Raines v. Shalala

• Decision Date: 11 January 1995
• Docket Number: No. 93-3557,93-3557
• Citation: 44 F.3d 1355
• Parties: , Unempl.Ins.Rep. (CCH) P 14583B William RAINES, Plaintiff-Appellee, v. Donna E. SHALALA, Secretary of Health and Human Services, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1355

44 F.3d 1355

46 Soc.Sec.Rep.Ser. 372, Unempl.Ins.Rep. (CCH) P 14583B

William RAINES, Plaintiff-Appellee, v. Donna E. SHALALA, Secretary of Health and Human Services Defendant-Appellant.

No. 93-3557.

United States Court of Appeals Seventh Circuit.

Argued May 10, 1994.

Decided Jan. 11, 1995.

Frederick J. Daley (argued), Marcie E. Goldbloom, Chicago, IL, for plaintiff-appellee.

Ann L. Wallace and Margaret C. Gordon, Asst. U.S. Attys., Office of the U.S. Atty. Criminal Div., Gary A. Sultz, Dept. of Health and Human Services, Region V, Office of the Gen. Counsel, Chicago, IL, William Kanter, Michael E. Robinson (argued), Dept. of Justice, Civil Div., Appellate Section, Washington, DC, for defendant-appellant.

Before MESKILL, ^* COFFEY, and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

After William Raines won entitlement to social security disability benefits and supplemental security income, the district court awarded him attorney fees and expenses under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. Sec. 2412(d)(2)(A). The Secretary of Health and Human Services ("Secretary") appeals that award. She challenges both the district court's decision that a special factor justified enhancement of the award and the district court's inclusion of fees for administrative proceedings conducted after an earlier remand from that court to the agency. For the following reasons, we reverse the district court's judgment and remand the case for further proceedings consistent with this opinion.

I

A. Prior Proceedings

Plaintiff William Raines, a former Marine who later worked as a janitor, fork-lift operator and shipping clerk, became unemployed in 1982. In 1986, he applied for both social security disability insurance benefits and supplemental security income on the ground that a back injury and psychological impairments caused his disability. His applications were denied at all administrative levels. After a hearing, the Administrative Law Judge ("ALJ") determined that Mr. Raines had neither physical nor psychological impairments that imposed significant limitations on his ability to work. The Appeals Council's denial of Mr. Raines' request for review of the ALJ decision, entered December 10, 1987, became the final decision of the Secretary.

On January 29, 1988, Mr. Raines filed a civil action for judicial review of the Secretary's decision. With the consent of the parties, the case was assigned to a magistrate judge who sat as the district court pursuant to 28 U.S.C. Sec. 636(c). By Order of June 8, 1990, the district court decided that the ALJ had committed an error of law by failing to develop fully the mental impairment issue, and remanded the case to the Secretary. On remand, the ALJ considered the evaluations and reports concerning Mr. Raines' mental impairment and heard the testimony of several psychologists and a vocational expert. On November 25, 1991, the ALJ issued a favorable decision granting Mr. Raines benefits from January 1, 1987. The ALJ's decision became the final decision of the Secretary on January 24, 1992. On January 29, 1992, Mr. Raines then filed a petition for EAJA attorney fees and expenses in the district court.

