The opinion of the court was delivered by: Magistrate Judge Jeffrey Cole
MEMORANDUM OPINION AND ORDER
The plaintiff seeks an award of $10,766.75 in attorneys' fees and $385.93 in costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, arguing that the Commissioner's position in denying her application for Disability Insurance Benefits was not substantially justified. The EAJA provides that a district court may award attorneys' fees where (1) the plaintiff is a "prevailing party"; (2) the government's position was not substantially justified; (3) no "special circumstances make an award unjust"; and (4) the fee application is submitted to the court within 30 days of final judgment and is supported by an itemized statement. 28 U.S.C. § 2412(d)(1)(A), (B); Golembiewski v. Barnhart, 382 F.3d 721, 723-24 (7th Cir. 2004). Costs are available under 28 U.S.C. § 2412(a)(1). Here, by virtue of the remand of his case, the plaintiff is the prevailing party. Shalala v. Schaefer, 509 U.S. 292, 302 (1993). There are no "special circumstances" alleged. See Golembiewski, 382 F.3d at 724; United States v. Hallmark Const. Co., 200 F.3d 1076, 1079 (7th Cir. 2000). The plaintiff's application was timely filed and is supported by an itemized statement. As to the final point -- whether the government's position was substantially justified -- the Commissioner bears the burden of proof. Scarborough v. Principi, 541 U.S. 401, 416 (2004); Golembiewski, 382 F.3d at 724. Here, the Commissioner concedes the point. The Commissioner also does not object to the number of hours the plaintiff's attorney spent on this case. The only issues are whether the plaintiff is entitled to a cost of living increase of EAJA's $125 per hour statutory rate, and whether the fee award should be paid directly to plaintiff's attorney. The answer depends upon the interpretation and application of the Seventh Circuit's decision in Mathews-Sheets v. Astrue, 653 F.3d 560 (7th Cir. 2011)(Posner, J.). At the conclusion of that portion of the opinion dealing with counsel's entitlement to a cost of living adjustment to EAJA's $125 rate -- and before turning to the separate question of whether the court can order the fee award paid to the lawyer rather than the client -- Judge Posner said that: 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 [the requested rate], 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.
Based on this statement, the Commissioner insists that Mathews-Sheets imposes a "more onerous demonstration" than previously required by a lawyer seeking a cost of living increase. Amey v. Astrue, 2012 WL 4738985, 3 (N.D.Ill. 2012)(finding it unnecessary to decide the issue).*fn1 With all deference, this conclusion, resting as it does on a hyper literal reading of a single sentence at the end of the relevant portion of the Mathews-Sheets opinion is contrary to the rules regarding the proper reading of cases -- rules rigorously adhered to by Judge Posner, himself.
First, a literal reading of a single sentence in a judicial opinion "is a disservice to courts, as well as a common source of erroneous predictions concerning the scope and direction of the law...." All-Tech Telecom v. Amway Corp., 174 F.3d 862, 866 (7th Cir. 1999)(Posner, C.J.). That sort of approach "treat[s] a judicial opinion as if it were a statute...." Id. But "[j]udicial opinions must not be confused with statutes...." United States v. Skoien, 614 F.3d 638, 640 (7th Cir. 2010)(En Banc). See also CBS, Inc. v. F.C.C., 453 U.S. 367, 3855 (1981).
