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Valentin Vallejo v. Michael J. Astrue

September 19, 2011

VALENTIN VALLEJO, PLAINTIFF,
v.
MICHAEL J. ASTRUE, COMMISSIONER OF THE SOCIAL SECURITY ADMINISTRATION, DEFENDANT.



The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

ORDER

On July 15, 2011, the undersigned granted summary judgment in favor of plaintiff Valentine Vallejo (the "plaintiff") and remanded the matter to the Social Security Administration. (Dkt. No. 20.) Currently pending before the undersigned is plaintiff's Motion For An Award Of Attorney's Fees Pursuant To The Equal Access To Justice Act. (Dkt. No. 22.) Plaintiff seeks attorneys' fees at "full market rates." (Id. at 8-9.) Plaintiff argues that "market rate" fees are appropriate because his attorneys possessed "expertise in the area of Social Security overpayment waiver cases" and that this "distinctive knowledge" was necessary to the litigation of his case. (Id. at 6-8.)

Defendant Commissioner of the Social Security Administration (the "defendant") filed an opposition to plaintiff's pending motion. (Dkt. No. 26.) Defendant does not oppose plaintiff's entitlement to attorney's fees under the Equal Access to Justice Act ("EAJA"). (Dkt. No. 26.) However, defendant opposes plaintiff's request to receive attorneys' fees at the "market rate" and in excess of the statutory maximum stated within the EAJA. (Id. at 2-3.) Defendant contends that plaintiff is entitled to no more than $7,981.16. (Id. at 7-8.) Defendant also challenges certain fees which defendant describes as "excessive, duplicative, and otherwise not compensable." (Id. at 9-12.) When the so-called "excessive" fees are omitted, defendant argues that plaintiff is entitled to no more than $4,973.02. (Id. at 12.) Plaintiff filed a Reply in support of his motion and in response to defendant's opposition brief. (Dkt. No. 27.)

Because oral argument would not materially aid the resolution of the pending motion, the matter is submitted on the briefs and record without a hearing. Fed. R. Civ. P. 78(b); E.D. Local Rule 230(g). The undersigned has fully considered the parties' papers and the record in this case and, for the reasons that follow, the undersigned grants plaintiff's motion in part and denies it in part.*fn1

I. BACKGROUND

Plaintiff's case arose from his receipt of social security benefits overpayments.*fn2

An administrative law judge ("ALJ") found plaintiff was not without fault in causing the overpayments and denied plaintiff's request to waive the overpayments. Plaintiff initiated this action, and the undersigned ultimately granted plaintiff's motion for summary judgment and entered judgment in plaintiff's favor. (Dkt. No. 20.)

The issue in plaintiff's case was whether, after having timely reported his employment to the Social Security Administration ("SSA"), and after the SSA stopped paying plaintiff's Supplemental Security Income benefits but continued paying his Title II benefits, plaintiff knew or should have known that his continued receipt of Title II benefits was improper. 20 C.F.R. § 404.507. If plaintiff knew or should have known his continued receipt of Title II benefits was improper, his failure make afollow-up report to the SSA regarding these payments would amount to "fault" in connection with these overpayments, and plaintiff would be obligated to repay the overpaid amounts. (Dkt. No. 20 at 7.) If not at fault, plaintiff would be entitled to a "waiver" of his obligation to repay the overages. (Id.)

In a nutshell, because the "fault" determination in this particular case turned on what plaintiff knew or should have known during the period he was overpaid, Anderson v. Sullivan, 914 F.2d 1121, 1122 (9th Cir. 1990); 20 C.F.R. § 404.507, this case turned on the ALJ's credibility findings and the bases therefor. (Dkt. No. 20 at 7.)

II. LEGAL STANDARD

The EAJA provides for attorney's fees to "prevailing parties" in social security actions under certain circumstances. 28 U.S.C. § 2412(d).*fn3 The EAJA authorizes federal courts to award attorneys' fees when a party prevails against the United States, although fee-shifting is not mandatory. Hardisty v. Astrue, 592 F.3d 1072, 1076 (9th Cir. 2010.)

Under the EAJA, the court "shall" award fees to the prevailing party unless "the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d). The government has the burden to demonstrate that "its position was substantially justified or that special circumstances exist to make an award unjust." Gutierrez v. Barnhart, 274 F.3d 1255, 1258 (9th Cir. 2001).

The text of the EAJA limits the hourly rate to be used in calculating attorney fee awards. 28 U.S.C. § 2412(d)(2)(A).*fn4 With cost-of-living increases, that hourly rate is $172.24 per hour for work completed in 2009, $175.06 per hour for work completed in 2010, and $179.51 per hour for work completed in 2011. Id. § 2412(d)(2)(A)(ii); Thangaraja v. Gonzalez, 428 F.3d 870, 876-77 (9th Cir. 2005) (explaining that cost-of-living increases are calculated by multiplying the $125 statutory maximum hourly rate by the annual average consumer price index figure for all urban consumers ("CPI-U") for the years in which the attorney's work was performed and dividing by the CPI-U figure for March 1996 (155.7), the effective date of the statutory maximum hourly rate).

Notwithstanding the limit on hourly fee rates that can be awarded under EAJA, EAJA also provides that "special factor[s]" may "justif[y] a higher fee." 28 U.S.C. § 2412(d)(2)(A). An award in excess of the statutory rate is only appropriate where "lawyers skilled and experienced enough to try the case are [not only] in short supply," but there is also limited availability of "attorneys having some distinctive knowledge or specialized skill needful for the litigation in question." Pierce v. Underwood, 487 U.S. 552, 573 (1988). The Ninth Circuit Court of Appeals has since clarified that, "[i]t is not enough, however, that the attorney possess distinctive knowledge and skills. Those qualifications warrant additional fees only if they are in some way needed in the litigation and cannot be obtained elsewhere at the statutory rate." Pirus v. Bowen, 869 F.2d 536, 542 (9th Cir. 1989). The Court of Appeals has thus distilled a two-prong test from Pierce: (1) the attorney must possess "distinctive knowledge and skills" and (2) the qualifications must be "in some way needed in the litigation and cannot be obtained elsewhere at the statutory rate." Id. The Ninth Circuit Court of Appeals has awarded "market rate" fees to attorneys specializing in complex Social Security litigation. Id. (awarding attorney fees in excess of EAJA's hourly limit in class action involving a "highly complex" area of the Social Security Act, specifically, the legislative history of the "widow's insurance" provisions of the Act); Garnes v. Barnhardt, No. C 02-4428 VRW, 2006 WL 249522, at ...


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