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Ninth Circuit:
Attorney Fees Due for ‘Unreached Issue’ on Winning Claim
Opinion Says Successful Plaintiff in Disability Action May Recover, Under Statute Providing for Awards in Suits Against U.S., for Lawyer’s Work Preparing Unlitigated Alternative Arguments
By Kimber Cooley, associate editor
The Ninth U.S. Circuit Court of Appeals held yesterday that a magistrate judge improperly partially denied attorney fees to a party who successfully challenged a denial of Social Security disability benefits for hours the claimant’s lawyer worked on issues never reached by the court where the undecided matters were not additional, unsuccessful causes of action but alternative legal grounds for granting the relief on the single claim asserted.
Fees were sought under the Equal Access to Justice Act (“EAJA”), codified at 28 U.S.C. § 2412, which provides in subd. (d)(1)(A):
“[A] court shall award to a prevailing party…fees and other expenses…incurred by that party in any civil action…, including proceedings for judicial review of agency 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.”
At issue was language in the 2010 Ninth Circuit decision in Hardisty v. Astrue, written by Senior Circuit Judge Diramuid O’Scannalin, saying that the statute “provides no indication that attorneys’ fees should be awarded with respect to positions of the United States challenged by the claimant but unaddressed by the reviewing court.”
Appealing the reduced fee award was Consuelo Nerio Mejia, who sued Commissioner of Social Security Martin J. O’Malley after being denied disability benefits for her alleged inability to work caused by fibromyalgia, left knee meniscus fracture, left ankle damage, depression, anxiety, and other afflictions. After an administrative law judge (“ALJ”) affirmed the denial on March 3, 2021, Nerio Mejia sought judicial review.
Magistrate Judge’s Decision
Both parties consented to the matter being decided by a magistrate judge and the case was assigned to Maria A. Audero of the Central District of California. Audero found that the ALJ had erred in rejecting Nerio Mejia’s testimony about the severity of her symptoms without offering specific, clear, and convincing reasons for doing so as required by governing case law.
Concluding that the deficiency in the rejection of the testimony was sufficient to reverse, Audero explicitly “decline[d] to address [Nerio Mejia’s] remaining arguments” and final judgment was entered reversing the ALJ’s decision and remanding the matter.
Nerio Mejia timely filed a motion for fees under the EAJA. Audero reasoned that because the ALJ’s rejection of the testimony was not “substantially justified,” the recovery of attorney fees was mandated under the EAJA.
The magistrate judge found that the attorney’s hourly billing rate of $231.49 was reasonable as were the 58 hours worked, noting that the case involved 5,900 pages of medical records.
However, Audero sua sponte ordered a reduced award, saying that “Plaintiff’s counsel spent a total of 24.05 hours in researching and drafting…two issues” that the court “did not reach,” and “the time that Plaintiff’s counsel spent on these issues is not compensable” under Hardisty.
Audero reduced the requested recovery of $13,426.42 by approximately $5,567 and awarded Nerio Mejia $7,859.19.
Collins’s Opinion
Circuit Judge Daniel P. Collins authored the opinion reversing the partial denial and remanding with instructions to award the full $13,426.42. He wrote:
“Because the district court’s application…was legally erroneous, we reverse the district court’s order to the extent that it partially denied the fee application. And because the district court already found the fees requested to be otherwise reasonable, we remand for entry of an amended order awarding the full amount of fees requested.”
Senior Circuit Judge Sidney R. Thomas and Circuit Judge John B. Owens joined in the opinion.
Collins said that “[t]he district court committed legal error in concluding that Hardisty required a reduction of the fee.” Distinguishing the case, he remarked:
“In Hardisty, as in this case, the district court reversed the denial of benefits based on one of the grounds raised by the claimant, and the court then declined to reach the claimant’s remaining objections….However, unlike in this case, the district court concluded that the SSA’s position on the dispositive issue, while unsuccessful, was ‘substantially justified.’….Accordingly, the district court held that the claimant was ineligible for fees under the EAJA….The claimant asked the district court to award fees based on the asserted lack of substantial justification for the SSA’s position concerning the claimant’s other objections that the district court had not reached, but the district court declined to do so….”
He continued:
“Our decision in Hardisty…made quite clear that we were addressing the significance of undecided, additional objections raised by a claimant only in the context of determining whether the claimant satisfied the statutory requirement for eligibility to obtain any attorneys’ fees….Hardisty…did not raise or decide the quite different issue that confronts us here—viz., whether, if a claimant has established her eligibility for fees under the EAJA, a ‘reasonable’ fee award may include fees for work relating to issues that the district court found unnecessary to decide. The district court therefore committed legal error in concluding that, under Hardisty, work relating to undecided issues is categorically ‘not compensable under the EAJA.’ ”
Supreme Court Precedent
The jurist noted that Aulero’s application of Hardisty was inconsistent with U.S. Supreme Court jurisprudence governing the relevant standards for assessing the reasonableness of attorney fees.
Pointing out that the high court distinguishes between cases in which the plaintiff’s claims for relief involve a common core of facts and related legal theories from those where distinctly different claims for relief are asserted. If distinct claims are raised, a plaintiff may only recover fees—under statutes providing fees to a prevailing party—if successful on that specific cause.
In contrast, Collins explained, for cases involving a common core of facts, the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit as litigants are entitled to raise alternative legal grounds for the desired outcome.
Applying these principles to the present case, the judge opined:
“Nerio Mejia did not raise multiple ‘unrelated’ claims; rather, she raised a single claim for relief that was supported by a variety of alternative theories. The relief she sought was a reversal and remand of the SSA’s denial of her claim for disability benefits, and she asserted a variety of objections in pursuit of that one result. Her civil action…challenging that single administrative decision thus presented ‘one claim for relief,’ and her ‘assertion of several distinct grounds does not create multiple claims.’
“….Nerio Mejia obtained all the relief she sought except for an outright award of benefits, and her failure to obtain that ‘rare’ form of relief,…does not materially detract from her success in achieving her overall litigation goal of reversing the SSA’s denial of benefits.”
He added:
“Of course…the hours devoted to the litigation, including the alternative issues not reached, must still have been ‘reasonably expended.’….But the district court here expressly held that they were reasonable, and it rejected the SSA’s arguments that the hours that Nerio Mejia’s counsel devoted to the district court briefing, including with respect to the two additional issues that were ultimately never decided, were excessive.”
The case is Nerio Mejia v. O’Malley, 23-3162.
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