Galvez v. Bisignano -- A Rare COSS Appeal to the Ninth Circuit

On September 10, 2025, the Ninth Circuit published the opinion in Galvez v. Bisignano. The federal reporter fourth citation is pending as of the writing of this piece. 

The facts are simple. Galvez has been to the district court before. The case has been around for a very long time. The period at issue is 2008 to 2018. Eventually everyone grids out. A case that old implies or requires the inference that some of the older decisions are tainted by the appointments clause problem at issue in Carr v. Saul, 593 U.S. 83, 88–96 (2021). The Ninth Circuit extended Carr to hold that an ALJ that heard the case while not properly appointed may not hear the case on remand after being properly appointed. Cody v. Kijakazi, 48 F.4th 956 (9th Cir. 2022). In Galvez, a different ALJ incorporated at least some of the rationale stated by the prior ALJ. The district court held that incorporating the current ALJ may not use nearly identical or verbatim passages from the tainted ALJ decision. Lydia G. v. O'Malley. The district court reversed and remanded. The COSS appealed.

We win cases in the district courts. We win cases that the Office of General Counsel fought tooth and nail. Those cases don't get appealed. Why? Appealing a decision on the facts is not what Justice will allow OGC to do. OGC needs permission from the Solicitor General to file an appeal in federal court, particularly if the COSS has lost a case in a lower court. The Solicitor General's office within the Department of Justice has centralized authority over all federal government litigation and appeals. Garden variety fact-based decisions will not catch the eye of the SG. Where the district court errs on a matter of statutory interpretation on in this case on the Constitution, well we know that the SG greenlighted the appeal on this case. 

The clerk's office summary describes the holding of the case succinctly:

the new ALJ’s opinion, which incorporated part of a prior, tainted opinion, was not tainted by an Appointments Clause violation. Some similar, or even identical, text in a subsequent decision is not automatically disqualifying.

 Carr holds that an ALJ must have a proper appointment. 

Cody holds that an ALJ that heard the case without proper appointment cannot later rehear the case after proper appointment. 

Galvez holds that a properly appointed ALJ may decide the case and adopt parts of the invalid decision if "it reflects the newly assigned judge's independent view of the case." Slip op. at 4, see also 12, 19, 20. 

Galvez will get another crack at the most recent denial of benefits, this time on the merits. Galvez may still win. She has capable representation. James Tree is the counsel for the appellant in Stubbs-Danielson and Gatliff as well a ton of experience. If and when Galvez wins on the merits, the EAJA fees for fighting DOJ on appeal will become available. The prevailing private party need not prevail on every issue to get paid on every reasonable hour expended. 

Time for no quarter. 

___________________________

Suggested Citation:

Lawrence Rohlfing, Galvez v. Bisignano -- A Rare COSS Appeal to the Ninth Circuit, California Social Security Attorney (October 24, 2025)  https://californiasocialsecurityattorney.blogspot.com

The author has been AV-rated since 2000 and listed in Super Lawyers since 2008.

 

Culbertson -- Predictions

Culbertson v. Berryhill - a case in which the Supreme Court granted certiorari to resolve the split in the circuits.  The question presented:

QUESTION PRESENTED:

"Fees   for [the] representation of individuals claiming Social Security old-age, survivor, or disability benefits [at] the administrative and judicial review stages [are handled] discretely: [42 U.S.C.] § 406(a) governs fees for representation in administrative proceedings; § 406(b) controls fees for representation in court.” Gisbrecht v. Barnhart, 535 U.S. 789, 793- 794 (2002).  Section 406(b) specifies in particular that

[w]henever a court renders a judgment favorable to a claimant * * * who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due  benefits to which the claimant is entitled by reason of such judgment.

42 U.S.C. § 406(b)(l)(A) (emphasis added).

The question presented is:  Whether fees subject to § 406(b)'s 25-percent cap include, as the Sixth, Ninth, and Tenth Circuits hold, only fees for representation in court or, as the Fourth, Fifth, and Eleventh Circuits hold, also fees for representation before the agency.

 The chances of the Supremes granting certiorari went way up when the Solicitor General agreed that the Court should resolve the split among the circuits.  Is there a de jur 25% cap on fees when cases go to federal court?  We know that there is no cap if a case is resolved at the agency level only -- just a reasonableness cap.

So we all entered the merits stage sitting fat and happy -- the Supreme Court was going to agree that there did not exist a cumulative cap on fees under section 406(a) and (b), just a 25% cap on fees under 406(b).  The SG threw a curveball.  While a de jur 25% cumulative cap on fees did not exist, the agency and the courts could exercise their discretion to impose a 25% cap when the courts believed that a reasonable fee should not exceed 25% of the past due benefits.

So here are my predictions:

1.  Culbertson will win a pyrrhic victory.  The Supreme Court will vacate and remand back to the 11th Circuit the fee petition where the court will entertain the question of whether Culbertson can or should get 25% of the past due benefits plus keep the EAJA fee and the 11th Circuit will say "no."

