Clark v. Commissioner of Social Security

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0629n.06
FILED
No. 16-5393 Nov 29, 2016
DEBORAH S. HUNT, Clerk
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
DARLA CLARK, ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR
Plaintiff-Appellant, ) THE WESTERN DISTRICT OF
) KENTUCKY
v. )
)
COMMISSIONER OF SOCIAL SECURITY, )
Carolyn W. Colvin, Acting Commissioner, )
)
Defendant-Appellee. )
Before: MOORE and CLAY, Circuit Judges; HOOD, District Judge.*
HOOD, District Judge. Plaintiff-Appellant Darla Clark (“Clark” or “Plaintiff”) appeals
the decision of the district court granting in part and denying in part her motion for attorney fees
under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d)(2)(A), arguing that the
district court abused its discretion when it declined to award attorney fees at the adjusted hourly
rate as she requested. For the reasons stated below, we AFFIRM.
I.
On January 8, 2016, Clark filed a sworn motion for attorney fees under the EAJA,
seeking $6,790.52 in fees.1 The total represented 34.75 attorney hours multiplied by an hourly
*
The Honorable Joseph M. Hood, United States District Judge for the Eastern District of Kentucky, sitting
by designation.
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rate of $176.13, plus 6.70 paralegal hours multiplied by an hourly rate of $100. The hourly rate
exceeded the $125 rate provided for under the EAJA, but Clark argued that her counsel should
receive a cost of living adjustment. In her motion, Clark calculated the cost of living adjustment
by relying on the United States Bureau of Labor Statistics Consumer Price Index (“CPI”) for
“Midwest Urban Consumers,” which she argued was the CPI “for this region.” The CPI was the
sole evidence upon which she relied in her request for the adjusted rate. The Commissioner
objected to the enhanced rate. Citing Bryant v. Commissioner of Social Security, 578 F.3d 443,
450 (6th Cir. 2009), the Commissioner argued that referring to the cost of living and relying on
the CPI was not sufficient to justify an hourly rate higher than the cap set forth in the EAJA.
Rather, she argued that satisfactory evidence in addition to the attorney’s affidavit was required
to support a conclusion that the requested rate was in line with those prevailing in the community
for similar services by lawyers of reasonably comparable skill, experience, and reputation. The
Commissioner requested that the Court award EAJA fees at a rate of no more than $140, which
she identified as the current reasonable and customary rate for experienced Social Security
practitioners in the Western District of Kentucky based on decisions in other matters.
Only in her reply did Clark attach a declaration from her attorney, Howard D. Olinsky, in
which he stated that he had practiced disability law from his Syracuse, New York, office for
several years and provided his firm’s non-contingent hourly rate. Clark argued for the first time
that, in Glenn v. Commissioner of Social Security, 763 F.3d 494 (6th Cir. 2014), this Court had
concluded that Olinsky’s requested rate of $176.13 was modest and appeared to be reasonable
1
In the proceeding below, the district court reversed the Commissioner’s denial of benefits and remanded
the case for a new hearing and decision upon the joint motion of the parties. Plaintiff’s motion for attorney fees
under the EAJA was filed after a successful prosecution of the claim at the administrative level.
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and that several other courts of appeal have held that citing to the CPI alone was sufficient to
justify an enhanced hourly rate above the statutory cap.
The district court granted an award of fees but denied the requested rate on March 15,
2016, concluding that the hourly rate was inappropriate because, under Bryant, the CPI alone is
insufficient to satisfy the Plaintiff’s burden to produce appropriate evidence to support an
increased rate in the absence of evidence that the rate requested was in line with that charged by
comparable attorneys in Bowling Green, Kentucky. The Court concluded, as well, that the Court
of Appeals’ comments in Glenn were dicta and did not address the issue of whether the rate
requested by Clark was in-line with that charged by similar attorneys in Bowling Green,
Kentucky. Rather, the district court determined that the Commissioner had provided sufficient
evidence from a line of Western District of Kentucky cases showing that $140 was the prevailing
market rate for hourly work by experienced Social Security practitioners in the Western District
of Kentucky. An hourly rate of $140 was awarded.
