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Refusing to read any “permissive” language into the Equal Access to Justice Act, a federal judge has ruled that fees are capped at $125 per hour for lawyers who bring claims against the federal government. In his 16-page opinion in Newmark v. West, U.S. District Judge Jan E. DuBois slashed nearly two-thirds of a fee request filed by attorneys Alice W. Ballard and Ralph E. Lamar in a suit brought by a former Veterans Hospital doctor under the Age Discrimination in Employment Act and as a Bivens action. Ballard and Lamar argued that under the EAJA, the award for their fees should be the same as an award under the ADEA against a private employer, rather than the statutory rate of $125 per hour. Ballard had requested $350 per hour for her time, and Lamar asked for $250 per hour for his time. EAJA, they said, includes both “permissive” and “mandatory” provisions relating to hourly rates for attorneys, and that courts are therefore authorized to award fees at the prevailing market rates. In their brief, they argued that the “permissive” language appears in EAJA Section 2412(b), which states: “a court may award reasonable fees and expenses of attorneys … to the prevailing party in any civil action brought … against the United States.” The provision is permissive, they said, because of the use of the term “may.” By contrast, they noted, Section 2412(d)(1) is “mandatory” because it uses the term “shall” in stating that “a court shall award to a prevailing party other than the United States fees and expenses … unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” Judge DuBois disagreed, saying, “Section 2412 should not be read as having two separate and distinct sections with permissive and mandatory components, but instead must be read as a whole.” DuBois found that the 3rd U.S. Circuit Court of Appeals has been unflinching in enforcing the cap — even when it was just $75 per hour prior to 1996. In its 1992 decision in Dewalt v. Sullivan, the 3rd Circuit said, “Congress has determined that attorney’s fees awarded under the EAJA are to be based upon ‘prevailing market rates,’ but that no fee may be awarded in excess of [the cap] 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.” Interpreting the instructions from several cases, DuBois found that “unless special circumstances are present, or unless the court determines that an increase in the cost of living justifies exceeding the $125 per hour cap, the court is not authorized to award attorney’s fees at a rate in excess of $125 per hour.” As the 6th Circuit put it, the cap “is a ceiling and not a floor,” DuBois noted. DuBois found that the $125 per hour limit on attorneys’ fees “is applicable to all awards of such fees under the EAJA.” Since Ballard and Lamar didn’t argue that they qualified for any of the special circumstances or cost-of-living considerations, DuBois found that the cap applied. DuBois also found that due to the nature of the settlement, Ballard and Lamar had no right to fees for their work on the Bivens claim. CASE HISTORY According to court papers, Dr. Arthur Newmark was employed as a physician at the Philadelphia Veterans Affairs Medical Center until he was fired on Dec. 5, 1997. In November 1999, Newmark filed a Bivens action against the U.S. Department of Veterans Affairs alleging violations of his rights to free speech and procedural and substantive due process. In March 2000, Newmark amended his suit to add a claim for age discrimination under the ADEA. The case settled in September 2000 when Newmark and his lawyers accepted a formal offer by the government of $297,154. The offer, made under Rule 68 of the Federal Rules of Civil Procedure, stated that it was a settlement of Newmark’s ADEA claims but was contingent upon his agreement to drop his Bivens claim. It also stated that the attorneys’ fees would be decided under EAJA. But Ballard and Lamar asked for $38,788, billing at their usual rates for every hour they had logged on the case. Assistant U.S. Attorney Susan Dein Bricklin argued that the government should be expected to pay only $11,162 because the fees should be limited to $125 per hour for the time spent on the ADEA claims. She also argued that paralegal time should be excluded. DuBois essentially agreed, but awarded $859 for the work of paralegal Merry Guben (at $95 per hour) for a total award of $11,909.75. DODGES THORNY QUESTION Due to the existence of the Rule 68 offer and its “absolutely clear” language, DuBois found that he was able to dodge a question that has divided the federal circuits and has never been addressed by the 3rd Circuit — whether attorneys’ fees for ADEA clams against the United States are allowed at all. Ballard and Lamar argued that the ADEA permits recovery of attorneys’ fees by incorporating Section 216(b) of the Fair Labor Standards Act, which expressly permits claimants in the private sector to recover attorneys’ fees against their employers. Some circuits — the 1st, 8th and 11th — have held that the United States is not liable for attorneys’ fees under the ADEA. Others — the 5th and D.C. circuits — have disagreed and allowed recovery of attorneys’ fees in an ADEA claim against the government. But DuBois found that he did not need to decide the question because the government’s offer of judgment “specifically provides for payment of such fees.” The language of the offer also acted as a bar to any fees for the Bivens claim, DuBois found, since it mentioned only the fees for the ADEA claim. “An offer of judgment made pursuant to Rule 68 is generally interpreted according to contract principles,” DuBois wrote. “The offer provides that an attorney’s fee for work on the ADEA claims … is to be paid. The offer does not provide for payment of any attorney’s fees for the Bivens claims,” he wrote. In the opinion, DuBois found that deleting fees for work on the Bivens claim meant that 10 hours should be subtracted from Lamar’s bill and 20 hours from Ballard’s bill.

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