Baker v. Bowen
| Decision Date | 14 March 1988 |
| Docket Number | Nos. 86-1620,87-1422,87-1133,87-1247 and 87-1401,87-1246,s. 86-1620 |
| Citation | 839 F.2d 1075 |
| Parties | , Unempl.Ins.Rep. CCH 17,960 Eddie K. BAKER, Plaintiff-Appellant, v. Otis R. BOWEN, M.D., Secretary of Health & Human Services, Defendant-Appellee. Elwyn R. SHUGART, Plaintiff-Appellant, v. Otis BOWEN, M.D., Secretary of Health & Human Services, Defendant-Appellee. David W. STIBBINS, Plaintiff-Appellant, v. Otis R. BOWEN, M.D., Secretary, Dept. of Health & Human Services, Defendant-Appellee. Thomas E. MACHEN, Plaintiff-Appellant, v. Otis R. BOWEN, M.D., Secretary of Health & Human Services, Defendant-Appellee. Mary F. PHILLIPS, Plaintiff-Appellant, v. Otis R. BOWEN, M.D., Secretary of Health & Human Services, Respondent-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Joe Smith, Foreman, Boudreaux, Smith & Johnson, Dallas, Tex., for plaintiffs-appellants in Nos. 86-1620, 87-1422 and 87-1401.
Carl Weisbrod, Weisbrod & Weisbrod, Dallas, Tex., for plaintiffs-appellants in Nos. 87-1133, 87-1247 and 87-1246.
Karen J. Sharp, Patrick A. Hudson, John M. Gough, Attys., Office of the General Counsel, Dallas, Tex., for defendant-appellee in No. 86-1620.
Karen J. Sharp, Dept. of HHS, Dallas, Tex., for defendant-appellee in No. 87-1422.
John M. Gough, Asst. Reg. Counsel, Region VI, Dallas, Tex., for defendant-appellee in Nos. 87-1133 and 87-1246.
John M. Gough, Patrick A. Hudson, Dallas, Tex., for defendant-appellee in No. 87-1247.
Karen J. Sharp, Atty., Office of General Counsel, Charles D. Cabaniss, Asst. U.S. Atty., Marvin Collins, U.S. Atty., Dallas, Tex., for defendant-appellee in No. 87-1401.
Consolidated Appeals from the United States District Court for the Northern District of Texas.
Before CLARK, Chief Judge, JOLLY and JONES, Circuit Judges.
These five cases, consolidated on appeal, challenge the failure of district courts in the northern district of Texas to award attorney's fees above the statutory limit of $75 an hour prescribed by the Equal Access to Justice Act ("EAJA"), 28 U.S.C. Sec. 2412. These appellants also urge the need for uniformity in fee awards among various federal courts in Dallas. We hold that, as a usual matter, the statutorily set ceiling of $75 permits upward adjustment only in the rarest circumstances. However, the two exceptions to the ceiling specifically expressed in the statute--cost of living and the limited number of attorneys available to handle these cases--may justify general increases. We further hold that a determination of the appropriateness of such increases should be uniform in the Dallas federal courts. Thus, if it is clearly demonstrated that the number of attorneys available to handle these cases is so limited that access to the courts is being denied or that cost-of-living increases justify raising the set hourly rate, then the district court should conservatively adjust the rate accordingly. Finally, because the efficient administration of justice requires that these two factors be applied to each case uniformly, we remand these five cases to direct such a result.
As a result of various disabilities, each of the appellants here petitioned for social security benefits. These benefits were denied and, after exhausting their administrative remedies, the appellants filed in federal district court where they eventually prevailed and were awarded benefits. Each party then petitioned for attorney's fees under the EAJA. In each case, the district court awarded fees at the statutory limit of $75 an hour, but refused to exercise discretion to award fees in excess of that amount. Although the bases of their claims vary, all the petitioners believe they are entitled to fees above $75 an hour (up to the market rate of $125 an hour) and challenge the district courts' decisions.
At the outset, we recognize that each case presents its own facts and issues, and we note briefly the claims of each petitioner. Three cases raise issues that pertain only to their own cases. Petitioners Shugart and Baker question the district court's determination that they were not entitled to attorneys' fees for time spent in district court prior to remand. Petitioner Phillips claims that the district court erred in failing to award market rate fees for the Secretary's alleged bad-faith dealings in administering her claim.