Plaintiff filed a timely appeal of the decision on March 25, 2016, and this Court has
appellate jurisdiction pursuant to 28 U.S.C. § 1291.
II.
This Court reviews a decision on an application under the EAJA, including the district
court’s determination of whether a request for fees is reasonable, for an abuse of discretion.
Bryant, 578 F.3d at 445 (citing Blum v. Stenson, 465 U.S. 886, 898 (1984); Townsend v. Comm’r
of Soc. Sec., 415 F.3d 578 (6th Cir. 2005)). “A district court abuses its discretion when it relies
on clearly erroneous findings of fact, or when it improperly applies the law or uses an erroneous
legal standard.” Id. (quoting Deja Vu of Nashville, Inc. v. Metro. Gov’t of Nashville & Davidson
Cty., 274 F.3d 377, 400 (6th Cir. 2001)).
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III.
Under the EAJA, the hourly rate for attorney fees is capped at $125 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)(A). The rate of $125 is “a ceiling and not a floor.” Chipman v. Sec’y of Health &
Human Servs., 781 F.2d 545, 547 (6th Cir. 1986). When requesting an increase in the hourly fee
rate above the statutory cap, a plaintiff “bear[s] the burden of producing appropriate evidence to
support the requested increase.” Bryant, 578 F.3d at 450 (citing Blum, 465 U.S. at 898). This
Court has held that reference to the CPI, alone, is insufficient to sustain that burden and that
“[p]laintiffs must ‘produce satisfactory evidence—in addition to the attorney’s own affidavits—
that the requested rates are in line with those prevailing in the community for similar services by
lawyers of reasonably comparable skill, experience, and reputation.’” Id. (quoting Blum, 465
U.S. at 895 n.11). Evidence of rates outside of the relevant jurisdiction provide no evidence of
the prevailing rates within a given community for attorneys of comparable skill, experience, and
reputation. See id.2
In support of her motion for attorney fees, Clark submitted a half-page calculation of her
fees using the Midwest Urban CPI to reach an adjusted hourly rate of $176.13 per hour and, in
support of her reply brief, a declaration concerning attorney Olinsky’s experience and his non-
contingent hourly rate in Syracuse, New York. The record below contains no discussion, let
2
We note that the Commissioner also references this Court’s unpublished decision in Gay v. Commissioner
of Social Security, No. 13-2575, at 4–5 (6th Cir. Aug. 7, 2014), as an example of a case where evidence of rates
charged in Illinois and Wisconsin for Social Security work or for work in the local area on ERISA cases was
insufficient to determine prevailing market rate for Social Security work in the Eastern District of Michigan and
that, under Bryant, reference to the CPI with nothing else was insufficient to justify an increase in the hourly rate.
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alone evidence, of the rate that comparably experienced Social Security practitioners command
in Bowling Green, Kentucky, save awards referenced in other cases in that district.
Plaintiff presents two arguments in support of her contention that the district court erred.
Clark contended below and argues on appeal that this Court’s decision in Glenn, which describes
Olinsky’s requested hourly rate of $171.06 in that case as “modest” and “appear[ed] to be
reasonable[,]” controls the cost of living adjustment which should be applied. 763 F.3d at 497
n.3. The district court concluded, however, that Glenn was not dispositive because it was
concerned with whether the Commissioner’s position was substantially justified, not the rate
recoverable by counsel, which was referenced only in dicta. Further, Glenn addressed work
performed in a case in the Eastern District of Michigan, not the Western District of Kentucky.
We conclude that the dicta in Glenn has no bearing on the decision at hand for the same reasons
as articulated by the district court.
