James Wilkett D/b/a Wilkett Trucking Co., Petitioner, v. Interstate Commerce Commission and United States of America,respondents, 844 F.2d 867 (D.C. Cir. 1988)

TOTAL $71,561.41We consider in turn the Government's various objections to the amounts requested.

The Availability of a Fee Award for the 1987 Memorandum

The Government contends that, even if Wilkett has a right to attorney fees in connection with the merits litigation and his 1983 memoranda in support of his fee application, he may not recover for the 1987 memorandum this court ordered him to submit. The Government notes that Wilkett waited four years from the time he filed his fee application before inquiring into its status. The Government conjectures that the supplemental memorandum we requested would not have been necessary had Wilkett earlier directed the court's attention to the delayed processing of his application. It therefore claims it ought not have to pay for Wilkett's indolence. See Respondents' Supplemental Memorandum in Opposition to Petitioner's Application for Fees and Other Expenses at 10 n. 12.

This argument is baseless. A court has authority to require supplemental briefing by the parties as it deems helpful. Indeed, we do so frequently, particularly where, as here, the law is and has been in a state of flux. As the Government recognizes, if the EAJA applies to the merits litigation of a case, it applies equally to work done in connection with the prevailing party's fee application. Any work ordered by this court is similarly compensable.

Furthermore, we are unwilling to hold Wilkett responsible for an error committed in our Clerk's Office. The blame for the delay in this case lies with the court, not the parties, and we will not penalize Wilkett for our error.

Finally, the rapidly developing case law and the statutory changes wrought by the 1985 EAJA amendments would likely have prompted us to request additional assistance from the parties even if Wilkett had inquired about the processing of his fee application after only a couple of years. Hence, we see no reason whatever to deny Wilkett recompense for work done on his 1987 memorandum.

Cost-of-Living Adjustments to the Maximum Statutory Fee

Section 2412(d) (2) (A) reads in part:

The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that ... (ii) 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.

This provision unambiguously licenses cost-of-living adjustments ("COLAs") to the $75 per hour ceiling established by the EAJA.3 In computing a COLA, however, we must answer two questions. First, what should serve as the baseline date in measuring the COLA? Second, should an adjustment be made to the year in which legal services were rendered, or to the year in which the fee award is paid?

The first of these questions was answered by our decision in Hirschey v. FERC, 777 F.2d 1, 5 (D.C. Cir. 1985). The baseline date for measuring an adjustment to the statutory cap is 1981, the year in which the EAJA became effective. The fact that this provision was not amended in 1985 when the sunset provision of the EAJA (which was initially to remain in force only three years) was repealed, does not entail that the $75 per hour cap should form a new baseline in 1985. There is no indication in the legislative history that Congress intended the 1985 EAJA amendments to have this consequence. In addition, our adoption of a new $75 per hour baseline in 1985 would have the anomalous result of entitling parties to collect larger fee awards for work done in 1984 than in 1986, since the former could obtain a three-year adjustment to the $75 per hour cap, whereas the latter could only receive a one-year adjustment to the same cap. We therefore adhere to our view in Hirschey that a COLA to the $75 per hour ceiling should be measured from 1981.

The second question has also been answered already by this court. In Massachusetts Fair Share v. Law Enforcement Assistance Administration, 776 F.2d 1066 (D.C. Cir. 1985), we refused to allow a COLA to the $75 per hour cap for work performed in 1981, even though fees were not awarded until 1985. See id. at 1069. We are constrained to follow that holding in reviewing Wilkett's fee request.4

The adjustment to the $75 per hour maximum statutory fee is relevant to two elements of Wilkett's request. First, one of Wilkett's lawyers billed at a rate of $85 per hour for work done in 1982-83. That hourly rate exceeds the cap of $75 per hour even with a COLA. Unless the "special factors" exception applies, that amount is not fully compensable under the EAJA.5

Second, Wilkett requests reimbursement for work performed on his 1987 Supplemental Memorandum at hourly rates of $100 and $125. These figures far exceed the $75 per hour cap with a COLA to November 1987, when most of the work on the Supplemental Memorandum was performed. According to the U.S. Department of Labor Consumer Price Index, the cost of living increased in the Washington, D.C.-Maryland-Virginia urban area by 27.77% between October 1981 and November 1987. This produces an adjusted cap of $95.83. Unless "special factors" justify increasing this amount, Wilkett's request for complete reimbursement for these services must be denied. Wilkett's attorneys billed 47.3 hours at a rate of $125 per hour, and 39.5 hours at a rate of $100 per hour, resulting in a total bill for the two attorneys involved of $9,862.50. If the adjusted cap of $95.83 is applied to these services, the fee award must be reduced to $8,318.04.6

