Federal Court Fees Explained. Ann Atkinson, Esq.

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1 B Federal Court Fees Explained Ann Atkinson, Esq.

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3 Federal Court Fees Explained Section B Federal Court Fees: An Oasis in the Desert Attorney s Fees under the Equal Access to Justice Act ( EAJA ) and 42 U.S.C. 406(b) Ann Atkinson, Esq. Statutory authority. There are three ways to get paid for representing claimants in Social Security claims: 42 U.S.C. 406(a) for Agency work [a way to remember: A is for Agency ], 42 U.S.C. 406(b) federal court work contingent fees, and 5 U.S.C. 504 et seq, and 28 U.S.C Equal Access to Justice Act ( EAJA ). NOTE: This discussion will NOT include fees under 42 U.S.C. 406(a) except as they relate to federal court cases on remand. Under The Equal Access to Justice Act ( EAJA ), 5 U.S.C. 504, et seq, and 28 U.S.C. 2412, a fee can be awarded to the Plaintiff as the prevailing party if the government s position in the litigation (and the underlying agency action) is not substantially justified. This fee must be approved by the Court. Note that this fee is available to the prevailing party. It is available if the Court either reverses and remands, or reverses for payment of benefits. Under the Social Security Act, 42 U.S.C. 406(b), the attorney may charge a contingent fee. Any fee charged under this section must be approved by the Court. Obviously, there must be an award of past due benefits for this fee to be available. EAJA Fees WHAT Are EAJA Fees? Except in certain limited situations or in the case of bad faith, under the American Rule, litigants are normally required to pay their own attorneys fees. In the case of litigation against the government, sovereign immunity applies to preclude an award of fees unless statutorily authorized. The Equal Access to Justice Act ( EAJA ), 5 U.S.C. 504, et seq, and 28 U.S.C. 2412, enacted in 1980, was designed to provide for an award of attorney s fees against the US Government in cases in which the plaintiff is the prevailing party in a lawsuit in which the government s position was not substantially justified. 1 Also, the plaintiff must be an individual whose net worth does not exceed two million dollars, and there should be no special circumstances that would make an award of fees unjust. A plaintiff in a Social Security appeal is considered the prevailing party when she obtains a reversal of the Commissioner s decision, regardless of whether the order is for payment of benefits or a remand. 2 The result is that even though you may not have yet won benefits for your 23

4 Section B National Social Security Disability Law Conference client, just getting the case turned around on remand in the federal court can result in eligibility for an award of attorney s fees under the EAJA, so long as the government s position was not substantially justified. The EAJA fee is a payment from the US Government that is not part of any amounts withheld from client s benefits; it is paid directly out of the US Treasury. It serves to offset the client s fee under 406(b) if the case is ultimately successful and there is an award of benefits. WHO Is Entitled to EAJA Fees? This seems like an easy question: To whom should the attorney s fees under EAJA fee be paid? You might think, the attorney, of course, but, alas, you would be wrong. The EAJA statute provides the following:... A court may award reasonable fees and expenses of attorneys,... to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United states acting in his or her official capacity in any court having jurisdiction of such action... [Emphasis added.] 28 U.S.C (b). You, as the attorney, may represent the prevailing party, but you are not, in fact, the party. In the mid-2000s the US Government started to use EAJA fee awards as a way to collect debts owed by the plaintiff to the government, such as government-guaranteed student loans, child support, and back taxes. The government s authority for this remarkable practice was the Treasury Offset Program managed by a unit of the US Treasury called the Financial Management Service, under the Administrative Offset provisions in a 1996 statute, the Debt Collection Improvement Act. 3 As the government started to assert its authority to collect plaintiff s debts out of the attorney s fee awards under the EAJA, attorneys understandably started objecting, and a split developed in the circuits over whether the EAJA fee award was subject to this offset as the property of the plaintiff, rather than the attorney. The issue reached the US Supreme Court, and in Astrue v. Ratliff, 130 S.Ct (2010) the Court held that in fact, the EAJA award was payable to the plaintiff as the prevailing party, not directly to the attorney, and it was therefore subject to offset to collect debts owed by your client to the US Government or collectable by the US Government. 4 Practice tip: Before taking a case to the US District Court or beyond, inquire of your client as to whether he or she owes any unpaid student loans, child support, or back taxes. The answer may not ultimately affect your willingness to proceed, but you will do so with your eyes wide open as to the probability that you will not be able to collect a fee under the EAJA without it being offset to collect your client s debts. 24

