                             In the

United States Court of Appeals
               For the Seventh Circuit

No. 10-3746

JAYNE A. M ATHEWS-SHEETS,
                                                Plaintiff-Appellant,
                                 v.

M ICHAEL J. A STRUE, Commissioner of Social Security,

                                                Defendant-Appellee.


             Appeal from the United States District Court
     for the Southern District of Indiana, Indianapolis Division.
     No. 1:08-cv-1426-WTL-DML—William T. Lawrence, Judge.


       A RGUED JUNE 14, 2011—D ECIDED A UGUST 5, 2011




  Before P OSNER, R OVNER, and W OOD , Circuit Judges.
   P OSNER, Circuit Judge. After prevailing in this suit
for social security disability benefits, the plaintiff asked
for an award of attorney’s fees of $25,200. The district
judge cut the amount down to $6,625. He thought
the hours her lawyer had spent on the case excessive
and sliced them from 112 or 116 (we’re about to see that
it’s unclear how many hours the lawyer was seeking
compensation for) to 53. Although the judge’s explana-
2                                               No. 10-3746

tion for this drastic cut was skimpy, it was skimpy in part
because he had simply adopted objections made by
the Social Security Administration’s lawyer—and those
objections were compelling. They included objections to
1.5 hours that the plaintiff’s lawyer claimed for preparing
requests for extensions of time, 6 hours for preparing the
fee petition, 10 hours for preparing the reply brief in
support of the fee petition, and 16 hours for preparing a
two-page letter. It is not that any of the items were im-
proper, see Commissioner v. Jean, 496 U.S. 154 (1990); it was
that the amount of time that he had spent on each one
was excessive. Moreover, he had added the 10 hours
for the brief to 106 hours for his other work on the
case even though the number of hours that he sought
compensation for, before the addition of the hours spent
on the reply brief, was 112. The judge wasn’t sure
whether he was asking for compensation for 106, 112, or
116 hours (or perhaps 122: 112 plus 10) The biggest
chunk of time for which he sought a fee award—85.5
hours—was for writing two briefs, and as the judge
pointed out “the majority of [the contents of] those briefs
related to arguments that were wholly without merit.”
  The judge also thought the hourly rate the lawyer was
seeking—$225—excessive, and cut that down to the rate
specified in the statute (the presumptive ceiling, as
we’re about to see)—$125. Although the lawyer’s argu-
ment for a higher rate was weak, the judge rejected it on
an improper ground.
 The Equal Access to Justice Act, which is the basis for
awarding attorney’s fees in this case, provides that the
award “shall be based upon prevailing market rates for
No. 10-3746                                                 3

the kind and quality of the services furnished, except
that . . . attorney fees shall not be awarded in excess of
$125 per hour unless the court determines that an
increase in the cost of living [since 1996, when the current
version of the Act was passed] or a special factor, such as
the limited availability of qualified attorneys for the
proceeding involved, justifies a higher fee.” 28 U.S.C.
§ 2412(d)(2)(A)(ii). This is an unusual form of fee-
shifting statute, and rather chintzy; the usual form just
specifies “reasonable attorneys’ fees.” The departure
from it in the Equal Access to Justice Act is attributable
to the Justice Department’s reservations, shared by
a number of members of Congress, about forking over
government money to people litigating against the gov-
ernment. See H.R. Rep. No. 96-1418, 96th Cong., 2d Sess. 7
(1980); 126 Cong. Rec. 28,644-47 (1980). The Act’s final
form reflects this concern.
  Most time spent by lawyers seeking social security
disability benefits for their clients is spent at the adminis-
trative level, and fees awarded under the Equal Access
to Justice Act are limited to work performed in the judi-
cial proceeding challenging the administrative denial of
benefits. See Sullivan v. Hudson, 490 U.S. 877, 891-92 (1989);
Raines v. Shalala, 44 F.3d 1355, 1358 (7th Cir. 1995).
But the Social Security Act provides for awarding a
“reasonable fee” to compensate a lawyer who successfully
represents a client in the administrative proceeding.
42 U.S.C. § 406(a)(1). And if a denial of benefits at the
administrative level is successfully challenged in the
district court, the court may award a “reasonable fee”
under the Social Security Act for the lawyer’s work in the
4                                               No. 10-3746

