Osbon: Overbilling?

Overbilling?

The decision Michael J. Osbon v. Eric K. Shinseki, Opinion Number 09-0824(E), decided April 23, 2010, drastically reduced an EAJA request.

This case probably is only interesting to attorneys and has limited appeal to appellants, because while attorneys who work in the veterans’ benefits arena do so because it is an awarding area where you can help people, they also have law offices and families to support. This decision deals strictly with the amount of an EAJA award.

The attorney secured a benefit to his client by securing a Joint Motion for Remand and no one disagreed that he was entitled to an EAJA award. The problem was the amount. It was a single issue case with said issue being TDIU. The attorney submitted an EAJA application for $8,222,55, which accounted for 40.4 attorney hours and 21.2 paralegal hours. The Secretary objected and the attorney did not reply to the Secretary’s response.

Numerous objections were raised by the Secretary including: (1) time spent on clerical tasks (copying, preparing, reviewing and mailing appeals documents to the client), (2) spending excessive time preparing and mailing standard documents, and spending excessive time receiving documents, (3) billing excessively for “simple tasks and receipt of routine documents”, (4) unreasonable and excessive billing for repetitive paralegal acts, (5) spending too long to review the record for counter-designation, (6) excessive and duplicative time spent reviewing and annotating the Record Before the Agency, (7) vague descriptions of attorney time, (8) unreasonable billed for corrective actions take pursuant to the attorney’s own delay, (9) excessive and duplicative time on the EAJA application, 11.8 attorney hours and 5.2 paralegal hours.

The Court agreed with the Secretary that time was billed that was clerical, unreasonable excessive or duplicative, and inefficient in requiring corrective documents. The Court also discounted all paralegal time because the EAJA application did not contain a statement of the paralegal’s qualifications and experience. But, what really seemed to upset the Court was the amount of time billed for the EAJA application. They noted it was basically boilerplate and yet in other applications submitted by the attorney he had billed a similar amount. The Court was also upset that the attorney charged what it considered to be an excessive amount of time to assemble, calculate, and check the time and billing statements. The Court seemed to say that if the times had been kept contemporaneously with the acts that the amounts would have been less. The end result was that the Court reduced by 80% the award to $1,372.80.

This is a tough case to judge. Surely some of the billing does not seem to be as problematic as the Court found. For instance, I am not sure that preparing documents for a client is clerical. Also, billing .1 for receiving and reviewing a document is not out of line with private practice. I also wonder what is an appropriate time to review and annotate the Record Before the Agency? Many practitioners have found that by going page by page they come across something the VA did not consider, this is necessarily a time consuming task.

Still, the Court seemed to be motivated by anger, probably by what it considered the excessive amounts of time spent preparing a largely boilerplate EAJA application and the fact that it was similar to amounts from other applications.

All in all, it seems like a case that reinforces the need to (1) keep contemporaneous and descriptive time records, (2) show some discretion by reducing or eliminating some mundane tasks (perhaps combine some of the smaller tasks into a larger listing and only bill .1) and never billing the government for work that is required because of you (i.e., billing for time spent when you request an extension), (3) and remember that it is the person seeking the award who has the burden to show that the fee request is reasonable.

As a young attorney I worked at an insurance defense firm that refused to bill its clients for fancy lunches. We might be out of town for a deposition and all the other attorneys going out to a nice lunch spot but the firm took the position that we were going to eat anyway and the client should not have to pay for it. The result was that I paid for a lot of my own lunches when other attorneys were expensing their clients. However, we always had plenty of good work to do while I was employed with that firm and I think our clients appreciated the fact that we did not just see them as an unlimited ATM.

With this decision, the Court is reminding all of the attorneys who practice before it that we should and will be paid for our work but that they are not paying for any fancy lunches.

Decision by Judge Hagel.