Levyash v. Colvin

• Decision Date: 04 June 2020
• Docket Number: Case No. 3:16-cv-2189 (BRM)
• Parties: IGOR G. LEVYASH Plaintiff, v. CAROLYN W. COLVIN Acting Commissioner of Social Security, Defendant.
• Court: U.S. District Court — District of New Jersey

IGOR G. LEVYASH Plaintiff, v. CAROLYN W. COLVIN

Acting Commissioner of Social Security, Defendant.

Case No. 3:16-cv-2189 (BRM)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

June 4, 2020

NOT FOR PUBLICATION

OPINION

MARTINOTTI, DISTRICT JUDGE

Before this Court is Igor G. Levyash's ("Plaintiff") Motion for Attorney Fees and Costs. (ECF No. 25.) The Acting Commissioner of Social Security ("Defendant") opposes the Motion. (ECF No. 26.) Having reviewed the submissions filed in connection with the Motion, and having declined to hold oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth herein, and for good cause shown, Plaintiff's motion is GRANTED.

I. BACKGROUND

At issue before this Court is whether Plaintiff is entitled to attorney's fees and costs pursuant the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. The facts and procedural history of this matter are set forth in this Court's prior opinion (ECF No. 23), and need not be repeated here. The following factual background is pertinent to this motion.

On April 19, 2016, Plaintiff filed a Complaint seeking judicial review of the ALJ's final decision denying Social Security Title II Disability Insurance benefits under Title 42 U.S.C. § 405(g). (ECF No. 1 ¶ 3, 5.) Defendant answered the Complaint on August 19, 2016. (ECF No. 5.) On March 30, 2018, the Court entered an Order reversing and remanding the ALJ's decision. (ECF No. 23.) As a result, on June 12, 2018, Plaintiff, as the prevailing party, filed a Motion for Attorney Fees and Costs. (ECF No. 25.)¹ Defendant opposes the Motion. (ECF No. 26.)

II. LEGAL STANDARD

"When the cost of contesting a Government order, . . . exceeds the amount at stake, a party has no realistic choice and no effective remedy. In these cases, it is more practical to endure an injustice than to contest it." Pierce v. Underwood, 487 U.S. 552, 575 (1988) (quoting S.Rep. No. 96-253, p. 5 (1979)). Concerned that the government, with its vast resources, might deter citizens from defending against, or seeking review of, unreasonable governmental action because of the threat of costly litigation, Congress enacted the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. Id. Under the EAJA, the United States waived its sovereign and general statutory immunities to fee awards and created "a limited exception to the 'American Rule' against awarding attorney fees to prevailing parties." Standowski v. Colvin, No. CV 13-5663 (FLW), 2016 WL 2625029, at *1 (D.N.J. May 9, 2016) (quoting Pierce, 487 U.S. at 575).

The EAJA was designed to rectify the threat of costly litigation by providing an exception for an award of reasonable attorney's fee to a prevailing party. Sullivan v. Hudson, 490 U.S. 877, 883-84 (1989). Under the EAJA, a party seeking an award of attorney fees and other expenses in a civil action or adversary adjudication shall submit to the court an application: (1) within thirty-days of the final judgment in the action; (2) which includes a reasonable amount sought; (3) which shows that the party is eligible to receive the award. See 28 U.S.C. § 2412. To be "eligible" under the EAJA statute, a party must meet the additional requirements enumerated such as: (a) showing that the party prevailed in the underlying action against the United States; (b) showing the networth of the party did not exceed $2,000,000 at the time the action was filed; and (c) alleging that the United States in the underlying action was not substantially justified in its position, nor would special circumstances make an award unjust. Bazalo v. West, 150 F.3d 1380, 1384 (Fed. Cir. 1998); Kadelski v. Sullivan, 30 F.3d 399, 401 (3d Cir. 1994); see also 28 U.S.C. § 2412. The burden of showing substantial justification lies with the Government and may not be satisfied by simply introducing "'some evidence' in support of its position." Washington v. Heckler, 756 F.2d 959, 961 (3d Cir. 1985). Rather, the Commissioner's position in the underlying action must be justified in substance that would satisfy a reasonable person. Standowski, 2016 WL 2625029 at *2 (citing Pierce, 487 U.S. at 565).

III. DECISION

Plaintiff seeks attorney's fees and costs, as a prevailing party pursuant to the EAJA, 28 U.S.C. § 2412. (ECF No. 25 at 1.) It claims fees are appropriate under the EAJA, which permits reasonable fees to prevailing parties in action against the United States where the position of the government was not substantially justified, because the Defendant has failed to show that the Government's actions were supported by substantial evidence. (ECF No. 29 at 2.) Plaintiff argues the Defendant has failed to meet their burden and show the Government's position was substantially justified because: (1) the Government's mistake was not inconsequential or an error of "articulation"; and (2) the Commissioner erred in failing to follow established precedent. (ECF No. 29.) Additionally, Plaintiff argues the fees requested are reasonable. (ECF Nos. 25 at 3; ECF No. 29 at 5-6.)