2.  Whichever decides fees second, the agency or the court, will take the decision in Culbertson as permission if not a mandate to limit the aggregate fees in court remand cases to a de facto cumulative cap of 25% of the past due benefits.

3.  Neither party nor any amicus to date has explained why the attorneys would ever want overlapping or coterminous fees that exceed 25% of the past due benefits and so the Court will assume that no good reason exists other than trying to avoid the mandatory reimbursement provisions of the Equal Access to Justice Act.

4.  Attorneys that share fees to even out the 25% distribution on a pro rata basis will lose that ability because it will remain a crime for either to receive an unauthorized fee.

5.  In the anti-claimant representative era, the practice of  Social Security law will get more cumbersome thanks to Mr. Culbertson.

We can all expect changes that will not be good in the long run.  This arises from the desire to avoid the uncodified portions of the EAJA to refund to the claimant the smaller of the two fees under the EAJA and 406(b).

When the Commissioner Stipulates to Remand, the Plaintiff Always Gets EAJA Fees

Sample statement from the Court:

The problem: the Court knows nothing about this case. The government stipulated to a voluntary remand of the action to the agency for further proceedings on the disability benefits application – without any substantive court involvement. (Docket # 21.) As a result, the Court has no insight into the agency’s litigation position during proceedings with the ALJ or on appeal. That’s a prerequisite to a finding that Plaintiff is entitled to fees under EAJA. And it’s not addressed anywhere in Plaintiff’s form brief.

Response -- or should be in the fee petition if it gets that far:

The Commissioner stipulated to the remand of this matter.  The Court did not have the opportunity to determine the reasonableness of the Commissioner's position.  The Court should not hear the Commissioner's assertions of reasonableness now.  The Court does not weigh the reasonableness of the issues that the Court did not address on the merits.  Hardisty v. Astrue, 592 F.3d 1072, 1079 (9th Cir. 2010).
 The Court cannot find substantial justification in this case because to do so would require the inquiry into the merits of the Commissioner's position administratively and in forcing the matter into Court.  Hardisty precludes that inquiry.  Therefore, the Commissioner cannot sustain her burden of proof.  Floresv. Shalala, 49 F.3d 562, 569 (9th Cir. 1995). 

I submit that the upshot of the analysis is simple -- when the Commissioner stipulates to the remand of the matter, the plaintiff always prevails in the quest for reasonable fees and expenses.  This argument is tailored to Ninth Circuit caselaw.  

EAJA Timeliness and Prematurity

Every once in a while, a court will enter an order making a party the prevailing party in litigation involving the United States.  The court sometimes does not formally enter judgment.  Because of the 60 days in which to appeal a judgment of a District Court or 90 days in which to seek certiorari from a decision of the Court of Appeals, the intrepid attorneys for the prevailing party may wish to file before the entry of formal judgment or before the expiration of the time in which to appeal.

The Commissioner will complain that the application is premature.  Judgment has not been entered or the time in which to appeal has not expired.  These are spurious arguments designed to extend litigation, creates satellite litigation, and do not assist the Court in management of its docket.  A recent decision from the Court of International Trade, in Former Employee of Marlin Firearms, Co. v. United States Secretary of Labor, says the following about prematurity:

Regardless, the plaintiff did not make his application prematurely. Section 2412(d)(1)(B) requires “[a] party seeking an award of fees and other expenses” to submit its application “within thirty days of final judgment in the action.”  Legislative history and the weight of case law correctly interprets this language as creating only a final deadline for filing, rather than also establishing a time before which applications are premature, i.e., the entry of final judgment. See Equal Access to Justice Act, Extension and Amendment, H.R. Rep. 99-120(I), at 18 n.26 (1985), as reprinted in 1985 U.S.C.C.A.N. 132, 146 n.26 (stating that “fee petitions [under the EAJA] may be filed before a ‘final judgment,’” and disavowing “the overly technical approach” of a case holding that applications filed prior to final judgment are premature) (emphasis added); see, e.g., Haitian Refugee Ctr. v. Meese, III, 791 F.2d 1489, 1495 (11th Cir. 1986) (“[S]ince the district court has not entered final judgment, since the thirty-day limit has not begun, and sincethe time to appeal has not run, the application for attorneys’ fees was timely filed.”), vacated on other grounds, 804 F.2d 1573 (11th Cir. 1986); Gonzalez v. United States, 44 Fed. Cl. 764, 767 (1999) (“Congress did not intend to proscribe EAJApetitions filed prior to the start of the 30-daylimitations period.”). But see Perez v. Guardian Roofing, No. 3:15-cv-05623-RJB, 2016 WL898545, at *3 (W.D. Wash. Mar. 9, 2016) (“[Defendant’s] EAJA Counterclaim is premature,because EAJA contemplates that the submission of an EAJA application follows, not precedes, final judgment. This interpretation is supported by use of the word ‘within,’ . . . versus use of words such as ‘before’ or ‘prior to[.]’”). Because the plaintiff did not file the application prematurely, and because, regardless, Labor has waived its objection to the application’s timing,the court will consider the merits of the plaintiff’s motion.

