Fortin v. Comm'r of Soc. Sec.

JOSEPH A. FORTIN, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.

No. 18-10187

United States District Court, E.D. Michigan, Southern Division

April 11, 2022

Elizabeth A. Stafford Magistrate Judge.

ORDER DENYING MOTION FOR ATTORNEY'S FEES

DAVID M. LAWSON United States District Judge.

Plaintiff Joseph A. Fortin moves the Court for an order awarding attorney's fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). Fortin appealed the Commissioner's denial of his request for disability benefits under Title II of the Social Security Act. After filing a complaint and motion for summary judgment before this Court, he filed a supplemental brief arguing that the administrative law judge (ALJ) that decided his case had not been appointed consistently with the Appointments Clause of the constitution. U.S. Const. art. II, § 2, cl. 2. The Commissioner opposed that argument, contending that Fortin forfeited the issue by failing to raise it before the agency. The magistrate judge agreed with Fortin and, although she found the ALJ's decision sound on the merits, recommended that the Court remand the case for a rehearing before a properly appointed ALJ. The Court disagreed, held that Fortin forfeited his Appointment's Clause argument, and affirmed the findings of the Commissioner. Fortin appealed that decision.

At the time, no appellate court had issued a decision on the forfeitability of an Appointments Clause challenge, but the vast majority of district courts agreed with the Commissioner's position. Appellate courts began addressing the issue in 2020, which quickly resulted in a circuit split. In September 2020, the Sixth Circuit ruled in Fortin's favor and held that Social Security claimants may raise Appointment Clause challenges before federal courts without first raising them before the agency. The Supreme Court adopted that same position in early 2021.

Fortin now seeks attorney fees under the EAJA because he was a prevailing party. However, to receive an award under that statute, Fortin must demonstrate that the Commissioner's position was not substantially justified. The record amply shows that the Commissioner's argument was reasonable, as demonstrated by the plethora of decisional law from both district and appellate courts adopting the Commissioner's position. The motion for attorney's fees under the EAJA will be denied.

I.

On September 28, 2016, an ALJ denied Joseph Fortin's request for disability income benefits under Title II of the Social Security Act. The Appeals Counsel denied Fortin's request for review of the ALJ's decision on November 28, 2017. Fortin then filed a complaint seeking judicial review of the denial of his requested benefits. The case was referred to United States Magistrate Judge Elizabeth A. Stafford pursuant to 28 U.S.C. § 636(b)(1)(B) and E.D. Mich. LR 72.1(b)(3). Both parties filed motions for summary judgment in mid-2018. While the motions were pending, the Supreme Court decided Lucia v. Securities and Exchange Commission, which held that administrative law judges working for the Securities and Exchange Commission are “inferior officers, ” who must be appointed under the Appointments Clause of the United States constitution. --- U.S ---, 138 S.Ct. 2044, 254-55 (2018); U.S. Const. art II, § 2, cl. 2. Based on that decision, Fortin supplemented his motion for summary judgment on September 28, 2018, arguing that the administrative law judge who decided the case was not properly appointed under the Appointments Clause. On October 4, 2018, the Commissioner responded that Fortin forfeited his argument because he failed to raise the issue at the administrative level. When the Commissioner raised this argument, neither the Sixth Circuit nor the Supreme Court had opined whether forfeiture was a valid defense for the Commissioner under these circumstances, and the issue was a close question of unsettled law.

The magistrate judge agreed with Fortin and on February 1, 2019 issued a report on the parties' cross motions for summary judgment, recommending that the Court grant Fortin's motion and deny the Commissioner's motion. However, the magistrate judge agreed with the Commissioner on the merits that the ALJ properly evaluated the medical opinion evidence, considered the side-effects of Fortin's medication, and assessed Fortin's residual functional capacity.

Both parties objected to the report. The Commissioner reiterated that Fortin forfeited his Appointments Clause argument by failing to raise it before the agency. The Court agreed with the Commissioner and sustained his objections, overruled Fortin's objections (which were focused on the merits), adopted in part and rejected in part the magistrate judge's report, denied Fortin's motion for summary judgment, granted the Commissioner's motion for summary judgment, and affirmed the findings of the Commissioner.

