Prince v. Colvin

• Decision Date: 29 January 2015
• Docket Number: No. 3:13-cv-4804-P-BN,3:13-cv-4804-P-BN
• Parties: GREGORY CHARLES PRINCE, Plaintiff, v. CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.
• Court: U.S. District Court — Northern District of Texas

GREGORY CHARLES PRINCE, Plaintiff, v. CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.

No. 3:13-cv-4804-P-BN

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

January 29, 2015

FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

Plaintiff Gregory Charles Prince's Application for Attorneys Fees Under the "Bad Faith" Provision of the Equal Access to Justice Act [Dkt. No. 21] has been referred to the undersigned United States magistrate judge under 28 U.S.C. § 636(b) by Chief Judge Jorge A. Solis. The undersigned issues the following findings of fact, conclusions of law, and recommendation that Plaintiff's Application for Attorneys Fees Under the "Bad Faith" Provision of the Equal Access to Justice Act [Dkt. No. 21] should be granted in part and denied in part.

Background

Plaintiff Gregory Charles Prince successfully appealed the denial of his application for disability insurance benefits and Supplemental Security Income payments. After Plaintiff sought judicial review of a final adverse decision of the Commissioner of Social Security pursuant to 42 U.S.C. § 405(g), after DefendantCarolyn W. Colvin, Acting Commissioner of Social Security ("Defendant" or the "Commissioner"), filed an answer, and after Plaintiff filed his opening brief, see Dkt. Nos. 1, 10, & 17, the Commissioner only then, on the eve of her briefing deadline, filed an Unopposed Motion to Remand, see Dkt. No. 18. In support of the remand motion, the Commissioner explained:

The Administrative Law Judge (ALJ) found that Plaintiff had the residual functional capacity (RFC) to perform "light" work as defined in 20 C.F.R. §§ 404.1567(b), 416.967(b), except he could lift and carry 20 pounds occasionally and ten pounds frequently; could stand and/or walk for three to four hours in an eight-hour workday; and sit with normal breaks for six hours in an eight-hour workday (Tr. 16, Finding 5). Additionally, the ALJ found that Plaintiff could occasionally climb ramps and stairs, never climb ladders, ropes and scaffolds, frequently balance and crawl, and occasionally stoop, kneel and crouch (Tr. 16, Finding 5). At step five of the sequential evaluation process, the ALJ stated that he obtained vocational expert evidence and that the vocational expert indicated that a hypothetical person with Plaintiff's vocational factors and established RFC could perform work as a waxer, addresser, and assembler (Tr. 20, 170). The ALJ further stated that he determined, pursuant to Social Security Ruling (SSR) 00-4p, 2000 WL 1898704 (Dec. 4, 2000), that the vocational expert's testimony was consistent with the information contained in the Dictionary of Occupational Titles (DOT) (Tr. 20). The ALJ then concluded that the claimant was not disabled "[b]ased on the testimony of the vocational expert" (Tr. 20).

The Commissioner concedes that the ALJ's decision is not supported by substantial evidence. Accordingly, the Commissioner respectfully requests that the Court remand the instant case pursuant to sentence four in order to re-evaluate the case and conduct a new hearing, if necessary.

Dkt. No. 18 at 2.

Chief Judge Solis granted the Unopposed Motion to Remand [Dkt. No. 18], reversing the decision of the Commissioner and remanding the action for further proceedings pursuant to the fourth sentence of U.S.C. § 405(g), and then enteredjudgment. See Dkt. Nos. 19 & 20.

Plaintiff then moved for an award of attorneys' fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, invoking Section 2412(b)'s common-law provision, which authorizes a fee award at market hourly rates, or, alternatively, Section 2412(d), which authorizes a fee award at capped hourly rates. See Dkt. No. 21. The Commissioner does not object to all of Plaintiff's request but objects to an award under Section 2412(b)'s common-law provision and objects to the number of hours that Plaintiff's counsel devoted the case as being excessive. See id. at 1-2; Dkt. No. 24.

The undersigned held oral argument on Plaintiff's application on January 22, 2015 and, in preparing these findings, conclusions, and recommendation, has benefitted from the arguments of both counsel as to the Commissioner's objections.

Legal Standards

"There are two distinct methods for a district court to award attorneys' fees under the EAJA." Gate Guard Servs. L.P. v. Solis, Civ. A. No. V-10-91, 2013 WL 3873275, at *3 (S.D. Tex. July 24, 2013).

