Court Opinion

ID: 807378
Source: CourtListenerOpinion
Date Created: 2012-08-24 17:08:33+00
Date Added: 2024-06-11T18:00:24.709220
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

SHANE A. COSTA,                               
                Plaintiff-Appellant,                  No. 11-35245
                v.
                                                        D.C. No.
                                                    3:09-cv-06048-HU
COMMISSIONER OF SOCIAL SECURITY
ADMINISTRATION,                                         OPINION
              Defendant-Appellee.
                                              
        Appeal from the United States District Court
                 for the District of Oregon
       Dennis James Hubel, Magistrate Judge, Presiding

                      Argued and Submitted
                 July 13, 2012—Portland, Oregon

                        Filed August 24, 2012

        Before: Betty B. Fletcher and Harry Pregerson,
         Circuit Judges, and Consuelo B. Marshall,
                       District Judge.*

                         Per Curiam Opinion

  *The Honorable Consuelo B. Marshall, Senior District Judge for the
U.S. District Court for the Central District of California, sitting by desig-
nation.

                                   9639
                  COSTA v. COMMISSIONER SSA                 9641

                          COUNSEL

Linda Ziskin (argued), Ziskin Law Office, Lake Oswego,
Oregon; Drew L. Johnson, Drew L. Johnson, P.C., Eugene,
Oregon, for the appellant.

David Morado, Regional Chief Counsel, Seattle Region X;
Kathryn A. Miller (argued), Assistant Regional Counsel, Seat-
tle, Washington, for the appellee.

                          OPINION

PER CURIAM:

   The Social Security Administration denied Shane Costa’s
application for social security disability benefits. Costa sought
review of that decision in the Oregon district court. The fed-
eral magistrate judge who presided over Costa’s action deter-
9642                 COSTA v. COMMISSIONER SSA
mined that the agency’s decision improperly disregarded the
opinions of an examining psychologist and remanded Costa’s
case to the agency. Costa sought reasonable attorney’s fees
pursuant to the Equal Access to Justice Act (EAJA), 28
U.S.C. § 2412(d). The magistrate judge granted the request in
part but determined that the 60.5 hours Costa’s attorneys
spent working on the case were excessive. Applying what
amounts to an informal rule limiting fee awards in social
security cases, he reduced the number of hours compensated
by nearly one-third, to 41.1 hours. We hold that it is improper
for district courts to apply a de facto cap on the number of
hours for which attorneys may be compensated under the
EAJA in a “routine”1 case challenging the denial of social
security benefits. Rather individualized consideration must be
given to each case.

                                     I

   Shane Costa applied for disability benefits alleging that he
suffered from bi-polar disorder, an eating disorder, spinal
pain, agoraphobia, and anxiety. The state disability determina-
tion agency denied Costa’s application and his request for
reconsideration. An administrative law judge heard Costa’s
appeal and issued a decision finding him not disabled. Costa
sought review in the United States District Court for the Dis-
trict of Oregon. The parties consented to entry of final judg-
ment by a United States Magistrate Judge.

   The magistrate judge reversed the ALJ’s decision finding
Costa not disabled and remanded to the agency for further
proceedings. The magistrate judge’s order includes an exhaus-
tive description of the medical evidence in the record and
explains that the agency improperly disregarded the opinions
of an examining psychologist. The merits of the magistrate
judge’s order are not at issue in this appeal.
  1
    We note that the term “routine” is a bit of a misnomer as social security
disability cases are often highly fact-intensive and require careful review
of the administrative record, including complex medical evidence.
                  COSTA v. COMMISSIONER SSA                9643
   Costa sought attorney’s fees under the EAJA. The magis-
trate judge reduced the total time awarded for counsel’s work
on Costa’s opening memorandum to the court from 25 hours
to 12 hours. In doing so, he explained that “the opening mem-
orandum was only seventeen pages long” and “the issues in
the case were not novel or unusually complex.” As a result he
concluded that “25 hours is unreasonable.” He did not explain
how he determined that 12 hours was a reasonable amount of
time to have spent on the opening memorandum.

   Similarly, the magistrate judge reduced the hours requested
for preparation of the supplemental and reply memoranda.
Costa requested a total of 5.1 hours for preparation of his sup-
plemental memorandum. The magistrate judge said that this
memorandum was “just over six pages, with only one-half of
one page devoted to argument.” The magistrate judge’s order
indicates that he felt some of the work billed by Costa’s attor-
neys duplicated work previously performed. The magistrate
judge also declined to compensate Costa’s attorneys for 1.4
hours of work that he deemed clerical.