5 Federal Court Fees Explained Section B WHEN Should They Be Requested? The EAJA provides: A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses U.S.C. 2412(d)(1)(A). A final judgment is one that is final and not appealable, and includes an order of settlement. 28 U.S.C. 2412(d)(2)(G). In most cases, a judgment against the United States is not final until the 60-day time period for appeal has run. Melkonyan v. Sullivan, 501 US 89, 111 S.Ct (1991). Therefore, the window for filing the fee request is between day 61 and day 90 after the judgment is entered. Exceptions to this rule include cases where the judgment is based on a stipulated motion to remand, or when there is no objection filed to a Magistrate Judge s recommended opinion. The basis for these exceptions is that these judgments are not appealable. However, before you start counting days on your calendar, you must determine whether your judgment was issued under Sentence Four or Sentence Six of 42 USC 405(g). A remand under Sentence Four is one that affirms, reverses, or modifies an administrative decision. A remand under Sentence Six is one resulting from the Commissioner s motion granted upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding... In a Sentence Six remand, the District Court retains jurisdiction of the case, because once the Commissioner has acted on the remand administratively, the new findings of fact and decision must be filed with the Court. At that point a final judgment is issued, and the appeal period starts to run. Because the Court retains jurisdiction in a Sentence Six remand, and because the plaintiff is not the prevailing party until a final decision is reached after that remand, the EAJA fee application is not timely until this final judgment (based on the new decision after remand) is issued and the 60-day appeal period has run. Therefore, if your judgment is under Sentence Four, your EAJA application is due during the window that occurs between day 61 and day 90 after the Court s judgment, (unless the judgment was issued after a stipulated remand or a Magistrate Judge recommended opinion with no objection filed). If your judgment is under Sentence Six, your EAJA application is due between days 61 and 90 after the Commissioner s post-remand decision is filed with the Court and the Court issues a judgment. Many attorneys, including Thomas Bush, Esq. in his excellent practice guide, Social Security Disability Practice, 2 nd Ed. (Revision #24, 2017), and Kirk Roose, Esq., an Ohio attorney known as Dr. EAJA, advise filing the EAJA petition early and often, in order avoid missing a deadline. Mr. Bush opines that nothing bad happens if you file early by mistake, and if the government objects, you can ask the Court to hold it in abeyance until the proper time window, or just file the application a second time. 25

6 Section B National Social Security Disability Law Conference HOW Are They Requested (and HOW MUCH Can Be Requested)? How. Local rule or not, confer with opposing counsel. Even if you do not have any local rules regarding the requirement to confer with opposing counsel prior to filing any motion, it makes sense to contact your opposing counsel at the Office of General Counsel with a proposal for the amount of the EAJA fee you intend to request, and ask if the Agency will object. Many times a resolution can be reached and a simple stipulated motion filed. Even if the Agency is going to assert that its position was substantially justified, in order to simplify the process you can often reach an agreement on the issues of prevailing party, the hourly rate, and the reasonableness of the number of hours expended in representation. No doubt the Court appreciates anything you can do to narrow the issues it needs to decide, and issues other than substantial justification, are usually easy to resolve. File an application, not a motion. The statute itself directs the filing of an application, not a motion, although calling it a motion is not fatal. The Court will consider it a motion, and in using the electronic filing system you file it as a motion for attorney s fees. However, it is best to be accurate and title your pleading as an Application for an Award of Fees under the Equal Access to Justice Act. Contents of the application. Your application should include the following assertions and requests: the plaintiff did not have a net worth exceeding $2 million at the time the claim was filed, 5 the plaintiff is the prevailing party, the position taken by the Commissioner either in the litigation or administratively, or both, was not substantially justified. (More on this below.) an explanation of how you calculated the amount of the fee and why that amount is reasonable, including how you calculated the hourly rate. There are no special circumstances that would make an award of fees unjust. Request permission to file a Reply in the event the Commissioner objects to the Application. You should attach to your Application: an accounting of the time spent on the case and your own affidavit that this is an accurate account of the hours expended, and an affidavit from the client regarding net worth and assigning the fee to you (so you can get paid directly if there is no government debt subject to offset). Documentation justifying the hourly rate, if necessary. Substantial justification. You must assert in your Application that the government s position was not substantially justified in the litigation, the agency action, or both. However, it is the Commissioner s burden to prove substantial justification. Nonetheless, you are the one that has to get the ball rolling by filing the Application, before you know for sure how the Commissioner is going to try to meet that burden. 26

