NIEMEYER, Circuit Judge:
The plaintiffs in these three cases prevailed in district court on their appeals from the Social Security Administration's denial of their claims for disability benefits, and then, as prevailing parties, filed motions under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), for "fees and other expenses." In the motions, the plaintiffs sought reimbursement for the attorneys fees of Paul T. McChesney, a South Carolina attorney, as well as the attorneys fees of two out-of-state attorneys, who assisted McChesney in writing the briefs and other pleadings submitted to the district court.
While the district court granted the motions for the fees charged by McChesney, it denied the motion for the fees charged by the out-of-state attorneys because they were not licensed to practice law in the District of South Carolina and were not admitted pro hac vice in these cases. District
On appeal, the plaintiffs contend that McChesney's retention of out-of-state attorneys for assistance in brief writing did not preclude reimbursement for their fees under the EAJA, nor did it violate the District of South Carolina's local rules, and therefore, they argue, there were no "special circumstances" to justify denial of the out-of-state attorneys fees.
Even though the District of South Carolina appropriately regulates the practice of law in its court, we conclude that the use of nonadmitted lawyers for brief writing services does not present a "special circumstance" sufficient to deny a fee award as "unjust" under the EAJA. Accordingly, we vacate and remand these cases for reconsideration of the fee applications.
Andria Priestley, Barbara Peter, and Zella Davis filed claims for disability benefits with the Social Security Administration, and the Social Security Administration denied each of the claims. These plaintiffs appealed to the district court, successfully challenging the agency's rulings. As prevailing parties, they then filed motions for fees and expenses under the EAJA. Priestly sought reimbursement of $6,661.57; Peter, of $6,083.52; and Davis, of $8,639.62. Supporting the motions, the plaintiffs included the affidavit of their attorney, Paul T. McChesney, as well as the affidavits of out-of-state attorneys Charles L. Martin and Perrie H. Naides, or, in one case, Martin and paralegal David Tillett, who assisted McChesney in drafting briefs and pleadings for McChesney's review and filing. In the motions, the plaintiffs indicated that the time spent by McChesney accounted for roughly 15% to 25% of the time for which fees were claimed, and the time spent by Martin, Naides, and Tillett accounted for the remainder.
Although McChesney was a South Carolina attorney, admitted to practice law in both the State courts and in the district court, Martin and Naides were not admitted in the State, nor in the district court. Martin, a Georgia lawyer, and Naides, a Pennsylvania lawyer, practice their specialty of briefing Social Security appeals through their firm, Martin and Jones, in Decatur, Georgia. McChesney retained Martin and Naides because of their expertise, and these attorneys assisted McChesney by providing him with research and drafts of briefs and other filings. Martin and Naides never spoke with McChesney's clients, nor with opposing counsel. They limited their involvement to submitting, in draft form, briefs and papers, which McChesney then reviewed, edited, signed, and filed with the court. Martin was occasionally listed on filed documents as "attorney for plaintiff" or "on the brief," and on some of the papers filed, his name was accompanied by an electronic signature. Also, in his affidavits supporting the plaintiffs' applications for fees, Martin stated that he served as "counsel for the plaintiff," while Naides' affidavits stated that
Martin and Naides were not admitted to the South Carolina State bar and therefore did not qualify for admission to the bar of the district court. They also suggest that they did not qualify for pro hac vice admission because they associated with McChesney too regularly to satisfy the "occasional appearance" requirement. McChesney engaged Martin in dozens of cases over the years since at least 2003.
The Commissioner of Social Security opposed the plaintiffs' motions for fees and other expenses, arguing that because Martin and Naides were neither licensed in South Carolina, nor admitted pro hac vice, they had engaged in the unauthorized practice of law when assisting in these cases. The Commissioner claimed that the plaintiffs should not be reimbursed for their work at all, or, alternatively, that reimbursement be only at a reduced rate.
By separate orders entered in each of the cases before us, the district court granted the motions for attorneys fees to the extent that the plaintiff sought reimbursement for work performed by McChesney, but denied them with respect to reimbursement for work performed by Martin and Naides because they had not been admitted to practice in the District of South Carolina, either permanently or pro hac vice. In Davis, No. 10-1176, however, the court did grant the motion for fees for work performed by Tillett at a lower "paralegal rate" and also reduced the rate at which McChesney was compensated during his travel time. In support of its orders, the court explained that Martin had a long history of assisting McChesney with Social Security appeals and had previously been warned by other judges in South Carolina to gain admission under the court's local rules, in one form or other, before continuing that work. Martin's violations, the court found, contravened the public policy in favor of attorney licensure and thus presented the "special circumstance" in 28 U.S.C. § 2412(d)(1)(A) that would render fee awards for his and Naides' work "unjust."
From the district court's orders, which denied, for the most part, their motions for reimbursement of fees and expenses, Priestly, Peter, and Davis filed these appeals, which we consolidated by order dated March 23, 2010.
For their main argument, the plaintiffs contend that the district court erred by invoking the EAJA's "special circumstances" exception to deny reimbursement for work performed by the out-of-state attorneys Martin and Naides. They argue that the out-of-state attorneys' work in assisting McChesney did not violate any local rule of the district court and that there is no public policy against a South Carolina attorney hiring out-of-state contract attorneys to assist him in writing
In further support of their argument, they claim that the district court has a "long history of allowing the arrangement involved here in light of the full disclosure that has always been provided, and awarding fees for all the attorneys involved [and]... that the district court below itself never before interpreted its own rules to prohibit lawyers in one kind of case from hiring out-of-state lawyers to draft briefs — while permitting them to hire out-of-state paralegals."
The Commissioner argues that the district court reasonably applied the EAJA when it concluded that plaintiffs used a "hybrid form of representation" to circumvent the district court's local rules, and that such use of attorneys provided a special circumstance to render an award of fees for the out-of-state attorneys' work unjust.
