Hull v. Bowen, C87-1086.

• Decision Date: 05 October 1990
• Docket Number: No. C87-1086.,C87-1086.
• Citation: 748 F. Supp. 514
• Parties: Grace M. HULL, Plaintiff, v. Otis R. BOWEN, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Northern District of Ohio

748 F. Supp. 514

Grace M. HULL, Plaintiff, v. Otis R. BOWEN, Secretary of Health and Human Services, Defendant.

No. C87-1086.

United States District Court, N.D. Ohio, E.D.

October 5, 1990.

COPYRIGHT MATERIAL OMITTED

Edward A. Icove, Lustig, Icove & Lustig, Cleveland, Ohio, for plaintiff.

William K. Redmond, Sp. U.S. Atty., Cleveland, Ohio, for defendant.

MEMORANDUM OF OPINION RE: AWARD OF ATTORNEY FEES

KRENZLER, District Judge.

Presently pending before this Court is an application for attorney fees filed by plaintiff's counsel ("counsel"). Counsel seeks attorney fees pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, and the Social Security Act ("Act"). 42 U.S.C. § 406(b)(1), (2).¹

Plaintiff previously applied for disability insurance benefits ("DIB") under the Act pursuant to 42 U.S.C. §§ 416(i), 423. Plaintiff alleged an onset date of October 31, 1985. The Secretary of Health and Human Services ("Secretary")² denied plaintiff's application for DIB because it was determined that plaintiff did not suffer from a severe impairment. Having exhausted her administrative remedies, plaintiff sought judicial review of the Secretary's decision, pursuant to 42 U.S.C. § 405(g).³ This Court reversed in part and affirmed in part the Secretary's decision, holding that the Secretary's decision was supported by substantial evidence through June 8, 1986, but was unsupported by substantial evidence beginning on June 9, 1986.⁴

This Court notes that much confusion and inconsistency exists among the various district courts when attorneys seek concurrent attorney fee awards under both the EAJA and the Act. Therefore, this Court shall examine both statutes in detail, and discuss the interaction between them when concurrent fee applications are made, while at the same time, keeping in mind Congress' intent as to the effect each statute should have when concurrent fee applications are made.

I. Attorney's Fees Under the Equal Access to Justice Act

The EAJA provides in pertinent part, as follows:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, 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).⁵

A party seeking an award of fees and other expenses shall, within thirty days of final judgement in the action, submit to the court an application for fees and other expenses which shows that a party is a prevailing party and is eligible to receive an award under this subsection.... The party shall also allege that the position of the United States was not substantially justified. Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based)....

28 U.S.C. § 2412(d)(1)(B).

The conditional language of the EAJA in the first sentence to 28 U.S.C. § 2412(d)(1)(A) does not conflict with a district court's authority to award attorney's fees under both the EAJA and 42 U.S.C. § 406(b).

The legislative history makes clear that the conditional language of the EAJA is meant only to prevent it from applying where other federal statutes already authorize fee awards against the federal government.

Ocasio v. Schweiker, 540 F.Supp. 1320, 1322 (S.D.N.Y.1982) (emphasis original).

This section 28 U.S.C. § 2412(d)(1)(A) is not intended to replace or supersede any existing feeshifting statutes such as the Freedom of Information Act, the Civil Rights Acts, and the Voting Rights Act in which Congress has indicated a specific intent to encourage vigorous enforcement, or to alter standards or the case law governing those Acts. It is intended to apply only to cases (other than tort cases) where fee awards against the government are not already authorized.

Ocasio at 1322 (quoting H.R.Rep. No. 1418, 96th Cong., 2d Sess. 18, reprinted in 1980 U.S.Code Cong. & Ad.News 4953, 4997) (emphasis supplied in Ocasio).

The original purpose of the EAJA, as enacted in 1980,

was to expand the liability of the United States for attorneys' fees and other expenses in certain administrative proceedings and other civil actions. The primary purpose of the Act was to ensure that certain individuals, partnerships, corporations, businesses, and other associations, or other organizations will sic not be deterred from seeking review of, or defending against, unjustified governmental action because of the expense involved in securing the vindication of their rights.

