Plaintiff has filed an application for payment of attorney's
fees under section 2412(d) of the Equal Access To Justice Act
(EAJA), 28 U.S.C. § 2412(d), based upon an action filed on her
behalf in 1983 which ultimately led to an award of Supplemental
Security Income (SSI) benefits by an administrative law judge
(ALJ) on March 7, 1990. Defendant opposes the award of fees
and, in the alternative, argues that the hourly rate sought is
I. Facts and Procedural History
Plaintiff then filed this action on May 26, 1983. On March
13, 1984, the court remanded for the purpose of locating
plaintiff's claims folder. A second hearing was held before
the ALJ on August 23, 1984,
Id. Plaintiff then appealed to this court, but also filed
another application for benefits. We remanded the case for
Upon remand plaintiff was awarded SSI benefits by an ALJ on
March 7, 1990. The ALJ found that plaintiff was disabled as of
July 17, 1982, based on her having satisfied as of that date
the requirements of 20 C.F.R. Part 404, Subpart P, Appendix 1,
§ 10.10. Section 10.10A addresses obesity and a history of pain
and limitation of motion in any weight bearing joint or spine,
associated with arthritis. Id.
II. Legal Analysis
EAJA entitles plaintiff to an award of fees "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 burden of
proving the statutory concept of substantial justification is
on the government." Edge v. Schweiker, 814 F.2d 125, 128 (3d
The Supreme Court settled the definition of "substantially
justified" in Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct.
2541, 2550, 101 L.Ed.2d 490 (1988). The term means
Id. The court cited Citizens Council of Delaware County v.
, 593 (3d Cir. 1984) as one of those
cases that adhere to "reasonable basis both in law and fact."
Citizens Council relied on the articulation of a "reasonable
basis in both law and fact" first set forth by the Third
Circuit in Dougherty v. Lehman, 711 F.2d 555, 564 (3d Cir.
1983). The government must:
Id. In sum, "[t]o meets its burden, the government must show a
in truth for the facts alleged, a reasonable basis in law for
the theory it propounds, and a reasonable connection between
the facts alleged and the legal theory advanced." Edge v.
Schweiker, 814 F.2d at 128.
The government's "position" refers "to both the litigation
position taken by the agency and the agency's conduct that was
the subject of the litigation." Citizens Council of Delaware
County v. Brinegar, 741 F.2d at 593; Dougherty v. Lehman,
711 F.2d 555, 563 n. 12 (3d Cir. 1983); Natural Resources Defense
Council, Inc. v. U.S. Environmental Protection Agency,
703 F.2d 700, 706-12 (3d Cir. 1983) (Gibbons, J., opinion announcing the
judgment of the court); id., at 714-17 (Thompson, J.,
b) The Government's Position Was Not "Substantially
Upon remand the ALJ found that plaintiff, "[a]s of July 17,
1982 . . . weighed in excess of 258 pounds. . . . [Her]
current weight is 425 pounds. The record reflects reports from
Herbert Fichman, M.D., extending back to July 1982,
documenting the fact that the claimant was suffering from
osteoarthritis of the lumbosacral spine. . . . [Her] condition
continues to be documented as . . . consistent with the
diagnosis of Dr. Fichman, in July 1982. . . . [B]y virtue of
[her] massive obesity and a history of osteoarthritis of the
knees and lumbosacral spine, . . . the claimant does in fact
meet an appropriate listing found in Listings of Impairments
in Appendix 1, Subpart P, Regulation No. 4." Decision of Alan
M. Neff, ALJ, of March 7, 1990, at p. 2.
Defendant argues that "there was no evidence to conclude
that plaintiff was suffering from arthritis of a weight
bearing joint or the spine," and therefore "the Secretary
reasonably concluded that plaintiff was not disabled."
Defendant's Brief at 7. Moreover, to the extent the ALJ found
plaintiff to have been disabled since July 1982, "the evidence
upon which the [ALJ] awarded benefits was not, for the most
part, compiled until after remand," and "plaintiff was found
to be eligible for benefits based, at least, in part upon this
new evidence. Accordingly, the Secretary was substantially
justified in finding that plaintiff was not disabled."
