EAJA Fees in Social Security Cases: What Social Security Practitioners Need to Know
II. The Minimum Requirements of an EAJA petition
Additionally, EAJA requires that a party seeking fees must be an individual worth less than $2,000,000, or a corporation worth less than $7,000,000. 28 U.S.C. 2412(d)(2)(B). Traditionally, courts have held that an EAJA petition
III. Establishing that the Plaintiff Is The Prevailing Party
In Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598, —, 121 S.Ct. 1835, 1839, 149 L.Ed.2d. 855 (2001), the Supreme Court, the Supreme Court cited with approval the definition found in Black’s Law Dictionary. The Court stated, “Black’s Law Dictionary 1145 (7th ed. 1999) defines ‘prevailing party’ as ‘[a] party in whose favor a judgment is rendered, regardless of the amount of damages awarded (in certain cases, the court will award attorney’s fees to the prevailing party).-Also termed “successful party.”
The Supreme Court held that, in order to obtain prevailing party status under fee-shifting statutes, a party is entitled to attorney’s fees only if the party has secured a judgment on the merits or a court ordered consent decree. Buckhannon, 121 S.Ct. at 1838. Thus, a party is still entitled to prevailing party status if:
1) the party “has been awarded some relief by the court.” Buckhannon, 121 S. Ct. at 1839. The Court further explained that this requires that the plaintiff receive “at least some relief on the merits of his claim.” Id, at 1840 (citations omitted). “[E]ven an award of nominal damages suffices under the test.” Id.
The Court concluded, “enforceable judgments on the merits and court-ordered consent decrees create the material alteration of the legal relationship between the parties necessary to permit the award of attorney’s fees.” Buckhannon, 121 S.Ct. at 1840. (internal quotations and citations omitted).The plaintiff does not have to win on every issue raised on a claim in order to be considered a prevailing party, for which her attorneys are entitled to be fully compensated. See Haitian Refugee Center v. Meese, 791 F.2d 1489, 1599 (11th Cir.1986)(holding that where the position of the United States is substantially justified only as to some counts, but is not justified as to the remaining causes of action, if each claim involves the same factual bases, and the issues are intertwined, the attorneys should be fully compensated for their work on the case as a whole, citing Hensley v. Eckerhart, 461 U.S. 424, 435 (1983)).
IV. The Position of The Government Must Not Be Substantially Justified
V. The Motion For EAJA Fees Must Be Timely Filed
A. The Time Deadlines for a Sentence Four Remand
Generally speaking, if a court enters an order under “sentence 4,” a prevailing plaintiff has 90 days to file an EAJA petition from the date of the order. In Melkonyan, the Supreme Court explained, “[t]he 30-day EAJA clock begins to run after the time to appeal that “final judgment” has expired.” Melkonyan, 111 S.Ct. 2157 at 2162. Because the government is a party in a Social Security Case, under the Federal Rules of Appellate Procedure, a party has 60 days to file an appeal; if one is not filed, the judgment becomes final, and the thirty-day clock for filing an EAJA petition begins to run. “In sentence four cases, the filing period begins after the final judgment (‘affirming, modifying, or reversing’) is entered by the court and the appeal period has run, so that the judgment is no longer appealable.” Melkonyan 111 S.Ct. at 2165, (see also 28 U.S.C. 2412(d)(2)(G)).
In 1993, the Supreme Court reaffirmed the time limits:
An EAJA application may be filed until 30 days after a judgment becomes “not appealable”–i.e., 30 days after the time for appeal has ended. See Secs. 2412(d)(1)(B), (d)(2)(G); see also Melkonyan, 501 U.S., at —-, 111 S.Ct., at 2165. Rule 4(a) of the Federal Rules of Appellate Procedure establishes that, in a civil case to which a federal officer is a party, the time for appeal does not end until 60 days after “entry of judgment,” and that a judgment is considered entered for purposes of the rule only if it has been “entered in compliance with Rul[e] 58 … of the Federal Rules of Civil Procedure.” Fed.R.App.Proc. 4(a)(1), (7). Rule 58, in turn, requires a district court to set forth every judgment “on a separate document” and provides that “[a] judgment is effective only when so set forth.” See United States v. Indrelunas, 411 U.S. 216, 220, 93 S.Ct. 1562, 1564, 36 L.Ed.2d 202 (1973) (per curiam).
Shalala v. Schaefer, 113 S.Ct. 2625, 2632 (1993).