 The prevailing party needs to prevail, not have judgment entered.  Animal Lovers v. Carlucci, 867 F.2d 1224, 1225 (9th Cir. 1989); Marks v. Clarke, 102 F.3d 1012, 1034 (9th Cir. 1996).  The whole idea of a premature EAJA petition is wrong.  Labor was wrong to wrong to raise it in Marlin Firearms but right to waive it.  

The EAJA Offset and 406(b) Fees

The Equal Access to Justice Act permits an attorney to obtain a fee outside of the confines of the Social Security Act.  The savings provision (Section 206 of Pub. L. 96–481, as amended by Pub. L. 99–80, §3, Aug. 5, 1985, 99 Stat. 186) provides in relevant part that:

Section 206(b) of the Social Security Act (42 U.S.C. 406(b)(1)) shall not prevent an award of fees and other expenses under section 2412(d) of title 28, United States Code. Section 206(b)(2) of the Social Security Act shall not apply with respect to any such award but only if, where the claimant's attorney receives fees for the same work under both section 206(b) of that Act and section 2412(d) of title 28, United States Code, the claimant's attorney refunds to the claimant the amount of the smaller fee.

 Parish v. Comm'r of Soc. Sec. Admin. reads the same work provision broadly, to include all civil actions on the application.  Morales v. Colvin applied the offset to EAJA fees paid for the work before the agency after remand under sentence six pursuant to Sullivan v. Hudson.

Enter the fray and apply Clark v. Astrue.  Clark holds that the plain text of 42 USC § 406(b) limited the dollar amount of fees awarded for cart work, not the combined fees for administrative work under §406(a) and (b).  The District Court held that it should reduce the amount of withholding by the administrative fee and by the EAJA fee.  The footnote in Clark explains the math:

The district court arrived at this figure as follows: $18,017 (25% of Clark's past-due benefits) minus $5,300 (amount awarded to Ms. Cook under § 406(a)) minus $6,058.68 (amount previously awarded to Mr. Halpern under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, for his representation of Clark in this matter). The district court's $6,058.68 deduction for the prior EAJA award is not at issue in this appeal.

Clark answered the question of whether the court could award $18,017 or whether it could only award $14,717, the amount of the withholding less the administrative fee.  The real question is whether it matters.

The agency will only withhold $18,017 under the facts of Clark.  The Commissioner certifies to the treasury the payment of the administrative fee of $5300.  The Commissioner continues to withhold $14,717.  Once the award exceeds $14,717, the most that the Commissioner will ever pay is $14,717.  The only time in which Clark makes sense is if the motion seeks in the order sets out a payment of $18,017 to the attorneys representing the plaintiff in the civil action for review by the District Court net of the EAJA fees already paid.  If the motion for fees seeks a "net" payment $11,958.32 on the premise that the net payment reimburses the client for the amount of the EAJA fees, all the while ignoring the administrative fee of $5300, and the proposition that the net fee award $758.68 in fee relief, then the savings provision of the EAJA has been satisfied.  In the real world, the most that the Commissioner would ever certify from the withholding is $14,717.  The Commissioner already certified $5300 to the administrative representative.  If the court ordered the fee of $18,017 and the attorney representing the claimant in court received $14,717, the savings provision requiring reimbursement of the smaller of the two fees for the same work would apply, resulting in a reimbursement to the claimant of $6058.68.

The question would then be whether the attorney could engage in self-help to make up the difference in the field awarded by the court ($18,017) in the amount actually certified by the Commissioner and paid by Treasury ($14,717) to the tune of $5300, and then reimbursing the client $758.68 and satisfy the statute.  To be sure, Clark is correct that the court fees and the administrative fees are separately calculated.  But that does not mean that when the available withholding is reduced by an administrative fee award and the residual was paid over to the court attorneys that those attorneys can then invade the reimbursement provisions of the savings award.

The court should never award a "net" fee under 42 USC § 406(b).  The 11th circuit got it wrong, completely wrong in Jackson v. Comm'r of Soc. Sec. Permitting the net fee award simply allows the attorney to evade the reimbursement.  Why else would the attorney have appealed the order in Jackson.   To keep the $3,371.93 in the EAJA fee.  Appealing for an accounting problem -- please.

Court Scrutiny of EAJA Settlements with a Federal Agency

The parties attempted to settle this matter, twice.  The court denied the opportunity to settle this matter because the Commissioner did not confess a lack of substantial justification.  Counsel  represents to the court that no other court in which he practices requires a confession of error or a confession of a lack of substantial justification in order to permit a represented party to resolve a matter of questionable or certain loss.  Would the court require the United States to admit to negligence in an action under the Federal Tort Claims Act in order to resolve a negligence claim?  Undoubtedly that would prevent resolution of claims because the alleged tort feasor rarely admits to liability in a settlement – the parties settle for reasons that they don’t admit to each other much less the world.  

