Darla Clark v. Comm'r of Soc. Sec. ( 2016 )


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  •                                RECOMMENDED FOR FULL-TEXT PUBLICATION
    Pursuant to Sixth Circuit I.O.P. 32.1(b)
    File Name: 16a0296p.06
    UNITED STATES COURT OF APPEALS
    FOR THE SIXTH CIRCUIT
    _________________
    DARLA CLARK,                                                    ┐
    Plaintiff-Appellant,     │
    │
    >        No. 16-5393
    v.                                                   │
    │
    │
    COMMISSIONER OF SOCIAL SECURITY,                                │
    Defendant-Appellee.                  │
    ┘
    Appeal from the United States District Court
    for the Western District of Kentucky at Bowling Green.
    No. 1:15-cv-00015—H. Brent Brennenstuhl, Magistrate Judge.
    Decided and Filed: November 29, 2016*
    Before: MOORE and CLAY, Circuit Judges; HOOD, District Judge.**
    _________________
    COUNSEL
    ON BRIEF: Paul B. Eaglin, OLINSKY LAW GROUP, Syracuse, New York, for Appellant.
    Brian J. Alesia, SOCIAL SECURITY ADMINISTRATION, Chicago, Illinois, for Appellee.
    _________________
    OPINION
    _________________
    HOOD, District Judge. Plaintiff-Appellant Darla Clark (“Clark” or “Plaintiff”) appeals
    the decision of the district court granting in part and denying in part her motion for attorney fees
    under the Equal Access to Justice Act (“EAJA”), 
    28 U.S.C. § 2412
    (d)(2)(A), arguing that the
    *
    This decision was originally issued as an unpublished opinion filed on November 29, 2016. The court has
    now designated the opinion as one recommended for full-text publication.
    **
    The Honorable Joseph M. Hood, United States District Judge for the Eastern District of Kentucky, sitting
    by designation.
    1
    No. 16-5393                            Clark v. Comm’r of Soc. Sec.                                  Page 2
    district court abused its discretion when it declined to award attorney fees at the adjusted hourly
    rate as she requested. For the reasons stated below, we AFFIRM.
    I.
    On January 8, 2016, Clark filed a sworn motion for attorney fees under the EAJA,
    seeking $6,790.52 in fees.1 The total represented 34.75 attorney hours multiplied by an hourly
    rate of $176.13, plus 6.70 paralegal hours multiplied by an hourly rate of $100. The hourly rate
    exceeded the $125 rate provided for under the EAJA, but Clark argued that her counsel should
    receive a cost of living adjustment. In her motion, Clark calculated the cost of living adjustment
    by relying on the United States Bureau of Labor Statistics Consumer Price Index (“CPI”) for
    “Midwest Urban Consumers,” which she argued was the CPI “for this region.” The CPI was the
    sole evidence upon which she relied in her request for the adjusted rate. The Commissioner
    objected to the enhanced rate. Citing Bryant v. Commissioner of Social Security, 
    578 F.3d 443
    ,
    450 (6th Cir. 2009), the Commissioner argued that referring to the cost of living and relying on
    the CPI was not sufficient to justify an hourly rate higher than the cap set forth in the EAJA.
    Rather, she argued that satisfactory evidence in addition to the attorney’s affidavit was required
    to support a conclusion that the requested rate was in line with those prevailing in the community
    for similar services by lawyers of reasonably comparable skill, experience, and reputation. The
    Commissioner requested that the Court award EAJA fees at a rate of no more than $140, which
    she identified as the current reasonable and customary rate for experienced Social Security
    practitioners in the Western District of Kentucky based on decisions in other matters.
    Only in her reply did Clark attach a declaration from her attorney, Howard D. Olinsky, in
    which he stated that he had practiced disability law from his Syracuse, New York, office for
    several years and provided his firm’s non-contingent hourly rate. Clark argued for the first time
    that, in Glenn v. Commissioner of Social Security, 
    763 F.3d 494
     (6th Cir. 2014), this Court had
    concluded that Olinsky’s requested rate of $176.13 was modest and appeared to be reasonable
    1
    In the proceeding below, the district court reversed the Commissioner’s denial of benefits and remanded
    the case for a new hearing and decision upon the joint motion of the parties. Plaintiff’s motion for attorney fees
    under the EAJA was filed after a successful prosecution of the claim at the administrative level.
    No. 16-5393                       Clark v. Comm’r of Soc. Sec.                          Page 3
    and that several other courts of appeal have held that citing to the CPI alone was sufficient to
    justify an enhanced hourly rate above the statutory cap.
