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 The parties have consented to Magistrate Judge jurisdiction pursuant to 28 U.S.C. §

636(c).

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

KIMBERLY COWART, 

Plaintiff, Civil Action No. 08-14887

v. 

HON. R. STEVEN WHALEN

COMMISSIONER OF SOCIAL U.S. Magistrate Judge

SECURITY,

Defendant.

_____________________________/

OPINION AND ORDER RE: ATTORNEY FEES

This is a Social Security Disability case brought under 42 U.S.C. § 405(g). On March 30,

2010, this Court entered judgment in favor of the Plaintiff, remanding the case for further

administrative proceedings pursuant to Sentence Four of § 405(g). Before the Court at this time is

the Plaintiff’s motion for attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C.

§ 2412(d)(1)(A) [Doc. #20]. For the reasons discussed below, the Plaintiff’s motion is GRANTED.1

I. STANDARD OF REVIEW

The Equal Access to Justice Act (“EAJA”) is one of some 131 fee shifting statutes enacted

by Congress. See Coulter v. State of Tennessee, 805 F.2d 146, 148 (6th Cir. 1986). Specifically, 28

U.S.C. § 2412(d)(1)(A) provides, in pertinent part:

“Except as otherwise specifically provided by statute, 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 (other than cases sounding in tort), including

proceedings for judicial review of agency action, brought by or against the United

States...unless the court finds the position of the United States was substantially

justified or that special circumstances make an award unjust.”

In the context of a Social Security case brought under 42 U.S.C. § 405(g), a plaintiff such

as Ms. Cowart who wins a Sentence Four remand directing further administrative proceedings is a

“prevailing party” within the meaning of the EAJA. Shalala v. Schaefer, 509 U.S. 292, 301-302,

113 S.Ct. 2625, 125 L.Ed.2d 239 (1993). Thus, the salient question in the present case is whether

the position of the United States was “substantially justified.” Under the EAJA, the government

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has the ultimate burden of showing that its position was substantially justified such as to support a

denial of attorney fees. United States v. 0.376 Acres of Land, 838 F.2d 819, 829 (6th Cir. 1988);

United States v. True, 250 F.3d 410, 419, fn. 7 (6th Cir. 2001). The resolution of that question is

addressed to the district court’s discretion. Pierce v. Underwood, 487 U.S. 552, 563, 108 S.Ct.

2541, 101 L.Ed.2d 490 (1988).

In Pierce v. Underwood, 487 U.S. at 565, the Supreme Court defined the term “substantially

justified” as “justified to a degree that could satisfy a reasonable person.” However, in linking the

term to a standard of reasonableness, the Court cautioned that “[t]o be ‘substantially justified’

means, of course, more than merely undeserving of sanctions for frivolousness; that is assuredly not

the standard for Government litigation of which a reasonable person would approve.” Id., at 566.

II. ANALYSIS

A. Entitlement to Attorney Fees in the Present Case

Having won a Sentence Four remand, Ms. Cowart is a “prevailing party” within the meaning

of the EAJA. The question is whether the government’s position in this appeal was substantially

justified.

In the Opinion and Order entered on March 30, 2010, this Court held that in finding the

Plaintiff not disabled, the Administrative Law Judge (“ALJ”) erred in three critical respects. First,

his adverse credibility determination was flawed as a result of his overstatement of the Plaintiff’s

activities of daily living. Opinion and Order, p. 13. (“[T]he ALJ both overstated and gave undue

weight to the Plaintiff’s activities of daily living in making his credibility determination.). The Sixth

Circuit has recognized this type of error since at least 1967. See Walston v. Gardner, 381 F.2d 580,

586 (6th Cir. 1967).

Secondly, the ALJ improperly discounted statements made by the Plaintiff’s mother simply

because of her familial relationship. This Court found as follows:

“Ms. Sellers observed Plaintiff on a daily basis, and her remarks support a finding

of disability. The ALJ erred in rejecting her credibility without any explanation

other than a suggestion that, being Plaintiff’s mother, she was biased. If that were

the test, then why should the Commissioner even bother to solicit information from

relatives?” Opinion and Order, p. 14.

