The opinion of the court was delivered by: SWEET
Plaintiff Lorraine Jackson ("Jackson") brings this motion for an award of attorney's fees pursuant to the Equal Access to Justice Act, (hereinafter "EAJA"), 28 U.S.C. § 2412 awarding reasonable fees and costs to her counsel in this action. For the reason set forth below, Jackson's motion is granted.
Jackson is a mentally disabled person who has been receiving Social Security disability benefits since approximately 1974. Accordingly to the Social Security Administration, (the "SSA") Jackson received an overpayment of Social Security benefits from January 1974 to September, 1975. While Jackson attempted to repay these overpayments for approximately one year, she requested a wavier of this repayment in December, 1983, informing the SSA that she could not afford the monthly deductions from her benefits and that the strain associated with the existence of the debt was aggravating her mental condition. In April, 1984, defendant Margaret Heckler, Secretary of Health and Human Services (the "Secretary") reduced Jackson's installment payments from $40.00 per month to $25.00 per month in response to Jackson's expressed difficulty in repaying the addotional benefits.
However, the Secretary denied Jackson's request for a waiver of such overpayments. A wavier of repayment of erroneously distributed benefits may be granted if the recipient shows that (1) he was without fault in connection with the overpayment, and (2) recovery would defeat the purpose of the SSI program, be inequitable, or impede efficient or effective administration of Title XVI due to the small amount involved. Harrison v. Heckler, 746 F.2d 480, 482 (9th Cir. 1984); 42 U.S.C.A. § 1383(b)(1); 20 C.F.R. § 416.550.
Jackson appeared pro se before an Administrative Law Judge ("ALJ") on June 24, 1984 and submitted a medical report from her treating psychiatrist which stated that she could not be accountable for the overpayment and that the pressure caused by the deductions from her benefits and concern over the debt was harming her mental condition. Jackson provided documentation of her living expenses and debts, and stated that she believed the SSA was sending her the correct amount of benefits at the time of the overpayment. Relying on the report of jackson's treating psychiatrist, the ALJ found that she was without fault in accepting the overpayment, but declined to waive repayment because it would not defeat the purpose of Title XVI of the Act, be against equity and good conscience, or impede the efficient or effective administration of Title XVI. Valente v. Secretary of Health and Human Services, 733 F.2d 1037, 1042 (2d Cir. 1984).
Jackson, still without representation of counsel, requested a review of the ALJ's decision by the Appeals Council of the SSA, and submitted additional documentation of her expenses to refute some of the ALJ's contentions to support the application for review. By letter of October 31, 1984, Jackson's request for Appeals Council review was denied, rendering the ALJ's decision final. Jackson then obtained the assistance of counsel and filed this action on December 14, 1984, seeking a reversal, or in the alternative a remand of the denial of an overpayment waiver. On January 17, 1985, Jackson's counsel agreed to extend the Secretary's answer denied Jackson's allegations that the decision was not supported by substantial evidence, was based on erroneous legal standards and that Jackson was denied a fair hearing. The Secretary also asserted that jackson had not shown good cause for a remand.
On June 20, 1985 counsel for both parties had a telephone discussion regarding the submission of motion papers, wherein counsel for the Secretary informed Jackson's counsel that she had not yet determined what posture she would take in the litigation but that she would determine her approach after reading the papers being drafted to support Jackson's motion for judgment on the pleadings filed July 22, 1985. Approximately three months later the parties filed a consent order, signed by this court on October 23, 1985, remanding this case to the Secretary "for the sole purpose of the Secretary issuing a decision waiving the overpayment at issue in this action." Jackson then filed her motion for attorney's fees on November 27, 1985.
Jackson bases her request for reasonable attorney's fees and costs on two provisions of the EAJA. Section 2412(b), the "bad faith" section, provides that a court may award attorney's fees, expenses and costs to the prevailing party in an action brought against an agency or official of the United States if the defendant acted in "bad faith, vexatiously, wantonly, or of oppressive reasons." 28 U.S.C. 2412(b). Alternatively, Jackson seeks attorney's fees under section 2412(d) of the EAJA because the Secretary cannot demonstrate that her position in the litigation was "substantially justified." 28 U.S.C. § 2412(d)(1)(A).
28 U.S.C. Section 2412(b) provides that the United States shall be liable for attorney's fees to the same extent as any other party would be liable under common law or statute:
(b) Unless expressly prohibited by statute, a court may award reasonable fees and expenses of attorneys, in addition to the costs which may be awarded pursuant to subsection (a), to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award.
In the Second Circuit, EAJA exception to the general rule against the awarding of attorney's fees is made when the losing party's claims are "entirely without color" and have been asserted "wantonly for purposes of harassment or delay or for other improper reasons." Browning Debenture Holders' Committee v. DASA Corp., 560 F.2d 550, 559 (9th Cir. 1984), an award of fees under this section is a punitive measure and can be imposed "only in exceptional cases and for dominating reasons of justice." United States v. Standard Oil Co. of California, 603 F.2d 100, 103 (9th Cir. ...