   The magistrate judge’s order places substantial weight on
a published order by Judge Mosman of the District of Oregon.
The magistrate judge quoted Judge Mosman’s order, which
states that there is “some consensus . . . that 20-40 hours is
a reasonable amount of time to spend on a social security case
that does not present particular difficulty.” Harden v. Comm’r
of the Soc. Sec. Admin., 497 F. Supp. 2d 1214, 1215 (D. Or.
2007). Again quoting Harden, he wrote, “this range provides
an accurate framework for measuring whether the amount of
time counsel spent is reasonable.” Id. at 1216. The magistrate
judge later explained that “while the total number of allowed
hours is at the high end of the range identified by Judge Mos-
man, it is not unreasonable in this case.”

  Based on his determination of the number of hours reason-
ably expended on Costa’s case, the magistrate judge awarded
9644              COSTA v. COMMISSIONER SSA
Costa a total of $7,191.35, which is $3,353.37 less than the
$10,544.72 that Costa requested.

  We have jurisdiction pursuant to 28 U.S.C. §§ 636(c)(3)
and 1291, and we reverse.

                               II

   [1] The EAJA provides for the award of attorney’s fees to
a party that prevails against the United States in a proceeding
for review of an agency action, 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). The Commissioner has never contended that
the agency’s position was substantially justified but argues
that the amount of fees Costa requested was not reasonable.
See id. at § 2412(d)(2)(A).

   We “review the district court’s calculation of the reason-
able hours and the hourly rate for abuse of discretion.”
Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir.
2008). An error of law is an abuse of discretion. Strauss v.
Comm’r of the Soc. Sec. Admin., 635 F.3d 1135, 1137 (9th
Cir. 2011). The abuse of discretion standard “is appropriate in
view of the district court’s superior understanding of the liti-
gation and the desirability of avoiding frequent appellate
review of what essentially are factual matters.” Hensley v.
Eckerhart, 461 U.S. 424, 437 (1983). Nonetheless, the district
court must give reasons for reducing fees. See Moreno, 534
F.3d at 1111. Where the disparity between the fees requested
and those awarded is relatively large, the district court should
provide a specific articulation of its reasons for reducing the
award. See id.

   The Supreme Court’s seminal decision in Hensley v. Ecker-
hart held that courts should apply what is now called the
“lodestar” method to determine what constitutes a reasonable
attorney’s fee under 42 U.S.C. § 1988, the fee shifting statute
                     COSTA v. COMMISSIONER SSA                       9645
applicable in civil rights cases. 461 U.S. at 433. To calculate
the lodestar amount, the court multiplies “the number of hours
reasonably expended on the litigation . . . by a reasonable
hourly rate.”2 Id. at 433. The Court further explained that
counsel for the prevailing party should exercise “billing judg-
ment” to “exclude from a fee request hours that are excessive,
redundant, or otherwise unnecessary” as a lawyer in private
practice would do. Id. at 434; see also Moreno, 534 F.3d at
1111 (“The number of hours to be compensated is calculated
by considering whether, in light of the circumstances, the time
could reasonably have been billed to a private client.”).

   This court applies the principles set forth in Hensley—and
other cases interpreting 42 U.S.C. § 1988—to determine what
constitutes a reasonable fee award under the EAJA. See
Comm’r, INS v. Jean, 496 U.S. 154, 161 (1990) (explaining
that once a litigant has established eligibility for fees under
the EAJA, “the district court’s task of determining what fee
is reasonable is essentially the same as that described in Hens-
ley.”); see also Nadarajah v. Holder, 569 F.3d 906, 916 (9th
Cir. 2009).

   In Moreno v. City of Sacramento, we held that a California
district court abused its discretion when it awarded fees for a
significantly lower number of hours than the prevailing plain-
tiffs had requested and failed to provide adequate explanation
for those cuts. 534 F.3d at 1112-13. We said in Moreno that
“lawyers are not likely to spend unnecessary time on contin-
gency fee cases in the hope of inflating their fees” because
“[t]he payoff is too uncertain.” Id. at 1112. As a result, courts
should generally defer to the “winning lawyer’s professional
judgment as to how much time he was required to spend on
the case.” Id. The court added that a district court can impose
a reduction of up to 10 percent—a “haircut”—based purely on
  2
   Neither party makes any argument regarding the reasonableness of the
hourly rate, which the magistrate judge set at the EAJA statutory rate plus
a cost-of-living adjustment. 28 U.S.C. § 2412(d)(2)(A)(ii).
9646               COSTA v. COMMISSIONER SSA
the exercise of its discretion and without more specific expla-
nation. Id. But where the district court had cut the number of
hours by twenty to twenty-five percent it was required to pro-
vide more specific explanation than its view that “the amount
of time plaintiff’s counsel spent was ‘excessive.’ ” Id. at
1112-13. Finally, we recognized that sometimes “the vicissi-
tudes of the litigation process” will require lawyers to dupli-
cate tasks. Id. at 1113. “Findings of duplicative work should
not become a shortcut for reducing an award without identify-
ing just why the requested fee was excessive and by how
much.” Id.

