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Sutton v. Commissioner of Social Security

United States District Court, S.D. Ohio, Western Division

June 15, 2017

NORMAN F. SUTTON, III, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

          Dlott, J.

          REPORT AND RECOMMENDATION

          Litkovitz, M.J.

         This matter is before the Court on plaintiffs motion for attorney fees under the Social Security Act, 42 U.S.C. § 406(b)(1) (Doc. 22) and supplement thereto (Doc. 24). The Commissioner has not filed any opposition to plaintiffs motion.

         On April 22, 2016, the Court granted the parties' joint motion to remand and remanded this matter for further administrative proceedings pursuant to Sentence Four of 42 U.S.C. § 405(g). (Doc. 18). On remand, the Commissioner determined that plaintiff was disabled. (See Notice of Award, Doc. 22 at 8). The Court previously awarded plaintiff $ 1, 500.00 for attorney fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). (Doc. 21). Plaintiff represents that $6, 000.00 in attorney fees have also been awarded for work performed at the administrative level. (See Doc. 22 at 4). Plaintiff represents that acting pursuant to § 406(b)(1)(A), the Commissioner withheld 25 percent of past-due benefits-or $14, 162.25-as a potential contingency fee to be awarded to plaintiffs counsel. (See Doc. 22 at 4, 9). From that amount, plaintiff now seeks an award of $6, 662.25 in attorney fees available under § 406(b) for 11.75 hours of work that plaintiff represents was performed before the Court.[1] (See Doc. 22 at 4- 5). The $6, 662.25 requested represents 25 percent of plaintiff s past-due benefits (SI 4, 162.25), less the amount awarded by the Commissioner for work performed at the administrative level ($6, 000), and less the amount of EAJA fees previously received ($1, 500.00). (See id.).

         Pursuant to 42 U.S.C. § 406(b)(1)(A), a court may award a prevailing claimant's attorney a reasonable fee not in excess of 25 percent of past-due benefits recovered by the claimant for work done in a judicial proceeding. 42 U.S.C. § 406(b)(1)(A). See Horenstein v. Sec'y of H.H.S., 35 F.3d 261, 262 (6th Cir. 1994) (en banc) (court may award fees only for work performed before the court, and not before the Social Security Administration). Fees are awarded from past-due benefits withheld from the claimant by the Commissioner and may not exceed 25 percent of the total past-due benefits. Gisbrecht v. Barnhart, 535 U.S. 789, 792 (2002).

         In determining the reasonableness of fees under § 406(b), the starting point is the contingency fee agreement between the claimant and counsel. Gisbrecht, 535 U.S. at 807. When a claimant has entered into a contingency fee agreement entitling counsel to 25 percent of past-due benefits awarded, the Court presumes, subject to rebuttal, that the contract is reasonable. Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en banc). Within the 25 percent boundary, the attorney for the claimant must show that the fee sought is reasonable for the services rendered. Gisbrecht, 535 U.S. at 807. The Court should consider factors such as the character of the representation, the results achieved, the amount of time spent on the case, whether the attorney was responsible for any delay, and the attorney's normal hourly billing rate for noncontingent fee cases. Id. at 808. See also Rodriquez, 865 F.2d at 746. Additionally, the Court should consider instances of improper conduct or ineffectiveness of counsel; whether counsel would enjoy a windfall because of either an inordinately large award or from minimal effort expended; and the degree of difficulty of the case. Hayes v. Sec 'y of HHS, 923 F.2d 418, 422 (6th Cir. 1990); Rodriquez, 865 F.2d at 746. An award of 25 percent of past-due benefits may be appropriate where counsel has overcome legal and factual obstacles to enhance the benefits awarded to the client; in contrast, such an award may not be warranted in a case submitted on boilerplate pleadings with no apparent legal research. Rodriguez, 865 F.2d at 747.

         An award of fees under § 406(b) is not improper merely because it results in an above-average hourly rate. Royzer v. Sec y o/HHS, 900 F.2d 981, 981-82 (6th Cir. 1990). As the Sixth Circuit determined:

is not at all unusual for contingent fees to translate into large hourly rates if the rate is computed as the trial judge has computed it here [by dividing the hours worked into the amount of the requested fee]. In assessing the reasonableness of a contingent fee award, we cannot ignore the fact that the attorney will not prevail every time. The hourly rate in the next contingent fee case will be zero, unless benefits are awarded. Contingent fees generally overcompensate in some cases and undercompensate in others. It is the nature of the beast.

Id. "[A] hypothetical hourly rate that is less than twice the standard rate is perse reasonable, and a hypothetical hourly rate that is equal to or greater than twice the standard rate may well be reasonable." Hayes, 923 F.2d at 422.

         Here, the fee of $6, 662.25 that plaintiff requests falls below the 25 percent boundary. Thus, the issue is whether the requested fee is reasonable. Gisbrecht, 535 U.S. at 807. Plaintiff asserts the requested attorney fee is reasonable given that attorney Eric Allen represented him on a contingency basis and achieved excellent results. (See Doc. 22 at 3). Plaintiff also notes that his counsel has been practicing since 1987 and has represented clients in Social Security cases before this Court since 1989. (See id.). Counsel has submitted an affidavit that details his experience representing Social Security claimants. (Affidavit of Eric Allen, Doc. 24 at 3-4). Counsel has also submitted time records showing that he performed a total of 11.75 hours of work on the case in this Court. (See Doc. 24 at 8). Plaintiff has submitted a copy of the contingency fee agreement he entered into with counsel under which he agreed to pay counsel a contingency fee of 25 percent of past-due benefits. (Doc. 22 at 7).

         Dividing the $14, 162.25 withheld by the Social Security Administration less the $6, 000 awarded for work at the administrative level-$8, 162.25-by the 11.75 hours counsel worked on this case before the Court produces a hypothetical hourly rate of $694.66. In determining whether counsel "would enjoy a windfall because of either an inordinately large benefit or from minimal effort expended, " Hayes, 923 F.2d at 422 (quoting Rodriguez, 865 F.2d at 746), the Court notes 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." Id. As the Sixth Circuit explained in Hayes:

[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.
A calculation of a hypothetical hourly rate that is twice the standard rate is a starting point for conducting the Rodriquez analysis. It provides a floor, below which a district court has no basis for questioning, under the second part of Rodriguez''s windfall rule for ...

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