Cheryl Minor v. Commissioner of Social Securi

Filing

OPINION and JUDGMENT filed : The judgment of the district court is VACATED, and the case is REMANDED for further proceedings consistent with the opinion of this court. Decision for publication. Ronald Lee Gilman, Helene N. White, and Jane Branstetter Stranch (AUTHORING), Circuit Judges.

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 16a0144p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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CHERYL LYNN MINOR,
Plaintiff-Appellant,

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v.
COMMISSIONER OF SOCIAL SECURITY,
Defendant-Appellee.

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No. 15-1054

Appeal from the United States District Court
for the Western District of Michigan at Grand Rapids.
No. 1:10-cv-00782—Janet T. Neff, District Judge.
Argued: January 27, 2016
Decided and Filed: June 21, 2016
Before: GILMAN, WHITE, and STRANCH, Circuit Judges.
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COUNSEL
ARGUED: Ronald D. Glotta, GLOTTA & ASSOCIATES, P.C., Detroit, Michigan, for
Appellant. Meghan O’Callaghan, SOCIAL SECURITY ADMINISTRATION, Chicago, Illinois,
for Appellee. ON BRIEF: Ronald D. Glotta, GLOTTA & ASSOCIATES, P.C., Detroit,
Michigan, for Appellant. Niranjan S. Emani, SOCIAL SECURITY ADMINISTRATION,
Chicago, Illinois, for Appellee.
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OPINION
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JANE B. STRANCH, Circuit Judge. Cheryl Minor suffers from multiple physical and
mental impairments, including migraine headaches, injuries from a serious car accident,
fibromyalgia, and depression. Minor previously appealed the Social Security Commissioner’s

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decision to deny her disability claims, and a panel of this court remanded with instructions to
award benefits. See Minor v. Comm’r of Soc. Sec., 513 F. App’x 417 (6th Cir. Jan. 24, 2013)
(Minor I). The question in this appeal boils down to whether the government must reimburse
Minor for her attorney fees under the provisions of the Equal Access to Justice Act (EAJA).
Specifically, the issue is whether the district court abused its discretion in calculating fees under
the EAJA by substantially reducing the requested hourly rate and number of hours. Because the
district court provided little explanation for drastically reducing the requested EAJA fee award,
we VACATE and REMAND with instructions for the district court to reconsider and provide a
full explanation of its reasoning.
I. LEGAL LANDSCAPE
We begin with a brief overview of federal law governing attorney fees in Social Security
benefits litigation. Fees for court representation may be awarded under section 406(b) of the
Social Security Act and/or under the Equal Access to Justice Act (EAJA). This is in part because
of the way Congress structured each statute’s fee provisions—while fees awarded under
42 U.S.C. § 406(b) are deducted from a claimant’s award of past-due Social Security benefits,
the United States must pay fees awarded under the EAJA out of government funds.

See

Gisbrecht v. Barnhart, 535 U.S. 789, 795–96 (2002). In other words, Social Security claimants
pay section 406(b) fees out of their benefits—benefit payments that would otherwise go into
their own pockets—whereas the government must pay EAJA fees independent of the benefits
award. Congress thus harmonized the two options for payment of fees covering the same work:
“[A]n EAJA award offsets an award under Section 406(b) . . . up to the point that the claimant
receives 100 percent of the past-due benefits.” Id. at 796 (citation omitted).
The purpose of the EAJA is to remove financial obstacles to challenging unreasonable
government action. See Comm’r, I.N.S. v. Jean, 496 U.S. 154, 163 (1990); Bryant v. Comm’r of
Soc. Sec., 578 F.3d 443, 445–46 (6th Cir. 2009). The EAJA provision for fees specifies that “a
court shall award” attorney fees and other expenses to a prevailing party, including a Social
Security claimant, in civil litigation against the United States government, “unless the court finds
that the position of the United States was substantially justified or that special circumstances

