The opinion of the court was delivered by: THELTON E. HENDERSON
This matter comes before the Court on the plaintiffs' Motion for Attorneys' Fees and Costs against the Federal defendants
under 28 U.S.C. §§ 2412(b) and (d) of the Equal Access to Justice Act ("EAJA"). In light of this Court's ruling, filed concurrently herewith, denying plaintiffs' Motion for Leave to File a Corrected Second Amended Complaint, the Court denies plaintiffs' request for fees under 28 U.S.C. § 2412(b). However, having carefully considered the parties' papers, supporting documentation, and the record herein, the Court grants plaintiffs' request for attorneys' fees and costs under 28 U.S.C. § 2412(d) and directs the parties to proceed as set forth below.
Under EAJA, prevailing plaintiffs are entitled to recover their attorneys' fees and costs unless the government's position was substantially justified, special circumstances would make an award unjust, or the application for fees is not timely filed. 28 U.S.C. §§ 2412(d)(1)(A), (1)(B); Commissioner, I.N.S. v. Jean, 496 U.S. 154, 110 S. Ct. 2316, 2319, 110 L. Ed. 2d 134 (1990); Oregon Natural Resources Council v. Madigan, 980 F.2d 1330, 1331 (9th Cir. 1992); Thomas v. Peterson, 841 F.2d 332, 335 (9th Cir. 1988) ("EAJA creates a presumption that fees will be awarded unless the government's position was substantially justified"). Once a court finds that a party is entitled to attorneys' fees, it must then determine a reasonable fee. This inquiry focuses on the reasonable number of hours expended and the appropriate hourly rate.
We first address the requirements for establishing eligibility for fees under EAJA, and second, the issue of a reasonable fee.
A plaintiff qualifies as a prevailing party if she succeeds on "'any significant issue in the litigation which achieved some of the benefit the parties sought in bringing the suit.'" Texas State Teachers Ass'n v. Garland Independent School District, 489 U.S. 782, 109 S. Ct. 1486, 1493, 103 L. Ed. 2d 866 (1989). In this case, there is no dispute that plaintiffs have "prevailed." Their complaint asserted that the state of California was engaging in unlawful deeming practices, in determining eligibility for Medi-Cal, in violation of 42 U.S.C. § 1396a(a)(17)(D), and that the United States Department of Health and Human Services was permitting or requiring such unlawful policies throughout the Ninth Circuit.
After obtaining certification of a California, and later, a Ninth Circuit-wide class, plaintiffs prevailed against both the State and Federal defendants. On January 5, 1990, we granted a partial summary judgment against the State of California, finding that it was unlawfully relying on improperly deemed income and resources to reduce or deny eligibility for Medi-Cal benefits. On December 11, 1990, we extended this ruling to the Federal defendants, finding that they were permitting or requiring such unlawful deeming throughout the Ninth Circuit.
Plaintiffs were also highly successful at the remedial stage, which raised a number of highly complex and novel issues regarding compliance. As a result of this Court's remedial rulings, California has revised its eligibility procedures, with respect to deeming, and the Federal defendants have provided all States within the Ninth Circuit with extremely detailed instructions regarding how to develop deeming policies that are consistent with the dictates of the Medicaid Act, as set forth in 42 U.S.C. § 1396a (a)(17)(D).
The end result is that plaintiffs achieved very significant benefits for thousands of applicants who would otherwise be denied needed medical benefits. See Wulsin Decl. at P 6 ("the court's decisions will have a significant impact on the financial circumstances of [Medi-Cal] recipients throughout the State, allowing them to obtain needed medical care that they could not have obtained absent the relief that the decision ensures"); Bird Decl. at P 6 ("The results of the Sneede case have been extremely important in California, based upon the comments and responses I have observed from advocates at our Statewide task force meetings . . . [At such meetings] advocates volunteered that the new Sneede rules had been of remarkable benefit to their clients").
2. Substantial Justification
Once we determine that the plaintiffs are the prevailing party, it is the government's burden to demonstrate that fees should nonetheless be denied because the "position" of the United States was "substantially ...