B. District Court Proceedings

Before the district court, the only issue was the amount of the attorney fee award. The United States did not contest that its position had not been substantially justified. Nor did it argue that the fee petition was not timely. ¹ The district court was authorized, under 28 U.S.C. Sec. 2412(d)(2)(A), ² to award fees exceeding $75.00 per hour if such compensation was justified by either an increase in the cost of living or a special factor. Mr. Raines' petition requested $175.00 per hour for attorney fees. The petition claimed that this hourly rate was the prevailing market At the outset of its consideration of the fee petition, the district court noted that, in Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), the Supreme Court had stated that the exception to the $75.00 statutory cap for attorneys "qualified in the proceedings" referred to qualifications "in some specialized sense, rather than in general legal competence." Order at 7 (quoting Pierce, 487 U.S. at 572, 108 S.Ct. at 2553). Therefore, it was necessary that the attorney possess "some distinctive knowledge or specialized skill needful for the litigation in question--as opposed to an extraordinary level of general lawyerly knowledge and ability useful in all litigation." Id. It also noted that the Ninth Circuit had applied the special factor concept of Pierce to lawyers who have an expertise in the area of social security law in Pirus v. Bowen, 869 F.2d 536 (9th Cir.1989). Employing these two cases as its decisional matrix, the court then examined the facts of this case to determine whether such an enhancement was appropriate. It found that Frederick J. Daley, Mr. Raines' attorney, possessed an expertise in the area of social security law, an expertise that the Secretary did not dispute. Order at 9. He had "familiarity and credibility with administrative and civil actions needed to effectively litigate social security claims." Order at 8-9. Additionally, noted the district court, his law firm had litigated numerous social security cases before the Seventh Circuit and district courts. The court also found that "there is limited availability of attorneys in Chicago who are both experienced in Social Security law and willing to take a case such as Raines' for less than the prevailing rate." Order at 10. Finally, the court determined that the case involved complex issues requiring "more than just routine lawyering skills available from the general bar." ³ Order at 14. On the basis of these findings, the court held that Mr. Raines' attorney met the criteria for awarding the special factor market fee. It summarized those factors as follows: 1) expertise with a complex statutory scheme; 2) familiarity and credibility with a particular agency; and 3) understanding the needs of a particular class of clients. Order at 15.

rate for this type of litigation because of the limited availability of qualified social security lawyers. Alternatively, Mr. Raines requested fees that reflected the increase in the cost of living.

The district court next turned to the question whether attorney fees incurred during the post-remand proceedings were compensable. ⁴ Beginning with the general premise that EAJA fees are not generally available for work performed in an administrative proceeding, the district court wrote that Sullivan v. Hudson, 490 U.S. 877, 109 S.Ct. 2248, 104 L.Ed.2d 941 (1989), allowed an exception to this rule and permitted fees incurred during administrative proceedings after a remand when the claimant must prevail on remand in order to be considered the prevailing party for purposes of awarding EAJA fees. Order at 15-16. The district court also acknowledged that Melkonyan v. Sullivan Nevertheless, the district court believed that EAJA fees could still be awarded in this case. The district court acknowledged that Mr. Raines did not apply for attorney fees within the thirty-day filing period prescribed by Melkonyan as beginning once the district court enters a remand order. See 28 U.S.C. Sec. 2412(d)(1)(B). The district court also noted that it did not retain jurisdiction of the case to enter final judgment after the administrative decision because, at the time of the remand in this case, it was not the practice in this circuit for the district court to retain jurisdiction. ⁵ The district court further held that the lack of retention of jurisdiction was not fatal to the plaintiff's recovery of attorney fees for the remand proceedings because the remand proceedings were necessary for determining prevailing party status; therefore Raines would not have been considered "a prevailing party until he established his entitlement to benefits at the administrative proceedings." Order at 18.

01 U.S. 89, 111 S.Ct. 2157, 115 L.Ed.2d 78 (1991), later narrowed that exception to those cases in which the district court retains jurisdiction and contemplates the entry of a final judgment after the completion of administrative proceedings.

The district court further held that Shalala v. Schaefer, --- U.S. ----, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993), did not govern the disposition here. In that case, the Supreme Court held that a social security claimant who is granted a sentence four remand is a "prevailing party" upon remand, and that the actual administrative proceedings following remand are not covered by the EAJA. Again referring to the earlier precedent of this circuit, the district court explained that, "prior to Schaefer, this circuit would have held that Raines could not attain 'prevailing party' status until the result of the administrative proceedings became known." Order at 18. The court further pointed out that, in this case, the district court's "October 31, 1991 order instructed plaintiff that he would have 'an opportunity to file a timely fee petition if he prevails in administrative proceedings.' " Id. (emphasis in text). Because the district court had advised Mr. Raines that the administrative proceedings were necessary for the resolution of prevailing party status, that court, relying on Hudson, concluded that the fees incurred during the administrative proceedings held pursuant to the district court's remand order were recoverable under the EAJA. Order at 18-19. Accordingly, the district court awarded plaintiff all of the expenses requested and the fees sought for work performed before the district court and in the post-remand hearing. The court denied the fees for services rendered in administrative proceedings prior to the court remand. The total award was $13,212.50 in fees, for 75.5 hours at $175.00 per hour, and $732.90 in expenses.

II DISCUSSION

A. Enhanced Fee Award

1.

The Secretary has not objected to a fee award for Mr. Raines' counsel; in...