Opinion
CASE No. 00-CV-10336-BC.
January 13, 2003
MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION ON PLAINTIFF'S MOTION FOR ATTORNEY FEES PURSUANT TO THE EQUAL ACCESS TO JUSTICE ACT (EAJA) (Dkt. 20)
I. REPORT
A. Introduction
Pending, pursuant to an Order of Reference from United States District Judge David M. Lawson, is the above-entitled motion. (Dkts. 20-21.) No response has been filed.
Attorney Donald Popielarz has represented Plaintiff throughout the pendency of this case. On March 14, 2001, I issued a Report and Recommendation, recommending that the findings of the Commissioner be affirmed. (Dkt. 12.) Plaintiff filed objections to this recommendation (Dkt. 13), counsel for the Commissioner filed a response to the objections (Dkt. 16), and Plaintiff filed a reply (Dkt. 17). On July 22, 2003, Judge Lawson issued an Opinion and Order rejecting the Report and Recommendation. (Dkt. 18; Gaffney v. Comm'r of Soc. Sec., 277 F. Supp.2d 733 (E.D. Mich. 2003)).
The instant motion was filed September 26, 2003. The motion papers indicate that counsel for Plaintiff seeks an award under the EAJA of $2,387.50 for his time spent on this case. Specifically, Plaintiff states that he has incurred 19.10 hours of attorney time at the rate of $125.00 per hour. The Commissioner has filed no response within the time limits set forth in E.D. Mich. LR 7.1. Accordingly, the matter is ready for Report and Recommendation.
B. Law and Analysis
In order to recover fees and expenses under the EAJA, (1) the plaintiff must be a "prevailing party," (2) the position of the United States must not have been "substantially justified," (3) no special circumstances must make an award of fees unjust, and (4) plaintiff must submit a timely fee application. Comm'r, I.N.S. v. Jean, 496 U.S. 154, 158, 110 S.Ct. 2316, 110 L.Ed.2d 134 (1990). At the threshold, I conclude that Plaintiff is a "prevailing party." See Shalala v. Schaefer, 509 U.S. 292, 301-02, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993) (holding that a party who obtains a Sentence Four remand is a prevailing party eligible for a judgment awarding costs and attorney fees and expenses under the EAJA).
I must next address whether Plaintiff's request for attorney fees was timely made. Section 2412 of the EAJA provides that a "party seeking an award of fees and other expenses shall, within 30 days of final judgment in the action, submit to the court an application for fees and other expenses. . . ." 28 U.S.C. § 2412(d)(1)(B). In this circuit, the time for filing begins to run only when the underlying judgment has become final; i.e., 60 days after judgment was entered, providing that no notice of appeal or other motion under Rules 59 or 60 of the Federal Rules of Civil Procedure has been filed in the meantime. Gidcumb v. Sec'y of Health Human Servs., 650 F. Supp. 96 (W.D. Ky. 1986); Najor v. Sec'y of Health Human Servs., 675 F. Supp. 379 (E.D. Mich. 1987) (Cook, J.). As the filing date of Plaintiff's motion falls within these deadlines, I suggest it is timely.
Under the EAJA, a litigant may not recover attorney fees from the United States if the government's position was substantially justified. The statute reads in pertinent part:
Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action . . . brought by or against the United States . . ., 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).
The government bears the burden of demonstrating substantial justification. E.W. Grobbel Sons, Inc. v. Nat'l Labor Relations Bd., 176 F.3d 875, 878 (6th Cir. 1999). The government's "position" comprehends both its underlying action and its litigation position. 28 U.S.C. § 2412(d)(1)(A), (d)(2)(D). See also Delta Eng'g v. United States, 41 F.3d 259, 261 (6th Cir. 1994). The government's failure to win its suit raises no presumption that its position was not substantially justified. United States v. Real Property Located at 2323 Charms Road, 946 F.2d 437, 440 (6th Cir. 1991). Nor does its decision to withdraw its claims. Grobbel, 176 F.3d at 878.
In Pierce v. Underwood, 487 U.S. 552, 563, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), the Supreme Court took pains to define "substantial justification." The Court rejected the demanding interpretation "justified to a high degree," and approved formulations such as "[existence of] a genuine dispute," "if reasonable people could differ as to [the appropriateness of the contested action]," "justified to a degree that could satisfy a reasonable person," and "reasonable basis both in law and fact." Id. at 565. The Court specifically rejected as nonauthoritative legislative history a suggestion that "the test must be more than mere reasonableness." Id. at 566 (quoting H.R. Rep. No. 99-120, at 9 (1985), reprinted in 1985 U.S.C.C.A.N. 132, 138).
