Torres v. Comm'r of Soc. Sec.

MIGUEL A. TORRES, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY^[1], Defendant.

Civil No. 19-2003 (CVR)

United States District Court, D. Puerto Rico

August 11, 2021

OPINION AND ORDER

CAMILLE L. VELEZ RIVE, UNITED STATES MAGISTRATE JUDGE.

INTRODUCTION

On October 23, 2019, Plaintiff Miguel A. Torres (“Plaintiff”) filed the instant case challenging the final decision of Defendant Kilolo Kijakazi, the Commissioner of Social Security (“Defendant” or “Commissioner”), denying him disability benefits.

The issue before the Court today is the propriety of attorney's fees pursuant to a consent remand to the Social Security Administration for further administrative proceedings considering the United States Supreme Court cases of Lucia v. S.E.C., 138 S.Ct. 2044, 201 L.Ed.2d 464 (2018) and Carr v. Saul, 141 S.Ct. 1352, 209 L.Ed.2d 376 (2021).

For the reasons explained below, the Court finds that the agency was substantially justified in its defense of this case and declines to award attorney's fees under the EAJA. Consequently, Plaintiff's “Motion for Attorney Fees Pursuant to the Equal Access to Justice Act” (Docket No. 38) is DENIED.

LEGAL ANALYSIS

On January 25, 2021, after the usual procedural history Plaintiff filed his Memorandum of Law, arguing that a remand was appropriate for two reasons. First, the Administrative Law Judge (“ALJ”) erred in the assessment of his mental condition and second, the ALJ had no valid constitutional authority to issue a decision according to Lucia. (Docket No. 29).

In Lucia, the Supreme Court granted certiorari to determine whether an ALJ in an enforcement proceeding before the Securities and Exchange Commission (“SEC”) was an Officer of the United States within meaning of Appointments Clause and therefore, had to be appointed by the President or an agency head. The Supreme Court held that these ALJs were Officers of the United States because they had career appointments to a continuing office established by law and exercised significant discretion in carrying out important functions. The Supreme Court further found the ALJs had all the authority needed to ensure fair and orderly adversarial hearings and nearly all the tools of federal trial judges. It further concluded that the appropriate remedy for an adjudication tainted with an Appointment Clause violation was a new hearing before a properly appointed official. Important to the instant case Lucia specifically ruled that a claimant was entitled to relief only if he/she made a timely administrative challenge to the ALJ's appointment.

Lucia concerned only ALJs from the SEC. However, as a precautionary measure, on July 16, 2018 then-Acting Commissioner of Social Security Nancy Berryhill reappointed the ALJs of the Social Security Administration, including both ALJs and Administrative Appeals Judges, under her own authority.

On April 22, 2021, after both parties filed their briefs, the Supreme Court decided Carr, which involved six petitioners whose Social Security disability petitions had been denied by an ALJ prior to Lucia. They challenged the outcome in federal court arguing that according to the Lucia holding, they were entitled to a fresh administrative review by constitutionally appointed ALJs. In each case, the Court of Appeals held that consistent with Lucia, petitioners could not obtain judicial review because they failed to raise those challenges in their administrative proceedings. The issue then in Carr was whether it was appropriate to impose an exhaustion requirement on Social Security challenges to the appointments of its ALJ's who presided over the cases. The Supreme Court ruled that exhaustion was not required given the non-adversarial nature of Social Security disability benefits proceeding. The Supreme Court further determined that Social Security Administration ALJs had no special expertise on constitutional challenges of their appointments. Therefore, the Social Security ALJs had no ability to accord the claimants relief on these constitutional claims.

On May 11, 2021, the parties to this case agreed to a consent remand for further administrative action under sentence four of 42 U.S.C. §405(g) so a different ALJ could re-examine the issues presented and issue a new opinion. (Docket No. 35). The consent remand was granted, and Judgment was entered accordingly. (Docket Nos. 36 and 37).

On May 24, 2021, Plaintiff filed a “Motion for Attorney Fees Pursuant to the Equal Access to Justice Act” (Docket No. 38) arguing that the government's position in this case was not substantially justified, as the agency was on notice since the Lucia decision that Social Security ALJ's were not constitutionally appointed. Plaintiff contends that, because the Commissioner agreed to the remand Plaintiff was the prevailing party and attorney fees in the amount of $8, 210.10 are justified.

