Wonders v. Shalala

• Decision Date: 02 June 1993
• Docket Number: No. 89-C-1532.,89-C-1532.
• Citation: 822 F. Supp. 1345
• Parties: Joyce WONDERS, Plaintiff, v. Donna M. SHALALA, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

822 F. Supp. 1345

Joyce WONDERS, Plaintiff, v. Donna M. SHALALA,¹ Secretary of Health and Human Services, Defendant.

No. 89-C-1532.

United States District Court, E.D. Wisconsin.

June 2, 1993.

Hannah C. Dugan, Legal Action of Wisconsin, Inc., Milwaukee, WI, for plaintiff.

Stephen Liccione, Asst. U.S. Atty., Milwaukee, WI, for defendant.

DECISION AND ORDER

WARREN, Senior District Judge.

On June 29, 1992, this Court ordered that judgment be entered in favor of plaintiff Joyce A. Wonders in the above-captioned dispute over the denial of disability benefits, but held in abeyance her motion for attorney fees pursuant to 28 U.S.C. § 2412, the Equal Access to Justice Act ("EAJA"). (Order of June 29, 1992 at 9.) The Court indicated that, in awarding attorney fees pursuant to the latter motion, it would employ the "Legal Services" component of the Consumer Price Index ("CPI-LSI") to adjust for inflation. (Id. at 7.) The Court also directed Ms. Wonders to submit evidence regarding the prevailing market rate for the kind and quality of services furnished in this case. (Id. at 9-10.) Such evidence having been submitted and responded to, Ms. Wonders' motion is again before the Court.

Also before the Court is the July 14, 1992 motion of defendant Secretary of Health and Human Services ("Secretary"), pursuant to Rule 59(e), Fed.R.Civ.P., to alter or amend the Court's June 29, 1992 judgment. The Secretary argues that the Order should be changed to reflect that the proper measure of inflation, for purposes of Ms. Wonders' motion, is the "All Items" component of the Consumer Price Index ("CPI-AI"), rather than the CPI-LSI. (Secretary's motion at 2.)

For the following reasons, the Secretary's motion is granted, and Ms. Wonders' motion is granted in part and denied in part.²

I. MOTION TO ALTER OR AMEND JUDGMENT

Essentially, the Secretary argues that the Court's decision to employ the CPI-LSI relied solely on Dewalt v. Sullivan, 756 F.Supp. 195, 201 (D.N.J.1991), in which the district court held that the CPI-LSI was the appropriate inflation escalator to be applied to attorney fees awarded pursuant to the EAJA. Id. That court, however, was subsequently overruled by the Third Circuit, which employed the CPI-AI, a generally lower measure.³Dewalt v. Sullivan, 963 F.2d 27, 30 (3rd Cir.1992). As such, the Secretary argues, the Court should use the CPI-AI to adjust any award for attorney fees, and amend the Order of June 29, 1992 to reflect that intention. (Secretary's motion at 2.)

Upon reconsideration of the issue, the Court agrees with the Secretary. Section 2412(d)(2) of Title 28, United States Code, states in relevant part:

(A) ... The amount of fees awarded under this subsection 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 $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. § 2412(d)(2). On its face, the statute directs a district court to award fees in excess of $75 per hour upon determining that: (1) the prevailing market rates for the kind and quality of the services furnished equals or exceeds $75 per hour; and (2) an increase in the cost of living justifies the higher fee.⁴ In making the latter determination, the court's range of action is not unlimited. Failure to adjust the statutory cap for inflation might be considered an abuse of discretion. See, e.g., Sierra Club v. Secretary of the Army, 820 F.2d 513, 521 (1st Cir.1987); Trichilo v. Secretary of Health and Human Services, 823 F.2d 702, 704-07 (2d Cir.1987); Allen v. Otis Bowen, 821 F.2d 963 (3d Cir.1987); Ramon-Sepulveda v. INS, 863 F.2d 1458 (9th Cir.1988); see, also, U.S. v. A Leasehold Interest in Property, 789 F.Supp. 1385, 1394 (E.D.Mich.1992).

Controlling authority on the mechanics of the inflation escalator, however, is admittedly sparse. In this district, it appears, adjustments for cost of living are not necessarily made as a matter of course. See, e.g., Magray v. Sullivan, 807 F.Supp. 495, 500 (E.D.Wis.1992) (awarding $75 per hour); McWilliams v. Sullivan, 1989 WL 281919, * 2 (E.D.Wis.1989) (awarding $75 per hour); Donahue v. Heckler, 600 F.Supp. 153, 158 (E.D.Wis.1985) (awarding $75 per hour). Where they are made, adjustments are generally based on the CPI-AI or one of its broad component indexes. See, e.g., Continental Web Press, Inc. v. NLRB, 767 F.2d 321, 323-24 (7th Cir.1985) (Posner, C.J.) (though plaintiff company cannot demonstrate "special factors" justifying higher award, court upholds award against NLRB including 10.6% adjustment "to reflect inflation (`increase in the cost of living')"); Price v. Sullivan, 756 F.Supp. 400, 404-05 (E.D.Wis.1991) (Curran, J.) (employing hourly rate of $106.12 to reflect the CPI-AI); Lee v. Sullivan, 723 F.Supp. 92 (E.D.Wis.1989) (Curran, J.) (employing hourly rate of $99 to reflect CPI for all urban consumers ("CPI-U")); Brookens v. Sullivan, 1989 WL 281918, * 3 (E.D.Wis.1989) (Reynolds, J.) (employing hourly rate based on Social Security Disability cost of living allowance). This Court did use the CPI-LSI in Kieff v. Sullivan, 89-C-1230 (E.D.Wis. December 20, 1991) (order granting motion for attorney fees) (Warren, J.), as Ms. Wonders correctly notes, (Plaintiff's Objections at 1), but that decision was based on the now-discredited holding of Dewalt, 756 F.Supp. at 201. (See Order of December 20, 1991 at 4.) Thus, no controlling authority of which the Court is aware compels us to use the CPI-LSI, or any index other than the CPI-AI.

