, 2019. All pending fee motions were filed on or before October 10, 2019 and therefore
appear to be timely.
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in law and fact.”’ DeLong v. Comm’r of Soc. Sec. Admin., 748 F.3d 723, 726–27 (6th Cir.
2014) (quoting Pierce, 487 U.S. at 565).
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 omitted).
Here, the position of the Government is substantially justified as evidenced by the
multiple courts and judges inside and outside of this District that reached differing,
reasonable conclusions about the legality of the Government’s actions. “The Supreme
Court has equated [the substantially-justified] standard with a reasonable basis both in
law and fact.” Noble v. Barnhart, 230 F. App’x 517, 519 (citing Pierce, 487 U.S. at 565).
The Sixth Circuit has affirmed that position.
United States ex rel Wall v. Circle C
Construction, LLC, 868 F.3d 466, 470 (6th Cir. 2017) (“[O]ur court (along with numerous
others) has held that ‘the question of substantial justification is essentially one of
reasonableness.” (quoting United States v. 0.376 Acres of Land, 838 F.2d 819, 827 (6th
Cir. 1988)). Thus, a position “will be deemed to be substantially justified if there is a
genuine dispute, or if reasonable people could differ as to the appropriateness of the
contested action.” Noble, 230 F. App’x at 519.
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In this case, it is clear that reasonable people differ as to the legality of the
Government’s approach to the redetermination process, and, subsequently, the position
taken by the Government throughout this litigation. Not only was there a vigorous dissent
by Judge Rogers of the Sixth Circuit in Hicks agreeing with the Government’s litigation
position, but also a number of district courts both inside and outside of the Eastern District
of Kentucky have found the Government’s redetermination approach to be appropriate
and agreed with the Government’s position that its actions were legal under the Due
Process Clause and the APA. See Howard, 2019 WL 5191831, at *7 (collecting cases
from Virginia, Florida and West Virginia upholding the redetermination process); Perkins
v. Colvin, 224 F. Supp. 3d 575 (E.D. Ky. 2016) (upholding the redetermination process);
Carter v. Colvin, 220 F. Supp. 3d 789 (E.D. Ky. 2016) (same). This is not a case where
merely one unreasonable, outlier decision found that the Government’s redetermination
process was legal and the Government’s position was justified. Rather, many seasoned,
reasonable federal jurists agreed with the Government and found its redetermination
process to be appropriate under the Due Process Clause and the APA. Clearly, the
relevant precedent was not as clear-cut and well-established as Plaintiffs claim. See No.
7:16-cv-90 (Doc. # 30 at 5–6). The varying outcomes and opinions in district courts and
the Sixth Circuit indicated that there is a true, “genuine dispute” over the legality of the
Government’s redetermination approach, that “reasonable people could differ as to the
appropriateness” of the Government’s approach, and therefore, the Government’s
position must be “deemed to be substantially justified.” Noble, 230 F. App’x at 519 (citing
Pierce, 487 U.S. at 565).
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Additionally, “a string of losses or successes may be indicative of whether a
position is substantially justified.” Howard, 376 F.3d at 554 (citing Pierce, 487 U.S. at
569); see also United States ex. Rel Wall, 868 F.3d at 471 (“[A] string of successes in
advocating a position might indicate the position is reasonable.”) (internal quotations
omitted). While, “the fact that one court agreed or disagreed with the Government does
not establish whether its position was substantially justified,” Howard, 376 F.3d at 554
(quoting Pierce, 487 U.S. at 569), the Sixth Circuit has found a position to be substantially
justified when multiple courts or judges have agreed with the Government’s position. See
Gray v. Comm’r of Soc. Sec., 23 F. App’x 436, 437 (6th Cir. 2001) (finding that the fact
that the magistrate judge and district judge did not reverse the Commissioner’s decision
to deny benefits, even though the case was remanded due to a legal error, “supports the
Commissioner’s argument that his position was justifiable”); see also Peck v. Comm’r of
Soc. Sec. 165 F. App’x 443, 446 (6th Cir. 2006) (noting that “the Appeals Council, a
magistrate judge, and a district judge all agreed with the administrative law judge’s
assessment” before finding that the district court did not abuse its discretion by finding
the government’s position to be substantially justified). Thus, the Court also finds the
Government’s position to be substantially justified given the multiple courts and judges
that have agreed with the Government’s position.
