United States District Court, N.D. Alabama, Middle Division
MEMORANDUM OPINION
This
court entered an order on August 8, 2019, granting
claimant's motion for an award of attorney fees, but
reducing the fee award from the requested amount of $78,
280.63, which would have amounted to an hourly rate of $5,
218.71, to a total of $5, 701.80, which amounted to an hourly
rate of $380.12, or twice counsel's typical hourly
rate.[1] The case presently is before the court on
claimant's attorney's motion for reconsideration of
that order, [2] the Commissioner's response,
[3] and
claimant's reply.[4]
Claimant
asserts that this court erroneously relied upon the Sixth
Circuit's decision in Hayes v. Secretary of Health
and Human Services, 923 F.2d 418 (6th Cir. 1990), to
find that the requested fee would constitute a windfall to
claimant's counsel. The Sixth Circuit held that
a windfall can never occur when, in a case where a contingent
fee contract exists, the hypothetical hourly rate determined
by dividing the number of hours worked for the claimant into
the amount of the fee permitted under the contract is less
than twice the standard rate for such work in the relevant
market. We believe that a multiplier of 2 is appropriate as a
floor in light of indications that social security attorneys
are successful in approximately 50% of the cases they file in
the courts. Without a multiplier, a strict hourly rate
limitation would insure that social security attorneys would
not, averaged over many cases, be compensated adequately.
See, e.g., Kirchoff v. Flynn, 786 F.2d 320, 326 (7th
Cir. 1986) (“[w]ithout a floor the introduction of a
cap would depress average fees below their expected level in
the private market”). Such a result would thwart
Congress's intention to assure social security claimants
of good representation. See Rodriquez, 865 F.2d at
744 (“[t]he fee approval provision is also designed to
assure adequate compensation to the claimant's attorney
and as a consequence to encourage attorney
representation”).
Hayes, 923 F.2d at 422 (alterations in original).
According to the Sixth Circuit, the “calculation of a
hypothetical hourly rate that is twice the standard
rate” provides a “floor, below which a district
court has no basis for questioning . . . the reasonableness
of the fee.” Id. If the hypothetical
calculated hourly rate is above the “floor, ”
then the district court should evaluate it for reasonableness
using the usual factors. Id.
This
court is not persuaded by claimant's arguments that it
was wrong to rely upon Hayes. As an initial matter,
this court treated the Hayes decision not as binding
authority, but as a case that “provided
persuasive guidance about how to determine when a
high hourly rate will constitute a windfall to claimant's
counsel.”[5]
Additionally,
the Hayes decision was neither
“preempted” by the Supreme Court's decision
in Gisbrecht v. Barnhart, 535 U.S. 789 (2002), nor
“contrary to 11th Circuit
precedent.”[6] Even though the Supreme Court held in
Gisbrecht that the Social Security Act did not
“displace contingent-fee agreements as the primary
means by which fees are set for successfully representing
Social Security benefits claimants in court, ” it was
careful to note the importance of “court review of such
arrangements as an independent check, to assure that they
yield reasonable results in particular cases.”
Gisbrecht, 535 U.S. at 807. Even when a valid
contingency agreement is in place, an attorney's fee can
be reduced based upon either “the character of the
representation and the results the representative achieved,
” or whenever “the benefits are large in
comparison to the amount of time counsel spent on the
case.” Id. at 808 (emphasis supplied,
citations omitted). The process described persuasively in
Hayes and, accordingly, implemented by this court is
but one method for conducting the reasonableness inquiry the
Supreme Court mandated in Gisbrecht. It is
irrelevant that Hayes predated Gisbrecht,
or that Hayes employed the lodestar method for
calculating attorney fee awards, without giving deference to
any contingency agreement, because this court's ultimate
conclusion - that the requested fee was unreasonable - was
consistent with Gisbrecht.
There
are no Eleventh Circuit decisions requiring the court to
follow a different path. Claimant cites Keller v.
