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Schulz v. Colvin

United States District Court, D. South Dakota, Western Division

June 10, 2015

CAROLYN W. COLVIN, Acting Commissioner, Social Security Administration, Defendant.


JEFFREY L. VIKEN, Chief Judge.

On November 13, 2014, the court entered an order (1) reversing the decision of the Acting Commissioner of the Social Security Administration ("Commissioner") denying plaintiff Charles Schulz's application for benefits and (2) remanding the case for further administrative proceedings. (Docket 21). Pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, Catherine Ratliff, counsel for Mr. Schulz, timely moved for an award of attorney's fees and expenses. (Docket 23). Mr. Schulz seeks an award of $6, 629.84 in attorney's fees and $397.79 in state and local sales tax. (Docket 23 at p. 1). The Commissioner opposes Mr. Schulz's motion. (Docket 25). For the reasons stated below, the court grants Mr. Schulz's motion.


Under the EAJA, a court shall award to a prevailing party, other than the United States, fees and expenses[1] incurred 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). A party seeking such an award must comply with the following requirements: (1) the party must file an application for fees and expenses demonstrating the party is the prevailing party and is eligible to receive an award; (2) the party must submit the application within 30 days of final judgment in the case;[2] (3) the party must indicate the amount sought and provide an itemized statement in support; and (4) the party must allege the position of the United States was not substantially justified. 28 U.S.C. § 2412(d)(1)(B). "Whether or not the position of the United States was substantially justified shall be determined 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) which is made in the civil action for which fees and other expenses are sought." Id.

The court finds Mr. Schulz complied with the requirements of the EAJA. Mr. Schulz is the prevailing party under the court's reversal and remand order and subsequent judgment. (Dockets 21 & 22); see Larson v. Astrue, Civil No. 06-1734 PJS/FLN, 2008 WL 2705494, at *2 (D. Minn. July 9, 2008) (citing Shalala v. Schaefer, 509 U.S. 292, 301-02 (1993)) ("The Supreme Court has held that a judgment granting remand is a final judgment for which fees may be granted."). Mr. Schulz filed his motion for fees and expenses well within the EAJA's 30-day window following the close of the appeal period. (Docket 23). His attorney, Ms. Ratliff, set forth the amount requested and properly provided an itemized log detailing the actual time expended in this case. (Dockets 23 and 24-2).

The Commissioner opposes Mr. Schulz's motion, arguing the position maintained by the Commissioner throughout the appeal to the district court, although ultimately unsuccessful, was substantially justified. (Docket 25). The government bears the burden of proving its position was substantially justified. Goad v. Barnhart, 398 F.3d 1021, 1025 (8th Cir. 2005). A social security claimant may be the prevailing party for purposes of the EAJA, yet still not be entitled to an award of fees if the government's position was substantially justified. "A position enjoys substantial justification if it has a clearly reasonable basis in law and fact." Id. A loss on the merits by the government does not create a presumption that it lacked substantial justification for its position. Id. This distinction is explained as follows:

The district court correctly recognized that "fees are not... awarded just because the Secretary [loses a] case." The Secretary's position in denying benefits can be substantially justified even if the denial is unsupported by substantial evidence on the record as a whole. This is so because the substantial evidence and substantial justification standards are different. Under the substantial evidence standard, the district court must consider evidence that both supports and detracts from the Secretary's position. In contrast, under the substantial justification standard the district court only considers whether there is a reasonable basis in law and fact for the position taken by the Secretary. Because the standards are "neither semantic nor legal equivalents, " the Secretary can lose on the merits of the disability question and win on the application for attorney's fees.

Welter v. Sullivan, 941 F.2d 674, 676 (8th Cir. 1991) (internal citations omitted).

The court finds the government cannot meet its burden of showing substantial justification for the position it maintained in this case. The government's position was not well founded in fact or law, as explained in the court's reversal and remand order. Lauer v. Barnhart, 321 F.3d 762, 764 (8th Cir. 2003) ("The standard is whether the Secretary's position is clearly reasonable, well founded in law and fact, solid though not necessarily correct.'") (citation omitted).

The administrative law judge ("ALJ") erred not just once, but five times in critical areas during the administrative process of considering Mr. Schulz's application. Those were errors as follow:

1. After discovering that a vocational disability expert's report was not in the record, the ALJ placed the burden on Mr. Schulz to get the report into the record. (Docket 21 at pp. 6-7). When the expert's report became part of the administrative record, the ALJ did not require the supporting medical records of Dr. Wayne Anderson to be added to the administrative record. Id. at p. 7. When the absence of this medical record was pointed out, the Commissioner took the position those records were merely repetitive of other records. (Docket 17 at p. 6). The court found Dr. Anderson's diagnostic observations focused on an additional area of pain not referenced in other medical records. (Docket 21 at p. 8). Based on this finding the court concluded, "The absence of Dr. Anderson's medical records and report from the administrative record is not harmless." Id. at p. 9. "[T]he ALJ's failure to elicit [these materials] prejudiced [Mr. Schulz] in his pursuit of benefits." Id. (citation omitted).

2. The ALJ failed to request the documentation supporting Mr. Schulz's South Dakota Retirement System ("SDRS") disability benefits records. Id. "The ALJ is bound to consider the disability determination made by the SDRS." Id. at p. 10 (referencing 20 CFR § 404.1512(5)) ("evidence' includes the [d]ecisions by any governmental... agency about whether [the claimant is] disabled...."). Id. The ALJ "was obligated to obtain those records.... The ALJ's failure to develop the record is both unfair and prejudicial." Id. at p. 11.

3. The ALJ relied on the opinions of a non-examining physician whose opinion was premised on yet another non-examining physician's opinion which was expressed before a treating, board-certified physician's final opinions. Id. at pp. 14-15. "Dr. Whittle's record review was conducted before Dr. Lawlor's modified and more restrictive directive of April 2011." Id. at p. 15. Neither non-examining consulting physician "had access to the complete record." Id.

4. The ALJ also gave Dr. Lawlor's opinions concerning Mr. Schulz's physical limitations less weight by relying on a Ph.D. psychologist whose opinions were limited only to Mr. Schulz's mental status. Id. at p. 15 n.4. "Contrary to the ALJ's decision, there is substantial medical evidence to support Dr. Lawlor's ...

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