7 Federal Court Fees Explained Section B The Supreme Court has held that alleging that the position of the United States was not substantially justified is merely a pleading requirement, and a timely filed EAJA application may be amended to satisfy this pleading requirement. Scarborough v. Principi, 541 U.S. 401, 414, 423; 124 S.Ct. 1856; 158 L.Ed.2d 674 (2004). Your amendment is your Reply Brief, which you will have requested permission to file in the Application itself if you follow the above instructions. In asserting that the Agency s position was not substantially justified, however, the court expects that you will examine your case carefully to determine whether the Agency s actions were substantially justified before including that assertion in your Application. As the Court said in Hackett v. Barnhart, 475 F.3d 1166, 1172 (10 th Cir. 2007):... once an EAJA application is filed, the government is on notice, based on the plain language of the statute, that it must justify both its position in any underlying administrative proceedings and its position in any subsequent district court litigation. Keep in mind that the government s position has to be substantially justified in both the agency and the court litigation. In Hackett, for example, the Administrative Law Judge had stated that the vocational expert testified that his opinions were consistent with the DOT. In fact, the VE s answers were not consistent with the DOT and he had not testified that they were. Since the case in part turned on that issue, the ALJ s mischaracterization of the facts was not a harmless error, and was therefore not an action that could be said to be substantially justified. The Court essentially held that an error of fact by the ALJ (assuming it was not harmless error) could not be substantially justified. Recently the government has been arguing that their litigation position can cure any unreasonable Agency action. E.G., Evans v. Colvin, 640 F.App x. 731, 733 (10 th Cir. 2016) (unpublished). To be considered substantially justified, the Agency s position must be reasonable both in law and in fact. Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed. 490 (1988). The government s position must be justified to a degree that could satisfy a reasonable person. The reasonableness test breaks down into three parts: the government must show: (1) that there is a reasonable basis for the facts alleged, (2) that there exists a reasonable basis in law for the theory it propounds, and (3) that the facts alleged will reasonably support the legal theory advanced. Keep in mind that the government s position can be substantially justified even if it is not ultimately determined by the Court to be correct. It just has to be justified to a degree that would satisfy a reasonable person. The government often tries to assert what I call the scorecard argument: that it won on most of the issues raised, and the Court s reversal and remand is based only on one of several issues, so its position overall was substantially justified. However, as the Supreme Court held in Comm r INS v. Jean, 496 U.S. 154, ; 110 S.Ct. 2316, 110 L.Ed.2d 134 (1990), EAJA... favors treating a case as an inclusive whole, rather than as atomized line-items. 27