Unusual Delay as a "Special Factor"

Section 2412(d) (2) (A) limits awards of attorney fees to the $75 per hour cap adjusted for increases in the cost of living "unless the court determines that ... a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." In the past, we have increased the adjusted cap to compensate parties for the cost of foregone investment attributable to delayed payment of the award, on the assumption that delay may be counted as a "special factor" justifying a higher award. See Hirschey, 777 F.2d at 5 (award calculated on basis of current billing rates rather than rates when services performed because processing of fee award was greatly delayed by clerical error in Clerk's Office); Action on Smoking & Health v. Civil Aeronautics Bd., 724 F.2d 211, 219 (D.C. Cir. 1984) (slight increase in cap allowed because payment of award occurred four years after services were rendered, where delay was partly attributable to agency's six requests for stays).

We continue to believe that delay may be regarded as a "special factor" under the EAJA. The Supreme Court's decision in Library of Congress v. Shaw, 478 U.S. 310, 106 S. Ct. 2957, 92 L. Ed. 2d 250 (1986), does not alter the law of the circuit on this point. The Court in Shaw held that, in the absence of express congressional consent, a fee award may not be adjusted upward to take account of inflation or the opportunity cost of capital. However, the statutory provision considered by the Court in Shaw was 42 U.S.C. § 2000e-5(k), which only allowed an award of "a reasonable attorney's fee." By contrast, the EAJA explicitly permits a court to raise the $75 per hour ceiling if it determines "that an increase in the cost of living or a special factor ... justifies a higher fee." Therefore, we adhere to the holdings enunciated in Hirschey and Action on Smoking, which read section 2412(d) (2) (A) to allow increases in the statutory cap to compensate parties for prolonged delay in payment when a court deems such increases equitable. In reaching this conclusion, we think it significant that the Supreme Court has said, after its decision in Shaw: "We do not suggest ... that adjustments for delay are inconsistent with the typical fee-shifting statute." Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, --- U.S. ----, 107 S. Ct. 3078, 3082, 97 L. Ed. 2d 585 (1987).

We emphasize, however, that no adjustment of the $75 cap other than that necessary to compensate for an increase in the cost of living is available in routine cases. Some delay in payment is inevitable, given the strain under which almost all courts labor. The normal delay attendant on litigation of a fee request can hardly be called a "special factor." Nor will we permit an increase in the cap in every instance when there has been a delay in payment that is unusually long. If, for example, a prolonged delay is attributable to the negligence of the party requesting fees, an upward revision of the adjusted cap might not be warranted. Where the delay is exceptional and not attributable to negligence or improper conduct by the prevailing party, however, an increase might be appropriate where the prevailing party is able to justify the increase it seeks.

In the instant case, we find that Wilkett has made the requisite showing with regard to work billed by one of his attorneys at $85 per hour in 1982-83. The small increase in the adjusted cap that Wilkett has requested for this work is amply justified by the exceptional delay, through no fault of his own, in our consideration of his application. We therefore allow recovery at a rate of $85 per hour for the attorney's services over five years ago.7

We refuse, however, to allow Wilkett to obtain attorney fees at hourly rates of $100 and $125 per hour for work performed in late 1987. Wilkett contends that we should permit recovery of fees in excess of the adjusted cap of $95.83 per hour, in order to compensate him to some extent for delayed payment of the fee award for services performed in 1982-83. See Petitioner's 1987 Supplemental Memorandum at 20-21. However, Wilkett asks us to do what the law plainly forbids. Our award of fees for work performed in 1987 is not tardy. Hence, the statute does not permit us to order reimbursement for this work at a rate above the adjusted cap of $95.83 per hour. Because we lack statutory authorization to grant Wilkett's illogical request for a roundabout, partial adjustment for the unusual delay in compensating him for his attorneys' earlier services, we cannot award him compensation for the "special factor" of protracted delay except to the extent that we permit recovery of hourly rates of $85 billed in 1982-83.

Allegations of Excessive Fees

The Government contends that several of the amounts claimed by Wilkett are excessive, and thus not permitted under the statutory allowance of "reasonable" attorney fees "based upon prevailing market rates for the kind and quality of the services furnished." 28 U.S.C. § 2412(d) (2) (A).

(a) The $75 Per Hour Rate for a First-Year Associate in 1983

The Government asserts that an hourly rate of $75 for work performed by a new associate in 1982-83 is unduly high. After reviewing the affidavits submitted by Wilkett's attorneys and evidence of local billing rates submitted in connection with the fee claim in Laffey v. Northwest Airlines, 572 F. Supp. 354 (D.D.C. 1983), which Wilkett has also supplied, we conclude that the $75 per hour rate charged by one of Wilkett's attorneys in 1982-83 is not unreasonable.

