Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-05720/USCOURTS-cand-3_06-cv-05720-2/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:405 Review of HHS Decision (DIWC)

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SONDRA J. HAYES,

Plaintiff,

 v.

MICHAEL J. ASTRUE,

Commissioner,

Social Security Administration,

Defendant. /

No. C 06-05720 WHA

ORDER GRANTING ATTORNEY’S

FEES AND DENYING PLAINTIFF’S

REQUEST FOR DIRECT PAYMENT

OF FEES

INTRODUCTION

In this social security appeal, plaintiff moves for an order awarding attorney’s fees and

costs under the Equal Access to Justice Act, 28 U.S.C. 2412(d). Plaintiff asserts defendant

should pay any EAJA fees award directly to her attorney. In the alternative, plaintiff requests

that the Court appoint her the “representative payee” of counsel. Defendant does not dispute

plaintiff’s entitlement to an award, but challenges the amount of fees claimed by plaintiff and

the right of counsel to receive direct payment.

Plaintiff’s request for attorney’s fees and costs under the EAJA is GRANTED. This

order finds plaintiff is entitled to recover reasonable attorney’s fees in the amount of $5,546.40

and costs in the amount of $374.44. Plaintiff’s assignment of the right to collect attorney’s

fees awarded pursuant to the EAJA is void, however, for failure to comply with the

Assignment of Claims Act, 31 U.S.C. 3727. Accordingly, plaintiff’s request that the Court

order defendant to pay counsel directly is DENIED. The request that the Court appoint her the

“representative payee” of counsel is also DENIED.

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STATEMENT

On September 19, 2006, plaintiff filed an appeal of an adverse decision from an

administrative law judge denying social-security disability benefits. On February 14, 2007,

plaintiff filed a summary judgment motion. Before a responsive brief was filed, the parties

stipulated to reverse the decision of the administrative law judge and remand the action for

further proceedings under sentence four of Social Security Act Section 205(g), 42 U.S.C.

405(g). The Court approved this stipulation on April 2.

Plaintiff then filed the instant motion for attorney’s fees and costs under the EAJA, 28

U.S.C. 2412(d)(1)(B). Plaintiff asserts defendant should pay any fees award directly to her

attorney. In the alternative, plaintiff requests the Court appoint her the “representative payee”

of counsel. 

ANALYSIS

The EAJA provides that “a court shall award to a prevailing party other than the United

States fees and other expenses . . . incurred by that party in any civil action . . . including

proceedings for judicial review of agency action, brought . . . against the United States . . .

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)(1)(A). Such fees and

costs must be reasonable. 28 U.S.C. 2412(d)(1)(C)) and 2412(d)(2)(A).

1. ENTITLEMENT.

The Supreme Court in Shalala v. Schaefer, 509 U.S. 292, 301 (1993), held that a party

who wins a sentence-four remand order under 42 U.S.C. 405(g) qualifies as a prevailing party. 

Applying Schaefer, plaintiff became a prevailing party when the Court approved a stipulation

to reverse the decision of the administrative law judge and remand the case for further

administrative proceedings. 

To be substantially justified, “the government’s position must have a reasonable basis

in law and fact.” Corbin v. Apfel, 149 F.3d 1051, 1052 (9th Cir.1998). The government bears

the burden of proving its position was substantially justified. Scarborough v. Principi, 541

U.S. 401, 403 (2004). Defendant has not tried to show substantial justification. Accordingly,

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this order need not address the issue. A district court may also decline to award attorney’s fees

if it finds that “special circumstances make an award unjust.” 28 U.S.C. 2412(d)(1)(A). 

Again, defendant has not tried to show “special circumstances.” In sum, plaintiff is a

prevailing party and the government has failed to plead its position was substantially justified

or that special circumstances make an award unjust. Accordingly, plaintiff’s request for

attorney’s fees and costs under the EAJA is GRANTED. 

2. DIRECT PAYMENT OF FEES TO COUNSEL.

The next issue is whether the Court has authority to order the government to pay EAJA

fees directly to a prevailing party’s counsel. Plaintiff asserts defendant must pay any award

directly to counsel. Defendant argues any award should be paid to plaintiff, not plaintiff’s

attorney.