The United States is never estopped in other cases because the Commissioner settled any claim arising under the EAJA.  New Hampshire v. Maine, 532 U.S. 742, 755 (2001) (citing Heckler v. Community Health Services of Crawford Cty., Inc., 467 U. S. 51, 60 (1984)).  Settlement does not conclusively establish weakness and the court should not penalize or discourage useful settlements.  Pierce v. Underwood, 487 U.S. 552, 568 (1988). 

And the risk to the fisc is significant.  The preparation of serial stipulations, motions, or other documents to evade the court’s requirement that a settlement include a confession of sin eats at the most valuable public and private asset of the parties – the time of their counsel.  Nor does this motion seeking the court finding of a lack of substantial justification help.  But for the settlement, this party would seek $4,600 in fees and expenses already itemized and additional time for the preparation of this motion.  Settlement allows the Commissioner to avoid some of its exposure in exchange for a sacrifice of some of the plaintiff’s potential fee recovery all with the serendipitous result that allowing parties to settle avoids the court’s expenditure of time and effort in the noble quest that the ably represented United States not give away the contents of the Treasury or the Social Security Trust Funds.   

In the final analysis, the court’s oversight of the EAJA process should not amount to a rigorous extraction of itemization and confession of each element of the fee request.  The court need exercise care in approving settlement of class actions because of the divergent interests of the class representatives, class counsel, and the members of the class.  Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (risk, expense, complexity, likely duration, amount offered, extent of discovery, stage of proceedings, experience and views of counsel, presence of a government entity, and view of the proposed class).   But those factors are not present in individual party litigation after the close of the merits.  Fees should not give rise to a second round of motion practice or litigation.  Hensley, 461 U.S. at 437.  The Supreme Court focused on the desired practice – “Ideally, of course, litigants will settle the amount of a fee.”  Id.  If the parties don’t settle, then and only then does the prevailing party bear the burden of proof of time, rates, and entitlement.  Id.  Where the parties resort to the ideal, the court should not put the parties to the expense of the unideal.  The court should approve the fee agreed upon by the parties.

Notes on McLean v. Colvin — and EAJA Case

In an unpublished opinion, the Ninth Circuit decided McLean v. Colvin, reversing the District Court's denial of fees and expenses under the Equal Access to Justice Act.  The case is important because it reinforces in a persuasive manner the proposition that an ALJ decision that lacks the support of substantial evidence or violates the law, the cases, or the rulings will lack safe refuge under the cloak of reasonableness.  Congress passed and Pres. Reagan signed the EAJA to offset the expense and burden of proceeding to court against the United States.  And unduly strict reading of the substantial justification doctrine defeats the purpose and intent of the act to reimburse partially that expense.

One word of caution is in order.  The court cites to Social Security Ruling 96-7p.  the Commissioner superseded that ruling with Social Security Ruling 16-3p on March 28, 2016.  Look for synthesis and comparison of the two rulings on this blog in the near future.


The Legal Kernels Derived from McLean

The court has jurisdiction pursuant to 28 USC § 1291.

The court reviews the decision of the district court for an abuse of discretion.  Tobeler v. Colvin, 749 F.3d 830, 832 (9th Cir. 2014). 

The ALJs mischaracterization of, and failure to weigh properly, the record evidence cannot be said to be justified to a degree that would satisfy a reasonable person.  Meier v.  Colvin, 727 F.3d 867, 870, 872 (9th Cir. 2013); cf. Sampson v.  Colvin, 103 F.3d 918, 921–22 (9th Cir. 1996).

The ALJ violated the Commissioner’s own regulations by failing to discuss side effects of medication and failing to explicitly state whether the side effects had adequately supported the temporary discontinuation of other medication.  Gutierrez v. Barnhart, 274 F.3d 1255, 1259 (9th Cir. 2001); Social Security Ruling 96-7p; 20 C.F.R. §§ 404.1529(c)(3)(iv); 416.929(c)(3)(iv). 

The ALJ’s failure to credit the testimony was not harmless because it affected the ultimate determination on the issue of medical improvement.  Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012).  

What Happens When Allowance Rates Drop ... to the Public Fisc

Ask any ALJ or any representative that handles Social Security disability claims -- allowance rates have dropped for the good judges, the bad judges, and those in between.  According to the ALJ disposition data figures, the allowance rate of all dispositions in FY 2010  was 46%.  The allowance rate for all decisions was 67%.  The allowance rate for all dispositions in FY 2015 was 37%.  The allowance rate for all decision was 53%. 

The allowance rates dropped by 9% for all disposition and 14% of all ALJ decisions.  Good for the public fisc, right?  The answer is counter intuitive and  the dilution of allowance rates just hurts those that cannot fend for themselves -- the disabled.  But it also hurts the public fisc. 