    The district court granted an award of fees but denied the requested rate on March 15,
    2016, concluding that the hourly rate was inappropriate because, under Bryant, the CPI alone is
    insufficient to satisfy the Plaintiff’s burden to produce appropriate evidence to support an
    increased rate in the absence of evidence that the rate requested was in line with that charged by
    comparable attorneys in Bowling Green, Kentucky. The Court concluded, as well, that the Court
    of Appeals’ comments in Glenn were dicta and did not address the issue of whether the rate
    requested by Clark was in-line with that charged by similar attorneys in Bowling Green,
    Kentucky. Rather, the district court determined that the Commissioner had provided sufficient
    evidence from a line of Western District of Kentucky cases showing that $140 was the prevailing
    market rate for hourly work by experienced Social Security practitioners in the Western District
    of Kentucky. An hourly rate of $140 was awarded.
    Plaintiff filed a timely appeal of the decision on March 25, 2016, and this Court has
    appellate jurisdiction pursuant to 
    28 U.S.C. § 1291
    .
    II.
    This Court reviews a decision on an application under the EAJA, including the district
    court’s determination of whether a request for fees is reasonable, for an abuse of discretion.
    Bryant, 
    578 F.3d at
    445 (citing Blum v. Stenson, 
    465 U.S. 886
    , 898 (1984); Townsend v. Comm’r
    of Soc. Sec., 
    415 F.3d 578
     (6th Cir. 2005)). “A district court abuses its discretion when it relies
    on clearly erroneous findings of fact, or when it improperly applies the law or uses an erroneous
    legal standard.” 
    Id.
     (quoting Deja Vu of Nashville, Inc. v. Metro. Gov’t of Nashville & Davidson
    Cty., 
    274 F.3d 377
    , 400 (6th Cir. 2001)).
    III.
    Under the EAJA, the hourly rate for attorney fees is capped at $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.
    No. 16-5393                              Clark v. Comm’r of Soc. Sec.                                   Page 4
    § 2412(d)(2)(A). The rate of $125 is “a ceiling and not a floor.” Chipman v. Sec’y of Health &
    Human Servs., 
    781 F.2d 545
    , 547 (6th Cir. 1986). When requesting an increase in the hourly fee
    rate above the statutory cap, a plaintiff “bear[s] the burden of producing appropriate evidence to
    support the requested increase.” Bryant, 
    578 F.3d at
    450 (citing Blum, 
    465 U.S. at 898
    ).
    This Court has held that reference to the CPI, alone, is insufficient to sustain that burden and
    that “[p]laintiffs must ‘produce satisfactory evidence—in addition to the attorney’s own
    affidavits—that the requested rates are in line with those prevailing in the community for similar
    services by lawyers of reasonably comparable skill, experience, and reputation.’” 
    Id.
     (quoting
    Blum, 
    465 U.S. at
    895 n.11). Evidence of rates outside of the relevant jurisdiction provide no
    evidence of the prevailing rates within a given community for attorneys of comparable skill,
    experience, and reputation. See id.2
    In support of her motion for attorney fees, Clark submitted a half-page calculation of her
    fees using the Midwest Urban CPI to reach an adjusted hourly rate of $176.13 per hour and, in
    support of her reply brief, a declaration concerning attorney Olinsky’s experience and his non-
    contingent hourly rate in Syracuse, New York. The record below contains no discussion, let
    alone evidence, of the rate that comparably experienced Social Security practitioners command
    in Bowling Green, Kentucky, save awards referenced in other cases in that district.
    Plaintiff presents two arguments in support of her contention that the district court erred.
    Clark contended below and argues on appeal that this Court’s decision in Glenn, which describes
    Olinsky’s requested hourly rate of $171.06 in that case as “modest” and “appear[ed] to be
    reasonable[,]” controls the cost of living adjustment which should be applied. 763 F.3d at 497
    n.3. The district court concluded, however, that Glenn was not dispositive because it was
    concerned with whether the Commissioner’s position was substantially justified, not the rate
    recoverable by counsel, which was referenced only in dicta. Further, Glenn addressed work
    performed in a case in the Eastern District of Michigan, not the Western District of Kentucky.
    2
    We note that the Commissioner also references this Court’s unpublished decision in Gay v. Commissioner
    of Social Security, No. 13-2575, at 4–5 (6th Cir. Aug. 7, 2014), as an example of a case where evidence of rates
    charged in Illinois and Wisconsin for Social Security work or for work in the local area on ERISA cases was
    insufficient to determine prevailing market rate for Social Security work in the Eastern District of Michigan and
    that, under Bryant, reference to the CPI with nothing else was insufficient to justify an increase in the hourly rate.
