We Who Care, Inc. v. Sullivan, Civ. No. 89-0172-P.

• Decision Date: 19 December 1991
• Docket Number: Civ. No. 89-0172-P.
• Citation: 781 F. Supp. 57
• Parties: WE WHO CARE, INC., et al., Plaintiffs, v. Louis SULLIVAN, Secretary of U.S. Department of Health and Human Services, Defendant.
• Court: U.S. District Court — District of Maine

781 F. Supp. 57

WE WHO CARE, INC., et al., Plaintiffs, v. Louis SULLIVAN, Secretary of U.S. Department of Health and Human Services, Defendant.

Civ. No. 89-0172-P.

United States District Court, D. Maine.

December 19, 1991.

Jack Comart, Pine Tree Legal Assistance, Inc., Augusta, Me., for plaintiff.

Marina E. Thibeau, Asst. Atty. Gen., Augusta, Me., for Com'r, Maine Dept. of Human Services.

David R. Collins, Asst. U.S. Atty., Portland, Me., Joyce McCourt, Asst. Regional Counsel, U.S. Dept. of HHS, Boston, Mass., for Louis Sullivan.

ORDER GRANTING PLAINTIFF'S MOTION FOR AWARD OF ATTORNEY'S FEES

GENE CARTER, Chief Judge.

This case arose out of a class action under Federal Rule of Civil Procedure 23(b)(2) brought by applicants for Aid to Families with Dependent Children (hereinafter "AFDC") to challenge Defendant Louis Sullivan's, Secretary of U.S. Department of Health and Human Services, regulations that limited to $1,500 the amount of equity that an AFDC recipient could have in an automobile and thus be eligible for AFDC benefits. Plaintiffs alleged that these regulations were arbitrary and capricious, were promulgated in violation of the Administrative Procedure Act, and violated federal law.

The Court issued a declaratory judgment dated January 28, 1991, declaring that the challenged regulations were invalid. We Who Care, Inc. v. Sullivan, 756 F.Supp. 42 (D.Me.1991).¹ Plaintiffs now seek an award of attorney's fees and costs, totalling $20,093.03, pursuant to the Equal Access to Justice Act (hereinafter "EAJA"), 28 U.S.C. § 2412(d).²

I. Discussion

The EAJA provides in pertinent part:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses ... incurred by that party in any civil action ... brought by or against the United States ... unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412(d)(1)(A). To be entitled to fees, the plaintiff must prevail, the Secretary's position must not be substantially justified, and no special circumstances must exist.³ Plaintiffs allege that they are entitled to an award of attorney's fees and costs under the EAJA. First, they argue that they are the prevailing party in this litigation. Second, they argue that the Defendant's position was not "substantially justified" under the EAJA. Lastly Plaintiffs argue that they are entitled to fees in excess of $75 per hour, based on cost-of-living and "special factor" exceptions. For the reasons that follow, the Court finds that (a) Plaintiffs are the prevailing party; (b) Defendant's position was not "substantially justified" under the EAJA; and (c) Plaintiffs are entitled to fees in excess of $75 per hour, based on a cost-of-living adjustment, but not on any "special factor."

A.

The EAJA provides that the "prevailing party" may seek recovery of fees and costs. 28 U.S.C. § 2412(d)(1)(A). The Court of Appeals for the First Circuit noted that a plaintiff may be considered the prevailing party if he or she "succeeds on any significant issue in litigation which achieves some of the benefit the party sought in bringing suit." McDonald v. Secretary of Health and Human Services, 884 F.2d 1468, 1474 (1st Cir.1989) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)). See also Estate of Duplissis v. Bowen, 640 F.Supp. 842, 845 (D.Me. 1986).

In this action, Plaintiffs sought to invalidate the AFDC $1,500 vehicle asset regulation. The Court granted declaratory judgment in their favor on this issue, holding invalid the Federal and State regulations that Plaintiffs challenged in this action. Thus, they "clearly succeeded in obtaining a substantial portion of the benefit sought." There is no question that Plaintiff is a prevailing party in this litigation,⁴ and, hence, may seek recovery of attorney's fees and costs.

B.

The United States Supreme Court has articulated the standard to be applied in the determination of whether the government's position was substantially justified. Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 2548, 101 L.Ed.2d 490 (1988). A "substantially justified" position is one that is reasonable, based both in law and in fact. Id.

The Court of Appeals for the First Circuit adopted the "reasonableness" standard, prior to the Supreme Court's ruling in Pierce, in a three-part test: whether the government had a reasonable basis for the facts alleged;⁵ whether it had a reasonable basis in law for the theories advanced; and whether the facts supported its theory. United States v. Yoffe, 775 F.2d 447, 450 (1st Cir.1985). The Secretary bears the burden of proving that its position⁶ was justified by a preponderance of the evidence. McDonald, 884 F.2d at 1475.

