Ibarra-Montufar v. Astrue
Filing
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MEMORANDUM Opinion and Order Signed by the Honorable Young B. Kim on 12/12/2013. (ma,)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
HECTOR G. IBARRA-MONTUFAR,
Plaintiff,
v.
CAROLYN COLVIN, Acting
Commissioner, Social Security
Administration,1
Defendant.
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No. 12 CV 736
Magistrate Judge Young B. Kim
December 12, 2013
MEMORANDUM OPINION and ORDER
Before the court is Plaintiff Hector Ibarra-Montufar’s motion for fees and
costs pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. §§ 2412(a),(d).
Ibarra-Montufar argues that he is entitled to $10,681.59 in fees and $18.30 in costs
as a “prevailing party” under EAJA. The motion for fees is granted for the following
reasons:
Background
In April 2009, Ibarra-Montufar applied for disability insurance benefits
pursuant to sections 216(i) and 223(d) of the Social Security Act, alleging that he
became disabled on January 3, 2009, as a result of degenerative disk disease.
(Administrative Record (“A.R.”) 102-03.) After the Social Security Administration
denied Ibarra-Montufar’s claims initially, (id. at 54), and then again on
Pursuant to Federal Rule of Civil Procedure 25(d), Carolyn W. Colvin—who
became the Acting Commissioner of Social Security on February 14, 2013—is
automatically substituted as the named defendant.
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reconsideration, (id. at 60), Ibarra-Montufar requested and received a hearing
before an administrative law judge (“ALJ”), (id. at 66).
The ALJ conducted a
hearing and issued a decision finding Ibarra-Montufar not disabled. (Id. at 20-27.)
Ibarra-Montufar filed this action for review of the Commissioner’s final decision,
and the parties subsequently consented to the jurisdiction of this court. (R. 1, 9.)
On May 30, 2013, the court granted Ibarra-Montufar’s motion for summary
judgment and remanded the case for further proceedings. (R. 33-35.)
As a “prevailing party,” Ibarra-Montufar now seeks an award of $10,681.592
in attorney and legal assistant fees and $18.30 in costs under EAJA.
This
requested award involves an hourly attorney rate of $184.25 billed primarily in the
month of June 2012. (R. 36-3, EAJA Itemization of Time.) The Commissioner does
not contest Ibarra-Montufar’s entitlement to recover fees or costs, but she contends
that both the number of hours worked and the hourly rate charged are excessive
and should be reduced. Additionally, the Commissioner argues that any EAJA
award should be granted as payable directly to Ibarra-Montufar, not to his attorney,
pending confirmation that Ibarra-Montufar does not owe a pre-existing debt to the
government.
Ibarra-Montufar initially sought $9,926.17 in fees, representing 53.1 hours of
attorney work and 1.5 hours of legal assistant work. In his reply, Ibarra-Montufar
seeks an additional $755.42 in fees, representing an additional 4.1 hours of attorney
work on the reply brief, for a new total of $10,681.59. (R. 47, Pl.’s Reply at 9-10.)
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Analysis
Pursuant to EAJA, an award of attorney fees “shall be based upon prevailing
market rates for the kind and quality of the services furnished, except that . . .
attorney fees shall not be awarded in excess of $125.00 per hour unless the court
determines that an increase in the cost of living . . . justifies a higher fee.” 28
U.S.C. ' 2412(d)(2)(A)(ii); Bias v. Astrue, No. 11 C 2247, 2013 WL 615804, at *1
(N.D. Ill. Feb. 15, 2013). In 2008 the Seventh Circuit recognized that “given the
passage of time since the establishment of the hourly rate, a cost-of-living
adjustment is warranted.” Tchemkou v. Mukasey, 517 F.3d 506, 512 (7th Cir. 2008).
EAJA does not automatically entitle an attorney to a cost-of-living adjustment,
however, and one is not presumed despite the fact that the $125 cap rate was set
more than 17 years ago in March 1996. Mathews–Sheets v. Astrue, 653 F.3d 560,
563 (7th Cir. 2011).