In resolving the issue, we begin with an analysis of the EAJA's requirements. The EAJA provides that a district court "shall award to a prevailing party ... fees and other expenses ... incurred by that party in any civil action" against the United States "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) (emphasis added). The term "fees and other expenses" is defined to include:
28 U.S.C. § 2412(d)(2)(A).
Congress designed the exceptions to the mandatory award of fees and expenses to prevailing parties as a "safety valve" that would "insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of law that often underlie vigorous enforcement efforts" and that would provide district courts with "discretion to deny awards where equitable considerations dictate an award should not be made." Nken v. Holder, 385 Fed. Appx. 299, 302 (4th Cir.2010) (quoting H.R.Rep. No. 96-1418, at 11, 1980 U.S.C.C.A.N. 4984, 4990 (1980)). We thus review the district court's grant or denial of reimbursement for attorneys fees for abuse of discretion. See Pierce v. Underwood, 487 U.S. 552, 571, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). We will find such abuse if the district court applied "mistaken legal principles" or made "clearly erroneous factual findings." People for the
The broad definition of "fees and other expenses" in the EAJA indicates, without much doubt, that Congress intended to award a wide range of fees and expenses to the prevailing party in litigation with the government, unless one of the exceptions applies. Thus, the EAJA authorizes the reimbursement of fees for persons conducting studies, doing analyses, or issuing reports, as well as for attorneys fees. And consistent with this manifested intent, we have held that the statute's authorization for reimbursement of attorneys fees includes authorization for reimbursement for work performed not only by attorneys but also by persons doing "tasks traditionally performed by an attorney and for which the attorney would customarily charge the client," regardless of whether a licensed attorney, paralegal, or law clerk performed them. Hyatt v. Barnhart, 315 F.3d 239, 255 (4th Cir. 2002); see also Richlin Sec. Serv. Co. v. Chertoff, 553 U.S. 571, 581, 128 S.Ct. 2007, 170 L.Ed.2d 960 (2008) (holding that the term "attorneys fees" includes "fees for paralegal services").
Accordingly, we have little difficulty in concluding that the EAJA authorizes the plaintiffs to receive reimbursement for work performed by an attorney, regardless of whether the attorney performing the work is admitted to practice or not. We therefore conclude that the EAJA authorizes reimbursement for work of the type performed by Martin and Naides in assisting McChesney with brief writing and related tasks.
In denying reimbursement for the work performed by Martin and Naides, the district court relied in essence on their failure to be admitted under the local rules as attorneys in the District of South Carolina or under the local rules' pro hac vice provisions, concluding that because these attorneys were performing legal services in South Carolina on a regular basis and therefore were engaged in the unauthorized practice of law, a fee award to them would be unjust.
In relying on this reasoning, we believe that the district court improperly linked the requirements for the practice of law in the district court with the requirements of the EAJA, thus limiting the scope of fees that the EAJA otherwise authorizes. And in doing this, the court ended up effectively sanctioning out-of-state attorneys for purported violations of its local rules by denying reimbursement for their fees under the EAJA. We conclude that the issues should not be so mixed, at least in the circumstances of this case, as they actually are separate matters.
The district court was, of course, rightfully concerned about the unauthorized practice of law in its court, and it has the authority to regulate that through local rules and an array of appropriate sanctions. We need not determine, however, whether Martin and Naides violated any local rules or, if they did, what the appropriate sanctions would be, because the violation in question, if any, was so attenuated and technical that it would not affect the plaintiffs' claims for fee awards under the EAJA, which does not condition eligibility for reimbursement on whether an attorney is admitted.
The violation hypothesized by the dissent and found by the district court would presumably require a showing that Martin and Naides "appeared" in the district court without court authorization or licensure in the District of South Carolina, such that their work constituted the unauthorized practice of law. In support of this view, the dissent relies on Black's Law Dictionary, which defines "[a]ppearance by attorney"
Yet the record strongly suggests that Martin and Naides did not "appear" before the district court. Indeed, their role was quite limited. Martin and Naides never physically appeared in court or before the judge; they never filed a brief or paper in the court; they never communicated with opposing counsel; they never even communicated with the plaintiffs; their work agreement was with McChesney, a member of the district court bar, and not with the plaintiffs; and they prepared only drafts of briefs and papers which they then submitted to McChesney for editing, signing, and filing with the court. Even though their names were sometimes included on briefs as attorneys for the plaintiffs and they stated in their EAJA affidavits that they were attorneys for plaintiffs, the nature of their brief-writing function in supporting McChesney never changed. See, e.g., Dietrich Corp. v. King Res. Co., 596 F.2d 422 (10th Cir.1979). Indeed, McChesney could just as well have retained an English professor or law professor to assist him in writing briefs and submitted those charges as paralegal type fees, with a legitimate expectation that his clients would receive reimbursement.
In Dietrich, two Colorado law firms retained a law professor at the University of Colorado, who was a "nationally recognized expert in the field of legal accounting" as a legal consultant. The professor was admitted to practice law in Illinois, but not in Colorado, where the suit was tried. When it came time for the court to apportion fees and costs, the law firms requested that the professor be compensated at an agreed upon rate. The bankruptcy trustee, however, objected, arguing that the professor had engaged in the unauthorized practice of law in Colorado. The trustee relied on letters which "showed the law firms had not employed [the professor] as a consultant, law clerk or paralegal, but rather `at all times ... as a practicing lawyer a fortiori, in the area of his specialty, the liability of accountants.'" Dietrich, 596 F.2d at 423. While the district court sustained the trustee's objection, the Tenth Circuit reversed, holding that the professor "was entitled to be treated as a lawyer whose services ... did not constitute the unauthorized practice of law." Id. at 426. It explained:
Id. (citing Spanos v. Skouras Theatres Corp., 364 F.2d 161, 169 (2d Cir.1966)). Quoting an American Bar Association ethics opinion, the court continued:
Id. (emphasis modified).
