The opinion of the court was delivered by: Magistrate Judge Finnegan
MEMORANDUM OPINION AND ORDER
Plaintiff Alisha Claiborne filed an action seeking review of the final decision of the Commissioner of Social Security ("Commissioner") denying her application to recover Supplemental Security Income ("SSI") on behalf of her minor daughter, L.D., under Title IX of the Social Security Act. 42 U.S.C. § 1382c(a)(3)(C). On January 24, 2012, the Court remanded the case to the Administrative Law Judge ("ALJ") for further evaluation. Claiborne ex rel., L.D. v. Astrue, No. 10 C 7728, 2012 WL 205907, at *17 (N.D. Ill. Jan. 24, 2012). Plaintiff now seeks to recover her attorneys' fees and costs pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), arguing that the Commissioner's position in defending the ALJ's decision was not "substantially justified." For the reasons set forth here, Plaintiff's application for $13,372 in fees and $38.73 in costs is granted.
Under the EAJA, a plaintiff is eligible to recover attorneys' fees if (1) she makes a timely application for fees; (2) she is a "prevailing party"; (3) the government's position was not "substantially justified"; and (4) no special circumstances makes an award unjust. 28 U.S.C. § 2412(d)(1)(A)-(B); Seabron v. Astrue, No. 11 C 1078, 2012 WL 1985681, at *1 (N.D. Ill. June 4, 2012). The Commissioner does not dispute that Plaintiff has satisfied these requirements and is entitled to an award of fees and costs in this case.
Plaintiff has submitted invoices showing that her attorneys worked a total of 73.1 hours, including time spent preparing the fee petition and reply brief. Specifically, Barry Schultz worked 24.6 hours; Lauren Rafferty worked 35.9 hours; and Julie Coen worked 12.6 hours. Two legal assistants worked an additional 1.3 hours. (Doc. 45-3; Doc. 49, at 15 n.10). Plaintiff seeks an attorneys' rate of $181.25 per hour based on the "All items" figure provided by the Chicago-Gary-Kenosha Consumer Price Index ("CPI") for May 2011, when her lawyers performed most of the work for this case. (Doc. 45 ¶ 12; Doc. 45-1). She also seeks $95 per hour for the legal assistant work. (Id. ¶ 15).
The Commissioner does not challenge the reasonableness of the number of hours, or the $95 hourly rate requested for the legal assistant work. The Commissioner does object, however, that the $181.25 hourly rate for Plaintiff's counsel is unjustifiably high. (Doc. 48, at 2-6). The Commissioner also insists that any award of fees must be made payable directly to Plaintiff, though it may be mailed to her "at the address of her attorney." (Id. at 1). The Court considers each argument in turn.
The EAJA provides that the amount of attorneys' fees awarded "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 of $125 per hour unless the court determines that an increase in the cost of living [since 1996, when the current version of the Act was passed] or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." Mathews-Sheets v. Astrue, 653 F.3d 560, 562 (7th Cir. 2011) (quoting 28 U.S.C. § 2412(d)(2)(A)(ii)). This "rather chintzy" fee-shifting statute sets the $125 rate as "a presumptive ceiling; to justify a higher rate the plaintiff must point to inflation," or show that the case "requires for competent counsel someone from among a small class of specialists who are available only for [more than $125] per hour." Id. at 562, 563, 565.
Though the two methods of justifying a fee increase are set forth in the disjunctive under the EAJA, the Commissioner construes certain language in Mathews-Sheets to mean that lawyers must prove both propositions: (1) "inflation has increased the cost of providing adequate legal service," 653 F.3d at 563; and (2) no competent attorney in the area would handle the case for less than the amount requested in the fee petition. Id. at 565. In the Commissioner's view, Plaintiff is not entitled to a cost of living increase in this case because her lawyer has not established either criterion. (Doc. 48, at 3).
Plaintiff responds that Mathews-Sheets involved "an unusual and convoluted set of facts" not applicable here, and insists that the Commissioner's position with respect to rate increases is unworkable. (Doc. 49, at 5-7). She also notes that prior to this decision, the Commissioner "did not contest the appropriateness of a cost of living adjustment to EAJA fees[,]" and the Seventh Circuit "also assumed the appropriateness of a COLA." (Doc. 49, at 5) (citing Tchemkou v. Mukasey, 517 F.3d 506, 512 (7th Cir. 2008) ("We believe that, given the passage of time since the establishment of the hourly rate, a cost-of-living adjustment is warranted. The Government does not object [ ] to the increase in general...."). Given the parties' disagreement concerning the meaning and applicability of Mathews-Sheets, this Court begins with a detailed discussion of that decision.
The plaintiff's attorney in Mathews-Sheets sought a fee of $225 per hour based on his conclusory assertion that this amount constituted "the prevailing market rate." Id. at 563. Aside from citing to the CPI (which supported a rate of only $170 per hour), the lawyer provided no basis whatsoever for the requested fee increase, though he did raise the issue of inflation in a reply brief. Id. at 562-63. Even then, the lawyer failed to reference his particular circumstances that purportedly justified the "inflation adjustment."*fn1
Id. at 563-64. The district court declined to award the attorney more than $125 per hour, not because his arguments were weak, but because "the information in the reply brief about cost of living had been submitted 'too late.'" Id. at 563. The Seventh Circuit rejected the district court's rationale and remanded the case, explaining that "it was not improper for the lawyer ...