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WILLIS v. SULLIVAN

February 6, 1990

MARY WILLIS, ET AL.
v.
LOUIS SULLIVAN, Secretary, Health and Human Services



The opinion of the court was delivered by: MORTON

 L. CLURE MORTON, SENIOR UNITED STATES DISTRICT JUDGE.

 Counsel for the plaintiffs in this class action challenging actions of the Secretary of Health and Human Services have applied to this court for an award of attorney fees pursuant to the Equal Access to Justice Act, 28 U.S.C. Sec. 2412. In pertinent part, that statute provides that

 
a court shall award to a prevailing party . . . fees and other expenses . . . incurred by that party in any . . . proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

 The United States has not opposed the application and therefore apparently concedes the appropriateness of a fee award. As discussed below, this court also agrees that the prerequisites of a fee award have been met, but nevertheless believes the amount requested is excessive.

 As indicated by the statutory language quoted above, the natural first question is whether the plaintiffs were the prevailing party. Clearly they were. First, although the case was eventually settled, the mere fact of a settlement does not preclude classification of a party as a prevailing party for EAJA purposes. See Pierce v. Underwood, 487 U.S. 552, 101 L.Ed 2d 490, 108 S. Ct. 2541 (1988). Second, the three original named plaintiffs all received the complete relief they requested as individuals. Third, the settlement agreement provided the relief sought on behalf of a class including all Tennessee residents who were approved for benefits under Titles II and XVI of the Social Security Act and had an attorney fee approved on or after February 1, 1985. This will undoubtedly result in a large amount of additional benefits being granted to this rather large group of individuals. True, the agreed order did not grant relief to members of the proposed class who had an attorney fee approved prior to February 1, 1985, but their class status had never been certified, and furthermore their rights were in no way prejudiced by the final order. Thus, the court concludes that the plaintiffs were the "prevailing party" within the meaning of 28 U.S.C. Sec. 2412. *fn1"

 The second critical question is whether the position of the United States throughout this action was substantially justified. The government bears the burden of proving that its position was substantially justified. See United States v. 0.376 Acres of Land, 838 F.2d 819 (6th Cir. 1988) (including the dissent); Sigmon Fuel Co. v. Tennessee Valley Authority, 754 F.2d 162 (6th Cir. 1985) ("A party that prevails in a case is entitled to attorneys' fees . . . unless the government shows that its position was substantially justified"); In re Cohen, 793 F.2d 1291 (6th Cir. 1986) (full text not published). However, the government has not even attempted to make such a showing in this case. Furthermore, the significance of this failure is exacerbated by the fact that the case was settled before full argument on the merits was presented to the court. The court simply does not have the benefit of viewing or hearing each party's complete analysis of the factual and legal issues involved. Ultimately, however, it appears that this case arose out of the Social Security Administration's obvious failure to comply with its own regulations and POMS instructions. This being so, the court concludes that the Secretary's position was not substantially justified.

 Since there has not been the slightest hint of any special circumstance which would make a fee award unjust, the determinations that the plaintiffs were the prevailing party and that the defendant's position was not substantially justified require the conclusion that an award is appropriate. Thus, the next question concerns the size of the award. This may in turn be divided into two components. The court must first analyze the number of hours of service for which compensation is claimed. Next, the court must determine the proper hourly rate in order to reach the final computation of reasonable fees.

 Two attorneys have submitted affidavits detailing the services provided in this case. William Stephens requests compensation for 23.4 hours of service. His co-counsel, David Ettinger of Legal Services of Middle Tennessee, requests an award to Legal Services of Middle Tennessee for 79.8 hours of service. For the most part, these amounts are accepted. It appears that both counsel have used good billing judgment in general, but the court exercises its discretion to make a few minor reductions despite the fact that a good faith basis exists for counsels' complete claim.

 The first three hours listed on Stephens' fee petition are for activities prior to the actual beginning of representation or even communication with those individuals who would eventually be plaintiffs. In essence, the time involved finding out about a class action in California and then determining whether some of his own past clients might be able to successfully bring a similar action. The court concludes that this was "general awareness" activity which should not be compensated as specific representation of a client. Additionally, the court reduces the 2.5 hours claimed for 9/17/87 by one half to account for travel time at a lesser rate and some inevitably nonproductive time involved in a working lunch. The court further notes that 25 of Stephens' 28 accepted entries specifically mention some communication with co-counsel Ettinger. This court frequently rejects fees for time spent in communication with co-counsel as unnecessary or duplicative. However, the complexity and enormity naturally associated with a class action make such conferences more palatable in this instance. Furthermore, Ettinger ordinarily did not request compensation for those same times. Thus, the court concludes that it will make no further reductions in the times submitted by Stephens.

 Likewise, the court makes only minor adjustments in Ettinger's itemized statement of services rendered. It appears that counsel has conservatively estimated the reconstructed hours. His commendable 10% reduction in addition to the conservative estimates renders his request for compensation of 2.9 reconstructed hours completely reasonable. *fn2" Of the 76.9 hours for which there are contemporaneous time records to support the requested fee, the court only eliminates a small portion of time related to research and writing.

 In particular, the court strikes the last 2.5 hours devoted to drafting the complaint. The requested 11.5 hours for this activity is excessive. Granted, the complaint was a lengthy instrument, but a great portion was simply a recitation of very basic and simple facts. Furthermore, counsel has been or is hereby given credit for an additional 2.5 hours of analysis of the POMS instructions, and that provided the foundation for the most substantive part of the complaint. The court also finds roughly 6 hours of preparation for the short oral argument in support of class certification to be excessive, especially since between 4 and 5 hours had already been committed to memorandum preparation on the same issue. Thus, the court strikes an additional 3 hours.

 Having determined the hours of service for which a fee award is appropriate, the sole remaining issue concerns the proper hourly rate. Section 2412(d)(2)(A) of Title 28 of the United States Code provides that "attorney fees [pursuant to the Equal Access to Justice Act] shall not be awarded in excess of $ 75 per hour unless the court determines that an increase in the cost of living . . . justifies a higher fee." Surprisingly, this court has never before been presented with a request to award greater than $ 75 per hour to account for a cost of living increase. *fn3" In this case, however, the plaintiffs request an hourly rate of $ 99 to account for increases in the cost of living since October 1, 1981, the original effective date of the Equal Access to Justice Act. In support of this claim, the plaintiffs have attached a copy of the Department of Labor's urban consumer price index for 1970 through part of 1989.

 A strong majority of courts addressing this issue have determined that cost of living adjustments are appropriate and should be computed from the Act's original enactment date. See Ramon-Sepulveda v. I.N.S., 863 F.2d 1458 (9th Cir. 1988); Allen v. Bowen, 821 F.2d 963 (3rd Cir. 1987); Sierra Club v. Secretary of Army, 820 F.2d 513 (1st Cir. 1987); Trichilo v. Secretary of Health and Human Services, 823 F.2d 702 (2nd Cir. 1987); Hirschey v. F.E.R.C., 250 U.S. App. D.C. 1, 777 F.2d 1 (D.C.Cir. 1985); Holden v. Bowen, 668 F. Supp. 1042, 1047 (N.D.Ohio 1986). See also Baker v. Bowen, 839 F.2d 1075, 1984 (5th Cir. 1988) (apparently views 1981 as an appropriate reference point, but emphasizes adjustment not automatic and should be limited to ensuring adequate representation). These decisions reject use of the EAJA's August 1985 reenactment date as the "base" date for inflationary adjustments on the ground that legislative ...


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