Smith v. Astrue

Filing 31

ORDER by Judge Hamilton granting in part and denying in part 25 Motion for Attorney Fees (pjhlc3, COURT STAFF) (Filed on 7/31/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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CLIFFORD O. SMITH II,

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United States District Court
For the Northern District of California

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No. C 10-4814 PJH

Plaintiff,

ORDER RE PLAINTIFF’S MOTION FOR
ATTORNEY’S FEES

v.
MICHAEL J. ASTRUE, Commissioner of
Social Security
Defendant.

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Plaintiff Clifford O. Smith (“Smith”) applies for an award of attorney’s fees and costs

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pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), for the time that

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his attorney, Harvey P. Sackett (“Sackett”), expended on appeal before this court of the

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Commissioner’s final decision denying plaintiff’s disability insurance benefits (“DIB”) and

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supplemental security income (“SSI”) benefits under Titles II and XVI of the Social Security

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Act. Having carefully reviewed the parties’ papers and considered their arguments and the

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relevant legal authority, the court hereby GRANTS IN PART and DENIES IN PART Smith’s

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motion for the following reasons.

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BACKGROUND
On March 26, 2012, this court granted Smith’s motion for summary judgment, and

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denied the Commissioner’s cross-motion for summary judgment. The court remanded the

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case pursuant to sentence four of 42 U.S.C. § 405(g) because the administrative law judge

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(“ALJ”) erred in partially rejecting Dr. Gonick-Hallows’ opinion, and because he failed to

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pose hypotheticals to the vocational expert (“VE”) reflecting all of Smith’s limitations based

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on Dr. Gonick-Hallows’ opinion. On remand, the ALJ was ordered to consider Dr. Gonick-

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Hallows’ opinion, articulate clear and convincing reasons to support any rejection of the

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opinion, and to present a new hypothetical to the VE incorporating any changes to Smith’s

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residual functional capacity (“RFC) and/or properly supported limitations.

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On April 30, 2012, Smith filed a motion with the court, requesting an award of

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attorney’s fees in the amount of $6,614.78, based on 33.65 hours for Sackett’s work, as

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well as 5.2 hours for paralegal work.1 On June 5, 2012, Sackett added 2.6 hours in a

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supplemental declaration attached to Smith’s reply brief to seek a total award of fees in the

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amount of $7,084.31.

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United States District Court
For the Northern District of California

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DISCUSSION
A.

Legal Standards

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The EAJA mandates an award of attorney’s fees and expenses to a prevailing party

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other than the United States in any civil action, other than one sounding in tort, “brought by

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or against the United States . . . unless the court finds the position of the United States was

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substantially justified or that special circumstances make an award unjust.” 28 U.S.C.

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§ 2412(d)(1)(A). A disability applicant becomes a prevailing party “if the denial of [his]

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benefits is reversed and remanded regardless of whether disability benefits ultimately are

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awarded.” Gutierrez v. Barnhart, 274 F.3d 1255, 1257 (9th Cir. 2001) (citing Shalala v.

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Schaefer, 509 U.S. 292, 300-02 (1993)). In addition, the government carries the burden to

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show that its position was substantially justified or that special circumstances existed. Id.

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B.

Motion for Attorney’s Fees

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Here, Smith’s counsel, Harvey Sackett, argues that the requested attorney’s fees

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are warranted because the ALJ’s decision was contrary to relevant case law and agency

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policy. Because the ALJ’s decision had no reasonable basis in law and fact, Smith

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contends the Commissioner’s position was not substantially justified. Smith also asserts

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the payment of fees should be directed to his counsel because of a fee assignment from

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Smith to Sackett.

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Sackett billed 2.4 hours at $175.06 per hour for 2010 and billed 31.25 hours at $180.59
per hour for 2011. Sackett billed 5.2 hours for the paralegal’s time at $106.00 per hour.
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In contrast, the Commissioner claims his position was substantially justified and

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Smith should not be awarded fees. Additionally, the Commissioner opposes the payment

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of fees directly to Sackett. The Commissioner does not dispute the reasonableness of

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Sackett’s hourly rates other than to contend in the conclusion of his opposition brief that

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“[a]lternatively, if fees are awarded, they must be substantially reduced.” See Def.’s Opp’n

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Br. at 6.

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1.

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Substantial Justification
“The Commissioner is ‘substantially justified’ if his position met ‘the traditional

reasonableness standard - that is justified in substance or in the main, or to a degree that

United States District Court
For the Northern District of California

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could satisfy a reasonable person.’” Lewis v. Barnhart, 281 F.3d 1081, 1083 (9th Cir.

