Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03379/USCOURTS-cand-3_05-cv-03379-4/pdf.json

Parties Involved:
Jo Anne B. Barnhart
Defendant
Denise A. Schanz
Plaintiff

Document Text:

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

DENISE A. SCHANZ,

Plaintiff,

 v.

JO ANNE B. BARNHART, Commissioner,

Social Security Administration,

Defendant. /

No. C-05-3379 MMC

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S

MOTION FOR ATTORNEY’S FEES AND

COSTS

(Docket No. 21)

Before the Court is plaintiff Denise A. Schanz’s (“Schanz”) motion, filed August 2,

2006, for attorney’s fees and costs, pursuant to the Equal Access to Justice Act (“EAJA”),

28 U.S.C. § 2412(d). Defendant Jo Anne B. Barnhart, Commissioner, Social Security

Administration (“Commissioner”), has filed opposition to the motion; Schanz has filed a

reply. Having considered the papers filed in support of and in opposition to the motion, the

Court rules as follows.

BACKGROUND

On August 19, 2005, Schanz filed the above-titled action, seeking judicial review of

the final decision of the Commissioner denying Schanz’s application for disability benefits

under the Social Security Act. On June 15, 2006, the Court granted in part and denied in

part Schanz’s motion for summary judgment, denied the Commissioner’s cross-motion for

summary judgment, and remanded the action for further proceedings.

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Thereafter, on June 26, 2006, Schanz filed a motion to alter or amend the judgment,

pursuant to Rule 59(e) of the Federal Rules of Civil Procedure. On June 30, 2006, the

Court denied the motion.

LEGAL STANDARD 

Under EAJA, the Court “shall award” the attorneys’ fees, expenses, and costs

incurred by a prevailing party in a suit 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.” See 28 U.S.C. § 2412(d). An individual may not recover such fees

and expenses, however, if his net worth exceeded $2,000,000 at the time the action was

filed. See 28 U.S.C. § 2412(d)(2)(B). In addition, the Court may reduce or deny an award

of fees and expenses if the prevailing party “engaged in conduct which unduly and

unreasonably protracted the final resolution of the matter in controversy.” See 28 U.S.C.

§ 2412(d)(1)(C). Attorneys’ fees “shall not be awarded in excess of $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.” 

See 28 U.S.C. § 2412(d)(2)(A). 

A plaintiff seeking an award of fees and expenses under EAJA must submit to the

Court, “within thirty days of final judgment,” an application for fees, demonstrating he is a

prevailing party and eligible to receive an award of fees. See 28 U.S.C. § 2412(d)(1)(B). 

The thirty-day period begins running upon expiration of the time for filing an appeal of the

judgment. See Shalala v. Schaefer, 509 U.S. 292, 302 (1993). In cases in which the

federal government or one of its officers or agencies is a party, an appeal may be filed no

later than 60 days after the judgment or order appealed from is entered. See id. (citing

Fed. R. App. 4(a)(1)(B)). Thus, in such cases, an application for fees under EAJA must be

filed within 90 days of the court’s entry of judgment. See id.

A plaintiff’s application for fees must state the amount sought and include an

itemized statement from the plaintiff’s attorney setting forth the actual time expended and

the rate at which fees were computed. See 28 U.S.C. § 2412(d)(1)(B). Additionally, the

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 Sentence four of section 405(g) provides: "The court shall have power to enter,

upon the pleadings and transcript of the record, a judgment . . . reversing the decision of

the Commissioner of Social Security . . . [and] remanding the cause for a rehearing." 42

U.S.C. § 405(g).

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plaintiff must “allege that the position of the United States was not substantially justified.” 

See id. 

Under EAJA, the government's position is substantially justified if it has a

“reasonable basis both in law and fact,” and “is justified to a degree that could satisfy a

reasonable person.” See Pierce v. Underwood, 487 U.S. 552, 565 (1988). Put another

way, the government’s position is substantially justified if there is a “genuine dispute”

between the parties and “reasonable people could differ as to the appropriateness of the

contested action[.]” See id. (citations and internal punctuation omitted). The government

bears the burden of demonstrating its position was substantially justified. See Scarborough

v. Principi, 541 U.S. 401, 414 (2004).