The court thus announced a commonsense rule: there is no unauthorized practice of law when "an individual trained in the law acts as a filter between [an] unlicensed person ... and the lay client, adding and exercising independent professional judgment, and, importantly, is an officer of the local court subject to its discipline." Id. McChesney "acted as a filter" between the plaintiffs and Martin and Naides, the nonadmitted Social Security specialists, with the result that their brief-writing assistance was likewise permissible. See D.S.C. Civ. R. 83.I.04 (requiring that parties be represented by "at least one member of the Bar of this Court who shall sign each pleading").
While it may be unjust to compensate individuals who, without proper licensure, directly represent clients and, on their behalf, file papers and appear before the court, there is nothing inequitable or "unclean" about the supporting role that Martin and Naides actually played in these cases. See Dietrich, 596 F.2d at 426. Their purported violations, if any, of the local rules would be quite thin and, at most, of a technical nature. Moreover, Martin and Naides would have been largely without notice that their actions violated the local rules. Accordingly, the doctrine of "unclean hands" is not supportable, and the nature of Martin and Naides' work cannot be a special circumstance making the EAJA award for their work unjust in these cases.
Because the EAJA provides reimbursement for fees incurred by persons, whether licensed attorneys or not, we believe that the district court must reconsider the fees of Martin and Naides. To be sure, it could choose to treat them as nonattorneys who provided support to McChesney, similar in nature to the work performed by other nonadmitted attorneys, such as law clerks or paralegals. Surely if Martin and Naides were summer associates in McChesney's operation, not admitted to practice, their time would be billable to clients and reimbursable under the EAJA. In refusing to consider their work at least on this basis, we conclude that the district court relied on a mistaken interpretation of the EAJA and therefore abused its discretion. Accordingly, we vacate the district court's orders in these cases and remand for reconsideration of plaintiffs' motions for reimbursement of fees and expenses. The court should take the work of Martin and
In calculating any fee awards for the work performed by Martin and Naides, the district court should determine the prevailing market rate for services of the kind provided by them, based on their training, skill, and experience; provided that in no event may this rate be less than the rate traditionally used for summer associates, paralegals, and other nonattorneys performing legal work. See Chertoff, 553 U.S. at 581, 128 S.Ct. 2007; 28 U.S.C. § 2412(d)(2)(A).
Plaintiffs also contend that in Davis, No. 10-1176, the district court abused its discretion when it reduced the rate at which McChesney was compensated for travel time. Plaintiffs acknowledge that rate reductions are legitimate when an attorney voluntarily chooses to serve remotely located clients. But they claim that in this case, McChesney's travel was necessitated by factors out of his control. Specifically, "[i]n the District of South Carolina, Social Security cases are assigned in rotation to judges and divisions throughout the State, without regard to the jurisdiction in which the plaintiff resides." Because this rotation scheme was the cause of McChesney's travel, the plaintiffs argue that it was unreasonable to treat it as voluntary and thus subject to a lower rate. While the argument might be a legitimate one to make to the district court, the court, nonetheless, had broad discretion when ruling on fee requests brought under the EAJA to weigh that argument along with others. See United States v. Cox, 575 F.3d 352, 358-59 (4th Cir.2009). We cannot conclude that, in the circumstances here, the district court's adjustments of fees for travel time was an abuse of discretion. See Cooper v. United States R.R. Retirement Bd., 24 F.3d 1414, 1417 (D.C.Cir.1994) (compensating travel time at a reduced rate).
In view of our determination to remand these cases for an award for fees charged by Martin and Naides, we do not reach the plaintiffs' other arguments challenging the district court's analysis and application of the "special circumstances" exception to fee awards under the EAJA.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS
DAVIS, Circuit Judge, concurring in part and concurring in the judgment:
I agree entirely with my friend Judge Niemeyer's unimpeachable statutory analysis of the EAJA and with the resulting conclusion that the use of non-admitted contract attorneys to perform legal work in social security disability appeals is not a "special circumstance" justifying the withholding of attorney's fees for such work. As Judge Niemeyer persuasively demonstrates, the district court erred in its improper intermixing of the requirements for a lawyer's appearance before the district court with the requirements of the EAJA; the two are indeed separate matters. Thus, I concur in the judgment vacating the orders in these cases and remanding for reconsideration of plaintiffs' motions for fees and costs.
I also respect my friend Judge Hamilton's full-throated defense of the local rules of the United States District Court for the District of South Carolina and of the prerogative and indeed, the duty, of the judges of that district to enforce those rules, including those aimed at ensuring attorneys' competence as advocates and
Martin is a specialist in social security disability appeals litigation. He is a member in good standing of the Georgia Bar, maintaining offices in Decatur, Georgia, outside of Atlanta, and practices before the United States District Court for the Northern District of Georgia. His expertise in such cases has prompted local lawyers in the District of South Carolina and the Western District of North Carolina to retain his services in brief-writing in social security disability appeals.