However, waiting until the end of the 90 days may not always be the safest approach. If, for example, the underlying claim on the merits was referred to a Magistrate Judge for a Report and Recommendation (“R&R”), pursuant to Fed. R. Civ. P. 72, a party must object to the “R&R” within 10 days to preserve any issues on appeal. Arguably, in no objections are filed, then the final order of the Article III judge, adopting or approving the R&R is not an “appealable” order so that the EAJA petition must be filed within 30 days of the order of the judge adopting the R&R.
The Court may also remand a case to the Commissioner under sentence six of 42 U.S.C. 405(g) for good cause before the Commissioner files his answer or at any time upon a showing of new and material evidence for which there was good cause for the failure to incorporate the evidence earlier. If the Court remands under sentence six of 42 U.S.C. 405(g), the Court retains jurisdiction of the case until the further administrative actions are complete. The Plaintiff may file for EAJA fees only after the administrative action is complete and the Court enters a final judgment pursuant to Fed. R. Civ. P. 58. Melkonyan, 111 S.Ct. at 2165. In Melkonyan, the Court explained that its previous case of Sullivan v. Hudson, 490 U.S. 877, 109 S.Ct. 2248, 104 L.Ed.2d 941 (1989), “stands for the proposition that in those cases where the district court retains jurisdiction of the civil action and contemplates entering a final judgment following the completion of administrative proceedings, a claimant may collect EAJA fees for work done at the administrative level.” Melkonyan 111 S.Ct at 2162, citing Hudson, 109 S.Ct. at 2258.
If a case is remanded under sentence six, the Commissioner is supposed to report back to the court after the administrative proceedings on remand are complete. If benefits are awarded, then the Court should enter an order dismissing the case, at which time the clock begins to run for filing EAJA fees. Because such an order would not normally be appealable, the EAJA petition should be filed within 30 days of that order.
VI. The Prevailing Plaintiff is Entitled to Reasonable Fees for the Time Spent “Before the Court”
VII. Proving the Hourly Rate to be Paid Under EAJA
shall be based upon prevailing market rates for the kind and quality of the services furnished, except that. . .(ii) attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.A. Lodestar factors
Traditionally, fee-shifting schemes, including the EAJA, have considered the “lodestar” factors. Johnson v. Georgia Highway Exp., Inc., 488 F.2d 714 (5th Cir 1974) is a frequently cited case that explains that the factors are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
488 F.2d, at 717-719. These factors were derived directly from the American Bar Association Code of Professional Responsibility, Disciplinary Rule 2-106. Id.
B. How to apply the Lodestar factors since Hensley
1. The basic formula:
“The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer’s services.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933(1983). The Court explained that the burden is on the prevailing party to establish the hours and rate claimed: “The party seeking an award of fees should submit evidence supporting the hours worked and rates claimed. Where the documentation of hours is inadequate, the district court may reduce the award accordingly.” Id.
The Supreme Court further considered the proper application of the lodestar method in Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984); Riverside v. Rivera, 477 U.S. 561, 106 S.Ct. 2686, 91 L.Ed.2d 466 (1986); Pennsylvania v. Delaware Valley Citizens’ Council, 478 U.S. 546, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (Delaware Valley Citizens’ Council I ); and Pennsylvania v. Delaware Valley Citizens’ Council, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987) (Delaware Valley Citizens’ Council II ). Taken together, these cases hold that the “lodestar as calculated in Hensley presumptively includes all of the twelve [“lodestar”] factors derived from the ABA Code of Professional Responsibility DR 2-106 (1980) . . .except on rare occasions, the factor of results obtained and, perhaps, enhancement for contingency.” Norman v. Housing Authority of City of Montgomery, 865 F.2d 1292, 1299 (11th Cir. 1988).
In other words, in most cases, the entire calculation will be to take the reasonable market rate and multiply it by the hours reasonably expended. The lodestar factors are largely subsumed in the hourly rate requested and in the decision as to what hours were reasonably expended. Factors such as the skills and experience of the attorney, for example, are subsumed in the “market rate” that is included in the basic calculation. See Hensley at n. 9, Delaware Valley, 106 S.Ct. at 3098, and Norman at 1300; See also Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1201 (10th Cir 1986).
2. What hours are compensable?
In Hensley, 461 U.S. at 435. The Court cited with approval the previous cases that held that
Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success, an enhanced award may be justified. In these circumstances, the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. See Davis v. County of Los Angeles, 8 E.P.D. 9444, at 5049 (CD Cal.1974).