8 Section B National Social Security Disability Law Conference Your job in your Application is to assert that the Commissioner s position, in either the agency proceedings or in the litigation, or both, was not substantially justified. While this is all you technically need to do, it is probably good practice to remind the Court why it ruled in your favor with a brief outline of the reasons it has ordered a reversal. The Commissioner will then file a Response, which will argue why his positions at the agency and in litigation were substantially justified. You will then be able to, in your Reply, respond to those arguments. How Much? Hourly rate. In the original 1980 statute, hourly rates for EAJA fees were set at $75 per hour. In March 1996 the statute was amended to provide for hourly fees of $125 per hour, unless the agency determines by regulation that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agents for the proceedings involved, justifies a higher fee. 5 U.S.C. 504(b)(1)(A) and 28 U.S.C. 2412(d)(2)(A). You should ask for a fee based on the $125 plus inflation, and the agency will often agree to a reasonable cost of living adjustment during your pre-filing negotiations. Compare the Consumer Price Index (CPI) in March 1996 [at which point the statute set the rate at $125] with the present CPI, and adjust accordingly. Alternatively, you could ask for an hourly rate based on prevailing market rates in your area, in which case you attach supporting documentation in the form of market surveys, etc. An hourly rate based on a COLA under the CPI, or an alternative market rate is not a given. Recently, the Sixth Circuit in particular has been a hotbed of litigation over hourly rates for EAJA. The government recently successfully argued in the Sixth Circuit that the prevailing market rate for experienced Social Security practitioners in Kentucky was only $140. Clark v. Comm r. of Social Security, 664 Fed.Appx. 525 (6 th Cir. 2016). Some districts have hourly caps established on EAJA rates. Check your local jurisdiction. How many hours? Use your discretion and judgment in calculating your hours. Keep good records, and don t include clerical time. Paralegal time (at a reduced hourly rate) can be included, especially if you can demonstrate that some economy of effort was achieved by using a nonattorney. However, the award itself must be to the licensed attorney with whom the client has an attorney-client relationship. See Celeste v. Sullivan, 988 F.2d 1069 (11 th Cir. 1992). The Fourth Circuit has held that fees for paralegal time may be recoverable under the EAJA, but only to the extent that it reflects tasks traditionally performed by an attorney and for which the attorney would customarily charge the client. Hyatt v. Barnhart, 315 F.3d 239 (4 th Cir. 2002). Time spent after the Appeals Council order and before the Complaint is filed is includable in both EAJA and 406(b). See HALLEX I (B). WHERE Is the Petition for EAJA Fees Filed? Even if the case has been appealed to the Court of Appeals or to the U.S. Supreme Court, the EAJA application is initially filed in the District Court. Check your local rules and your circuit s rules. You can appeal an unfavorable EAJA decision in the same way as you could appeal the underlying case. Beware that if you appeal an unfavorable EAJA decision by the District Court, however, you must demonstrate that the District Court abused its discretion or made a clear error of law in denying your application. 28

9 Federal Court Fees Explained Section B Fees Under 42 U.S.C. 406(b) WHEN to File a 406(b) Motion. Note that the statute states that the 406(b) fee is to be awarded as part of the judgment. However, if the Court proceedings resulted in a remand for additional proceedings, the actual award of past due benefits will not occur until months, and maybe years, after the Court s judgment. How then, can the Court award these fees as part of the judgment? Requiring a motion within 14 days of the judgment [as required in Fed.R.Civ.P. 54(d)(2)(B)] results in the attorney being required to make a motion before knowing both whether there will be any past-due benefits at all, and how much those past-due benefits will be. The 3 rd Circuit called this an absurd outcome. 6 Several circuits have weighed in on this conundrum. In some circuits, the motion must be filed within the 14-day requirement under Fed. R. Civ. P. 54(d)(2)(B), with some local variations. The 11 th Circuit recommended that the attorney file, at the time of the judgment, a motion for extension of the 14-day time limit, to be extended to a point after the past-due benefits are awarded. 7 The 3 rd Circuit held that the motion should be filed within 14 days of the attorney s receipt of the Notice of Award. 8 The 7 th Circuit has held simply that the motion be filed within a reasonable time. 9 The 10 th Circuit provides that the motion be filed under Fed. R. Civ. P. 60(b)(6) (relief from judgment), and can be filed at any reasonable time after the award of past-due benefits. 10 A district court in Pennsylvania held that the 14-day period was equitably tolled until the attorney received the written notice from the Commissioner awarding past-due benefits. 11 The attorney in that case, however, showed little diligence in waiting two and one-half years after the Notice of Award was issued to seek his 406(b) fee. The bottom line: at the time you get your judgment remanding the case check your circuit s law, as well as your local rules, to determine when to file your 406(b) motion. Note Regarding Interaction of 406(a) and 406(b). Take care to determine whether your circuit considers the 25% cap in 406(b) to apply to just 406(b) fees or the aggregate of 406(a) and 406(b) fees. In the 4 th, 5 th, 6 th, and 11 th circuits, for example, Courts have adopted the rule in Dawson v. Finch, 425 F.2d 1192, 1195 (5 th Cir. 1970), that Congress intended that the total fees under both 406(a) and 406(b) not exceed 25%. The 11 th Circuit ruled on this issue recently, in Wood v. Comm r. of Soc. Sec., F.3d, 2017 WL (11 th Cir. 2017), also available at: Other circuits have taken the opposite approach. See: Wrenn ex rel. Wrenn v. Astrue, 525 F.3d 931 (10 th Cir. 2008). ELEMENTS of a Motion under 406b While the statute allows for a fee of up to 25% of past due benefits, the Court must nonetheless evaluate the amount of the fee for reasonableness. Gisbrect v. Barnhart, 535 U.S. 789, 152 L.Ed.2d 996, 122 S.Ct (2002). Cite the facts in your case that justify your fee and demonstrate its reasonableness. For example: 29

