Decker v. Commissioner of Social Security

Filing 27

REPORT AND RECOMMENDATIONS that the 24 MOTION for Attorney Fees under EAJA filed by Stacy Ann Decker be denied. Objections due w/in fourteen (14) days. Signed by Magistrate Judge Terence P Kemp on 5/2/2014. (kk2)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Stacy Ann Decker,

:

Plaintiff,

:

v.

:
:

Commissioner of Social
Security,

Case No. 2:12-cv-0454
JUDGE ALGENON L. MARBLEY
Magistrate Judge Kemp

:
Defendant.
REPORT AND RECOMMENDATION
Plaintiff, Stacy Ann Decker, filed this action seeking review
of a decision of the Commissioner of Social Security denying her
applications for disability insurance benefits and supplemental
security income.

In a decision filed on September 10, 2013, the

Court remanded the case to the Commissioner for further
proceedings.

Decker v. Commissioner of Social Sec., 2013 WL

4830961 (S.D. Ohio Sept. 10, 2013).

Plaintiff’s counsel have now

filed an application for attorneys’ fees under the Equal Access
to Justice Act, 28 U.S.C. §2412.

Responsive and reply memoranda

have been filed, and the motion is now ready to decide.
I.

Legal Standard

The Equal Access to Justice Act, 28 U.S.C. §2412, provides,
in pertinent part, that the Court shall award to a prevailing
party other than the United States attorneys' fees and expenses
"unless the court finds that the position of the United States
was substantially justified or that special circumstances make an
award unjust."
The party seeking an award of such fees and expenses is
required to submit a fee application to the court within 30 days
of the date that the judgment became final and non-appealable.
The application must demonstrate that the party is a prevailing

party and is eligible to receive a fee award.

It must also

document the amount sought, including an itemized statement from
the attorney or attorneys involved, and must allege that the
position of the United States was not substantially justified.
The court is then required to determine, on the basis of the
record, whether the position of the United States was
substantially justified.

Attorneys' fees are limited to the rate

of $125.00 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,
justifies a higher fee."
Once a petition has been filed alleging that the position of
the United States was not substantially justified, the United
States has the burden of demonstrating such justification.

See

Miller v. United States, 831 F. Supp. 1347, 1351 (M.D. Tenn.
1993) ("The burden lies with the government to demonstrate that
its position was substantially justified ...."); Weber v.
Weinberger, 651 F.Supp. 1379, 1388 (E.D. Mich. 1987) ("with
respect to an application for attorney's fees the Government has
the burden of showing that its position was substantially
justified."); see also Howard v. Heckler, 581 F. Supp. 1231, 1233
(S.D. Ohio 1984).

The question of whether the United States’

position is substantially justified is determined based upon the
standards set forth in Pierce v. Underwood, 487 U.S. 552 (1988).
In Pierce, the Court concluded that the phrase "substantially
justified" as used in the EAJA means justified "to a degree that
could satisfy a reasonable person."

Pierce, supra, at 565.

As

the Court noted, that test "is no different from the 'reasonable
basis both in law and fact' formulation adopted by the Ninth
Circuit and the vast majority of other Courts of Appeals that
have addressed this issue."

Id., citing, inter alia, Trident

Marine Construction, Inc. v. District Engineer, 766 F.2d 974 (6th
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Cir. 1985). An agency decision that is not supported by
substantial evidence may still be one that has a reasonable basis
in law and fact.
1989).

Jankovich v. Bowen, 868 F.2d 867 (6th Cir.

Consequently, this Court is required to apply the

"reasonable basis in law and fact" test set forth in Trident
Marine Construction to this application for attorneys’ fees.
II.

The Application for Fees

In this case, two attorneys, Payam Yazdani and David S.
Bloomfield, represented Plaintiff.

According to their

application, they expended, in total, 49 hours on the case.

They

request an award of $8,771.00 for the time spent, an hourly rate
of $179.00.
In the response, the Commissioner takes issue both with the
number of hours spent on the case and the proposed hourly rate of
compensation, but, more significantly, argues that the litigation
position taken by the Commissioner in this Court was
substantially justified.

The Court now turns to that question.
III.

Discussion

A brief review of the case’s procedural history is in order.
Plaintiff had applied for benefits on the basis of disability due
to psychological issues.

At the administrative hearing, which

was held by videoconference before an ALJ sitting in St. Louis,
Missouri, a vocational expert was permitted to appear and testify
by telephone.

That process violated then-existing HHS

regulations.
In a Report and Recommendation, the undersigned Magistrate
Judge recommended reversal based on the combination of the
commission of a procedural error and the conclusion that the
error was not harmless.