Defendant contends they have met their burden and shown the Government's position to be substantially justified. (ECF No. 26.) Defendant argues: (1) there was evidence in the record supporting the ALJ's decision; and (2) the error identified by the Court was one of articulation,rather than substance. Id. It alternatively claims that if the Court should find the Government's actions were not substantially justified that the Plaintiff's requested attorney fees be reduced for unreasonableness. Id. at 8-11.

It in undisputed that Plaintiff applied within thirty-days of the final judgment, is a prevailing party, and is within the net worth necessary to be eligible for attorney fees under the EAJA. (See ECF Nos. 25 and 26.) The only issues before this Court are: (1) was the position of the United States in the underlying action substantially justified; and (2) is the amount sought reasonable.

A. The Government was Not Substantially Justified

The Defendant argues that the Government's position was substantially justified. Firstly, the Defendant claims that in considering the Plaintiff's arguments the court found for the Defendant on six of the seven claims. (ECF No. 26 at 1.) Secondly, the Defendant claims that evidence existed in the record to support the ALJ's decision was reasonably based in both law and fact. Id. at 1-2. Finally, the Defendant claims the error identified by the Court was one of articulation rather than substance. Id. at 2.

Substantial justification constitutes the middle ground between an automatic award of fees and "an award made only when the government's position was frivolous." Washington, 756 F.2d at 961 (citing Dougherty v. Lehman, 715 F.2d 555, 563 n.12 (3d Cir. 1983)). The burden of showing substantial justification lies with the Government. Id. In order to meet its burden, the Government must show that the government's position contained: "(1) a reasonable basis in truth for the facts alleged; (2) a reasonable basis in law for the theory it propounded; and (3) a reasonable connection between the facts alleged and the legal theory advanced." Id. Though the Government may satisfy its' burden even where the court remands the ALJ's decision, the government will notmeet its burden by merely providing some evidence in support to its position. Id.; Standowski, 2016 WL 2625029 at *2 (citing Morgan v. Perry, 142 F.3d 670, 685 (3d Cir. 1998)). When the Government's legal position offends established precedent, its position cannot be said to be substantially justified. Washington, 756 F.2d at 962.

An ALJ's decision may be reasonably based in both law and fact even if the Court rejects the Government's position. Serpe v. Astrue, No. CV 12-570-LPS, 2015 WL 849568, at *2 (D. Del. Feb. 24, 2015) (citing Jackson v. Chater, 94 F.3d 274, 279-80 (7th Cir. 1996)). The Government will satisfy its' burden of substantial justification if the ALJ cited to some evidence in the record. Id. An ALJ who applies the correct law, but provides insufficient facts or reasoning to support her conclusion does not lack substantial justification. Standowski, 2016 WL 2625029, at *3 (quoting Washington, 756 F.2d at 962). Additionally, an ALJ's decision may be substantially justified if the error is inconsequential. Williams v. Astrue, 600 F.3d 299, 302 (3d Circ. 2009). An error is considered inconsequential if the ALJ had the ability to reach the same conclusion on remand based on other evidence in the record. Id.; see also Johnson v. Comm'r of Soc. Sec., 529 F.3d 198, 204 (3d Cir. 2008).

However, the court has repeatedly ruled that the failure of the Government to develop the record to be a substantial error of law which is not substantially justified. See, e.g., Diaz v. Commissioner of Social Sec., 410 Fed. Appx. 430, 433 (3d Cir. 2010) ("The clearly established case law . . . required the ALJ to develop the record sufficient to permit meaningful appellate review. . . . As a result of the ALJ's failure to develop the record here and to follow our precedent, . . . [w]e thus conclude that the Government lacked substantial justification for its decision."); Fargnoli v. Massanari, 247 F.3d 34, 43-44 (3d Cir. 2001) ("The ALJ makes no mention of any of these significant contradictory findings, leaving us to wonder whether he considered and rejectedthem, considered and discounted them, or failed to consider them at all . . . . We therefore cannot conclude that his findings at step four were supported by substantial evidence."); Cotter v. Harris, 642 F.2d 700, 704-05 (3d Cir. 1981) ("[U]nless the Secretary has analyzed all evidence and has sufficiently explained the weight he has given to obviously probative exhibits, to say that his decision is supported by substantial evidence approaches an abdication of the court's duty . . . .") (quoting Dobrowolsky v. Califano, 606 F.2d 403 (3d Cir. 1979)); Centeno v. Comm'r of Soc. Sec., No. CIV. 096023 AET, 2011 WL 810970, at *2 (D.N.J. Mar. 2, 2011) (...