Shumaker v. Commissioner of Social Security
Filing
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Memorandum Opinion and Order: Plaintiff's motion for an award of attorney fees is substantially granted, and the Court awards attorney fees to plaintiff in the amount of $4,005.00, plus $350.00 in costs, for a total award of $4,355.00, payable to plaintiff's attorney's law firm following the procedure outlined in the paragraph immediately above. (Related Doc # 20 ). Judge Sara Lioi on 12/11/2013. (P,J)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
JOSEPH P. SHUMAKER,
PLAINTIFF,
vs.
COMMISSIONER OF SOCIAL
SECURITY,
DEFENDANT.
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CASE NO. 1:11CV2801
JUDGE SARA LIOI
MEMORANDUM OPINION
AND ORDER
Before the Court is the motion of plaintiff Joseph P. Shumaker (“Shumaker” or
“plaintiff”) for an award of attorney fees pursuant to the Equal Access to Justice Act, 28 U.S.C. §
2412(d) (“EAJA”). (Doc. Nos. 20, 21.) The Commissioner of Social Security (“Commissioner”
or “government”) has filed a brief in opposition. (Doc. No. 23.) Plaintiff filed no reply. This
matter is fully briefed and ripe for determination.
I. BACKGROUND
Shumaker filed the instant action on December 28, 2011, seeking review of the
Commissioner’s denial of his application for disability insurance benefits (“DIB”). (Doc. No. 1.)
On February 4, 2013, the Court adopted the Report and Recommendation of the magistrate
judge, concluding that the Commissioner’s decision was not supported by substantial evidence to
the extent it completely failed to discuss the impact, if any, of three disability determinations
issued by the Department of Veterans Affairs (“VA”), which were not even mentioned or
acknowledged by the Commissioner.1 Pursuant to sentence four of 42 U.S.C. § 405(g), the Court
remanded for further proceedings.
Shumaker moves for attorney fees in the amount of $5,731.04, representing 31.70
total hours of service at a rate of $180.79 per hour, plus costs totaling $450.00, representing the
filing fee of $350.00 plus a pro hac vice fee of $100.00, payable directly to counsel’s law firm
pursuant to an assignment executed by Shumaker. The Commissioner opposes the request and
asserts that the government’s position was substantially justified. In the alternative, the
Commissioner asserts that the requested hourly rate and number of hours are unreasonable, and
asks this Court to reduce any amount awarded. The Commissioner also opposes a direct payment
to counsel.
II. STANDARD OF REVIEW
The EAJA requires the government to pay a prevailing social security plaintiff’s
attorney’s fees and costs2 “unless the court finds that 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); Pierce v. Underwood, 487 U.S. 552, 565 (1988); Howard v. Barnhart, 376 F.3d
551, 553 (6th Cir. 2004). In Shalala v. Schaefer, 509 U.S. 292 (1993), the Court held that
“prevailing party” status was achieved within the meaning of the EAJA when the plaintiff
succeeded in securing a sentence four remand order, which differs from a sentence six order in
1
The R&R noted that the VA had found plaintiff disabled under its regulations on several occasions. On October 21,
2005, he was found to have a 10% military-service-connected disability due to cardiomyopathy and depression; on
April 24, 2006, this was increased to a 100% disability for a period from April 26 to July 1, 2006, to account for
recovery from having a stent procedure. After that, on July 2, 2006, it decreased to 60% for the cardiomyopathy,
with no mention of the depression. On July 24, 2008, the VA notified plaintiff that he was found to be 90% disabled
due to cardiomyopathy. (See R&R at 1435-36.) None of these determinations were considered, or even mentioned,
by the ALJ in his final decision dated February 11, 2010. (Doc. No. 10, beginning at 71.)
2
Amounts awarded under the EAJA are in addition to any benefits awarded. Turner v. Comm’r of Soc. Sec., 680
F.3d 721, 723 (6th Cir. 2012) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 795-986 (2002)).
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that it “terminates the litigation with victory for the plaintiff[.]” Id. at 300-01; see also Turner,
680 F.3d at 723. “Allowing fee awards for sentence-four remands also furthers the EAJA’s
purpose of ‘eliminat[ing] for the average person the financial disincentive to challenge
unreasonable governmental actions’ through fee-shifting.” Turner, 680 F.3d at 724 (quoting
Comm’r, I.N.S. v. Jean, 496 U.S. 154, 163 (1990)).
A position is substantially justified under the EAJA when it is “justified in
substance or in the main—that is, justified to a degree that could satisfy a reasonable person.”
