Conn. State Dept. of Social Services v. Thompson

289 F.Supp.2d 198

CONNECTICUT STATE DEPARTMENT OF SOCIAL SERVICES, et al. v. Tommy THOMPSON

No. CIV.A.3:00 CV 2020 S.

United States District Court, D. Connecticut.

October 23, 2003.

COPYRIGHT MATERIAL OMITTED

Maite Barainca, Richard J. Lynch, Attorney General's Office, Health & Human

Services, Hartford, CT, for Dept. Social Services.

Lisa Bornstein, Richard Robert Brown, Martha Hirschfield, Hannah A. Stires, U.S. Department of Justice, Washington, DC, Patrick F. Caruso, John B. Hughes, U.S. Attorney's Office-NH, New Haven, CT, for HHS.

Gill W. Deford, Center For Medicare Advocacy, Inc., Willimantic, CT, for Philip Myrun.

Keith B. Gallant, Cummings & Lockwood, New Haven, CT, Rosemary Miller, McGovern, Attorney General's Office, Hartford, CT, Brad S. Plebani, Judith Stein, Center of Medicare Advocacy, Willimantic, CT, for Confesora Santiago.

RULING ON MOTION FOR AN AWARD OF ATTORNEYS' FEES AND EXPENSES

UNDERHILL, District Judge.

In October 1999, the Connecticut State Department of Social Services and a class of Medicare beneficiaries (collectively known as "the plaintiffs") brought a suit challenging a series of procedures in the Department of Health and Human Services' ("the government") system of administrative review of Medicare claims. Discovery in the suit commenced in February 2000, upon certification of the plaintiff class of Medicare beneficiaries. In February 2001, the plaintiffs filed their motion for summary judgment. Briefing was completed on the cross-motions for summary judgment in May 2001. The motions were argued on October 3, 2001 and decided in a written opinion dated September 9, 2002.

Plaintiffs prevailed on three of four issues presented. An order directing the government to send out written notices of initial determinations on all pending requests for payment, regardless of whether the claim had been filed properly, was issued in the case. The government then filed a motion for partial reconsideration under Rule 59(e). The motion was denied and judgment entered on February 20, 2003. The government filed a notice of appeal on March 7, 2003.

Pursuant to Local Rule 11(a) and the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, plaintiffs have moved for an award of attorneys' fees and expenses.

DISCUSSION

Statutory Requirements

Subsection 2412(d)(1)(A) of the EAJA provides that "a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action ... including proceedings for judicial review of agency action ...." 28 U.S.C. § 2412(d)(1)(A). There are four threshold requirements for an award of fees and expenses under the EAJA. The moving party must: (1) file within 30 days of final judgment; (2) be the prevailing party; (3) show that the government's position was not substantially justified; and (4) show an absence of special circumstances that would make an award of fees unjust. 28 U.S.C. § 2412(d)(1)(B).

The EAJA requires that an application for attorneys' fees and expenses be filed "within thirty days of final judgment in the action." Id. On February 20, 2003, the government's motion for Rule 59 reconsideration was denied and judgment entered. Plaintiffs filed their application for attorneys' fees and costs on March 24, 2003, well within the 30 days prescribed by the EAJA. The question whether a plaintiff is a "prevailing party" within the meaning of the fee-shifting statutes is a threshold question that is separate from the question of the degree to which the plaintiff prevailed. See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). For a plaintiff to be considered a "prevailing party," and thus eligible for an award of fees, it need not have succeeded on "the central issue" in the case, Texas State Teachers Association v. Garland Independent School District, 489 U.S. 782, 790-91, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989), and need not have obtained the "primary relief sought," Id. It is sufficient that the plaintiff succeeded on "any significant issue in [the] litigation," Id. at 791, 109 S.Ct. 1486 (internal quotation marks omitted), regardless of "the magnitude of the relief obtained," Farrar v. Hobby, 506 U.S. 103, 114, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), if he received "actual relief on the merits of his claim [that] materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Id. at 111-12, 113 S.Ct. 566.

Here, plaintiffs prevailed on three of the four substantive claims, obtaining an order and judgment providing declaratory and injunctive relief that required the government to provide full procedural rights at the initial determination stage of claims review. Accordingly, plaintiffs are prevailing parties under the EAJA.