10 Section B National Social Security Disability Law Conference The amount of the past-due benefits awarded for the Plaintiff and any auxiliary beneficiaries. You may decide to only ask for 25% of the primary number holder s benefits. If so, point out to the Court that the actual amount you are requesting amounts to less than 25% if all beneficiaries past-due amounts are considered. The attorney s time in the case. Remember that the Court only has the authority to award a fee for your time spent in the court itself, not in the administrative proceedings. However, you may want to point out to the Court how much time you spent in the administrative proceedings, and tell it how, and if, you intend to collect a fee for that time. Sometimes, depending on the jurisdiction s position on the aggregation issue, it makes sense to simply request the entire 25% as the 406(b) fee, and tell the court that I will not be seeking a 406(a) fee for the administrative time if the 406(b) fee is awarded. Do the math, do what makes sense. The attorney s experience. Due to your expertise, the total amount of time you spend may be less than that expended by less experienced attorney. If so, point that out. The contingent nature of the fee. Remind the court that this is a contingent fee, and that you took on considerable risk of loss in undertaking the representation of this claimant considering the time you devoted to the case without any guarantee of a fee. A contingency fee agreement provides the keys to the Courthouse for claimants who would otherwise go unrepresented. The fact that your client will receive ongoing benefits for x number of years. Point out that the client will receive monthly benefits until no longer disabled or full retirement age, whichever occurs first. Point out that the children will receive benefits until age 18 or 19 if still in secondary school. Do a calculation of the present value of those future benefits to show just how favorable an outcome this was for this client and his or her family. Other favorable consequences of the favorable decision. Point out the fact that your client will be receiving Medicare or Medicaid benefits as a result of the favorable decision, and any other favorable consequences available under State law, or a private pension fund, as a result of this decision. Refund of the EAJA fee. If you got an EAJA fee, point out that the client will not end up paying the entire 25%, given that he or she will be getting a refund of the EAJA fee you were paid, under Gisbrect, supra. (This issue is discussed below.) The Interaction of EAJA and 406B Fees Remember to keep the two types of fees available under 42 U.S.C. 406 straight. Fees under subsection (a) are awarded for work at the agency level. 12 Fees under subsection (b) are for work at the federal court level. If fees are awarded under 406(b) at the federal court level, for federal court time (which includes any time expended after the Appeals Council denial), AND the attorney has also received an award for EAJA fees, the attorney must refund the lesser of the two fees to the client. 13 See Gisbrecht v. Barnhart, 535 U.S. 789, 152 L.Ed.2d 996, 122 S.Ct (2002). What if there are multiple federal court cases and multiple EAJA awards regarding the same claim? A recent Ninth Circuit case holds that the EAJA awards from both cases must be offset against the 406(b) fee. See Parrish v. Commissioner, 698 F.3d 1215 (9 th Cir. 2012). 14 In dicta, the 30