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make an award unjust.” 28 U.S.C. § 2412(d)(1)(A); see also Gisbrecht, 535 U.S. at 796 (quoting
id.); Bryant, 578 F.3d at 445.
Once a court makes the threshold determination that a party is eligible for EAJA fees, it
looks to the lodestar amount as a starting point for calculating a reasonable fee award. See Jean,
496 U.S. at 160–61 (citing Hensley v. Eckerhart, 461 U.S. 424, 433–37 (1983)); Gonter v. Hunt
Valve Co., 510 F.3d 610, 616 (6th Cir. 2007). The lodestar—used to calculate attorney fees
under a variety of different statutes—“is the product of the number of hours billed and a
reasonable hourly rate.” Gonter, 510 F.3d at 616 (citing Hensley, 461 U.S. at 434); see also
28 U.S.C. § 2412(d)(1)(B) (authorizing EAJA fee awards based on “the actual time expended
and the rate at which fees and other expenses were computed”). The EAJA imposes a statutory
cap of “$125 per hour” on the rate used to calculate the lodestar “unless the court determines that
an increase in the cost of living or a special factor . . . justifies a higher fee.” 28 U.S.C.
§ 2412(d)(2)(A). “In requesting an increase in the hourly-fee rate, Plaintiffs bear the burden of
producing appropriate evidence to support the requested increase.” Bryant, 578 F.3d at 450.
In the instant case, the issue is essentially whether the government must reimburse Minor
for some or all of the section 406(b) attorney fees to be deducted from her benefit award.1
II. BACKGROUND
The merits of Minor’s benefits claims—and the corresponding facts, which a prior
opinion described at length, see Minor I, 513 F. App’x at 418–32—are not at issue in this
litigation. Consequently, we focus only on the circumstances and procedural history surrounding
the contested fee award. See Jean, 496 U.S. at 156 (“Because the question for decision is so
narrow . . .[,] it is not necessary to restate the protracted history of this vigorously contested
litigation.”).
Minor filed the instant motion for EAJA attorney fees on April 2, 2013, seeking to offset
the attorney fees that were eventually paid out of her benefits. Minor asserted that she was
eligible for fees under the EAJA—i.e., that she was the prevailing party and that the
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The district court granted Minor’s motion for attorney fees under 42 U.S.C. § 406(b) and awarded her
counsel $35,323.25 (or 25% of Minor’s past-due benefits, from which the 406(b) fee award is taken).

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government’s position was not substantially justified. She requested a total of $30,975.05 in fees
for 176.85 hours of work performed by two attorneys from 2010 to 2013 at hourly rates ranging
from $175.06 to $184.32.

She also requested $712.16 in costs.

Minor attached several

supporting documents to her motion, including a personal affidavit, affidavits from both of her
attorneys, a Michigan State Bar Association report on attorney billing rates for 2010, and what
appears to be a printout from a website maintained by the Ninth Circuit Court of Appeals
regarding hourly rates for EAJA attorney fees adjusted to include cost-of-living increases in
recent years. The government opposed Minor’s motion for EAJA fees. It argued that she had
failed to justify an hourly rate over $125 and that the claimed number of hours was unreasonable,
but the government did not dispute that Minor was eligible for a fee award under the EAJA.
The district court referred Minor’s EAJA fee motion to a magistrate judge, who issued a
report and recommendation (R&R) suggesting that the court grant in part and deny in part
Minor’s motion. Specifically, the magistrate judge recommended awarding $8,080.00 in EAJA
fees based on a $125 hourly rate for 61 hours of attorney work plus $455.00 in costs. Minor
filed an objection, but the district court denied it and instead adopted the R&R, awarding Minor
EAJA fees in the amount of $8,080.00. Minor timely appealed the district court’s EAJA fee
award. The court later granted Minor’s separate motion for attorney fees under 42 U.S.C.
§ 406(b) and awarded $35,323.25 in fees payable out of her benefits award. Neither side
appealed the court’s section 406(b) award, and that award is not before this panel.
III. STANDARD OF REVIEW
This panel reviews a district court’s award or denial of EAJA attorney fees for an abuse
of discretion. See Glenn v. Comm’r of Soc. Sec., 763 F.3d 494, 497 (6th Cir. 2014); see also
Adcock-Ladd v. Sec’y of Treasury, 227 F.3d 343, 348–49 (6th Cir. 2000). Under our circuit
precedent, “[a] district court abuses its discretion when it relies on clearly erroneous findings of
fact, when it improperly applies the law, or uses an erroneous legal standard[,]” and a panel will
find such an abuse of discretion when it “is firmly convinced that a mistake has been made[.]”
Glenn, 763 F.3d at 497 (quoting Stough v. Mayville Cmty. Sch., 138 F.3d 612, 614 (6th Cir.
1998)).

