stated, it is held that the new rule should be applied prospectively. The present fee petition can be considered since it is timely under Seventh Circuit law existing at the time Butts was pursuing his remand before the Secretary.
Plaintiff is entitled to fees under the EAJA if the position taken by the Secretary was not substantially justified. "Substantially justified" does not mean "'justified to a high degree,' but rather 'justified in substance or in the main'--that is, justified to a degree that could satisfy a reasonable person. That is no different from the 'reasonable basis both in law and fact' formulation adopted by the Ninth Circuit and the vast majority of other Courts of Appeals that have addressed this issue." Pierce v. Underwood, 487 U.S. 552, 108 S. Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988) (citing Ramos v. Haig, 716 F.2d 471, 473 (7th Cir. 1983)).
Defendant argues that his position was substantially justified in that the ALJ made a reasonable decision based on a fully developed medical record and addressed the required issue. That assertion of the Secretary is certainly wrong in that it was held that the ALJ did not adequately develop the record in that he failed to consult a medical advisor, March 31, 1989 Order at 10-12, and that he did not properly consider plaintiff's various impairments in combination, id. at 6-10. In reaching this conclusion, it was noted that the ALJ considered only part of one medical report, ignoring the part that supported plaintiff, see id. at 8; failed to consider that impairments may have worsened over time, see id. at 9; and that the ALJ essentially substituted his own "medical" opinion for that of a physician, see id. at 12. The Secretary, though, argues more than is necessary. To avoid paying fees it is not necessary that the ALJ's decision have been supported by substantial evidence and affirmed; it is only necessary that any argument to that effect be substantially justified. While the Secretary's position in this case was not a frivolous one, this case also cannot be characterized as either a close or difficult case. Instead it falls within that amorphous middle ground that is often difficult to characterize. Given the two grounds for reversal and that the legal errors of the ALJ were clear, the Secretary's position does not reach the level of substantial justification. Cf. Uskokovic v. Sullivan, 772 F. Supp. 387 (N.D. Ill. July 16, 1991). No argument presented in the Secretary's present brief points to the opposite conclusion. Plaintiff is entitled to fees under the EAJA.
The Secretary does not dispute any of the hours claimed in support of plaintiff's fee petition, but does dispute certain of the rates charged. By statute, the hourly rate is limited to "$ 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)(A)(ii). The parties agree that a cost of living adjustment is appropriate, but disagree as to the appropriate adjustment to make. Defendant relies on the Consumer Price Index for all Urban Consumers, whereas plaintiff wants to use the "Legal Services" component of that index which reflects a greater rate of inflation than the general index. The general index more properly reflects changes in the cost of living than does increases in the rates charged by attorneys, which is all that the Legal Services component measures. The general Consumer Price Index is the index that should be used. Uskokovic, supra; Ofray v. Secretary of Health & Human Services, 741 F. Supp. 53 (W.D.N.Y. 1990); Wells v. Sullivan, Unempl. Ins. Rep. (CCH) para. 16036A (N.D.N.Y. 1990). Contra De Walt v. Sullivan, 756 F. Supp. 195, 198-200 (D.N.J. 1991). Per plaintiff's alternative argument, it is appropriate to use the index for Chicago instead of the index for all Urban Consumers in the country. Based on plaintiff's computation, the maximum rate shown by the local index through July 1991 is $ 111.37.
Based on plaintiff's initial and supplemental time log (which includes hours related to briefing the fee issue), plaintiff is entitled to an award reflecting 115.75 attorney hours and 9.5 hours for third year law students for which a rate of $ 75 per hour is requested. Plaintiff also seeks $ 1,049 of expenses for experts and the $ 120 filing fee. Defendant does not object to either of those expenses. One hundred fifteen and three-quarters hours at $ 113.37 per hour equals $ 13,123. Nine and one-half hours at $ 75 per hour equals $ 713. Plaintiff is entitled to $ 13,836 for fees, $ 1,049 for expenses, and $ 120 for costs.
IT IS THEREFORE ORDERED that plaintiff's petition for fees is granted in part and denied in part. The Clerk of the Court is directed to enter judgment in favor of plaintiff and against defendant awarding plaintiff $ 13,836 in attorney's fees, $ 1,049 for expenses, and $ 120 for costs for a total of $ 15,005. Defendant is to pay this judgment directly to plaintiff's attorney, Frederick J. Daley.