Some, but not all, of the judges in those districts, in the face of objections by the Commissioner of Social Security, and invoking their local rules as authority, have refused, in whole or in part, to award attorney's fees to prevailing social security disability claimants for the work performed by Martin and members of his firm as contract attorneys. Priestly v. Astrue, No. 6:08-546, 2009 WL 4267076 (D.S.C. Nov. 24, 2009); Mortenson v. Astrue, No. 8:07-547, 2009 WL 4676510 (D.S.C. Dec. 9, 2009), aff'd on other grounds, 428 Fed. Appx. 248, 2011 WL 1690068 (4th Cir. May 5, 2011). Other judges have rejected the Commissioner's argument but have recommended that Martin seek pro hac vice admission in future cases, in part "[t]o avoid confusion over this issue." Pace v. Astrue, 9:07-cv-546 (D.S.C. May 9, 2008); see also Tadlock v. Astrue, No. 8:06-cv-3610 (D.S.C. Apr. 9, 2009); Freeman v. Astrue, No. 0:06-cv-2255 (D.S.C. July 24, 2008). In still other cases, district judges
As the lead district court opinion in these appeals notes, the conflict over EAJA fees arose because, as vigorously urged by the Commissioner in opposing (in whole or in part) an award of attorney's fees to prevailing parties in social security disability appeals, attorneys Martin and his associate are not admitted to the bar of the United States District Court for the District of South Carolina and, specifically, they were not admitted pro hac vice. See Mortenson v. Barnhart, 2009 WL 4267218, at 2 ("The question, as the court sees it, is whether attorney Martin should be compensated at the same rate as a plaintiff's attorney of record when attorney Martin, though he no doubt provided valuable and skillful work, is not licensed to practice law in this district."); see also Mullinax v. Astrue, 768 F.Supp.2d 829, 831 (D.S.C. 2010) ("In at least four cases since May 2008, courts in this District have cautioned Mr. Martin against continuing to represent clients in the District of South Carolina without applying for pro hac vice admission in this District.").
Therefore, under the reasoning of the orders under review, the only way for these lawyers to provide (and be paid for) their specialized brief-writing services to attorney McChesney, or other local attorneys in South Carolina, would be for them to be admitted to the bar of the District of South Carolina. Consequently, under Local Civil Rule 83.I.03, the only way for them to gain admission to practice in the District of South Carolina is for them to become members of the Bar of the Supreme Court of South Carolina. And, under Rule 402(c)(5) of the South Carolina Appellate Court Rules, the only way for them to become members of the Bar of the Supreme Court of South Carolina is to pass the South Carolina bar examination.
Put simply, in light of the local rules as applied by the district judges in these cases, the United States District Court for the District of South Carolina does not permit Martin to provide contractual legal services to McChesney unless he passes the State of South Carolina's three-day-long bar exam. With respect, in my judgment, under the circumstances of the cases before us, this requirement imposes a journey to a bridge too far.
Furthermore, social security disability law is entirely federal, and its practice requires no knowledge of South Carolina law. It is also a unique, highly technical area of practice in which specialization can only benefit all parties to the litigation, including the court itself.
District Judge Fitzwater of the Northern District of Texas has observed how specialization actually works in the Commissioner's favor in the context of motions for the payment of fees under the EAJA:
Sandoval v. Apfel, 86 F.Supp.2d 601, 608-09 (N.D.Tex.2000). Similarly, I can discern no compelling reason why the Commissioner would seek to prevent (by contesting reasonable payments otherwise due under the EAJA) a local attorney from utilizing the brief-writing services of an expert social security disability practitioner. As Judge Niemeyer's opinion convincingly shows, non-admission to the district court bar hardly justifies non-payment as a matter of statutory interpretation.
Questions regarding the wisdom and fairness of the application of the district's local rules to one side, there is respectable and persuasive authority supporting the proposition that a local attorney's use of non-admitted contract attorneys in social security appeals is entirely appropriate. See Rose-Velasquez v. Astrue, 2008 WL 1765659, at * 1-2 (D.Utah April 16, 2008); Sandoval, 86 F.Supp.2d at 604-11.
The irony evident in this case should not be lost on anyone. The rules adopted by this court (as mandated by the Federal Rules of Appellate Procedure
Manifestly, the perquisites of "local legal culture" have their limits. Cf. Frazier v. Heebe, 482 U.S. 641, 646, 107 S.Ct. 2607, 96 L.Ed.2d 557 (1987) (exercising supervisory authority and applying "right and justice" standard to find a local rule of the Eastern District of Louisiana requiring that attorneys who were members of the bar of the State of Louisiana either reside in or maintain an office in Louisiana to qualify for admission to the bar of that district court was "unnecessary and irrational"). One could reasonably conclude that those limits have been exceeded in these cases.
HAMILTON, Senior Circuit Judge, concurring in part and dissenting in part:
I agree with the majority that, in Davis, the district court did not abuse its discretion when it reduced the rate at which attorney Paul McChesney (Attorney McChesney) was compensated for travel time under the Equal Access to Justice Act (the EAJA), 28 U.S.C. § 2412(d), and therefore, this portion of the district court's order ruling on Davis' motion for attorneys' fees under the EAJA should be affirmed. However, because, in my view, the district court did not abuse its discretion in concluding that special circumstances existed that make an award of attorneys' fees for the professional legal services of attorney Charles Martin (Attorney Martin) and his subordinate attorney Perrie Naides (Attorney Naides) in the present three cases unjust, I would also affirm the portion of the same order denying plaintiffs Zella Davis (Davis), Barbara Peter (Peter), and Andria Priestley (Priestley) such attorneys' fees under the EAJA. Accordingly, I dissent in part.
Proper analysis of the issues presented in this consolidated appeal require a full account of the relevant facts that informed the district court's exercise of discretion in denying the attorneys' fees at issue.
After the Social Security Administration denied Social Security disability benefits to Davis, Peter, and Priestley (collectively the Plaintiffs), each appealed their respective denials to the district court and prevailed.
28 U.S.C. § 2412(d)(1)(A) (emphasis added).
Davis sought $8,639.62 in fees under the EAJA for 35.75 hours of attorney time, at $172.46 per hour, and 29.50 hours of paralegal time at $83.87 per hour. Of the 35.75 hours of attorney time, Paul T. McChesney (Attorney McChesney) performed 15.50 hours, while Attorney Martin performed 20.25 hours.
