Cooks v. Astrue et al

Filing 26

ORDER granting 21 Motion for Attorney Fees; granting 25 Motion for Attorney Fees. Signed by U.S. District Judge Karen E. Schreier on 12/19/2013. (KC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
REBECCA R. COOKS,
Plaintiff,
vs.
CAROLYN W. COLVIN,
Commissioner of Social Security,
Defendant.

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CIV. 12-4177-KES

ORDER GRANTING MOTION FOR
ATTORNEY’S FEES

Plaintiff, Rebecca R. Cooks, moved for reversal of the Commissioner of
Social Security’s decision denying her application for Social Security Disability
Insurance (SSDI) benefits. On October 22, 2013, the court reversed and
remanded the Commissioner’s decision denying benefits. Cooks now seeks an
award of $7,409.31 in attorney’s fees, $444.56 in sales tax, and $17.25 in
costs pursuant to the Equal Access to Justice Act. The Commissioner objects
to the motion. The court grants Cooks’s motion for attorney’s fees.
DISCUSSION
I.

Substantially Justified
Under the Equal Access to Justice Act, the prevailing party in a

proceeding for judicial review of federal agency action is entitled to legal fees
and costs “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). In this context, “substantially justified” means

“justified to a degree that could satisfy a reasonable person” or having a
“reasonable basis in law and fact.” Koss v. Sullivan, 982 F.2d 1226, 1229 (8th
Cir. 1993) (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988)). The
standard is whether the Commissioner’s position is well founded in law and
fact, “solid though not necessarily correct.” Lauer v. Barnhart, 321 F.3d 762,
764 (8th Cir. 2003). The government bears the burden of proving that the
denial of benefits was substantially justified. Id. (citing Welter v. Sullivan, 941
F.2d 674, 676 (8th Cir. 1991)).
“[T]he most powerful indicator of the reasonableness of the government’s
position is the rationale of the court’s majority opinion in the first appeal.”
Lauer, 321 F.3d at 765. This court’s October 22, 2013, opinion identified in
detail why the ALJ’s decision to deny benefits was unfounded in law and fact.
Docket 19. Even though Cooks had a long history of mental illness, including
being diagnosed with depression, anxiety, panic attacks, bipolar disorder,
posttraumatic stress disorder, intermittent explosive disorder, and mood
disorder, the ALJ failed to include Cook’s mental limitations in developing her
RFC. This error at Step Two permeated the remainder of the opinion. In light of
the foregoing, neither the ALJ’s nor the Commissioner’s position in this case
was well founded in law and fact. See Lauer, 321 F.3d at 764. Accordingly, the
government’s position was not substantially justified, and Cooks is entitled to
attorney’s fees pursuant to 28 U.S.C. § 2412(d)(1)(A).

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II.

Number of Hours Expended
The Commissioner does not object to the amount of the fee request, but

does request that it be paid to Cooks and not her counsel. The court has
reviewed the billing records and finds that 40.1 hours is reasonable at a rate of
$184 per hour, for a total amount of $7,378.401 for attorney fees. The court
also finds that $442.70 for sales tax and $17.25 for expenses are reasonable.
Thus, the court finds that Cooks is entitled to a total attorney fee award of
$7,378.40, sales tax of $442.70, and costs of $17.25.
The Commissioner also objects to payment of the fees and expenses
directly to Cooks’s attorney in light of Astrue v. Ratliff, 560 U.S. 586 (2010). In
Ratliff, the United States Supreme Court found that EAJA fees are payable to
the litigant and subject to government offset to satisfy a pre-existing debt the
litigant owes to the United States. Ratliff, however, did not address the issue of
assignments of EAJA fees.
In her fee agreement, Cooks signed a valid assignment assigning her
right to any EAJA award to her counsel. Post-Ratliff the approach taken by
most courts has been to honor such fee assignments in the absence of the
litigant’s pre-existing debt to the United States. See, e.g., Walker v. Astrue,
2011 WL 1297744 (M.D. Ala. Apr. 5, 2011) (Ratliff does not explicitly reject the

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Cooks’s calculations contain a mathematical error, which explains the
court’s award of slightly less for attorney fees than the amount requested by
Cooks.
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practice of awarding fees to attorneys where litigant has assigned them in
cases where the plaintiff does not owe a debt to the government. . . .”); Gors v.
Colvin, 2013 WL 960230 (D.S.D. Mar. 12, 2013) (same); and Dornbusch v.
Astrue, 2011 WL 779781 (D. Minn. Mar. 1, 2011) (same).
The Commissioner next asserts that the Anti-Assignment Act, which
generally precludes assignment of claims against the United States, applies to
EAJA fees. This issue was addressed in detail by the district court in
Minnesota in McGrath v. Astrue, 2012 WL 4898276 (D. Minn. Oct. 1, 2012).
This court agrees with the reasoning in McGrath and its conclusion that “[t]o
read the AAA as prohibiting these fee agreements, as the Commissioner argues,
is nonsensical when read alongside the law’s stated intent.” Id. at *7. While
Ratliff required EAJA awards to be paid to the prevailing party, a prevailing
party has the right to contract with her attorney regarding payment for
representation.
The court acknowledges that fees recovered pursuant to EAJA are
subject to federal administrative offset if the prevailing party has outstanding
debts to the federal government pursuant to Ratliff. To allow the federal
administrative offset inquiry to occur, the court grants the Commissioner 30
days to determine whether any portion of Cooks’s EAJA fee award is subject to
offset, after which the balance will be remitted to her counsel, per Cooks’s own
wishes.

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CONCLUSION
Accordingly, it is
ORDERED that Cooks’s motion for attorney’s fees, expenses, and costs
(Docket 21) is granted. Cooks is awarded $7,378.40 in attorney fees and
$442.70 representing 6 percent state and local sales tax on the attorney’s fees
pursuant to the Equal Access to Justice Act.
IT IS FURTHER ORDERED that Cooks is awarded costs of $17.25. These
costs will be paid from the United States Department of Justice Judgment
Fund.
IT IS FURTHER ORDERED that after 30 days the administration will
issue the check to plaintiff’s counsel, less any amount subject to offset under
the Treasury Offset Program, because that will permit electronic deposit of
funds.
Dated December 19, 2013.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

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