The Ninth Circuit has not addressed the issue. As observed by Judge Marilyn Hall

Patel, however, in McCarty v. Astrue, 2007 WL 2601442 at *3 (N.D. Cal. 2007), circuits

elsewhere have held an EAJA fee award is made to the prevailing party, not the attorney. See

Panola Land Buying Association v. Clark, 844 F.2d 1506, 1510–12 (11th Cir. 1988) (holding

Congress’ intent was to award attorney’s fees under the EAJA to the prevailing party and not

to its counsel); Phillips v. General Services Administration, 924 F.2d 1577, 1582 (Fed. Cir.

1991) (holding that the language of the EAJA requires any fee award be made directly to the

prevailing party and counsel cannot directly claim entitlement to the award); Oguachuba v.

INS, 706 F.2d 93, 97–98 (2d Cir. 1983) (holding that an application for fees under the EAJA

must be made in the name of the plaintiff and an attorney’s entitlement to fees depends upon

the contractual arrangement between the attorney and the plaintiff). Judge Patel also noted

that:

The Supreme Court, the Ninth Circuit, and other Circuits

have similarly interpreted other fee-shifting statutes with

“prevailing party” language to award attorney’s fees directly

to the party and not the party’s attorney. See Evans v. Jeff

D., 475 U.S. 717, 731–732 (1986) (holding that the

“prevailing party” language in 42 U.S.C. 1988 indicates

Congress intended to bestow an award of attorney’s fees

directly to the prevailing party); Gilbrook v. City of

Westminster, 177 F.3d 839, 875 (9th. Cir. 1999) (following

Evans in holding that 42 U.S.C. 1988 awards attorney’s fees

directly to the prevailing party and the contract between the

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party and his lawyer determines the disposition of the

award); see also U.S. v. McPeck, 910 F.2d 509, 513 (8th Cir.

1990) (“[W]hen a statute awards attorney’s fees to a party,

the award belongs to the party, not to the attorney

representing the party.”).

McCarty, 2007 WL 2601442 at *3. See also Venegas v. Mitchell, 495 U.S. 82, 110 (1990)

(holding that “it is the party, rather than the lawyer” who is eligible for fees under the statute).

Evans, Gilbrook, and Venegas concern fee awards under the Civil Rights Attorney’s

Fees Act, 42 U.S.C. 1988. The decisions are relevant here because Section 1988 is considered

the statutory “counterpart” of the EAJA. See West Virginia University Hospitals, Inc. v Casey,

499 U.S. 83, 89 (1991). Moreover, federal “prevailing party” fee-shifting statutes should be

interpreted consistently. See Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983).

In McCarty, Judge Patel found that: 

Panola provides the most persuasive analysis describing

how other provisions of the EAJA rule out the possibility

that Congress intended the EAJA to award attorney’s fees

directly to an attorney. First, the statute defines “fees and

expenses” to include attorney’s fees alongside costs for

other expert witnesses. See 28 U.S.C. 2412(D)(2)(A);

Panola, 844 F.2d at 1511. Congress could not have

intended every attorney representing the client or every

engineer and scientist acting as an expert witness to be able

to seek separate claims for compensation before the court. 

See Panola, 844 F.2d at 1511. The EAJA also requires the

prevailing party to submit an application for fees and

expenses that includes “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 are computed.” 28

U.S.C. 2412(d)(1)(B). As the court held in Panola, this

provision “clearly manifests Congress’ intent that the

prevailing party’s [sic] lawyer is not considered to be an

applicant under the EAJA.” Panola, 844 F.2d at 1511.

McCarty, 2007 WL 2601442 at *4.

 This order recognizes that some awards have been made directly to counsel in special

cases. In Grand Boulevard Improvement Association v. City of Chicago, 553 F. Supp. 1154,

1169 (N.D. Ill. 1982), Judge Prentice H. Marshall ordered direct payment of EAJA fees to a

nonprofit legal services organization. Moreover, in Wedra v. Thomas, 623 F. Supp. 272, 278

(S.D. N.Y. 1985), Judge Charles S. Haight stated that it would be “foolish, if not imprudent” to

pay EAJA fees to prison inmates — payment should be made directly to counsel.

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This order agrees with Judge Patel’s reasoning in McCarty, however, that a prevailing

party’s request for fees does not, without more, mean counsel has the right to receive direct

payment. The ultimate disposition of fees is dependent on the agreement reached between a

prevailing party and his or her counsel. An attorney may have a contractual right to fees from

plaintiff, but, absent special circumstances, counsel has no right to direct payment of those fees

from the government.