Attorney McChesney is a member of the Bar of the Supreme Court of South Carolina and is a member of the Bar of the district court, which Bar "consists of those attorneys heretofore admitted and those attorneys hereafter admitted as prescribed by Local Civil Rule 83.I.01-03." Local Civil Rule 83.I.01DSC. In order to be eligible for admission to the Bar of the district court, a person must, inter alia, be a member in good standing of the Bar of the Supreme Court of South Carolina. Local Civil Rule 83.I.02DSC. Attorney Martin is a licensed member of the Bar of the Supreme Court of Georgia, but is not a member of the Bar of the district court. Moreover, Attorney Martin never applied to be admitted pro hac vice in Davis' case, pursuant to Local Civil Rule 83.I.05DSC, entitled "Appearances by Attorneys not Admitted in the District." Id.
Notably, although Davis and Attorney McChesney had entered into a fee agreement at the inception of their attorney-client relationship, Davis and Attorney Martin never entered into such an agreement. Such fee agreement gave McChesney the right to "get other lawyers to help" in Davis' case, but specified that such help would be "at no extra charge" to Davis. (J.A. 182). It also provided that "[a]ssociated lawyers assume joint responsibility for representation." Id.
Davis' opening brief on the merits below and reply brief on the merits below declared that Attorney Martin was "On the brief," identified Attorney Martin as "Attorney for Plaintiff," gave his Georgia Bar number, his office address in Georgia, his office telephone number, and his office fax number. (government's Addendum at 2); Davis v. Astrue, No. 2:07-cv01621-JFA (D.S.C. January 31, 2008) (Docket Entry No. 25 at 12). Davis' opening brief in support of her motion for attorneys' fees under the EAJA states, in relevant part: "In the representation of the claimant in the district court Attorney Charles L. Martin spent approximately 20.25 hours representing plaintiff before the court...." (J.A. 169).
In his affidavit that Attorney Martin provided in support of Davis' motion, entitled "AFFIDAVIT OF COUNSEL FOR THE PLAINTIFF," Attorney Martin attested:
(J.A. 176). He signed the affidavit (in the form of a handwritten signature) and identified himself as "Attorney for Plaintiff." (J.A. 178). Attorney Martin also gave his Georgia Bar Number and office information. The attached time summary reflected that Attorney Martin provided substantial case management services, performed legal research, reviewed all filings in the case, drafted the opening and reply briefs ("including final proofing and revision"), and drafted Davis' motion for
Peter sought $6,083.52 in attorneys' fees under the EAJA for 34.45 hours of attorney time, at $176.59 per hour. Of the 34.45 hours of attorney time, McChesney performed 4.75 hours, Attorney Martin performed 6.70 hours, and Attorney Naides performed 23.00 hours. Attorney Naides is a subordinate of Martin in his law firm. She is a member of the Bar of the Supreme Court of Pennsylvania, but is not a regular member of the district court Bar. Neither Attorney Martin nor Attorney Naides applied to be admitted pro hac vice in Peter's case.
Peter and Attorney McChesney entered into a fee agreement at the inception of their attorney-client relationship, but Peter never entered into a fee agreement with Attorney Martin or Attorney Naides. Similar to the language contained in the fee agreement between Davis and Attorney McChesney, the fee agreement between Peter and Attorney McChesney provided: "We can hire other attorneys, but that won't cost you anything." (J.A. 314). However, the Peter/Attorney McChesney fee agreement lacks language to the effect that associated lawyers assume joint responsibility for representation.
In Peter's case, Attorney Martin signed the opening brief on the merits (in the form of an electronic signature), stated in such brief that he was "On the brief," identified himself as "Attorney for Plaintiff," gave his Georgia Bar number, his office address in Georgia, his office telephone number, and his office fax number, (government's Addendum 3); Peter v. Astrue, No. 3:07-cv-03785-JFA-JRM (D.S.C. May 5, 2008) (Docket Entry No. 14 at 35). Peter's opening brief in support of her motion for attorneys' fees under the EAJA states that Attorney Martin "spent approximately 6.70 hours representing plaintiff before the court...." Peter, No. 3:07-cv-03785-JFA-JRM (D.S.C. Sept. 15, 2008) (Docket Entry No. 21-1 at 2). In support of Peter's motion for attorneys' fees under the EAJA, Attorney Martin provided an affidavit, entitled "AFFIDAVIT OF COUNSEL FOR THE PLAINTIFF," stating:
(J.A. 308). He signed the affidavit (in the form of a handwritten signature) and identified himself as "Attorney for Plaintiff." (J.A. 310). He also gave his Georgia Bar Number and office information. Id. The attached time summary reflected that Attorney Martin provided substantial case management services, reviewed all filings in the case, drafted the opening brief ("including final proofing and revision"), and drafted Peter's motion for recovery of fees under the EAJA. (J.A. 311).
In support of Peter's motion for fees under the EAJA, Attorney Naides Martin provided an affidavit attesting to the following:
(J.A. 312). Attorney Naides signed the affidavit (in the form of a handwritten signature) and identified herself as "Attorney for Plaintiff." (J.A. 313). The same time summary submitted in support of the time spent by Attorney Martin in the case showed that Attorney Naides read the transcript from the administrative proceedings, drafted the statement of the
Priestley sought $6,661.57 in attorneys' fees under the EAJA, for 38.80 hours of total attorney time, at $171.69 per hour. Of these 38.80 hours, McChesney performed 5.75 hours; Attorney Martin performed 8.55 hours; and Attorney Naides performed 24.50 hours.
