Unice v. Berryhill, 3:16-cv-02469
| Decision Date | 20 July 2018 |
| Docket Number | No. 3:16-cv-02469,3:16-cv-02469 |
| Parties | SUSAN K. UNICE, Plaintiff, v. NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant. |
| Court | U.S. District Court — Middle District of Tennessee |
SUSAN K. UNICE, Plaintiff,
v.
NANCY A. BERRYHILL,
Acting Commissioner of Social Security, Defendant.
No. 3:16-cv-02469
UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION
July 20, 2018
Judge Trauger
Magistrate Judge Brown
To: The Honorable Aleta A. Trauger, United States District Judge
REPORT AND RECOMMENDATION
Pending before the Court is Plaintiff Susan K. Unice's motion for attorney's fees and costs pursuant to the Equal Access to Justice Act ("EAJA") (Docket Entry No. 34), seeking $16,943.95 in fees and $493.00 in costs, that was referred to the Magistrate Judge (Docket Entry No. 37). For the following reasons, the Magistrate Judge RECOMMENDS that this motion be GRANTED in part and DENIED in part, and that Plaintiff be awarded $13,659.76 in EAJA attorney's fees and $493 in costs.
After receiving a fully favorable disability decision from an administrative law judge ("ALJ") in 2010, Plaintiff, Susan K. Unice, and her daughter, Lauren M. Unice, were awarded Title II disability benefits, which began on March 1, 2008, and continued through July 2012. See administrative record (Docket Entry No. 16, Tr. 44-62, 116-17).1 Defendant, Commissioner of
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Social Security ("Commissioner"), notified Plaintiff in July 2011 and again in August 2012 that her disability ended in October 2009 because she engaged in substantial gainful activity ("SGA") and that Plaintiff's SGA made her and her daughter ineligible for benefits as of January 2010. Id. at 67-69, 74-76, 81-86. Defendant mailed Plaintiff invoices requesting repayment of $56,097.20, the amount paid to Plaintiff and her daughter from January 2010 to July 2012. Id. at 91-98.
Plaintiff requested a waiver of the overpayment in January 2013, which was ultimately denied by the administrative law judge ("ALJ"). Id. at 20-35. The ALJ specifically found that Plaintiff was overpaid $56,097.20 in benefits between January 1, 2010 and July 1, 2012; Plaintiff was not at fault for causing the overpayment; recovery of the overpayment would not defeat the purpose of Title II of the Social Security Act and would not be against equity and good conscience; and recovery of the overpayment would not be waived. Id. at 25-27. The Appeals Council declined to review the ALJ's decision. Id. at 3-7.
Plaintiff filed this action pursuant to 42 U.S.C. § 405(g) to obtain judicial review of the final decision of the Commissioner, denying Plaintiff's request for a waiver of adjustment or recovery of an overpayment. The Magistrate Judge summarized Plaintiff's assertions of error as follows: (1) the ALJ erred by finding Plaintiff was overpaid; (2) the ALJ erred by concluding waiver of adjustment or recovery of overpaid benefits was not against equity and good conscience; (3) the ALJ abused her discretion by finding waiver of adjustment or recovery of overpaid benefits does not defeat the purpose of Title II; and (4) the ALJ deprived Plaintiff of her rights to due process and equal protection by failing to reinstate her benefits. (Docket Entry No. 29, at 6).
Although Plaintiff resided in Tennessee, because the ALJ's decision was rendered in the District of Arizona, the Magistrate Judge applied Ninth Circuit law to the merits of the ALJ's
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decision. Id. at 5. The Magistrate Judge concluded that the ALJ's finding of overpayment required clarification on remand. Id. at 10-11. The Magistrate Judge stated, "Absent any indication which test the ALJ used to conclude Plaintiff was engaged in SGA from January 2010 to July 2012, the Commissioner's decision cannot be thoroughly scrutinized, and the Court cannot say for certain that the correct legal standards were applied." Id. at 11. The Magistrate Judge stated that although the Commissioner's finding may be correct, it was not the "Court's duty to construct the logical pathway to that conclusion," noting that the record contained evidence that was favorable to both sides on this issue. Id.