Here, this order finds no special circumstances exist to warrant a court order for direct

payment to counsel. Plaintiff and her attorney have a contract for the payment of fees. There

is no reason to interfere with that contract or the government’s liability to the EAJA claimant. 

Such interference would disrupt the attorney-client relationship and might result in successive

and highly burdensome litigation. See Panola, 844 F.2d at 1511; McCarty, 2007 WL 2601442

at *4.

Nor does the court find the argument for direct payment based on the language of

Section 206(b) of Pub. L. 96-481, as amended by Pub. L. 99-80, §3, and codified at 42 U.S.C.

406(b) (the “Savings Clause”), persuasive (Plaintiff’s Response 12). Pursuant to the Savings

Clause, where a claimant’s attorney receives fees for the same work under both the Social

Security Act and the EAJA, the attorney must refund to the claimant the amount of the smaller

fee. Plaintiff argues that an attorney can refund fees only if the government has made

payments directly to counsel. Plaintiff’s argument ignores the possibility of indirect payment

of fees, i.e., where a client sends payment to counsel after receiving an award from the

government. Plaintiff’s argument also fails to focus on whether attorney’s fees are properly

awarded to the prevailing party or counsel at first instance.

3. PURPORTED ASSIGNMENT OF RIGHT TO COLLECT ATTORNEY’S FEES.

This order turns next to plaintiff’s purported assignment of the right to collect

attorney’s fees awarded pursuant to the EAJA. Plaintiff’s retainer agreement with her attorney

states that she assigns to counsel “payment of attorney’s fees awarded pursuant to the Equal

Access to Justice Act” (Plaintiff’s Response to Defendant’s Sur-Reply 3, Exh. A). 

Under the Assignment of Claims Act (“ACA”), an assignment of a claim against the

government may be made only after a claim is allowed, the amount of the claim is decided,

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and a warrant for payment of the claim has been issued. 31 U.S.C. 3727(b). The statute

defines assignment to mean: “(1) a transfer or assignment of any part of a claim against the

United States Government or of an interest in the claim; or (2) the authorization to receive

payment for any part of the claim.” 31 U.S.C. 3727(a) (emphasis added).

Plaintiff fails to cite any decisions where a court has permitted a pre-award assignment

under the ACA. Thus, the ACA represents an immovable obstacle for plaintiff’s counsel. The

statute simply does not permit plaintiff to assign her interest in the claim against the

government until the requirements of 31 U.S.C. 3727(b) are satisfied. Accordingly, this order

finds plaintiff’s pre-award assignment of the right to collect attorney’s fees awarded pursuant

to the EAJA void under 31 U.S.C. 3727. The ACA permits only post-award assignments. See

Empire Ordnance Corp. v. United States, 128 F. Supp. 744, 745 (Ct. Cl. 1955). Thus,

plaintiff’s request that the Court order defendant to pay counsel directly is DENIED.

4. PAYMENT OF FEES TO PLAINTIFF AS REPRESENTATIVE PAYEE OF COUNSEL.

In the alternative, plaintiff argues the Court should order defendant to pay plaintiff as

the “representative payee” of counsel so as to avoid a potential offset for federally-recoverable

debts. Appointing plaintiff as representative payee of counsel requires that plaintiff “transfer .

. . a claim against the United States Government . . . or an interest in the claim,” which

qualifies as an “assignment” under the ACA, 31 U.S.C. 3727(b)(1). As discussed above, such

a pre-award assignment is invalid under the ACA. Furthermore, as pointed out by defendant,

whether any EAJA award would be subject to administrative offset is speculative at this stage. 

Certainly, plaintiff provides no evidence that there would be an offset. Accordingly, plaintiff’s

request that the Court appoint her the “representative payee” of counsel is DENIED.

5. REASONABLENESS OF FEES.

With respect to the amount, plaintiff seeks $5,773.50 in attorney’s fees (33.05 hours at

a rate of $174.69/hr) plus $374.44 in costs (Sackett Suppl. Decl. ¶ 4). Defendant does not

dispute plaintiff’s entitlement to an award, or counsel’s hourly rate, but argues that we should

award plaintiff only $2,620.35 in fees (15 hours at a rate of $174.69/hr). 

In awarding fees, a court must provide a concise but clear explanation of its reasons. 