Finally, and perhaps most importantly, the approach the Government took to
redetermination, and the position it took during litigation, was substantially justified from
a substantive, merits perspective, even if it was ultimately found to be incorrect by the
Sixth Circuit. See United States ex. Rel Wall, 868 F.3d at 471 (indicating that what often
matters in determining if there is substantial justification “is the actual merits of the
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Government’s litigating position”) (internal quotations omitted). As explained by Chief
Judge Reeves, “the Commissioner was substantially justified in believing that SSA’s
redetermination process passed muster under Mathews and therefore comported with
due process” and “was substantially justified in its position with respect to the
Administrative Procedure Act.” See Howard, 2019 WL 5191831, at *5–7; see also Hicks,
909 F.3d at 813–27 (Rogers, J. dissenting).
With regard to the due-process issue, Chief Judge Reeves explained that the SSA
excluded the potentially-fraudulent evidence based on SSA regulations, and it was
reasonable, albeit ultimately incorrect, for the SSA to believe that excluding that evidence
met the due-process requirements of Mathews. Howard, 2019 WL 5191831, at *6 (“Put
simply, the SSA disregarded the evidence believed to be fraudulent as commanded in 42
U.S.C. §§ 405(u) and 1383(e)(7).”). Specifically, the three-part due-process analysis
under Mathews is “a flexible concept,” and, therefore, the conclusion that due process
was not met by the redetermination procedure “was open to reasonable disagreement.”
Id. at *5. Both parties had strong interests at stake—the Plaintiffs in maintaining their
benefits and the Government in preventing and dealing with fraud. Id. (discussing the
first and third elements of the Mathews analysis).
Additionally, the Government
concluded that the risk of erroneous deprivation and the value of additional safeguards
were both low because Plaintiffs were given an opportunity to supplement the records
throughout the redetermination process and allowing Plaintiffs to challenge the excluded
records would have had little benefit to them. Id. at *5–6 (discussing the second element
of the Mathews element). Therefore, the Government’s reasonable conclusion that the
process comported with due process was substantially justified.
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As to the claims under the APA, Chief Judge Reeves explained that the
Government’s position was also substantially justified, even though the Circuit found the
position to be in violation of the APA. Id. at *6–7. Specifically, he noted that it was
reasonable for the SSA to believe that the redetermination process was not subject to the
formal adjudication requirements because those requirements apply to agency hearings,
and the SSA regulations reasonably could be read to “not require” that hearings be
conducted. Id. at *6. Plaintiffs raise the fact that the Sixth Circuit found one aspect of the
redetermination process to be arbitrary and capricious and suggest that this finding
makes the entirety of the Government’s position unjustified on the merits. See, e.g., 7:16cv-90 (Docs. # 30 at 4 and 33 at 7–8). This is not the case, however.
As an initial matter, Plaintiffs appear to overstate the Sixth Circuit’s ruling. The
Sixth Circuit did not say that the entire remand process was “so irrational as to be
‘arbitrary and capricious,”’ see, e.g., 7:16-cv-90 (Doc. # 30 at 4) (quoting Hicks, 909 F.3d
at 808–09), as Plaintiffs seem to suggest. The Circuit’s holding was more limited; it held
that the SSA’s treatment of “OIG-based determinations of fraud differently than SSAbased determinations of fraud” is arbitrary and capricious. Hicks, 909 F.3d at 808–09;
see also Howard, 2019 WL 5191831, at *7. This holding was the second of the two issues
under the APA that the Sixth Circuit considered, Hicks at 804–09, and, noted by Chief
Judge Reeves, was one not originally raised by the Plaintiffs, Howard, 2019 WL 5191831,
at *7.
“[A]n EAJA application fails if the multiple claims involved are ‘distinct’ and if the
more ‘prominent’ claims were substantially justified.” Amezola-Garcia, 835 F.3d at 555
(quoting EEOC, 526 F. App’x at 615). Here, the multiple claims against the SSA—
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including the due-process claim and claims under the APA—are distinct. The Court finds
that, even if arguendo the Government’s position on the APA issue that was found to be
arbitrary and capricious is not substantially justified, the other more prominent claims
under the Due Process Clause4 and APA, including those originally raised by Plaintiffs in
this litigation, were substantially justified.5 See supra. Thus, the “EAJA application fails.”
Amezola-Garcia, 835 F.3d at 555.
III.
CONCLUSION
Accordingly, because the Government’s position was substantially justified, the
Fee Motions in the above-referenced cases pursuant to the EAJA are DENIED.
This 18th day of November, 2019.
K:\DATA\SocialSecurity\Omnibus Order re Fee Motions .docx
The prominence of this claim was highlighted by Judge Thapar in his district-court opinion
in Hicks. Hicks v. Colvin, 214 F. Supp. 3d 627, 633 (E.D. Ky. 2016). In that case he only
considered the due-process issue because “above all else, agencies must follow the
Constitution.” Id.
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Similarly, even if arguendo the remand position of the Government was not substantially
justified as the Plaintiffs suggested, see, e.g., 7:16-cv-90 (Doc. # 30 at 8–9), this would not support
granting the EAJA application, as the “more ‘prominent’ claims” and aspects of the litigation “were
substantially justified.” Amezola-Garcia, 835 F.3d at 555 (quoting EEOC, 526 F. App’x at 615).
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