We disagree. The basis upon which the ALJ determined
plaintiff to have been disabled was her obesity, coupled with
a history of arthritis in her spine and knees. The ALJ relied
upon a report by Dr. Fichman from 1982 that had always been
part of the record to establish both obesity and arthritis in
plaintiff's spine. The ALJ relied upon later medical reports
submitted by Dr. Maslow and Dr. Shoemaker, but only to confirm
Dr. Fichman's earlier findings regarding obesity and arthritis
of the low back. The later reports referred also to arthritis
in the knees, but the findings as to obesity and spinal
arthritis were sufficient without more to meet the
requirements of section 10.10. To meet that listing, "it must
be established that the claimant suffered a history of pain
and limitation of motion of any weight bearing joint or spine."
Id. at 8 (emphasis added). Dr. Fichman's 1982 report and
plaintiff's own testimony as to pain support the ALJ's finding
of disability. Thus, to the extent that new evidence was
considered, it merely confirmed former evidence sufficient in
itself to demonstrate disability.
The question is whether the presence of such record
evidence, long since available to the Secretary, which was
found on remand to support a finding of disability, now bars
a conclusion that the government's position was "substantially
justified." We find that it does.
The court has been able to discover only one other case
involving the award of EAJA fees where the claimant suffered
from obesity and was found on remand to be disabled pursuant
to section 10.10. See Rosado v. Bowen, 823 F.2d 40 (2d Cir.
1987). In Rosado, the court concluded that the government's
position was substantially justified, because the award of
disability benefits upon remand was based on new evidence,
which "was far stronger and more detailed than that presented
at the first hearing." Id. at 43. In contrast, "the evidence of
her impairment was weak and
undeveloped at the time of the initial hearing." Id.
Here, the evidence available to the ALJ at the first hearing
in 1982 was the same evidence upon which ultimately claimant
was awarded disability benefits in 1990. The government's
position was not substantially justified.
c) Hourly Rate of Fees Requested
Under the EAJA, "[t]he amount of fees awarded . . . shall be
based upon prevailing market rates for the kind and quality of
the services furnished, except that . . . attorney fees shall
not be awarded in excess of $75 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."
28 U.S.C. § 2412(d)(2)(A)(ii) (emphasis added).
Plaintiff seeks an award of $3,808.56 in EAJA fees, based
upon 28 hours of work by her counsel at an hourly rate of
$136.02. Plaintiff derives this hourly rate by increasing the
statutory $75 rate according to inflation rates listed in the
Consumer Price Index for all Urban Consumers (CPI-U). The
controversy arises from plaintiff's choice of categories
within the CPI-U. Plaintiff has chosen the categories of
"Other Services" and "Legal Services" (a category within
"Other Services" until December 1986, but since then a
separate category). The government prefers "All Items" — by
all accounts the most frequently applied category, and one that
yields a lower rate. See Animal Lovers Volunteer Asso. v.
Carlucci, 867 F.2d 1224, 1227 (9th Cir. 1989); Ramon-Sepulveda
v. Immigration & Naturalization Service, 863 F.2d 1458, 1463
(9th Cir. 1988); Dabone v. Thornburgh, 734 F. Supp. 195, 204
(E.D.Pa. 1990).*fn1 We note, however, that the category of the
CPI-U to be used was not at issue in any of these cases.
Indeed, as another district court has observed, "[t]he case law
on this issue is sparse." Ofray v. Secretary of HHS,
741 F. Supp. 53, 54 (W.D.N.Y. 1990).
By the government's reckoning the "All Items" index yields
an hourly rate as of April 1990 of $105.91, or roughly $30 an
hour less than the rate sought by plaintiff. The fee sought
here represents an increase of about 81% for the period
October 1981 to April 1990, while the "All Items" increase is
only 41% for the same period. Thus, the inflation rate for the
combined categories plaintiff seeks to apply is about twice
that for "All Items," and yields an hourly fee about 30%
higher than "All Items."*fn2
Plaintiff argues that the higher rate is appropriate because
"the basis for payment of funds under the EAJA is to reimburse
the client for fees to be paid to an attorney," and "the fee
that must be paid to an attorney has risen disproportionately
to other costs," with the result that the "EAJA award covers
an increasingly small portion of the fee normally to be
charged [by] an attorney in such cases." Here, "any fee award
under EAJA serves to directly reduce any fee that must be paid
the [p]laintiff for the costs of representation in this
matter." Thus, "the rates charged by attorneys [are] the only
logical basis for an adjustment in fees based upon changes in
the `cost of living'." Plaintiff's Reply Brief at 7-8.