judicial-review proceeding, though that fee may not
exceed 25 percent of the total past-due benefits that the
claimant received as a result of the court’s decision. 42
U.S.C. § 406(b)(1)(A). If the court awards fees under both
the Social Security Act and the Equal Access to Justice Act,
as it is allowed to do, only the larger of the two
awards may be collected. McGuire v. Sullivan, 873 F.2d 974,
977 n. 1 (7th Cir. 1989); Weakley v. Brown, 803 F.2d 575, 580
(10th Cir. 1986). (Otherwise the lawyer would be paid
twice for the same work.) The cases we’ve just cited say
that Congress decreed this result, although all they cite
is the House Report that we cited earlier, which is not
legislation. But they are right—there is legislation, just
not codified. Act of August 5, 1985, Pub. L. No. 99-80, § 3,
99 Stat. 183, 186 (1985); see Savings Provision Note to
28 U.S.C. § 2412.
  In his initial submission the plaintiff’s lawyer based
his request for an hourly fee greater than $125—namely
$225—on a claim that it was the prevailing market rate
for his services to his client. But he failed to indicate
whether he meant the prevailing market rate for lawyers
in social security disability cases or some general average
of lawyer fees in the region in which he practices. And he
did not mention the cost of living or any other “special
factor.” The government in its brief in response op-
posed any fee award in excess of $125 an hour. The
lawyer filed a reply brief in which he divided the Con-
sumer Price Index for 2009, when the bulk of his work
on the case was done, by the CPI for 1996, when the
statutory rate (which had been $75 an hour) was raised
to $125, and multiplied the quotient by $125, which
No. 10-3746                                                  5

yielded $170. At argument he told us that he used the
CPI for “midwestern towns with 50,000 inhabitants”; he
practices law in the Village of Frankfort, Illinois, popula-
tion 18,000. The reply brief does not indicate that he
actually used that measure and our own computation
indicates that $167 is the correct number, but we
won’t quibble over $3 an hour.
  The reply brief gave no reason for choosing the CPI
over other inflation measures, nor explained why an
inflation adjustment was appropriate in this case. The
lawyer repeated his request for $225 an hour on the
ground that that was the prevailing market rate,
but presumably he meant to be asking for $170 as a
fallback if the judge refused to award him the
prevailing rate.
  The Equal Access to Justice Act does not authorize an
award of the prevailing hourly rate, as such, unless it is
less than $125 an hour. For that matter it doesn’t
authorize an award of $125 per hour, or even $125 plus
inflation. The $125 rate is a presumptive ceiling; to
justify a higher rate the plaintiff must point to inflation
or some other special factor. Floroiu v. Gonzales, 498
F.3d 746, 749 (7th Cir. 2007) (per curiam); Muhur v.
Ashcroft, 382 F.3d 653, 656 (7th Cir. 2004); Healey v. Leavitt,
485 F.3d 63, 68-71 (2d Cir. 2007). If he points to inflation
he still must show that it actually justifies a higher fee;
for while it might seem obvious that a statutory price
ceiling should be raised in step with inflation, to do that as
a rote matter would produce windfalls in some cases.
Inflation affects different markets, and different costs in
6                                               No. 10-3746

the same market, in different ways. The framers of the
Equal Access to Justice Act were right therefore not to
create an entitlement to an inflation adjustment; the
lawyer seeking such an adjustment must show that infla-
tion has increased the cost of providing adequate legal
service to a person seeking relief against the government.
Bryant v. Commissioner of Social Security, 578 F.3d 443, 450
(6th Cir. 2009); May v. Sullivan, 936 F.2d 176, 178 (4th
Cir. 1991) (per curiam); Headlee v. Bowen, 869 F.2d 548, 552
(10th Cir. 1989); Baker v. Bowen, 839 F.2d 1075, 1084 (5th
Cir. 1988); but cf. Johnson v. Sullivan, 919 F.2d 503, 505
(8th Cir. 1990) (intimating a presumption in favor of a cost
of living adjustment). No such showing was made.
   But the district judge did not reject the request for a
higher fee on the basis of the weakness of the lawyer’s
argument. Instead he said that the information in the
reply brief about cost of living had been submitted “too
late.” Although the general rule is indeed that arguments
made for the first time in a reply brief are forfeited,
Narducci v. Moore, 572 F.3d 313, 324 (7th Cir. 2009), the
judge didn’t invoke the rule—and anyway it was inap-
plicable. Remember that the lawyer asked for $225 an
hour in his opening brief. The government’s brief in
response said it was too much. The lawyer replied that
it wasn’t too much because inflation brought the $125
statutory presumptive maximum to $170 in real terms.
That was a non sequitur; a cost of living adjustment
that raised the statutory fee to $170 provided no basis
for an award of $225. The lawyer named no other fac-
tor. And he didn’t help his case by arguing that he didn’t
No. 10-3746                                              7

