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United States v. United States Currency In the Sum of Six Hundred Sixty Thousand

July 13, 2006

UNITED STATES OF AMERICA, PLAINTIFF,
v.
UNITED STATES CURRENCY IN THE SUM OF SIX HUNDRED SIXTY THOUSAND, TWO HUNDRED DOLLARS ($660,200.00), MORE OR LESS, DEFENDANT.



The opinion of the court was delivered by: Azrack, United States Magistrate Judge

Memorandum and Order

On April 6, 2006, I entered an Order*fn1 granting Samy Khalil ("Claimant") and Abdel Soliman's motion to enforce a settlement agreement. See United States v. United States Currency in the Sum of Six Hundred Sixty Thousand, Two Hundred Dollars ($660,200.00), More or Less, 423 F. Supp. 2d 14 (E.D.N.Y. 2006) (hereinafter "Currency I"). At that time, I also granted Khalil and Soliman's motion for costs and attorneys' fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), because the government was not substantially justified in its refusal to execute the Stipulation, honor the oral settlement and the written agreement, or comply with the terms of the settlement. See Id. at 36-38. On a motion for reconsideration, I clarified that only Khalil could recover costs and attorneys' fees because Soliman, having pled guilty to conspiracy to defraud the United States, was ineligible for reimbursement under the Civil Asset Forfeiture Reform Act of 2000. See United States v. United States Currency in the Sum of Six Hundred Sixty Thousand, Two Hundred Dollars ($660,200.00), More or Less, 429 F. Supp. 2d 577, 580-81 (E.D.N.Y. 2006) (hereinafter "Currency II"). Familiarity with this Court's April 6, 2006 and May 16, 2006 Memoranda and Orders is presumed.

Claimant Khalil now moves for reimbursement of his costs and fees pursuant to my decision in Currency I. Claimant contends that the hourly rate for his attorneys' fees should not be set by the EAJA cap of $125/hour but, rather, at the reasonable rate for a forfeiture attorney. For the reasons stated below, I will not deviate from the EAJA cap other than to account for an increase in the cost of living. Thus, claimant is awarded $54,617.03 in fees, pursuant to the EAJA rate based on a Consumer Price Index adjustment, and $156.93 in costs for a total award of $54,773.96.

DISCUSSION

A. Attorneys' Fees and Costs Awarded under the EAJA

The EAJA provides in pertinent part that:

[e]xcept as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a) incurred by that party in any civil action . . . brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412(d)(1)(A). Under this section of the EAJA, the prevailing party is entitled to attorneys' fees of $125.00 per hour. See Kerin v. United States Postal Serv., 218 F.3d 185, 189 (2d Cir. 2000) (rate applies to all cases commenced on or after March 29, 1996). The EAJA allows for an hourly rate of more than $125.00 if 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); see also Wells v. Bowen, 855 F.2d 37, 43 (2d Cir. 1988) ("[I]t remains clear that the EAJA's [ ] per hour rate can be increased to reflect a demonstrable increase in the cost of living since the date of the statute's effectiveness.").

Once the court determines that the prevailing party has met the threshold for an award of fees and costs under the EAJA, it must determine what fee is reasonable. See INS v. Jean, 496 U.S. 154, 161 (1990) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Claimant moves for an increase of the EAJA cap either for cost of living pursuant to the Consumer Price Index or, in the alternative, for the "special factor" that there are a limited number of qualified attorneys able or willing to take on substantial civil forfeiture matters. I grant claimant's motion for an increase in fees based on cost of living but deny the motion for an increase based on the special factor analysis.

1. Upward Adjustment for Cost of Living

In Harris v. Sullivan, the Second Circuit established that the cost of living increase allowed under the EAJA is properly measured by the Consumer Price Index ("CPI"). 968 F.2d 263, 265 (2d Cir. 1992). The court must apply a different cost of living adjustment for each year in which hours were billed, rather than applying a single adjustment to the total hours billed. See Kerin, 218 F.3d at 194 (citing Masonry Masters, Inc. v. Nelson, 105 F.3d 708, 711-13 (D.C. Cir. 1997) (holding that cost of living adjustment should be made using a different hourly cap for each year in question)). Claimant seeks reimbursement of attorneys' fees for hours billed in both 2005 and 2006. Claimant submitted CPI statistics based on the Northeast urban New York-Northern New Jersey-Long Island, NY-NJ-CT-PA region. See U.S. Dept. of Labor, Bureau of Labor Statistics, http://data.bls.gov/PDQ/servlet/SurveyOutputServlet (last visited June 16, 2006). The hourly rate for 2005, based on the CPI, is adjusted by 27.4%*fn2 , resulting in a rate of $159.25 per hour for attorneys' fees billed in 2005. The hourly rate for 2006 is adjusted by 30.8%*fn3 , resulting in a rate of $163.50 per hour for attorneys' fees billed in 2006. This upward adjustment, because it is made based on a cost of living increase, applies to all counsel. See Cruz v. Apfel, 48 F. Supp. 2d 226, 230 (E.D.N.Y. 1999).

2. No "Special Factor" Exists

While claimant's attorneys were exceptionally competent and the legal memoranda submitted concise, articulate, and well-argued, an attorney's skill, no matter how extraordinary, is not a consideration under the EAJA special factors cap increase. In Pierce v. Underwood, the Supreme Court determined that superior legal skill was not an EAJA "special factor" intended by Congress. 487 U.S. 552, 571-72 (1988). "If 'the limited availability of qualified attorneys for the proceedings involved' meant merely that lawyers skilled and experienced enough to try the case are in short supply, it would effectively eliminate the [$125.00] cap . . . ." Id. at 571. The Court held that the special factor "must refer to attorneys qualified for the proceedings in some specialized sense, rather than just in their general legal competence." Id. at 572 (internal quotation marks omitted). Examples of "some specialized sense" were "an identifiable practice specialty such as patent law, or knowledge of a foreign law or language." Id.

The legal issues presented in this matter were complex and the research and analysis required substantial. However, the court is not permitted to consider any of those factors in determining whether it should exceed the EAJA cap. A court may not base an adjustment upon "the novelty and difficulty of [the] issues, the undesirability of the case, the work and ability ...


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