In the Commissioner's opposition, she posits that the agency was substantially justified in its litigation position of Plaintiff's Appointments Clause challenge in view of the unsettled law at the time of the administrative proceedings and when the case was litigated in federal court. The Lucia holding involved ALJs from the SEC and it was not until the Carr decision in April of 2021 that the Supreme Court clarified that no exhaustion was required for constitutional challenges to Social Security ALJs. As to the merits of the claims, the Commissioner contends that she had a reasonable basis in fact and law to defend the substantive issues raised in Plaintiff's brief. Finally, she proffers that, should the Court find that the agency's defense was not substantially justified, the hours sought by Plaintiff's counsel be reduced as they are unreasonable. (Docket No. 43).

Section 2412(d)(1)(A) of the EAJA establishes 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 ... 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.” 28 U.S.C. § 2412(d)(1)(A).

The EAJA “is a fee-shifting statute that creates a right to attorney's fees in appropriate civil actions against the United States ... [i]t's purpose is to ensure that individuals are not deterred from seeking review of unjustified governmental action.” Rivera-Quintana v. Comm'r of Soc. Sec., 692 F.Supp.2d 223, 225 (D.P.R. 2010) (quoting Perkins v. Astrue, 568 F.Supp.2d 102, 103 (D.Mass. 2008)).

Eligibility for a fee award in any civil action under the EAJA requires the following: (1) that the claimant be a “prevailing party”; (2) that the Government's position was not “substantially justified”; (3) that no special circumstances make an award unjust; and (4) that any fee application be submitted to the court within 30 days of final judgment, supported by an itemized statement as required by 28 U.S.C. § 2412(d)(1)(B); see also Comm'r I.N.S. v. Jean, 496 U.S. 154, 158, 110 S.Ct. 2316, 2328-29 (1990).

The first element is easily met here because the Supreme Court held that a plaintiff is the prevailing party in a sentence four remand such as the one in the case at bar. See Shalala v. Schaefer, 509 U.S. 292, 301-302, 113 S.Ct. 2625, 2631-32 (1993).

It is in the second element that Plaintiff's request falters. “The Supreme Court has explained that for a government position to be ‘substantially justified,' it must have ‘a reasonable basis in law and fact' and be ‘justified to a degree that could satisfy a reasonable person.' ” McDonald v. Sec'y of Health & Human Servs., 884 F.2d 1468, 1475 (1st Cir. 1989) (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2, 108 S.Ct. 2541, 2551 (1988)). The government has the burden of showing that its position was substantially justified. Scarborough v. Principi, 541 U.S. 401, 124 S.Ct. 1856 (2004); 28 U.S.C. § 2412(d)(1)(A)).

Plaintiff begins by stating that “the SSA's already heavy burden of proving substantial justification is even more daunting in this case due to the Agency's admitted violation of this claimant's constitutional rights”. (Docket No. 45, p. 3). The Court is unclear how Plaintiff reached this sweeping conclusion because no citation was given by Plaintiff for this proposition. Plaintiff again mentions this in his discussion of the agency's judicial actions, where he states again that the agency knew this action was unconstitutional and criticizing its choice thereafter “not to correct actions which it knew to be unconstitutional”. Id. at p. 7. As previously stated, Lucia applied to ALJs of a different agency, and did not resolve whether it applied to ALJs of the Social Security Administration.

Plaintiff has raised the issue of the unconstitutional appointment of the ALJ that heard his case but failed to inform the Court in his motion for attorney's fees whether he complied with the Lucia directive at the administrative level, to wit, whether he made a timely constitutional challenge. Plaintiff did raise this issue in his brief arguing for remand (which was prior to the Carr decision) and admitted that he did not challenge the ALJ's appointment at the administrative level. (Docket No. 29, p. 28-29).^[2] Giving Plaintiff the benefit of the doubt and assuming the Lucia decision applied to Social Security ALJs, because Plaintiff failed to raise an Appointments Clause challenge in the proceedings below, this alone is sufficient to defeat his claim.

The Court, however, finds that the Lucia holding was not sufficiently clear, and that it was not until Carr that the subject of exhaustion was specifically applied to Social Security...