Additionally and at greater length, Clark argues that the language of the EAJA supports
her position that the CPI alone can support a claim for a particular hourly rate due to the
increased cost of living and cites a series of cases for the proposition that the “prevailing market
rate” has nothing to do with a cost of living increase.3 She argues that the district court erred
when it conflated the two concepts and that, in fact, once a court concludes that some amount
greater than $125 per hour is the “prevailing market rate,” then the cost of living adjustment may
be made without reference to the going rate of practice in the local area. Thus, she urges us to
3
The Commissioner argues that Clark makes this argument for the first time on appeal and that we should
consider the issue waived. See Ealy v. Comm’r of Soc. Sec., 594 F.3d 504, 513 (6th Cir. 2010) (citing Young v. Sec’y
of Health & Human Servs., 925 F.2d 146, 149 (6th Cir. 1990); Kidd v. Comm’r of Soc. Sec., 283 F. App’x. 336, 344
(6th Cir. 2008)) (holding that an appellant waives any challenges not raised before the district court and raised for
the first time on appeal). We are not persuaded and conclude that, in this instance, the issues directly addressed in
this appeal could be understood as raised below under the umbrella of what rate should apply, even if Clark did so
inartfully and even if she is citing certain cases for her position for the first time on appeal.
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conclude that the district court lacked the authority to arbitrarily set the amount of the cost of
living adjustment or require additional proof beyond that submitted.
Clark provides an extensive review of case law from across the circuits to show that
many courts have recognized the validity of using the CPI to determine whether inflation
demands an increase in the maximum allowable fee beyond the $125 statutory cap. For
example, in Castaneda-Castillo v. Holder, 723 F.3d 48, 76–77 (1st Cir. 2013), the United States
Court of Appeals for the First Circuit used the regional CPI to calculate the cost of living
adjustment where the government did not object to calculating the hourly attorney rate based on
that number. By contrast, in Harris v. Sullivan, 968 F.2d 263, 265 (2d Cir. 1992), the United
States Court of Appeals for the Second Circuit rejected the district court’s holding that the
“maximum hourly rate should be increased to take into account the prevailing market rate for
legal services,” held that the “cost of living” should be measured using the CPI, and determined
that the statutory cap—not the award itself—should be adjusted for general inflation by the
district court by referencing the CPI before reaching a determination on fees. In DeWalt v.
Sullivan, 963 F.2d 27, 29–30 (3d Cir. 1992), the United States Court of Appeals for the Third
Circuit held that the statutory cap—not necessarily the hourly fee awarded—should be evaluated
and increased using the CPI-ALL to adjust for inflation.4
4
See also Sullivan v. Sullivan, 958 F.2d 574, 575–78 (4th Cir. 1992) (same); Baker v. Bowen, 839 F.2d
1075, 1084 (5th Cir. 1988) (explaining that, while not absolutely required, adjustment for cost of living is a factor to
be considered in evaluating requests under the EAJA within district court’s discretion); Yoes v. Barnhart, 467 F.3d
426, 427 (5th Cir. 2006) (declining to require uniform cost of living adjustments throughout each district noting,
among other things, the varying costs of living among cities in each district and explaining that the EAJA factors are
market-based); Johnson v. Sullivan, 919 F.2d 503, 505 (8th Cir. 1990) (holding that where EAJA petitioner presents
uncontested proof of an increase in the cost of living sufficient to justify hourly attorney fees of more than statutory
cap, enhanced fees should be awarded but that district court should consider any circumstances that would render a
cost-of-living increase unjust or improper, citing as an example the situation where petitioner’s counsel ordinarily
charges a fee no greater than the statutory cap per hour which would preclude a cost-of-living increase above that
amount); Thangaraja v. Gonzales, 428 F.3d 870, 876–77 (9th Cir. 2005) (holding that appropriate cost-of-living
increases are calculated by multiplying $125 statutory rate by the annual average consumer price index figure for all
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As suggested above, these cases do not universally stand for the proposition that a district
court must award the maximum amount possible once the statutory cap is increased to reflect the
cost of living adjustment, perhaps with reference to the CPI. For example, in Sprinkle v. Colvin,
777 F.3d 421, 428–29 (7th Cir. 2015), the United States Court of Appeals for the Seventh Circuit
concluded that, while the CPI was a more practical and meaningful measure of the cost of
providing legal services than requiring litigants to provide proof of the effects of inflation on the
requested attorneys’ costs, the EAJA contemplates that fee awards should be based upon
prevailing market rates paid by clients, not costs paid by attorneys. Id. Thus, while the CPI
provides a reasonably accurate measure of the need for inflation adjustment to the statutory cap
in most cases, under Sprinkle, a plaintiff must still produce evidence that the rate they request is
in line with those rates prevailing in the community for similar services by lawyers of
comparable skill and experience in order to justify the increase. Id. at 429 (holding that “to
avoid the possibility of a ‘windfall,’ courts may not award an inflation-adjusted rate that is higher
than the prevailing market rate in the community for comparable legal services.”).