(b) Thirteen Hours Spent Researching Scope of Review

The Government charges that thirteen hours was an excessive amount of time for an experienced attorney to spend researching the scope of review of ICC licensing decisions, and that Wilkett should not be permitted to recover the entire amount his attorneys billed for this service. We reject the Government's contention. The portion of the fee request to which the Government points covers not only research concerning the scope of review, but also client conferences, the preparation of a timetable, and the drafting and filing of the Petition for Review. Moreover, only one-half hour was billed by a senior attorney. The bulk of the time--12.6 hours--was billed at a lower rate by a law clerk. We therefore grant Wilkett full recovery of the cost of this work.

(c) Total Hours Billed for Merits Brief

Wilkett requests $16,599 for 146.9 lawyer hours and 143.1 law clerk hours spent preparing the merits brief in this case. The Government argues that this bill is inflated, because the issues in the case were simple, the administrative record short, and the arguments before this court almost identical to those made before the ICC. Wilkett's attorneys, however, have prepared a detailed itemization of their work on the brief. Because we have no reason to question their probity, and because the number of hours billed does not strike us as unreasonable, we decline the Government's invitation to allow only partial recovery.(d) The $1,950 Unopposed Motion to Expedite

The Government notes that Wilkett's attorneys billed $1,950 for 24.8 hours spent in connection with Wilkett's unopposed motion to expedite his appeal. The Government considers this amount excessive, particularly in view of the fact that the short memorandum in support of the motion cited no cases. Wilkett's attorneys replied that because Wilkett Trucking's business was deteriorating, expedited consideration was important. They therefore thought it essential to prepare the motion carefully, even though it was unopposed. The absence of citations, they say, stems from the simple fact that their research failed to uncover authority on point.

In light of Wilkett's explanation and documentation in support of this work, we have no reason to question the hours submitted. The hours would seem unduly high only if counsel had prepared the motion with no effort at legal research. The fact that their legal research bore no fruit is no reason to deny them fees for the time spent on this work. Furthermore, counsel correctly recognized that there was no guarantee that their motion would be granted merely because it was unopposed. Therefore, it made good sense for them to research the issue.

(e) 72.9 Hours Spent Preparing for and Participating in Oral

Argument

Wilkett asks for $5,941.50 for 72.9 hours billed by his attorneys for their preparation for oral argument and participation therein. The Government decries this claim as unreasonable. It notes that each side was allotted only fifteen minutes for oral argument, and that the attorney who argued the case billed 51.4 hours, even though he had written the brief the previous year and had spent almost 65 hours drafting the reply brief two months prior to oral argument.

We agree with the Government that this bill is plainly excessive. Although seventy hours' preparation might be justified in a complex case, particularly when the lawyer arguing the case on appeal has not done considerable work on it in its earlier stages, this case did not warrant so great an expenditure of time. The issues it presented were not especially complicated and Wilkett's lead attorney had directed the litigation from start to finish. The normal amount of time for average cases was allotted for oral argument. We therefore grant an award of $2,970.75, which represents half the amount Wilkett requested.

(f) The $14,418 Reply Memorandum Supporting Wilkett's Fee

Application

Wilkett requests $14,418 in fees incurred in preparing the reply memorandum in support of his fee application. When Wilkett made this request initially, the Government suggested that the amount claimed was unduly high, given that the arguments largely tracked those presented in the memorandum accompanying his fee application. The Government acknowledged, however, that its allegation was necessarily speculative, since Wilkett had failed to itemize the work performed by his attorneys in connection with the reply memorandum.

On February 5, 1988, we directed Wilkett to provide an itemized bill for this work. Wilkett has done so, and his request seems to us adequately documented and not patently unreasonable. We therefore grant this request in full.

III. CONCLUSION

For the foregoing reasons, we accede to Wilkett's fee request with the following modifications. First, the $40,125 requested for work done on the merits phase of the litigation is reduced by $2,970.75, because the amount of time claimed in preparation for oral argument is unreasonably high. Second, the amounts claimed in fees associated with Wilkett's 1987 Supplemental Memorandum must be lowered, in accordance with the $95.83 per hour cap on attorney fees, from $10,125 to $8,580.54.

Accordingly, we award Wilkett $67,046.20 in attorney fees and other expenses, calculated as follows:

Wilkett's Request $71,561.41 MINUS: Excess Oral Argument 2,970.75 Excess 1987 Memorandum 1,544.46 ---------- TOTAL $67,046.20

So Ordered.

