Opinion
CASE NO. C17-1514 BAT
09-20-2018
MATTHEW SMITH, Plaintiff, v. NANCY A. BERRYHILL, Deputy Commissioner of Social Security for Operations, Defendant.
ORDER GRANTING PLAINTIFF'S MOTION FOR EAJA FEES AND BAD FAITH EAJA FEES
The Commissioner opposed plaintiff's request for Equal Access to Justice Act ("EAJA") fees based entirely on the contention that the government's position was substantially justified. Dkts. 15, 16. Plaintiff then moved for bad faith EAJA fees for having to respond to the Commissioner's frivolous opposition to EAJA fees. Dkt. 17. Having allowed the Commissioner to respond to the allegation of bad faith and plaintiff to file a surreply, Dkts. 18-22, the Court GRANTS plaintiff's requests for EAJA fees and for bad faith EAJA fees because government counsel (1) raised frivolous arguments foreclosed by binding precedent; (2) materially misstated the record; and (3) appears to be engaging in a pattern of harassing claimants who have successfully challenged the Commissioner's final decisions.
No one disputes plaintiff's entitlement to EAJA fees. Government counsel concedes that the opposition to plaintiff's request for EAJA fees was patently meritless and admits that he materially misstated the administrative record. See Dkt. 19, at 1-2. The parties disagree about whether government counsel should face bad faith sanctions for filing a frivolous and misleading opposition to plaintiff's request for EAJA fees.
"[A] finding of bad faith is warranted where an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent." Rodriguez v. United States, 542 F.3d 704, 709 (9th Cir. 2008) (citation and internal quotation marks omitted). Recklessness alone does not constitute bad faith: "an award of attorney's fees is justified when reckless conduct is combined with an additional factor such as frivolousness, harassment, or an improper purpose." Id. (citation and internal quotation marks omitted). A frivolous case is one that is groundless, with little prospect of success; a case is frivolous when the government's position was foreclosed by binding precedent or so obviously wrong as to be frivolous. Id. Government counsel here knowingly or recklessly raised frivolous arguments in opposition to plaintiff's reasonable request for EAJA fees, based argumentation on a material misstatement of the administrative record, and acted with what appears to be an improper intent to harass this claimant and others who have successfully challenged the Commissioner's final decisions.
First, government counsel frivolously declined to adequately state or to satisfy the proper standard for opposing EAJA fees on the basis of substantial justification. The EAJA provides that "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 . . . 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). It is the government's burden to show its position was substantially justified, i.e., the government's position must have a reasonable basis both in law and fact. Meier v. Colvin, 727 F.3d 867, 870 (9th Cir. 2013). The government's position includes both the government's litigation position and the underlying agency action giving rise to the civil action. Id. Where substantial evidence does not support an ALJ's decision, it is the "decidedly unusual case" in which substantial justification, within the meaning of the EAJA, exists. Id. at 872 (quoting Thangaraja v. Gonzales, 428 F.3d 870, 874 (9th Cir. 2005)).
In opposing plaintiff's EAJA request, government counsel made no attempt to demonstrate how or why the current case is the "decidedly unusual case" in which the ALJ's decision was unsupported by substantial evidence and yet the government's position was substantially justified. See Meier, 727 F.3d at 870. Instead, government counsel recycled arguments previously rejected and called them examples of substantial justification. Dkt. 16. These included improper post hoc justifications never relied upon by the ALJ that clearly violate the rule announced in SEC v. Chenery Corp., 332 U.S. 194 (1947). Chenery requires that an agency's order be upheld, if at all, on the same basis articulated in the agency's order itself. Adding insult to injury, government counsel also presented an unrecognizable substantial justification standard, contending that "the Commissioner's position is substantially justified so long as 'some evidence' supports it." Dkt. 16, at 2 (quoting Williams v. Bowen, 966 F.2d 1259, 1261 (9th Cir. 1991)). Government counsel's knowing or reckless disregard for the proper substantial justification standard, as well as his advancement of frivolous arguments foreclosed by Meier, Chenery, the remand order, and common sense, demonstrate that bad faith sanctions are warranted even before considering counsel's material misstatement and pattern of harassment.
Here the Court reversed and remanded because the ALJ had misevaluated (1) the opinion of examining psychiatrist Peter Meis, MD; and (2) other medical and other source evidence. Dkt. 13. With respect to Dr. Meis, the government argued that the ALJ had properly assessed residual functional capacity ("RFC") because when Dr. Meis referred to "marked" limitations he was actually defining them as "moderate" limitations. The Court rejected this specious contention because (a) it was an improper post hoc rationalization never advanced by the ALJ; (b) it disregarded the plain language found in Dr. Meis's opinion that tracked the categories set forth in 20 C.F.R. Part 404, Subpart P 12.00(F)(2); (c) it consisted of language selectively plucked from the Program Operations System Manual ("POMS") even though the ALJ did not refer to the POMS and, regardless, the POMS language remained consistent with the regulations and Dr. Meis's opinion; and (d) the ALJ provided no cognizable reason for limiting the weight given to Dr. Meis's opinion. Dkt. 13, at 2-4. With respect to other medical and other source evidence, the government argued that the ALJ may reject evidence existing since the time of onset solely because it predates the date the claimant applies for SSI benefits. The Court rejected the Commissioner's approach as illogical and inconsistent with the regulations and case law, which may reasonably include relevant medical evidence that postdates the alleged onset date and predates the application date. Dkt. 13, at 4- 6.
