Smith v. Commissioner Social Security Administration

Filing 39

ORDER: Granting Plaintiff's Application for Fees Pursuant to EAJA 33 . Signed on 6/22/2016 by Judge Michael J. McShane. (cp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DEANNA SMITH

Plaintiff,

v.

Civ. No. 3:15-cv-00267-MC
OPINION AND ORDER

CAROLYN W. COLVIN,
Acting Commissioner of the Social Security
Administration,

Defendant.

MCSHANE, Judge:

Plaintiff Deanna Smith filed a motion, ECF No. 33, for attorney fees in the amount of
$7,820.51 under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). Defendant
responded by moving this Court to deny the petition, arguing that the Commissioner was
substantially justified in denying Plaintiff further review for social security insurance ("SSI")
benefits under Title XVI of the Social Security Act. The issue before the Court is whether the
Commissioner was substantially justified in denying Plaintiff's request for the Administrative
Law Judge ("ALJ") to reevaluate her claim after she submitted new medical evidence on appeal.
Because the Commissioner denied Plaintiff's request for review despite the fact that the new
evidence may affect the ALJ's finding, the Commissioner was not substantially justified in her
position. Therefore, Plaintiff's motion, ECF No. 33, is GRANTED.

1 OPINION AND ORDER

BACKGROUND
Smith applied for SSI on June 25, 2009, claiming that her disability began on July 30,
2002. Tr. 311. 1 Smith's claims were denied initially, upon reconsideration, and in an ALJ
decision issued June 20, 2011. Id. at 137-62. After Smith requested review of the ALJ decision,
the Appeals Council remanded the case on September 8, 2012 for further proceedings. Id. at
163-65. Smith appeared before the ALJ again on June 3, 2013, id. at 42-72, and December 18,
2013, id. at 73-93.
The ALJ denied Smith's claim in a decision dated March 14, 2014. Id. at 16. Smith
sought review a second time and submitted new evidence of her carpal tunnel syndrome to the
Appeals Council. Id. at 1-8. The Appeals Council considered the evidence and included it in the
record but denied Smith's request. Id. Smith then sought judicial review before this Court.
Opinion and Order, 2, ECF No. 31. I affirmed the Commissioner's decision on two issues and
reversed and remanded on the third, ordering further consideration of the new evidence. Id. at 17.

STAND ARD OF REVIEW
The EAJA dictates that this Court "shall award to a prevailing party other than the United
States fees and other expenses ... incurred by that party in any civil action ... unless [this
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)(l)(A); Meier v. Colvin, 727 F.3d
867, 870 (9th Cir. 2013). Substantial justification means ''justified in substance or in the mainthat is, justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487
U.S. 552, 565 (1988). "Put differently, the government's position must have a 'reasonable basis
both in law and fact."' Meier, 727 F.3d at 870 (quoting Underwood, 487 U.S. at 565). The

1

Citations to "Tr." refer to the page(s) indicated in the official transcript of the administrative record filed herein as
ECFNo. 10.

2 - OPINION AND ORDER

government's "position" includes the action or failure to act upon which the civil action is based
("agency conduct") and the litigation position of the United States in the civil action. 28 U.S.C. §
2412(d)(2)(D). "It is the government's burden to show that its position was substantially
justified." Meier, 727 F.3d at 870 (citing Gutierrez v. Barnhart, 274 F.3d 1255, 1258 (9th Cir.
2001)).
DISCUSSION
The EAJA creates a presumption that a court will award attorney fees to the prevailing
party unless the government was substantially justified in its position. Thomas v. Peterson, 841
F.2d 332, 335 (9th Cir. 1988). However, the fact that the Plaintiff prevailed does not raise a
presumption that the government was not substantially justified. Kali v. Bowen, 854 F.2d 329,
334 (9th Cir. 1988). Plaintiffs petition for attorney fees turns on (1) whether the Commissioner
was substantially justified in her agency conduct and litigation position and (2) whether the fees
Plaintiff requests are reasonable.

I.

Substantial Justification
a. Underlying Agency Conduct
The parties dispute whether the Commissioner's decision to deny Plaintiff's second

request for review was substantially justified. On appeal to this Court, Plaintiff argued, among
other things, that the Appeals Council erred in ignoring new evidence that she submitted
regarding her carpel tunnel syndrome. PL' s Br., 10, ECF No. 17. Plaintiff contended that, in light
of the vocational expert's testimony, she would have been found disabled if the ALJ credited
Plaintiff's testimony (supported by the new evidence) regarding the use of her hands. Id. I agreed
that the new evidence undermined the ALJ's finding that Plaintiff was not disabled. Opinion and
Order, 15, ECF No. 31. I then concluded that the ALJ's finding was not supported by substantial

3 - OPINION AND ORDER

I

I

evidence and reversed and remanded the case for evaluation of the new evidence. Id. at 16. I also
noted that the record may reflect that Plaintiffs carpal tunnel impairs her ability to work if the
ALJ determines on remand that it is a severe impairment. Id. at 17. A finding that an agency's
decision was not supported by substantial evidence is "a strong indication that the 'position of
the United States' ... was not substantially justified." Meier, 727 F.3d at 872 (quoting