Priestley and Attorney McChesney entered into a fee agreement at the inception of their attorney-client relationship, but Priestley never entered into a fee agreement with Attorney Martin or Attorney Naides. The fee agreement between Priestley and Attorney McChesney provided: "We can get other lawyers to help at no extra charge." (J.A. 50). Moreover, it provided that "[a]ssociated lawyers assume joint responsibility for representation." Id.
Attorney Martin signed the opening brief on the merits (in the form of an electronic signature), stated in such briefs that he was "On the brief," identified himself as "Attorney for Plaintiff," and gave his Georgia Bar number, his office address in Georgia, his office telephone number, and his office fax number. (government's Addendum 4); Priestly v. Astrue, No. 6:08-cv-00546-GRA-WMC (D.S.C. Sept. 22, 2008) (Docket Entry No. 18 at 32). With the exception of the electronic signature, the same information is repeated in the reply brief on the merits.
Notably, by the time Priestley had filed her motion for fees under the EAJA, Attorneys Martin and Naides had been cautioned by the district court at least three times (in other Social Security disability appeals) against continuing to represent clients in the United States District Court for the District of South Carolina without applying for pro hac vice admission. Not surprisingly, when Attorney Martin drafted the brief in support of Priestley's motion for fees under the EAJA, Attorney Martin changed his standard language in such brief, previously stating that he and Naides represented the plaintiff, to language characterizing his activity in the case as "providing brief writing services to Attorney Paul Townsend McChesney" and characterizing Attorney Naides' activity in the case as "reviewing the transcript and preparing the statement of the case in support of Paul Townsend McChesney." (J.A. 37). In the same brief, Attorney Martin states that he is "On the brief," identifies himself as "Attorney for Plaintiff," and gives his Georgia Bar number and other office information.
As he did in Davis and Peter, Attorney Martin entitled the affidavit that he provided in support of Priestley's motion for attorneys' fees under the EAJA as "AFFIDAVIT OF COUNSEL FOR THE PLAINTIFF." (J.A. 44). However, similar to Attorney Martin's change in the description of his activity in the brief in support of Priestley's motion for attorneys' fees under the EAJA, Martin changed his standard affidavit language to state:
(J.A. 44). He signed the affidavit (in the form of a handwritten signature) and identified himself as "Attorney for Plaintiff." (J.A. 46). The attached time summary, which accounts for the time of Attorney Martin and Attorney Naides reflects the same division of labor as is found in the time summary in Peter.
(J.A. 48). Attorney Naides signed her affidavit (in the form of a handwritten signature): "Attorney for Plaintiff." (J.A. 49).
Notably, neither Davis, Peter, nor Priestley ever sought fees under the EAJA for the time of Attorney Martin or Naides at a rate lower than that of Attorney McChesney. Indeed, the record reflects that throughout this litigation, the fees sought under the EAJA for the time of Attorney Martin and Naides have always been at the same rate as attorney time for Attorney McChesney. Moreover, the record makes abundantly clear that the Plaintiffs were seeking only attorneys' fees for services rendered by Attorneys Martin and Naides at their normal hourly rate as attorneys under the EAJA fee scheme, as opposed to some lesser rate as would be awarded for mere behind-the-scene brief writing, paralegal services, or layman services.
Citing Local Civil Rule 83.I.05DSC, which requires attorneys who are not admitted to practice before the district court and who desire to appear before the district court to be admitted pro hac vice, the government argued that attorneys' fees for Attorneys Martin and Naides should be compensated, if at all, at a lower hourly rate than McChesney, a position quite contrary to Attorney Martin's and Attorney Naides' demand for attorneys' fees at their normal hourly rate as attorneys under the EAJA fee scheme.
Of relevance in the present appeal, in all three cases, the district court agreed with the government that awarding attorneys' fees under the EAJA for the work of Attorney Martin in Davis and Attorneys Martin and Naides in Peter and Priestley would be unjust, and therefore denied attorney fee awards in this regard under the EAJA. As noted previously, the same district court judge simultaneously ruled on Davis' and Peter's respective motions for attorneys' fees under the EAJA, while a different district court judge subsequently ruled on Priestley's motion for attorneys' fees under the EAJA.
In Davis and Peter, the district court aptly described Attorney Martin as a "fixture" in the United States District Court for the District of South Carolina since 2003. (J.A. 224). As the district court correctly went on to state:
(J.A. 224). The district court listed all fifty-eight cases by name and civil action number in an attachment to its order. The district court next made the following findings of fact, which are undisputed:
(J.A. 224-25).
In the district court's view, Attorney Martin's history in the District of South Carolina compelled the conclusion that Attorney Martin improperly sought the benefits of representing clients before the district court without being licensed to do so. Similarly, in an obvious reference to Local Rule 83.I.05DSC pertaining to appearances by attorneys not admitted to practice before the district court, the district court found that given Attorney Martin's prolonged history in the district and the nature of his continuous contacts therein, "it would be intellectually disingenuous to characterize him as not having `appeared' here." (J.A. 230). The district court then stated that the certainty as to whether Attorney Martin would be admitted to the district pro hac vice was also in doubt in light of this history. Because Attorney Naides is a subordinate in Attorney Martin's law firm and repeatedly held herself out via affidavit as representing various Social Security plaintiffs before the district court, the district court treated the conduct of Attorney Martin and Attorney Naides as inextricably intertwined and equally culpable.
Based upon the above factual circumstances, the district court then applied equitable principles to hold that awarding the attorneys' fees requested under the EAJA for the attorney time of Attorney Martin and Attorney Naides would be unjust. The crux of the district court's reasoning is as follows:
(J.A. 399-400).
