Hoover v. Saul
| Decision Date | 08 September 2020 |
| Docket Number | Civil No. 1:19-CV-579 |
| Parties | Damian HOOVER, Plaintiff, v. Andrew SAUL, Commissioner of Social Security, Defendant. |
| Court | U.S. District Court — Middle District of Pennsylvania |
Patrick J. Best, ARM Lawyers, Stroudsburg, PA, for Plaintiff.
George Michael Thiel, U.S. Attorney's Office, Scranton, PA, for Defendant.
We are now called upon to write the last chapter in this Social Security appeal. Specifically, we must consider whether the plaintiff, Damian Hoover, who has prevailed on one of the claims he advanced in this appeal, an argument that his case should have been remanded for rehearing before a properly appointed Administrative Law Judge under the Appointments Clause to the United States Constitution, Art. II, § 2, cl. 2, pursuant to Lucia v. S.E.C., ––– U.S. ––––, 138 S. Ct. 2044, 201 L.Ed.2d 464 (2018) and Cirko on behalf of Cirko v. Comm'r of Soc. Sec., 948 F.3d 148, 152 (3d Cir. 2020), is now entitled to attorneys’ fees under the Equal Access to Justice Act, ("EAJA"). 28 U.S.C. § 2412. The EAJA provides for fee awards in cases where a litigant has prevailed in setting aside government agency action, unless the government demonstrates that its litigation position was "substantially justified." This is a term of art which means: " ‘justified in substance or in the main’—that is, justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565, 108 S. Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988). As discussed below, we recognize that the issue of whether a plaintiff who has successfully argued for a remand due to this Appointments Clause issue is entitled to attorney's fees under the EAJA is a hotly contested question. However, on the facts of this case, we do not find it necessary to reach this issue because we conclude that Hoover's attorney's fees claim succeeds on another independent ground.
The pertinent facts can be simply stated. The plaintiff brought this Social Security appeal challenging an adverse decision by an Administrative Law Judge denying an application for disability benefits. On appeal, the plaintiff advanced a number of merits issues challenging the agency decision. Included among these merits issues was an argument that the Administrative Law Judge (ALJ) erred by assigning great weight to Dr. Feinstein's medical opinion when crafting the residual functional capacity (RFC) assessment in this case, without explaining why that RFC did not incorporate all of the limitations found by Dr. Feinstein.
In addition to these merits claims, Hoover argued a structural issue relating to the ability of the ALJ to preside over this case, contending that this case should be remanded for rehearing before a properly appointed Administrative Law Judge pursuant to Lucia v. S.E.C., ––– U.S. ––––, 138 S. Ct. 2044, 201 L.Ed.2d 464 (2018), which held that certain federal agency Administrative Law Judges were "Officers of the United States," within the meaning of the Appointments Clause of the United States Constitution, Art. II, § 2, cl. 2, and therefore should have been appointed to their positions by either the President, a court of law, or the Department head.
At the time that the plaintiff pursued this appeal, the question of whether a plaintiff needed to exhaust this Appointments Clause issue by presenting it in a timely fashion to the Administrative Law Judge was hotly contested with many district courts in this circuit imposing an exhaustion requirement upon Social Security claimants, while several court rejected the government's contention that agency exhaustion was a prerequisite to assertion of this argument. Recognizing the disputed, and potentially dispositive, nature of this legal issue, we stayed consideration of this case because the question of the application of Lucia to Social Security ALJs was pending before the United States Court of Appeals for the Third Circuit in two cases, Bizarre v. Comm'r of Soc. Sec., No. 19-1773, 948 F.3d 148 (3d Cir. 2020) and Cirko v. Comm'r of Soc. Sec., No. 19-1772, 948 F.3d 148 (3d Cir. 2020). These appeals raised one of the same issue presented in this case, i.e. , whether a plaintiff forfeited the appointments clause challenge by failing to raise the issue during administrative proceedings. On January 23, 2020, the Court of Appeals held that "that exhaustion is not required in this context," and affirmed a decision which called for the remand of a Social Security appeal for re-hearing by an ALJ who was properly appointed under the Appointments Clause to the United States Constitution. Cirko on behalf of Cirko v. Comm'r of Soc. Sec., 948 F.3d 148, 152 (3d Cir. 2020).
