          UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS


                                          NO . 03-1008(E)

                               CHARLES F. EVINGTON , APPELLANT ,

                                                 V.


                                    ANTHONY J. PRINCIPI,
                          SECRETARY OF VETERANS AFFAIRS, APPELLEE.


                   On Appellant's Application for Attorney Fees and Expenses


                               (Decided      September 13, 2004      )



      Barton F. Stichman, Nancy L. Foti, and James W. Stewart (nonattorney practitioner), all of
Washington, D.C., were on the pleadings for the appellant.

       Tim S. McClain, General Counsel; R. Randall Campbell, Assistant General Counsel; Carolyn
F. Washington, Deputy Assistant General Counsel; and Richard Mayerick, all of Washington, D.C.,
were on the pleading for the appellee.

       Before IVERS, STEINBERG, and GREENE, Judges.

       STEINBERG, Judge: Before the Court is the appellant's January 9, 2004, application, filed
through counsel, for attorney fees and expenses pursuant to the Equal Access to Justice Act,
28 U.S.C. § 2412(d) (EAJA). The Secretary filed a response, and the appellant filed a reply thereto.
For the reasons set forth below, the Court will grant the appellant's application.


                                          I. Background
       The appellant, through attorneys Barton F. Stichman and Nancy L. Foti, and nonattorney-
practitioner James W. Stewart, previously sought review of a March 7, 2003, Board of Veterans'
Appeals (BVA) decision that denied his claim for an increased rating for Department of Veterans
Affairs (VA) service-connected residuals of a shell-fragment wound of the left flank with a
compound comminuted fracture of the ilium, rated as 20% disabling. On December 4, 2003, the
parties filed a joint motion to terminate based on a stipulated agreement. See U.S. VET . APP . R. 42.
Judgment was issued and the mandate was entered on December 11, 2003. By the terms of the
stipulated agreement, the appellant was granted an increased rating to 50%, effective from
July 1, 1971, under 38 C.F.R. § 4.73, Diagnostic Code 5317 (2002).
       In January 2004, the appellant filed an EAJA application seeking $4,124.76 in attorney fees
and expenses. Application (Appl.) at 1. He calculates the requested amount based on (1) 30.5 hours,
at a rate of $126.73 per hour, spent by the senior litigation paralegal, Mr. Stewart, who is employed
by the National Veterans Legal Services Program (NVLSP) and is admitted to practice before this
Court as a nonattorney practitioner; (2) 1 hour spent by attorney Foti, a member of the Court's bar,
at a rate of $148.45 per hour; (3) .5 hour spent by attorney Stichman, a member of the Court's bar,
at a rate of $148.45 per hour; and (4) expenses in the amount of $36.81. Appl. at 5-6. Mr. Stewart's
requested hourly rate was calculated "by adding the increase in the Consumer Price Index for All
Urban Consumers [(CPI-ALL)] for the Washington, D.C., area since June 2001 to [the] $120 per
hour" rate that this Court has previously approved for Mr. Stewart in Abbey v. Principi, 17 Vet.App.
282 (2003), and Pentecost v. Principi, 17 Vet.App. 257 (2003). Appl. Exhibit (Exh.) D. Attached
to the EAJA application are, inter alia, affidavits from representatives of three Washington, D.C.,
law firms stating that the prevailing market rate for experienced and specialized paralegals ranges
from $130 to $250 per hour. Appl. Exhs. F, G, H.
       The Secretary "concedes that [the] appellant is a 'prevailing party[]' and that the Secretary's
position was not 'substantially justified.'" Response (Resp.) at 1. The Secretary asserts that Mr.
Stewart should be awarded, instead of the $126.73-per-hour fee requested, a $120-per-hour fee based
on the Court's opinions in Abbey and Pentecost, both supra; the Secretary argues that a cost-of-living
adjustment (COLA) is not available for Mr. Stewart because the opinion of the U.S. Court of
Appeals for the Federal Circuit (Federal Circuit) in Levernier Construction, Inc. v. United States,
947 F.2d 497 (Fed. Cir. 1991), "rejected a COLA . . . [for] the statutory rate paid to paralegals."
Resp. at 2.
       In reply, the appellant argues that the Federal Circuit did not hold that a paralegal could never
be compensated under the EAJA at a rate exceeding the statutory maximum, but "actually held that
a [COLA] cannot be added to the prevailing market rate for either attorneys or paralegals." Reply


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at 8 (emphasis added). Alternatively, he contends that, even if the Secretary were correct in his
interpretation of Levernier, this Court is not precluded from permitting a COLA to be applied to the
statutory maximum for a nonattorney practitioner because, in accordance with section 403 of the
Veterans Benefits Act of 2002 (VBA), Pub. L. No. 107-330, § 403, 116 Stat. 2819, 2833, the Court
is authorized "to award fees for non[]attorney practitioners 'in an amount determined appropriate by'
th[e] Court." Reply at 8-9.