“The most useful starting point for determining the amount of a reasonable fee is the number of

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hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley,

461 U.S. 424, 433–37 (1983). The resultant figure is commonly referred to as the “lodestar.” 

A. NUMBER OF HOURS REASONABLY EXPENDED.

It is plaintiff’s burden to document “the appropriate hours expended in the litigation by

submitting evidence in support of those hours worked.” Gates v. Deukmejian, 987 F.2d 1392,

1397 (9th Cir. 1992). The appropriate number of hours includes all time “reasonably expended

in pursuit of the ultimate result achieved, in the same manner that an attorney traditionally is

compensated by a fee-paying client for all time reasonably expended on a matter.” Hensley,

461 U.S. at 431. 

Plaintiff has submitted detailed declarations demonstrating the 33.05 hours billed by

her attorney in this action (Sackett Decl. ¶ 4 and Sackett Suppl. Decl. ¶ 2). Defendant has

responded to the declarations by arguing that plaintiff’s counsel over-billed. First, defendant

contends that 2.25 hours are non-compensable. Second, defendant claims that plaintiff’s

attorney wasted 10.75 hours on administrative and collateral matters not directly bearing on the

legal issues of this action. Third, defendant reasons that 2.8 hours for preparation of the

motion and application for EAJA fees and related pleadings is excessive. Fourth, defendant

states that counsel was not fully responsible for plaintiff prevailing in this action. Fifth,

defendant asserts that the 16 hours billed for preparation of plaintiff’s summary-judgment

motion and supporting brief is excessive. Sixth, defendant concludes that counsel reasonably

expended only 15 hours working on this action. These contentions are examined in turn

below.

(1) 2.25 Hours Of Allegedly Non-Compensable Work.

Defendant argues the following eight entries in plaintiff’s EAJA petition are noncompensable: 

Date: Description of work: Hours: Commissioner’s objections:

10-03-06 Email to Judge

Alsup.

0.5 Ex parte communication with the

Court without an explanation of

the subject matter of the email.

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Date: Description of work: Hours: Commissioner’s objections:

8

10-06-06 Preparation of

Complaint and

related documents;

email to District

Court.

0.5 Complaint was filed on 9-18-06. 

Filing of Certificate of Service

was a clerical task and not

compensable.

10-12-06 Reviewed

correspondence from

U.S. Attorney’s

Office re: service of

Complaint.

0.15 Correspondence contained basic

and general legal information.

10-13-06 Reviewed

correspondence from

Office of Regional

Counsel re: service

of Complaint.

0.15 Same objection as 10-12-06.

11-15-06 Reviewed email from

District Court.

0.15 Reviewing the email (Notice of

Appearance filed by Assistant

Regional Counsel for the

Commissioner) should have

taken a few seconds, not 9

minutes. Entry in the case file

was a clerical task and not

compensable.

12-18-06 Reviewed email from

District Court.

0.15 Reviewing the email (Notice of

Manual Filing of Administrative

Transcript) should have taken a

few seconds, not 9 minutes. 

Filing the Notice was a clerical

task and not compensable.

12-21-06 Reviewed Answer;

prepared memo to

file.

0.5 Defendant filed a pro forma

Answer, to which Plaintiff filed

no objections and no motions for

specificity. Counsel should not

have taken 30 minutes to review

the Answer and prepare a memo.

03-09-07 Reviewed email re:

substitution of

counsel; prepared

memorandum to file.

0.15 Reviewing the email (notice of

change of counsel) and noting it

in the file should not have taken 9

minutes. Counsel already billed

for talking with the new

Commissioner’s attorney on 03-

08-07. Thus, the entry is

redundant.

TOTAL 2.25

Hours

This order does not agree that the above work was “either clerical in nature or

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redundant” (Opp. 4). The sentence “Case development, background investigation and case

administration” precedes each of the listed entries. Thus, under the circumstances, this order

finds that 2.25 hours is a reasonable expenditure of time and not excessive.

(2) 10.75 Hours Allegedly Wasted On Administrative And

Collateral Matters Not Directly Bearing On The Legal Issues

Of This Action.

Defendant has not specified which hours were wasted on administrative and collateral

matters unrelated to the legal issues of this action. Nor has defendant identified which

administrative and collateral matters plaintiff’s attorney allegedly wasted time on. 

Accordingly, this order will not reduce the number of compensable hours on this ground.

(3) 2.8 Hours Preparing The Motion For EAJA Fees And Related

Pleadings.

