IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Robert D. Lewis, :

 Plaintiff, :

 v. : Case No. 2:12-cv-0490

Commissioner of Social : JUDGE MICHAEL H. WATSON

 Security, Magistrate Judge Kemp

 :

Defendant. 

 REPORT AND RECOMMENDATION

AND ORDER

 Plaintiff, Robert D. Lewis, filed this action seeking review

of a decision of the Commissioner of Social Security denying his

application for disability insurance benefits. As the complaint

reflects, Plaintiff did not receive timely notification of the

ALJ’s decision in his case (if, in fact, one was ever made), and

the Appeals Council determined that his effort to appeal the

merits of that decision was untimely. In his complaint, he

sought an order directing the Appeals Council to accept and

adjudicate his appeal.

After service was made, the Commissioner moved to remand the

case pursuant to 42 U.S.C. §405(g), sentence six. Doc. 7. In

that motion, the Commissioner represented that Plaintiff had

timely submitted his arguments to the Appeals Council, and that

upon remand the Appeals Council would decide the appeal on its

merits. Without objection from Plaintiff, the Court granted the

motion. Doc. 8.

A little more than a year later, Plaintiff moved to reopen

the case, stating in that motion (Doc. 9) that a fully favorable

decision had been issued on remand. The case was reopened and

the Clerk entered judgment. Plaintiff then moved for an award of

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attorneys’ fees under the Equal Access to Justice Act, 28 U.S.C.

§2412. Doc. 12. The motion has been fully briefed. For the

following reasons, it will be recommended that the motion be

granted in substantial part, although the parties will be

directed to supplement the record in one aspect before a final

determination of the amount of the fee can be made. 

I. Legal Standard

The Equal Access to Justice Act, 28 U.S.C. §2412, provides,

in pertinent part, that the Court shall award to a prevailing

party other than the United States attorneys' fees and expenses

"unless the court finds that the position of the United States

was substantially justified or that special circumstances make an

award unjust." 

 The party seeking an award of such fees and expenses is

required to submit a fee application to the court within 30 days

of the date that the judgment became final and non-appealable. 

The application must demonstrate that the party is a prevailing

party and is eligible to receive a fee award. It must also

document the amount sought, including an itemized statement from

the attorney or attorneys involved, and must allege that the

position of the United States was not substantially justified. 

The court is then required to determine, on the basis of the

record, whether the position of the United States was

substantially justified. Attorneys' fees are limited to the rate

of $125.00 per hour "unless the court determines that an increase

in the cost of living or a special factor, such as the limited

availability of qualified attorneys for the proceedings involved,

justifies a higher fee." 

 Once a petition has been filed alleging that the position of

the United States was not substantially justified, the United

States has the burden of demonstrating such justification. See

Miller v. United States, 831 F. Supp. 1347, 1351 (M.D. Tenn.

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1993) ("The burden lies with the government to demonstrate that

its position was substantially justified ...."); Weber v.

Weinberger, 651 F.Supp. 1379, 1388 (E.D. Mich. 1987) ("with

respect to an application for attorney's fees the Government has

the burden of showing that its position was substantially

justified."); see also Howard v. Heckler, 581 F. Supp. 1231, 1233

(S.D. Ohio 1984). The question of whether the United States’

position is substantially justified is determined based upon the

standards set forth in Pierce v. Underwood, 487 U.S. 552 (1988). 

In Pierce, the Court concluded that the phrase "substantially

justified" as used in the EAJA means justified "to a degree that

could satisfy a reasonable person." Pierce, supra, at 565. As

the Court noted, that test "is no different from the 'reasonable

basis both in law and fact' formulation adopted by the Ninth

Circuit and the vast majority of other Courts of Appeals that

have addressed this issue." Id., citing, inter alia, Trident

Marine Construction, Inc. v. District Engineer, 766 F.2d 974 (6th

Cir. 1985). An agency decision that is not supported by

substantial evidence may still be one that has a reasonable basis

in law and fact. Jankovich v. Bowen, 868 F.2d 867 (6th Cir.

1989). Consequently, this Court is required to apply the

"reasonable basis in law and fact" test set forth in Trident

Marine Construction to this application for attorneys’ fees.

II. The Application for Fees

In this case, Plaintiff’s counsel, Clifford M. Farrell,

represents that he spent 74.75 hours on this case in the District

Court and at the administrative level after remand. He requested

an award of $14,950.00 for the time spent, at an hourly rate of

$200.00, plus court costs of $368.87. The total award sought by

the motion was $15,318.87. Doc. 12. That has been increased by

time spent on the reply - 12.75 hours, billed at $200.00 per

hour, for a total of $2,550.00 in additional fees - so that the

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total award now being sought is $17,868.87. 

