On Appeal from the United States District Court from the Eastern District of Pennsylvania, D.C. Civil No. 83-1453.
Gibbons, Chief Judge, Weis and Sloviter, Circuit Judges.
Emilio Garcia, by his counsel, Community Legal Services, Inc. of Philadelphia (Community Legal Services) applies to this court under the Equal Access to Justice Act, 28 U.S.C. § 2412(d) (Supp. III 1985) (EAJA) for an award of attorneys' fees for the appellate work performed on this case. Appeal No. 83-1786. Community Legal Services also appeals from an order awarding attorneys' fees under the EAJA for work performed in the district court. Appeal No. 87-1084. Garcia, an applicant for disability insurance benefits under the Social Security Act, was initially denied such benefits by the agency and the district court. We vacated and remanded the matter to the Secretary, who again found Garcia not disabled. The matter was presented again to the district court, whereupon Garcia was awarded disability benefits on the basis that he suffered from severe phlebitis and mental impairment.
Thereafter, Community Legal Services filed in the district court for attorneys' fees under the EAJA for 26.75 hours of work performed before that court. The district court found that Garcia was a prevailing party, that the Secretary "had little, if nay, support in the record" for denying Garcia's claim and that the agency had failed to establish substantial justification for its position. Accordingly, the district court awarded $75.00 an hour for 26.75 hours of legal services. The district court declined, however, to award an enhanced fee based on special factors or cost of living increases since 1981. We will reverse the judgment on the cost of living claim and affirm on the special factors claim. With respect to Appeal No. 83-1786, we conclude that Community Legal Services is entitled to attorneys' fees under the EAJA for 8.5 hours of appellate work at the rate of $75.00 an hour, adjusted for inflation since the statutory rate was fixed in 1981.
Community Legal Services filed simultaneous fee petitions before the district court and this court for work performed before each respectively. Both petitions raise identical or related issues but request different monetary awards. The Secretary objects to the filing of concurrent petitions, arguing that bifurcated consideration results in protracted and duplicative litigation.*fn1 In response, Community Legal Services explains that separate applications were filed in light of Stokes v. Bowen, Civ. A. No. 82-5124 (E.D. Pa. July 17, 1986). In Stokes, the same district judge as in the present case declined to consider hours expended on the appeal, stating that "the determination as to whether a position taken by the Secretary was justified is best made by the court before which the Secretary took that position." Id., slip op. at 3 (citing Washington v. Heckler, 608 F. Supp. 1286, 1287-89 (E.D. Pa. 1985).
We have since reversed, however, and remanded the Stokes case to the district court, directing it to calculate and award attorneys' fees under the EAJA for work performed on the trial and appellate levels. See Stokes v. Bowen, 811 F.2d 814, 817 (3d Cir. 1987). In doing so, we repeated the Third Circuit position that "'we perceive no reason why the district court should not set the fees for work in both courts when representation in each was required. That practice reduces the time and effort required of counsel and also simplifies judicial oversight of the process.'" Id. (quoting Guido v. Schweiker, 775 F.2d 107, 110 (3d Cir. 1985)). Accord Brinker v. Guiffrida, 798 F.2d 661, 669 (3d Cir. 1986).
The present case is a perfect example of the waste of judicial economy which results when petitions are filed separately in different courts. The district court below considered the exact issues raised in the first instance before this court. At one point, two separate motions -- the appeal from the district court's decision and the fee petition for appellate work -- were pending before this court and were eventually consolidated by this court sua sponte. Clearly, judicial resources could have been saved if both petitions were filed in the district court. Any appeals from the judgment below would have then come up together, thereby insuring uniform appellate consideration. Since we must review the district court decision in connection with the trial hours, however, we will now also entertain the fee petition for appellate hours.
Community Legal Services applies under the EAJA for an award of attorneys' fees for the time it expended on appeal. A prevailing party is entitled to attorneys' fees under the EAJA "unless the court finds that the position of the United States was substantially justified on that special circumstances made an award unjust." 28 U.S.C. § 2412(d)(1)(A).*fn2 Since it is undisputed that Garcia is a prevailing party, the only issue that we must consider in determining if Community Legal Services is entitled to an award for attorneys' fees under the EAJA is whether the government has met its burden of proving substantial justification. See Dougherty v. Lehman, 711 F.2d 555, 562 (3d Cir. 1983).
In order to prevail, the government must show: 1) a reasonable basis in truth for the facts alleged; 2) a reasonable basis in law for the theory it propounded; and 3) a reasonable connection between the facts alleged and the legal theory advanced. Washington v. Heckler, 756 F.2d 959, 961 (3d Cir. 1985) (citing Citizens Council of Delaware County v. Brinegar, 741 F.2d 584, 593 (3d Cir. 1984)).*fn3
The Secretary contends that its initial decision to deny benefits and to defend that denial was reasonable both in law and fact because there was no record evidence that Garcia suffered from a severe mental impairment, that he was treated for a disabling leg impairment or that Garcia's phlebitis imposed significant functional limitations. The fact of the matter is, however, that the agency's position clearly offended established precedent. Indeed, in considering the appeal from the denial of Garcia's disability benefits, we vacated the district court's judgment affirming the agency determination and ...