H.R.Rep. No. 120, 99th Cong., 1st Sess. 4, reprinted in 1985 U.S.Code Cong. & Ad. News 132, 133.

Although the primary purpose of the EAJA as originally enacted does not appear to be directed to Social Security cases, the legislative history to the EAJA clearly indicates "Congress' intent that, while the EAJA does not apply to administrative proceedings under the Social Security Act, it does cover civil actions to review social security decisions of the Agency. For example, the House Report accompanying the EAJA states that changes were made:"

to exclude administrative proceedings under the Social Security Act. There was much discussion whether the United States should be liable when it is named party and represented in a civil action under the Social Security Act. The Committee decided that civil actions should be covered.

Ocasio at 1321 (quoting H.R.Rep. No. 1418 at 4991) See also Kerr v. Heckler, 575 F.Supp. 455 (S.D.Ohio 1983) (holding that EAJA applies to court proceedings for review of social security cases).

As noted above, in order to recover attorney fees under the EAJA one must be the "prevailing party" to the action and the position of the United States must not have been "substantially justified." As to the "prevailing" requirement, it is satisfied notwithstanding the fact that the claimant's suit "resulted in partial recovery on a claim previously denied in full," Philpott v. Gardner, 403 F.2d 774-75 (6th Cir.1968); See also McCoach v. Bowen, 672 F.Supp. 807, 809 (D.N.J.1987) (relying on Philpott for the principle that the EAJA requires less than a total victory to satisfy the "prevailing" requirement); Sterner v. Department of Army, 711 F.2d 1563, 1567 (Fed. Cir.1983) (similarly relying on Philpott), but a court remand does not automatically render the applicant a "prevailing party" (unless benefits are awarded), rather the Secretary must, after reviewing a case as directed by the district court, file its findings with the reviewing court as mandated by 42 U.S.C. § 405(g). "Thus the remand decision is not a `final judgment,'⁶ nor is the agency decision after remand. Instead, the District Court should enter an order affirming, modifying, or reversing the final HHS decision, and this will usually be the final judgment that starts the 30 days running." H.R.Rep. No. 120 at 148 (citations omitted).

With regard to the "substantial justification" element, the Sixth Circuit has held that the standard "is essentially one of reasonableness," and the pertinent inquiry is whether the position maintained by the Secretary "had a reasonable basis in law and fact." Kerr, at 457. A finding that the Secretary's position was unsupported by substantial evidence does not automatically require the district court to rule that the Secretary's position was not substantially justified, Meyers v. Heckler, 625 F.Supp. 228, 232 (S.D.Ohio 1985) (citing Kerr at 458). However, the Third Circuit has stated:

agency action found to be ... unsupported by substantial evidence is virtually certain to not to have been substantially justified under the Act. Only the most extraordinary circumstances could permit such an action to be found substantially justified under the Act.

Coup v. Heckler, 834 F.2d 313, 319 (3rd Cir.1987) (citations omitted).⁷

II. Attorney Fees Under the Social Security Act

The relevant section under the Act is 42 U.S.C. §§ 406(a), (b). Concerned that some attorneys were charging exorbitant fees, and that unnecessary delay would result in a windfall to attorneys with contingency fee agreements due to the accrual of back benefits,⁸ Congress enacted a new subsection in the Social Security Amendments of 1965:

(b)(1) Whenever a court renders a judgment favorable to a claimant under this title who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Secretary may, notwithstanding the provision of section 205(i) 42 U.S.C. § 405(i), certify the amount of such fee for payment to such attorney, out of, and not in addition to, the amount of such past due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.

(2) Any attorney who charges, demands, receives, or collects for services rendered in connection with proceedings before a court to which paragraph (1) is applicable any amount in excess of that allowed by the court thereunder shall be guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $500, or imprisonment for not more than one year, or both.

Coup v. Heckler, 834 F.2d 313, 320-21 (3rd Cir.1987) (quoting Social Security Amendments of 1965, Pub.L. 89-97, Title III § 332; 79 Stat. 286, 403; 42 U.S.C. § 406(b) (1982)).

In 1967, Congress amended section...