Thus, concluding that the ALJ's decision did not clearly articulate the test or tests used to find Plaintiff was engaged in SGA from January 2010 to July 2012, and that the evidence presented was not so clearly one-sided as to direct a decision, the Magistrate Judge recommended that the ALJ's decision be reversed in part and remanded for the Commissioner to clarify the rationale supporting the overpayment finding. Id. at 12. As to whether the ALJ erred by concluding waiver of adjustment or recovery of overpaid benefits was not against equity and good conscience or whether the ALJ abused her discretion by finding waiver of adjustment or recovery of overpaid benefits did not defeat the purpose of Title II, the Magistrate Judge concluded that substantial evidence supported the ALJ's decision. Id. at 12-18. The Magistrate Judge also concluded that Plaintiff's claim that the ALJ deprived her of her rights to due process and equal protection was without merit. Id. at 19. The District Court overruled Plaintiff's objections to the Magistrate Judge's Report and Recommendation ("R&R") and accepted and adopted the Magistrate Judge's R&R. (Docket Entry Nos. 31 and 32).
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Defendant contends that Plaintiff's application for attorney's fees should be denied because the position of the Commissioner was substantially justified. (Docket Entry No. 36, at 1). Alternatively, Defendant contends that Plaintiff's hours billed are excessive and should be significantly reduced. Id. In reply, Plaintiff contends that the number of issues that she prevailed upon is irrelevant; that contrary to Defendant's contention, the Court determined that the underlying facts did not clearly support a finding that Plaintiff's self-employment constituted SGA; and that the Court found that the ALJ did not apply the correct legal standard. (Docket Entry No. 40, at 2-3).
Because the Magistrate Judge applied Ninth Circuit precedent in his R&R analyzing Plaintiff's claims, the Magistrate Judge will apply Ninth Circuit law in addressing Plaintiff's application for attorney's fees and costs. "Although eligibility for fees is established upon meeting the conditions set out by the EAJA, the district court has substantial discretion in fixing the amount of an EAJA award." Catholic Soc. Servs., Inc. v. Napolitano, 837 F. Supp. 2d 1059, 1071 (E.D. Cal. 2011) (citing Comm'r, I.N.S. v. Jean, 496 U.S. 154, 163 (1990)). "The decision whether to award fees under the EAJA, including the district court's conclusion that the government's position was substantially justified, is reviewed for abuse of discretion." Gutierrez v. Barnhart, 274 F.3d 1255, 1258 (9th Cir. 2001) (citing Pierce v. Underwood, 487 U.S. 552, 559 (1988)). The EAJA provides:
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.
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28 U.S.C. § 2412(d)(1)(A). "Thus, to be eligible for attorney fees under the EAJA: (1) the claimant must be a 'prevailing party'; (2) the government's position must not have been 'substantially justified'; and (3) no 'special circumstances' exist that make an award of attorney fees unjust." Budnik v. Berryhill, No. 3:16-CV-05343-KLS, 2017 WL 932173, at *1 (W.D. Wash. Mar. 9, 2017).2
"An applicant for disability benefits becomes a prevailing party for the purposes of the EAJA if the denial of her benefits is reversed and remanded regardless of whether disability benefits ultimately are awarded." Gutierrez, 274 F.3d at 1257. Defendant does not dispute that Plaintiff is a prevailing party or argue that no "special circumstances" exist that make an award of attorney fees unjust. Whether Defendant's position was "substantially justified" is the only EAJA requirement at issue.
"The EAJA creates a presumption that fees will be awarded to prevailing parties. However, Congress did not intend fee shifting to be mandatory." Flores v. Shalala, 49 F.3d 562, 567 (9th Cir. 1995), as amended on denial of reh'g (June 5, 1995) (citation omitted). "'It is the government's burden to show that its position was substantially justified.'" Tobeler v. Colvin, 749 F.3d 830, 832 (9th Cir. 2014) (citation omitted). "The government's failure to prevail does not raise a presumption that its position was not substantially justified." Kali v. Bowen, 854 F.2d 329, 332 (9th Cir. 1988).
"'Substantially justified' means 'justified in substance or in the main'--that is, justified to a degree that could satisfy a reasonable person.' A substantially justified position must have a
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reasonable basis both in law and fact." Gutierrez, 274 F.3d at 1258 (citations and internal quotation marks omitted). "'The government's position must be substantially justified at each stage of the proceedings.'" Shafer v. Astrue, 518 F.3d 1067, 1071 (9th Cir. 2008) (quoting Corbin v. Apfel, 148 F.3d 1051, 1052 (9th Cir. 1998)). "In making a determination of substantial justification, the court must consider the reasonableness of both 'the underlying government action at issue' and the position asserted by the government in 'defending the validity of the action in court.'" Al-Harbi v. I.N.S., 284 F.3d 1080, 1084 (9th Cir. 2002) (citation and internal quotation marks omitted); Tobeler, 749 F.3d at 832 ("The position of the United States includes both the government's litigation position and the underlying agency action giving rise to the civil action." (citation and internal quotation marks omitted)). Moreover, when courts determine "whether the...
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