                                              II. Analysis
                                        A. Eligibility for Award
       This Court has jurisdiction to award reasonable attorney fees and expenses pursuant to
28 U.S.C. § 2412(d)(2)(F). Here, the appellant's January 2004 EAJA application was filed within
the 30-day EAJA application period set forth in 28 U.S.C. § 2412(d)(1)(B) and satisfies the EAJA
"application-content specifications", Scarborough v. Principi, ___ U.S. __, __, No. 02-1657, slip.
op. at 11, 2004 WL 938027, at *9 (May 3, 2004), because the application contained the following:
(1) A showing that, by virtue of the Court's remand, he is the prevailing party within the meaning
of the EAJA; (2) a showing that he is a party eligible for an award under the EAJA because his net
worth does not exceed $2,000,000; (3) an allegation that the position of the Secretary was not
substantially justified; and (4) an itemized fee statement. 28 U.S.C. § 2412(d)(1)(A), (1)(B), (2)(B);
Cullens v. Gober, 14 Vet.App. 234, 237 (2001) (en banc) (listing four EAJA-application content
requirements).
       As to prevailing-party status, this Court stated in Rollins v. Principi:
                         In order to receive an EAJA award, an EAJA applicant must
                 be a prevailing party. See 28 U.S.C. § 2412(d)(1)(A) ("court shall
                 award to a prevailing party . . . fees and other expenses"); Briddell [v.
                 Principi, 16 Vet.App. 267, 271 (2002)]: Sumner [v. Principi,
                 15 Vet.App. 256, 260-61 (2001) (en banc), aff'd sub nom. Vaughn v.
                 Principi, 336 F.3d 1351 (Fed. Cir. 2003)]: Cullens, [supra]. The
                 appellant has the burden of demonstrating prevailing-party status
                 under the EAJA. See Sumner, Briddell, and Cullens, all supra.
                 Prevailing-party status arises in either of two ways. The first is
                 through a direction of the Court, evident within the terms of the
                 particular Court decision upon which the appellant is basing the
                 EAJA application, for VA to award VA benefits to the appellant.

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               Sumner, 15 Vet.App. at 264-65. The second is through the grant of
               a merits-stage Court remand that was predicated upon administrative
               error. Ibid. In order for a remand to have been predicated upon
               administrative error, the remand must either (1) have been directed in
               a Court opinion, decision, or order that contained a Court recognition
               of administrative error or (2) have been granted on the basis of a
               concession of error by the Secretary. McCormick [v. Principi,
               16 Vet.App. 407, 411 (2002)]; Briddell, 16 Vet.App. at 271-72. The
               Court will not "investigate at the EAJA prevailing-party stage the
               validity, type, or nature of the administrative error." McCormick,
               [supra].
Rollins, 17 Vet.App. 294, 298 (2003).
       In the instant case, the Secretary concedes that the appellant is a prevailing party;
furthermore, because the Court's December 11, 2003, termination order was predicated on the parties'
December 2003 joint motion to terminate the appeal in accordance with the terms of the settlement
agreement, including the Secretary's consent to assign the appellant an increased rating of 50% for
his service-connected residuals of a shell-fragment wound, the Court holds that the appellant is a
prevailing party for EAJA purposes by virtue of the "award [of] VA benefits to the appellant",
Rollins, supra. See 28 U.S.C. § 2412(d)(1)(A); Buckhannon Board & Care Home, Inc. v. W. Va.
Dep't of Health & Human Res., 532 U.S. 598, 604 (2001) (noting that prior caselaw "establish[es]
that enforceable judgments on the merits and [settlement agreements enforced through]
court-ordered consent decrees create the 'material alteration of the legal relationship of the parties'
necessary to permit an award of attorney's fees" (quoting Tex. State Teachers Ass'n v. Garland Indep.
Sch. Dist., 489 U.S. 782, 792-93 (1989))); Sumner and McCormick, both supra; Cullens, supra
(concluding that Secretary did not contest that appellant was a prevailing party and "agree[ing] that
pursuant to the terms of the settlement, the appellant is a prevailing party").
       Moreover, the Secretary concedes that his position was not substantially justified. Resp. at
1; see McCormick, 16 Vet.App. at 412 (determining that, "[u]nder the EAJA, the Secretary has
affirmative defenses to a fee award, one of which is to demonstrate that his position at both the
administrative (BVA) and litigation (Court) stages was 'substantially justified'"); Cullens, supra
(noting that "[o]nce an appellant has alleged a lack of substantial justification, the burden shifts to
the Secretary to prove that VA was substantially justified in its administrative and litigation


