MORGAN v. COMMISSIONER OF SOCIAL SECURITY

Filing 16

MEMORANDUM OPINION filed. Signed by Judge Mary L. Cooper on 5/15/2017. (mps)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

:
KEVIN C. MORGAN,
:
:
Plaintiff,
:
:
v.
:
:
NANCY A. BERRYHILL,
:
Acting Commissioner of Social Security, :
:
Defendant.
:
:

CIVIL ACTION NO. 16-8570 (MLC)
MEMORANDUM OPINION

Cooper, District Judge
This matter comes before the Court on Plaintiff Kevin C. Morgan’s (“Plaintiff”)
Motion for an Award of Attorney’s Fees and Costs Pursuant to the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. § 2412(d) (the “Motion”). (Dkt. 14.)1 Defendant
Acting Commissioner of Social Security (“Commissioner” or “Defendant”) does not
oppose Plaintiff’s Motion, but raises an objection with respect to the payment of the
award of attorney’s fees directly to Plaintiff’s counsel. (Dkt. 15.) For the following
reasons, Plaintiff’s Motion is granted.

1

The Court will cite to the documents file on the Electronic Case Filing System (“ECF”)
by referring to the docket entry numbers by the designation “dkt.” Pincites reference ECF
pagination.
1

BACKGROUND
On November 18, 2016, Plaintiff filed a complaint seeking review of the denial of
his claim for Social Security benefits by the Commissioner. (See dkt. 1.) As required by
Local Civil Rule 9.1(d)2, Plaintiff filed a statement of primary contentions explaining his
position in regard to his entitlement to relief. (See dkt. 8.) The parties consented to
remand, and the Court entered an Order remanding this case to the Commissioner for
further administrative proceedings under sentence four of 42 U.S.C. § 405(g). (Dkt. 13.)
Plaintiff filed the pending Motion seeking attorney’s fees on April 17, 2017 as the
prevailing party in this action. (Dkt. 15.) Plaintiff seeks attorney’s fees for 12.9 hours of
work performed at an hourly rate of $196.21, a sum of $2,531.00. In addition, Plaintiff
seeks $400.00 in costs. In total, Plaintiff seeks $2,931.00. The Commissioner does not
oppose the relief requested. (Dkt. 15 at 1.)
DISCUSSION
I.

Applicable Standard
The EAJA, in pertinent part, provides that:
[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 . . . including proceedings for judicial review of
agency action, brought by or against the United States . . .
unless the court finds that the position of the United States was
substantially justified or that special circumstances make an
award unjust.

2

Local Civil Rule 9.1(d)(1) states “[t]o encourage early and amicable resolution of
Social Security matters, Plaintiff, within 14 days of the filing of Defendant’s answer, shall file
with the Clerk of this Court a statement setting forth Plaintiff’s primary contentions or arguments
as to why plaintiff believes that he or she is entitled to relief.”
2

28 U.S.C. § 2412(d)(1)(A). As a prerequisite to an award of attorney’s fees, however, a
court must find: (1) plaintiff timely submitted an application for attorney’s fees and the
requested amount is reasonable; (2) plaintiff was the prevailing party in the underlying
action against the United States; and (3) the position of the United States in the
underlying action was not substantially justified, nor do special circumstances make an
award unjust. Kadelski v. Sullivan, 30 F.3d 399, 401 (3d Cir. 1994).
II.

Analysis
Upon consideration of Plaintiff’s Motion and the applicable law, the Court finds

that Plaintiff is entitled to an award of attorney’s fees in this case.
A.

Plaintiff’s Application for Attorney’s Fees is Timely

Applications for attorney’s fees must be made within thirty days of a “final
judgment.” 28 U.S.C. § 2412(d)(1)(B). Cases, such as this, that are remanded under
sentence four of 42 U.S.C. § 405(g) are considered “final” immediately upon remand.
See Shalala v. Schaefer, 509 U.S. 292, 302-04 (1993). Plaintiff filed the Motion six days
after we remanded this case to the Commissioner for further administrative proceedings
under sentence four of 42 U.S.C. § 405(g). (See dkt. 13; dkt. 14.) Thus, Plaintiff’s
Motion was timely filed.
B.

The Requested Amount is Reasonable

Plaintiff’s counsel requests attorney’s fees in the total amount of $2,931.00, based
on $2,531.00 in attorney’s fees plus $400 in costs. (See dkt. 14-2; dkt. 14-5.) The
Defendant does not oppose this amount. (See dkt. 15 at 1.) 28 U.S.C. § 2412(d)(2)(A)
provides that attorney fees shall not be awarded in excess of $125 per hour unless the
3

Court determines that a cost of living adjustment should apply or that a special factor
justifies a higher fee. See 28 U.S.C. § 2412(d)(2)(A). The Third Circuit has approved
the use of the Consumer Price Index (“CPI”) to determine cost of living adjustments
under the EAJA. See Dewalt v. Sullivan, 963 F.2d 27, 28-30 (3d Cir. 1992); Allen v.
Bowen, 821 F.2d 963, 964-67 (3d Cir. 1987). Plaintiff’s counsel asserts that the
appropriate hourly rate, adjusted for the cost of living, is $196.21.3 We find the requested
amount to be reasonable. We also find the requested costs in the amount of $400,
attributable to the filing and administrative fee (see dkt. 1), to be reasonable.
C.