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IV. ANALYSIS
The government has not contested Minor’s eligibility for an EAJA fee award—meaning
there is no dispute that Minor was the prevailing party or that the government’s litigating
position lacked substantial justification. The only question before this panel is whether the
district court abused its discretion in calculating the lodestar with respect to determining the
applicable hourly rate and the number of attorney hours reasonably expended in this case. A
“district court’s calculation of the lodestar value . . . deserves substantial deference, but only
when the court provides a ‘clear and concise explanation of its reasons for the fee award.’”
Gonter, 510 F.3d at 616 (quoting Hadix v. Johnson, 65 F.3d 532, 535 (6th Cir. 1995)). Put
another way, “[a]lthough the trial court’s discretion in fee award cases sweeps broadly, it is not
absolute. Among other things, the district court ‘must provide a clear and concise explanation of
its reasons for the fee award.’” Adcock-Ladd, 227 F.3d at 349 (quoting Hadix, 65 F.3d at 535).
Accordingly, “we have found an abuse of discretion where a district court fails to explain its
reasoning adequately or to consider the competing arguments of the parties.”

Garner v.

Cuyahoga Cty. Juvenile Court, 554 F.3d 624, 643 (6th Cir. 2009) (quoting Geier v. Sundquist,
372 F.3d 784, 791 (6th Cir. 2004)). “Failure to provide such an explanation requires us to
remand the case for further consideration.” U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d
1185, 1193 (6th Cir. 1997); see also Binta B. ex rel. S.A. v. Gordon, 710 F.3d 608, 639 (6th Cir.
2013).
A. Hourly Rate
With respect to the appropriate hourly rate, the R&R concluded—among other things—
that the Michigan State Bar report on attorney billing that Minor submitted with her motion for
EAJA fees did not adequately support her request for a fee rate greater than the statutory cap of
$125 per hour. Our circuit, however, has previously accepted state bar reports as evidence of
reasonable hourly attorney rates. See Gonter, 510 F.3d at 619 (discussing Auto All. Int’l, Inc. v.
U.S. Customs Serv., 155 F. App’x 226, 228 (6th Cir. Nov. 23, 2005)). And the state bar report
submitted in this case breaks down Michigan attorneys’ rates in a number of detailed ways, such
as by “Office Location” (R. 41-5, PageID 1226), “Primary County of Practice” (id. at PageID
1229–30), and “Field of Practice” (id. at PageID 1227–28). A chart of hourly rates organized by

