Kanengieter v. Colvin
Filing
32
ORDER granting 27 Motion for Attorney Fees; granting 31 Motion for Attorney Fees. Signed by U.S. District Judge Karen E. Schreier on 8/7/2015. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
MICHELLE D. KANENGIETER,
CIV. 13-4141-KES
Plaintiff,
vs.
CAROLYN W. COLVIN, Acting
Commissioner, Social Security
Administration,
ORDER GRANTING MOTION FOR
ATTORNEY’S FEES
Defendant.
Plaintiff, Michelle D. Kanengieter, moved for reversal of the
Commissioner of Social Security=s decision denying her application for social
security disability insurance benefits. On March 19, 2015, the court reversed
and remanded the Commissioner=s decision denying benefits. Kanengieter now
seeks an award of $7,182.75 in attorney=s fees, $430.97 in sales tax, and
$18.33 in costs pursuant to the Equal Access to Justice Act. The
Commissioner objects to the motion. The court grants Kanengieter=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 Aunless 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, Asubstantially justified@ means
Ajustified to a degree that could satisfy a reasonable person@ or having a
Areasonable 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, Asolid 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)).
A[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 March 19, 2015, opinion identified in
detail why the ALJ=s decision to deny benefits was unfounded in law and fact.
Docket 25. The ALJ improperly disregarded Kanengieter’s treating source
opinion without a well-founded basis. Docket 19. Instead, the ALJ gave great
weight to the opinion of a physician who saw Kanengieter one time for the
purpose of conducting a medical evaluation. This doctor’s opinion was
inconsistent with the conclusions of every other treatment provider. Docket
20. The weight to be given medical opinions is a basic principle of social
security disability law. This error at Step Two permeated the remainder of the
opinion. In fact, if the limitations identified by Kanengieter’s treating physician
had been incorporated into Kanengieter’s residual functional capacity
formulation, the vocational expert would have concluded that Kanengieter was
-2-
not able to work at all. 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 Kanengieter is entitled to attorney=s fees pursuant
to 28 U.S.C. ' 2412(d)(1)(A).
II.
Number of Hours Expended
The Commissioner does not object to the number of hours in the fee
request, but does request that it be paid to Kanengieter and not her counsel.
The court has reviewed the billing records and finds that 39.25 hours is
reasonable at a rate of $183 per hour, for a total amount of $7,182.75 for
attorney’s fees. The court also finds that $430.97 for sales tax and $18.33 for
expenses are reasonable.
The Commissioner also objects to payment of the fees and expenses
directly to Kanengieter=s attorney in light of Astrue v. Ratliff, 130 S. Ct. 2521
(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, Kanengieter 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
-3-
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 (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 A[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 the 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 Kanengieter=s EAJA fee award is
subject to offset, after which the balance will be remitted to her counsel, per
Kanengieter=s own wishes.
-4-
CONCLUSION
Accordingly, it is
ORDERED that Kanengieter=s motions for attorney=s fees, expenses, and
costs (Dockets 27 and 33) are granted. Kanengieter is awarded $7,182.75 in
attorney’s fees and $430.97 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 Kanengieter is awarded costs of $18.33.
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 August 7, 2015.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
-5-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?