As the Seventh Circuit explained in Mathews-Sheets,
“[i]nflation affects different markets, and different costs in the same market, in
different ways,” such that a lawyer seeking an adjustment because of an increase in
the cost of living must show that “inflation has increased the cost of providing
adequate legal service to the person seeking relief against the government.” Id.
However, “[t]he Mathews–Sheets court did not describe any particular method or
manner by which a lawyer might demonstrate that inflation has increased the cost
of legal services to persons seeking redress against the government.” Shipley v.
Astrue, No. 10 CV 1311, 2012 WL 1898867, at *3 (S.D. Ill. May 23, 2012). This
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absence of guidance has led to numerous interpretations of what a litigant must
prove when seeking a cost of living increase under EAJA.
In Mireles v. Astrue, No. 10 CV 6947, 2012 WL 4853065 (N.D. Ill. Oct. 11,
2012), the district court evaluated Mathews-Sheets within the same context as
presented in this case and determined as follows:
Mathews–Sheets is best read to require a litigant seeking a cost of
living increase under the EAJA to establish two things: (1) that the
cost of living in the region has indeed increased to the degree of his
requested adjustment, and (2) that his attorney’s costs of providing
legal services have increased in a manner that tends to show that
inflation has indeed raised those costs. Both showings are necessary
because general inflation might not raise the particular costs of
running a law office, while a particular attorney’s increased costs
might be attributable to factors other than inflation, such as the
attorney’s decision to move to a nicer office or to buy more expensive
office supplies.
Id. at *3. Other courts in this district have reached the same conclusion. See
Claiborne ex rel. L.D. v. Astrue, 877 F.Supp.2d 622, 626-28 (N.D. Ill. 2012); Booker v.
Colvin, No. 09 CV 1996, 2013 WL 2147544, at *6 (N.D. Ill. May 16, 2013); Dewolf v.
Astrue, No. 11 CV 2043, 2012 WL 3260420, at *2-3 (N.D. Ill. Aug. 8, 2012). This
court also adopts the reasoning set forth in Mireles and likewise applies the twopart analysis.
With this standard in mind, the court turns to the fee request.
Ibarra-
Montufar supports his requested hourly attorney rate of $184.25 by attaching cost
of living calculations based upon the “all items” portion of the Consumer Price Index
– All Urban Consumers (“CPI-U”). (R. 36-1.) This court previously held that the
CPI-U is an appropriate index by which to show that the cost of living in this region
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has indeed increased to the degree of the requested adjustment. See Cobb v. Colvin,
No. 11 CV 8847, 2013 WL 1787494, at *2 (N.D. Ill. April 25, 2013) (approving fee
calculation of $184.75 per hour based on the CPI-U); see also Bias, 2013 WL 615804,
at *2 (approving fee calculation of $181.25 per hour based on the CPI-U “all items”
index); Hamrick v. Astrue, No. 09 CV 179, 2010 WL 3862464, at *3 (N.D. Ind. Sept.
27, 2010) (“[I]t appears that district courts in the Seventh Circuit have permitted
the use of either the national or regional index, provided that plaintiff’s counsel
justifies the increased rate that he seeks.”).
Further, to satisfy Mathews-Sheets’s directive for additional information
proving that inflation has increased the attorney’s cost of providing legal
services─as opposed to the increase caused, for instance, by an attorney’s desire for
fancier office space or supplies─Ibarra-Montufar alleges that his attorney has
incurred additional expenses in the form of increases to rent (at least 3% annually),
employee salaries (ranging from 3-5% annually), health insurance premiums (100%
since 1996), Westlaw fees, and continuing legal education conferences, among other
things. (R. 36, Pl.’s Mot. at ¶17.) Ibarra-Montufar’s attorney, Barry Schultz, avers
that he charged a non-contingency hourly rate of $180 in 1996, whereas today he
charges $275—an increase of 52%.
(Id.)
Attorney Schultz explains that the
increases in rent, health insurance costs, and salaries are the direct result of
inflationary pressures such as increased rents charged by landlords and increased
insurance premiums.
(Id.)