President Reagan advocated and signed into law the Equal Access to Justice Act to to give common people the ability to fight unreasonable government action.   28 USC sec. 2412.  As long as the person or organization meets the financial ceiling test, that person or organization can shift part of the fees to the United States for acting unreasonably.  The rate is $125 per hour adjusted potentially for inflation. 

In FY 2010, SSA paid $19 million in EAJA fees for making or defending flawed decisions denying human beings disability benefits.  In FY 2015, SSA paid $38 million in EAJA fees.  What happens when the ALJ corps succumbs to political pressure to deny benefits?  The corps does it badly.  Does it benefit the public fisc?  Not in terms of EAJA fees, the government doubled its EAJA outlay in five short years. 

EAJA Offset

The recurring question of the reduction of fee awards under 42 U.S.C. §§ 406(a); 1382(d)(2) (hereafter referred to generically as “406(a)”) by the amounts awarded under 28 U.S.C. § 2412.  The question arises where counsel has submitted a fee petition or the Social Security Administration reviews the reasonableness of the fees on a review under the expedited fee process on request by the claimant, counsel, or own timely own motion.  The result is the same regardless of the scenario under which counsel seeks fees under sec. 406(a) after having first received fees under sec. 2412. 

 The uncodified portion of the EAJA provides the short answer to the question.  The Savings Provisions of Section 206 of Pub.L. 96-481, as amended by Pub.L. 99-80, § 3, Aug. 5, 1985, 99 Stat. 186, provide that:

“(b) Section 206(b) of the Social Security Act (42 U.S.C. 406(b)(1)) [section 406(b) of Title 42, The Public Health and Welfare] shall not prevent an award of fees and other expenses under section 2412(d) of title 28, United States Code [subsec. (d) of this section].  Section 206(b)(2) of the Social Security Act [section 406(b)(2) of Title 42] shall not apply with respect to any such award but only if, where the claimant's attorney receives fees for the same work under both section 206(b) of that Act [section 406(b) of Title 42] and section 2412(d) of title 28, United States Code [subsec. (d) of this section], the claimant's attorney refunds to the claimant the amount of the smaller fee.”

 (Emphasis added); see also HALLEX I-1-2-91(A).[i]  This uncodified provision articulates the intent of Congress that counsel not receive and keep both EAJA and fees under 42 U.S.C. § 406(b) “for the same work” and if counsel receives both fees then counsel shall refund the smaller fee to the claimant. 

In a case remanded under 42 U.S.C. § 405(g)(sentence 4), the court enters judgment and counsel seeks EAJA fees immediately.  The court does not retain jurisdiction and the time invested on remand is not part of the court case.  See generally Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993).  Time invested by counsel either before the first exhaustion of administrative remedies or after the remand from the court are not part of the court case and are not “the same work.”  See also HALLEX I-1-2-91(B)(1). 

There are times when the EAJA fee can and should offset a fee payable under 42 U.S.C. § 406(a).  Those circumstances occur when the fee is “for the same work.”  The court retains jurisdiction and work performed on remand is part and parcel of the court case when the court remands pursuant to 42 U.S.C. § 405(g)(sentence 6).  Sullivanv. Hudson, 490 U.S. 877, 109 S.Ct. 2248, 104 L.Ed.2d 941 (1989); Melkonyan v. Sullivan, 501 U.S. 89, 111 S.Ct. 2157, 2162-63, 115 L.Ed.2d 78 (1991); Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993).  If and only if the court has retained jurisdiction over the proceedings on remand and awards fees pursuant to the EAJA for that time does the offset of the EAJA fee award from the fees payable for that time expended before the Social Security Administration arise.[ii] 

The policy concerns are appropriate.  The Congressional purpose in enacting the EAJA is patent.  Congress sought to offset the costs of litigating against the government where the United States could not prove that its position was substantially justified.  Scarboroughv. Principi, 541 U.S. 401, 124 S.Ct. 1856, 1861, 158 L.Ed.2d 674 (2004) citing H.R.Rep. No. 99-120, p. 4; see also POMS GN 03990.001.  In some circumstances, the EAJA fee may be the entire fee that counsel can receive.  See e.g. McGraw v. Barnhart, 370 F.Supp.2d 1141 (N.D. Okla. 2005) rev’d on other grounds 450 F.3d 493 (10th Cir. 2006).  The district court in McGraw illustrates the proposition that in many cases the EAJA fee is the only fee for the court work.  This can arise in small benefit level cases (e.g. SSI with income by a non-eligible spouse), closed period (including cases where the back benefit pool is cut off by the claimant getting benefits on a subsequent application with or without the encouragement or assistance of counsel), or other circumstances.  Reducing the fee payable for time spent before the Social Security Administration by the amount of the fee received by counsel before the courts defeats the intent of Congress that counsel only get paid once for each hour of work.  Reducing the administrative award by the court fees means one set of hours did not get paid, at all. 

