Costa v. Commissioner of Social Security Administration

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.