ORDER GRANTING ATTORNEYS’ FEES AND COSTS
This matter comes before the Court on the plaintiffs’ Motion for Attorneys’ Fees and Costs against the Federal defendants 1 under 28 U.S.C. §§ 2412(b) and (d) of the Equal Access to Justice Act (“EAJA”). In light of this Court’s ruling, filed concurrently herewith, denying plaintiffs’ Motion for Leave to File a Corrected Second Amended Complaint, the Court denies plaintiffs’ request for fees under 28 U.S.C. § 2412(b). However, having carefully considered the parties’ papers, supporting documentation, and the record herein, the Court grants plaintiffs’ request for attorneys’ fees and costs under 28 U.S.C. § 2412(d) and directs the parties to proceed as set forth below.
*530 I.
Under EAJA, prevаiling plaintiffs are entitled to recover their attorneys’ fees and costs unless the government’s position was substantially justified, special circumstances would make an award unjust, or the application for fees is not timely filed. 28 U.S.C. §§ 2412(d)(1)(A), (1)(B);
Commissioner, I.N.S. v. Jean,
We first address the requirements for establishing eligibility for fees under EAJA, and second, the issue of a reasonable fee.-
II.
ENTITLEMENT TO FEES
1. Prevailing Party
A plaintiff qualifies as a prevailing party if she succeeds on “ ‘any significant issue in the litigation which achieve[d] some of the benefit the parties sought in bringing the suit.’”
Texas State Teachers Ass’n v. Garland Independent School District,
After obtaining certification of a California, and later, a Ninth Circuit-wide class, plaintiffs prevailed against both the State and Federal defendants. On January 5,1990, we granted a partial summary judgment against the State of California, finding that it was unlawfully relying on improperly deemed income and resources to reduce or deny eligibility for Medi-Cal benefits. On December 11, 1990, we extended this ruling to the Federal defendants, finding that they were permitting or requiring such unlawful deeming throughout the Ninth Circuit.
Plaintiffs were also highly successful at the remedial stage, which raised a number of highly complex and novel issues regarding comрliance. As a result of this Court’s remedial rulings, California has revised its eligibility procedures, with respect to deeming, and the Federal defendants have provided all States within the Ninth Circuit with extremely detailed instructions regarding how to develop deeming policies that are consistent with the dictates of the Medicaid Act, as set forth in 42 U.S.C. § 1396a(a)(17)(D).
The end result is that plaintiffs achieved very significant benefits for thousands of applicants who would otherwise be denied needed medical benefits.
See
Wulsin Deck at ¶ 6 (“the court’s decisions will have a significant impact on the financial circumstances of [Medi-Cal] rеcipients throughout the State, allowing them to obtain needed medical care that they could not have obtained absent the relief that the decision ensures”);
Bird
Deck at ¶ 6 (“The results of the
Sneede [by Thompson v. Kizer,
2. Substantial Justification
Once we determine that the plaintiffs are the prevailing party, it is the government’s burden to demonstrate that fees should nonetheless be denied because the “position” of thе United States was “substantially justified.”
Oregon Natural Resources Council,
The “position” of the United States refers to the agency’s underlying position—
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1. e. the agency action or inaction upon which the litigation is based — and the agency’s litigation position.
Id.
at 1331;
Thomas,
The term “substantial justification” requires the agency to “show that its position has a reasonable basis in law and fact.”
Pierce v. Underwood,
The underlying conduct at issue here is the decision of the Secretary of Health and Human Services to issue his August 1989 transmittal, which permitted or required State Medicaid agencies to promulgate regulations that violated the unambiguous terms of the Medicaid statute, as set forth in 42 U.S.C. § 1396a(a)(17)(D). We readily agree with plaintiffs that this underlying conduct lacked any reasonable basis in either law or fact, and thus can not be “justified to a degree that could satisfy a reasonable person.”
Pierce,
As we previously held, the statutory language at issue in this case could hardly be more plain or unambiguous. In no uncertain terms, it prohibits the Secretary from deeming income from persons outside the spousal or parent-child relationship.
See Sneede,
Notwithstanding the above, the Secretary inexplicably and without ever proffering any reasonable justification, insisted on flouting § 1396a(a)(17)(D) in favor of a policy which permitted or required States to deem income outside the spousal or parent-child relationships.
