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Zanders v. Commissioner of Social Security

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

March 28, 2018

NINA ZANDERS, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

          Black, J.

          REPORT AND RECOMMENDATION

          KAREN L. LITKOVITZ, UNITED STATES MAGISTRATE JUDGE

         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. 25). The Commissioner has not filed a memorandum in opposition to plaintiffs motion.

         On February 24, 2014, the Court reversed and remanded this case for further proceedings pursuant to Sentence Four of 42 U.S.C. § 405(g). (Docs. 19, 20). On remand, the Commissioner determined that plaintiff was disabled as of January 19, 2009. (Doc. 25 at 2). The Court awarded plaintiff $2, 805.00 in attorney fees and $400.00 in costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d).[1] (Doc. 23). Plaintiff states that he also received $6, 000.00 in attorney fees for representation at the administrative level. (Doc. 25 at 2). Plaintiff further represents that the Commissioner withheld 25 percent of past-due benefits ($57, 295.00) -or $14, 323.75 - as a potential contingency fee to be awarded to plaintiffs counsel. (Id.; Doc. 25-1 at 1). Plaintiff now seeks an award of $5, 870.75 in attorney fees under § 406(b) for 16.50 hours of work performed before the Court. The $5, 870.75 fee request represents 25 percent of plaintiffs past-due benefits ($14, 323.75), less the amount paid by the Commissioner for work performed at the administrative level ($6, 000), less the amount of EAJA fees counsel previously received ($2, 453.00).

         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. Rodriguez 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); Rodriguez, 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. Rodriquez, 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 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. "[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.

         Here, the fee of $5, 875.00 that plaintiff requests 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 attorney fee is reasonable given attorney Henry D. Acciani's experience and background, which includes admission to several bars and representing clients in Social Security cases since 1979. (Doc. 25 at 3-4). Plaintiff has also submitted an itemized billing sheet demonstrating that her attorney performed a total of 16.30 hours of work on the case in this Court. (Id. at 6).

         Dividing the $5, 875.00 requested by plaintiff by the 16.50 hours counsel worked on this case before the Court yields a hypothetical hourly rate of $356.06. 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 Rodriquez, 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 Rodriquez's windfall rule for ...

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