Parrott v. Shulkin

Parrott v. Shulkin

851 F.3d 1242 (Fed. Cir. 2017)

Authored by Darby T. R. Findley

Statement of Facts: Paula Parrott’s husband, a military veteran, died as a result of esophageal adenocarcinoma, with liver and peritoneal metastasis. Mrs. Parrott submitted an entitlement claim to the Board of Veterans Appeals (“Board”) for benefits after her husband’s death. The Board denied her claim and she appealed to the Veterans Court. The Veterans Court remanded her case back to the Board for adjudication, reversing the outright denial. Mrs. Parrott then filed a claim for $7,163.11 to cover her legal expenses as permitted under the Equal Access to Justice Act (“EAJA”). The EAJA statutorily mandates payment of fees and other expenses to a prevailing party in a civil or agency action brought by or against the United States. 28 U.S.C. § 2412(d)(1)(A). In calculating the cost of living adjustment to be used to determine her attorney’s hourly rate, the Board decided to award Mrs. Parrott only $4,050 in legal fees and expenses. Mrs. Parrott appealed the decision to the Court of Appeals for Veterans Claims, seeking the original amount plus additional appeal costs. The Veterans Court decided to award Mrs. Parrott $4,050 in attorney fees to be paid to her attorney, Chris Attig, and to cover other expenses. Although attorney fees are usually capped at $125 per hour, the cap can be raised to account for a high cost of living. To determine whether the cap should be raised, courts use the national Consumer Price Index (“CPI”) for Urban Consumers or a local CPI. Mrs. Parrot calculated her CPI adjustment using the local CPI for Washington, D.C., which resulted in an hourly rate of $191.69.

Procedural History:  The Secretary of Veterans Affairs agreed that Mrs. Parrott prevailed in her claim for legal fees and expenses, but thought that the full $7,163.11 claimed was unreasonable. The Secretary agreed that the cap should be raised, but argued that the CPI for Dallas, TX, where Mr. Attig had his principal office, should be used instead. The Dallas, TX CPI resulted in a rate of $183.74 an hour.

The Veterans Court declined to use either of the proposed approaches, reasoning instead that the local CPI from each of the locations that Mr. Attig performed his legal services should be used to calculate the hourly rate in each of the three locations. After the three hourly rates are calculated, the Veterans Court reasoned that Mr. Attig’s itemized billing statement should be reviewed and each of the billing entries apportioned to the office where the work was performed. To correctly determine the hourly rates to be awarded, the Veterans Court reasoned that it would need additional information from Mrs. Parrot and Mr. Attig. Instead of acquiring the information needed, the Veterans Court decided to use the $125 rate to calculate Mrs. Parrott’s award. After finding 32 to be a reasonable number of hours for the work performed, Mrs. Parrott was entitled $4,000 of attorney feel and $50 in filing fees. Mrs. Parrott appealed the Veterans Court’s decision. 

Questions Presented: (1) Whether the Veterans Court adopted an incorrect approach for determining the cost of living adjustment to be used in calculating her attorney hourly rate under EAJA. (2) Whether the Veterans Court abused its discretion by not allowing Mrs. Parrott to resubmit her EAJA application using the approach the court adopted. 

Holdings: The Federal Circuit held that (1) the Veterans Court did not adopt an incorrect approach for making the cost of living adjustment determination and (2) that it lacked jurisdiction to determine whether the Veterans Court abused its discretion in not allowing Mrs. Parrott to resubmit her EAJA application.

Reasoning: The local CPI approach, where available, is more consistent with the EAJA than the national approach. First, the plain language of the EAJA defines attorney fees as rates influenced by both market rates and the cost of living. These two factors are inherently local in nature, making the local CPI approach most consistent with the plain language of the statute. Second, the local CPI approach is more consistent with the underlying purpose of the EAJA. The EAJA was passed to ensure adequate representation for those filing suit against the government and to minimize such costs to taxpayers. The local CPI approach furthers both of these goals by assisting litigants in obtaining counsel whose rates may exceed the national average, and by preventing windfalls to attorneys whose cost of living is below the national average. Use of the national CPI approach would provide a windfall to attorneys with a low cost of living at the expense of taxpayers and would undercompensate attorneys with higher costs of living, thereby discouraging the type of representation the EAJA is meant to ensure. Third, the local CPI approach is consistent with the Federal Circuit’s holding in Levernier Constr., Inc. v. United States, 947 F.2d 497 (Fed. Cir. 1991), where the court refused to grant a cap increase to an attorney whose market rate was below the statutory cap. The Levernier case suggests local market condition can serve as a proper indicator for EAJA awards – a conclusion reached by other circuits, as well. See, e.g., Sprinkle v. Colvin, 777 F.3d 421, 428 n.2 (7th Cir. 2015); Bryant v. Comm’r of Soc. Sec., 578 F.3d 443, 450 (6th Cir. 2009); Johnson v. Sullivan, 919 F.2d 503, 505 (8th Cir. 1990); Clark v. Comm’r of Soc. Sec., 664 Fed. App’x. 525, 529 (6th Cir. 2016).

The Federal Circuit also found that Mrs. Parrot’s contention that an EAJA application can choose the CPI approach that results in the most favorable rate is incorrect for three reasons. First, the EAJA requires applicants to justify a request for a higher award and tie their requests to prevailing market rates. Allowing any CPA approach to be used would result in statutorily prohibited windfalls for either the prevailing party or the attorney. Second, there is no ambiguity in the EAJA’s language. Third, the cases cited by Mrs. Parrott that interpret veterans benefit statutes do not apply to this statute of general applicability. Mrs. Parrot fails to cite a case that holds that a statute should be construed in favor of a litigant because the litigant is a veteran.

Finally, the Federal Circuit noted that it does not have the authority to review all discretionary actions taken by the Veterans Court. In its decision to deny Mrs. Parrott the opportunity to resubmit her EAJA application, the Veterans Court did not interpret any law or regulation. The Veterans Court just stated that Mrs. Parrott failed to demonstrate the need for a higher fee and used its discretion to calculate her EAJA fee. The Federal Circuit does not have the power to review that factual determination. There is also no controlling statute or regulation that would require the Veterans Court to submit another application. As such, the Veterans Court did not commit any legal error.

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