He has also provided affidavits from six attorneys
licensed to practice in the State of Illinois, all of whom represent clients seeking
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Social Security disability benefits, and all of whom testify that they charge hourly
rates ranging from $165 to $550 per hour. (R. 36-4, 5, 6, 7, 8, 9.) One of these
attorneys, who has been practicing law since 1973, testified that he knows of no
attorney who would represent a Social Security client in federal court for less than a
fully-adjusted for inflation fee under EAJA. (Id. at 36-4.) Finally, Ibarra-Montufar
points out that even the Social Security Administration’s own fee agreement process
ceilings are 50 percent higher today than they were in 1996. (R. 36 at ¶16.)
The Commissioner counters that these allegations—particularly as to the
increased costs associated with running a legal practice—are not relevant here
because the majority of the legal work performed on Ibarra-Montufar’s file was
performed by a contract attorney living in a different state.
According to the
Commissioner, “usual arguments regarding increased health insurance premiums,
office rent, and so forth, do not apply when employing contract attorneys.” (R. 43,
Govt.’s Resp. at 8.) Furthermore, the Commissioner contends, contract attorneys
work for less than the hourly rate sought by lead attorneys, resulting in a cost
savings that should be passed along to the government. (Id.)
This court is satisfied with Ibarra-Montufar’s proffered evidence indicating
that inflation has increased the prevailing market rate for legal work compensable
under EAJA. See also Suess v. Colvin, 11 CV 4090, 2013 WL 5304094, at *2 (N.D.
Ill. Sept. 18, 2013) (noting that other courts within this district have analyzed the
same arguments and “have found that similar supporting evidence justifies an
inflation adjustment to the EAJA hourly rate”); Booker, 2013 WL 2147544, at *7-8
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(analyzing similar supporting arguments and awarding an enhanced hourly rate of
$169.71). Furthermore, the court is satisfied that the fee request of $184.25 per
hour adequately reflects the inflationary effect upon Attorney Schultz’s hourly rate.
See Bias, 2013 WL 615804, at *2 (granting attorney’s rate of $181.25 per hour under
EAJA); Shipley, 2012 WL 1898867, at *3-4 (granting attorney’s rate of up to $175.75
per hour under EAJA); Gonzalez v. Astrue, No. 10 CV 899, 2012 WL 1633937, at *2
(S.D. Ind. May 9, 2012) (granting attorney’s rate of up to $180.23 per hour under
EAJA).
The Commissioner’s contract-attorney argument does not change this
determination, even though the argument has some facial appeal.
The
Commissioner’s position is that because contract attorneys are not “employees” of
the lead attorney’s law office, an increase in the cost of running a law office has no
relevance to the fee requested above the cap rate and, therefore, the Commissioner
should only be ordered to absorb the fee paid to the contract attorney. The court is
willing to accept the notion that the hourly rate paid to the contract attorney is
more likely than not less than the hourly rate sought by Attorney Schultz. But the
court is not willing to accept the Commissioner’s logic that having a contract
attorney perform work on Social Security disability cases has no impact on the cost
of running a law office. For example, even though a contract attorney performed
work on this case, Attorney Schultz is the attorney of record and has to accept the
responsibility for what happens in this case.
As such, the contract attorney
arrangement Attorney Schultz has put in place may impact his liability insurance
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premium. Also, the Commissioner’s argument supposes that Attorney Schultz does
not have to pay anything to his contract attorneys unless he is able to recover fees.
If he does pay the contract attorneys for their work no matter what happens with
the appeal, these payments do impact the cost of operating his practice.
The
Commissioner also neglects to consider the real possibility that Attorney Schultz
has no choice but to retain contract attorneys on Social Security disability
cases─where he is unable to charge his typical market hourly rate─because of the
rise in the cost of running a law office and of having permanent associates. Thus,
while the argument has some facial allure, it is neither sufficiently developed nor
legally supported.