Clark further argues that a conclusion that she failed to meet her burden under Bryant
conflates the issues of what the lodestar calculation should be and whether a cost of living
adjustment is justified. She argues that the “appropriate evidence” or “satisfactory evidence”
requirement announced in Bryant only applies in cases where the district court caps the fee
award at the statutory ceiling of $125 per hour because the “prevailing market rates for the kind
urban consumers (“CPI–U”) for the years in which counsel’s work was performed, and then dividing by the CPI-U
figure for the effective date of the statutory cap and awarding adjusted statutory maximum); Meyer v. Sullivan, 958
F.2d 1029, 1031 (11th Cir. 1992) (remanding case to determine district court’s rationale for declining to apply cost-
of-living escalator but stating that district courts had discretion to apply cost-of-living escalator where necessary in
order to determine if market rate for fees was to be awarded or whether adjusted cap would be awarded); but see
Headlee v. Bowen, 869 F.2d 548, 552 (10th Cir. 1989) (holding that is in the sound discretion of district court to
determine whether CPI alone constitutes sufficient evidence to support raising the statutory cap for cost of living
adjustment purposes).
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and quality of the services furnished” under 28 U.S.C. § 2412(d)(2)(A) exceeds $125 and not in
cases, such as the present case, where the district court decides to exceed the EAJA cap in its
award. Arguably, she is correct, but that does not suggest that the district court reached an
erroneous conclusion.
In this instance, the district court determined that there are reasons to award some amount
greater than $125 per hour, including the fact that prevailing rates in the community, as
recognized by the court, exceed this amount and that evidence from the CPI indicates that the
cost of services has increased. This does not mean, however, that the district court could only
reasonably conclude that Plaintiff had met her burden to support the full amount of the award
requested where she provided only the CPI and her attorney’s affidavit that referenced a different
locality from Bowling Green, Kentucky. Clark’s argument runs roughshod over the statutory
requirement that the “amount of fees awarded . . . shall be based upon prevailing market rates for
the kind and quality of the services furnished.” 28 U.S.C. § 2412(d)(2)(A). Bryant teaches that
there must be some understanding of the rates charged locally before a district court can adjust
for cost of living or other factors. The Commissioner argues, albeit somewhat indirectly, that the
emphasis on local geographic rates discussed in Bryant is still relevant once a cost of living
adjustment is used to raise the cap on the award that must be made. We agree.
To the extent that Clark wishes for us to “clarify” the decision in Bryant, we may do so
while leaving that decision in intact and while affirming the district court’s decision. We
conclude that the district court acted within its discretion when it awarded Clark attorney fees at
a rate of $140 per hour, although perhaps it might have better articulated how it was adjusting the
statutory cap. For example, it might have done so by recognizing its use of the CPI in an upward
adjustment of the statutory cap based on the cost of living but declining to award an amount
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equal to that cap in the absence of any evidence that the full amount would be the prevailing
market rate for attorneys of comparable skill, experience, and reputation in Bowling Green,
Kentucky, as presented by the Commissioner. Nonetheless, it is clear that the district court did
not abuse its discretion in awarding Clark an attorney fee calculated on a rate of $140 per hour,
and we AFFIRM the decision of the district court.
9