11 Federal Court Fees Explained Section B Parrish decision seems to indicate this could be true (at the discretion of the District Court) even if different attorneys represented the client at the federal court level: even in circumstances where a claimant has more than one attorney at different appeals, district courts would have ample discretion to apportion fees equitably under 406(b), and apply the offset as appropriate to those attorneys who received both 406(b) and EAJA awards. Some EAJA & 406(b) Cases Parrish v. Commissioner, 698 F.3d 1215 (9 th Cir. 2012). See above discussion. Costa v. Commissioner, 690 F.3d 1132 (9 th Cir. 2012). Courts may not apply a de facto cap on the number of hours for which compensation is awarded under EAJA; an individualized consideration must be given to each case. Kornhauser v. Commissioner, 685 F.3d 1254 (11 th Cir. 2012). Attorney s memorandum brief in the underlying case did not comply with the local rules concerning spacing and margins. The magistrate judge, sua sponte, sanctioned attorney by reducing the EAJA fee hourly rate. The Eleventh Circuit held that the magistrate had abused his discretion by failing to comply with the mandates of due process in issuing this sanction. Turner v. Commissioner, 680 F.3d 721 (6 th Cir. 2012). Claim was remanded under Sentence Four, and the attorney sought EAJA fees. The District Court found that because the fee agreement with the attorney called for a contingent fee, that had not yet been incurred (since the underlying case was not yet decided), that no EAJA fee could be awarded. The Sixth Circuit held (citing numerous cases in other circuits) that the plain meaning of incurred does not require the plaintiff to have actually paid counsel and that the fee has been incurred when client has an express or implied legal obligation to pay over the EAJA award. Practice tip: Make sure your fee agreement for federal court work includes a provision requiring the client to pay you any EAJA fee awarded, especially in light of this case and Ratliff, supra. Include this provision again in the affidavit you have the client sign when filing your EAJA application. Jackson v. Astrue, 705 F.3d 527 (5 th Cir. 2013): The District Court, sua sponte, held that it had no jurisdiction to award a 406b fee when it had merely remanded for additional proceedings, even if that remand resulted in an award of past-due benefits. The 5 th Circuit held that in enacting 406b, Congress had intended that attorneys be able to receive a reasonable fee in order to encourage effective representation for disabled claimants, and held that 406b fees are available when the judgment is for remand for additional proceedings, if those proceedings result in past-due benefits. Minor v. Comm r. of Social Security, 826 F.3d 878 (6 th Cir. 2016): district court failed to provide a clear and concise explanation for reducing both the EAJA hourly rate (from the $200 requested per market surveys) and the number of hours. 31

12 Section B National Social Security Disability Law Conference ATTACHMENT 1: 406b 42 U.S.C. 406(b) (b) Fees for representation before court (1) (A) Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title, but subject to subsection (d) of this section, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph. (B) For purposes of this paragraph (i) the term past-due benefits excludes any benefits with respect to which payment has been continued pursuant to subsection (g) or (h) of section 423 of this title, and (ii) amounts of past-due benefits shall be determined before any applicable reduction under section 1320a-6(a) of this title. (2) Any attorney who charges, demands, receives, or collects for services rendered in connection with proceedings before a court to which paragraph (1) of this subsection is applicable any amount in excess of that allowed by the court thereunder shall be guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $500, or imprisonment for not more than one year, or both. ATTACHMENT 2: EAJA selected sections 28 U.S.C. 2412(d) (d) (1) (A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. 32

