Melissa L.R. v. Kijakazi

1

MELISSA L.R.,^[1] Plaintiff, v. KILOLO KIJAKAZI, Acting Commissioner of the Social Security Administration, Defendant.

No. 1:21-cv-00318 (BKS)

United States District Court, N.D. New York

April 21, 2023

For Plaintiff: Charles E. Binder Law Office of Charles E. Binder and Harry J. Binder, LLC

For Defendant: Carla B. Freedman United States Attorney Michael L. Henry Special Assistant United States Attorney Social Security Administration

MEMORANDUM-DECISION AND ORDER

Hon Brenda K. Sannes, United States District Judge

I. INTRODUCTION

Plaintiff Melissa L.R. filed this action under 42 U.S.C. § 405(g) seeking review of the Commissioner of Social Security's (the “Commissioner”) denial of her application for Supplemental Security Income (“SSI”) and Social Security Disability Insurance (“SSDI”) Benefits. (Dkt. No. 1). On August 8, 2022, the Court entered judgment in Plaintiff's favor and remanded this case for further proceedings. (Dkt. No. 18). As the prevailing party, Plaintiff moves under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, for an award of attorney's fees and costs in the sum of $9,674.89. (Dkt. Nos. 20, 22). The Commissioner opposes Plaintiff's motion on the ground that the Commissioner's position was substantially justified. (Dkt. No. 21). For the following reasons, Plaintiff's motion is denied.

II. BACKGROUND

Plaintiff applied for SSI and SSDI benefits on May 31, 2016. (R. 333, 340). Following an initial denial, Plaintiff requested and received a hearing before an Administrative Law Judge (“ALJ”). (R. 198-204, 206). ALJ Andrew Soltes held a hearing on January 2, 2018, (R. 85-139), and on March 8, 2018, issued a decision finding that Plaintiff was not disabled within the meaning of the Social Security Act (R. 176-88). Plaintiff filed a request for review of that decision with the Appeals Council. (R. 195-96). On June 22, 2019, the Appeals Council granted Plaintiff's request for review, vacated the ALJ's decision, and remanded the case back to ALJ Soltes for further proceedings. (R. 195-96). On February 18, 2020, ALJ Soltes, held a second hearing, (R. 34-83), and on March 30, 2020, issued a second decision finding that Plaintiff was not disabled. (R. 11-24). On March 19, 2021, after the Appeals Council denied Plaintiff's request for review, (R. 1-3), Plaintiff filed the instant action, (Dkt. No. 1).

On June 21, 2018, between Plaintiff's first and second hearings before ALJ Soltes, the Supreme Court issued Lucia v. S.E.C., 138 S.Ct. 2044 (2018), holding that because the Appointments Clause allowed “[o]nly the President, a court of law, or a head of department” to appoint “Officers of the United States,” 138 S.Ct. at 2051 (citing U.S. Const. art. II, § 2, cl. 2), and the Securities and Exchange Commission's (“SEC”) ALJs were “Officers of the United States,” they had been unconstitutionally appointed, id. at 2055. The “‘appropriate' remedy for an adjudication tainted with an appointments violation,” the Court explained, was “a new ‘hearing before a properly appointed' official.” Id. (quoting Ryder v. United States, 515 U.S. at 182-83).

On July 16, 2018, recognizing that Social Security ALJs, like the SEC ALJs at issue in Lucia, had been unconstitutionally appointed because they “had been selected by lower level staff rather than appointed by the head of the agency,” Carr v. Saul, 141 S.Ct. 1352, 1357 (2021), the SSA's Acting Commissioner “pre-emptively ‘address[ed] any Appointments Clause questions involving Social Security claims' by ‘ratif[ying] the appointments' of all SSA ALJs and ‘approv[ing] those appointments as her own.'” Carr, 141 S.Ct. at 1357 (quoting 84 Fed.Reg. 9583 (2019)). Thus, while ALJ Soltes had not been constitutionally appointed at the time of Plaintiff's first hearing, by the time ALJ Soltes conducted Plaintiff's second hearing on February 18, 2020, (R. 34), he had been constitutionally appointed.

In this action, Plaintiff argued that because ALJ Soltes had not been constitutionally appointed at the time of the first hearing, she was entitled, under Lucia, to a different ALJ at the second hearing and that, in any event, the Commissioner's finding that she was not disabled, was not supported by substantial evidence. (Dkt. No. 14). The Commissioner responded that: (1) Plaintiff failed to preserve any Appointments Clause challenge by not objecting to ALJ Soltes's appointment during the proceedings below; (2) any Appointments Clause issue was cured because the first decision was vacated on the merits allowing ALJ Soltes, who was properly appointed by the time of the second hearing, to consider Plaintiff's disability claim anew; and (3) there was no error with respect to the merits. (Dkt. No. 15). The Court found that the Supreme Court's decision in Carr^[2]-that “claimants are not required to exhaust [Appointments Clause] issues in administrative proceedings to preserve them for judicial review”-foreclosed the Commissioner's first argument. (Dkt. No. 18, at 5 (citing Carr, 141 S.Ct. at 1362)). However, the Court found the Commissioner's second argument-that Lucia and Carr did not require remand where, as here, the ALJ was properly appointed by the time of the second hearing and the first decision had been vacated on the merits-was not without legal support. As the Court explained:

The district courts are divided. Compare Camille B. v. Kijakazi, No. 20-cv-262, 2021 WL 4205341, at *3, 2021 U.S. Dist. LEXIS 176667, at *8-9 (E.D. Va. Sept. 15, 2021) (rejecting the plaintiff's Appointments Clause argument, explaining that because the ALJ was properly appointed by the time of the second hearing, and the Appeals Council had vacated the ALJ's first decision “on the merits,” “the reason behind the Court's remedy in Lucia,” which was “animated by the fear of an ALJ who has ‘no reason to think he did anything wrong on the merits-and so could be expected to reach all the same judgments' is not applicable here” (quoting Lucia, 138 S.Ct. at 2055 n.5)), and Govachini v. Comm'r of Soc. Sec., No. 19-cv-1433, 2020 WL 5653339, at *1 n.1, 2020 U.S. Dist. LEXIS 174254, at *1 n.1 (W.D. Pa. Sept. 23, 2020) (“ALJ Leslie Perry-Dowdell was properly appointed during the entirety of the administrative adjudication of this case after the Court had overturned her earlier decision. As such, even if the Court were inclined to permit Plaintiff to raise an Appointments Clause argument at this late stage of the proceedings, such a claim would be without merit.”), with Misty D. v. Kijakazi, No. 18-cv-206, 2022 WL 195066, at *2-3, 2022 U.S. Dist. LEXIS 11717, at *6 (N.D.N.Y. Jan. 21, 2022) (“[S]ince Plaintiff was not required to raise her Appointments Clause challenge before the SSA, it is not forfeited. Moreover, as the Commissioner concedes, ALJ Ramos was unconstitutionally appointed at the time he took testimony and rendered his first decision in 2016. The subsequent attempt to cure that defect when Commissioner Berryhill reappointed all of the agency's ALJs did not cure that defect”), and Hoerle v. Comm'r of Soc. Sec., No. 21-cv-11605, 2022 WL 2442203, at *16, 2022 U.S. Dist. LEXIS 117781, at *45 (E.D. Mich. June 16, 2022) (“[W]hile the Commissioner states that the Appointments Clause violation has been ‘cured' by vacating the earlier determination on its merits, sending the case back to the same ALJ for further determination would presumably address the substantive errors identified by the Appeals Council, but would not allow for the remedy set forth in Lucia: a new hearing and determination by a different ALJ”), report and recommendation adopted, 2022 WL 2440341, 2022 U.S. Dist. LEXIS 117726 (E.D. Mich. July 5, 2022), and Welch v. Comm'r of Soc. Sec., No. 20-cv-1795, 2021 WL 1884062, at *5, 2021 U.S. Dist. LEXIS 89478, at *15-16 (S.D. Ohio May 11, 2021) (same), report and recommendation adopted, 2021 WL 2142805, 2021 U.S. Dist. LEXIS 99408 (S.D. Ohio May 26, 2021), and Navarre L. v. Comm'r of Soc. Sec., No. 21-cv-05420, 2022 WL 190711, at *5-6, 2022 U.S. Dist. LEXIS 11511, at *15-16 (W.D. Wash. Jan. 21, 2022) (same).

(Dkt. No. 18, at 6-7). Ultimately, the Court found those cases that held “that rehearing by the same ALJ, even if properly appointed, d[id] not cure the Appointments Clause defect, to be more persuasive,” granted Plaintiff's motion for judgment on the pleadings and remanded this matter for a new hearing before a different ALJ. (Dkt. No. 18, at 7). Having found that remand was required on the Appointments Clause issue, the Court did not address the underlying merits of Plaintiff's disability claim.

III. DISCUSSION

A. Standard - EAJA

The EAJA provides, in relevant part, 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 . . . 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 Commissioner bears the burden of showing that [her] position was ‘substantially justified,' which the Supreme Court has construed to mean ‘justified to a degree that could satisfy a reasonable person.'” Ericksson v Comm'r of Soc. Sec., 557 F.3d 79, 81 (2d Cir. 2009) (quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988)). This requires the Commissioner to “demonstrate that his position had a reasonable basis both in law and fact.” Id. (internal quotation marks omitted). “When assessing the ‘position of the United States,'” the court must “review both ‘the position taken by the United States in the civil action, [and] the action or failure to act by the agency upon which the civil action is based.'” Id. at 82 (quoting 28 U.S.C. § 2412(d)(2)(D))....