In the response (Doc. 17), the Commissioner takes issue both

with the number of hours spent on the case and the proposed

hourly rate of compensation, and also argues that the litigation

position taken by the Commissioner in this Court was

substantially justified. The Court will address that question

first.

 III. Discussion

A. Entitlement to a Fee Award

The Commissioner’s position on the issue of substantial

justification can be stated simply. The Commissioner argues (and

the docket confirms) that the Commissioner did not defend this

case in any way. Rather, within 30 days of the date of service

of the complaint, the Commissioner asked for a remand. The

Commissioner contends that “he acted as reasonably as possible

under the circumstances.” Opposing Memorandum, Doc. 17, at 5. 

The Commissioner’s brief also points out that the award of

benefits was not based solely on the record as it was presented

to the Appeals Council by way of Plaintiff’s appeal, but relied

instead on additional applications and a new consultative

examination which was ordered after remand. For those reasons,

the Commissioner claims that Plaintiff has not shown an

entitlement to an award under the EAJA.

Plaintiff’s primary response to this argument is to cite the

Court to the Court of Appeals’ decision in Marshall v. Comm’r of

Social Security, 444 F.3d 837 (6th Cir. 2006). Plaintiff

contends that in the Marshall case, like this case, the

Commissioner filed a motion to remand filed in lieu of an answer

and did not concede legal error, yet the Court of Appeals found

an award of fees under the EAJA to be appropriate.

The precise question presented in Marshall was whether a

party who obtains a sentence six remand at the behest of the

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Commissioner, and then prevails on remand, is also a prevailing

party for EAJA purposes. The Court of Appeals observed that the

district courts retain jurisdiction after a sentence six remand

and that the district court in that case actually entered a

judgment in the plaintiff’s favor after the remand process was

complete. Based on those facts, it held that the judgment

conferred prevailing party status on the plaintiff. Since the

district court had concluded otherwise, the case was remanded for

a determination of whether the Commissioner’s position was

substantially justified. 

The Court of Appeals in Marshall was not asked to determine

if the Commissioner could escape liability for an EAJA fee award

by agreeing, quickly and reasonably, to a voluntary remand. 

Consequently, the precise holding in Marshall does not answer the

question posed by the Commissioner’s opposing memorandum filed in

this case. The district court, however, answered that question

when it awarded fees under the EAJA in a memorandum order filed

on August 31, 2007. See Marshall v. Comm’r of Social Security,

Case No. 7:02-cv-00041 (E.D. Ky.), Doc. 40.

Indirectly, however, the Court of Appeals addressed that

issue as well. It did not rule out the possibility of a fee

award under the EAJA just because the case had been remanded by

stipulation without the filing of an answer; in fact, the

decision strongly implies that had the record of administrative

proceedings been filed with the district court prior to the

appeal, it could have decided itself the issue of whether the

Commissioner’s overall position was substantially justified. 

Marshall both quoted 28 U.S.C. §2412(d)(1)(B), which says that

the “substantially justified” decision must be made on the basis

of the record “including the record with respect to the action or

failure to act by the agency upon which the civil action is

based,” and stated that as a result of the absence of the

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administrative record, “we cannot determine whether the

Commissioner’s position below was ‘substantially justified.’” 

Marshall, 444 F.3d at 842.

The Commissioner has not cited any cases which appear to

hold that, if the Commissioner determines that the underlying

administrative decision is not defensible and that a stipulated

remand is the right result, a subsequent EAJA application must be

denied. The case law suggests just the opposite - that is, that

“[t]he government thus must justify both positions [i.e. the

administrative position and the litigation position] to avoid

liability for EAJA fees.” Torres v. Barnhart, 2007 WL 1810238,

*9, 120 Soc.Sec.Rep.Serv. 536 (S.D.N.Y. June 25, 2007). See also

Hardy v. Callahan, 1997 WL 470355, *6 (E.D. Tex. Aug. 11,

1997)(rejecting the argument that EAJA fees were inappropriate

because the Commissioner sought a sentence four remand after the

case was filed, and stating that “[t]he Government's position at

the agency level was not substantially justified, which is a

sufficient basis upon which an award of attorney's fees and costs

may be granted”). Courts in this Circuit routinely award fees

under the EAJA where the Commissioner consents to a sentence four

remand instead of contesting the matter - which is inconsistent

with the argument that if the Commissioner chooses not to defend

an indefensible position, the reasonableness of that decision, by

itself, defeats any application for fees under the EAJA. See,

e.g., Mullins v. Astrue, 2012 WL 298155 (S.D. Ohio Feb. 1, 2012),

adopted and affirmed 2012 WL 628508 (S.D. Ohio Feb. 27, 2012);

see also Bernhart v. Comm’r of Social Security, 2013 WL 3822141

(N.D. Ohio July 23, 2013). 