Numerous other courts in this district have come to a similar conclusion. In
Mireles, the court rejected the Commissioner’s contract attorney argument, stating
that its acceptance of a $181.25 hourly rate “is based not on factors unique to
[Attorney] Schultz, but rather on increases in the CPI and in the costs of providing
legal services.” 2012 WL 4853065, at *4. Similarly, in Brazitis v. Colvin, 11 CV
7993, 2013 WL 6081017, at *2 (N.D. Ill. Nov. 19, 2013), the court awarded a single
enhanced rate for legal work done, regardless of whether the work was done by the
lead attorney or by an outside attorney hired to assist him. And in Suess, the court
noted that inflationary costs such as rent and salary increases impact a law firm,
regardless of whether the attorneys are associates or “brief-writing contract
attorneys.” 2013 WL 5304094, at *3. The Suess court noted that the relevant focus
is not on the cost of the contract attorney to the law firm, but rather on the
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prevailing market rate for the services provided. Id. Both the Brazitis and Suess
courts cited to 28 U.S.C. § 2412(d)(2)(D), which provides that in cases where the
United States is a party, “[t]he amount of fees awarded . . . shall be based upon
prevailing market rates for the kind and quality of the services furnished.” See
Brazitis, 2013 WL 6081017, at *2; Suess, 2013 WL 5304094, at *3. The conclusions
of these other courts lend support to this court’s own reasoning that the
Commissioner’s argument lacks legal or factual support.
The court also does not find any merit to the Commissioner’s next
argument—that the amount of time spent on the case was excessive given its
“routine” nature and the lead attorney’s “years of experience in Social Security
disability litigation.” (R. 43, Govt.’s Resp. at 1-2.) The Commissioner believes that
37.7 hours is much too high for an initial brief and should be cut in half to about 20
hours.
(Id. at 4.)
She also believes the 12.2 hours spent on the reply brief is
unreasonable and should be cut.3 (Id.) However, the Commissioner does not point
to any single line item that is excessive, and so this request is simply an arbitrary
guess as to what the Commissioner believes is reasonable. The court, however, may
not reduce the number of hours absent a clear indication of why this is necessary.
See Smith v. Great Am. Restaurants, Inc., 969 F.2d 430, 439 (7th Cir. 1992) (noting
that in fee award cases, “the district court may not arbitrarily reduce the number of
The court is unable to replicate exactly the Commissioner’s calculations of 37.7
hours spent on the initial brief and 12.2 hours on the reply, but this is of little
import. By the court’s own calculation, Ibarra-Montufar’s attorneys spent 38.3
hours on the initial brief and 13.5 hours on the reply. (R. 36-3.) This discrepancy is
not significant.
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hours requested; if it reduces hours it should provide a ‘concise but clear
explanation’”). Furthermore, although Social Security cases follow the same fivestep analysis, each case involves unique medical facts and a rather labor-intensive
study of the administrative record. See Suess, 2013 WL 5304094, at *4. The court
does not consider the roughly 38 hours spent on the initial brief, or the 57.2 total
hours spent on this case, to be excessive. See Brazitis, 2013 WL 6081017, at *1
(concluding that an EAJA request for $10,000 in fees is “in the ballpark” and listing
cases); Verlee v. Colvin, No. 1:12-CV-45-TLS, 2013 WL 6063243, at *9 (N.D. Ind.
Nov. 18, 2013) (finding that 36.4 hours spent on an opening brief is “on the high
side” but “not so patently unreasonable as to warrant a reduction”); Garcia v.
Colvin, No. 1:11-cv-00165, 2013 WL 1343662, at *2 (N.D. Ind. Apr. 3, 2013)
(upholding 61.3 hours spent on claimant’s appeal); Schulten v. Astrue, No. 08 CV
1181, 2010 WL 2135474, at *6 (N.D. Ill. May 28, 2010) (noting that 40-60 hours for
EAJA fee cases is within permissible range).
Finally, the Commissioner argues that any EAJA award should be granted as
payable directly to Ibarra-Montufar, not to his attorney, pending confirmation that
he does not owe a pre-existing debt to the government. (R. 43, Def.’s Resp. at 9-12.)
Ibarra-Montufar does not object to this point. As such, the award will initially be
payable to Ibarra-Montufar pending confirmation that he owes no pre-existing debt
to the government, at which point the award will then convert to being payable to
his attorney.
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Conclusion
For the foregoing reasons, Ibarra-Montufar’s motion for an award of fees and
costs is granted.
ENTER:
____________________________________
Young B. Kim
United States Magistrate Judge
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