Under these standards, the failure of the government to entirely prevail in this case does not in and of itself constitute a lack of substantial justification for its position. See United States v. Yoffe, 775 F.2d 447 (1st Cir. 1985). Nor does the finding by a district court that the position of the Commissioner in denying benefits was not supported by substantial evidence automatically require the court to conclude that the Commissioner's position was not "substantially justified" for the purposes of attorney fee awards under the EAJA. See Hull v. Bowen, 748 F. Supp. 514 (N.D. Ohio 1990).
In determining a prevailing claimant's entitlement to EAJA fees, the clarity of existing law is an important factor in determining whether the position of the Commissioner was substantially justified. Spruil v. Bowen, 691 F. Supp. 302 (M.D. Fla. 1988). On the other hand, where the evidence is equivocal or highly disputed, the Commissioner's position is more likely to be substantially justified within the meaning of the EAJA. Gowen v. Bowen, 855 F.2d 613 (8th Cir. 1988); Andrews v. Bowen, 848 F.2d 98 (7th Cir. 1988). The failure of the Commissioner to follow the requirements of applicable regulations renders the Commissioner's position not substantially justified and entitles Plaintiff's counsel to an EAJA attorney fee award. Hudson v. Sec'y of Health Human Servs., 839 F.2d 1453 (11th Cir. 1988). Similarly, the failure of the Commissioner to follow clearly established circuit court precedent renders the Commissioner's position not substantially justified. Fraction v. Bowen, 859 F.2d 574 (8th Cir. 1988).
Turning then to the merits of this motion, I begin by noting that in enacting the Social Security system, Congress created a two-tiered system in which the administrative agency handles claims, and the judiciary merely reviews the determination for exceeding statutory authority or for being arbitrary and capricious. Sullivan v. Zebley, 493 U.S. 521, 110 S.Ct. 885, 890, 107 L.Ed.2d 967 (1990). The scope of the court's review of this administrative determination is limited to an examination of the record only. Brainard v. Sec'y of Health Human Servs., 889 F.2d 679, 681 (6th Cir. 1989) (per curiam). Thus, this Court, in considering both the instant motion, and Plaintiff's underlying claim for benefits, is limited to the administrative record. In addition, in this circuit, where the Appeals Council, as it did in this case, denies a request to review the ALJ's decision, it has been held that the administrative record is closed at the administrative law judge level. Cline v. Comm'r of Soc. Sec., 96 F.3d 146, 148 (6th Cir. 1996); Cotton v. Sullivan, 2 F.3d 692, 696 (6th Cir. 1993); Willis v. Sec'y of Health Human Servs., 727 F.2d 551, 553-54 (6th Cir. 1984). Thus, the record to be reviewed by this Court was closed upon the issuance of the ALJ's decision, which was filed September 25, 1998. (Tr. at 10-21.)
In rejecting the Report and Recommendation, Judge Lawson cited extensively from Social Security Ruling (hereinafter "SSR") 99-2p. SSRs are "binding on all components of the Social Security Administration." 20 C.F.R. § 402.35(b)(1). They are, however, not controlling law. Heckler v. Edwards, 465 U.S. 870, 873 n. 3, 104 S.Ct. 1532, 79 L.Ed.2d 878 (1984); see also Skidmore v. Swift Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). It follows as a necessary corollary to this rule that a reviewing court should consider the law as it existed at the time of the ALJ's decision, rather than at some later date, particularly where the record for review is closed at that same time.
This Social Security Ruling may be found at SSR 99-2p, 1999 WL 271569 (SSA Apr. 30, 1999).