It is a true observation that the claimant gets no true fee relief by the presence of the EAJA award not offsetting an administrative fee.  Where the administrative fee exhausts the 25% withheld for that purpose, the question raised is whether counsel can keep the entire EAJA fee for court work and the entire 25% for the administrative work.  The claimant has received some fee relief insofar as counsel had any incentive to take a case to the district court.  If it were not for the presence of EAJA fees, many cases would become unviable.  This would violate the intent of Congress that people have the resources to litigate against government action that is not substantially justified.  Therefore, allowing counsel to retain an EAJA fee and receive fully reasonable compensation for different hours expended before the Social Security Administration is correct.

Finally, any practice by an ALJ, ODAR, Region, or SSA generally to reduce the amount of the sec. 406(a) fees by the amount of the EAJA fees for different time means that counsel that seeks fees both before the Social Security Administration and before the courts for representation of a claimant will have the amount of the EAJA fees offset twice.  The courts will offset the amount of a fee payable under 42 U.S.C. § 406(b) by the amount of the EAJA fee.  Scarborough, 124 S.Ct. at 1862 fn. 2.  It is the court that is obligated not to offset the EAJA fee against the sec. 406(b) fee but to order counsel to reimburse the smaller of the two fees for time paid for twice. 

In light of the uncodified portion of the EAJA, the intent of Congress, and the possibility that in many cases the court will order the reimbursement against a fee payable under sec. 406(b), it is not appropriate to reduce, credit, offset, or otherwise take into account the amount of a prior EAJA award in setting the fees payable under sec. 406(a). 

---

[i] This section “provides that when a representative received fees for the same work under both section 206(b) of the Social Security Act and EAJA, the representative must refund to the claimant the amount of the smaller fee.”  The “NOTE” in the following paragraph ignores the operative phrase “for the same work.”  POMS GN 03990.040 clarifies the “for the same work” requirement for offset.  See also POMS SI 00830.100(B)(5). 

[ii] A fair question, beyond the pale of this position paper, is whether time expended by counsel after remand from the court under sentence 6 should be the focus of fees under sec. 406(a) or 406(b). 

Hardisty v. Astrue-- EAJA and Unreached Issues

 One of the frequent issues that comes up in the practice of law when fee shifting to the losing side becomes an issue concerns the question of recoverability of fees.  Many cases involve more than one issue and the prevailing party sometimes wins on all, some, or just one issue.  Sometimes the court reaches all the issues up or down, but with some degree of regularity does not decide all the issues.  The Ninth Circuit decisin in Hardisty v. Astrue decided in January 2010.  This post explores my opinions and observations on the case in particular and the subject in general. 

1.      Hardisty v. Astrue, the Boundaries of the Decision

Hardisty v. Astrue, 592 F.3d 1072 (9th Cir. 2010) cert. denied ___ U.S. ___ (2010) stands for the proposition that the Court should not consider issues it did not decide in determining substantial justification.  The Court’s reasoning is that fee litigation should not create satellite litigation and that determining substantial justification on unreached issues would necessarily require deciding those issues on the merits first.  In a case where the plaintiff prevailed, the Court decides whether the Commissioner was substantially justified administratively and in Court on the issues that the Court actually reached.  

In Casey v. Astrue, 2010 WL 2925094, *2 (E.D. Cal. 2010), the District Court did reduce the time paid by 6 hours for issues not reached, relying on Hardisty. The Court reasoned that it should not pay for time expended on issues not reached.  That constitutes an over-reading of Hardisty.  The Ninth Circuit held that issues not reached cannot form part of the calculus of whether to pay fees under the substantial justification analysis.  The issue of whether the Court should pay for such time became moot once the Court reached the issue before it in the negative.  Any reading of Hardisty for the proposition that the Court can or should deny fees for issues not reached or issues decided adversely to the plaintiff violates the law of the circuit.  See Natural Resources Defense Council, Inc. v. Winter, 543 F.3d 1152, 1162 (9th Cir. 2008) citing Hensley v. Eckerhart, 461 U.S. 424, 440, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Sorenson v. Mink, 239 F.3d 1140, 1147 (9th Cir. 2001).  Even in the event of limited success, the prevailing plaintiff recovers a full fee absent some special circumstance under the Equal Access to Justice Act.  For instance, raising a frivolous issue might satisfy the special circumstance question. 

Even if Hardisty wrote on a blank slate, a reading foreclosing compensation for some issues would not constitute the law of the circuit.  United States v. Johnson, 256 F.3d 895, 914 (9th Cir. 2001) (en banc) (opinion of Kozinski,.J.) (plurality) holds that:

where a panel confronts an issue germane to the eventual resolution of the case, and resolves it after reasoned consideration in a published opinion, that ruling becomes the law of the circuit, regardless of whether doing so is necessary in some strict logical sense.

The question of what could be paid in Hardisty was never germane to the question of whether Hardisty could overcome the Commissioner’s affirmative defense of substantial justification on the issue reached by the District Court in that case.  It would constitute an anomalous state indeed where a plaintiff could recover for an issue on which he lost under Winter and Sorenson but not recover on an issue that the Court did not reach.  The Court should reject the Casey extension of Hardisty as unwarranted and not justified by any part of the Hardisty opinion germane to the resolution of the issue before the Ninth Circuit in that case.