Here, the Commissioner does not argue that the agency

decision which was the subject of the initial complaint - the

Appeals Council’s refusal to hear Plaintiff’s appeal on grounds

that it was untimely, after the Appeals Council itself had set a

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deadline for submitting arguments in support of the appeal - was

substantially justified. As the Hardy decision points out, the

lack of justification for that decision is enough to support an

award of fees under the EAJA. That is the only argument advanced

by the Commissioner in opposition to the Plaintiff’s claim of

entitlement to a fee award. Consequently, the Court concludes

that Plaintiff may obtain fees in this case because the

Commissioner has not demonstrated that both the litigation

position taken and the underlying agency action were

substantially justified. 

B. The Hourly Rate

The Commissioner also contests the amount of the requested

award, contending that the 1996 statutory rate of $125.00 should

cap any fee award made here. According to the Commissioner, the

higher rate requested by Plaintiff is “arbitrary” and he has not

“tie[d] his request for an increased hourly rate to the cost of

living or cost of providing legal service[s].” Commissioner’s

Memorandum, Doc. 17, at 6. Relying on the Court of Appeals for

the Seventh Circuit’s decision in Mathews-Sheets v. Astrue, 653

F.3d 560 (7th Cir. 2011), the Commissioner argues that Plaintiff

was required to show that his “costs of providing adequate legal

service to a person seeking relief against the government have

increased since 1996,” Doc. 17, at 7, and that he had not done

so. The Commissioner also cites to a few scattered cases in this

District where social security attorneys have chosen not to ask

for more than $125.00 per hour, but, in the Court’s view, they

have no precedential or persuasive value since counsel may

choose, for various reasons, not to seek fees in excess of that

rate, and many other social security attorneys choose the exact

opposite approach.

The key question here is whether Plaintiff has adequately

documented an increase in the overall cost of living which can be

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applied to the $125.00 rate found in the EAJA. There is no

requirement, in this Circuit, that the Plaintiff show an increase

in counsel’s actual cost of providing legal services; the text of

the EAJA refers only to “an increase in the cost of living,” see

28 U.S.C. §2412(c)(2)(a), and, as this Court has said, “[t]he

Consumer Price Index ... is the best indicator for computing the

increase in the cost of living.” Crabtree v. Colvin, 2013 WL

1314875, *1 (S.D. Ohio Mar. 29, 2013).

In support of his motion, Plaintiff has submitted a cost of

living calculator sheet, the authenticity of which the

Commissioner does not challenge. The Commissioner is correct,

however, that the $200 per hour rate being requested is somewhat

arbitrary in the sense that counsel has not tied it to the cost

of living increases shown on his exhibit, and the supporting

memorandum concedes that the rate “is slightly above BLS [Bureau

of Labor Standards] cost of living calculations.” Counsel has

pointed to no authority for an award of fees above the statutory

cap as adjusted for increases in the cost of living, so the rate

he has asked for may not be awarded. 

In a recent case, this Court found that the appropriate

adjusted rate for services performed in 2012 was $180.00; for

2013, $182.50; and for 2014, $186.25. These figures were derived

from the Midwest Urban CPI, beginning with the index from March,

1996, which is the date the EAJA’s $125.00 rate went into effect. 

See Hardy v. Comm’r of Social Security, 2014 WL 3687767, *2 (S.D.

Ohio July 24, 2014), adopted and affirmed 2014 WL 4385745 (S.D.

Ohio Sept. 4, 2014). The Court does not have that same evidence

here, because the exhibit submitted only dates to 2004 and does

not appear to reflect the Midwest Urban CPI. If the evidence

submitted in Hardy were used here, the preliminary fee

calculation would look like this:

2012 - 45.5 hours x $180.00 = $8,190.00

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2013 - 12.5 hours x $182.50 = $2,281.25 

2014 - 29.5 hours x $186.25 = $5,494.37.