Because plaintiffs have established that they have timely filed and are prevailing parties, the burden shifts to the government to make a "strong showing" that its position was substantially justified. Environmental Defense Fund, Inc. v. Watt, 722 F.2d 1081, 1085 (2d Cir.1983). That is, the government must demonstrate that its position had a reasonable basis in law and fact. Sotelo-Aquije v. Slattery, 62 F.3d 54, 57 (2d Cir.1995). The government argues that its position was substantially justified in that its interpretation of the regulations pertaining to an initial determination was reasonable. The September 9, 2002 ruling, however, clearly concluded that the government's interpretation of the regulations was patently unreasonable and that there was no substantial justification for the government's decision not to provide a notice of initial determinations to individual beneficiaries. As noted in that ruling, "[t]here can be no serious dispute that the Medicare regulations contemplate that the Secretary will provide a notice of initial determination not only in response to proper claims filed by providers, but also in response to requests for initial determinations filed by beneficiaries." Connecticut State Dep't of Soc. Serv. v. Thompson, 242 F.Supp.2d 127, 144 (D.Conn.2002). The plain language of the regulations requires that a notice of initial determination be sent in response to a beneficiary's request for determination, regardless of whether a complete claim had been filed by the health care provider. The government's actions were inconsistent with the plain language of the regulations and established principles of due process. See Mathews v. Eldridge, 424 U.S. 319, 348, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (noting that fundamental principles of due process require that those facing significant loss receive adequate notice of changes and an opportunity to respond). Accordingly, the government cannot meet its burden to make a strong showing that its actions were substantially justified.

Because there was no substantial justification for the government's actions, the final step of the EAJA inquiry requires that the court determine whether there are special circumstances that would make an award of attorney's fees unjust. The "special circumstances" exception to the EAJA is a "`safety valve' [that] ... gives the court discretion to deny awards where equitable considerations dictate an award should not be made." H.R.Rep. No. 1418, 96th Cong., 2d Sess. 5, 11, reprinted in 1980 U.S.C.C.A.N 4984, 4990. No such considerations exist in this case. Accordingly, plaintiffs have met the EAJA's threshold requirements for an award of attorneys' fees.

Calculation of the Award

Upon establishing its eligibility for an award of attorneys' fees and expenses under the EAJA, plaintiffs are entitled to a reasonable fee award. 28 U.S.C. § 2412(d)(1)(A). In order to determine a reasonable fee award under the EAJA, the district court calculates a "lodestar" figure, which is arrived at by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. 28 U.S.C. § 2412(d)(1)(B). Accordingly, determining the amount of the award will be a three-step process. The court will first determine the appropriate hourly rate for the attorneys and their support staff, and then determine the number of hours reasonably expended in litigating the matter. Finally, the hourly rate and total hours will be multiplied to determine the amount of plaintiffs' award.

Hourly Rate

Section 2412(d) provides a statutory cap of $125 per hour as the standard hourly rate. 28 U.S.C. § 2412(d)(2)(A). However, if 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," it may, in its discretion, make an award based on a higher hourly rate. Id.

Here, plaintiffs seek an enhancement of the statutorily provided $125 rate on the ground that their attorneys possessed specialized skills in benefits law that were required for this litigation. Moreover, the plaintiffs contend that a reasonable fee award should be based on prevailing market rates in the District of Connecticut. Each of the plaintiffs' three public interest attorneys, Deford, Plebani, and Stein, has been practicing law for more than 20 years. Decl. of Pl. Attorneys and Paralegals (doc. # 110). Based on an several affidavits from attorneys who practice in this District, plaintiffs argue that $325 per hour is an appropriate hourly rate for Attorneys Deford, Plebani, and Stein. Attorney Brad Gallant, a partner in private practice who assisted in the final stages of the litigation seeks $375 per hour, his 2002 standard hourly billing rate in private practice. Decl. of Keith Bradoc Gallant (doc. # 110) at 3, ¶ 10. The plaintiffs also seek reimbursement for work provided by their paralegals. The plaintiffs contend that $85 is an appropriate hourly rate for the work performed by the two paralegals.

The government opposes any enhancement of the...