Not surprisingly, federal defendants do not even attempt to defend the reasonableness of their underlying conduсt on the merits. Instead, the Secretary falls back on blanket principles that have little persuasive force under the particular circumstances presented here. For example, the Secretary emphasizes that the Medicaid statute is renowned for its complexity. However, the simple fact that a federal statute is complex, as many are, does not shield the government from liability for fees. Moreover, the specific language at issue here was not difficult to interpret. Rather, as the courts have consistently agreed, it is “plain” and “unambiguous.”
The government alsо seeks support from the fact that the general concept of “deeming” has been upheld by the Supreme Court *532 in other contexts. However the fact that deeming, as a general concept, has been upheld is simply beside the point. No one in this case has ever disputed that deeming can not occur in the proper context.
The government’s final argument is that language in the Ninth Circuit’s December 13, 1991 memorandum opinion shields it from any liability for fees. As explained below, however, this argument is equally unavailing.
Of the many rulings entered in this action, only one was appealed. That ruling, contained in an order issued June 8, 1990, concerned a narrow remedial issue (involving one step of the state of California’s proposed method for determining the income and need of California’s Medi-Cal Family Budge Units). As required by Ninth Circuit rules, plaintiffs included a statement in their appellate brief that they intended to seek attorney fees if they prevailed on appeal. Neither plaintiffs nor defendants briefed the issue of fees.
On December 13, 1991, the Ninth Circuit affirmed the Court’s June 8, 1990 order on merits. At the same time, it also ruled that plaintiffs were not entitled to recover fees for the appeal under section 28 U.S.C. § 2412(d) because the government’s position was substantially justified. Dec. 13, 1991 Memorandum Opin. at 10-11.
Federal defendants argue that under the “law of the case” doctrine, the Ninth Circuit’s ruling prevents this Court from determining whether the government’s underlying conduct was “substantially justified.” The fatal flaw in this argument is that the only matter before the Court of Appeals, and the only matter considered, was a single issue concerning California’s proposed remedial plan. See Memorandum Opin. at 1, n. 1 (“[T]he only issue presently before this Court is the propriety of the June 8 order”) (emphasis added). Thus, the only “position” the Court of Appeals сould have evaluated for “substantial justification” was the Secretary’s litigation position regarding the June 8, 1990 order on appeal. Indeed, the Court of Appeals never once discusses or addresses the Secretary’s underlying conduct in its decision. 3
It is well settled that the Law of the Case doctrine only “operates to preclude a reexamination of issues óf law decided on appeal, explicitly or by necessary implication.”
Chapman v. Nat’l Aeronautics and Space Administration,
In sum, and for all the foregoing reasons, we conclude that the government has not met its burden of demonstrating that its underlying position, which necessitated this litigation, was substantially justified, “that is, justified to a degree that could satisfy a reasonable person.”
Pierce,
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The determination that the government’s prelitigation position was not substantially justified acts as a “one-time threshold fоr fee eligibility.”
Jean,
3. Special Circumstances
A court may deny fees to а prevailing party even where the government’s position was not substantially justified, if special circumstances would make an award unjust. 28 U.S.C. § 2412(d)(1)(A). This provision, however, should only be invoked with caution.
J & J Anderson, Inc. v. Town of Erie,
4. Timeliness of Application
Under 28 U.S.C. § 2412(d), the plaintiff must submit an application for attorneys’ fees within 30 days of final judgment. This is a mandatory, jurisdictional condition.
Shalala v. Schaefer,
— U.S.-,-,
Defendants contend that plaintiffs’ request for fees is untimely because it was not filеd within 30 days of this Court’s December 11,1990 order, which extended the Court’s earlier ruling against the State defendants to the Federal defendants. Alternatively, Defendants argue that the application should have been filed within 30 days of February 26,1991, which is the date that the appeal from the December 11, 1990 order was dismissed. Both arguments are merit-less since the December 11, 1991 order was clearly not a final judgment.
Melkonyan v. Sullivan,
III.
DETERMINATION OF A REASONABLE FEE
Where, as here, the plaintiffs have satisfied the conditions for recovering attorneys’ fees under § 2412(d), we must determine what fee is “reasonable.” The process for determining a reasonable fee under 28 U.S.C. § 2412(d) is the same as that followed in cases awarding fees under 42 U.S.C. § 1988.
Jean,
Accordingly, we must determine the number of hours reasonably expended in the litigation and multiply that figure by а reasonable hourly rate.
Hensley v. Eckerhart,
1. Number of Reasonable Hours Expended
It is plaintiffs’ burden to “document[] the appropriate hours expended in the litigation” by submitting evidence in support of those “hours worked.”