The government argues that use of the "All Items" index "has
been the customary practice in the past," and that the index
offered by plaintiff creates "an arbitrary, artificially high
hourly rate which is not representative of general inflation
and circumvents the intent of the cost-of-living allowance
provided in the EAJA." Defendant's Brief at 10.
1. Case Law On the Appropriate CPI-U Category
Plaintiff presents the question of which CPI category is
appropriate under the EAJA as one of first impression in this
Circuit. We agree. The court has been unable to discover any
case in which the Third Circuit has addressed which CPI
sub-index courts are to use for cost of living increases under
The Third Circuit has "expressly approved the use of the
Consumer Price Index in determining cost of living
adjustment[s] under the Equal Access to Justice Act."
Allen v. Bowen, 821 F.2d 963, 967 (3d Cir. 1987), citing
Natural Resources Defense Council, Inc. v. U.S. Environmental
Protection Agency, 703 F.2d at 700, 713. We measure the cost of
living adjustment to the $75 hourly rate from 1981. Id. In
Allen, the rate derived from the CPI was undisputed, and the
court did not discuss the propriety of using one or more
categories from the CPI. Id., 821 F.2d at 968.
In Malick v. Heckler, No. 85-4946, 1989 WL 831, 1989
U.S.Dist. LEXIS 68 (E.D.Pa. Jan. 9, 1989), the court rejected
"All Items" in favor of "`services,' a category into which
legal services presumably falls." Id., 1989 WL 831, 1989
U.S.Dist. LEXIS 68 at *17. Without explaining why, the court
found "this a more accurate number to apply." Id. The fee
amount awarded represented a 38.2% increase over the $75 fee,
only 15% higher than the "All Items" index provided, and netted
a fee of $103.50 per hour (less even than the amount the
government submits applies here under "All Items").
Ofray is the only reported decision on point that has come to
the court's attention. The court in Ofray rejected the "Other
Services" index in favor of "All Items."*fn3 Plaintiff argued
there, as here, that the "Other Services" index "more
accurately reflects the cost of legal services." Id., 741
F. Supp. at 54. In rejecting plaintiff's argument, the court
noted first that "the `All Items' index has generally been used
in the past".*fn4 Second, Congress had not prescribed the use
of any particular index. On the contrary, while "neither the
statute itself nor the legislative history indicates explicitly
that Congress meant for a particular index to be used, . . .
the use of the broad term `cost of living' seems to suggest
that Congress had in mind increases in the overall cost of
living, rather than increases in a specific category of the
CPI. Presumably, if Congress had intended that a specific index
be used, it would have said so." Id. The court also noted that
Congress could have amended the statute at the time of its
reenactment in 1985 to provide for use of a particular index,
but had not done so. Id. at 54-55. In refusing to depart from
the use of "All Items," the court concluded:
there is nothing to suggest that Congress
intended that any particular index be used. The
statute is framed in broad,
general terms, and I therefore decline to read
into it a requirement that a particular category
of the CPI be used.
Id. However, that "All Items" has generally been used in the
past, or that Congress did not intend that any particular index
be used, does not explain why "All Items" is the appropriate
index, or why "Other Services" is not. And while there is some
logic to the equation drawn between "the broad term `cost of
living' . . . [and] increases in the overall cost of living"
(which favors "All Items" over "Legal Services"), Ofray does
not develop that logic but relies instead on a vague sense of
congressional intent which we do not find persuasive.
In sum, we do not find Ofray, Malick, Davie or Torres
illuminating on why one index is more appropriate than the
other, and so must seek our own way to answer the question.
2. The Purpose In Awarding Counsel Fees Under the
In Natural Resources Defense Council, Inc. v. U.S.
Environmental Protection Agency, 703 F.2d 700, 713 (3d Cir.
1983), the Third Circuit described the purpose of awarding
attorney's fees to prevailing parties under the EAJA: "The
purpose of the statute was to encourage challenges to agency
action, and the cost of living adjustment provision seems
designed to provide a disincentive to agencies to prolong the
litigation process." See Animal Lovers, 867 F.2d at 1227
(disincentive to suit created by enormous resources of federal
government was rationale for EAJA); H.R.Rep. No. 1418, 96th
Cong., 2d Sess., at 5-6 reprinted in 1980 U.S.Code Cong. &
Admin.News p. 4984.
