The opinion of the court was delivered by: Judge Feinerman
MEMORANDUM OPINION AND ORDER
Having successfully challenged the Social Security Administration's denial of his disability insurance benefit claim, 2012 WL 1520712 (N.D. Ill. Apr. 30, 2012), Plaintiff Antonio Mireles moves for an award of attorney fees and costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). Doc. 40. The Commissioner does not contest Mireles's entitlement to fees and costs, but instead argues that the $10,674.71 Mireles has requested is excessive. The court rejects most of the Commissioner's arguments and awards Mireles $9,587.21. The parties also present the question whether the award should be made payable to Mireles himself or to his attorney. Unless the Commissioner finds that Mireles owes money to the United States that could require an offset, the award should be paid to the attorney.
The parties' principal dispute concerns whether Mireles is entitled to an attorney fee award that reflects an hourly rate above the EAJA's presumptive ceiling of $125 per hour. The EAJA provides in relevant part:
The amount of fees awarded under this subsection 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 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) (emphasis added). As its use of the disjunctive "or" indicates, the statute permits an hourly rate above $125 if "the court determines" that "a higher fee" is "justifie[d]" by either of two circumstances: (1) "an increase in the cost of living," or (2) "a special factor, such as the limited availability of qualified attorneys for the proceedings involved."
Mireles does not contend that a "special factor" justifies an hourly rate above $125. He instead seeks a "cost of living" increase to $181.25 per hour, grounding his request on three submissions. First, Mireles observes that the consumer price index ("CPI") for the Chicago-Gary-Kenosha region, as measured by the U.S. Department of Labor's Bureau of Labor Statistics, shows substantial inflation since 1996, when Congress amended the EAJA to raise the hourly rate ceiling from $75 to $125. Doc. 40-1 (CPI chart documenting a 39.4% increase from March 1996 to March 2011). Second, Mireles submits four affidavits from other attorneys in the area attesting that they have been awarded at least $165 per hour under the EAJA and that they charge substantially more for work on non-Social Security matters. Doc. 40-4 (Jan L. Kodner affidavit); Doc. 40-5 (Eric Schnaufer affidavit); Doc. 40-6 (Frederick J. Daley Jr. affidavit); Doc. 40-7 (David F. Traver affidavit). Third, Mireles's attorney avers that he has faced increasing costs for rent (3% annually, which compounds to over 55% over 15 years), employee salaries (5% annually for legal staff and 3% to 4% for administrative staff), health insurance (an increase of at least 100% since 1996), and other costs associated with the practice of law, such as Westlaw fees, continuing legal education conferences, and file folders. Doc. 40 at 7-8. The attorney attests further that he charges $275 per hour for non-contingency work, an increase of 52% over his 1996 rate of $180, id. at 7, though presumably part of that increase is attributable to his greater experience rather than to inflation.
The Commissioner responds that Mireles's arguments are insufficient to justify a cost of living increase under the standard set forth in Mathews-Sheets v. Astrue, 653 F.3d 560 (7th Cir. 2011), which interpreted the above-quoted EAJA provision. The parties debate the meaning of these two paragraphs of Mathews-Sheets:
It might seem that because the cost of living special factor [in 28 U.S.C. § 2412(d)(2)(A)] is not automatic, the two enumerated special factors merge; the lawyer arguing for a cost of living increase must show limited availability of lawyers able to handle such a case. But that is not correct. Inflation might have an impact across a range of fields of practice that would make it difficult to hire a competent lawyer even in a rather routine case in a field of law by no means esoteric; in such a situation a fee above the statutory fee might well be justified. When inflation is not a factor, the lawyer does have to show that there is something special about the particular type of case that justifies the higher fee. That special factor has not been invoked in this case.
And so on remand the plaintiff's lawyer will have to show that without a cost of living increase that would bring the fee award up to $170 per hour [the amount that Mathews-Sheets had requested on cost of living grounds], a lawyer capable of competently handling the challenge that his client mounted to the denial of social security disability benefits could not be found in the relevant geographical area to handle such a case.