After discussing SSR 99-2p, Judge Lawson stated: "In this case, the ALJ and the Magistrate Judge failed to apply, or even make reference to, SSR 99-2p. Had they done so, they would have determined that there was clinical correlation for the Plaintiff's complaints[.] For these reasons, the Court reverses the Commissioner's decision that the plaintiff was not disabled." (Op. Order, Dkt. 18 at 8.) However, Attorney Popielarz failed to inform Judge Lawson that the ALJ did not have the benefit of this Social Security Ruling at the time he issued his decision, as this ruling did not then exist. Nor did Judge Lawson make mention of the fact that on the first page of the SSR, the effective date is listed as April 30, 1999, 218 days after the administrative law judge's decision, which, as mentioned, under the law of this circuit, closed the administrative record for judicial review purposes. It therefore appears, without explicitly so finding, that Judge Lawson concluded that SSR 99-2p should be applied retroactively to the consideration of Plaintiff's claim.
However, the United States Supreme Court has made clear that
[r]etroactivity is not favored in the law. Thus, Congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result. By the same principle, a statutory grant of legislative rule making authority will not, as a general matter, be understood to encompass the power to promulgate retroactive rules unless that power is conveyed by Congress in express terms. Even where some substantial justification for retroactive rule making is present, courts should be reluctant to find such authority absent an express statutory grant.Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208-09, 109 So. Ct. 468, 102 L.Ed.2d 493 (1988) (citations omitted).
Thus, for an administrative rule to have retroactive effect, the rule must first explicitly state that it is intended to have retroactive effect. On this requirement, I suggest that SSR 99-2p fails to pass muster. The Social Security Administration, in promulgating this rule, simply states that its effective date is April 30, 1999. No other explanatory information is given beyond this effective date. Nor does the purpose given by the Administration for this ruling provide the explicit guidance required by the Supreme Court in order for it to be applied retroactively. Instead, the Social Security Administration states only that the purpose is "to restate and clarify the policies of the Social Security Administration for developing and evaluating title II and title XVI claims for disability on the basis of Chronic Fatigue Syndrome (CFS)[.]" SSR 99-2p, 1999 WL 271569 (SSA Apr. 30, 1999). I therefore suggest that the language of SSR-99-2p neither implies nor mandates retroactivity.
Nor, I suggest, did Congress confer upon the Social Security Administration the authority to promulgate retroactive regulations. The Congressional delegation of authority to the Commissioner of Social Security to issue rules and regulations is set forth in 42 U.S.C. § 405(a). That provision states:
The Commissioner of Social Security shall have full power and authority to make rules and regulations and to establish procedures, not inconsistent with the provisions of this subchapter, which are necessary or appropriate to carry out such provisions, and shall adopt reasonable and proper rules and regulations to regulate and provide for the nature and extent of the proofs and evidence and the method of taking and furnishing the same in order to establish the right to benefits hereunder.42 U.S.C. § 405(a).
I conclude that this grant of authority, while indeed wide ranging, does not confer upon the Social Security Administration the express power to engage in retroactive rule making. See Bowen, supra; Kokal v. Massanari, 163 F. Supp.2d 1122 (N.D. Cal. 2001); Portlock v. Barnhart, 208 F. Supp.2d 451 (D. Del. 2002).
Applying these findings to the motion at bar, I suggest that the guidance provided by SSR 99-2p was unavailable to the ALJ at the time he rendered his decision, that the administrative record was closed, and that the Commissioner's opposition to Plaintiff's disability claim was reasonably based in fact and upon the law as it existed at the time of the ALJ's decision. I therefore suggest that under the governing standards outlined above, the Commissioner's opposition was "substantially justified within the meaning of the EAJA." As a result, I suggest that counsel for Plaintiff is not entitled to fees under this statute. II. RECOMMENDATION
For the reasons set forth above, IT IS RECOMMENDED that Plaintiff's Motion for Attorney Fees Under the Equal Access to Justice Act be DENIED. III. REVIEW
This recommendation does not preclude counsel for Plaintiff from seeking attorney fees under 42 U.S.C. § 406(g).
The parties to this action may object to and seek review of this Report and Recommendation within ten (10) days of service of a copy hereof as provided for in 28 U.S.C. § 636(b)(1). Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Howard v. Sec'y of Health Human Servs., 932 F.2d 505 (6th Cir. 1991); United States v. Walters, 638 F.2d 947 (6th Cir. 1981). The parties are advised that making some objections, but failing to raise others, will not preserve all the objections a party may have to this Report and Recommendation. Willis v. Sec'y of Health Human Servs., 931 F.2d 390, 401 (6th Cir. 1991); Smith v. Detroit Fed'n of Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987). Pursuant to E.D. Mich. LR 72.1(d)(2), a copy of any objections is to be served upon this Magistrate Judge.