The District Judge adopted that

recommendation, although noting that in the wake of one of the
decisions cited in the Report and Recommendation, Edwards v.
Astrue, 2011 WL 3490024 (D. Conn. Aug. 10, 2011), new regulations
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were adopted which allowed vocational expert testimony to be
provided telephonically if advance notice and an opportunity to
object were given to the claimant.
Plaintiff seizes upon the fact that several District Courts
had issued rulings adverse to the Commissioner’s litigation
position in this case as evidence that the Commissioner’s
position was not substantially justified.

Plaintiff’s position

is well-summarized by this statement in her reply:
The Commissioner defended the ALJ’s decision while on
notice about other District Court cases with similar
holdings on a central issue in this case, and while
working to change its regulations to allow for
telephonic witness testimony as a result of such
precedent. Thus, the Commissioner’s defense was
unreasonable and its position was not justified.
Reply Memorandum, Doc. 26, at 5.

The first part of this

statement is factually true: there were contrary District Court
cases, and the Commissioner was working on a regulatory change
while litigating this case.

The question is whether it can be

inferred from those facts that the Commissioner’s litigation
position was not substantially justified.
In the Commissioner’s initial memorandum in opposition to
the Plaintiff’s statement of errors, the regulatory issue was not
really addressed.

The Commissioner argued, alternatively, that

any procedural irregularity had been waived, or that Plaintiff
was not deprived of Constitutional due process.

A more

substantial argument was made in the objections (Doc. 20), to
which Plaintiff did not respond.

There, the Commissioner argued

not only that a waiver had occurred, but that no procedural
violation took place and that any error was harmless.
The earlier Report and Recommendation (Doc. 14) illustrates
the substantial nature of at least some of these arguments.
Although the Commissioner’s argument on waiver may have bordered

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on the insubstantial, the other arguments - was there a
procedural violation, and was it harmless error - produced nine
pages of analysis.

Included in that analysis was a citation to

several District Court decisions which concluded that any
violation of the regulation in question was harmless unless the
claimant could show specific prejudice.

These were not easy

questions to answer, and the District Judge also devoted
substantial discussion to them.
This Court is not prepared to say that when a handful of
District Courts have rejected the Commissioner’s litigation
position, while others have supported it, the Commissioner cannot
make a reasonable argument that the conflict should be resolved
against the claimant.

As one court has said, where the parties

are “operating in a relatively novel area of the law,” the United
States’ litigation position is substantially justified for
purposes of the EAJA if it is “supported by reasonable factual
and legal arguments.”

U.S. Commodity Futures Trading Com'n v.

WeCorp, Inc., 878 F.Supp.2d 1160, 1165 (D. Hawai'i 2012).
is the case here.

That

The Commissioner may well have wished to

revise the regulation in question not because it clearly
prohibited telephonic testimony by vocational experts, but in
order to preclude further litigation over that issue.

And the

Commissioner is always free to make a harmless error argument
even when a regulation has been violated.

The substantiality of

that argument will depend on the specific facts of each case, but
here, where even the standard to be applied to the harmless error
was a topic for debate, it is difficult to say that the
Commissioner did not advance a reasonable argument that the Court
should find that the regulatory violation was harmless error.
EAJA fees can be awarded when “there [i]s no reasonable factual
or legal basis for the Commissioner to argue that the error was
harmless,” Downey v. Astrue, 2012 WL 1205824, *7, 177

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Soc.Sec.Rep.Serv. 18 (E.D. Cal. Apr. 11, 2012), but that is not
the case here.

Consequently, the Court recommends the denial of

Plaintiff’s motion.
IV.

Recommended Decision

For these reasons, it is recommended that the Plaintiff’s
motion for an award of fees under the Equal Access to Justice Act
(Doc. 24) be denied.
V. Procedure on Objections
If any party objects to this Report and Recommendation,
that party may, within fourteen (14) days of the date of this
Report, file and serve on all parties written objections to
those specific proposed findings or recommendations to which
objection is made, together with supporting authority for the
objection(s).

A judge of this Court shall make a de novo

determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.

Upon proper objections, a judge of this Court may

accept, reject, or modify, in whole or in part, the findings
or recommendations made herein, may receive further evidence
or may recommit this matter to the magistrate judge with
instructions.

28 U.S.C. §636(b)(1).

The parties are specifically advised that failure to
object to the Report and Recommendation will result in a
waiver of the right to have the district judge review the
Report and Recommendation de novo, and also operates as a
waiver of the right to appeal the decision of the District
Court adopting the Report and Recommendation.

See Thomas v.

Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d
947 (6th Cir. 1981).

/s/ Terence P. Kemp
United States Magistrate Judge
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