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positions"). Because substantial justification is an affirmative defense to be raised by the Secretary,
the Court need not address whether the Secretary's position was "substantially justified" when the
Secretary does not assert such a defense. See Cook v. Brown, 6 Vet.App. 226, 237 (1994) (holding
that Court need not address whether Secretary's position was "substantially justified" when Secretary
did not assert such a defense but expressly conceded that issue), aff'd, 68 F.3d 447 (Fed. Cir. 1995);
see also Abbey, 17 Vet.App. at 288 (applying Cook, supra); Calma v. West, 12 Vet.App. 66, 68-69
(1998); Shaw v. Gober, 10 Vet.App. 498, 501 (1997). Based on the foregoing, the Court concludes
that the appellant is entitled to an award of EAJA fees.
                                B. Reasonableness of Fee Request
       The only remaining question in this appeal is whether $126.73 is an appropriate hourly rate
for Mr. Stewart's work as a nonattorney practitioner in this matter. Generally, "[t]he Court has wide
discretion in the award of attorney fees under the EAJA." Chesser v. West, 11 Vet.App. 497, 501
(1998). For work performed by an attorney, fees "shall not be awarded in excess of $125 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."
28 U.S.C. § 2412(d)(2)(A)(ii). In Sandoval v. Brown, the Court considered whether EAJA fees
could be awarded for work done by an attorney-supervised law student. Sandoval, 9 Vet.App. 177
(1996). In deciding in the affirmative, the Court held that the appropriate hourly rate for paralegals,
law clerks, and law students was the prevailing market rate for such services, or the then-statutory
cap of $75 per hour as established by 38 U.S.C. § 2412(d)(2)(A), plus COLA, whichever was lower.
Id. at 181 (citing Elcyzyn v. Brown, 7 Vet.App. 170, 181 (1994)). Several years later, the Court also
held that the work of attorney-supervised nonattorney practitioners is "compensable under the EAJA
at an appropriate rate". McCracken v. Principi, 14 Vet.App. 269, 274 (2001) (citing Sandoval,
9 Vet.App. at 181). The Court stated in McCracken that "the appropriate hourly rate for such fees
is either the prevailing market rate for such services or the rate set forth in 28 U.S.C. §
2412(d)(2)(A), adjusted by the applicable [COLA], 'whichever is lower'." McCracken, at 272
(quoting Sandoval, supra); cf. Levernier, supra.




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       VBA § 403 provides:
                The authority of the United States Court of Appeals for Veterans
                Claims to award reasonable fees and expenses of attorneys under
                section 2412(d) of title 28, United States Code, shall include authority
                to award fees and expenses, in an amount determined appropriate
                by the United States Court of Appeals for Veterans Claims, of
                individuals admitted to practice before the Court as non[]attorney
                practitioners under subsection (b) or (c) of Rule 46 of the Rules of
                Practice and Procedure of the United States Court of Appeals for
                Veterans Claims.
VBA § 403 (emphasis added). This provision empowers the Court to award fees "in an amount
determined appropriate" to nonattorney practitioners admitted to practice before this Court under
Rule 46(b) and (c). See Abbey, 17 Vet.App. at 290; Pentecost, 17 Vet.App. at 259; U.S. VET . APP .
R. 46(b), (c). In section 403, Congress recognized that the nonattorney practitioners who practice
before this Court are "unique and . . . more akin to attorneys than they are to paralegals." Pentecost,
17 Vet.App. at 260; see Abbey, 17 Vet.App. at 292 (concluding that "section 403 itself constitutes
a recognition of the special role of nonattorney practitioners who practice before the Court"). The
Committees on Veterans' Affairs stated in their Explanatory Statement regarding the final version
of VBA § 403:
                The Committees expect that in determining the amount of reasonable
                fees payable to non[]attorney practitioners, the Court will apply the
                usual rules applicable to fees for the work of other non[]attorneys
                such as paralegals and law students based upon the prevailing market
                rates for the kind and quality of the services furnished. 28 U.S.C.
                § 2412(d)(2)(A). See[] Sandoval[,] 9 Vet.App. [at] 181[.]
148 CONG . REC. S11338 (daily ed. Feb. 18, 2002); 148 CONG . REC . H9006-07 (daily ed.
Feb. 14, 2002) [hereinafter Explanatory Statement].
       Applying section 403 in Abbey and Pentecost, the Court held that $120 per hour was a
reasonable and appropriate rate for Mr. Stewart's work in those matters. Abbey, 17 Vet.App. at 292
(holding $120"'reasonable' and 'appropriate' based on [Mr. Stewart's] reputation, skill, and special
expertise and qualifications as an experienced advocate in veterans law"); Pentecost, 17 Vet.App.
at 260-61 (stating that "[w]e cannot, in the exercise of common sense, order that non[]attorney
practitioners be compensated as attorneys, but neither is their compensation to be limited by the