DISCUSSION

A. Entitlement to Fees and Costs

Where, as here, the Court reverses a decision of the Commissioner and remands a

Social Security appeal for further proceedings, pursuant to sentence four of 42 U.S.C.

§ 405(g),1 the plaintiff is considered a prevailing party for purposes of awarding attorneys'

fees under EAJA. See Shalala v. Schaefer, 509 U.S. at 300-01. Accordingly, Schanz is a

prevailing party.

Schanz has filed a timely application for fees, has submitted evidence that her net

worth does not exceed $2,000,000 (see Sammis Decl. at 1), and has alleged that the

position of the Commissioner was not substantially justified, (see Motion at 12). Schanz

also has submitted an itemized statement from her counsel setting forth the actual time

expended with respect to work performed in this litigation, and the rate at which counsel’s

fees were computed. (See Sammis Decl. ¶¶ 3-5.) There is no contention that Schanz

“engaged in conduct which unduly and unreasonably protracted the final resolution of the

matter in controversy.” See 28 U.S.C. § 2412(d)(1)(C). Nor is it contended that any

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“special circumstances” make an award of fees unjust. Consequently, the only remaining

issue with respect to Schanz’s entitlement to fees under EAJA is whether the

Commissioner’s position was substantially justified. As noted, the Commissioner has the

burden of demonstrating its position was substantially justified. See Scarborough v.

Principi, 541 U.S. at 414.

Here, the ALJ failed to adequately explain his rejection of a treating physician’s

opinion as to Schanz’s ability to perform work-related functions, in favor of the opinions of

two non-treating physicians. Additionally, the ALJ failed to adequately explain his rejection

of an examining physician’s opinion as to Schanz’s ability to stand, in favor of the opinion of

a non-examining physician. The ALJ further failed to set forth adequate reasons for

rejecting Schanz’s testimony as to the extent of her pain. The law unambiguously requires

an ALJ to provide, based on substantial evidence in the record, specific and legitimate

reasons for rejecting the opinions of treating and examining physicians in favor of the

opinions of non-treating and non-examining physicians, see Lester v. Chater, 81 F.3d 821,

830 (9th Cir. 1995), and further requires the ALJ to provide specific, clear and convincing

reasons for rejecting a claimant’s testimony as to the severity of her symptoms, see

Smolen v. Chater, 80 F.3d 1273, 1281 (9th Cir. 1996). Thus, the ALJ’s decision was not

substantially justified and, for the same reason, the Commissioner was not substantially

justified in defending the ALJ’s decision in this court. See, e.g., Corbin v. Apfel, 149 F.3d

1051, 1053 (9th Cir. 1998) (finding no substantial justification where ALJ failed to make

specific findings in rejecting plaintiff’s allegations of disabling pain as required by case law;

noting “the defense of basic and fundamental errors such as the ones in the present case

is difficult to justify”). 

Accordingly, the Court finds the Commissioner’s position was not substantially

justified, and that Schanz is entitled to an award of the reasonable fees and costs she

incurred in litigating the above-titled action.

B. Amount of Fees and Costs

Schanz seeks an award of $8149.18 in fees for work performed by her counsel, Ian

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M. Sammis (“Sammis”), and Sammis’ law clerk, Andrew Ragnes (“Ragnes”), along with

$92.13 in expenses, and $250.00 in costs. (See Amended Sammis Decl. at 7-8.) 

1. Hourly Rate

Although Schanz requests an hourly rate of $160.37 for work performed by Sammis,

which exceeds the maximum rate of $125 per hour set forth in § 2412(d)(2)(A), that section

permits the Court to increase the statutory hourly rate to take into account an increase in

the cost of living. See 28 U.S.C. § 2412(d)(2)(A). Sammis attests that the cost of living

has increased 28.3% since the date the above-referenced section of the EAJA was last

amended. (See Amended Sammis Decl. at 7.) The Commissioner does not dispute

Sammis’ conclusion that the cost of living has increased 28.3%. Accordingly, the Court

finds Schanz has demonstrated the propriety of using an hourly rate of $160.37 for work

performed by Sammis. 

