B. Equal Access To Justice Act (Eaja) Fees For Adversarial Litigation

• Jurisdiction: New York

B. Equal Access to Justice Act (EAJA) Fees for Adversarial Litigation

The EAJA²²⁵ authorizes the payment of attorney's fees and costs to a prevailing party in an adversarial civil proceeding against the United States. Thus, the EAJA does not apply to any services performed solely in connection with administrative proceedings before the Agency.²²⁶ To obtain fees under this statute, you must file a motion for such fees, or otherwise file a stipulation to settle in lieu of a motion through informal negotiations with counsel for the Agency, within a prescribed time period. How long you have to file a motion for EAJA fees after the civil action is terminated depends on the type of remand (sentence four or sentence six) and how the case was disposed of (a stipulation/consent motion to remand or a decision on the merits following briefing by the parties).²²⁷ The timing issue is discussed in greater detail below. All motions for EAJA fees also requires: (1) a statement of "the amount sought, including an itemized statement from any attorney . . . stating the actual time expended and the rate at which fees . . . were computed;²²⁸ (2) a showing that "the position of the United States was not substantially justified;²²⁹ and, (3) a statement that the prevailing party had a net worth of less than $2 million at the time the civil action was filed.²³⁰

You bear the burden of producing contemporaneous time records for services performed in Federal Court.²³¹ In addition, a memorandum of law in support of the motion for fees should provide an argument on why the government's position was not substantially justified and justification for the requested hourly rate, if necessary. It is also helpful to attach an affirmation detailing (1) the history of the case; (2) the hours expended by attorneys and a brief curriculum vitae of the attorneys' experience; (3) detailing how the contemporaneous hours were recorded and how the requested hourly rate was determined; and, (4) certifying that your client did not have a net worth of more than $2 million dollars at the time the civil action was filed. A few District Courts have Local Rules that impose additional requirements on what must be submitted with requests for fees under the EAJA, which may include a statement on whether or not the government consents to the motion or reserves the right to object to the motion. Thus, it is important to review the Local Rules in preparing these motions to avoid the motion from being stricken from the docket for non-compliance.

If the government opposes a motion for fees under EAJA on the grounds that the Social Security Administration's position in the case was substantially justified, the Agency bears the burden of proof to show substantial justification.²³² Substantial justification can be established only if the government's position is found to be reasonable both in fact and in the law.²³³ Furthermore, the burden requires establishing that the government's position was substantially justified both in denying the claim before the Agency and in defending the action in Federal Court.²³⁴ Thus, while the EAJA is not an automatic fee shifting statute, it imposes a relatively high burden on the government to support a denial of fees to a prevailing party who meets the other requirements of the statute.

The government may also argue, though it is exceedingly rare,²³⁵ that "special circumstances make an award unjust" even without asserting that its position was substantially justified.²³⁶ Indeed, not a single published Circuit Court decision has upheld a finding that "special circumstances" warrant denying or reducing EAJA fees in the context of Social Security disability benefits. The Second Circuit has held that it is an abuse of discretion to reduce EAJA fees under this provision when an attorney does not obtain medical records that the ALJ had a duty to obtain based on the Commissioner's affirmative duty to develop the record in non-adversarial proceedings.²³⁷ The Ninth Circuit has found that EAJA fees cannot be denied under the special circumstances provision because the decision on the merits was on an issue of first impression.²³⁸ The Fourth Circuit has found that a Court cannot reduce EAJA fees under the special circumstances provisions because some of the attorneys who worked on the case were not admitted to practice in the District Court.²³⁹ Thus, none of the four published Circuit cases on this issue have found in the government's favor of applying the special circumstances exception.

According to the statute, as modified in March 1996, "attorney fees shall not be awarded in excess of $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."²⁴⁰ Rarely have any Courts found that a "special factor" justifies an hourly rate about $125 per hour, but an increase in the cost of living is routinely applied to justify a higher hourly rate in the vast majority of District Courts. To prove an increase in the cost of living, obtain a printout of the Consumer Price Index—All Urban Consumers from the Bureau of Labor Statistics at the Labor Department in Washington, D.C., which can be obtained online (https://www.bls.gov/cpi). You can then calculate the appropriate hourly rate by multiplying the $125.00 hourly rate set in March 1996 by the consumer price index for the month when the work was performed on the case and then dividing that number by the consumer price index that applied in March 1996. In most case, the District Court will increase the cap on the hourly rate to the resulting rate.²⁴¹

The Supreme Court ruled that EAJA fees for paralegal services performed during Federal Court litigation should be paid at the "prevailing market rate" for such services, rather than paid as "other expenses" that can only be paid at a "reasonable cost."²⁴² Since Richlin was decided ten years ago, Courts have found that anywhere from $30 per hour²⁴³ to $157 per hour²⁴⁴ is an appropriate rate for paralegals and law clerks. This is somewhat ironic since $157 an hour is even higher than the amount set by statute as an appropriate hourly rate for attorneys in 1996 and some District Courts continue to refuse to award more than the $125 per hour rate even for attorney services before the Court.²⁴⁵

When the government proceeds in bad faith, the EAJA directs that fees should be paid at a fair market rate without the statutory fee cap.²⁴⁶ However, this requires a showing that the Commissioner's position in the case was "entirely without color and made for reasons of harassment or delay or for other improper purposes."²⁴⁷ This requires proving "far more egregious conduct" on the part of Defendant than establishing lack of substantial justification.²⁴⁸ Bad faith has been found on the part...