See also Norman v. Housing Authority of City of Montgomery, 865 F.2d 1292 (11th Cir. 1988).
If the party prevails on all issues, some hours may still be excluded. “The district court also should exclude from this initial fee calculation hours that were not ‘reasonably expended.’ S.Rep. No. 94-1011, p. 6 (1976).” Hensley at 434. The Court explained,
Cases may be overstaffed, and the skill and experience of lawyers vary widely. Counsel for the prevailing party should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission. “In the private sector, ‘billing judgment’ is an important component in fee setting. It is no less important here. Hours that are not properly billed to one’s client also are not properly billed to one’s adversary pursuant to statutory authority.” Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980) (en banc) (emphasis in original).
However, if a party does not prevail on all issues, then not all hours are presumed compensable. The lodestar factor of “results obtained” is considered in determining which hours are compensable. If a party presents different claims in the same lawsuit against the same defendant, where the claims are so different that they are based on different facts and legal theories, the work on the unsuccessful claims is not compensable. Hensley, at 434-435.
If the claims are interrelated, the court may still reduce an award based on limited success.
If . . . a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole, multiplied by a reasonable hourly rate may be an excessive amount. This will be true even where the plaintiff’s claims were interrelated, nonfrivolous, and raised in good faith. Congress has not authorized an award of fees whenever it was reasonable for a plaintiff to bring a lawsuit or whenever conscientious counsel tried the case with devotion and skill. Again, the most critical factor is the degree of success obtained. . . There is no precise rule or formula for making these determinations. The district court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success. The court necessarily has discretion in making this equitable judgment. This discretion, however, must be exercised in light of the considerations we have identified.
Hensley, at 436-437. In making the adjustment to reflect the success of the claim, the Supreme Court has rejected “a mathematical approach comparing the total number of issues in the case with those actually prevailed upon.” Id. at n. 11. The Court explained, “[s]uch a ratio provides little aid in determining what is a reasonable fee in light of all the relevant factors. Nor is it necessarily significant that a prevailing plaintiff did not receive all the relief requested. For example, a plaintiff who failed to recover damages but obtained injunctive relief, or vice versa, may recover a fee award based on all hours reasonably expended if the relief obtained justified that expenditure of attorney time.” Id.
The Hensley Court, at 461 U.S. 440, concluded:
We hold that the extent of a plaintiff’s success is a crucial factor in determining the proper amount of an award of attorney’s fees under 42 U.S.C. 1988. Where the plaintiff has failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of a reasonable fee.
3. How do you prove the hourly rate?
A reasonable hourly rate is the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation. Blum v. Stenson, 465 U.S. at 895-96 n. 11, 104 S.Ct. at 1547 n. 11. Satisfactory evidence at a minimum is more than the affidavit of the attorney performing the work. Blum, 465 U.S. at 896 n. 11, 104 S.Ct. at 1547 n. 11.
a. Affidavits or testimony from other attorneys:
“Evidence of rates may be adduced through direct evidence of charges by lawyers under similar circumstances or by opinion evidence. The weight to be given to opinion evidence, of course, will be affected by the detail contained in the testimony on matters such as similarity of skill, reputation, experience, the similarity of case and client, and breadth of the sample of which the expert has knowledge.” Norman, 836 F.2d at 1299. But, “generalized and conclusory ‘information and belief’ affidavits from friendly attorneys presenting a wide range of hourly rates will not suffice. National Ass’n of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319, 1325 (D.C. Cir. 1982). The affidavits should state what type of litigation the rates refer to, whether that is a current rate or past rate, whether it is an average for a specific attorney. “The best evidence would be the hourly rate customarily charged by the affiant himself or by his law firm. . . or based on the affiant’s personal knowledge about specific rates charged by other lawyers or rates for similar litigation.” Id at 1325-1326.
When submitting an affidavit in a federal case, the easiest way to do an affidavit is to use the form set out in 28 U.S.C. 1746.
b. The attorney’s own billing rate
The counsel for the prevailing party may submit “specific evidence of his or her actual billing practice during the relevant time period. . .This information. . . will provide important substantiating evidence of the prevailing community rate. . .[T]he actual rate that applicant’s counsel can command in the market is itself highly relevant proof of the prevailing community rate.” Id at 1326.
c. Evidence from prior cases
“Evidence submitted by attorney fee applicants in prior cases may also be relied on in compiling an attorney fee application. There is no requirement that each attorney develop all of the evidence for the hourly rate he seeks from scratch.” National Ass’n of Concerned Veterans, 675 F.2d at 1326.