The Court concludes that Defendant has not met its burden in establishing the justifiability of both the agency's position and the government's litigation position in proving the second and third prongs of the test. There was no basis in law for the Secretary's agency position and, similarly, his litigation position was not justified or reasonable. The Court finds that Plaintiffs, as the prevailing party, shall receive fees and costs in accordance with the EAJA.

C.

i. Cost-of-Living Adjustment

The EAJA provides that attorney's fees "shall be based upon prevailing market rates for the kind and quality of the services furnished," but "shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living ... justifies a higher fee." Pierce, 487 U.S. at 571, 108 S.Ct. at 2553 (quoting 28 U.S.C. § 2412(d)(2)(A)(ii)) (emphasis added). See also Wells v. Bowen, 855 F.2d 37, 43 (2d Cir.1988) ("Notwithstanding the narrowing of the `special factors' language in Pierce ... it remains clear that EAJA's $75 per hour rate can be increased to reflect a demonstrable increase in the cost of living since the date of the statute's effectiveness."). Similarly, the Court of Appeals for the First Circuit has recognized that a cost-of-living adjustment for inflation is appropriate in determining attorney's fees under the EAJA. Sierra Club v. Secretary of Army, 820 F.2d 513, 523 (1st Cir.1987) ("The federal courts remain able to augment hourly rates by considering changes in the cost of living which took place since October 1981 ... and thereafter."). Cf. Wilcox v. Ives, No. 85-0342-P, slip op. at 12 (D.Me. July 28, 1989) ("Plaintiffs argument on the increase in cost of living is limited to a single sentence in a supporting affidavit, stating that `there have been significant increases in the cost of living since the EAJA was enacted several years ago.'").⁷

Courts have held that the Consumer Price Index (hereinafter "CPI") may be used to determine cost-of-living adjustments under the EAJA. See, e.g., Garcia v. Schweiker, 829 F.2d 396, 401 (3d Cir. 1987); Sierra Club v. Marsh, 639 F.Supp. 1216, 1221-22 (D.Me.1986), aff'd, 820 F.2d 513 (1st Cir.1987). Plaintiffs note that since 1981, the CPI has risen 40.9%. USDOL, Monthly Lab.Rev., Bureau of Labor Statistics, August 1991 (Exhibit to Comart's Affidavit). Here, if the inflation factor of 40.9% is multiplied by the statutory cap of $75 under the EAJA, the adjusted hourly rate is $105.68.⁸

The Court finds that Plaintiffs' counsel is entitled to a cost-of-living adjustment for attorney's fees under the EAJA in the revised amount of $105.68 per hour. It bases this adjustment on the inflation factor of 40.9% (calculated since the inception of the EAJA on August 1, 1981).⁹

ii. Special Factor Exception

The EAJA also provides for an increase in the hourly rate of attorney's fees if a "special factor," such as the limited availability of qualified attorneys for the litigation involved, justifies a higher fee. See 28 U.S.C. § 2412(d)(2)(A)(ii); see also Pierce, 487 U.S. at 571, 108 S.Ct. at 2553. For the reasons that follow, the Court finds that Plaintiffs are not entitled to such an increase under the "special factor" exception.

The Supreme Court stated that:

This exception must refer to attorneys `qualified for the proceedings' in some specialized sense, rather than just in their general legal competence. We think it refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in question — as opposed to an extraordinary level of the general lawyerly knowledge and ability useful in all litigation. Examples of the former would be an identifiable practice specialty such as patent law, or knowledge of foreign law or language.

Pierce, 487 U.S. at 572, 108 S.Ct. at 2554.¹⁰ Thus, the "special factor" exception should be "interpreted narrowly and cannot be read to encompass situations in which normally skilled and qualified attorneys are simply in short supply." Wells, 855 F.2d at 42.

Courts have held that Social Security law is a type of "limited availability" contemplated by the EAJA. See, e.g., Pirus v. Bowen, 869 F.2d 536, 541-42 (9th Cir.1989) ("The special expertise of the attorneys was necessary because the litigation involved a highly complex area of the Social Security Act, with which plaintiff's attorneys had already developed familiarity and expertise."); Bowker v. Bowen, 706 F.Supp. 88, 90 (D.Me.1989) ("Affidavits from attorneys in counsel's locality state that counsel has a great deal of experience and expertise in Social Security law, a highly specialized field, and that he provides `excellent representation' on ... claims.... Another attorney's affidavit states that few attorneys in counsel's area practice in this field . . ."); McDonald v. Bowen, 693 F.Supp. 1298, 1306 (D.Mass.1988) ("The attorneys who represented the plaintiffs in this case are all specialists in the law of public assistance Social Security benefits ... and there is a relative shortage of attorneys possessing the specialized skills brought to bear by the...