even have to request a cost of living increase—that it is
tacked on automatically to the statutory fee, the way
postjudgment interest is automatically tacked on to an
award of damages. An inflation adjustment must, as we
said, be justified by reference to the particular circum-
stances of the lawyer seeking the increase. Suppose infla-
tion had not affected the wages he pays his clerical em-
ployees, or had been offset by advances in law-office
technology or changes in the standards and procedures
of the Social Security Administration that made it
cheaper to litigate claims for disability benefits.
  That said, a fee of $125 for legal services rendered in
2009 in a social security disability appeal seems awfully
low, especially when multiplied by the cut-down level
of hours allowed by the district judge to yield a total
fee award of $6,625. Can a contested social security
case really be litigated to judgment in a district court at
a cost in legal fees of so minute an amount? Even at
$170 an hour the total fee award would be only $9,010.
In the circumstances, as we have explained, it was not
improper for the lawyer to request the cost of living
increase for the first time in his reply brief. The
judge’s stated reason for rejecting the enhancement—
that the request was untimely—was thus invalid. His
mistake in invoking forfeiture, and the meagerness of the
fee award, which resulted in part from that mistake,
persuade us that he should take a further look at the
plaintiff’s request for a cost of living adjustment.
  But that should be the entire scope of the remand. The
plaintiff’s lawyer mentioned nothing other than inflation
8                                               No. 10-3746

that might justify a fee award above the statutory pre-
sumptive ceiling. It is doubtful that he could have identi-
fied another justification in this case.
  The Supreme Court has held that the other special
factor mentioned in the statute—“the limited availability
of qualified attorneys for the proceeding involved”—is to
be interpreted narrowly, as being limited to necessary
skills or knowledge specialized to the area of law in
question, and that any nonenumerated special factor
must likewise be specialized to that area of law and so
can’t be just a factor of “broad and general application”
such as “the ‘novelty and difficulty of issues,’ ‘the
undesirability of the case,’ the ‘work and ability of coun-
sel,’ and ‘the results obtained.’ ” Pierce v. Underwood, 487
U.S. 552, 572 (1988).
   Rarely are special factors other than the two enumer-
ated in the statute invoked. Some courts think undue
litigiousness by the government such a factor, e.g., Jean
v. Nelson, 863 F. 2d 759, 776 (11th Cir. 1988), but
usually that would just increase the number of hours the
plaintiff’s lawyer had to spend on the case rather than
the hourly rate. Controversy in the wake of the Supreme
Court’s decision in Pierce v. Underwood has focused on
whether a specialized legal practice is ipso facto a special
factor warranting a fee above the statutory fee—the
position of the Ninth Circuit, e.g., Nadarajah v. Holder,
569 F.3d 906, 912-14 (9th Cir. 2009) (immigration and
habeas corpus)—or whether, at the opposite extreme,
the specialty must be one requiring training in a field
outside American law—the position of the Fifth and
No. 10-3746                                                      9