Gates,
Plaintiffs have submitted detailed declarations and supporting time sheets demonstrating that they have spent a total of 1428 hours litigating the merits of this action. Under Jones v. Espy,10 F.3d 690 (9th Cir.1993), plaintiffs have allocated these hours between purely state, purely federal and joint state-federal matters. The hours set forth below represent those hours spent on purely federal matters and 50 percent of those hours spent on joint state-federal matters. Rubin Supp.Deel. ¶4-6 and Ex. A & C. 7
Fed. Hr! % Jt. ffrs Total Hrs
443.45 87.53 530.98 Evelyn Frank
127.00 8.5 135.50 Michael Parks
19.00 2.38 21.38 Jane Perkins
31.50 4.0 35.50 Mark Regan
TOTAL: 723.36
Having reviewed the affidavits submitted, and based on our familiarity with this case, we conclude that the total of 723.38 hours is eminently reasonable. Indeed, as discussed below, it is the specialized expertise and knowledge of counsel that enabled them to litigate this case in such an efficient fashion. See Finberg Decl. at ¶ 11 (“Ordinarily I would be amazed that such a difficult ease could be litigаted so efficiently but I know from experience that Evelyn Frank worked *535 with extraordinary speed and effectiveness”); Bird Decl. at ¶8.
The record also indicates that plaintiffs exercised considerable billing judgment and restraint.
See e.g.,
Parks Deck, at ¶ 3-4; Regan Deck at ¶¶ 3-4; Ronfeldt Deck, at ¶ 5. Based on our review of the record, it does not appear that the above tally contains excessive, redundant or unnecessary hours. Finally, the number of hours sought are documented by contemporaneous time records maintained by plaintiffs.
See Hensley,
Defendants, however, have not yet had an opportunity to respond to plaintiffs’ allocation оf hours between federal and state matters because such allocation was only provided in plaintiffs’ reply brief in response to the Ninth Circuit’s recent decision in Jones v. Espy. Accordingly, Federal defendants will be given an opportunity to comment on the reasonableness of the number of hours in light of the State-Federal allocation provided by plaintiffs.
2. Reasonable Hourly Rate
The EAJA provides that attorneys’ fees shall not be awarded in excess of $75.00/ 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 procеedings involved justifies a higher fee.” 28 U.S.C. § 2412(d)(2)(A)(ii). In referring to “special factors,” “ ‘Congress intended for courts to deviate from the statutory cap only if there was limited availability of “attorneys having some distinctive knowledge or specialized skill needful for the litigation in question.’ ”
Pirus v. Bowen,
Based on the Court’s experience with counsels’ written and oral presentations in this case, its familiarity with the issues raised therein, and the declarations submitted with plaintiffs’ motion, there can be no question that plaintiffs’ counsel possessed distinctive knowledge and specialized skill needful for this litigation. Indeed, the instant case is exactly thе type of case in which a deviation from the statutory cap is appropriate, and Federal defendants do not argue otherwise in their opposition to plaintiffs’ motion.
Medicaid law is recognized as one of the most complex, arcane, and difficult areas of practice. As a result, very few attorneys are competent to practice in this area. Wulsin Deck at ¶ 5. Plaintiffs’ lead counsel for much of this case, Evelyn Frank, was considered one of the, if not the, most knowledgeable and outstanding attorney litigating complex health care/Medicaid issues in Cаlifornia, and perhaps the country. See Bird Deck at ¶¶ 2, 7. Finberg Deck at ¶ 6 (Evelyn Frank had a deeper substantive grasp and greater intuitive understanding of ... Medicaid ... than any legal services lawyer I have ever known. She was considered by many, including myself, to be the most able legal advocate for Medicaid recipients in the country”); Wulsin Deck at ¶ 5. Plaintiffs’ co-counsel, Michael Parks, Mark Regan, and Jane Perkins are also highly experienced, well regarded, litigators in the area of Medicaid benefits. See Finberg Deck at ¶¶ 3-4, 9; Parks Deck, Regan Deck, Perkins Deck We are amply satisfied that plaintiffs’ counsel possessed the type of distinctive knowledge that Congress contemplated would warrant a deviation from the statutory cap.