Plaintiff was the Prevailing Party

A plaintiff who obtains a judgment under sentence four of 42 U.S.C. § 405(g),
including remand to the Commissioner for further development of the record, is deemed
the prevailing party for purposes of the EAJA. Shalala, 509 U.S. at 301-02; Kadelski v.
Sullivan, 30 F.3d 399, 401 n.2 (3d Cir. 1994). This case was remanded to the
Commissioner for further administrative proceedings under sentence four of 42 U.S.C. §
405(g). (See dkt. 13.) As a result, Plaintiff was the prevailing party.

3

Plaintiff’s counsel asserts that “[t]he United Stated Dept. of Labor notes the Consumer
Price Index in March, 2006 [sic] for the New Jersey area has risen an average of 29% from
March 29, 1996 to June 2014. Thus the hourly rate becomes $196.21.” (Dkt. 14-2.) This
statement is inaccurate. An increase of 29% on a base rate of $125 would equal $161.25 per
hour, not $196.21 as suggested by Plaintiff’s counsel.
The CPI for the New York-Northern New Jersey area (which includes Trenton) was
166.5 on March 29, 1996 and increased to 261.35 as of June 2014. See
http://www.bls.gov/schedule/archives/cpi_nr.htm (for CPI figures). This is approximately a 57%
increase. A 57% increase would increase the hourly rate to $196.25. We also note that the CPI
for the New York-Northern New Jersey area has continued to increase after June, 2014. See id.
Nevertheless, because the Defendant does not object to Plaintiff’s calculation, we find counsel’s
requested hourly rate of $196.21 to be reasonable.
4

D.

The Position of the United States was not Substantially Justified

The burden of showing substantial justification lies with the Commissioner.
Hanover Potato Prods., Inc. v. Shalala, 989 F.2d 123, 127 (3d. Cir. 1993)). The
Commissioner must show: “(1) a reasonable basis in truth for the facts alleged; (2) a
reasonable basis in law for the theory it propounded; and (3) a reasonable connection
between the facts alleged and the legal theory advanced.” Id. In this case, the
Commissioner does not argue that the position of the United States was substantially
justified, and therefore fails to meet the burden of demonstrating substantial justification
under the EAJA.
E.

Payment to Plaintiff’s Counsel

Finally, Plaintiff requests that the fee award be paid directly to his counsel. (See
dkt. 14-6.) Defendant objects and requests that the award of attorney’s fees be paid
directly to Plaintiff, and not his counsel. (See dkt. 15.) Defendant further states that the
Commissioner will first determine whether Plaintiff has any outstanding federal debt to
be offset from the attorney’s fees, and, if not, the Commissioner will honor Plaintiff’s
assignment of attorney’s fees. (Id. at 1.) If Plaintiff does have outstanding federal debt,
Defendant represents that the Commissioner will, after subtracting the applicable amount,
make the check payable to Plaintiff directly and deliver the check to the business address
of Plaintiff’s counsel. (Id. at 1-2.) Finally, Defendant states that if Plaintiff’s outstanding
federal debt exceeds the approved amount of attorney’s fees, the amount of the attorney’s
fees will be used to offset Plaintiff’s federal debt and no attorney’s fees shall be paid.

5

(Id. at 2.) Plaintiff did not file a reply with any objections to this proposed course of
action.
Although EAJA fee awards belong to the prevailing party, not the party’s attorney,
28 U.S.C. § 2414(d)(1)(A), such fees may be paid directly to a plaintiff’s counsel in cases
in which the plaintiff does not owe a debt to the government and assigns the right to such
fees to the attorney. Astrue v. Ratliff, 560 U.S. 586, 597 (2010). While assignments are
not prohibited, the Anti-Assignment Act provides that “[a]n assignment may be made
only after a claim is allowed, the amount of the claim is decided, and a warrant for
payment of the claim has been issued.” 31 U.S.C. § 3727(b). Thus, assignment of
Plaintiff’s award to Plaintiff’s counsel would only be possible if these requirements were
waived – which the Defendant has conditionally agreed to do if the Plaintiff does not owe
a federal debt. Accordingly, the Court finds that EAJA fees may be paid directly to
counsel, subject to any government debt offset and Defendant’s waiver of the AntiAssignment Act’s requirements.

6

CONCLUSION
For the reasons discussed above, the Court will grant Plaintiff’s Motion for an
attorney’s fees. An appropriate order follows.

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated: May 15, 2017

7