United States District Court, W.D. North Carolina, Charlotte Division
STEPHEN J. ROWE JR., Plaintiff,
CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.
MAX O. COGBURN, Jr., District Judge.
THIS MATTER is before the court on defendant's Motion for Fees under EAJA. While the Commissioner did not oppose the Objections filed by plaintiff, the Commissioner now opposes granting plaintiff's request for attorneys' fees under the Equal Access to Justice Act ("EAJA") arguing that, because the magistrate judge recommended affirming the Commissioner's final decision, the position of the government was "substantially justified" as that term is used in EAJA.
EAJA authorizes the payment of attorneys' fees to a prevailing party in an action against the United States, unless the government shows that its position in the underlying litigation "was substantially justified." 28 U.S.C. § 2412(d)(1)(A). While EAJA creates a presumption that fees will be awarded to a prevailing party, Congress did not intend fee shifting to be mandatory. Flores v. Shalala, 49 F.3d 562, 567 (9th Cir.1995). The decision to deny EAJA attorney's fees is ultimately within the sound discretion of the court. Id.
A social security claimant is the "prevailing party" following a sentence-four remand pursuant to 42 U.S.C. § 405(g) either for further administrative proceedings or for the payment of benefits. Flores, 49 F.3d at 567-68 (citation omitted). Plaintiff was the prevailing party as he received a sentence-four remand for further proceedings.
In determining whether the government's position was substantially justified, the court applies a reasonableness standard. Flores, 49 F.3d at 569. "The government has the burden of proving its positions were substantially justified." Hardisty v. Astrue, 592 F.3d 1072, 1076 n. 2 (9th Cir. 2010). The government must demonstrate that its position had a reasonable basis in both law and fact, Flores, 49 F.3d at 569-70, and that standard is met if the government's position is "justified in substance or in the main" or "to a degree that could satisfy a reasonable person." Gutierrez v. Barnhart, 274 F.3d 1255, 1258 (9th Cir.2001) (citation and corresponding quotation marks omitted). When it elects to challenge an application for an award, the government must justify both the original agency action and its litigation position. Gutierrez, 274 F.3d at 1259.
In Pierce v. Underwood, 487 U.S. 552, 569 (1988), the Supreme Court held that "[c]onceivably, the Government could take a position that is not substantially justified, yet win; even more likely, it could take a position that is substantially justified, yet lose." Thus, whether the government prevails in its position on the underlying issues is not dispositive of the issue of whether the government's position was "substantially justified." Id . Where this court ultimately reverses the final decision of the Commissioner, that determination serves as a strong indicator that the government's position was not substantially justified. Thangaraja v. Gonzales, 428 F.3d 870, 874 (9th Cir. 2005) (holding that "it will be only a decidedly unusual case in which there is substantial justification under the EAJA even though the agency's decision was reversed as lacking in reasonable, substantial and probative evidence in the record") (internal quotations omitted).
The government contends that because the Commissioner successfully persuaded Honorable Dennis L. Howell, United States Magistrate Judge, to recommend affirmance of her final decision, the Commissioner's position must be, per force, substantially justified. Plaintiff disagrees and contends that because he was ultimately successful in having this matter remanded, the position of the Commissioner was not substantially justified and he is entitled to his attorneys' fees under EAJA.
The court has carefully considered the novel argument that because the Commissioner was successful before the magistrate judge, plaintiff is foreclosed from an award of EAJA fees. While the court appreciates the core logic of the Commissioner's argument, such argument does not take into account the impact of de novo review, creates a scenario where Article III jurisdiction over EAJA would be ceded where a magistrate judge issues a favorable recommendation, and, ultimately, amounts only to a factor, albeit an important one, which must be considered in a totality of the circumstances review under EAJA.
Where a magistrate judge enters a Memorandum and Recommendation ("M&R") as to the disposition of motions for summary judgment, either party may file objections and the opposing party may file a response. Fed.R.Civ.P. 72(b)(3). Where, as here, objections are properly raised, this court conducts a de novo review of those portions of the M&R objected to, as Rule 72(b)(3) requires:
The district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.
Fed.R.Civ.P. 72(b)(3). As the court may "accept, reject, or modify the recommended disposition, " it does not follow that a district court's discretion to award a fee under EAJA is foreclosed by an M&R that it declines to follow. Indeed, taken to its logical next step, the Commissioner's argument would automatically foreclose EAJA fees where the Commissioner is successful before the district court on the merits, but reversed on appeal. Webster v. U.S. Dep't of Agric., 685 F.3d 411, 421 (4th Cir. 2012)(finding that the standard of review on appeal of a summary judgment ...