Williams is inapposite. In Williams, the question presented was whether the district court had abused its discretion by determining that the government's position was substantially justified. A district court abuses its discretion when its "decision is based on an erroneous conclusion of law or when the record contains no evidence on which [it] rationally could have based that decision." Kali v. Bowen, 854 F.2d 329, 331 (9th Cir. 1988) (emphasis added, citation and internal quotation marks omitted).
Second, in recycling his previously rejected, frivolous arguments, counsel knowingly or recklessly made a material misstatement about the administrative record. In briefing the merits, government counsel had erroneously stated that Dr. Meis had defined a "moderate" limitation as "only a 'slight limitation.'" Dkt. 11, at 5. The Court rejected this counter-textual argument, noting that the form Dr. Meis used contained categories of limitations (none, mild, moderate, and marked) that were consistent with the regulations. Dkt. 13, at 3 (citing Tr. 1012 and 20 C.F.R. Part 404, Subpt. P 12.00(F)(2)). Nevertheless, government counsel, in opposing EAJA fees, again misstated the administrative record. Government counsel spent a full paragraph arguing that Dr. Meis "defined 'moderate' as amounting to only a 'slight limitation, '" which corresponded to the regulatory definition of a mild limitation. Dkt. 16, at 3 (citing Tr. 1012). However, the form used by Dr. Meis provided: "Moderate - There is more than a slight limitation in this area but the individual is still able to function satisfactorily." Tr. 1012 (emphasis added).
Government counsel admits that he materially misstated the administrative record but pleads "scrivener's error." Dkt. 19, at 2. The Court rejects this explanation. A scrivener's error, i.e., a clerical error, is "[a]n error resulting from a minor mistake or inadvertence and not from judicial reasoning or determination; esp., a drafter's or typist's technical error that can be rectified without serious doubt about the correct reading." BLACK'S LAW DICTIONARY (10th ed. 2014). This was no scrivener's error. It was reckless for government counsel to have based his merits argument on a material misrepresentation of the administrative record. See Dkt. 11, at 5. After the Court pointed out that textual error in the remand order, Dkt. 13, at 3, it was wantonly vexatious for government counsel not only to repeat the material misrepresentation but also to expand upon the facetious claim while opposing EAJA fees.
Third, plaintiff has submitted documentation that demonstrates that government counsel assigned to this case has been filing oppositions to requests for EAJA fees based on meritless substantial justification arguments with a frequency that suggests a pattern and practice of harassing claimants who have successfully challenged the Commissioner's final decisions. Dkt. 22, Exh. 2. Of the 53 cases in which attorneys requested EAJA attorney fees over the past two years, government counsel objected to 46 of the cases based on meritless substantial justification arguments. Dkt. 22, Exh. 2, at 1-3. And 46 consecutive times the Court has rejected government counsel's frivolous substantial justification arguments. A representative sample of the Court's comments in these cases has included: "The Commissioner's opposition is entirely baseless, and invites the Court to create a new standard of evidence, i.e., some evidence," Key v. Berryhill, C17-5785-JPD, Dkt. 18, at 1; "The Commissioner misstates the Court's holding," Black v. Berryhill, C17-1198-BHS, Dkt. 21, at 3; "The Commissioner contends that the government's position had a reasonable basis in fact because 'some evidence' supported it. That is not the correct standard," Buckholz v. Berryhill, C17-5715-TLF, Dkt. 27, at 4.
Since plaintiff filed the supporting exhibits, the Court has determined that the government lacked substantial justification and has granted EAJA fees in four more cases filed by the same government counsel: Case Nos. C17-1198-BHS, C17-5785-JPD, C17-5779-DWC, and the current one. --------
The Court finds that government counsel has engaged in vexatious, wanton, and oppressive conduct by raising frivolous arguments to oppose plaintiff's reasonable request for EAJA fees, materially misstating the record, and engaging in a pattern and practice of harassing claimants who have successfully challenged the Commissioner's final decisions. See Brown v. Sullivan, 916 F.2d 492, 495 (9th Cir. 1990). In doing so, government counsel has willfully wasted judicial resources, plaintiff's time, and the government's money. This case is therefore exceptional and dominating reasons of justice recommend awarding bad faith EAJA fees for the time plaintiff's counsel spent briefing the EAJA motion and documenting government counsel's egregious conduct.
Although offered the opportunity to respond, government counsel has voiced no opposition to the reasonableness of plaintiff's request for EAJA fees or to calculating bad faith attorney fees at a market rate of $500 per hour. The Court finds that a market rate of $500 per hour is justified given the extensive experience that plaintiff's counsel has in the area of social security and disability law, and that the amount of time that plaintiff's counsel spent in litigating this case to judgment (23.7 hours) and in seeking EAJA fees/bad faith EAJA fees (16.7 hours) is reasonable. The Court therefore awards EAJA fees for pursuing the case to judgment of $5,073.35, and bad faith EAJA fees for litigating the EAJA request of $8,350.00, for a total of $13,423.35 in EAJA fees. Plaintiff's award is subject to any offset allowed pursuant to the Department of Treasury's Offset Program. See Astrue v. Ratliff, 560 U.S. 586 (2010). If the EAJA fees are not subject to an offset as described in Ratliff, the check for EAJA fees shall be made payable to Dellert Baird Law Offices, PLLC, based upon plaintiff's assignment of this fee to his attorney. The check for EAJA fees shall be mailed to plaintiff's counsel at Dellert Baird Law Offices, PLLC, 2805 Bridgeport Way W, #23, University Place, WA, 98466.
DATED this 20th day of September, 2018.
/s/_________
BRIAN A. TSUCHIDA
Chief United States Magistrate Judge