    No. 16-5393                             Clark v. Comm’r of Soc. Sec.                                   Page 5
    We conclude that the dicta in Glenn has no bearing on the decision at hand for the same reasons
    as articulated by the district court.
    Additionally and at greater length, Clark argues that the language of the EAJA supports
    her position that the CPI alone can support a claim for a particular hourly rate due to the
    increased cost of living and cites a series of cases for the proposition that the “prevailing market
    rate” has nothing to do with a cost of living increase.3 She argues that the district court erred
    when it conflated the two concepts and that, in fact, once a court concludes that some amount
    greater than $125 per hour is the “prevailing market rate,” then the cost of living adjustment may
    be made without reference to the going rate of practice in the local area. Thus, she urges us to
    conclude that the district court lacked the authority to arbitrarily set the amount of the cost of
    living adjustment or require additional proof beyond that submitted.
    Clark provides an extensive review of case law from across the circuits to show that
    many courts have recognized the validity of using the CPI to determine whether inflation
    demands an increase in the maximum allowable fee beyond the $125 statutory cap.                                 For
    example, in Castaneda-Castillo v. Holder, 
    723 F.3d 48
    , 76–77 (1st Cir. 2013), the United States
    Court of Appeals for the First Circuit used the regional CPI to calculate the cost of living
    adjustment where the government did not object to calculating the hourly attorney rate based on
    that number. By contrast, in Harris v. Sullivan, 
    968 F.2d 263
    , 265 (2d Cir. 1992), the United
    States Court of Appeals for the Second Circuit rejected the district court’s holding that the
    “maximum hourly rate should be increased to take into account the prevailing market rate for
    legal services,” held that the “cost of living” should be measured using the CPI, and determined
    that the statutory cap—not the award itself—should be adjusted for general inflation by the
    district court by referencing the CPI before reaching a determination on fees. In DeWalt v.
    Sullivan, 
    963 F.2d 27
    , 29–30 (3d Cir. 1992), the United States Court of Appeals for the Third
    3
    The Commissioner argues that Clark makes this argument for the first time on appeal and that we should
    consider the issue waived. See Ealy v. Comm’r of Soc. Sec., 
    594 F.3d 504
    , 513 (6th Cir. 2010) (citing Young v. Sec’y
    of Health & Human Servs., 
    925 F.2d 146
    , 149 (6th Cir. 1990); Kidd v. Comm’r of Soc. Sec., 283 F. App’x. 336, 344
    (6th Cir. 2008)) (holding that an appellant waives any challenges not raised before the district court and raised for
    the first time on appeal). We are not persuaded and conclude that, in this instance, the issues directly addressed in
    this appeal could be understood as raised below under the umbrella of what rate should apply, even if Clark did so
    inartfully and even if she is citing certain cases for her position for the first time on appeal.
    No. 16-5393                              Clark v. Comm’r of Soc. Sec.                                     Page 6
    Circuit held that the statutory cap—not necessarily the hourly fee awarded—should be evaluated
    and increased using the CPI-ALL to adjust for inflation.4
    As suggested above, these cases do not universally stand for the proposition that a district
    court must award the maximum amount possible once the statutory cap is increased to reflect the
    cost of living adjustment, perhaps with reference to the CPI. For example, in Sprinkle v. Colvin,
    
    777 F.3d 421
    , 428–29 (7th Cir. 2015), the United States Court of Appeals for the Seventh Circuit
    concluded that, while the CPI was a more practical and meaningful measure of the cost of
    providing legal services than requiring litigants to provide proof of the effects of inflation on the
    requested attorneys’ costs, the EAJA contemplates that fee awards should be based upon
    prevailing market rates paid by clients, not costs paid by attorneys. 
    Id.
     Thus, while the CPI
    provides a reasonably accurate measure of the need for inflation adjustment to the statutory cap
    in most cases, under Sprinkle, a plaintiff must still produce evidence that the rate they request is
    in line with those rates prevailing in the community for similar services by lawyers of
    comparable skill and experience in order to justify the increase. 
    Id. at 429
     (holding that “to
    avoid the possibility of a ‘windfall,’ courts may not award an inflation-adjusted rate that is higher
    than the prevailing market rate in the community for comparable legal services.”).