"Under the first method, the court is required to grant attorneys' fees to a prevailing party against the United States, unless there are special circumstances that make the award unjust or the government can show that it was substantially justified in its legal position." Id. at *4 (citing 28 U.S.C. § 2412(d)(1)(A)). Thus, under Section 2412(d), the Court must award attorneys' fees and expenses if: (1) the claimant is the "prevailing party"; (2) the Government's position was not "substantially justified"; and (3) there are not special circumstances that make an award unjust. See Murkledove v.Astrue, 635 F.3d 784, 790 (5th Cir. 2011) (citing 28 U.S.C. § 2412(d)(1)(A)). To be the "prevailing party" for purposes of the EAJA, the claimant must obtain a "sentence four" judgment reversing denial of disability benefits and requiring further proceedings before the agency. See Shalala v. Schaefer, 509 U.S. 292, 300-02 (1993).

But "[t]he EAJA further permits a court to award attorneys' fees to the prevailing party to the same extent it may award fees in cases involving other parties, whether by statute or common law." Gate Guard, 2013 WL 3873275, at *4 (citing 28 U.S.C. § 2412(b)). Specifically, Section 2412(b) states that "[t]he United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award." 28 U.S.C. § 2412(b); see also Scarborough v. Principi, 541 U.S. 401, 406 (2004). The so-called American Rule provides that litigants pay their own attorneys' fees and that the prevailing party in civil litigation may not collect attorneys' fees from the losing party. See Marx v. General Revenue Corp., 133 S. Ct. 1166, 1175 (2013). "Under section 2412(b) the federal government is subject to common law and statutory exceptions to the American Rule forbidding fee-shifting," Knights of Ku Klux Klan, Realm of La. v. East Baton Rouge Parish School Bd., 735 F.2d 895, 898 (5th Cir. 1984) (footnote omitted), and so Section 2412(b) "makes the federal government subject to the 'bad faith' exception to the 'American Rule' on attorneys' fees," Gate Guard, 2013 WL 3873275, at *4 (citing Baker v. Bowen, 839 F.2d 1075, 1080, n.3 (5th Cir. 1988)). The bad-faith or common-law "exception allows an award of attorneys' fees where the party seeking the award can show that the government has acted in 'bad faith,vexatiously, wantonly or for oppressive reasons.'" Gate Guard, 2013 WL 3873275, at *4 (quoting Baker, 839 F.2d at 1081).

"The court may consider conduct both during and prior to the litigation, although the award may not be based solely on the conduct that led to the substantive claim." Perales v. Casillas, 950 F.2d 1066, 1071 (5th Cir.1992); accord Sanchez v. Rowe, 870 F.2d 291, 294, 295 (5th Cir. 1989) ("While there is some authority to the contrary, we agree with Moore's treatise that the better view is that the requisite bad faith may be found only in bringing an action or causing an action to be brought. We have allowed fees only for bad-faith conduct related to the litigation, either in response to a claim before a suit has been filed or in the course of the litigation after a suit has been filed. .... We hold that the requisite bad faith may be found in a party's conduct in response to a substantive claim, whether before or after an action is filed, but it may not be based on a party's conduct forming the basis for that substantive claim." (footnote omitted; emphasis in original)). In Baker v. Bowen, 839 F.2d 1075 (5th Cir. 1988), in the Social Security appeal context, the United States Court of Appeals for the Fifth Circuit found Section 2412(b) bad faith based on litigation-related conduct at the Appeals Council stage. See 839 F.2d at 1081-82; accord Sanchez, 870 F.2d at 294 ("In Baker v. Bowen, in the context of an administrative adjudication, we also relied on litigation-related conduct as requisite to the allowance of fees." (footnote omitted)).

"The distinction between [Subsections 2412(b) and 2412(d)] is of considerable consequence in the calculation of amount of fees," because "Subsection 2412(d) imposes a presumptive $125 per hour cap on any award, unless it is adjusted for a special factoror the cost of living. 28 U.S.C. 2412(d)(2)(A)," but, "[u]nder § 2412(b), ... the court may use a market rate to determine attorneys' fees." Gate Guard, 2013 WL 3873275, at *4 (internal quotation marks omitted). And, while "[f]ee awards under subsection (d), although based on the prevailing market rate, are subject to a statutory cap," "[a]wards under subsection (b) are not." Romero v. Astrue, 413 F. App'x 747, 748 (5th Cir. 2011). "Thus, § 2412(b) allows for attorneys fees that can greatly exceed the cap placed on a § 2412(d) award." Gate Guard, 2013 WL 3873275, at *4 (internal quotation marks omitted).

Under 28 U.S.C. § 2412(d), the governmental agency "has the burden of establishing that its position was substantially justified." Sims v. Apfel, 238 F.3d 597, 602 (5th Cir. 2001). But the claimant bears the "burden of showing bad faith on the part of the [agency] in order to justify an award of attorneys' fees under 28 U.S.C. § 2412(b)." Gate Guard, 2013 WL 3873275, at *7. And the Court "'must make a specific finding that the sanctioned party acted in bad faith,'" vexatiously, wantonly, or for oppressive reasons to impose a Section 2412(b) fee award. Hornbeck Offshore Servs., L.L.C. v. Salazar, 713 F.3d 787, 796 (5th Cir 201...