Pierce, 487 U.S. at 565 (internal quotation marks omitted). A reasonable person could find the
Commissioner’s position substantially justified if it rested on a “reasonable basis in law and
fact.” Id. at 566 n.2; see Barnhart, 376 F.3d at 554. The burden of demonstrating substantial
justification “must be shouldered by the Government.” Scarborough v. Principi, 541 U.S. 401,
414 (2004).3
III. DISCUSSION
A. The Commissioner’s Litigation Position
The Commissioner contends that, despite the error found by the Magistrate Judge,
defense of the ALJ’s ruling was substantially justified4 because the R&R ultimately rejected two
3
The Sixth Circuit has outlined several factors that a court should consider when evaluating whether the
government’s position was substantially justified. Hartmann v. Stone, 156 F.3d 1229 (6th Cir. 1998) (Table, text in
WESTLAW) (citing Pierce, 487 U.S. at 568-69) (discussing factors). These factors include the views of other courts
on the underlying merits of the government’s position; whether those courts viewed the result as being close or
clear; the underlying clarity of the law at the time the government took its position; and the extent to which the
government’s position comported with the applicable law. Id. “In general, the more ambiguous the law, the more the
government can claim that its position had some support in the applicable statutes and case law.” Id. at *3 (citing
Tennessee Baptist Children's Homes, Inc. v. United States, 790 F.2d 534, 540 (6th Cir.1986) (fact that issues were
novel supported government’s claim to substantial justification)). None of the individual factors are dispositive in
and of themselves. See Pierce, 487 U.S. at 568-69. Under the particular circumstances of this case, however, the
Court does not find guidance in these factors.
4
The Court notes that the mere fact that it found the Commissioner’s disability determination unsupported by
“substantial evidence” does not require a finding that the determination was not “substantially justified.” Noble v.
Barnhart, 230 F. App’x 517, 519 (6th Cir. 2007).
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of plaintiff’s three arguments and remanded merely for articulation of the impact, if any, of the
VA disability determinations. This “two out of three” argument is not compelling. Since the ALJ
completely failed to account for the potential impact of the VA’s several disability
determinations, it is entirely possible that, had they been considered, plaintiff might have been
found to be disabled. There is no way of knowing until the ALJ addresses that issue. On the
record that was before the Court, it cannot be determined whether the ALJ was even aware of the
VA’s disability determinations, since not a single mention is made of any one of them, nor are
they alluded to in any way.5
This Court recognizes that the Commissioner is not bound by a disability
determination made by another federal agency. Stewart v. Heckler, 730 F.2d 1065, 1068 (6th Cir.
1984). However, the determination, especially if it is close in time, is entitled to some
consideration, and an ALJ should explain any reason why the VA’s disability determination
might be inconsistent with the Social Security Administration’s disability regulations. Ritchie v.
Comm’r of Soc. Sec., No. 12-2405, 2013 WL 5496007, at *1-2 (6th Cir. Oct. 4, 2013);6 see also
Harris v. Heckler, 756 F.2d 431, 434 (6th Cir. 1985) (noting it was “somewhat strange that . . .
the Secretary would have the audacity to claim [that a DIB claimant] was not disabled” where
“other responsible agencies” had allowed him black lung and workers’ compensation benefits).
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Had the ALJ simply acknowledged the existence of these VA disability determinations, the deferential standard of
review that this Court must apply might have suggested a presumption that the ALJ had rejected them. However,
with no mention whatsoever, it is difficult to conclude that the ALJ gave them any consideration.
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In Ritchie, the VA’s 100% disability determination had been made 21 years before social security disability was
even claimed. Despite the VA’s determination, Ritchie had chosen to continue to work for 17 more years. In the
instant case, at the time Shumaker filed his claim for social security disability benefits, the VA had quite recently
determined that he was 60% disabled and, by the time of the ALJ’s determination, the VA had revised that to 90%
disabled. Therefore, the VA determinations were close enough in time to be potentially relevant and, at the very
least, deserved to be considered and their rejection explained.
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In light of this analysis, the Court concludes that the Commissioner’s position was
not substantially justified. As a result, fee-shifting in this case would best “further[] the EAJA’s
purpose of ‘eliminat[ing] for the average person the financial disincentive to challenge
unreasonable governmental actions’ through fee-shifting.” Turner, 680 F.3d at 724.
B.