This Court is also convinced, and it is undisputed in the record, that counsels’ highly specialized expertise was “needed,” — indeed essential — to the success of this action. See e.g. Finberg Deck at ¶ 9 (The “Sneede litigation is known throughout the legal services community as one of the most complicated and nettlesome cases ever brought. For years, it has been discussed at conferences ... as the sort of case that only Eve *536 lyn could bring, and that only a very few of us were capable of fully understanding”).
Finally, we are satisfied that plaintiffs could not have found alternative counsel with the necessary expertise who would have been willing to take this case at the $75.00 statutory rate.
See Golden Gate Audubon Society v. U.S. Army Corps of Engineers,
Accordingly, we find that plaintiffs’ merits counsel are not subject to the $75.00 statutory rate but rather are entitled to compensation at “prevailing market rates for the kind and quality of the services furnished.” 28 U.S.C. § 2412(d)(2)(A).
Plaintiffs have submitted declarations from partners at San Francisco firms which provide persuasive evidence of the market rate in the Bay Area for litigators with experience equivalent to that possessed by plaintiffs’ counsel. See Declarations submitted by Wald (of Heller, Erhman, White & McAuliffe), Meadows (of Keker, Brockett & Van Nest), and George (of McCutchen, Doyle, Brown & Enesen). The hourly rates requested by plaintiffs’ merits counsel, set forth below, аre all either at or below these market rates.
Evelyn Frank (1975) $320
Michael Parks (1968) $265
Jane Perkins (1981) $225
Mark Regan (1981) $210
Although Federal defendants have not disputed that the requested hourly rates reflect “prevailing market rates of the kind and quality of the services furnished,” we must nonetheless make an independent finding that such rates are reasonable before any award is made.
Intel Corp. v. Terabyte Int’l, Inc.,
We have carefully reviewed the declarations submitted by Wald, Meadows, and George, as well as the declarations submitted by Parks, Perkins, and Regan, and Ronfeldt (on behalf of Frank), detailing the background and experience of counsel. Based on these declarations, and thе Court’s own familiarity with prevailing market rates in this area, as well as its first hand knowledge of the skill and exemplary performance of counsel in litigating this action, we are amply satisfied that the requested hourly rates are reasonable, and represent “prevailing market rates for the kind and quality of the services furnished.” 28 U.S.C. § 2412(d)(2)(A). 8
3. Adjustment of the Lodestar
Based on the above, the lodestar award amounts to $218,805 less the amount of fees incurred in defending the appeal of the June 8, 1990 order.
See
n. 6,
supra.
The lodestar is a presumptively reasonable rate and neither plaintiffs nor defendants seek an adjustment upward or downward. The Cоurt is also independently satisfied that the lodestar represents a reasonable fee in this case.
Gates v. Deukmejian,
4. Costs
Plaintiffs request reimbursement of their out-of-pocket costs in the amount of $6,703.71. It is well established that such costs are recoverable as part of a fee award, and defendants registered no objection to the amount of costs requested in plaintiffs’ opening memorandum. Accordingly, plaintiffs shall be awarded their costs in this amount.
Chalmers v. City of Los Angeles,
IV.
FEES ON FEES
Plaintiffs who are otherwise eligible for fees under EAJA are also entitled to
*537
recover fees for the time they expend litigating their request for fees, without regard to whether the government’s position with respect to the fee request was substantially justified.
Jean,
Accordingly, plaintiffs’ special fees counsel, Altshuler, Berzon, Nussbaum, Berzon & Rubin, seek reimbursement for a total of 170 hours expended in recovering attorneys fees in this case (which total excludes any time spent solely on recovering fees from the State defendants). Rubin Suppl.Decl. at ¶ 6. This request is supported by declarations and contemporaneous time sheets, and reflects the exercise of significant billing judgment. Time that was duplicative or nonproductive was excised, and no reimbursement is being sought for time spent by attorneys no longer at the firm. See Rubin Decl. at ¶¶ 5-7.
Again, based on the Court’s familiarity with this case, and having reviewed the records submitted, we conclude that the number of hours requested is reasonable, particularly given that special fees counsel were required to establish a predicate for fees, in addition to addressing the many issues raised by the fee motion itself.
Notably, Federal defendants did not object to special counsel’s fee documentation, nor did they assert that any of the hours requested were excessive or unnecessary.
See Gates,
With respect to the hourly rate, plaintiffs’ counsel have not argued in their papers that any “special factor” warrants exceeding the $75.00 statutory cap for special fees counsel. 28 U.S.C. § 2412(d)(2). However, the Court finds that a cost of living increase is appropriate. Under the Ninth Circuit’s formula, a cost of living adjustment currently adjusts the $75.00/hour statutory fee upwаrds to $120.39/hour.
