Supreme Court Case On EAJA

The Supreme Court has granted a writ of certiorari in the case of Richlin Security Service Co. v. Chertoff, which will be of interest to attorneys who represent Social Security claimants. Here is a summary of the case from Northwestern University:

The Supreme Court has agreed to clarify whether companies that successfully sue the United States in administrative proceedings are entitled to recover the full market cost of paralegals who aided them.

In the case, Richlin Security Service Co. v. Chertoff, No. 06-1717, Richlin provided guards who watched over detainees at Los Angeles International Airport. Several years into Richlin's contract with the Immigration and Naturalization Service, the federal government concluded that it had misclassified -- and consequently underpaid -- the guards.

Richlin sued the government to recover its lost income and prevailed. Under the Equal Access to Justice Act, 5 U.S.C. Sec. 504, Richlin was entitled to recover "fees and other expenses" incurred in the proceedings.

When Richlin sought those fees, the agency refused to reimburse the company the full amount of money it had been billed for paralegal services, ranging from $50 to $135 an hour. Instead, the Board determined that the company's law firm had a $35 per hour cost for the paralegals and paid the company that amount.

The circuit court of appeals affirmed the decision. The court reasoned that paralegal work should be categorized as an "expense" compensable at cost rather than a fee, akin to an attorney fee, compensable at market rates. The court explained that because the statute capped attorneys' fees at $125 per hour but did not refer to paralegal fee rates, a market-based reimbursement for paralegals could induce firms to shift work to those paraprofessionals to escape the cap.

In asking the Court to review the decision, Richlin argued that the Eleventh Circuit, in Jean v. Nelson, 863 F.2d 759 (11th Cir. 1988) reached the opposite conclusion, creating a clean split between the cirucits.

Richlin also noted that in Missouri v. Jenkins, 491 U.S. 274 (1989), the Supreme Court held that under the analogous Civil Rights Attorney's Fees Awards Act, paralegal services are an element of attorney's fees and therefore should be compensated at a firm's billable rate, rather than at the cost to the firm.
The Court had concluded that permitting market reimbursement for paralegals would encourage attorneys to delegate appropriate work to paraprofessionals in order to provide more cost-efficient legal services.

In resisting the petition for certiorari, the government argued that while the statute was designed to encourage the filing of legitimate lawsuits against the United States, it was simultaneously designed to conserve public funds by reimbursing some services at cost rather than at a market markup.

Witness List For Social Security Subcommittee Hearing

Below is the tentative witness list for tomorrow's hearing before the Social Security Subcommittee of the House Ways and Means Committee:

David A. Rust, Acting Deputy Commissioner for Disability and Income Security Programs, Social Security Administration

Laura R. Haltzel, Specialist in Social Legislation, Congressional Research Service

Frances Rosenfield, Retired Postmaster of Albany, New York, on behalf of the National Association of Postmasters

Margaret Cagle, Teacher, Los Angeles Unified School District; Member, National Education Association, Chatsworth, California

John O’Sullivan, Secretary-Treasurer, Texas AFT, Austin, Texas

Terry Moakley, Vice President for Public Affairs, United Spinal Association, Jackson Heights, New York, on behalf of the Consortium for Citizens with Disabilities’ Task Forces on Social Security and Employment and Training

Joan Entmacher, Vice President and Director of Family Economic Security, National Women’s Law Center

Joseph Rugola, International Vice President, American Federation of State, County and Municipal Employees (AFSCME), Columbus, Ohio

Sue Melton, State President, Association of Texas Professional Educators, Austin, Texas

By the way, notice that David Rust is still just acting Deputy Commissioner for Income Security Programs. Commissioner Astrue has not yet been able to come up with someone permanent for that job.

DPC Meets With Astrue On Proposed Regulatory Changes

From the Disability Policy Collaboration (DPC) Capitol Insider:

DPC staff and other advocates met with Social Security Commissioner Michael Astrue [last week] regarding concerns about the impact of proposed rule changes on the Social Security system appeals process. While the public comment period has officially closed, advocates wanted to discuss what are considered the most problematic proposals, including new limits on submission of evidence within 5 days before the administrative law judge hearing or after the hearing. In addition to signing on to the comments of the Consortium for Citizens with Disabilities, the DPC had submitted testimony on behalf of The Arc [Association for Retarded Citizens] and United Cerebral Palsy.

No New Cases For FedROs

No surprise in this announcement in today's Federal Register:

We are modifying our disability administrative adjudication processes to suspend new claims to the Federal reviewing official (FedRO) level, now operating in the Boston region. Claims already transferred to the Office of the Federal Reviewing Official (OFedRO) for FedRO review will continue to be processed by the OFedRO and a related component of the disability determination process, the Medical and Vocational Expert System (MVES), commonly known as the Office of Medical and Vocational Expertise (OMVE). We are making these changes to ensure that we continually improve our disability adjudication process.

Bush Budget Message Coming In Early February

The Disability Policy Collaboration Capitol Insider reports that President Bush's budget for fiscal year (FY) 2009, which begins on October 1, 2008, will be released on February 4. Commissioner Astrue's requested budget for the Social Security Administration should be released at about the same time.

Lack Of Planning

From an editorial entitled "Lack of Planning" in the Las Vegas Sun:

Federal auditors say the Social Security Administration lacks a sufficient plan to address its backlog of hundreds of thousands of disability claims. ...

The report by the Government Accountability Office, the investigative arm of Congress, says 1.5 million claims remained unresolved at the end of 2006 and 576,000 of those were backlogged meaning they had exceeded the amount of time generally needed for resolution of claims. ...

Social Security Administration officials have said that in order to hire enough staff to adequately process the backlog, the agency needs $100 million beyond the $275 million increase that Congress approved in December. Both amounts are more than President Bush has proposed in his 2008 budget, which calls for funding at the existing level.

The GAO, however, said that regardless of whether funding is increased, the agency needs to improve the poor communication that exists among the agency’s state offices, where initial claims are handled. ...

Social Security Administration officials also must improve the monitoring of claims as they enter the appeals process, the GAO says, and must adequately plan and execute programs to address the backlog something the agency has failed to do.

It is sad to think that Americans who are unable to work because of injury or illness are helplessly watching bills pile up and mortgages go into arrears while waiting years for the federal government to decide whether assistance will be granted. Congress must see to it that the GAO’s recommendations are carried out.

Note here that the GAO report has succeeded in convincing a newspaper editorial writer that most of the backlog problem at Social Security is due to poor leadership at the Social Security Administration. In a sense this is true. Social Security's leaders have been unwilling to exhibit leadership by speaking up and telling the world that they lack adequate funding. Their inability to speak the truth has been coupled with a willingness to come up with increasingly desperate "Hail Mary passes" such as re-engineering, Hearing Process Improvement (HPI) and Disability Service Improvement (DSI) to create the illusion that there is a plan to address the backlogs. We are to the point now that the current Commissioner can only come up with pathetic, meaningless phrases such as "compassionate allowances" that, even on their face, offer no solution to the backlog problem.

While Congress was considering Social Security's operating budget for the current fiscal year, Astrue was willing only to hint that his agency needed more operating funds than provided for in the President's budget, even though he knew well that Bush's budget might not even be enough to keep the backlogs from growing. This is poor leadership indeed.

CBS Promotes Allsup

The CBS News website contains a fair amount of material promoting Allsup, Inc., a large non-attorney representative group.

16,000 Have Died Over The Last Two Years

The first part of the CBS News story on the Social Security disability backlogs ran tonight. If you missed watching it, you can check out the video online.

The report contained the news that 16,000 Social Security disability claimants had died while awaiting a hearing in the last two years.