The Appropriate Award
The EAJA provides that the amount of any attorney fee awarded “shall be based
upon prevailing market rates for the kind and quality of the services furnished, except that . . .
attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an
increase in the cost of living or a special factor, such as the limited availability of qualified
attorneys for the proceedings involved, justify a higher fee.” 28 U.S.C. § 2412(d)(2)(A)(ii). “In
requesting an increase in the hourly-fee rate, Plaintiffs bear the burden of producing appropriate
evidence to support the requested increase.” Bryant v. Comm’r of Soc. Sec., 578 F.3d 443, 450
(6th Cir. 2009).
Here, plaintiff requests an hourly rate of $180.79, based upon an increased cost of
living, as reflected in the Consumer Price Index (“CPI”) for all urban consumers for the midwest
urban region. (See Doc. No. 20-2 ¶ 11.) His counsel asserts that costs to the law firm of litigating
these cases has increased by 75% between 1996 (when the current base rate was established by
law) and 2012. (Id. ¶ 12.) The Commissioner opposes any increase, arguing that, in Bryant, the
Sixth Circuit held that a district court did not abuse its discretion in declining to increase the rate
based solely on the CPI and the rate of inflation, requiring instead that the attorney “produce
satisfactory evidence—in addition to the attorney’s own affidavit—that the requested rates are in
line with those prevailing in the community for similar sevices by lawyers of reasonably
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comparable skill, experience, and reputation.” Bryant, 578 F.3d at 450 (internal quotation marks
and citations omitted).
Here, plaintiff is not relying solely on the CPI and the rate of inflation. Rather,
plaintiff submitted the affidavit of Attorney Harry J. Binder, the senior partner and chief
financial officer of plaintiff’s counsel’s law firm. (See Doc. No. 20-5.) Mr. Binder attests to, and
quantifies, increases in the law firm’s three major cost components—labor, rent, and mail
delivery—between 1996 and 2012. He further attests that the firm’s attorneys billed at an hourly
rate of $225 in 1996, whereas the rate in 2012 was $450.
That said, the Court notes that the attorney representing plaintiff (an Ohio
resident) is from New York City, where costs and hourly billing rates are undoubtedly higher by
comparison to the Northern District of Ohio. The burden is on the party requesting the increased
fee to satisfy the Court that the amount requested is in line with the local prevailing market rates
for similar work. Bryant, supra; see also, Binta B. ex rel. S.A. v. Gordon, 710 F.3d 608, 627 (6th
Cir. 2013) (noting that attorney’s fees under another fee-shifting statute, 42 U.S.C. § 1988,
“should be calculated according to the prevailing market rates in the relevant community”)
(citing Missouri v. Jenkins by Agyei, 491 U.S. 274, 285-86 (1989)). This is quite easily
accomplished by filing an affidavit from a local attorney who routinely handles these types of
cases, which counsel here failed to do. It is not the Court’s responsibility to comb through its
own cases to attempt to ascertain a prevailing rate. Further, where the Court increases the rate set
forth in the EAJA, that should be done based on a case-by-case analysis, since the statute
requires that the increased fee be justified. “As a general proposition, rates awarded in other
cases do not set the prevailing market rate—only the market can do that.” B&G Min., Inc. v. Dir.,
Office of Workers’ Comp. Programs, 522 F.3d 657, 664 (6th Cir. 2008).
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The Court concludes that plaintiff has not met his individual burden of
establishing the need for the particular increased rate requested. However, the Court agrees that
$125.00 is too low a rate, given the limited information that plaintiff’s counsel did provide. Since
a reasonable increase is appropriate, the Court will permit a rate of $150.00 per hour.
The Commissioner also challenges plaintiff’s claim for 31.70 hours of work,
arguing that, in the Northern District of Ohio, “attorneys of record have most often been awarded
fees for expending approximately 25 hours to successfully defend the case and prepare the fee
application.” (Doc. No. 23 at 1487, citing Perry v. Comm’r of Soc. Sec., No. 3:09cv1847, 2011
WL 7096614 (N.D. Ohio Dec. 15, 2011).) There is nothing magical about a particular number of
hours. Rather, the Court must examine the hours claimed and determine whether any are
excessive, redundant or unnecessary. See Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)
(applying Civil Rights Attorney’s Fees Awards Act, 42 U.S.C. § 1988). Here plaintiff’s counsel
seeks to be awarded for 31.70 hours, hardly an exorbitant amount on its face. (See Doc. No. 203.) However, because counsel’s “itemization” gathers into lump sums the hours spent on several
non-itemized tasks,7 the Court is unable to determine, as it must, whether any of the hours
claimed reflect excessive, redundant, or unnecessary services. See, e.g., Stanback v. Shinseki, No.