Priestley filed her motion for fees under the EAJA one month after the district court had ruled upon Davis' and Peter's applications for attorneys' fees under the EAJA. The government opposed any award of attorney's fees to Priestley for the attorney time of Attorney Martin and Attorney Naides on the same ground that it opposed any award of fees under the EAJA for the attorney fees of Attorney Martin in Davis and Attorneys Martin and Naides in Peter. Of relevance in the present appeal, the government opposed the district court awarding Priestley any attorneys'
Expressly following the reasoning of the district court in Davis and Peter with respect to the requests for attorneys' fees under the EAJA for Attorney Martin and Attorney Naides, the district court in Priestley, denied Priestley the attorneys' fees requested under the EAJA with respect to the attorney time of Attorney Martin and Attorney Naides.
In relevant part, the EAJA provides that "a court shall award to a prevailing party other than the United States fees and other expenses ... incurred by that party in any civil action ... brought by or against the United States ... unless the court finds that ... special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). Here, in denying attorneys' fees for the attorney time of Attorneys Martin and Naides in the present cases, the district court held that special circumstances made the award of attorneys' fees for such time unjust.
In my view, the district court did not abuse its discretion. The special circumstances provision of the EAJA is grounded in equity, such that it "explicitly directs a court to apply traditional equitable principles in ruling upon an application for counsel fees by a prevailing party." United States v. 27.09 Acres of Land, More or Less, Situated in the Town of Harrison and the Town of North Castle, 43 F.3d 769, 772 (2d Cir.1994) (internal quotation marks omitted). As the legislative history of the EAJA makes clear, the special circumstances provision "gives the court discretion to deny awards where equitable considerations dictate an award should not be made." H.R.Rep. No. 96-1418, at 11, 1980 U.S.C.C.A.N. at 4990 (1980). The doctrine of unclean hands is a traditional equitable consideration, Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814-15, 65 S.Ct. 993, 89 L.Ed. 1381 (1945), the theme of which pervades the jurisprudence of "special circumstances" under the EAJA, Air Transport Ass'n of Canada v. F.A.A., 156 F.3d 1329, 1333 (D.C.Cir.1998). See, e.g., Oguachuba v. INS, 706 F.2d 93, 99 (2d Cir.1983) (denying attorneys' fees under the special-circumstances-make-an-award-unjust exception under the EAJA, because, in classic equity terms, prevailing party was without clean hands). The doctrine of unclean hands applies to deny a party relief when there is a close nexus between the party's unethical conduct and the transactions upon which the party seeks relief. In re Uwimana, 274 F.3d 806, 810 (4th Cir. 2001). Notably, "[c]ourts are concerned primarily with their own integrity in the
The first critical point that must be made in support of the district court's denial of attorneys' fees under the EAJA for the attorney time of Attorneys Martin and Naides is that Attorneys Martin and Naides are the real parties in interest. The respective fee agreements between Davis, Peter, and Priestley on the one hand and McChesney on the other hand each made clear that the plaintiff would not be liable for the attorneys' fees of any attorney that Attorney McChesney enlisted to help in the case. Thus, while "`[r]ightfully, courts are reluctant to punish a client for the behavior of his lawyer,'" Dove v. CODESCO, 569 F.2d 807, 810 (4th Cir.1978), Plaintiffs suffered no prejudice from the rulings challenged here.
The second critical point is that the record leaves no doubt that in refusing to award attorneys' fees under the EAJA for the attorney time of Attorneys Martin and Naides, the district court invoked the equitable doctrine of unclean hands to protect the integrity of the court. As the majority opinion acknowledges, ante at 413, district courts have authority to regulate the practice of law before them.
Local Civil Rule 83.I.05DSC (emphasis added). In Latin, this rule permits attorneys not admitted to practice before the district court to appear before the court "pro hac vice," which means "[f]or this occasion or particular purpose." Black's Law Dictionary 1227 (7th ed.1999).
Notably, the validity and enforceability of Local Civil Rule 83.I.02DSC and Local Civil Rule 83.I.05DSC, at all times relevant to the present cases, are beyond dispute. The Judicial Council of the United States Court of Appeals for the Fourth Circuit is statutorily charged with periodically reviewing the local rules of all district courts within the Fourth Circuit for consistency with the rules prescribed by the United States Supreme Court under 28 U.S.C. § 2072, see id. § 332(d)(4), for example, for consistency with the Federal Rules of Civil Procedure. If, during the course of such review, the Judicial Council of the Fourth Circuit finds an inconsistency in a local rule of a district court within the Fourth Circuit, it "may modify or abrogate any such rule...." Id. Because, as of the time of this writing, the Judicial Council of the Fourth Circuit has neither modified nor abrogated Local Civil Rule 83.I.02DSC or Local Civil Rule 83.I.05DSC, they "remain in effect," 28 U.S.C. § 2071(c)(1).
The record is also undisputed that Attorneys Martin and Naides did not apply, pursuant to Local Civil Rule 83.I.05DSC, to appear pro hac vice before the district court in the present cases. Indeed, as the majority acknowledges, they suggest they would not have qualified to appear pro hac vice because they associated with McChesney too regularly to satisfy the "occasional appearance" requirement of Local Civil Rule 83.I.05DSC.
Moreover, the district court did not clearly err in finding that Attorneys Martin and Naides appeared before the district court, as the term "appearance of an attorney" is found in Local Civil Rule 83.I.05DSC. While the Local Civil Rules of the United States District Court for the District of South Carolina do not define the term "appearance of an attorney" nor give any examples of attorney conduct qualifying as appearing before the district court, Black's Law Dictionary (6th ed.1990), upon which we routinely rely as persuasive authority, see e.g., Mining Energy, Inc. v. Director, OWCP, 391 F.3d 571, 575 (4th Cir.2004), defines the almost identical term "[a]ppearance by attorney" as:
Black's Law Dictionary 97 (6th ed.1990). Consistent with this definition, affixing a name to a pleading or a brief has been interpreted by the Supreme Court of Nebraska as evincing intent to be involved in the litigation:
Emry v. Am. Honda Motor Co., Inc., 214 Neb. 435, 334 N.W.2d 786, 793 (1983) (emphasis added) (internal quotation marks omitted).