Id. at 565. The Commissioner reads the second paragraph to mean that if Mireles cannot show that no attorney in the Chicago area would have been willing and available to competently handle Mireles's appeal without a cost of living increase to $181.25 per hour, then that adjustment is prohibited. Pressing the opposite position, Mireles focuses on the passage's first two sentences, which say that it "is not correct" that a "lawyer arguing for a cost of living increase must show limited availability of lawyers able to handle such a case." Neither reading of Mathews-Sheets is obviously wrong or obviously right.
The court believes that Mireles's position-that he need not show that no competent lawyer in the region would have taken the case for under $181.25 per hour to justify a cost of living increase from the presumptive $125 rate-is more faithful to the EAJA's text and the overall thrust of Mathews-Sheets. As noted above, the statute by its plain terms allows for a rate above $125 per hour under either of two circumstances: if "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) (emphasis added). To require a litigant seeking a cost of living increase to demonstrate the limited availability of qualified attorneys to do the job absent that adjustment would nullify Congress's decision, evidenced by its use of the disjunctive "or," to make inflation and the limited availability of competent attorneys (a "special factor") alternate routes to a fee above $125. See Claiborne ex rel. L.D. v. Astrue, 2012 WL 2680777, at *3 (N.D. Ill. July 6, 2012) (making the same point about Mathews-Sheets and the "or" in the EAJA).
Other district courts in this Circuit have rejected the Commissioner's interpretation of Mathews-Sheets. See Carson v. Astrue, 2012 WL 3562771, at *1-2 (S.D. Ill. Aug. 17, 2012) (rejecting the Commissioner's reading of Mathews-Sheets and granting an adjustment based on the attorney's representations that his costs had risen); Just v. Astrue, 2012 WL 2780142, at *1-2 (N.D. Ill. July 9, 2012) ("it is more likely that Mathews-Sheets only requires that a claimant present evidence showing a general increase in attorney's fees in the relevant geographical area due to inflation, such that the legal market could not sustain an hourly rate of $125"); Shipley v. Astrue, 2012 WL 1898867, at *3 (S.D. Ind. May 23, 2012) ("This court does not read Mathews-Sheets to limit the availability of a fee higher than $125 based on an increase in the cost of living since 1996 only where the lawyer can prove that qualified attorneys would not otherwise be available."); but see Heichelbech v. Astrue, 2011 WL 4452860, at *2 (S.D. Ind. Sept. 26, 2011) (refusing to exceed the $125 ceiling where the plaintiff "made no attempt to demonstrate that, because of the cost of living increase since 1996, attorneys could not be found in the Evansville community and surrounding geographical area to handle a social security case for $125 an hour"). Other district courts, including courts in the Chicago metropolitan area, have found rates of around $181 per hour to be justified under the EAJA since Mathews-Sheets was decided. See Dewolf v. Astrue, 2012 WL 3260420, at *3 (N.D. Ill. Aug. 8, 2012) (approving hourly rate of $181.37); Claiborne ex rel. L.D., 2012 WL 2680777, at *5 ($181.25); Hudnall v. Astrue, 2012 WL 2504883, at *2 (N.D. Ind. June 28, 2012) ($179).
Mathews-Sheets is best read to require a litigant seeking a cost of living increase under the EAJA to establish two things: (1) that the cost of living in the region has indeed increased to the degree of his requested adjustment, and (2) that his attorney's costs of providing legal services have increased in a manner that tends to show that inflation has indeed raised those costs. Both showings are necessary because general inflation might not raise the particular costs of running a law office, while a particular attorney's increased costs might be attributable to factors other than inflation, such as the attorney's decision to move to a nicer office or to buy more expensive office supplies. Mathews-Sheets put it this way:
If [a litigant seeking attorney fees under the EAJA] points to inflation he still must show that it actually justifies a higher fee; for while it might seem obvious that a statutory price ceiling should be raised in step with inflation, to do that as a rote matter would produce windfalls in some cases. Inflation affects different markets, and different costs in the same market, in different ways. The framers of the Equal Access to Justice Act were right therefore not to create an entitlement to an inflation adjustment; the lawyer seeking such an ...