Animal Lovers Volunteer Assoc., Inc. v. Carlucci,
Y.
ORDER
Accordingly, and good cause appearing, it is HEREBY ORDERED that:
1. Plaintiffs’ Motion for Attorneys’ Fees pursuant to 28 U.S.C. § 2412(d) of the EAJA is GRANTED consistent with this Order.
2. Within 7 days of the date of this Order, plaintiffs shall file a statement itemizing those hours expended in defending the appeal of the June 8,1990 order, with a revised lodestar that excludes these hours.
3. Within 14 days of the date of this Order, Federal defendants shall file any objections they may have to plaintiffs’ allocation of hours between the Federal, State, and joint Federal-Statе matters, with respect to both merits counsel and special fees counsel. If any such objection is filed, plaintiffs may file any response to such objection within 7 days of service of the objection. In addition, plaintiffs shall submit a final statement of hours expended by special fee counsel that includes any time spent (1) responding to Federal defendants’ objections, filed pursuant to this paragraph, and (2) responding to paragraph two above.
IT IS SO ORDERED.
Notes
. Plaintiffs and State defendants have settled the question of attorneys' fees and costs. Thus, plaintiffs' motion is currently directed toward the Federal defendants only.
. We recognize that the failure to prevail does not raise a presumption that the government's position was not substantially justified.
Kali v. Bowen,
. As Federal defendants emphasize, the Court of Appeals makes note of the Court's January 5, 1990 Order in its оpinion. However, it only does so in the context of reciting the history of the case — not to discuss its merits or the reasonableness of the Federal defendants' underlying conduct.
. In
Jean,
the Supreme Court held that once a court makes a threshold determination regarding substantial justification, or lack thereof, that determination governs the entire action.
. Given the above, it is not necessary to also inquire into the Federal defendants' litigation position. We note, however, that while certain of the Federal defendants' litigation positions, particularly during the remedial phase, may have had a reasonable basis, we can not say the same
*533
for others. For example, in the early stages of the case, Federal defendants sought to indefinitely delay a ruling on the merits of plaintiffs' complaint, pending development of future regulations. This request was rejected as calling for a "lengthy and unnecessary delay." Indeed, it appears that the primary purpose of that request was to forestall what Federal defendants must have anticipated would be an unfavorable primary purpose of that request was to forestall what Federal defendants must have anticipated would be an unfavorable decision, givеn previous precedent in the Ninth Circuit and elsewhere. The Court did, however, delay pending proceedings for a limited time to allow Federal defendants additional time to participate. Federal defendants ultimately responded by declining to take any position with respect to the central liability issue raised by this case.
See, Sneede,
. As discussed above, the Ninth Circuit Court of Appeals found that the government’s litigation position regarding the compliance issue raised by the Court’s June 8, 1990 order was "substantially justified.” This raises the question whether fees may nonetheless be awarded for either "federal" or "jоint state-federal” time expended on this particular matter.
In
Jean,
the Supreme Court noted that any given civil action can have “numerous phases,” and that the parties' postures "on individual matters may be more or less justified.”
The fact that the Ninth Circuit concluded that the government's litigation position on "one individual matter" was substantially justified clearly does not, as discussed above, preclude the Court from making the threshold substantial justification determination envisioned by the Supreme Court in Jean. On the other hand, the Ninth Circuit has specifically denied fees for time expended in defending the appeal of the June 8, 1990 order, and we are bound by that particular ruling. As such, we conclude that we have no choice but to exclude those specific hours that plaintiffs expended in opposing defendants' appeal of the June 8, 1990 order. Consistent with Jean, however, time spent on all other phases of the litigation, including time spent in the district court relating to matters at issue in the June 8, 1990 order shall be compensable.
. Under Jones, supra, time spent on joint issues could be fully charged to one defendant, where the district court finds that the same amount of time would have been expended even if one defendant were involved. However, plaintiffs properly exercised their billing judgment to seek only 50 percent of time spent on joint state-federal matters given that they have settled the question of fees with the State defendants.
. While the hourly rate requested for Evelyn Frank may be at or near the high end for a 1975 graduate, such a rate is entirely appropriate in this case, given Frank's exceptional knowledge, skill, and experience in complex Medicaid litigation. See Bird Decl., Finberg Decl.