While neither Attorney Martin nor Attorney Naides filed a formal document stating that he or she was attorney of record in the present cases, see, e.g., I(c) of JS44 civil cover sheet, approved by the Judicial Conference of the United States in 1974 (Rev.03/99), when the record is viewed as a whole, including the prior Social Security cases noted on the district court's attachment to its order in Davis and Peter, each certainly engaged in sufficient affirmative conduct to support the district court's factual finding that each had appeared before the district court in a manner sufficient to trigger the need to file for admission pro hac vice, pursuant to Local Civil Rule 83.I.05DSC. Accordingly, there is no basis for us to hold the district court clearly erred in this regard. United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) ("A finding is `clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed."). Moreover, had the district court awarded the attorneys' fees requested for Attorneys Martin and Naides, the district court would have allowed such attorneys to reap the benefits of their wrongdoing. This is the very type of injustice the doctrine of unclean hands is meant to prevent and for which the special-circumstances-make-an-award-unjust exception under the EAJA applies. See In Re Uwimana, 274 F.3d at 810-11 (doctrine of unclean hands applies to prevent party from using courts to reap benefits of wrongdoing). Thus, the district court acted well within its discretion in applying the equitable doctrine of unclean hands to prevent Attorneys Martin and Naides from reaping the benefits of their own wrongdoing.
One of two fundamental analytical errors underlying the analysis of the majority opinion is the "belie[f] that the district court improperly linked the requirements for the practice of law in the district court with the requirements of the EAJA, thus limiting the scope of fees that the EAJA otherwise authorizes." Ante at 416.
In its eagerness to ensure that Attorneys Martin and Naides are paid for their
First, without exception, in the fee affidavits submitted by Attorneys Martin and Naides, each represented to the district court that he or she was an attorney for the plaintiff. Second, in many instances, Attorney Martin signed briefing or permitted briefing to be filed stating that he was an attorney for the plaintiff and including all of his office contact information and Georgia Bar number. In the fee affidavits submitted by Attorney Martin in Davis and Peter, Attorney Martin declared under penalty of perjury that he represented the plaintiff before the district court. Attorney Naides did the same thing in Peter. Third, in the fee affidavits filed in numerous previous cases, Attorneys Martin and Naides each declared under penalty of perjury that he or she represented the plaintiff before the district court, such that a well-documented pattern of these attorneys' Local Rule violating conduct exists. Because the sources of these inculpatory statements are Attorneys Martin and Naides themselves, they constitute highly probative evidence that Attorneys Martin and Naides appeared before the district court in violation of Local Civil Rule 83.I.05DSC. See Roberts v. LaConey, 375 S.C. 97, 650 S.E.2d 474 (2007) (in determining whether someone is practicing law, it is important to consider representations the person makes about his own activity). Fourth, the time records reflect that Attorney Martin was the person who primarily managed the cases of the Plaintiffs before the district court, including monitoring deadlines and reviewing all filings. Fifth, while I recognize that the case for appearance before the district court of Attorney Martin is stronger than that of Attorney Naides, the record suggests that Attorney Naides agreed with Attorney Martin regarding the manner in which their law firm would handle these Social Security cases.
In summary, when one views the record as a whole, the picture becomes crystal clear that Attorneys Martin and Naides were not content to be mere behind-the-scene brief writers, who did not actually represent the Plaintiffs. Rather, they wanted to hold themselves out before the district court, the district court Bar, other fellow attorneys, and potential Social Security claimants as attorneys who represent Social Security claimants before the district court. Professional ego and the motivation to create and seize commercial opportunity were obviously at play. To permit Attorneys Martin and Naides to obtain court ordered fees for services performed in violation of Local Civil Rule 83.I.05DSC, as the majority opinion does, condones, if not encourages, the same wrongful behavior and nullifies such local rule.
Finally, the fact that other district judges in the same district court have previously awarded attorney fees under the EAJA to Attorneys Martin and Naides at their requested full hourly attorney rate is worthy of addressing. For example, in Clowney v. Astrue, No. 8:07-856-CMC-BHH (D.S.C.), United States District Judge Cameron McGowan Currie awarded fees under the EAJA to Attorneys Martin and Naides at their requested full hourly attorney rate. Id. (Docket Entry No. 33) (D.S.C. Sept. 15, 2008). In so doing, Judge Currie rejected the government's argument that because non-admitted Attorneys
In conclusion, for the reasons stated, I would affirm the orders appealed in toto.
28 U.S.C. § 2071.
Section 1654 provides:
28 U.S.C. § 1654.
However one views the persuasiveness of the assumed reasons offered as to why out-of-state attorneys are less likely to be competent, see id. at 1181 (observing, without citation to authority or empirical evidence, that "the standard for admission in both Arizona and California may well exceed that required in other states"), or more difficult to discipline, see id., the point powerfully raised by the case at bar is whether, in the area of exclusive federal practice, such as social security disability appeals, a limited exception to such requirements such as that applied by some of the district judges in South Carolina, see infra pp. 422-23, is warranted.
Obviously, the Rules Committee understands that competence to practice before an appellate court is not automatically transferrable to the art of trial advocacy and I do not suggest anything to the contrary. See also supra pp. 419-20 & n. 1 (citing statutory basis for the authority of federal district judges to control admission of lawyers to practice before their courts). Nevertheless, the disconnectedness evident here (after all, the claim to compensation in these cases under the EAJA is based solely on "brief writing") is remarkable.