Lillo v. Commissioner of Social Security, 1:16-cv-01841

Plaintiff Robert Lillo sought review of the Commissioner’s denial of supplemental security income and prevailed on a magistrate judge’s Report and Recommendation finding the ALJ’s decision was not supported by substantial evidence and failed to articulate good reasons for discounting the treating psychiatrist’s opinion.
The district court adopted the R&R and remanded for a fuller explanation of the weight given to the treating psychiatrist.
Lillo moved for EAJA attorney fees of $7,420.63 for 40.5 hours of work (two rates: $182.50 and $185.00); counsel had an assignment of any EAJA award.
The Commissioner did not contest prevailing-party status, hours, rates, or amount, but argued the government’s position was substantially justified.
The court found the Commissioner failed to show substantial justification because the ALJ did not articulate the reasons required by the treating-physician rule, and thus awarded the requested fees subject to statutory setoff procedures.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Entitlement to EAJA fees	Lillo argued he is a prevailing party and the government was not substantially justified	Commissioner argued the government’s position was substantially justified despite remand	Court: Fees awarded; government failed to meet burden of substantial justification
Whether government position was substantially justified	ALJ’s failure to articulate reasons for discounting treating psychiatrist was not justified	Commissioner argued ALJ’s findings had a logical nexus to evidence contradicting Dr. Hill	Court: ALJ’s omission precluded meaningful review; position not substantially justified
Reasonableness of hours and rates	Counsel requested 40.5 hours at $182.50 and $185.00 (above $125 cap)	Commissioner did not challenge hours/rates/total	Court: Hours and cost-of-living adjusted rates reasonable; award of $7,420.63 granted
Payment and setoff	Lillo assigned EAJA award to counsel	Commissioner must offset any federal debt before payment	Court: Directed Commissioner to determine debts within 30 days and pay balance to attorney per assignment, consistent with Astrue v. Ratliff

Pierce v. Underwood, 487 U.S. 552 (1988) (EAJA requires fees unless government position was substantially justified)
Astrue v. Ratliff, 560 U.S. 586 (2010) (EAJA fees are payable to the plaintiff and subject to offset for federal debts)
Gisbrecht v. Barnhart, 535 U.S. 789 (2002) (courts may adjust EAJA hourly cap for cost-of-living or special factors)
Glenn v. Commissioner of Social Security, 763 F.3d 494 (6th Cir. 2014) (remand for lack of substantial evidence does not automatically preclude EAJA award; substantial justification analysis required)
Couch v. Secretary of HHS, 749 F.2d 359 (6th Cir. 1984) (discussing relationship between remand and EAJA entitlement)
Bowen v. Commissioner of Social Security, 478 F.3d 742 (6th Cir. 2007) (treating-physician rule is a substantive procedural protection)
Jankovich v. Bowen, 868 F.2d 867 (6th Cir. 1989) (definition of substantial justification standard)
Howard v. Barnhart, 376 F.3d 551 (6th Cir. 2004) (EAJA standards for Social Security plaintiffs)