Thangaraja v. Gonzales, 428 F.3d 870, 874 (9th Cir. 2005)). In this case, the Commissioner's
failure to review the new evidence in light of the record as a whole was not substantially
justified.
The Commissioner argued in her brief that the new evidence "identifies no limitations
whatsoever, and therefore does not contradict the ALJ's assessment." Def.'s Br., 6, ECF No. 23.
As stated in my Opinion and Order, an ALJ must consider the combined effects of a Plaintiffs
impairments to function, regardless of whether each individual impairment is sufficiently severe.
Opinion and Order, 17, ECF No. 31 (citing Howard ex rel. Wolffv. Barnhart, 341F.3d1006,
1012 (9th Cir. 2003); see also 20 C.F.R. § 416.923). In Flores v. Shala/a, the Ninth Circuit held
that the ALJ failed to consider evidence of plaintiffs cognitive limitations in its questioning of
the vocational expert and its finding that plaintiff was not disabled. 49 F.3d 562, 565 (9th Cir.
1995), as amended on denial of reh 'g. The court determined that the Secretary was not
substantially justified in her decision to uphold that finding. Id. at 572. In this case, the
Commissioner was not substantially justified in ignoring evidence of Plaintiffs physical
limitations. On December 18, 2013, the vocational expert testified that someone with only the
occasional ability of handling and fingering objects would be unable to perform the jobs
available to the plaintiff given her other limitations. Tr. 91. After Plaintiff submitted the new
evidence on March 14, 2014, a reasonable examination of the record would include

4 - OPINION AND ORDER

consideration of the combined effects of Plaintiffs impairments and would result in a grant of
her request for review. Therefore, it was unreasonable for the Commissioner to determine that
the new evidence did not warrant review because it alone did not identify any limitations.
In response to the Plaintiffs petition for attorney fees, the Commissioner argues that just
because there is conflicting evidence in the record does not mean that her position was not
substantially justified. Def.'s Resp., 3, ECF No. 34. As I stated in my Opinion and Order, it is the
Appeals Council's responsibility to weigh the evidence that supports or detracts from the
Commissioner's decision. Opinion and Order, 16, ECF No. 31 (citing Magallanes v. Bowen, 881
F.2d 747, 750 (9th Cir. 1989); Gardner v. Colvin, No. 6:12-CV-00755-JE, 2013 WL 3229955, at
*13-14 (D. Or. June 24, 2013) (Jelderks, J.)). The Appeals Council made the new evidence part
of the record but determined that it did not provide a basis for changing the ALJ' s determination.
Opinion and Order, 15, ECF No. 31. Yet the Appeals Council did not explain how it reached that
conclusion. Id. Although the presence of conflicting evidence is not dispositive of substantial
justification, the Commissioner's failure to properly weigh that evidence with the other evidence
in the record was not substantially justified.
The Commissioner further contends that her position had a reasonable basis in fact
because this Court determined that Smith's carpal tunnel "may" impair her ability to work,
Opinion and Order, 17, ECF No. 31, which also implies that it "may not." Def.'s Resp., 3, ECF
No. 34. However, when remand is based on failure to consider evidence, the substantial
justification inquiry should be "directed to the procedural error and not to the question of
ultimate disability." Flores, 49 F.3d at 569. Regardless of the possibility that Plaintiffs carpal
tunnel syndrome may not impair her ability to work, the Commissioner made a procedural error

I

I

!

I
l

5 - OPINION AND ORDER

when she denied Plaintiff review after the new evidence was submitted. As such, the
Commissioner's conduct was not substantially justified.

b. Litigation Position
"Because the government's underlying position was not substantially justified, (this
Court] need not address whether the government's litigation position was justified." Meier, 727
F.3d at 872 (citing Shafer v. Astrue, 518 F.3d 1067, 1071 (9th Cir. 2008)). If the Commissioner's
litigation position were at issue, however, I would conclude that it was not substantially justified.
"It is difficult to imagine any circumstance in which the government's decision to defend its
actions in court would be substantially justified, but the underlying administrative decision
would not." Flores, 49 F.3d at 570 n.11. The Commissioner's arguments that I have already
addressed would largely be repeated in defense of her litigation position, which is no more
substantially justified than the conduct that gave rise to these proceedings.

II.

EAJA Award

Smith submitted an itemized statement of services detailing the 41.10 hours her attorney
worked on this case at a rate of $190.28 for a total of $7 ,820.51. PL' s Pet., Attach. A, ECF No.
33. The Commissioner disputes whether Smith's requested fee is reasonable.
The Commissioner argues that this Court should reduce the award by ten percent because
Smith did not achieve the award of benefits she requested and by two-thirds more because Smith
did not prevail on two of the three issues she raised. Def.'s Resp., 5, ECF No. 34. In response,
Smith points out that she still has the opportunity to prove her claim and obtain benefits on
remand. PL 's Reply, 4, ECF No. 37. Smith argues that it is rare for a court to award benefits
outright and that she obtained overall success because an ALJ will review her case again. Id. at

