The opinion of the court was delivered by: Weinstein, District Judge:
MEMORANDUM, FINAL ORDER AND JUDGMENT
After a full hearing of this matter by the court, the
Magistrate Judge's recommendations and findings are adopted
for the reasons stated in her Report which is attached to, and
made a part of, this order.
Plaintiffs' counsel contend that the Magistrate Judge's
award of fees is based on rates that are somewhat low by
Manhattan standards. The fees awarded are adequate to
encourage attorneys to take on the important task of policing
government practices. Added to the monetary incentive is the
supplemental psychic incentive of recognition for a job well
done from the bar, bench, and public, and personal
satisfaction for performing a valued public service. Able
attorneys in metropolitan New York should be sufficiently
beguiled by this package of benefits to continue to pursue
public interest litigation of this kind.
REPORT AND RECOMMENDATION
This action began over twelve years ago when plaintiffs
— a class of Medicare beneficiaries who were enrolled in the
supplementary medical insurance program established under Part
B of the Social Security Act, 42 U.S.C. § 1395j et seq., but
who had been denied reimbursement for certain medical costs —
sued Group Health Incorporated (GHI), the carrier which
administers the program in Queens, New York, and the Secretary
of Health and Human Services (HHS), who is statutorily
authorized to contract with private insurance carriers to
administer the Part B claims process. Plaintiffs alleged, in
substance, that the "review determination notices," through
which GHI supposedly informed plaintiffs of the results of the
carrier's internal review of its decision to deny benefits,
were inadequate. Although Judge Weinstein resolved the primary
issue in 1984, ruling that these notices did not meet due
process standards and ordering that they be "changed to provide
claimants with comprehensible explanations of the actual reason
full reimbursement is denied," David v. Heckler, 591 F. Supp. 1033,
1035 (E.D.N.Y. 1984), there have been many subsequent
proceedings in which details concerning this original order
have been ironed out. In June 1990, plaintiffs moved, pursuant
28 U.S.C. § 2412, to recover the attorneys' fees and costs they
incurred during these post-judgment proceedings. After
rendering a decision as to certain aspects of this motion,
Judge Weinstein referred this matter to me for a report and
recommendation concerning all aspects of the fees request.
This class action, brought by plaintiffs' counsel on behalf
of "hundreds of thousands of older people in Queens, New York,
whose Medicare Part B claims [were] subjected to diminution,"
principally challenged the adequacy of notices and appeal
procedures used by GHI, the insurance carrier who was
authorized by HHS to administer the Part B claims process in
this area. David v. Heckler, 591 F. Supp. at 1035. The dispute
focused on the adequacy of GHI's "review determination notices"
(also referred to as "review letters"), which are sent to
beneficiaries who challenge GHI's refusal to reimburse them for
certain medical costs in order to inform them of the results of
GHI's internal review of its initial decision to deny benefits.
This dispute was largely resolved following a 1984 bench trial
before Judge Weinstein; in David v. Heckler, 591 F. Supp. 1033,
the judge ruled that the review determination notices were
in that they were "incomprehensible to most of the people who
receive them" and did "not contain enough information about
why reimbursement was denied and how the reimbursable amount
was calculated to enable an individual or his or her
representative to effectively appeal the decision."
Id. at 1042. The judge also found that this lack of information
pervaded all aspects of the review process, including the
hearing stage, thereby presenting a due process problem which
mandated certain modifications in procedures. Id. at 1046-47.
To cure these deficiencies, Judge Weinstein ordered,
inter alia, that defendants re-draft the review letters so as
to 1) eliminate code words and confusing language and 2) insure
that they were sufficiently clear and detailed so that
beneficiaries could determine whether or not their
reimbursement had been calculated correctly. The judge also
directed defendants to furnish plaintiffs' counsel with
information necessary to ensure that the Plan B program was
being properly administered. In so doing, the court praised
plaintiffs' counsel efforts, noting that plaintiffs might
otherwise not be represented because 1) the relatively small
claims made it uneconomical for them to obtain counsel, 2) no
specialized bar, such as that which has developed to
effectively protect the rights of Social Security recipients,
was likely to develop to protect Medicare beneficiaries, and 3)
it was difficult for the elderly to organize effective private
organizations with the interest and resources necessary to
provide a check on the system. Judge Weinstein stated:
[O]ne organization has shown the interest and
capacity necessary to investigate [Medicare
violations] and obtain relief — Legal Services for
the Elderly. In this case the organization provided
highly skilled and aggressive representation for
the class through Toby Golick, Esq. in conjunction
with Julia Spring Esq. and Whitney North Seymour,
Esq., acting pro bono in the highest traditions of
the bar. Id. at 1048.
Following this decision, plaintiffs moved for an award of
attorneys' fees. This motion was withdrawn in May, 1985,
however, after the parties reached an agreement on this issue.
Their agreement was embodied in a stipulation, entered as an
order by Judge Weinstein on May 17, 1985, which provided that
plaintiffs would accept $74,500 "in full settlement and
discharge of their claim for attorneys' fees and expenses
under the Equal Access to Justice Act, 28 U.S.C. § 2412." The
motion at bar, therefore, does not seek to recover attorneys'
fees or costs related to the trial or pre-trial proceedings,
but only to recover expenses relating to post-judgment
proceedings which took place in 1987 and thereafter.
Plaintiffs initiated these post-judgment proceedings on
April 2, 1987, by moving that defendants be held in contempt
for failure to comply with the Court's original July 11, 1984,
ruling. Plaintiffs alleged, inter alia, that GHI had failed to
simplify the review determination notices, but that HHS's
annual reviews had nonetheless found the carrier in perfect
compliance with the 1984 order. While Judge Weinstein denied
this motion, he directed defendants to produce the review
determination letters and other data analyzed during the
government's Fiscal Year (FY) 1985 and 1986 reviews.
Although the government subsequently provided plaintiffs'
counsel with copies of "scoring sheets" and summaries prepared
by the reviewers who evaluated GHI's performance, it could not
produce the specific letters analyzed during the FY 1985
review because these were not adequately identified in the
reviewer's records. Plaintiffs' counsel thereupon requested
that the government repeat its FY 1985 and 1986 reviews using
a new random sampling of letters, and that plaintiffs'
representatives be permitted to witness the review of these
letters. The government denied this request.
On March 18, 1988, based on an extensive review of the
letters produced by defendants, plaintiffs renewed their
original motion to hold defendants in contempt, asserting that
the notices produced were lacking in substantive content and
thus failed to comply with the court's original ruling. At the
June 27, 1988 oral argument on this motion, Judge Weinstein
declined to entertain the contempt question and essentially
converted the motion into a request for modification of the
original decree. He then ordered defendants, inter alia, to
make several alterations on the notices being used and directed
the parties to develop a proposal for a system that would
provide the beneficiaries with sufficient information to
challenge agency determinations.
Over the next few months, plaintiffs' counsel invested
substantial effort in developing a proposal for amending the
Medicare Part B reimbursement review determination procedure.
During this time, the parties appeared before Judge Weinstein
in several proceedings pertaining to this proposal, including
a September 1988 hearing at which plaintiffs adduced testimony
concerning the operation and costs of the proposed system.
These efforts culminated in an Interim Order, signed by
Judge Weinstein on December 21, 1988. This order denied
plaintiffs' civil contempt motion, with leave to renew, but
noted that "[t]he apparent failure of the defendants' actions
to rectify prior defects in notice and to fully comply with
directions of this Court in the Judgment previously entered
necessitate[d] a more precise order to ensure adequate
compliance. . . ." The court then directed GHI to implement,
for a six-month ...