05-1392(E), 2011 WL 2110213, at * 4 (Vet. App. May 27, 2011) (“Large blocks of time
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The bulk of the hours claimed are found in three entries on counsel’s “itemization”:
04/17/2012
(DSJ)
Review entire transcript/outline medical evidence/ draft
statement of facts/medical research/footnotes
9.60
04/18/2012
(DSJ)
Research and draft arguments on treating physician rule
and VA disability determination
9.40
04/19/2012
(DSJ)
Research and draft arguments on credibility/
conclusion/proofread and additional reserach [sic]
6.00
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associated with either many tasks or a single task with only generalized descriptions such as
‘research’ or ‘conference’ are not specific enough to permit the Court an adequate basis for
review and are subject to reduction.”) (internal quotation marks and citation omitted). It is not
the Court’s role to pull out the briefs filed by counsel in near proximity to the dates in his
“itemized” bill to ascertain whether, in the Court’s view, the briefs required the number of hours
expended. Nor is the Court unduly influenced by the fact that attorneys in other cases may (or
may not) have been awarded fees for a certain number of hours, although those cases can, to
some extent, provide guidance. The burden is on counsel in each case to justify the hours
claimed for that case.
The Court concludes that, due to lack of sufficient itemization, the three entries
listed in note 7, supra, should be reduced by 20% each, to 7.70, 7.50 and 4.80 hours,
respectively, for a total number of hours awarded of 26.70. See, e.g., Yellowbook, Inc. v.
Brandeberry, 708 F.3d 837, 850 (6th Cir. 2013) (where documentation is lacking, “requests for
more documentation and percentage reductions will generally be the appropriate response, not
flat denial.”); see also Kent State Univ. Bd. of Trs. v. Lexington Ins. Co., 512 F. App’x 485, 493
(6th Cir. 2013) (noting that a fee award “may be discounted as a result of poor documentation.”
(quoting Kennecott Corp. v. EPA, 804 F.2d 763, 767 (D.C. Cir. 1986)).
Finally, plaintiff seeks to be reimbursed for costs totaling $450, representing the
$350 filing fee plus a $100 pro hac vice fee. The Commissioner has not challenged these
amounts. However, the Court will not award the $100 pro hac vice fee, since there was no reason
for a New York lawyer, who was not otherwise authorized to practice in this Court, to appear on
behalf of plaintiff. That was plaintiff’s choice; therefore, he should reasonably bear that cost,
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absent any showing that there are an insufficient number of qualified lawyers for this kind of
case in the Northern District of Ohio, a showing that cannot be made.
In conclusion, the Court will award plaintiff $4,355.00 under the EAJA,
representing $4,005.00 in attorney’s fees (26.70 hours x $150.00/hour), plus $350 in costs.
C.
Person Entitled to Payment
Plaintiff seeks an order that the amount awarded be paid directly to his counsel’s
law firm, pursuant to an assignment that he executed.
In Astrue v. Ratliff, 560 U.S. 586 (2010), the Supreme Court held that EAJA fees
are payable to the plaintiff and are subject to setoff if the plaintiff has outstanding federal debts.
The Court also implicitly recognized that the payment could be made directly to a plaintiff’s
attorney only in cases where the plaintiff both owes no debt to the government and had assigned
any right to EAJA fees to the attorney.
Here, Shumaker has assigned his rights to EAJA fees awarded as a result of a
remand. (See Doc. No. 20-4, Section III.) However, plaintiff has made no showing that he owes
no debt to the government, such that it would be appropriate for this Court to order an
immediate, direct payment to his attorney’s law firm. See, e.g., Cutler v. Astrue, No. 1:10cv343,
2010 WL 901186, at *1 (N.D. Ohio Mar. 14, 2011).
Therefore, the Court orders the Commissioner to determine within 30 days of the
date of this order whether plaintiff owes a preexisting debt to the government, to offset that debt
(if any) against the award herein, and to thereafter directly pay the balance to plaintiff’s
attorney’s law firm, to be credited against the total amounts owed by plaintiff to his attorney.
This procedure shall be completed and payment made by January 31, 2014, at the very latest.
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IV. CONCLUSION
For the foregoing reasons, plaintiff’s motion is substantially GRANTED, and the
Court AWARDS attorney fees to plaintiff in the amount of $4,005.00, plus $350.00 in costs, for
a total award of $4,355.00, payable to plaintiff’s attorney’s law firm following the procedure
outlined in the paragraph immediately above.
IT IS SO ORDERED.
Dated: December 11, 2013
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE
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