    4
    See also Sullivan v. Sullivan, 
    958 F.2d 574
    , 575–78 (4th Cir. 1992) (same); Baker v. Bowen, 
    839 F.2d 1075
    , 1084 (5th Cir. 1988) (explaining that, while not absolutely required, adjustment for cost of living is a factor to
    be considered in evaluating requests under the EAJA within district court’s discretion); Yoes v. Barnhart, 
    467 F.3d 426
    , 427 (5th Cir. 2006) (declining to require uniform cost of living adjustments throughout each district noting,
    among other things, the varying costs of living among cities in each district and explaining that the EAJA factors are
    market-based); Johnson v. Sullivan, 
    919 F.2d 503
    , 505 (8th Cir. 1990) (holding that where EAJA petitioner presents
    uncontested proof of an increase in the cost of living sufficient to justify hourly attorney fees of more than statutory
    cap, enhanced fees should be awarded but that district court should consider any circumstances that would render a
    cost-of-living increase unjust or improper, citing as an example the situation where petitioner’s counsel ordinarily
    charges a fee no greater than the statutory cap per hour which would preclude a cost-of-living increase above that
    amount); Thangaraja v. Gonzales, 
    428 F.3d 870
    , 876–77 (9th Cir. 2005) (holding that appropriate cost-of-living
    increases are calculated by multiplying $125 statutory rate by the annual average consumer price index figure for all
    urban consumers (“CPI–U”) for the years in which counsel’s work was performed, and then dividing by the CPI-U
    figure for the effective date of the statutory cap and awarding adjusted statutory maximum); Meyer v. Sullivan,
    
    958 F.2d 1029
    , 1031 (11th Cir. 1992) (remanding case to determine district court’s rationale for declining to apply
    cost-of-living escalator but stating that district courts had discretion to apply cost-of-living escalator where
    necessary in order to determine if market rate for fees was to be awarded or whether adjusted cap would be
    awarded); but see Headlee v. Bowen, 
    869 F.2d 548
    , 552 (10th Cir. 1989) (holding that is in the sound discretion of
    district court to determine whether CPI alone constitutes sufficient evidence to support raising the statutory cap for
    cost of living adjustment purposes).
    No. 16-5393                       Clark v. Comm’r of Soc. Sec.                         Page 7
    Clark further argues that a conclusion that she failed to meet her burden under Bryant
    conflates the issues of what the lodestar calculation should be and whether a cost of living
    adjustment is justified. She argues that the “appropriate evidence” or “satisfactory evidence”
    requirement announced in Bryant only applies in cases where the district court caps the fee
    award at the statutory ceiling of $125 per hour because the “prevailing market rates for the kind
    and quality of the services furnished” under 
    28 U.S.C. § 2412
    (d)(2)(A) exceeds $125 and not in
    cases, such as the present case, where the district court decides to exceed the EAJA cap in its
    award. Arguably, she is correct, but that does not suggest that the district court reached an
    erroneous conclusion.
    In this instance, the district court determined that there are reasons to award some amount
    greater than $125 per hour, including the fact that prevailing rates in the community, as
    recognized by the court, exceed this amount and that evidence from the CPI indicates that the
    cost of services has increased. This does not mean, however, that the district court could only
    reasonably conclude that Plaintiff had met her burden to support the full amount of the award
    requested where she provided only the CPI and her attorney’s affidavit that referenced a different
    locality from Bowling Green, Kentucky. Clark’s argument runs roughshod over the statutory
    requirement that the “amount of fees awarded . . . shall be based upon prevailing market rates for
    the kind and quality of the services furnished.” 
    28 U.S.C. § 2412
    (d)(2)(A). Bryant teaches that
    there must be some understanding of the rates charged locally before a district court can adjust
    for cost of living or other factors. The Commissioner argues, albeit somewhat indirectly, that the
    emphasis on local geographic rates discussed in Bryant is still relevant once a cost of living
    adjustment is used to raise the cap on the award that must be made. We agree.
    To the extent that Clark wishes for us to “clarify” the decision in Bryant, we may do so
    while leaving that decision in intact and while affirming the district court’s decision. We
    conclude that the district court acted within its discretion when it awarded Clark attorney fees at
    a rate of $140 per hour, although perhaps it might have better articulated how it was adjusting the
    statutory cap. For example, it might have done so by recognizing its use of the CPI in an upward
    adjustment of the statutory cap based on the cost of living but declining to award an amount
    equal to that cap in the absence of any evidence that the full amount would be the prevailing
    No. 16-5393                      Clark v. Comm’r of Soc. Sec.                        Page 8
    market rate for attorneys of comparable skill, experience, and reputation in Bowling Green,
    Kentucky, as presented by the Commissioner. Nonetheless, it is clear that the district court did
    not abuse its discretion in awarding Clark an attorney fee calculated on a rate of $140 per hour,
    and we AFFIRM the decision of the district court.