2.     Reasonableness of Time Expended

The crux of the Commissioner’s position is that plaintiffs should not recover fees for time not reasonably expended.  Certainly the Commissioner cannot press on the plaintiffs’ bar the prescience to know which issues the Court will decide first or place upon them the Hobbesian choice of waiving certain issues on the belief that another issue will win the day.  In the case of limited success, the Court should use the same paradigm whether the plaintiff lost outright on an issue or the Court chose not to decide an issue:  was the plaintiff reasonable in briefing that issue?  The failure to prevail raises a threshold question but does not resolve the issue.  The failure to reach an issue does not cut either way. 

The Court should use an ad hoc analysis to determine reasonableness of time expended.  The issue is fact dependent.  Time spent testing the sufficiency of an articulation may frequently be reasonable.  The case of Hardisty provides an illustrative analysis.  Assuming arguendo that the Court had decided that the Commissioner lacked substantial justification, the question that would arise is whether the plaintiff reasonably expended time addressing the treating and other physician testimony.  The two issues have clear commonality.  Whether the ALJ articulated specific and legitimate or clear and convincing reasons for rejecting that testimony would necessarily require consideration of the medical baseline, i.e. by how much does the plaintiff’s complaints of limitation exceed the objectively based limitations?  In Hardisty, a reasonable plaintiff’s lawyer would either have to include a full discussion of the medical evidence inside of the excess pain analysis or segregate that discussion into an issue of the treatment of the opinion evidence.  Briefing or not briefing the opinion evidence would save little time and potentially provide a more confusing or convoluted presentation.  Similarly, the plaintiff that prevails on a treating physician opinion must prove up that the boilerplate allegation that the physician merely regurgitated the subjective complaints requires a full consideration of the plaintiff’s testimony. 

The majority of the Social Security docket come before the Court at step 4 of the sequential evaluation process.  Did the ALJ properly consider and determine the plaintiff’s residual functional capacity?  That is the issue.  The knife that cuts through that issue comes in two basic serrations:  expert opinion evidence and lay evidence.  Within those two broad classifications, there are at least seven forms of evidentiary distinction.  Because those issues blend together under Reddickv. Chater, 157 F.3d 715, 725 (9th Cir. 1998) (rejecting the quantum of evidence approach), the circumstance where the government lacked substantial justification on one of the seven variations of residual functional capacity evidence and the plaintiff was unreasonable in briefing together or separately one or more of the other six variations should prove rare. 

More likely candidates for reasonableness analysis exist in the step 4 or 5 analysis of the ability to perform past relevant work or other work.  These two issues rely on the completeness of the hypothetical question or the variation of the vocational testimony from the DOT.  These issues always assume the adequacy of the ALJ’s determination of residual functional capacity.  When the plaintiff prevails on the ability to engage in substantial gainful activity question, it is more likely that the plaintiff may have unreasonably briefed the residual functional capacity issue on the first half of the step 4 analysis. 

The same kind of analysis holds true in the briefing of a step 2 medically determinable severe impairments question or a step 3 listings question.  Those issues have common facts but completely different legal principles than does a residual functional capacity issue.  Prevailing on step 2 medically determinable severe impairments question or a step 3 listings question would rarely if ever result in a finding that the plaintiff was unreasonable in questioning the residual functional capacity assessment at step 4.  Failing to prevail at step 2 medically determinable severe impairments question or a step 3 listings question but prevailing on the residual functional capacity question would leave open a question of reasonableness for case-by-case determination. 

3.     A Rough Application of Hardisty and Reasonableness

When a plaintiff prevails at a lower step of the sequential evaluation process, it would present a rare case that the plaintiff unreasonably briefed issues at a higher step of the sequential evaluation process.  Prevailing at steps 2 or 3 of the sequential evaluation process implies error at steps 4 or 5 of the sequential evaluation process as based on a legally or factually infirm foundation.  Although the burden of proof of reasonableness remains with the plaintiff, the burden of persuasion would shift to the Commissioner. 

When the Court is convinced that the classification of an impairment as either not medically determinable or non-severe at step 2 of the sequential evaluation process constitutes a material error in the adjudication of the claim, the Court should rarely proceed to consider the remaining steps of the sequential evaluation process unless the Court intends to order the payment of benefits on one or more of those issues. 

When the plaintiff prevails at a higher step of the sequential evaluation process and loses at the lower steps of the sequential evaluation process, the burden of proof and the burden of persuasion on the question of reasonableness would still remain with the plaintiff. 

Where the Court is convinced that the independent step 5 analysis resulted in a finding of ability to engage in substantial gainful activity arose out of legal error, the Court should never ignore the step 4 residual functional capacity question unless it is clearly frivolous or the Court is ordering the payment of benefits. 