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2002). Moreover, “[t]he Supreme Court has explained that ‘a position can be justified even

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though it is not correct, and [that] it can be substantially . . . justified . . . if it has a

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reasonable basis in law and fact.’” Id. (quoting Pierce v. Underwood, 487 U.S. 552, 556 n.2

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(1988)); see also Flores v. Shalala, 49 F.3d 562, 569 (9th Cir. 1995) (“[i]n this circuit, we

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apply a reasonableness standard in determining whether the government’s position was

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substantially justified for purposes of the EAJA”).

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As mentioned above, Smith contends the Commissioner’s position was not

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substantially justified. Because this court found that the ALJ mistreated Dr. Gonick-

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Hallows’ opinion, similarly failed to provide clear and convincing reasons for partially

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rejecting it, and consequently gave inaccurate hypotheticals to the VE, Smith contends the

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ALJ acted contrary to case law and agency policy. Smith further argues the Commissioner

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maintained an erroneous position during litigation.

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In contrast, the Commissioner contends his position was substantially justified.

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Specifically, the Commissioner argues that even though the court reversed and remanded

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the ALJ’s decision, he was substantially justified in his treatment of Dr. Gonick-Hallows’

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opinion. The Commissioner maintains he acted reasonably and he based his position on

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the relevant facts and Ninth Circuit authority. Moreover, because the court engaged in a

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detailed discussion of the parties’ cited authority, the Commissioner argues this
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demonstrates that there was a “genuine dispute” regarding the proper treatment of Dr.

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Gonick-Hallows’ opinion. Pierce, 487 U.S. at 565.

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The court finds that the Commissioner’s position was not substantially justified, thus

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an award of attorney’s fees pursuant to the EAJA is warranted. More specifically, the court

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finds that the Commissioner has failed to meet his burden to demonstrate that his position

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had a reasonable basis in law and fact. Although the court undertook a detailed discussion

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of the parties’ cited authority in its March 26, 2012 order, the court’s order nonetheless

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reveals that the Commissioner’s position did not have a reasonable basis in law and fact.

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For example, the court pointed out that the ALJ failed to provide clear and

United States District Court
For the Northern District of California

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convincing reasons for discounting Dr. Gonick-Hallows’ opinion. The court, citing Ryan v.

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Comm’r of Soc. Sec., 528 F.3d 1194, 1199 (9th Cir. 2008), found that the ALJ similarly

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failed to explain how Dr. Gonick-Hallows’ opinion was based on Smith’s subjective

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complaints. In addition, the court also explained that the Commissioner’s reliance on

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Morgan v. Comm’r of Soc. Sec. Admin., 169 F.3d 595 (9th Cir. 1999) was “completely

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unrelated” to one of the issues on which the Commissioner based his litigation position.

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The court also found that the Commissioner’s position was not reasonable factually.

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Most importantly, the court explained that Dr. Gonick-Hallows carried out three

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standardized psychological examinations, which the ALJ failed to properly evaluate. The

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court explained the psychological examinations were not only supported by social security

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regulations, but also by Ninth Circuit authority. See Vasquez v. Astrue, 572 F.3d 586, 596

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(9th Cir. 2008).

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Accordingly, the court finds that the Commissioner’s position was not substantially

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justified and the court GRANTS Smith’s motion for attorney’s fees.

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2.

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Reasonableness of Hours
As noted above, Smith seeks a total award of fees in the amount of $7,084.31. This

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amount is based on 41.45 hours for both Sackett’s work and paralegal work. The

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Commissioner does not contest Smith’s hourly rate or specific fee request other than to

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briefly argue in the conclusion of his opposition brief that the fees should be “substantially
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reduced.” See Def.’s Opp’n Br. at 6.

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Under the EAJA, “reasonable attorney fees” shall be awarded. 28 U.S.C. §

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2412(d)(2)(A). Attorney’s fees are set at a market rate but capped at $125 per hour. Id.

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Thus, a district court may not award attorney’s fees in excess of $125 per hour “unless the

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court determines that an increase in the cost of living or a special factor, such as the limited

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availability of qualified attorneys for the proceedings involved, justifies a higher fee.” 28

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U.S.C. § 2412(d)(2)(A)(ii).

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This court has discretion in determining the amount of a fee award, including the

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reasonableness of the hours claimed by the prevailing party. Gates v. Deukmejian, 987

United States District Court
For the Northern District of California

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F.2d 1392, 1398 (9th Cir. 1992) (citing Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). In

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determining what constitutes a reasonable fee, a court should consider factors such as the

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number of hours requested and any duplication of effort. Id. at 1397. In determining the

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fee award, the court should “provide a concise but clear explanation of its reasons for the

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fee award.” Hensley, 461 U.S. at 437 (involving attorney fee proceeding under 42 U.S.C.