D.C. Circuits. See, e.g., In re Sealed Case 00-5116, 254
F.3d 233, 235-36 (D.C. Cir. 2001); Estate of Cervin v. Com-
missioner of Internal Revenue, 200 F.3d 351, 355 (5th Cir.
2000)).
  Neither extreme is attractive. Most lawyers are special-
ists; if being a specialist is a sufficient ground for a fee
award above the statutory presumptive ceiling, the
ceiling is a dead letter. But to confine the limited-avail-
ability special factor to specialties requiring training
outside of American law is too confining. Judge Boudin
proposed an attractive middle ground in his opinion
for a panel of the First Circuit in Atlantic Fish Spotters
Ass’n v. Daley, 205 F.3d 488, 492 (1st Cir. 2000),
when he said that “the statute does not assign extra com-
pensation by ‘fields’ but by asking the practical ques-
tion whether in the case at hand lawyers qualified to
handle the case can be found for $125 [per hour] or
less . . . . [I]f a plaintiff can show that a particular . . . kind
of case . . . requires for competent counsel someone from
among a small class of specialists who are available
only for [more than $125] per hour, that seems to us
enough to meet the language of the statute, its purpose,
and the Supreme Court’s gloss [in Pierce].” Our opin-
ions are consistent with Judge Boudin’s formulation,
Flouriou v. Gonzales, supra, 498 F.3d at 749; Muhur v.
Ashcroft, supra, 382 F.3d at 656; Raines v. Shalala, supra,
44 F.3d at 1361, if not quite so crisp. (For an
exhaustive review of the dizzying array of alternative
positions in the courts of appeals, see Former Employees
of BMC Software, Inc. v. U.S. Secretary of Labor, 519
F. Supp. 2d 1291, 1347-52 (Ct. Int’l Trade 2007).)
10                                             No. 10-3746

  It might seem that because the cost of living special
factor is not automatic, the two enumerated special
factors merge; the lawyer arguing for a cost of living
increase must show limited availability of lawyers able
to handle such a case. But that is not correct. Inflation
might have an impact across a range of fields of practice
that would make it difficult to hire a competent lawyer
even in a rather routine case in a field of law by no
means esoteric; in such a situation a fee above the
statutory fee might well be justified. When inflation is
not a factor, the lawyer does have to show that there
is something special about the particular type of case
that justifies the higher fee. That special factor has not
been invoked in this case.
  And so on remand the plaintiff’s lawyer will have to
show that without a cost of living increase that would
bring the fee award up to $170 per hour, a lawyer
capable of competently handling the challenge that his
client mounted to the denial of social security disability
benefits could not be found in the relevant geographical
area to handle such a case.
  A final point: the district court ordered the fee award
paid to the lawyer rather than to his client, and the gov-
ernment objects, citing Astrue v. Ratliff, 130 S. Ct. 2521
(2010), where the Supreme Court held that the statutory
fee entitlement belongs to the party rather than to the
party’s lawyer. But the plaintiff in this case had assigned
her claim to a fee award to her lawyer in advance, and,
so far as appears, that was not the case in Ratliff, where
the government wanted to deduct from the fee award
No. 10-3746                                                11

a debt she owed. Some language in the Supreme Court’s
opinion suggests that assignment would make no differ-
ence: “The fact that the statute awards to the prevailing
party fees in which her attorney may have a beneficial
interest or a contractual right does not establish that the
statute ‘awards’ the fees directly to the attorney.” Id. at
2526. But elsewhere the opinion notes that the govern-
ment “often paid EAJA fees directly to attorneys in cases
in which the prevailing party had assigned its rights in
the fees award to the attorney (which assignment
would not be necessary if the statute rendered the fees
award payable to the attorney in the first instance) . . .,
[though it] has since continued the direct payment prac-
tice only in cases where ‘the plaintiff does not owe a
debt to the government and assigns the right to receive the
fees to the attorney.’ ” Id. at 2529. The language we’ve
italicized suggests that if there is an assignment, the
only ground for the district court’s insisting on making
the award to the plaintiff is that the plaintiff has debts
that may be prior to what she owes her lawyer. There
is no indication of that in this case, so to ignore the as-
signment and order the fee paid to her would just
create a potential collection problem for the lawyer. See
United States ex rel. Virani v. Jerry M. Lewis Truck Parts &
Equipment, Inc., 89 F.3d 574, 579 (9th Cir. 1996).
  Even if our interpretation of Astrue v. Ratliff is incorrect
and the judge should not have ordered direct payment
of the fee award to the lawyer, this cannot help the gov-
ernment. For it is seeking to alter the judgment and it
cannot do that without having filed a cross-appeal, e.g.,
American Bottom Conservancy v. U.S. Corps of Engineers,
12                                           No. 10-3746

2011 WL 2314757, at *7 (7th Cir. June 14, 2011), which it
has not done. On the contrary, it urges us in the conclu-
sion of its brief to affirm the district court’s judg-
ment—having said a few pages earlier that the judgment
is incorrect because it ordered payment to the wrong
person!
                               R EVERSED AND R EMANDED.




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