Almost every other court that has applied Section 2412 has, albeit frequently without debate, employed the CPI-AI to adjust for inflation. See, e.g., Harris v. Sullivan, 968 F.2d 263 (2d Cir.1992); Dewalt v. Sullivan, 963 F.2d 27, 29 (3d Cir.1992); Sullivan v. Sullivan, 958 F.2d 574 (4th Cir.1992); Russell v. Sullivan, 930 F.2d 1443, 1446 (9th Cir.1991); Wilkett v. ICC, 844 F.2d 867, 875 (D.C.Cir.1988); Hirschey v. FERC, 777 F.2d 1, 5 (D.C.Cir.1985); Action on Smoking and Health v. CAB, 724 F.2d 211, 218 (D.C.Cir. 1984); Stewart v. Sullivan, 810 F.Supp. 1102, 1106 (D.Haw.1993); DeFrancesco v. Sullivan, 803 F.Supp. 1332 (N.D.Ill.1992); Kling v. Secretary, 790 F.Supp. 145, 152 (N.D.Ohio 1992); Harris v. Secretary, 792 F.Supp. 1014 (E.D.Va.1991); Faulkner v. Bowen, 673 F.Supp. 1549 (D.Or.1987). Some courts, declining to employ the CPI-AI, have used other comparably broad-based indexes. See, e.g., U.S. v. A Leasehold Interest in Property, 789 F.Supp. 1385 (E.D.Mich.1992) (employing "Other Services" index component of the CPI); Butts v. Bowen, 775 F.Supp. 1167, 1172 (N.D.Ill.1991) (employing Chicago index component of CPI after explicitly rejecting the CPI-LSI and CPI-U); Brookens, 1989 WL 281918 at * 3 (employing Social Security Disability cost of living allowance).

Of course, alternative interpretations exist. See Dewalt, 963 F.2d at 30-33 (Becker, C.J., dissenting) (though EAJA does not specify basis for adjustment, legislation's structure compels use of prevailing rates for legal services). The Court recognizes that "one of the purposes of the EAJA is to encourage challenges to agency action and to provide a disincentive to agencies to prolong the litigation process; and that awarding higher, fully compensatory, fees would better serve these statutory purposes than lesser awards." Dewalt, 963 F.2d at 29 (citing Natural Resources Defense Council v. U.S. EPA, 703 F.2d 700 (3d Cir.1983). We must thus, as always, strike a careful balance, observing the purposes of Congress, while weighing heavily the language of the statute itself. So doing, the Court adheres to the sound rationale underlying the majority position. As the Third Circuit has aptly said: "... it is simply impossible to equate `cost of living' with `cost of legal services.' And it is inconceivable that Congress, in 1981, intended a definition of `cost of living' which would measure it by a single component which was not measured and indexed until 1986.'" Id. at 30. See also Sullivan, 958 F.2d at 574 ("It is highly unlikely that Congress would have chosen this commonly used term, which is widely understood to be a composite of almost exclusively nonlegal costs ... had it intended to authorize adjustments to reflect increases in legal services costs in particular...."); accord Harris v. Sullivan, 968 F.2d at 265 ("we follow the well-reasoned opinions of the Third Circuit in Dewalt ... and the Fourth Circuit in Sullivan...." (emphasis in original)).

Without explicit direction from Congress, we will not make more vulnerable the public fisc. As such, the Secretary's motion will be granted. If the Court finds, based on the evidence submitted, that the prevailing market rate for legal services of the kind and quality rendered here exceeds the $75 statutory cap, the Court will make any adjustment in the cap justified by an increase in the cost of living based on the CPI-AI, and will order that the Court's Order of June 29, 1992 be amended to reflect this intention.

II. MOTION FOR ATTORNEY FEES

As the Secretary correctly notes, (Defendant's Response at 1), the movant bears the burden of producing satisfactory evidence of the prevailing market rate for the kind and quality of legal services rendered. Blum v. Stenson, 465 U.S. 886, 892 n. 11, 104 S.Ct. 1541, 1547 n. 11, 79 L.Ed.2d 891 (1984). Thus, at the Court's direction, (Order of June 29, 1992 at 8), Ms. Wonders submitted affidavits from Attorneys David G. Dreis, Robert C. Angermeier, James E. Collis, and Arthur Heitzer, Milwaukee practitioners who attest that their regular hourly rates are $150. (Aff. Dreis ¶ 3; Aff. Angermeier ¶ 6; Aff. Collis ¶ 3; Aff. Heitzer ¶ 2.) Attorneys Dreis and Angermeier attest that their practices are comprised mainly of Social Security cases comparable to...