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Finally, there was an unexplained and possibly critical discrepancy between the number of

existing jobs testified to by the VE, and the number found by the ALJ in his opinion. This Court

found as follows:

“The VE testified to potential work as an assembler (1,000 jobs in the regional

economy), inspector (700), or counter clerk (inaudible) (Tr. 412). However, the ALJ

found that 9,000 assembler jobs existed in the national economy (increasing the VE’s

numbers by a factor of 9), and 4,700 inspector jobs (increasing the VE’s numbers by

a factor of 6.7) (Tr. 21). There is no evidence in this record to support the ALJ’s

finding as to the number of existing jobs.” Opinion and Order, pp. 14-15.

The ALJ’s flawed credibility determination alone casts doubt on the Commissioner’s

argument that its position was substantially justified. See Doud v. CSS, 314 F.Supp.2d 680 (E.D.

Mich. 2003) (ALJ’s finding of claimant’s lack of credibility not substantially justified where

claimant’s testimony was corroborated by medical opinions and testimony of family members). In

combination, I find that the three errors defeat the Commissioner’s substantial justification

argument.

The Commissioner points to this Court’s observation that “[t]o be sure, there is medical

evidence in this record that might support a finding of non-disability.” Opinion and Order, p. 15.

That is beside the point, and to accept the Commissioner’s reasoning would be inconsistent with the

rule that a plaintiff who wins a Sentence Four remand is a “prevailing party,” and thus entitled to

EAJA fees, without regard to whether he or she ultimately prevails on remand. Whatever the

outcome on remand, the ALJ’s errors in the first hearing infected the decisional framework to the

extent that no reasonable person could have confidence in his finding of non-disability. 

The Court therefore finds that the Commissioner has not carried his burden of showing that

his position was substantially justified, and therefore the Plaintiff is entitled to attorney fees under

the EAJA.

B. Amount of Attorney Fees

Attorney’s fees claimed under the EAJA must be reasonable. Glass v. Secretary of HHS, 822

F.2d 19, 21 (6th Cir. 1987). As the Supreme Court noted in Hensley v. Eckerhart, 461 U.S. 424, 433,

103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), “[t]he most useful starting point for determining the amount

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 The actual total is $4,555.09. Counsel has generously waived his claim to the extra nine

cents.

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of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a

reasonable hourly rate.” In Glass, 822 F.2d at 21, the Sixth Circuit, citing Coulter v. State of

Tennessee, 805 F.2d 146, 149 (6th Cir. 1986), recognized “that the rate-times-hours method of

calculation, also known as the ‘lodestar’ approach, includes most, if not all, of the factors relevant

to determining a reasonable attorney’s fee.”

Plaintiff’s counsel, Kenneth Laritz, claims a total of 26.33 hours in attorney time. This is well

within the norm for Social Security appeals. In Glass, the Sixth Circuit noted that “the experienced

district judge is very likely correct that twenty to thirty hours may well be the norm for attorneys to

handle most [Social Security] cases....” 822 F.2d at 20. Indeed, a review of counsel’s time sheet

shows that handled this fact-intensive case rather efficiently, consistent with his experience and

expertise in this area of the law. The Commissioner quibbles with 70 minutes of attorney time

claimed for what he characterizes as clerical tasks, such as ECF filing on five specific dates.

However, the billings for November 21, December 3, and December 15, 2008, and March 2 and

November 13, 2009 indicate that in addition to simply filing documents, counsel dictated and

reviewed correspondence. The Court is satisfied that all hours Mr. Laritz claims were reasonably

expended on behalf of his client.

As to the hourly rate, the statutory hourly maximum under 28 U.S.C. § 2412(d)(2)(A) is

$125.00, “unless the court determines that an increase in the cost of living or a special

factor,...justifies a higher fee.” Mr. Laritz suggests an hourly rate of $173.00, based on his

calculation of increases in the Consumer Price Index. While the Commissioner opposes an award

of fees in general, he has not specifically contested this hourly rate. Given the effect of inflation

since 1996, the Court finds that $173.00 per hour is a reasonable rate for work performed from

November, 2008 to June, 2010.

