United States District Court, S.D. Ohio, Western Division
AMANDA L. WALTERS, Plaintiff,
COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT AND RECOMMENDATION
L. Litkovitz, United States Magistrate Judge.
matter is before the Court on plaintiffs motion for attorney
fees under the Social Security Act, 42 U.S.C. §
406(b)(1). (Doc. 37). The Commissioner does not oppose
plaintiffs request for fees. (Doc. 38).
the District Court's reversal and remand of this case
pursuant to Sentence Four of 42 U.S.C. § 405(g) (Doc.
35), the Commissioner awarded plaintiff disability benefits.
(See Notice of Award, Doc. 37-3). Acting pursuant to
§ 406(b)(1)(A), the Commissioner withheld 25 percent of
past due benefits, or $40, 540.75, as potential fees to be
awarded to plaintiffs counsel, Mark Naegel, who represented
plaintiff at both the administrative hearing level and on
appeal before this Court. (See Doc. 37-2, Doc. 37-3
at 3). The Commissioner notified plaintiff that counsel could
charge no more than $6, 000.00 under the parties' fee
agreement for work performed at the administrative level and
that the agency would continue to withhold the remaining
balance of $34, 540.75 for work counsel performed before the
federal court. (Doc. 37-3 at 3). From that amount, plaintiffs
counsel seeks an award of $20, 540.75 in attorney fees under
§ 406(b)(1) for 131 hours of work performed before this
Court and the United States Court of Appeals for the Sixth
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
HHS, 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 (SSA)). 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. Bamhart, 535
U.S. 789, 792 (2002).
determining the reasonableness of fees under § 406(b),
the starting point is the contingency fee agreement between
the claimant and counsel. Id. 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 non-contingent 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 due to minimal effort expended;
and the degree of difficulty of the case. Hayes v. Sec
'y of HHS, 923 F.2d 418, 420, 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
award of fees under § 406(b) is not improper merely
because it results in an above-average hourly rate.
Royzer v. Sec'y of HHS, 900 F.2d 981, 981-82
(6th Cir. 1990). As the Sixth Circuit determined:
It 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. at 981. "[A] hypothetical hourly rate that
is less than twice the standard rate is per se 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.
the fee of $20, 540.75 requested by plaintiff falls within
the 25 percent boundary. Thus, the issue is whether the
requested fee is reasonable. Gisbrecht, 535 U.S. at
807. Plaintiff asserts the requested fee is reasonable given
her attorney's background and experience, the contingency
fee agreement, and counsel's success in achieving a
favorable result on remand before the Commissioner. (Doc.
37). Plaintiff has submitted counsel's statement in which
counsel asserts he has represented social security claimants
since 1980 both during the administrative claims process and
in appeals to the federal district and appellate courts.
(Doc. 37-6). Plaintiff has also submitted a copy of the
contingency fee agreement she entered into with counsel under
which she agreed to pay counsel a contingency fee of 25
percent of past due benefits. (Doc. 37-4). In addition,
plaintiff has attached itemized billing sheets demonstrating
that her attorney performed a total of 131 hours of work on
the case in the District Court and on appeal to the Sixth
Circuit Court of Appeals. (Doc. 37-6). Plaintiff requests
that the Court award a total of $20, 540.75 in attorney fees
from the 25 percent in past due benefits - $40, 540.75 -
which the SSA withheld for the payment of such fees. (Doc.
37-3). As stated above, the Commissioner has no objection to
the fee request. (Doc. 38).
the requested fee of $20, 540.75 by the 131 hours counsel
worked on the case before the federal courts produces a
hypothetical hourly rate of $156.80. 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, 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 Rodriquez's windfall rule for
"minimal effort expended, " the reasonableness of
counsel has not provided his hourly rate for non-contingency
fee cases. Although the Court will ordinarily adopt the
hourly rate approved by the Court in connection with a fee
petition under the EAJA, see, e.g., Edwards v. Comm
'r of Soc. Sec, No. 1:08-cv-815, 2011 WL 1002186, at
*1 (S.D. Ohio Mar. 16, 2011), plaintiff did not submit an
EAJA fee petition in this case. However, judges in this Court
have approved significantly higher effective hourly rates in
contemporaneous and comparable disability appeals than the
$156.80 hourly rate requested by plaintiff here. See,
e.g., Jodrey v. Comm'r of Soc. Sec, No. 1:12-cv-725,
2015 WL 799770, at *3-4 (S.D. Ohio Feb. 25, 2015) (Report and
Recommendation) (Litkovitz, M.J.), adopted, 2015 WL
1285890 (S.D. Ohio Mar. 19, 2015) (Barrett, J.) (approving
effective hourly rate of $700.00); Havens v. Comm'r
of Soc. Sec, No. 2:12-cv-637, 2014 WL 5308595, at *2
(S.D. Ohio Oct. 16, 2014) (Report and Recommendation) (Kemp,
M.J.), adopted, 2014 WL 6606342 (S.D. Ohio Nov. 20,
2014) (Smith, J.) (approving effective hourly rate of
$750.00); Metz v. Comm'r, Soc. Sec. Admin., No.
3:11-cv-391, 2014 WL 1908512, at * 1-2 (S.D. Ohio May 12,
2014) (approving effective hourly rate of $780.25); Smith
v. Comm'r of Soc. Sec, No. 2:10- cv-701, ...