The remaining issues deal with special factors alleged by each plaintiff which they claim require an upward adjustment of attorneys' fees. Two such factors, the cost-of-living increase and limited availability are specifically mentioned in the statute. At least one is raised by each petitioner. Several of the petitioners also allege special factors that are not mentioned in the statute, but which they argue require upward adjustments in attorneys' fees for their particular claims. 1
To the extent necessary, we address the individual issues raised by Baker and Shugart concerning attorneys' fees for time in court prior to remand, and by Phillips concerning the "bad faith" exception, before turning to the issues common to all the petitioners. As a preliminary matter, however, we begin with a brief overview of the EAJA and its relevant provisions.
The EAJA, 28 U.S.C. Sec. 2412, provides a mandatory attorney's fee award for a prevailing party that meets certain financial eligibility requirements. 2 Once the plaintiff establishes these facts, the government must pay attorney's fees unless it is able to prove that its position was substantially justified or special circumstances make an award unjust. Herron v. Bowen, 788 F.2d 1127 (5th Cir.1986).
The EAJA was originally enacted with a sunset provision, but was reenacted and amended in 1985. These amendments make clear that the government bears the burden of proving substantial justification, both in its litigation position and its posture during the underlying administrative proceedings. "The test of whether or not a government action is substantially justified is essentially one of reasonableness." Knights of the Ku Klux Klan Realm of Louisiana v. East Baton Rouge Parish School Board, 679 F.2d 64, 68 (5th Cir.1982). When a claim for attorney's fees is made, the government has the burden of showing that its position in every stage of the proceedings was substantially justified by demonstrating that its actions had a reasonable basis both in law and fact. The EAJA provides that "Attorneys fees shall not be awarded in excess of $75 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." 28 U.S.C. Sec. 2412(d)(2)(A)(ii).
The EAJA also provides a "bad faith and common benefit/common fund" provision for discretionary awards in section 2412(b). 3 Unlike the "special factors provision" discussed above, this section permits a court to award attorney's fees and costs against the government to the same extent that it may award fees in cases involving other parties (i.e., the market rate). The prevailing party may qualify for awards under section 2412(b) in excess of $75 an hour without proving the existence of special factors noted in section 2412(d), that is, cost of living, etc., because this section has no fee-limiting provision. See KKK, 679 F.2d at 64. In addition, section 2412(c)(2) provides that, if acting in bad faith, the administrative body itself, rather than the Treasury, is liable for these fees. Action on Smoking and Health v. CAB, 724 F.2d 211, 217 (D.C.Cir.1984). Fees awarded under section 2412(b), however, are not mandatory. Most courts have applied the "bad faith" exception very narrowly. See, e.g., Action on Smoking, 724 F.2d at 217.
We first address the claims of petitioners Baker and Shugart that the district court erred when it denied them attorneys' fees for time spent in district court prior to remand. Both Shugart's and Baker's cases were originally remanded by the district court to the Secretary of Health and Human Services for further proceedings. Shugart and Baker finally prevailed on the merits on their second trip to the district court. Baker applied for attorney's fees at the close of each case. (Baker's first appeal, No. 86-1620, was stayed pending resolution of the remand and is now consolidated with the second action, No. 87-1422.) Shugart applied for attorney's fees only once, after his second district court appeal.
The district court found that the Secretary's position was substantially justified until the remand so that they were not prevailing parties at that point. It is clear from rulings in this and other circuits that a plaintiff is not a prevailing party until a judgment is entered in his favor. Once a plaintiff prevails on the merits, however, he is entitled to attorney's fees for all time spent in federal court on the prevailing issues both before and after remand. See Linn v. Chivatero, 790 F.2d 1270 (5th Cir.1986); Brown v. Secretary of Health and Human Services, 747 F.2d 878 (5th Cir.1984); McGill v. Secretary of Health and Human Services, 712 F.2d 28 (2d Cir.1983). The finding at trial that there was no substantial evidence to support the Secretary's decision does not necessarily or automatically mandate an award of attorney's fees. As a general proposition, however, if the case lacks substantial evidence, and does not turn on mere evidentiary ambiguities or involve novel legal principles, "the absence of support for the Secretary's decision in this case is at once an absence of justification for her position." Herron, 788 F.2d at 1132.
We find that the reasoning and language of Herron applies here. Once a favorable judgment has been reached on an issue, the plaintiff is entitled to attorney's fees for both the remand and final appeal. The only exception to this rule is "where the claims asserted are truly fractionable counsel should be compensated only for...
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