Schanz seeks an hourly rate of $100 for work performed by Ragnes. In discussing

fee awards pursuant to 42 U.S.C. § 1988, the Supreme Court has explained:

Clearly, a “reasonable attorney’s fee” cannot have been meant to

compensate only work performed personally by members of the bar. Rather,

the term must refer to a reasonable fee for the work product of an attorney.

Thus, the fee must take into account the work not only of attorneys, but also

of secretaries, messengers, librarians, janitors, and others whose labor

contributes to the work product for which an attorney bills her client; and it

must also take account of other expenses and profit. . . . [T]he “reasonable

attorney’s fee” provided for by statute should compensate the work of

paralegals, as well as that of attorneys.

See Missouri v. Jenkins, 491 U.S. 274, 285 (1989). Other courts likewise have held that

time spent by paralegals and law clerks is compensable under EAJA. See, e.g., Jean v.

Nelson, 863 F.2d 759, 778 (11th Cir. 1988). Although, as discussed below, the

Commissioner takes issue with the number of hours spent by Ragnes in litigating the

instant action, the Commissioner does not argue that fees for such work may not be

awarded under EAJA or that Ragnes’s hourly rate is excessive. Accordingly, the Court

finds Schanz is entitled to an award of fees for work performed by Ragnes, at the rate of

$100 per hour.

/ /

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2. Number of Hours

The Commissioner argues that the number of hours billed is excessive. In

particular, the Commissioner contends the Commissioner should not be assessed fees for

work performed on unsuccessful arguments made in support of Schanz’s motion for

summary judgment. With respect to the motion for summary judgment, Schanz submits

evidence that Ragnes spent 15.8 hours reviewing the transcript of the hearing before the

ALJ and preparing the motion for summary judgment, and an additional 18 hours reviewing

the Commissioner’s cross-motion for summary judgment and preparing a response thereto. 

(See Sammis Decl. ¶ 5.) The Commissioner contends that, in light of Schanz’s

unsuccessful arguments, the Court should award fees for a total of no more than 18 hours

of work in connection with the parties’ respective dispositive motions. 

The Supreme Court has noted, however, that “[l]itigants in good faith may raise

alternative legal grounds for a desired outcome, and the court's rejection of or failure to

reach certain grounds is not a sufficient reason for reducing a fee.” See Hensley v.

Eckerhart, 461 U.S. 424, 435 (1983). Where, as here, counsel obtains excellent results for

the plaintiff, the “attorney should recover a fully compensatory fee,” and “the fee award

should not be reduced simply because the plaintiff failed to prevail on every contention

raised in the lawsuit.” See id. Consequently, the Court declines to reduce the amount of

the fees as a result of Schanz’s inclusion of unsuccessful as well as successful arguments

in her motion for summary judgment.

The Commissioner further objects to any award of fees for time spent preparing

Schanz’s unsuccessful Rule 59(e) motion, in which Schanz argued that the Court erred by

remanding the instant action for further proceedings, rather than remanding for an award of

benefits. The Court expressly addressed Schanz’s argument in its remand order, relying

on Connett v. Barnhart, 340 F.3d 871, 876 (9th Cir. 2003), which, as the Court noted in

denying the Rule 59(e) motion, has never been overruled. Because Schanz failed to

achieve any success as a result of the Rule 59(e) motion, the Court agrees with the

Commissioner that no fees should be awarded for the preparation of that motion. In Atkins

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 Sammis attests that he spent 2.2 hours and that Ragnes spent 15.8 hours

preparing the Rule 59(e) motion. (See Sammis Decl. ¶¶ 4-5.) 

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v. Apfel, 154 F.3d 986 (9th Cir. 1998), the plaintiff prevailed in the district court by obtaining

a remand to the ALJ for further proceedings, then unsuccessfully appealed on the ground

the district court should have remanded for an award of benefits. See id. at 987. Although

the district court awarded fees to the plaintiff for both the district court proceedings and the

appeal, the Ninth Circuit held the district court erred in awarding fees incurred in

prosecuting the unsuccessful appeal, holding “the district court abused its discretion by

failing to consider the results obtained on appeal.” See id. at 990. Here, similarly, although