Commissioner of Social Security, 759 F.3d 1282 (11th
Cir. 2014), for the proposition that “courts could not
ignore contingent fee agreements.”[7] This court did
not ignore claimant's contingent fee agreement
with her attorney; instead, it reviewed that agreement for
reasonableness and determined that awarding counsel 25% of
claimant's past-due benefits would constitute an
unreasonable windfall.[8] Claimant also cites Jackson v.
Commissioner of Social Security, 601 F.3d 1268 (11th
Cir. 2010), as explicating “the reasons a fee might be
reduced from the 25% allowed by statute.”[9] But the
Jackson case only supports this court's previous
decision, because one of the reasons it stated for reducing a
25% contingency fee is the circumstance in which
“the benefits are large in comparison to the amount
of time the attorney spent on the case.”
Id. at 1271 (citing Gisbrecht, 535 U.S. at
808) (emphasis supplied).[10]
Finally,
claimant cites a number of district court decisions upholding
25% contingency fees, but those decisions are not persuasive
because none of the fee awards in those cases would have
resulted in an effective hourly rate anywhere close to the
$5, 218.71 per hour fee requested in the present case.
See Hadeed v. Commissioner of Social Security, No.
615CV392ORL41GJK, 2019 WL 1584531, at *3 (M.D. Fla. Apr. 4,
2019), report and recommendation adopted, No.
615CV392ORL41GJK, 2019 WL 1531982 (M.D. Fla. Apr. 9, 2019)
(approving a fee of $12, 406.81for 28.2 hours of work, or
$439.96 per hour); Jenkins v. Commissioner of Social
Security, No. 615CV2134ORL31LRH, 2019 WL 1347934, at *3
(M.D. Fla. Mar. 20, 2019), report and recommendation
adopted, No. 615CV2134ORL31LRH, 2019 WL 1330806 (M.D.
Fla. Mar. 25, 2019) (approving a fee of $11, 864.00 for 19.7
hours of work, or $602.2 per hour); Caffey v.
Berryhill, No. CV 15-00490-N, 2019 WL 456236, at *5
(S.D. Ala. Feb. 5, 2019) (awarding a fee of $42, 895.25, but
not disclosing how many hours counsel worked on the case);
Hill v. Berryhill, No. 1:14CV1141-CSC, 2018 WL
5499736, at *1 (M.D. Ala. Oct. 29, 2018) (approving a fee of
$21, 461.25 for 13.50 hours of work, or $1, 589.72 per hour);
Moore v. Berryhill, No. CV 115-074, 2018 WL 703295,
at *2 (S.D. Ga. Jan. 12, 2018), report and
recommendation adopted, No. CV 115-074, 2018 WL 702821
(S.D. Ga. Feb. 2, 2018) (approving a fee of $20, 373.00 for
25.75 hours of work, or $791.18 per hour); Norris v.
Colvin, No. 1:11-cv-3154-RDP (N.D. Ala. June 27, 2017)
(approving a fee of $10, 464.00 for 20.2 hours of work, or
$518.02 per hour); Horne v. Astrue, No.
3:09CV194/MCR/EMT, 2011 WL 6258837, at *2-3 (N.D. Fla. Nov.
8, 2011), report and recommendation
adopted, No. 3:09CV194/MCR/EMT, 2011 WL 6258828 (N.D.
Fla. Dec. 15, 2011)(approving a fee of $20, 244.00 for 19.05
hours of work, or $1, 062.68 per hour); Yarnevic v.
Apfel, 359 F.Supp.2d 1363, 1365 (N.D.Ga. 2005)
(approving a fee of $21, 057.75 for 8.15 hours of attorney
time and 24.6 hours of paralegal time, for an overall hourly
rate of $642.98.[11]
In
summary, the court stands by its decision that $5, 701.80 is
a reasonable fee for the work performed by claimant's
attorney before this court. Accordingly, claimant's
attorney's motion for reconsideration is due to be
denied. An appropriate order will be entered
contemporaneously herewith.
DONE
and ORDERED.
---------
Notes:
[1] Doc. no. 23 (Order).
[2] Doc. no. 24 (Motion for
Reconsideration of Order on Attorney Fee Pursuant to 42
...