Connecticut State Department of Social Services v. Thompson

289 F. Supp. 2d 198, 2003 U.S. Dist. LEXIS 18987
District Court, D. Connecticut·Decided October 23, 2003·No. CIV.A.3:00 CV 2020 S·Published·Cited by 7 cases

Opinion

RULING ON MOTION FOR AN AWARD OF ATTORNEYS’ FEES AND EXPENSES

UNDERHILL, District Judge.

In October 1999, the Connecticut State Department of Social Services and a class of Medicare beneficiaries (collectively known as “the plaintiffs”) brought a suit challenging a series of procedures in the Department of Health and Human Services’ (“the government”) system of administrative review of Medicare claims. Discovery in the suit commenced in February 2000, upon certification of the plaintiff class of Medicare beneficiaries. In February 2001, the plaintiffs filed their motion for summary judgment. Briefing was completed on the cross-motions for summary judgment in May 2001. The motions were argued on October 3, 2001 and decided in a written opinion dated September 9, 2002.

Plaintiffs prevailed on three of four issues presented. An order directing the government to send out written notices of initial determinations on all pending requests for payment, regardless of whether the claim had been filed properly, was issued in the case. The government then filed a motion for partial reconsideration under Rule 59(e). The motion was denied and judgment entered on February 20, 2003. The government filed a notice of appeal on March 7, 2003.

Pursuant to Local Rule 11(a) and the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, plaintiffs have moved for an award of attorneys’ fees and expenses. DISCUSSION

Statutory Requirements

Subsection 2412(d)(1)(A) of the EAJA provides that “a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action ... including proceedings for judicial review of agency action .... ” 28 U.S.C. § 2412(d)(1)(A). There are four threshold requirements for an award of fees and expenses under the EAJA. The moving party must: (1) file within 30 days of final judgment; (2) be the prevailing party; (3) show that the government’s position was not substantially justified; and (4) show an absence of special circumstances that would make an award of fees unjust. 28 U.S.C. § 2412(d)(1)(B).

The EAJA requires that an application for attorneys’ fees and expenses be filed “within thirty days of final judgment in the action.” Id. On February 20, 2003, the government’s motion for Rule 59 reconsideration was denied and judgment entered. Plaintiffs filed their application for attorneys’ fees and costs on March 24, 2003, well within the 30 days prescribed by the EAJA. The question whether a plaintiff is a “prevailing party” within the meaning of the fee-shifting statutes is a threshold question that is separate from the question of the degree to which the *202 plaintiff prevailed. See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). For a plaintiff to be considered a “prevailing party,” and thus eligible for an award of fees, it need not have succeeded on “the central issue” in the case, Texas State Teachers Association v. Garland Independent School District, 489 U.S. 782, 790-91, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989), and need not have obtained the “primary relief sought,” Id. It is sufficient that the plaintiff succeeded on “any significant issue in [the] litigation,” Id. at 791, 109 S.Ct. 1486 (internal quotation marks omitted), regardless of “the magnitude of the relief obtained,” Farrar v. Hobby, 506 U.S. 103, 114, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), if he received “actual relief on the merits of his claim [that] materially alters the legal relationship between the parties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.” Id. at 111-12, 113 S.Ct. 566.

Here, plaintiffs prevailed on three of the four substantive claims, obtaining an order and judgment providing declaratory and injunctive relief that required the government to provide full procedural rights at the initial determination stage of claims review. Accordingly, plaintiffs are prevailing parties under the EAJA.

Because plaintiffs have established that they have timely filed and are prevailing parties, the burden shifts to the government to make a “strong showing” that its position was substantially justifiéd. Environmental Defense Fund, Inc. v. Watt, 722 F.2d 1081, 1085 (2d Cir.1983). That is, the government must demonstrate that its position had a reasonable basis in law and fact. Sotelo-Aquije v. Slattery, 62 F.3d 54, 57 (2d Cir.1995). The government argues that its position was substantially justified in that its interpretation of the regulations pertaining to an initial determination was reasonable. The September 9, 2002 ruling, however, clearly concluded that the government’s interpretation of the regulations was patently unreasonable and that there was no substantial justification for the government’s decision not to provide a notice of initial determinations to individual beneficiaries. As noted in that ruling, “[t]here can be no serious dispute that the Medicare regulations contemplate that the Secretary will provide a notice of initial determination not only in response to proper claims filed by providers, but also in response to requests for initial determinations filed by beneficiaries.” Connecticut State Dep’t of Soc. Serv. v. Thompson, 242 F.Supp.2d 127, 144 (D.Conn.2002). The plain language of the regulations requires that a notice of initial determination be sent in response to a beneficiary’s request for determination, regardless of whether a complete claim had been filed by the health care provider. The government’s actions were inconsistent with the plain language of the regulations and established principles of due process. See Mathews v. Eldridge, 424 U.S. 319, 348, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (noting that fundamental principles of due process require that those facing significant loss receive adequate notice of changes and an opportunity to respond). Accordingly, the government cannot meet its burden to make a strong showing that its actions were substantially justified.

Because there was no substantial justification for the government’s actions, the final step of the EAJA inquiry requires that the court determine whether there are special circumstances that would make an award of attorney’s fees unjust. The “special circumstances” exception to the EAJA is a “ ‘safety valve’ [that] ... gives the court discretion to deny awards where equitable considerations dictate an award *203 should not be made.” H.R.Rep. No. 1418, 96th Cong., 2d Sess. 5, 11,

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Connecticut State Department of Social Services v. Thompson, 289 F. Supp. 2d 198, 2003 U.S. Dist. LEXIS 18987 (D. Conn. 2003).

289 F. Supp. 2d 198 (Connecticut State Department of Social Services v. Thompson) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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