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field even includes information about rates for Michigan attorneys who practice “Public
Benefits” law (id. at PageID 1228), a field that appears to encompass the work of Minor’s
counsel. According to the report, public-benefits attorneys practicing in Michigan in 2010 had a
median hourly billing rate of $200. (Id.)
The R&R’s stated reason for rejecting the state bar report—reasoning that the district
court adopted—was that the “report fails to advance counsel’s position as it simply does not
speak to counsel’s particular circumstances.” (R. 45, PageID 1240.) Neither the magistrate
judge nor the district court elaborated on the particular nature of those perceived circumstances
or offered any further explanation for the detailed report’s purported inadequacy. We have
previously held, and reiterate now, that “[i]t is essential that the judge provide a reasonably
specific explanation for all aspects of a fee determination” because “[u]nless such an explanation
is given, adequate appellate review is not feasible[.]” Binta B., 710 F.3d at 639 (first alteration in
original) (quoting Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 558 (2010)). The explanation
for disregarding the state bar report is not reasonably specific, particularly in light of our
previous approval of “a district court’s use of a state bar survey in determining a reasonable rate
for compensating attorneys.” Gonter, 510 F.3d at 619. We therefore remand for reconsideration
and for clear and concise explanation on this point. See U.S. Structures, Inc., 130 F.3d at 1193;
see also Garner, 554 F.3d at 643.
B. Number of Hours
The magistrate judge reviewed the various time entries that Minor’s counsel submitted in
support of the EAJA fee request and concluded that only 61 of the 176.85 claimed hours were
reasonably expended, thereby recommending a greater than 65% reduction in the number of
hours used to calculate the lodestar. In recommending such a drastic overall reduction, the
magistrate judge gave no explanation other than that a claimed number of hours for a particular
task was “simply not reasonable” (R. 45, PageID 1242), “not reasonable” (id. at PageID 1243),
or “unreasonable” (id. at PageID 1244), and suggested an alternative number of hours without
explaining why the rejected hours were not reasonable or why the recommended hours were. In
a number of instances the nature of the task provides some limited insight into the reason for
rejecting the reasonableness of the hours claimed.

But even if that were sufficient, the

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alternative number of hours suggested are not reasonable on their face and require further
explanation. For example, the R&R suggested the following as reasonable amounts of time in
which to complete each named task: 30 minutes to prepare the complaint, accompanying
exhibits, and a motion to proceed in forma pauperis (id. at PageID 1241); 30 minutes to review
11 different orders, letters, and motions, which is less than 3 minutes per document (id. at
PageID 1241–42); 45 minutes to review a 900-page administrative-hearing transcript (id. at
PageID 1242); 15 minutes to review defendant’s answer (id. at PageID 1243); and 30 minutes to
review and/or prepare 9 separate orders, letters, and motions, which is less than 4 minutes per
document (id. at PageID 1247).
“When the issue is a question of the lawyer’s judgment in billing for a particular number
of hours on a piece of work, we must depend in larger measure on the fairness of the District
Court in assessing the needs of the case.”

Gonter, 510 F.3d at 620 (quoting Coulter v.

Tennessee, 805 F.2d 146, 152 (6th Cir. 1986)). That said, the district court must still explain its
reasoning in a way that permits adequate appellate review. See id. at 616 (“The district court’s
calculation of the lodestar value . . . deserves substantial deference, but only when the court
provides ‘a clear and concise explanation of its reasons for the fee award.’” (quoting Hadix,
65 F.3d at 535)); see also Hensley, 461 U.S. at 437 (“It remains important, however, for the
district court to provide a concise but clear explanation of its reasons for the fee award.”)
The reductions adopted by the district court require more justification than was given.
See Ohio Right to Life Soc., Inc. v. Ohio Elections Comm’n, 590 F. App’x 597, 604 (6th Cir.
2014) (vacating and remanding fee award where “[n]either the report and recommendation nor
the district court’s order provides a sufficient basis for a reduction of [such] magnitude”); see
also Binta B., 710 F.3d at 640 (vacating and remanding fee award and finding court’s “brief
characterization” of reasons for reducing fee award “insufficient” based on the case’s long
history and other factors).

Such explanation may, of course, be concise but it must be

sufficiently specific to provide a clear picture of the reasoning supporting such minimal
suggested hours.

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CONCLUSION
For the foregoing reasons, we VACATE and REMAND with instructions for the district
court to reconsider the EAJA fee award and to provide clear and reasonably specific explanations
of its reasoning with respect to determining reasonable hourly rates for Minor’s attorneys and the
hours that they reasonably expended on Minor’s behalf in this case.