The legislative history states the purpose of EAJA fees as
follows: The statute
reflects a desire to limit the award of fees to
situations where participants have a concrete
interest at stake but nevertheless may be
deterred from asserting or defending that
interest because of the time and expense involved
in pursuing administrative remedies. . . . [T]o
insure that individuals will actively seek to
protect their rights vis-a-vis the government,
they must have the opportunity to recover the
costs of litigating. An administrative remedy in
these circumstances cannot be truly effective
unless a prevailing party is made whole.
Id. at 4993.
The court must decide which index here — one tied to
across-the-board inflation, or one tied directly to the cost of
legal services — better serves these purposes as a "cost of
If the fee rate serves to "encourage challenges to agency
action," it would seem that the higher the rate, the better.
On the other hand, if the same number of challenges would
result from a $200 an hour rate as from a $100 rate, the
purpose of the statute is served as well at $100 as at $200.
If the "cost of living adjustment" acts as a disincentive to
the government to prolong litigation, then the higher the
rate, the greater the disincentive for delay (and perhaps the
greater overall scrutiny of the litigation). What's plain is
that neither aspect of the statute's purpose identified by the
Third Circuit is disserved by authorizing use of an CPI
category that yields a higher fee rate, and the statute's
purpose may be better served by the higher rate.
However, we would be remiss to overlook that Congress did
set a limit of $75 an hour, and the provisions to depart from
that figure do not undermine the fact that Congress was
concerned about the public fisc, as well as the factors
identified by the court in Natural Resources Defense Council.
Thus, another court has written that the EAJA fee provision
"serves a dual purpose: to ensure adequate representation for
those who need it and to minimize the costs of this
representation to taxpayers." Baker, 839 F.2d at 1083. The
Baker court went on to describe how to accommodate twin
purposes that might conflict:
In order to satisfy both goals of the provision,
however, rates should be increased only to the
extent necessary to ensure an adequate source of
representation and should never exceed the
percentage by which the market rate attorneys' fees
have increased since the statute was enacted in
1981. At that time, Congress believed $75 was a
rate for awards under the Act. By permitting
cost-of-living increases, Congress intended to
provide attorneys at most with an hourly rate in
present-day dollars commensurate with
seventy-five dollars in 1981, but no more.
Id., 839 F.2d at 1084 (emphasis added). The Baker court's
formula sets a ceiling on attorneys' fees that is geared to the
increase in the "market rate" since 1981, with $75 as the
benchmark. The "Legal Services" category provides a measure of
that increase. And if the intention is to pay a rate equal to
what $75 would have purchased in the legal market in 1981, the
"Legal Services" rate is consistent with "an hourly rate in
present-day dollars commensurate with seventy-five dollars in
1981." (Beans, corn and hamburger may have appreciated less
than an hour of a lawyer's time, but plaintiffs must shop in
the legal market, not the supermarket.) Approving the "Legal
Services" category protects a plaintiff's ability to obtain
legal representation on par with the legal representation that
could have been obtained in 1981 for $75 per hour.
The only purpose that may not be served by approval of the
higher rate is minimizing the costs of legal representation to
taxpayers. That purpose is clearly expressed in the statute's
ceiling on fees. As noted above, if use of "Legal Services"
gains broad acceptance over "All Items", then fee awards will
increase by almost 30%, at current rates. However, it is also
possible that the increase under "Legal Services" will not
always be greater than under "All Items". Higher or lower, the
logic of using "Legal Services" rather than "All Items" still
obtains. And to the extent that "Legal Services" now yields a
higher rate, that higher figure serves the other purposes of
the statute at least as well — and perhaps better — than the
lower rate under "All Items".
There can be little doubt that, for their respective years,
the "Other Services" and "Legal Services" categories better
reflect the increased cost of legal services than does "All
Items", which is a composite of general inflation increases.
The question really is whether it is appropriate to equate the
statute's general language involving "an increase in the cost
of living" with the quite specific (and, for now, higher)
increase in the cost of attorneys. Given the number of cases in
which EAJA fees are available, the choice is of great practical
The court concludes that the logical course, one that
comports with the above purposes of the Equal Access to
Justice Act, is to adopt the use of "Other Services" and
"Legal Services" as reference categories under the Consumer
Price Index, in the manner set forth by plaintiff. We reject
the government's position that "All Items" is the appropriate
category for measuring "an increase in the cost of living,"
when the "cost" involved is a particular cost, that being the
cost of obtaining legal representation. Accordingly, we will
award plaintiff the amount she seeks, $3,808.56, based on her
attorney's 28 hours of work at an hourly rate of $136.02.