Halbert v. SSA

Filing 37

MEMORANDUM OPINION AND ORDER re 36 : the attorneys' fees motion shall be DENIED. Signed by Judge Joseph M. Hood on 1/9/2020. (TDA) cc: COR Modified text on 1/9/2020 (TDA).

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.
BERRYHILL, NO. 17-5206.

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Civil Case Nos.
5:16-cv-128-JMH
5:17-cv-169-JMH
6:16-cv-184-JMH
6:16-cv-298-JMH
6:17-cv-006-JMH
7:16-cv-035-JMH
7:16-cv-076-JMH
7:16-cv-096-JMH
7:16-cv-167-JMH
7:16-cv-171-JMH
7:16-cv-181-JMH
7:16-cv-194-JMH
7:16-cv-233-JMH
7:16-cv-245-JMH
7:16-cv-272-JMH
7:16-cv-286-JMH
7:16-cv-287-JMH
7:16-cv-298-JMH
7:17-cv-016-JMH
7:17-cv-107-JMH
7:17-cv-129-JMH
7:17-cv-131-JMH
MEMORANDUM OPINION
AND ORDER

***
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
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are now ripe for the Court’s review.

For the reasons set forth

herein, the motions are DENIED.
I.
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

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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.”
at 794–95.

Id.

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
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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”).
II.
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).

1

The plaintiffs originally requested attorney's fees in the Sixth Circuit.
However, the court granted the Commissioner's motion to remand this issue to
this Court.

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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-51DCR, 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)).
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However,

this is only a threshold determination; the Court must next
determine whether the SSA's position was substantially justified.
III.
The

Plaintiffs'

Government's

Motions

position

was

fail,

however,

substantially

because

justified,

so

the
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 F. App'x 607, 615 (6th
Cir.

2013)).

The

government

substantial justification.

has

the

burden

of

establishing

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
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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 F. App'x 436, 436 (6th Cir. 2001); Noble
v. Barnhart, 230 F. App'x 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 omitted). “While the parties' postures on
individual matters may be more or less justified, the EAJA—like
other fee-shifting statutes—favors treating a case as an inclusive
whole.”

Jean, 496 U.S. at 161-62, 110 S.Ct. 2316.
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Here, the position of the SSA 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 SSA’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).
that

position.

United

The Sixth Circuit has affirmed

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.

In this case, it is clear that reasonable people differ as to
the legality of the SSA’s approach to the redetermination process,
and, subsequently, the position taken by the SSA 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
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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
Colvin,

upholding
224

F.

the

Supp.

3d

redetermination
575

(E.D.

Ky.

process);
2016)

Perkins

(upholding

v.
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.
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).
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
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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

government’s position to be substantially justified).

the

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
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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  

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).
IV.
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

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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
opportunity

were
to

both

low

because

supplement

the

Plaintiffs
records

were

given

throughout

an
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.
V.
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.    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
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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.
at 4; DE 33 at 7–8).

See, e.g., 7:16-cv-90 (DE 30

This is not the case, however.

As an initial matter, Plaintiffs appear to overstate the Sixth
Circuit’s ruling.
remand

process

The Sixth Circuit did not say that the entire

was

“so

irrational

as

to

be

‘arbitrary

and

capricious,”’ see, e.g., 7:16-cv-90 (DE 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 “OIGbased

determinations

of

fraud

differently

than

determinations of fraud” is arbitrary and capricious.

SSA-based
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’

substantially

and

if

justified.”

the

more

‘prominent’

Amezola-Garcia,

(quoting EEOC, 526 F. App’x at 615).
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835

claims
F.3d

at

were
555

Here, the multiple claims

against the SSA— 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 Clause and APA,
including

those

originally

raised

by

Plaintiffs

litigation, were substantially justified.

See supra.

in

this

Thus, the

“EAJA application fails.” Amezola-Garcia, 835 F.3d at 555.
VI.
In

sum,

justified.

the

Commissioner’s

position

was

substantial

As a result, the plaintiffs’ motions for attorneys’

fees in the above-referenced actions, pursuant to the Equal Access
to

Justice

Act,

28

U.S.C.

§

2412,

must

necessarily

fail.

Accordingly, IT IS ORDERED that the attorneys’ fees motions,
including the following:
A. [Lexington Civil Action No. 5:16-cv-128; DE 39];
B. [Lexington Civil Action No. 5:17-cv-169; DE 29];
C. [London Civil Action No. 6:16-cv-184; DE 39];
D. [London Civil Action No. 6:16-cv-298; DE 27];
E. [London Civil Action No. 6:17-cv-6; DE 22];
F. [Pikeville Civil Action No. 7:16-cv-35; DE 101];
G. [Pikeville Civil Action No. 7:16-cv-76; DE 38];
H. [Pikeville Civil Action No. 7:16-cv-96; DE 52-53];
I. [Pikeville Civil Action No. 7:16-cv-167; DE 36];
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J. [Pikeville Civil Action No. 7:16-cv-171; DE 37];
K. [Pikeville Civil Action No. 7:16-cv-181; DE 38];
L. [Pikeville Civil Action No. 7:16-cv-194; DE 34];
M. [Pikeville Civil Action No. 7:16-cv-233; DE 34];
N. [Pikeville Civil Action No. 7:16-cv-245; DE 39];
O. [Pikeville Civil Action No. 7:16-cv-272; DE 29];
P. [Pikeville Civil Action No. 7:16-cv-286; DE 27];
Q. [Pikeville Civil Action No. 7:16-cv-287; DE 31];
R. [Pikeville Civil Action No. 7:16-cv-298; DE 29];
S. [Pikeville Civil Action No. 7:17-cv-16; DE 24];
T. [Pikeville Civil Action No. 7:17-cv-107; DE 28];
U. [Pikeville Civil Action No. 7:17-cv-129; DE 33]; and
V. [Pikeville Civil Action No. 7:17-cv-131; DE 40];
in the above-referenced actions, are, and hereby shall be, DENIED.
This, the 9th day of January, 2020.

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