6 - OPINION AND ORDER

4-5. Smith also argues that it is impossible to parse out the time her attorney spent on each issue
because he spent all of his time on all of the issues. Id at 4.
An award of attorney fees under the EAJA must be reasonable. 28 U.S.C. §
2412(d)(2)(A). The EAJA limits awards to $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
attorney for the proceeding involved, justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A); see also
Thangaraja, 428 F.3d at 876 (citations omitted) ("EAJA provides for an upward adjustment ...
based on cost-of-living-expenses."). The cost of living adjustment is determined by multiplying
the base EAJA rate ($125.00) by the current Consumer Price Index for all Urban Consumers
(CPI-U) and dividing the product by the CPI-U of the month that the cap was imposed. Id. at
877; Sorenson v. Mink, 239 F.3d 1140, 1148 (9th Cir. 2001).
"By and large, the court should defer to the winning lawyer's professional judgment as to
how much time he was required to spend on the case ...." Moreno v. City ofSacramento, 534
F.3d 1106, 1112 (9th Cir. 2008). However, the hours spent on unsuccessful claims should be
excluded "where the plaintiff has failed to prevail on a claim that is distinct in all respects from
his successful claims ...." Hensley v. Eckerhart, 461U.S.424, 440 (1983). In the Ninth Circuit,
claims are unrelated if they are both factually and legally distinct. Blair v. Colvin, 619 F. App'x
583, 585 (9th Cir. 2015) (citing Dang v. Cross, 422 F.3d 800, 813 (9th Cir. 2005)). When it is
difficult to divide the hours claim-by-claim because the plaintiffs claims involve a common set
of facts or are based on related legal theories, courts should focus on the significance of the
overall relief obtained in those cases. See Id. at 435. "While the parties' postures on individual
matters may be more or less justified, the EAJA-like other fee-shifting statutes-favors treating

7 - OPINION AND ORDER

-,
a case as an inclusive whole, rather than as atomized line-items." Comm 'r, INS v. Jean, 496 U.S.
154, 161-62 (1990).
This Court defers to Smith's lawyer's professional judgment as to how much time he
spent on the case. Although Smith was unsuccessful in two of her claims, they were factually and
legally related to her third claim, which was successful. In Blair v. Colvin, the Ninth Circuit held
that Blair's claims were factually related because the district court had to review a single
administrative record and legally related because the court's assessments related to a single
determination of Blair's disability. 619 F. App'x at 585. Like the court in Blair, I reviewed a
single administrative record and was charged with making a single determination of whether the
Appeals Council erred in denying Smith's request for further review. Similarly, Smith's attorney
reviewed the Appeals Council decision and the record as a whole and prepared his briefbased on
the issues therein. All three claims concerned evidence in the record that the Appeals Council
found immaterial in its denial of Smith's request for a further review. Because the claims are so
intertwined, I find them difficult, if not impossible, to parse out. Furthermore, I cannot assume
that Smith's attorney spent an equal amount of time on each issue, therefore I decline to divide
the award.
I now turn to the question of Smith's overall success. Smith achieved overall success
when I reversed and remanded the ALJ's determination that she was not disabled. Opinion and
Order, 1, ECF No. 31. I found that the ALJ did not err in its rejection of an examining
psychologist's opinion or its evaluation of Smith's credibility. Opinion and Order, 1, ECF No.
31. With regard to Smith's third claim, however, I found that the Appeals Council erred in
finding that substantial evidence supported the ALJ' s determination that Smith was not disabled
despite new evidence that Smith submitted to the Appeals Council. Id. The Commissioner

8

OPINION AND ORDER

I
I

I

I
I
I

l
l

r

l

compares this case to Blair, in which the plaintiff did not receive an award of benefits and the
court limited the scope of remand to her ability to persist and handle workplace stress. Def.'s
Resp., 3, ECF No 34; Blair, 619 F. App'x at 585. However, Smith is correct that an outright
award of benefits is rare and, unlike the court in Blair, I remanded her case to the ALJ to
reconsider its determination in light of the record as a whole, including the new evidence.
Therefore, this aspect of Blair is not analogous because Smith was successful in getting her case
remanded to the ALJ to determine whether she is disabled. Because Smith's claims are
interrelated and she obtained overall success in this litigation, I find that Smith's request fee of
$7 ,820.51 is reasonable in light of the circumstances of this case.

CONCLUSION
For the reasons set forth above, Plaintiff is entitled to attorney fees because the
Commissioner's position was not substantially justified. Plaintiffs request for EAJA fees in the
amount of $7,820.51 are reasonable. The Court hereby awards attorney fees in the amount of
$7,820.51 to Plaintiffs attorney, George J. Wall, pursuant to the EAJA. The Commissioner shall
direct payment to George J. Wall at the Law Office of George J. Wall, 1336 E. Burnside St.,
Suite 130, Portland, Oregon, 97214, on behalf of Plaintiff. This payment is subject to any offset
allowed under the Treasury Offset Program.
IT IS SO ORDERED.

__

DATED this 22 day of June, 2016.

'\........

..__L- -

Michael J. McShane
United States District Judge

9

OPINION AND ORDER

I

I
I

r