United States District Court, M.D. Alabama, Eastern Division
MEMORANDUM OPINION AND ORDER
Susan
Russ Walker United States Magistrate Judge
On
September 12, 2017, this court reversed the
Commissioner's decision and remanded the case for further
proceedings. Docs. 17, 18. Following remand, the Commissioner
issued a fully favorable decision. On August 5, 2019, the
Commissioner issued an Award Notice stating that, “up
to 25 percent of [Plaintiff's] past due benefits can be
used toward the payment of [attorney] fees. Thus, we are
withholding $28, 253.75 from your benefits, until the
authorized amount of your attorney's fees is
determined.” Doc. 24-2 at 2. Therefore, Plaintiff was
awarded retroactive benefits in the amount of $113, 015.00.
Doc. 24 at 2 ¶ 3.[1] This court previously awarded to Plaintiff
fees in the amount of $3, 875.82 pursuant to the Equal Access
to Justice Act (“EAJA”), 28 U.S.C. §
2412(d)(1)(A). Doc. 23.
Pending
before the court is Plaintiff's Attorney's Motion for
Award of Attorney Fees Under 42 U.S.C. §406(b) (Doc. 24)
in which counsel seeks authorization to charge her client
$24, 377.93 out of his past due Social Security insurance
benefits for 20.1 hours[2] of work performed before this court.
The Commissioner opposes the Motion “because the amount
requested is unreasonable in light of the hours spent on the
case.” Doc. 28 at 1.
The
statute provides, in relevant part:
Whenever a court renders a judgment favorable to a claimant
under this subchapter who was represented before the court by
an attorney, the court may determine and allow as part of its
judgment a reasonable fee for such representation, not in
excess of 25 percent of the total of the past-due benefits to
which the claimant is entitled by reason of such judgment . .
. .
42 U.S.C. §406(b)(1)(A). The contingency fee agreement
between Plaintiff and his attorney provides, in part,
“If Attorney prevails before the Federal Court, and if
Claimant is subsequently awarded benefits by the Social
Security Administration (“SSA”), Claimant agrees
to pay Attorney a fee for Federal Court work equal to 25% of
past-due benefits.” Doc. 24-1 at 1.
In
Gisbrecht v. Barnhart, 535 U.S. 789 (2002), the
Supreme Court examined the issue of attorney's fees
sought in connection with contingency fee agreements in
Social Security disability cases. The Court held that
“§406(b) does not displace contingent-fee
agreements as the primary means by which fees are set for
successfully representing Social Security benefits claims in
court. Rather, § 406(b) calls for court review of such
arrangements as an independent check, to assure that they
yield reasonable results in particular cases.”
Id. at 807. The burden is on the attorney for the
claimant to “show that the fee sought is reasonable for
the services rendered.” Id. Gisbrecht
instructs that the court is to review the fee resulting from
a contingent fee agreement for reasonableness, based on the
facts of the particular case before it. Id. at 808
(“Courts that approach fee determinations by looking
first to the contingent-fee agreement, then testing it for
reasonableness, have appropriately reduced the attorney's
recovery based on the character of the representation and the
results the representative achieved.”). The Supreme
Court observed that if the “benefits are large in
comparison to the amount of time counsel spent on the case, a
downward adjustment is . . . in order.” Id.
Here,
the Commissioner argues that a total fee of $28, 253.75 for
20.1 hours of work before this court would result in a
windfall to Plaintiff's counsel, but does not otherwise
argue that the fee is unmerited. Doc. 28 at 2.
Plaintiff's counsel contends that the fee is neither
unreasonable nor a windfall because taking this case posed a
risk to her. Specifically, Plaintiff's counsel states
that Plaintiff's prior attorney was unwilling to pursue
the case any further and that Plaintiff's insured status
for Title II benefits had expired on December 31, 2011, so if
she “had not risked taking this case to District Court,
[Plaintiff] would have never had the opportunity for back
benefits, ongoing Title II benefits, or Medicare prior to
full retirement age.” Doc. 31 at 3. Furthermore,
Plaintiff's counsel points out that her practice revolves
around Social Security disability cases so “all fees
received by [her] are contingency based”; that she is a
seasoned practitioner, having regularly represented Social
Security claimants since 2009 in this court; and that she has
made a three-year commitment to her client thus far.
Id.
In
balancing Gisbrecht's guidance and conclusion
that Congress intended to “contain” rather than
“outlaw” lawful contingent fee agreements,
[3]
along with the issues presented in this appeal, the 20.1
hours counsel spent compared to the fee she seeks, the
increased possibility of loss that the case posed, and the
results obtained for Plaintiff, the court finds that a
downward adjustment of the fee from $24, 377.93 to $20, 000
renders an award that largely preserves the benefit of
counsel's contingent fee agreement with Plaintiff and
compensates her reasonably for her work. Accordingly, it is
ORDERED,
pursuant to 42 U.S.C. § 406(b), that counsel's
Motion (Doc. 24) is GRANTED to the extent that the
Commissioner is DIRECTED to pay Plaintiff's attorney $20,
000 from Plaintiff's withheld past-due benefits for the
20.1 hours of work performed before the court.
It is
further ORDERED that counsel is DIRECTED to take the steps
necessary to ensure that Plaintiff is credited or refunded
$3, 875.82, the amount of fees previously awarded to
Plaintiff pursuant to the Equal Access to Justice Act.
---------
Notes:
[1] $28, 253.75 x 4 = $113,
015.00.