Fortin appealed the decision on May 25, 2019, and the Sixth Circuit consolidated his case with four others presenting the same Appointment Clause forfeiture issue. While Fortin's case was pending, several appellate courts ruled on the forfeiture issue beginning in early 2020. The Third Circuit issued the first decision in January 2020, in which it held that claimants may challenge the constitutionality of a Social Security administrative law judge's appointment for the first time in federal court. Cirko v. Comm'r of Soc. Sec., 948 F.3d 148, 152 (3d Cir. 2020). The Eighth and Tenth Circuits arrived at the opposite conclusion later that year. Davis v. Saul, 963 F.3d 790, 793 (8th Cir. 2020); Carr v. Comm'r of Soc. Sec., 961 F.3d 1267, 1268 (10th Cir. 2020). On September 1, 2020, the Sixth Circuit joined the Third Circuit and held in a 2-1 decision that “a claimant does not forfeit an Appointments Clause challenge in a Social Security proceeding by failing to raise that claim before the agency.” Ramsey v. Comm'r of Soc. Sec., 973 F.3d 537, 547 (6th Cir. 2020). Judge Siler wrote a dissenting opinion, explaining that he would have held that claimants in Social Security appeals must assert objections to the presiding ALJ “at or before the time of the ALJ hearing” to “promot[e] both judicial and agency efficiency” and prevent claimants from getting “two bites at the apple.” Id. at 547-48. The Fourth Circuit joined the Third and Sixth Circuit's position in November 2020. Probs v. Saul, 980 F.3d 1015 (4th Cir. 2020).

On January 29, 2021, the Commissioner filed a petition for a writ of certiorari in Ramsey. But on April 22, 2021, the Supreme Court resolved the issue, finding that claimants did not forfeit their Appointment Clause challenges by failing to raise them at the administrative level. Carr v. Saul, ___ U.S.___, 141 S.Ct. 1352, 1356 (2021). After the Supreme Court's decision, Fortin moved the Sixth Circuit to remand this case to the district court and issue the mandate. The Sixth Circuit granted Fortin's motion, which the Commissioner did not oppose.

On May 28, 2021, the Court remanded the case to the Commissioner for a new hearing before a properly appointed ALJ. After unsuccessfully attempting to negotiate an attorney's fee award, Fortin filed the present motion for attorney's fees under the Equal Access to Justice Act on July 20, 2021, seeking fees in the amount of $27, 704.55 and expenses in the amount of $400, representing about 145.05 hours of work at a rate of $191.00 per hour.

II.

A party who prevails against the United States in a civil case may recover attorney's fees “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); DeLong v. Comm'r of Soc. Sec. Admin., 748 F.3d 723, 725 (6th Cir. 2014) (citing Marshall v. Comm'r of Soc. Sec., 444 F.3d 837, 840 (6th Cir. 2006)). A position is “substantially justified” if “a reasonable person could think it correct” and “it has a reasonable basis in law and fact.” Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988). “While ‘objective indicia' of reasonableness - such as a dissenting opinion, the views of other courts, ‘a string of losses', or a ‘string of successes' - may be relevant, it is ‘the actual merits of the Government's litigating position' that matter most.” Griffith v. Comm'r of Soc. Sec., 987 F.3d 556, 563 (6th Cir. 2021) (quoting United States ex rel. Wall v. Circle C Constr., LLC, 868 F.3d 466, 471 (6th Cir. 2017)). Because the Court must consider the government's position “as a whole, ” Amezola-Garcia v. Lynch, 835 F.3d 553, 555 (6th Cir. 2016), it must evaluate the government's position before and during litigation, Griffith, 987 F.3d at 564.

The parties here do not dispute that Fortin prevailed on the Appointments Clause issue. Fortin argues, therefore, that he is entitled to fees because the Commissioner's position was not substantially justified because the government's forfeiture argument was novel and not supported by law when it was raised. He also insists that there are no special circumstances that make his requested award unjust. The government disagrees, contending that its forfeiture argument was supported by long-standing general principles.

A.

Fortin first asserts (ironically) that the Commissioner waived the agency's only viable affirmative defense - the special circumstances defense. The special circumstance defense which is distinct from the substantial justification defense, allows the government to pursue novel but credible extensions of the law. DeLong, 748 F.3d at 725; Brinker v. Guiffrida, 798 F.2d 661, 663, 664 (3d Cir. 1986) (“The legislative history suggests that this provision is a ‘safety valve' to protect the government's good faith advancement of ‘novel but credible extensions and interpretations...