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Flores v. Colvin

United States District Court, N.D. Illinois, Eastern Division

September 25, 2014

JOSE FLORES, Plaintiff,
CAROLYN COLVIN, Acting Commissioner, Social Security Administration, Defendant.


YOUNG B. KIM, Magistrate Judge.

Before the court is Plaintiff Jose Flores's motion for fees and costs pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. §§ 2412(a), (d). Flores argues that he is entitled to $12, 953.68 in fees as a prevailing party under EAJA. The motion for fees is granted for the following reasons:


In November 2009 Flores applied for disability insurance benefits pursuant to sections 216(i) and 223(d) of the Social Security Act, alleging that he became disabled in July 2008 as a result of depression, multiple sclerosis, degenerative disc disease, and "hand problems." (R. 19, Pl.'s Br. at 1.) The Commissioner denied Flores's claims initially and on reconsideration. (Id.) After Flores requested and received a hearing before an administrative law judge ("ALJ"), the ALJ issued a decision on October 28, 2011, finding Flores not disabled. (Id.) On April 4, 2013, Flores filed this action for review of the Commissioner's final decision, and the parties subsequently consented to the jurisdiction of this court. (R. 1, 6.) On July 21, 2014, the Commissioner moved for, and this court granted, entry of an agreed judgment reversing the Commissioner's decision with remand for further administrative proceedings. (R. 29, 31.)

Flores now seeks an award of $12, 953.68[1] in attorney and legal assistant fees under EAJA. This requested award is based on an hourly attorney rate of $188 billed primarily in the month of September 2013. (R. 33-3, EAJA Itemization of Time.) The Commissioner does not contest Flores's entitlement to recover fees or costs, but she contends that both the hourly rate charged and the number of hours worked are excessive and should be reduced. (R. 26, Govt.'s Resp. at 3-5.) Additionally, the Commissioner argues that any EAJA award should be granted as payable directly to Flores, not to his attorney, pending confirmation that Flores does not owe a pre-existing debt to the government. (Id. at 5-8.)


Pursuant to EAJA, an award of attorney fees "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 $125.00 per hour unless the court determines that an increase in the cost of living... justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A)(ii); Bias v. Astrue, No. 11 CV 2247, 2013 WL 615804, at *1 (N.D. Ill. Feb. 15, 2013). In 2008 the Seventh Circuit recognized that "given the passage of time since the establishment of the hourly rate, a cost-of-living adjustment is warranted." Tchemkou v. Mukasey, 517 F.3d 506, 512 (7th Cir. 2008). EAJA does not automatically entitle an attorney to a cost-of-living adjustment, however, and an adjustment is not presumed despite the fact that the $125 cap rate was set more than 18 years ago in March 1996. See Mathews-Sheets v. Astrue, 653 F.3d 560, 563 (7th Cir. 2011). As the Seventh Circuit explained in Mathews-Sheets, "[i]nflation affects different markets, and different costs in the same market, in different ways, " such that a lawyer seeking an adjustment because of an increase in the cost of living must show that "inflation has increased the cost of providing adequate legal service to the person seeking relief against the government." Id. However, "[t]he Mathews-Sheets court did not describe any particular method or manner by which a lawyer might demonstrate that inflation has increased the cost of legal services to persons seeking redress against the government." Shipley v. Astrue, No. 10 CV 1311, 2012 WL 1898867, at *3 (S.D. Ill. May 23, 2012). This absence of guidance has led to numerous interpretations of what a litigant must prove when seeking a cost of living increase under EAJA.

In Mireles v. Astrue, No. 10 CV 6947, 2012 WL 4853065 (N.D. Ill. Oct. 11, 2012), the court evaluated Mathews-Sheets within the same context as presented in this case and made the following determination:

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.

Id. at *3. Other courts in this district have reached the same conclusion. See Claiborne ex rel. L.D. v. Astrue, 877 F.Supp.2d 622, 626-28 (N.D. Ill. 2012); Booker v. Colvin, No. 09 CV 1996, 2013 WL 2147544, at *6 (N.D. Ill. May 16, 2013); Dewolf v. Astrue, No. 11 CV 2043, 2012 WL 3260420, at *2-3 (N.D. Ill. Aug. 8, 2012). This court also adopts the reasoning set forth in Mireles and likewise applies the two-part analysis.

With this standard in mind, the court turns to the fee request. Flores supports his requested hourly attorney rate of $188 by attaching cost-of-living calculations based upon the "all items" portion of the Consumer Price Index - All Urban Consumers ("CPI-U").[2] (R. 33-1.) To further satisfy Mathews-Sheets's directive for additional information proving that inflation has increased the attorney's cost of providing legal services, Flores alleges that his attorney has incurred additional expenses in the form of rent increases (at least 3% annually), employee salaries (ranging from 3-5% annually), and health insurance premiums (100% since 1996), among other things. (R. 33, Pl.'s Mot. ¶ 16.) Flores's attorney, Barry Schultz, avers that he charged a non-contingency hourly rate of $180 in 1996, whereas today he charges $300 per hour and his associates charge $200 per hour.[3] (Id. ¶ 14.)

Flores has also provided affidavits from six attorneys licensed to practice in the State of Illinois, all of whom represent clients seeking Social Security disability benefits, and all of whom testify that they charge hourly rates ranging from $165 to $550 per hour. (R. 33-4, 5, 6, 7, 8, 9.) One of these attorneys testified that he knows of no attorney who would represent a Social Security client in federal court for less than an adjusted-for-inflation fee under EAJA. (R. 33-4.) Finally, Flores points out that even the Commissioner recognized that an increase in the cost of living warranted increasing the maximum fees an attorney could charge and receive under the agency's fee approval process. (See R. 33, Pl.'s Mot. ¶ 17 (noting that in 1996, the agency set the maximum fee agreement limit at $4, 000, but in 2009 the agency raised the fee agreement approval limit to $6, 000).)

The Commissioner counters that Flores errs to the extent he relies on the CPI-U to justify his attorney's hourly rate and that the court should apply the regional Chicago area CPI instead. (R. 36, Govt.'s Resp. at 3-4.) Pursuant to the Chicago CPI, the Commissioner argues that Flores's attorney is only entitled to a billable rate of $179.94 per hour. (Id. at 4.) Flores argues in his reply that courts in this circuit have frequently relied on the national CPI and that it is appropriate to do so in this case. (R. 37, Pl.'s Reply at 2.)

This court has previously held that the CPI-U is an appropriate index by which to show that the cost of living in this region has indeed increased to the degree of the requested adjustment. See Cobb v. Colvin, No. 11 CV 8847, 2013 WL 1787494, at *2 (N.D. Ill. Apr. 25, 2013) (approving fee calculation of $184.75 per hour based on the CPI-U); see also Bias, 2013 WL 615804, at *2 (approving fee calculation of $181.25 per hour based on the CPI-U "all items" index); Hamrick v. Astrue, No. 09 CV 179, 2010 WL 3862464, at *3 (N.D. Ind. Sept. 27, 2010) ("[I]t appears that district courts in the Seventh Circuit have permitted the use of either the national or regional index, provided that plaintiff's counsel justifies the increased rate ...

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