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prevailing market rate for paralegals"). The Court did not state in either opinion whether the $120
rate was considered the prevailing market rate or a cap comparable to the $125-per-hour (plus
COLA) attorney-fee rate established by the EAJA. Nor was the issue before the Court as to whether
the hourly rate of a nonattorney practitioner could be augmented by a COLA. See Pentecost,
17 Vet.App. at 261 (holding that "[g]iven his extensive experience in veterans law, the request that
the services of James Stewart, the non[]attorney practitioner in this case, be valued at $120 per hour
(without COL[A]) is reasonable"); see also Abbey, 17 Vet.App. at 292.
       The Secretary asserts that Levernier, supra, is controlling of the fee-rate outcome here and
that the Court thus should deny the use of a COLA in connection with the computation of a
reasonable and appropriate fee for Mr. Stewart's nonattorney-practitioner work. Resp. at 2. In
Levernier, the Federal Circuit held that "although the EAJA allows for the recovery of paralegal fees
. . . neither the cap on [EAJA] fees nor the fees themselves may be augmented by a COLA."
Levernier, 947 F.2d at 503. Levernier, however, did not consider EAJA fees for those individuals
in the unique role of nonattorney practitioners, such as Mr. Stewart, and was decided prior to the
enactment of VBA § 403. Moreover, in Levernier the prevailing market rate for the paralegal work
in question was lower than the then $75-per-hour EAJA cap on attorney fees; hence, the paralegal
rate awarded there was required to be the prevailing market rate, as to which it is indisputable that
a COLA does not attach. See Levernier, 947 F.2d 503-04 (citing Hirschey v. FERC, 777 F.2d 1, 5
(D.C. Cir. 1985)). Finally, nothing in Levernier would limit this Court's authority to award a fee
premised on a prevailing market rate for a nonattorney practitioner's work. Therefore, Levernier is
not dispositive of the issue in the present case.
       As previously noted, the Court has wide discretion in awarding fees under the EAJA, see
Chesser, supra, and, by virtue of VBA § 403, has wide discretion in awarding EAJA fees for the
work of nonattorney practitioners, see Abbey, 17 Vet.App. at 290-91 (stating that VBA § 403
"provides this Court with wide discretion in determining what fee is 'appropriate' for the work of a
particular non[]attorney practitioner"); Pentecost, 17 Vet.App. at 261 (VBA § 403 "grants the Court
broad discretion in determining what would constitute a reasonable fee for a particular non[]attorney
practitioner"). In determining a reasonable and appropriate fee for Mr. Stewart in this case, the Court
must balance precedent and law instructing that nonattorney practitioners in the unique veterans


                                                    7
benefits system are more akin to attorneys than they are to paralegals, see VBA § 403; Abbey,
17 Vet.App. at 292; Pentecost, 17 Vet.App. at 260, with the recognition that generally nonattorney
practitioners are not the equivalent of attorneys and compensating them in a manner comparable to
paralegals is not, per se, unreasonable, see Abbey and Pentecost, both supra; Explanatory Statement,
supra. In light of the Court's broad discretion, and because the nonattorney-practitioner work was
performed from April 2003 to December 2003 in the instant case, as compared to the January 2001-
to-January 2002 and the September 2000-to-September 2002 work periods in Abbey and Pentecost,
respectively, and in light of the appellant's uncontested evidence that the prevailing market rate for
experienced paralegals in Washington, D.C., is anywhere from $130 to $250 per hour and that Mr.
Stewart is highly experienced in the practice of veterans benefits law, the Court holds that the fee
rate of $126.73 per hour requested by the appellant is reasonable and appropriate as a prevailing
market rate for Mr. Stewart's nonattorney-practitioner work during the time period involved in this
case. See Abbey, Pentecost, Sandoval, and Elcyzyn, all supra. We are not called upon by the rate
requested for Mr. Stewart's work in this case to determine whether a nonattorney practitioner can be
compensated at the $125-hourly-cap-plus-COLA EAJA statutory rate if that practitioner's prevailing
market rate is greater than that statutory rate because, in this case, the $126.73-per-hour prevailing
market rate for Mr. Stewart's work is clearly less than the $125-hourly-cap-plus-COLA EAJA
statutory rate. See VBA § 403; see also McCracken, supra; cf. Sandoval and Elcyzyn, both supra.
Nor do we in this case decide any more than that under VBA § 403 the rate of $126.73 per hour is
a reasonable and appropriate prevailing market rate under the EAJA for Mr. Stewart's work during
the pertinent time period involved in this case.


                                          III. Conclusion
       Upon consideration of the foregoing and the parties' pleadings, the Court will grant the
appellant's January 9, 2004, EAJA application in full in the amount of $4,124.76.
       APPLICATION GRANTED.




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