Evidence submitted by attorneys in prior cases may be used again as evidence; however, fee applicants should argue against courts using prior awards as “setting the fee” in current cases. The Eleventh Circuit has recently found cause to caution against the use of prior awards in setting hourly rates. Firstly, use of prior awards has an improper collateral estoppel and issue preclusion effect, making prior awards binding on individuals who were not parties to, and thus had no influence on, the prior litigations. Also, obedience to precedent is static, holding rates at the same level for long periods of time. This is directly contrary to what we all know about market rates: they go up, particularly to reflect cost of living and inflation. Thus, the Eleventh Circuit held:
prior awards are not direct evidence of prior behavior; the court is not a legal source. Of course, there is some inferential evidentiary value to the prior award because in theory the prior court based the award on the market rate. But giving prior awards controlling weight over the superior evidence of a lawyer’s actual billing rate equates to giving the prior awards issue preclusive value against a party whose interests were not even arguably represented in the prior litigation.
Dillard v. Greensboro, 213 F.3d 1347, 1355 (11th Cir. 2000).
d. Evidence from third party sources.
I have had success using the Altman Weil corporation’s Survey of Law Firm Economics as evidence from an objective third party as to prevailing rates. In an unpublished case in the Eastern District of Tennessee, the Court considered The 1998 Survey of Law Firm Economics, to ascertain the market rate for attorney compensation. Hackney v. Apfel, 3:98-cv-58 (E.D. Tenn., Memorandum and Order on EAJA fees, August 13, 1999). The court found the Altman Weil Survey to be “relevant and persuasive evidence of a reasonable prevailing market rate. . .” Id. (emphasis added). However, in a more recent case concerning the hourly rates for paralegals, London v. Halter, 134 F.Supp.2d 940 (E.D.Tenn. 2001) the same court was not persuaded by The 2000 Small Firm Economic Survey that the market rate for paralegals was higher than $45 an hour.
e. Whether the fee was contingent or not.
A court may consider as a factor the contingent fee contract, but it is not to be an automatic limitation on the attorney fee award. Sanchez v. Schwartz, 688 F.2d 503 (7th Cir.1982). But, some fee-shifting statutes do not permit enhancement above the lodestar amount based on a contingency contract. City of Burlington v. Daugue, 505 U.S. 557, 112 S.Ct. 2638 (1992).
f. Which market rate, then or now? A district court does not abuse its discretion in determining that reasonable hourly rate was the rate in effect during time work was performed, rather than when fee award was determined. Mares v. Credit Bureau of Raton, 801 F.2d 1197 (10th Cir. 1986).
4. Rebuttal evidence
“Once a fee applicant has provided support for his requested rate, the burden falls on the [opposing party] to go forward with evidence that the rate is erroneous. And when the [opposing party] attempts to rebut the case for a requested rate, it must do so by equally specific countervailing evidence.” National Ass’n of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319, 1326 (D.C. Cir. 1982). Unless the fee applicant’s evidence is so weak that it may be challenged as unsubstantiated, “in the normal case the [opposing party] must either accede to the applicant’s requested rate or provide specific contrary evidence tending to show a lower rate would be appropriate.” Id.
5. Sufficiency of district court’s findings.
A district court has discretion in determining the fee award. Hensley, at 437. However, “It remains important, however, for the district court to provide a concise but clear explanation of its reasons for the fee award. When an adjustment is requested on the basis of either the exceptional or limited nature of the relief obtained by the plaintiff, the district court should make clear that it has considered the relationship between the amount of the fee awarded and the results obtained. Jordan v. Multnomah County, 815 F.2d 1258, 1263-1264 (9th Cir 1987).
(g) Judicial review  Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow.  Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the United States District Court for the District of Columbia.  As part of the Commissioner’s answer the Commissioner of Social Security shall file a certified copy of the transcript of the record including the evidence upon which the findings and decision complained of are based.  The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing.  The findings of the Commissioner of Social Security as to any fact, if supported by substantial evidence, shall be conclusive, and where a claim has been denied by the Commissioner of Social Security or a decision is rendered under subsection (b) of this section which is adverse to an individual who was a party to the hearing before the Commissioner of Social Security, because of failure of the claimant or such individual to submit proof