Plaintiff’s attorney admits that he copied much of his motion for EAJA fees from

another motion EAJA fees filed by another lawyer in a separate action. Plaintiff’s attorney

states he expended 2.8 hours preparing the following documents: (1) Notice of Motion and

Motion and Application for Award of Attorney’s Fees and Costs Under the EAJA; (2)

Memorandum of Points and Authorities; (3) Declaration of Harvey P. Sackett in Support of

Application for Award of Attorney’s Fees and Costs Under the Equal Access to Justice Act;

(4) Declaration Re Meet and Confer; (5) Plaintiff’s Suggested Findings of Fact and

Conclusions of Law; (6) Declaration of Harvey P. Sackett ex rel. Sandra J. Hayes; and (7)

Draft Order. 

This order finds that documents 1, 4, 5, 6, and 7 are pro forma documents; counsel

could have prepared them all in fifteen minutes. Document 2 is around seven pages long and

counsel copied around four pages of it. Given counsel’s “borrowing,” and his extensive

experience in social-security disability law, this order finds that he could have drafted it in 45

minutes. Finally, document 3 comprises an itemized bill of counsel’s hours, fees, and costs,

which counsel could have prepared in thirty minutes. This order finds the time billed for this

entry is excessive. Counsel could have completed the work in 1.5 hours. The number of

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compensable hours will be reduced accordingly.

(4) The Role Of Counsel In Winning A Remand.

Plaintiff’s attorney actually obtained excellent overall results for his client, in

that defendant sought to settle and remand the case. This order finds that counsel’s efforts

were a major factor in the favorable result. Accordingly, we will not reduce the number of

compensable hours on this ground.

(5) Sixteen Hours Preparing Plaintiff’s Summary-Judgment

Motion And Supporting Brief.

Defendant argues in conclusory fashion that the sixteen hours billed for preparation of

the summary-judgment motion and supporting brief is excessive given the allegedly routine

issues raised in the brief and the relatively short administrative record. This order disagrees

and finds that sixteen hours is a reasonable expenditure of time and not excessive.

(6) The Number Of Hours Should Be Reduced.

Based on the foregoing discussion, this order finds that plaintiff is entitled to

reimbursement for 31.75 hours.

B. Reasonable Hourly Rate.

A prevailing party may recover his or her reasonable fees and expenses, but cannot

claim attorney’s fees “in excess of $125 per hour unless the court determines an increase in the

cost of living or a special factor . . . justifies a higher fee.” 28 U.S.C. 2412(d)(2)(A). Here,

plaintiff seeks an award of attorney’s fees calculated at a rate adjusted to account for an

increase in the cost-of-living. 

In Sorenson v. Mink, 239 F.3d 1140, 1148 (9th Cir. 2001), the Ninth Circuit computed

a cost-of-living adjustment by multiplying the basic EAJA rate cap (i.e., $125) by the current

Consumer Price Index for Urban Consumers (“CPI-U”) for the year the fees were earned, then

dividing the product by the CPI-U in the month the statutory rate cap was imposed (i.e., March

1996). The quotient equals the adjusted hourly rate. Under this analysis, plaintiff claims

entitlement to attorney’s fees at the rate of $174.69 per hour (Sackett Decl. ¶ 4). Defendant

does not dispute this amount. Multiplying this hourly rate with the total amount of hours

billed, 31.75, yields a lodestar of $5,546.40.

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D. Costs.

Under the EAJA, 28 U.S.C. 2412(a)(1), a district court may also award costs to a

prevailing party. Plaintiff’s request for costs in the amount of $374.44 is GRANTED.

CONCLUSION

For the foregoing reasons, plaintiff’s request for attorney’s fees and costs under the

EAJA, 28 U.S.C. 2412(d), is GRANTED. This order finds plaintiff is entitled to recover

reasonable attorney’s fees in the amount of $5,546.40 and costs in the amount of $374.44.

Plaintiff’s assignment of the right to collect attorney’s fees awarded pursuant to the EAJA is

void, however, for failure to comply with the Assignment of Claims Act, 31 U.S.C. 3727. 

Accordingly, plaintiff’s request that the Court order defendant to pay counsel directly is

DENIED. Plaintiff’s request that the Court appoint her the “representative payee” of counsel is

also DENIED. Defendant shall pay the above amounts directly to plaintiff.

IT IS SO ORDERED.

Dated: March 5, 2008. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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