One of Judge Posner's favorite themes, repeatedly stressed, is that"even where "[l]anguage in some... cases could be read to suggest" a specific result, the language is not decisive, and it "is a disservice to judges and a misunderstanding of the judicial process to wrench general language in an opinion out of context." Aurora Loan Services, Inc. v. Craddieth, 442 F.3d 1018, 1026 (7th Cir.2006). In All-Tech Telecom v. Amway Corp., 174 F.3d 862, 866 (7th Cir. 1999), he put it this way: "It is a disservice to courts, as well as a common source of erroneous predictions concerning the scope and direction of the law, to treat a judicial opinion as if it were a statute, every clause of which was law. It is difficult to write a judicial opinion without making some general statements by way of background and explanation. But in a system of case law such statements can be misleading if carelessly lifted from the case-specific contexts in which they were originally uttered." Id., at 866. See also Brown v. Calamos, 664 F.3d 123, 128 (7th Cir.2011)(Posner, J.); Miller v. Dobier, 634 F.3d 412, 415 (7th Cir.2011)(Posner, J)("Language in a few cases could be read to suggest that a pretrial detainee or a civil detainee does not have the same rights as prison inmates unless the challenged restriction imposed on him is intended as punishment. ... But such a reading cannot be correct....").*fn2
The plaintiff is requesting an hourly rate of $173.75 per hour. To support this request, plaintiff's attorney offers (1) the Consumer Price Index ("CPI") for the region detailing the effects of inflation on a month-by-month basis since January 1982 and claims that $173.75 is the "hourly rate for November 2009 -- the month in which the majority of the legal work was performed" (Plaintiff's Motion for Attorney's Fees, at 5); (2) his affirmation that since 1996, his office expenses have increased significantly: for example, office rent has increased 3% per annum, salaries paid to administrative and legal staff have increased 3-5% annually to keep pace with those paid by other firms, and health insurance costs have increased 100%; (3) his assertion that competent counsel could not be found to take plaintiff's case for $125 per hour, given that the success rate in federal court for similar cases is about 50%, see Martinez v. Astrue, 630 F.3d 693, 695 (7th Cir. 2011), making the effective hourly rate just $67.50 an hour; (4) the Social Security Administration's own increase of the ceiling for administrative fee agreements by 50% since 1996; (5) his affirmation that his non-contingency fee has increased 52% since 1996 -- when Congress set the current $125 EAJA rate -- and that his requested rate is only a 40% increase over that 1996 statutory rate; (6) affidavits from four other attorneys practicing disability law in the area attesting their hourly rates ranged from $165 to $500 per hour; and that they would not take a Social Security case without an inflation adjustment. (Plaintiff's Motion for Attorney's Fees, ¶¶ 12, 16-18).
The Commissioner argues that the plaintiff has not shown that no competent lawyer could be found in the Chicagoland area who would have brought the case for a fee of $125. Precisely how that showing could be made, the Commissioner does not say. And perhaps for good reason. Given current economic conditions and the number of lawyers who are out of work, it is probable that there is a competent lawyer in the Chicago area who would take a Social Security appeal for $125 per hour. Thus, properly understood, the Commissioner's reading of Mathew-Sheets, if accepted, would impose a burden of proof that could not, in all likelihood, ever be met.
Mathews-Sheets was written against a backdrop of severe dislocations in the market for attorneys in the Chicago area, and indeed, throughout the country. It is common knowledge that there is a glut of lawyers on the market, that law schools continue to churn out lawyers in numbers that exceed available jobs, and that older lawyers and those deemed "unproductive" are losing their jobs at an unprecedented rate as law firms, large and small, attempt to deal with the economic challenges confronting them. See generally, Steven J. Harper, The Lawyer Bubble: A Profession In Crisis (Basic Books 2013). It is thus folly to suggest that no competent lawyer in Chicago could be found to handle a Social Security appeal for $125 -- "a field of law by no means esoteric." Mathews-Sheets, 653 F.3d at 565.
Judge Posner (and Judges Wood and Rovner, the other members of the panel in Mathews-Sheets) could hardly have been unaware of the current situation confronting lawyers and the nation. And even though the Commissioner is not free to ignore economic reality, Sanders v. Apfel, 136 F.3d 137 (5th Cir.1998), her interpretation of Mathews-Sheets attributes to the panel economic obliviousness. What Judge Posner said in another context applies here: "If this 'literal' interpretation affronted the common sense of, or the economic realities behind, [the interpretation], that would be a powerful reason to reject it." Call v. Ameritech Management Pension Plan, 475
F.3d 816, 821 (7th Cir. 2007). See also, Posner, How Judges Think, 117 (Harv. Univ. Press 2008)("A lawyer's position in a case in the open area that violates common ...