United States District Court, N.D. Illinois
May 11, 2004.
STANLEY TAYLOR, Plaintiff, V. JO ANNE B. BARNHART, Commissioner of Social Security, Defendant
The opinion of the court was delivered by: WAYNE ANDERSEN, District Judge
MEMORANDUM, OPINION AND ORDER
This matter is before the Court on Plaintiff Stanley Taylor's
Petition for Attorney's Fees pursuant to the Equal Access to Justice Act
("EAJA"), 28 U.S.C. § 2412. For the reasons set forth below, we grant
his petition and award fees in the amount of $7,222.92.
Plaintiff Stanley Taylor applied for Supplemental Security Income (SSI)
in February, 1988, alleging disability since August 1984. His application
was granted, and he was found to be disabled since February 1, 1988.
However, in 1996, Congress enacted Public Law 104-121 which precluded an
award of SSI benefits if "alcoholism or drug addiction would . . . be a
contributing factor material to the Commissioner's determination that the
individual was disabled." Pub.L. 104-121 § 105. Pursuant to Public
Law 104-121, Plaintiff's claim was re-adjudicated and Plaintiff was
informed that his benefits would cease on January 1, 1997. Plaintiff's
request for reconsideration was denied. Plaintiff was granted an
administrative hearing. In January 1998, the ALJ issued his decision
finding that Plaintiff was not disabled and thus not entitled to SSI
benefits. Upon review, this Court found that the ALJ did not obtain a valid
waiver of counsel from Plaintiff and that the ALJ failed to fully and
fairly develop the record. Moreover, we found that the ALJ did not make
an express finding concerning Plaintiff's literacy, despite the fact that
this issue was critical to determining whether or not Plaintiff was
disabled. We, therefore, remanded the matter to the ALJ for further
proceedings. Plaintiff has now filed an EAJA petition for attorney's fees
incurred in connection with filing his appeal and with preparing the
The Equal Access to Justice Act ("EAJA") provides that a party who
prevails against the United States may receive attorney's fees and costs
if certain conditions are met. 28 U.S.C. § 2412. A party seeking such
fees and expenses must demonstrate that: 1) he filed a request for fees
within thirty days of final judgment in the action; 2) that he was a
"prevailing party"; and 3) that the United States was not "substantially
justified" in the earlier action. 28 U.S.C. § 2412(d)(1)(B).
In this case, Plaintiff has met all three requirements. First, he made
a timely request for fees. Second, a person is considered a prevailing
parry if, as here, the action is remanded to the agency for further
consideration. Schutt v. Massanari, 2001 WL 1155253, *2
(N.D.Ill. Sep.28, 2001). Third, the government bears the burden of
proving that the position of the United States in the earlier action was
substantially justified. See Jackson v. Chater,
94 F.3d 274, 278 (7th Cir. 1996). The Commissioner's sole argument in
opposition to the petition for attorney's fees in this case is that the
government's position was substantially justified and, therefore,
Plaintiff should not be awarded attorney's fees. The Commissioner's position is substantially justified if her conduct
has "a reasonable basis in law and fact, that is, if a reasonable person
could believe the position was correct." Marcus v.
Shalala, 17 F.3d 1033, 1036 (7th Cir. 1994). The Seventh Circuit
has described the substantial justification standard as requiring that
the government show that its position was grounded in: 1) a reasonable
basis in truth for the facts alleged; 2) a reasonable basis in law for
the theory propounded; and 3) a reasonable connection between the facts
alleged and the legal theory propounded. United States v. Hallmark
Construction Co., 200 F.3d 1076, 1080 (7th Cir. 2000). The
Commissioner bears the ultimate burden of proving that her position was
substantially justified. Marcus, 17 F.3d at 1036.
In making a substantial justification determination, a district court
should consider both the government's pre-litigation conduct (the actions
or inactions giving rise to the instant litigation), as well as the
government's conduct relative to the instant litigation. Id.
"EAJA fees may be awarded if either the government's pre-litigation
conduct or its litigation position are not substantially justified.
However, the district court is to make only one determination for the
entire civil action." Id.
We remanded this case back to the ALJ for further proceedings because
the ALJ failed to obtain a valid waiver of Plaintiff's right to counsel
and because the ALJ failed to meet his burden of showing that the record
was fully and fairly developed in the absence of counsel. We found that
the ALJ did not comply with the factors enunciated by the Seventh Circuit
in Binion v. Shalala, 13 F.3d 243, 245 (7th Cir. 1991), which
are necessary to secure a valid waiver of counsel. The ALJ did not advise
Plaintiff as to the manner in which an attorney could aid in the
proceedings or that there is a limitation on attorneys fees to 25 percent of the past due benefits. Moreover, the ALJ failed to
inform Plaintiff that the Court is required to approve the fees. We also
remanded the case because the ALJ failed to fully develop the record with
regard to the issue of literacy because he made no express finding as to
Plaintiff's literacy, despite the fact that this issue was critical to
determining whether or not Plaintiff was disabled.
We find that the ALJ's decision and, hence, the Commissioner's
pre-litigation position, was not reasonable based on the law or facts.
The ALJ did not meet his burden to develop sufficient facts to determine
whether or not Plaintiff was literate. The ALJ proceeded with the hearing
despite failing to provide Plaintiff with the required admonitions set
forth by the Seventh Circuit in Binion v. Shalala,
13 F.3d 243, 245 (7th Cir. 1994) necessary to ensure valid waiver of
Moreover, we find that the Commissioner's litigation position also was
not substantially justified. In this Court, the Commissioner argued that
since the ALJ impressed upon Plaintiff the importance of having
representation, arguably the requirements for valid waiver of counsel
have essentially been met. However, the Commissioner's argument is
contrary to the mandate of the Seventh Circuit which requires that the
ALJ explain to the pro se litigant three things-the manner in which an
attorney can aid the litigant, the possibility of free counsel or a
contingency arrangement, and the limitation of attorneys fees to 25
percent and required court approval of the fees. See Binion, 13
F.3d at 245. Thus, because the ALJ did not fully explain these factors to
Plaintiff, the Commissioner did not have a reasonable basis in law for
the theory propounded in this Court-that the attorney waiver was nonetheless valid. Therefore, the Commissioner's litigation
position was not substantially justified.
For these reasons, we find that the pre-litigation and litigation
positions of the Commissioner were not substantially justified, and
Plaintiff is entitled to an award of EAJA fees. Since the Commissioner
does not object to the amount of the fees requested by Plaintiff and
because we find them to be reasonable, we hereby grant Plaintiff's
request in the amount of $7, 222.92.
For the foregoing reasons, we grant Plaintiff Stanley Taylor's petition
for an award of fees and costs pursuant to the Equal Access to Justice
Act.(## 24-1, 24-2). We find that Plaintiff is entitled to a fee award in
the amount of $7,222.92. Specifically, we award 1) $6,690.72 for
attorney's fees incurred during 2000 (47.9 hours times an hourly rate of
$139.68); 2) $457.25 for attorney's fees incurred during 2003 (3.1 hours
times an hourly rate of $147.50); and 3) $75 for paralegal fees (1 hour
times $75 per hour).
It is so ordered.
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