Schanz prevailed with respect to her motion for summary judgment, she did not prevail on

any issue raised in the Rule 59(e) motion. Accordingly, the Court will not award fees for

hours expended in preparing the Rule 59(e) motion.2

The Commissioner additionally argues that the 5.5 hours spent by Ragnes on the

instant fees motion is excessive because it contains largely boilerplate language, and that

the Court should award fees for only 1.5 hours of such work. The Commissioner argues

that in light of counsel’s many years of experience litigating social security disability cases,

it is unlikely that his office had to draft anew those portions of the EAJA motion. Plaintiff

argues in her reply, albeit without providing a declaration, that Ragnes spent much of the

claimed 5.5 hours preparing and revising the declarations submitted in connection with the

fees motion. The Court agrees with the Commissioner that the fees motion largely consists

of boilerplate legal standards that would apply to any EAJA fees motion. As Ragnes attests

that he has worked on 48 social security cases since 2000, at least 13 of which cases have

been remanded for further proceedings, (see Ragnes Decl. at 1-2), and given that many of

the cited authorities pre-date 2000, the Court agrees with the Commissioner that 5.5 hours

for preparation of the fees motion is unreasonable. The Court agrees with plaintiff,

however, that the declarations submitted in connection with the fees motion contain

information specific to the instant action, and that Ragnes reasonably spent more than 1.5

hours preparing those declarations. The Court finds Ragnes reasonably spent 3.0 hours

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preparing the instant motion and associated declarations. Accordingly, the Court will

reduce the award of fees for the preparation of the fees motion from 5.5 hours to 3.0 hours.

In sum, the Court finds the hourly rates sought for work performed by Sammis and

Ragnes are reasonable and that the time spent on work performed in this litigation through

judgment is adequately documented. The Court declines to award any fees for the

preparation of the Rule 59(e) motion, however, and will award fees for only 3.0 hours of the

5.5 hours counsel assertedly expended in preparing the fees motion. Accordingly, the

Court finds Schanz is entitled to an award of fees for 6.4 hours of work performed by

Sammis at the rate of $160.37 per hour, and 49.4 hours of work performed by Ragnes at

the rate of $100 per hour, for a total fees award of $5966.37.

3. Expenses

Schanz seeks an award of $92.13 in expenses, including the cost of postage,

computerized legal research, and a single long distance telephone call.

The Commissioner objects to Schanz’s request for expenses billed for Westlaw

research and Pacer inquiries, (see Sammis Decl. at 7), on the ground such expenses

constitute overhead that should be included in the attorney’s hourly rate. The

Commissioner cites no authority holding that such legal research fees should be

considered unreimbursable overhead, however, and authority exists to the contrary. See In

re Continental Illinois Securities Litigation, 962 F.2d 566, 570 (7th Cir. 1992) (finding district

court committed “clear error” by holding computerized legal research costs to be part of

overhead; noting “the market – the paying, arms’ length market – reimburses lawyers’

LEXIS and WESTLAW expenses”). Accordingly, the Court will not deduct the cost of

computerized legal research from the award of expenses sought by Schanz.

The Commissioner further objects to an award of $3.00 for a long-distance

telephone call, (see Sammis Decl. at 7), on the ground the call was made in connection

with Schanz’s unsuccessful Rule 59(e) motion. As discussed above, because Schanz was

not the prevailing party on the Rule 59(e) motion, the Court will disallow this long distance

charge.

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The Commissioner asserts no objection to the remainder of the expenses sought by

Schanz. Accordingly, the Court finds Schanz is entitled to an award of $89.13 in expenses.

4. Costs

Schanz seeks an award of $250.00 in costs incurred in filing the instant action. The

Commissioner asserts no objection thereto. Accordingly, the Court will grant Schanz’s

request for $250.00 in costs.

CONCLUSION

For the reasons set forth above, Schanz’s motion for an award of fees and costs is

hereby GRANTED in part and DENIED in part, and Schanz is hereby awarded attorneys’

fees in the amount of $5966.37, plus expenses in the amount of $89.13, and costs in the

amount of $250.00.

This order terminates Docket No. 21.

IT IS SO ORDERED.

Dated: November 22, 2006 

MAXINE M. CHESNEY

United States District Judge

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