Finding that the holding in Cirko controlled here and compelled a remand of this case, we entered a judgment in favor of the plaintiff and ordered this case remanded to the Commissioner for a hearing before a properly appointed ALJ. We did not reach the merits issues presented by Hoover. That favorable ruling for the plaintiff, in turn, set the stage for the instant fees dispute, with the plaintiff seeking an award of attorneys’ fees under the Equal Access to Justice Act (EAJA), and the Commissioner resisting such a fees award.
This motion is fully briefed and is ripe for resolution. While the parties have devoted great attention in their briefs to the question of whether the Commissioner's position regarding our stated ground for remand—the Appointments Clause issue decided in Cirko—was substantially justified, the parties all agreed that we should also consider whether the plaintiff was entitled to EAJA fees based upon the underlying merits issues raised in Hoover's appeal. We have accepted the parties’ invitation to look beyond the stated grounds for remand, and to consider the underlying merits issues in this case. Having conducted a further in-depth evaluation of these merits issues, we find that Hoover was correct when he argued that the ALJ erred by assigning great weight to Dr. Feinstein's medical opinion when developing the RFC in this case without explaining why that RFC did not incorporate all of the limitations found by Dr. Feinstein. Accordingly, finding that Hoover was entitled to a remand on the merits of his appeal, we also conclude that Hoover's motion for attorneys’ fees should be granted.
The instant case calls upon us to apply benchmarks set by statute in accordance with Supreme Court precedent which defines these legal guideposts. The Equal Access to Justice Act (EAJA) creates a right to attorney's fees in certain cases where a litigant successfully challenges some government agency action, and provides that:
Thus, under the EAJA:
[E]ligibility for a fee award in any civil action requires: (1) that the claimant be a "prevailing party"; (2) that the Government's position was not "substantially justified"; (3) that no "special circumstances make an award unjust"; and, (4) pursuant to 28 U.S.C. § 2412(d)(1)(B), that any fee application be submitted to the court within 30 days of final judgment in the action and be supported by an itemized statement. Only the application of the "substantially justified" condition is at issue in this case.
Comm'r, I.N.S. v. Jean, 496 U.S. 154, 158, 110 S. Ct. 2316, 2319, 110 L. Ed. 2d 134 (1990). As to this issue concerning whether the Commissioner's legal position was substantially justified in a way which defeats an EAJA fees petition, the Commissioner bears the burden of proof and persuasion. See Hanover Potato Prod., Inc. v. Shalala, 989 F.2d 123, 128 (3d Cir. 1993).
The Supreme Court has provided us with explicit guidance regarding the interpretation of this statutory text. As the Court has observed: "as between the two commonly used connotations of the word ‘substantially,’ the one most naturally conveyed by the phrase before us here is not ‘justified to a high degree,’ but rather ‘justified in substance or in the main’—that is, justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565, 108 S. Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988). "To be ‘substantially justified’ means, of course, more than merely undeserving of sanctions for frivolousness; that is assuredly not the standard for Government litigation of which a reasonable person would approve." Id. at 566, 108 S. Ct. 2541, 2550. "Alternatively phrased, an agency position is substantially justified if it has a reasonable basis in both law and fact." Hanover Potato Prod., Inc. v. Shalala, 989 F.2d 123, 128 (3d Cir. 1993). Moreover, in making this substantial justification determination "the EAJA—like other fee-shifting statutes—favors treating a case as an inclusive whole, rather than as atomized line-items." Comm'r, I.N.S. v. Jean, 496 U.S. 154, 161–62, 110 S. Ct. 2316, 2320, 110 L. Ed. 2d 134 (1990).
The EAJA applies to Social Security disability appeals. Therefore, when a disability claimant prevails on appeal counsel is entitled to recovery of attorney's fees under the Act, unless the Commissioner's legal position, both at the agency level and before the district court, was substantially justified. As the court of appeals has observed:
[U]nder 28 U.S.C. § 2412(d)(2)(D), "the position of the United States" includes not only the position taken in the litigation, but...
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