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§ 1988); see INS v. Jean, 496 U.S. 154 (1990) (the district court’s determination of what fee

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is reasonable under the EAJA is the same as the standard in Hensley). Hensley requires

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only that this court provide some explanation of how it arrived at the amount of

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compensable hours for awarding attorney’s fees. See Gates, 987 F.2d at 1398.

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The Supreme Court has stated that “the most useful starting point for determining

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the amount of a reasonable fee is the number of hours reasonably expended on the

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litigation multiplied by a reasonable hourly rate.” Hensley, 461 U.S. at 433. In addition, the

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party seeking fees bears the burden of establishing entitlement to an award and

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documenting the appropriate hours expended and the hourly rates. Id. at 437.

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Fee shifting statutes like the EAJA encourage competent attorneys to accept cases

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that they otherwise would not by assuring recovery of a reasonable fee. A reasonable fee

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should be awarded based on, but not limited to, the complexity of the case or the novelty of

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the issues, and the attorney’s expertise and skill. See Kerr v. Screen Extras Guild, Inc.,

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526 F.2d 67, 69-70 (9th Cir. 1975) (setting forth twelve factors the district court may
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consider in calculating reasonable attorney’s fees, at least three of which the court must

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consider so as not to constitute an abuse of discretion), rev’d on other grounds, City of

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Burlington v. Dague, 505 U.S. 557, 567 (1992) (deeming irrelevant to fee calculation the

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fixed or contingent nature of a fee, casting doubt on the relevance of the case’s

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“desirability” to the fee calculation). The amount of time reasonably billed for social security

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appeals varies depending on the complexity of the case, the experience of counsel, and the

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disposition of the appeal. See Widrig v. Apfel, 140 F.3d 1207, 1209 (9th Cir. 1998)

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(concluding that the district court did not abuse its discretion in reducing an award of

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attorney’s fees in a social security appeal by considering the twelve factors set forth in Kerr

United States District Court
For the Northern District of California

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and the attorney’s insufficient support for his claimed hourly rate).
There is no bright line rule. Some courts have found that forty hours expended for a

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social security appeal is excessive. For example, in Vanover v. Chater, the court found

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forty-two hours was excessive. 946 F.Supp. 744, 746 (E.D. Mo. 1996). The court based

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this finding on the large number of routine social security disability cases it received and

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reduced the hours from forty-two to twenty hours. Id. Similarly, in Spruil v. Bowen, the

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district court reduced the hours from sixty-two to thirty-seven to reflect “billing judgment” in

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a social security case. 691 F.Supp. 302, 306-07 (M.D. Fla. 1988). In Chandler v.

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Secretary of Dep’t. of Health and Human Serv., the court found forty-one hours for a district

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court briefing unreasonable. 792 F.2d 70, 73 (6th Cir. 1986).

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On the other hand, some courts have found forty hours or more reasonable under

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the EAJA. For example, the court in Hardy v. Callahan, 1997 WL 470355, *9 (E.D. Tex.

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1997), awarded attorney’s fees for forty hours of work expended on a relatively non-

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complex social security case. Id. at *8. The court awarded a total of forty hours rather than

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the requested 58.5 hours because the case did not involve any particularly complex factual

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issues, the medical evidence was straightforward and understandable, and the legal issues

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were not matters of first impression. Id. Another district court likewise determined that forty

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hours was, in fact, “a reasonable expenditure of time” in a social security appeal. See

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Pribek v. Secretary of Dep’t. of Health and Human Serv., 717 F.Supp. 73, 75-7 (W.D. N.Y.
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1989) (granting fees for forty hours instead of the requested eighty-seven hours because

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“forty hours more adequately reflects, in this Court’s experience, a reasonable expenditure

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of time on a case of this sort, which is unextraordinary in all respects”).

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a.

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It appears that Smith seeks an award of attorney's fees calculated at a rate adjusted

Sackett’s Hourly Rate

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to account for an increase in the cost-of-living. In Sorenson v. Mink, 239 F.3d 1140, 1148

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(9th Cir. 2001), the Ninth Circuit approved a cost-of-living adjustment that is computed by

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multiplying the basic EAJA rate cap ( i.e., $125) by the current Consumer Price Index for

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Urban Consumers (“CPI-U”) for the year the fees were earned, then dividing the product by

United States District Court
For the Northern District of California

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the CPI-U in the month the statutory rate cap was imposed. The quotient equals the

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adjusted hourly rate. Id.