   [2] In Moreno, we also rejected the district court’s method
of determining a reasonable hourly rate. We said that the dis-
trict court “erred by applying what appears to be a de facto
policy of awarding a rate of $250 an hour to civil rights
cases.” Id. at 1115. We then explained, “[d]istrict judges can
certainly consider the fees awarded by other judges in the
same locality in similar cases. But adopting a court-wide
policy—even an informal one—of ‘holding the line’ on fees
at a certain level goes well beyond the discretion of the dis-
trict court.” Id.

   [3] We conclude that it is also an abuse of discretion to
apply a de facto policy limiting social security claimants to
twenty to forty hours of attorney time in “routine” cases.
Indeed, we question the usefulness of reviewing the amount
of time spent in other cases to decide how much time an attor-
ney could reasonably spend on the particular case before the
court. Surveying the hourly rates awarded to attorneys of
comparable experience and skill is a useful tool for assessing
the reasonableness of a requested hourly rate because lawyers
bill at the same rates in different cases. But it is far less useful
for assessing how much time an attorney can reasonably
spend on a specific case because that determination will
always depend on case-specific factors including, among oth-
ers, the complexity of the legal issues, the procedural history,
the size of the record, and when counsel was retained.
                  COSTA v. COMMISSIONER SSA                9647
   [4] Many district courts have noted that twenty to forty
hours is the range most often requested and granted in social
security cases. See Patterson v. Apfel, 99 Fed. Supp. 2d 1212,
1214 n.2 (C.D. Cal. 2000) (collecting district court cases).
While district courts may consider this fact in determining the
reasonableness of a specific fee request, courts cannot drasti-
cally reduce awards simply because the attorney has requested
compensation for more than forty hours or make reductions
with a target number in mind. Instead, district courts must
explain why the amount of time requested for a particular task
is too high. Any other approach fails to give deference to the
winning lawyer’s professional judgment, as required by
Moreno. 534 F.3d at 1112.

   [5] The magistrate judge reduced the number of hours
Costa requested by nearly one-third. Under Moreno, the mag-
istrate judge was required to provide relatively specific rea-
sons for making such significant reductions. In explaining
why he cut in half the number of hours requested for prepara-
tion of the opening memorandum, the magistrate judge said
only that the issues in the case were not novel or complex and
that the brief was not very long. The magistrate judge made
similar cuts to the hours Costa requested for preparation of the
supplemental and reply memoranda, never explaining why the
amount of time he allotted to each task was reasonable. We
conclude that the reasons the magistrate gave for reducing the
hours as he did were not sufficiently specific given the magni-
tude of the reductions. See Moreno, 534 F.3d at 1113 (“Of
course, the court might have some specific reason for believ-
ing that work is excessive or duplicative, but it must explain
why.”).

   More importantly, it appears that the magistrate judge
applied what he perceived to be an informal district-wide rule
that forty hours is the upper limit for the number of hours a
lawyer can reasonably spend on a social security disability
appeal that “does not present particular difficulty.” The mag-
istrate judge referenced the range of twenty to forty hours
9648             COSTA v. COMMISSIONER SSA
early in his order on fees and quoted Harden, 497 F. Supp. 2d
at 1216, as follows: “[T]his range provides an accurate frame-
work for measuring whether the amount of time counsel spent
is reasonable.” In addition, toward the end of his order he
explained that the 41.1 hours for which he awarded compen-
sation was not unreasonable, despite being “at the high end of
the range identified by Judge Mosman.” Reading the order in
its entirety, we can only conclude that the magistrate judge
made his cuts to the requested hours with an eye toward get-
ting the number of hours down to forty rather than based on
the number of hours that was reasonable for the legal services
provided in Costa’s case.

   [6] The magistrate judge’s approach was not consistent
with Moreno and was an abuse of discretion. District courts
may not apply de facto caps limiting the number of hours
attorneys can reasonably expend on “routine” social security
cases. For the foregoing reasons, we reverse the magistrate
judge’s decision on attorney’s fees. The magistrate judge shall
award fees in the amount of $10,544.72, as requested by
Costa, for the proceedings below.

  REVERSED and REMANDED.