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August 30, 1985


Appeal from the United States District Court for the Northern District of Illinois Eastern Division, 82 C 2523- Aspen, Judge

Author: Dumbauld

Before POSNER and COFFEY, Circuit Judges, and DUMBAULD*fn* , Senior District Judge.

DUMBAULD, Senior District Judge.

The inadvertent inhumanity towards the indigent which inheres in institutionalized and bureaucratized income transfer is illustrated by the case at bar.

Because appellee Penelope Gotches was enjoying the benefit of benefits under both the Railroad Retirement Act (45 U.S.C. 231 et seq.) and the Social Security Act (42 U.S.C. 401 et seq.), the practice "most approved and in use"*fn1 by the two agencies resulted, upon the death of her husband Steve (on January 2, 1982), in cancellation of all benefits except the Railroad Retirement spousal benefit. Thus the income for the support of this 81 year old widow suddenly dropped from $695 to $105 per month. She was told by the Railroad Retirement Board that it would take five or six months before the Board could compute what she was legally entitled to receive as a surviving widow.

After her attorney wrote without response to both agencies, suit was filed on April 23, 1982, in the form of a class action seeking relief for the multitude of individuals with dual coverage for benefits. The Board thereupon agreed to increase her interim benefits, and finally decided on May 24, 1982, that she was entitled to $575.90 per month, retroactive to January 1, 1982.

Though the class action never proceeded to determination of a class, settlement negotiations continued, and on November 16, 1982, a consent decree was entered.

The consent decree provided for the establishment of procedures for the benefit of other surviving spouses than Mrs. Gotches which averted some of the disadvantages of the former "dual eligibility" cut-off. The Railroad Retirement Board agreed to pay interim benefits equal to the amount of "spouse" benefits under both Acts. Schedules for implementation of the new system, and procedures for verifying compliance and reporting to the Court were also included in the decree.

The case comes before us in connection with plaintiff's counsel's application for attorney's fees, presenting perhaps the common situation deprecated by Judge Aldisert where the "side-show" eclipses the "main tent," and the inquiry as to the amount of the fee assumes "massive proportions, perhaps even dwarfing the case in chief." Lindy Bros. Inc. v American Radiator, 540 F.2d 102, 116 (3rd Cir. 1976).

The fee award is governed by the Equal Access to Justice Act, 28 U.S.C. 2412(b), which permits the award of reasonable "fees and expenses of attorneys, in addition to ... costs ... to the prevailing party in any civil action brought... against the United States or any agency..." It is further provided that "The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award."

Fees may be denied, under 28 U.S.C. 2412(d)(1)(A) if the court finds "that the position of the United States was substantially justified or that special circumstances made an award unjust." Fees may also be reduced or denied under 29 U.S.C. 2412(d)(1)(C) if the prevailing party "engaged in conduct which unduly and unreasonably protracted the final resolution of the matter in controversy."

By virtue of these statutory provisions for fees the case at bar is removed from operation of the general "American" rule prohibiting fee-shifting. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 260, 44 L. Ed. 2d 141, 95 S. Ct. 1612 (1975).

The government argues that its position was "substantially justified" and that "equitable considerations" exist amounting to "special circumstances" making an award unjust.*fn2

It is hard to find anything inequitable in plaintiff's concern for and efforts to ameliorate the lot of victims of the prior bureaucratic practice. If anything was inequitable (rather than merely ridiculous) it was that prior practice itself. It is difficult to see why the beneficiary of double coverage ...

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