Total fee = $15,965.62

The problem with using this figure as the starting point for

a fee award is that, as noted, the current record does not

support this precise cost of living adjustment. That is a

curable defect, however. Consequently, one of two courses of

action is open to the parties in order to address this issue. 

Plaintiff can submit appropriate cost of living data to support

these hourly rates, or the parties can stipulate to the hourly

rates used in this calculation while reserving the right to

challenge the other decisions reached in this Report and

Recommendation. Either should occur within fourteen days. If

Plaintiff chooses to submit additional evidence, the Commissioner

will have fourteen days to respond to it. The time for filing

objections to the Report and Recommendation will not run until

the final award is calculated.

C. Reasonableness of the Hours Spent

The Commissioner’s final argument is that the time spent by

counsel on the case was excessive and that it includes time spent

performing clerical functions. As the Court understands them,

the Commissioner’s contentions are: 

1. Any “judicial time” spent after the Commissioner moved

to remand the case is not compensable because there were no

court-related issues to be resolved after that; 

2. The number of hours (38.5) spent in drafting the

complaint and other activities preceding the motion to remand are

excessive; and

3. “[A] significant number of hours Plaintiff’s attorney

seeks compensation are clerical or secretarial tasks and should

not be compensated,” such as drafting routine correspondence,

making phone calls, calendaring receipt of documents, and

gathering exhibits to attach to the complaint. See Doc. 17, at

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9.

In his reply, Plaintiff devotes less than a full page of

argument to these contentions. Most of the reply addresses the

question of whether time spent during the administrative process

after remand can be compensated under the EAJA. However, the

Court does not read the Commissioner’s memorandum as raising that

issue. The only other observation made in the reply brief is

that “[t]he identified hours in Plaintiff’s original Motion are

clear and well documented.” Doc. 18, at 9. The original motion

points out that no charge was made for some administrative or

clerical-type activities. It is also accompanied by an affidavit

from counsel declaring that “[a]ll of the time spent on this case

was necessary in order to provide competent representation of my

client.” Id., Exhibit B, ¶13.

Having reviewed the itemization of time spent on judicial

proceedings prior to remand, the Court finds that a few time

entries do not appear to be compensable. A May 30, 2012 entry

(1.25 hours) for preparing correspondence to the Appeals Council

seems to be time spent on the prior administrative proceeding. 

A June 1, 2012 entry for marking exhibits and editing the

complaint (2.25 hours) would appear to be either excessive or to

contain time spent on clerical tasks. 1.5 hours seems more

reasonable. The same is true for the 2-hour entry of June 5,

2012 which includes time reviewing exhibits and correlating and

cross-referencing them with the complaint. One hour of attorney

time seems sufficient to do that. Making those deductions, which

total three hours, reduces the 2012 court time to 42.5 hours. In

the post-remand proceedings, there are numerous entries for

checking on the status of the Appeals Council’s progress as well

as communicating that to the client, and also processing the

claimant’s new address. Some of this is clearly administrative

time, and the Court will make a 1.5-hour reduction for that work,

bringing the 2013 time down to 11 hours. Absent more specific

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argument from the Commissioner about specific time entries (and

the Commissioner does not address any specific time entry in the

opposing memorandum), the Court will not make any further

reductions based on the arguments advanced by the Commissioner.

The result of these reductions can be stated this way:

 2012 - 42.5 hours x $180.00 = $7,650.00

2013 - 11.0 hours x $182.50 = $2,007.50 

2014 - 29.5 hours x $186.25 = $5,494.37.

Total fee = $15,151.87

That is the fee award the Court would recommend, plus costs, if

the record supported the hourly rates used in the calculation.

IV. Recommended Decision and Order

For these reasons, it is recommended that the Plaintiff’s

motion for an award of fees under the Equal Access to Justice Act

(Doc. 12) be granted in substantial part. Within fourteen days,

the parties may either stipulate to the hourly rates set forth

above, or Plaintiff may supplement the record with appropriate

evidence of the Midwest Urban CPI from March, 1996 to date. If

that occurs, the Commissioner shall have fourteen days to respond

to the new evidence. The time for objecting to any portion of

this Report and Recommendation, including the determination that

Plaintiff is entitled to a fee award and the determination of the

number of hours for which compensation should be paid, shall not

begin to run until the final fee award is calculated and a

supplemental Report and Recommendation is issued.

/s/ Terence P. Kemp 

United States Magistrate Judge

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