13 Federal Court Fees Explained Section B (B) A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed. The party shall also allege that the position of the United States was not substantially justified. Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought. (C) The court, in its discretion, may reduce the amount to be awarded pursuant to this subsection, or deny an award, to the extent that the prevailing party during the course of the proceedings engaged in conduct which unduly and unreasonably protracted the final resolution of the matter in controversy. Endnotes: 1. Martin Geer and Paul Reingold, Making Uncle Sam Pay: A Review of Equal Access to Justice Act Cases in the Sixth Circuit, , 19 Toledo Law Review (1988). 2. Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct (1993), 28 U.S.C. 2412(d)(2)(H) U.S.C et seq.; Administrative Offset provisions found at 31 U.S.C If it helps to know that attorneys in other practice areas share our pain, the Ratliff rule was extended to include fees awarded under the Civil Asset Forfeiture Reform Act in United States v. $186,416.00, 642 F.3d 753 (9 th Cir. 2011). 5. If the claim was filed in forma pauperis at the outset, simply cite the order granting the IFP motion. 6. Walker v. Astrue, 593 F.3d 274, 279 (3 rd Cir. 2010). 7. Pierce v. Barnhart, 440 F.3d (5 th Cir. 2006), Bergen v. Commissioner, 454 F.3d 1273, (11 th Cir. 2006). 8. Walker, supra. 9. Smith v. Bowen, 815 F.2d 1152 (7 th Cir. 1987). 10. McGraw v. Barnhart, 450 F.3d 493, 505 (10 th Cir. 2006). 11. Walker v. Massanari, 746 F.Supp.2d 657, 661 (W.D.Pa. 2010). 12. I remember the difference by using the pneumonic device, (a) stands for agency. 13. Arguably, if the fee was attached under the Treasury Offset Program to pay off a client s own 33

14 Section B National Social Security Disability Law Conference debt, the client has already received a refund for the amount of the offset taken out of the EAJA award. 14. The attorney in Parrish represented the Plaintiff in both federal court cases, but did not represent her in the administrative remand proceedings. He therefore argued that his 406(b) fee was only for work on the final appeal and therefore only the EAJA fee related to that second court case should be offset. The Court, however, found that an award under 406(b) compensates an attorney for all the attorney s work before a federal court on behalf of the Social Security claimant in connection with the action that resulted in past-due benefits. This interpretation is the most natural reading of the statutory language, and most congruent with the nature of the fee award itself. If 406(b) is the exclusive regime for obtaining fees from a Social Security claimant, [citing Gisbrecht] then the 406(b) award must compensate the claimant s attorney for all the work that led to the favorable result. This would include work on a prior appeal that did not result in the award of past-due benefits, because an attorney who secures a remand for a claimant plays an important role in achieving the ultimate award, regardless whether a different attorney represented the claimant during subsequent remands. (Emphasis added.) 34

15 Federal Court Fees Explained Section B A Road Map to the Fee Oasis Ann Atkinson, Esq. 35

16 Section B National Social Security Disability Law Conference A ROAD MAP TO THE FEE OASIS As with all maps, check local conditions before proceeding! Type of Fee Who Approves? What Time Can Be Included? How Much? (always test for reasonableness) When Requested? 406(a) The agency Agency time only Per fee contract. Typically, contingent fee of 25% of past due with cap of $6,000; or hourly in some cases. If fee contract approved, automatic. If fee petition, request as soon as possible after Notice of Award received from the payment center. 406(b) Fed. Ct. Fed. Ct. time only [includes time expended after appeals council denial, see: HALLEX I (B)] Per fee contract. Per 406(b)(1)(A): not in excess of 25% of total past due benefits. Check your circuit re: whether the 25% cap applies to the aggregate of 406(a) and 406(b) fees. Circuit split: Reasonable time rule, per Fed.R.Civ.P. 60(b)(6), OR 14-day time limit under Fed.R.Civ.P. 54(d)(2)(B). (May need to move for extension of time.) EAJA Fed. Ct. Sentence 4: federal court time only Sentence 6: federal court time plus time during remand proceedings $125/hour, plus COLA, or market rate within 30 days of final disposition (i.e., after no longer appealable, final and unreviewable ) Sentence 4: between Day after final judgment entered (if no objection to Magistrate Judge recommendation, or stipulated remand, then deadline may be within 30 days of judgment issuance check your circuit and local rules for interpretation). Sentence 6: between Day after final judgment issued after remand proceedings are complete. (May want to file a notice of intent to file EAJA soon after judgment.) 36

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