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Here, as noted, Smith seeks attorney’s fees at a rate of $175.06 per hour for 2010,

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and $180.59 per hour for 2011. Smith has not specifically explained how the CPI-U results

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in the 2010 and 2011 rates he claims in this case. However, the Commissioner does not

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dispute this rate, and the court notes that another judge on this court approved attorney’s

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fees at the rate of $174.69 per hour for Smith’s attorney, Sackett, in another case based on

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the CPI-U for work performed in 2006 and 2007. See Hayes v. Astrue, 2008 WL 648463

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at *6 (N.D. Cal. 2008). Accordingly, the requested rates, which pertain to work performed

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several years later in 2010 and 2011, appear to reasonably account for an increase in the

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cost-of-living, and the court will approve the requested rates under 28 U.S.C. §

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2412(d)(2)(A).

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b.

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The court finds that the EAJA award amount for Sackett’s attorney’s fees and other

Sackett’s Initial 33.65 Hours and the Paralegal’s 5.2 Hours of Work

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costs is reasonable. More specifically, the court finds that the services rendered

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constituted a reasonable allocation of time and resources. The court’s finding is also

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supported by the medical history and evidence involved, the length of the administrative

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transcript, and the issues presented in the case. Although Sackett bears the burden to

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establish the appropriate amount of hours expended, as well as the hourly rates, the
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Commissioner’s failure to specify how or why Sackett’s fees should be reduced further

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persuades the court to award the requested amount. Therefore, the court will allow the

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33.65 hours of Sackett’s work and the 5.2 hours of the paralegal’s work without any

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reduction.

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c.

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As noted above, Sackett seeks an additional award of 2.6 hours for the time spent

Additional 2.6 Hours For Reply on Fee Motion

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preparing the reply brief and its attached supplemental declaration. The Supreme Court

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has held that under the EAJA, the prevailing party is entitled to fees incurred in protecting

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the EAJA fee award in subsequent litigation by the Government over the amount of the

United States District Court
For the Northern District of California

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EAJA fee award. INS, 496 U.S. at 161; see also Love v. Reilly, 924 F.2d 1492, 1497 (9th

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Cir. 1991). Therefore, Sackett may reasonably request compensation for the work he

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performed for the reply brief and supplemental declaration. Because the 2.6 hours of work

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is reasonable, the court will allow and grant the request.

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3.

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Direct Payment of EAJA Attorney’s Fees to Plaintiff’s Attorney
Smith requests that the payment of attorney’s fees be made directly to Sackett

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based on a fee assignment from Smith to Sackett. The Commissioner, on the other hand,

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argues such a request is contrary to the EAJA and Supreme Court precedent.

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According to the EAJA, “a court shall award to a prevailing party . . . fees and other

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expenses . . . incurred by that party in a civil action (other than cases sounding in tort) . . .

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unless the court finds that the position of the United States was substantially justified.” 28

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U.S.C. § 2412(d)(1)(A) (emphasis added).

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In Astrue v. Ratliff, 130 S.Ct. 2521, 2524 (2010), the Supreme Court resolved a

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longstanding circuit split on the question of whether fee awards under EAJA were payable

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to the party or the attorney by holding that EAJA awards are to be paid to the prevailing

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litigant. See United States v. $186,416.00 in U.S. Currency, 642 F.3d 753, 755 (9th Cir.

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2011) (discussing Ratliff, 130 S.Ct. at 2525-29). In Ratliff, the Supreme Court highlighted

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the absence of language in EAJA explicitly directing fees to attorneys. Id. at 756

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(discussing Ratliff, 130 S.Ct. at 2525-29). Comparing EAJA with a provision in the Social
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Security Act making fee awards payable “to such attorney,” see 42 U.S.C. § 406(b)(1)(A),

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the Court concluded that “given the stark contrast between the SSA's express authorization

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of direct payments to attorneys” and the absence of such language in EAJA, it would not

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interpret EAJA to “contain a direct fee requirement absent clear textual evidence supporting

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such an interpretation.” Id. (quoting Ratliff, 130 S.Ct. at 2527–28).

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Based on Ratliff and the Supreme Court’s interpretation of EAJA, Smith is

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considered the prevailing party in the action before this court. Accordingly, Smith is entitled

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to the direct payment of the EAJA award and not Sackett. Therefore, the court DENIES

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Smith’s request that payment be directed to Sackett. Instead, the court orders that the

United States District Court
For the Northern District of California

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payment be directed to Smith.

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CONCLUSION

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For the foregoing reasons, this court GRANTS IN PART and DENIES IN PART

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Smith’s motion for attorney’s fees and costs. Specifically, the court finds that the

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Commissioner’s position was not substantially justified and thus GRANTS Smith’s motion

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for attorney’s fees and other costs. However, the court DENIES Smith’s request to make

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payment to Sackett and orders payment be made to Smith in the total amount of $7,084.31.

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IT IS SO ORDERED.

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Dated: July 31, 2012

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Phyllis J. Hamilton
UNITED STATES DISTRICT JUDGE

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