Accordingly, is entitled to EAJA fees in the amount of $4,555.00 (26.33 hours x $173).2

C. Who Gets the Fees?

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In Astrue v. Ratliff, ––– U.S. ––––, 130 S.Ct. 2521, 2224, 177 L.Ed.2d 91 (2010), the

Supreme Court held that EAJA attorney fees belong to the claimant, not to the claimant’s attorney,

and that the award of fees “is therefore subject to a Government offset to satisfy a pre-existing debt

that the litigant owes the United States.” In Ratliff, the claimant in fact owed the Government

a debt that predated the district court’s approval of the EAJA award. However, the Court noted,

albeit in dicta, that “the Government has...continued the direct payment [to attorneys] practice where

the plaintiff does not owe a debt to the government and assigns the right to receive the fees to the

attorney.” Id. at 2259.

Following Ratliff, a number of district courts have held that if there is an assignment of

EAJA fees, and if there is no pre-existing debt to the Government, then fees should be paid directly

to the attorney. See Hilker v. Astrue, 2010 WL 5553980, *1 (S.D.Ohio) (fees payable directly to

counsel based on assignment because government failed to identify any preexisting debt); Bates v.

Commissioner of Social Sec. 2011 WL 2149349, *3 (N.D. Ohio 2011) (“If Defendant determines

Plaintiff does not owe a debt to the government, and there is a valid assignment of the fees, the Court

sees no reason for the government not to honor the assignment and pay the fees directly to counsel”);

Walker v. Astrue, 2011 WL 1297744, *2 (M.D.Ala. 2011) (“[P]ursuant to the assignment agreement

between Plaintiff and counsel, attorney's fees may be made payable to Plaintiff's attorney, subject

to any offset which may be applicable”). But see Snyder v. Commissioner of Social Sec. 2011 WL

66458, *3 (N.D. Ohio 2011) (court order payment directly to plaintiff, with instructions to “leave

it to counsel to collect his fee from Plaintiff in accordance with their agreement”).

In this case, there is a written assignment of any EAJA fees from Ms. Cowart to her attorney.

As long she owes no pre-existing debt to the Government, there is nothing in Ratliff that would

prevent this Court from honoring her assignment. Indeed, to do so would at least partially address

Justice Sotomayor’s concern, expressed in her concurring opinion in Ratliff, that the decision “will

make it more difficult for the neediest litigants to find attorneys to represent them in cases against

the Government.” Id. at 2532 (concurring opinion of Sotomayor, J.).

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The Commissioner has not indicated whether in fact Ms. Cowart owes money to the

Government. I will therefore follow the common practice and give him the opportunity to determine

whether there is a pre-existing debt that would offset the EAJA fees. See Cutler v. Astrue 2011 WL

901186, *1 (N.D.Ohio) (N.D.Ohio,2011) (fees payable directly to attorney “after the defendant has

completed its customary investigation into any outstanding federal debts owed by the plaintiff”);

Taylor v. Astrue , 2011 WL 1261138, *2 (N.D.Ill. 2011) (“After the award is entered, if the

Government determines that plaintiff owes no such debts, the Government will direct that the fee

award and expenses be made payable to plaintiff's attorney pursuant to the EAJA assignment signed

by the parties”); Bates, supra, at *3 (“Courts...have been consistent in applying Ratliff for the

proposition that any award—regardless to whom it is paid—is first subject to offset for any

preexisting federal debt”). If there is not, then the EAJA fees will be paid directly to the Plaintiff’s

attorney.

III. CONCLUSION

Accordingly, Plaintiff’s motion for attorney fees in the amount of $4,555.00 is GRANTED.

No later than 14 days from the date of this Opinion and Order, the Commissioner will determine

whether the Plaintiff owes the Government a pre-existing debt. If no such debt is owed, then

payment of the EAJA fees will be made directly to Plaintiff’s attorney. If the Plaintiff does owe a

pre-existing debt, the EAJA fees will be offset by the amount of the debt, with any remainder to be

paid to Plaintiff’s attorney.

IT IS SO ORDERED.

s/R. Steven Whalen R. STEVEN WHALEN

UNITED STATES MAGISTRATE JUDGE

Date: June 14, 2011

______________________________________________________________________

CERTIFICATE OF SERVICE

I hereby certify on June 14, 2011 that I electronically filed the foregoing paper with the Clerk of the Court

sending notification of such filing to all counsel registered electronically. I hereby certify that a copy of this paper was

mailed to the following non-registered ECF participants on June 14, 2011: None.

s/Michael E. Lang Deputy Clerk to 

Magistrate Judge R. Steven Whalen

(313) 234-5217

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