The 1985 amendments unquestionably apply to this case. The Extension and Amendment Act of 1985 provides that "the amendments ... shall apply to cases pending on ... the date of enactment of this Act." Pub. L. No. 99-80, Sec. 7(a), 99 Stat. 183, 186. This court has held that a case was pending on the date of enactment--August 5, 1985--even if only the fee petition, but not the merits of the underlying case, awaited judicial resolution on that date. Center for Science in the Public Interest v. Regan, 802 F.2d 518, 524 & n. 10 (D.C. Cir. 1986)

Thus, even if the Supreme Court should endorse a weaker test of "reasonableness" in deciding Underwood v. Pierce, 761 F.2d 1342 (9th Cir. 1985), cert. granted, --- U.S. ----, 107 S. Ct. 2177, 95 L. Ed. 2d 834 (1987) (1987), the Government's position in this case would still fail

In Library of Congress v. Shaw, 478 U.S. 310, 106 S. Ct. 2957, 92 L. Ed. 2d 250 (1986), the Supreme Court stated that, " [i]n the absence of express congressional consent to the award of interest separate from a general waiver of immunity to suit, the United States is immune from an interest award." Id. at 2961. This rule applies "whether the loss to be compensated by an increase in a fee award stems from an opportunity cost or from the effects of inflation." Id. at 2965. The principle enunciated in Shaw, however, does not bar a COLA to the $75 per hour cap in this case, because section 2412(d) (2) (A) explicitly permits adjustments to the cap to compensate attorneys for "increases in the cost of living."

Our holding in Hirschey, decided the same day as Massachusetts Fair Share, is not to the contrary. We wrote in Hirschey:

We recognize that there is arguably a question whether we should limit the fees for the hours billed each year by the adjusted statutory maximum applicable for that year, or rather limit them only by the current statutory maximum. We will adopt the latter approach, in order to compensate petitioner for delay, as we are authorized to do under the "special factors" criterion in EAJA.

777 F.2d at 5 (emphasis in original). As the final sentence of this passage makes clear, the COLA to the date of the award (rather than to the date when services were rendered) that we granted in Hirschey was justified under the "special factors" exception, not the EAJA's express allowance for enhancements to the cap to compensate for "increases in the cost of living." There is thus no inconsistency between our decisions in Hirschey and Massachusetts Fair Share.

Because we conclude that "special factors" justify awarding the full $85 per hour Wilkett requested for this work, see Part II.C.3 infra, we need not calculate the exact amount of the applicable COLA

Wilkett argues that the statutory cap "applies only to the amount of compensation paid solely and directly for a lawyer's services; it has no applicability to the amounts paid a lawyer for his or her overhead or other costs." Petitioner's Reply to Respondents' Opposition to Petitioner's Application for Attorneys' Fees at 37. Wilkett contends that the hourly fees billed by his attorneys include overhead and secretarial costs, and that once these costs have been deducted, the hourly fees do not exceed the adjusted cap. Wilkett concludes that his attorney fees are compensable in full because that portion represented by the attorneys' own work is below the cap and because the remainder is obtainable separately

This argument is meritless. As Wilkett himself acknowledges, in Hirschey we rejected a separate claim for overhead and secretarial expenses because they "are traditionally covered by attorneys' fees and not charged separately." 777 F.2d at 6. We adhere to that reasoning here. It is true, as Wilkett points out, that the House committee report states: "The ceiling on attorney fees relates only to the compensation of lawyers or agents (e.g., accountants themselves). It does not include their overhead expenses or other costs connected with their representation of a particular interest in a proceeding." H.R.REP. NO. 1418, 96th Cong., 2d Sess. 15, reprinted in 1980 U.S.CODE CONG. & ADMIN.NEWS 4984, 4994; see also S.REP. NO. 253, 96th Cong., 2d Sess. 16. Commentators who have reviewed this passage in view of the purposes of the EAJA and the statute's text have concluded, however, that "Congress cannot have intended to permit attorneys to recover separately under the Act for [overhead and secretarial] expenses." Robertson & Fowler, Recovering Attorneys' Fees from the Government Under the Equal Access to Justice Act, 56 TUL.L.REV. 903, 941 (1982). Overhead and secretarial expenses are almost invariably included in attorneys' hourly rates, and section 2412(d) (2) (A) expressly requires that fee awards be based on "prevailing market rates." We therefore construe the statutory cap as applying to the combined charges for attorneys' services, overhead, and secretarial work. In other words, we follow Hirschey, which forbids independent recovery of overhead and secretarial expenses.

Wilkett has not requested an increase in the amounts his attorneys actually billed for work performed at that time, but merely an increase in the $75 per hour cap to allow him to recover the full hourly fees one of his attorneys charged