Bassett v. Astrue

The Seventh Circuit Court of Appeals decided Bassett v. Astrue on May 27, 2011.  The facts are simple enough.  Bassett alleged that he was disabled in April 2005.  The Administrative Law Judge found that he became disabled in December 2007.  Losing 32 months of benefits translates for most disability recipients to around $30,000.  For someone that has lost the ability to engage in work, that is a healthy chunk of change.

The ALJ found that Bassett could perform "light" work in 2005 but by the end of 2007 he had gotten worse and could perform only "sedentary" work.  Bassett turned 55 in December 2007.  The ALJ picked Bassett's birthday as the date that his ability to perform work changed from light to sedentary.  Because Social Security disability considers age, Bassett wins at 55 whether he could perform light or sedentary other unskilled work, only.  If Bassett were under 55 and limited to sedentary unskilled work, he wins disability benefits.  The United States District Court for the Central District of Illinois decided that the ALJ had made a mistake in picking Bassett's 55th birthday as the date that he could no longer perform light work but was limited to sedentary work.  Bassett won the court case.  Implicit in the decision of the District Court is the decision that no reasonable person would have picked Bassett's birthday as the change date because substantial evidence did not support that date.  In an abrupt about face, the District Court found that the ALJ and the attorneys defending the ALJ decision were substantially justified in making that determination, denying Bassett the right to recover his attorney fees from the government for forcing him to take such a silly ALJ decision to court.

 For most garden variety cases, taking a case like this to the Court of Appeals is a waste of time.  The Equal Access to Justice Act, signed into law by President Reagan, permits people and organizations within financial boundaries to recover attorney fees when the government either brings an action or defends an action without "substantial justification."  It originally paid for attorney fees at $70 per hour plus an optional COLA.  The reimbursement or payment rate is now $125 per hour plus COLA.  The COLA brings the rate up to around $175 per hour.  So let's assume that an attorney is pretty good and worth $300 per hour in Central Illinois.  The cost of taking up an appeal to the Circuit costs either the attorney on a contingency fee basis (Social Security disability cases are required to be contingency fee by law) or the client paying hourly $125 per hour. Taking 60 hours to research, write, and organize such an appeal is cheap.  Taking the case up on appeal will cost $7000 minimum in uncompensated time.  In my experience, most District Court cases for EAJA purposes are worth less than $6000, the case was not worth taking up.  Every once in a while, attorneys need to make an exception and take one of these bad boys out of the pile and appeal.  That is a "loss leader."  I will entertain the doubt that this was an intentional foray into making a point rather than a good business decision for the client or the attorney.

Since I gave the attorney the benefit of the doubt, I will similarly give the ALJ and the attorneys defending the ALJ the benefit of the doubt.  I assume that the ALJ had good reasons for believing that Bassett could perform light work at 52 years of age and therefore not disabled.  I further assume that by the time that Bassett turned 55, the evidence was clear that he was limited to sedentary work and disabled.  Because there is no mention of trauma in the Court's decision, I finally assume that Bassett had a slow progression of his problems that ate away at his ability to exert himself during the 32 months.

Giving the ALJ and the government lawyers every benefit of the doubt, the decision violated agency policy and commonsense.  Social Security Ruling 83-20 tells the ALJ to consult a medical expert to establish the onset date of disability in cases just like this one.  By picking Bassett's birthday, the ALJ violated agency policy.  This is not an articulation problem, it is a violation of the way that SSA interprets the law.  The ALJ doesn't get to interpret the law; the Commissioner gets to interpret the law.  Because the ALJ violated the ruling, the Seventh Circuit encouraged reckless and wanton decision-making by ALJs that ignore agency interpretation of the statute and regulations.

The ALJ also violated commonsense.  Certainly a birthday can be emotionally challenging as time marches on and the warranty card on our bodies falls further out of date.  But to find that this is the date that Bassett fell off the physical ability cliff is silly.  It is like an ALJ picking the date that a doctor took an x-ray for a longstanding chronic condition as the date that disability began.  This is also the kind of case where the ALJ should have engaged in the Solomonic decision to cut the baby in half.  The closer that Bassett got to age 55, the more lenient the ALJ should have looked at the evidence because that is exactly what the statute, regulations, and policy demand the ALJ to do.  Finally, it is just plain a slap in the claimant's face to pick his birthday as the onset date of disability when the deterioration was ongoing.

An ALJ has an obligation to pay every dime of benefits owed.  An ALJ has an obligation to deny every dime of benefits not owed.  When an ALJ asks whether he/she can legally and reasonably pay benefits in cases, people like Bassett get reasonable and trustworthy decisions early.  When an ALJ asks for every angle to deny cases, we get shoddy decisions like the administrative decision in this case.  A dumb decision by the ALJ and a tragic mistake by the Courts not to tell the ALJ and the attorneys that defend those decisions in court that this kind of frivolous decisions will not only get sent back for a re-do but also find the government paying at least part of the attorney fees incurred to correct the egregious error.