United States District Court, S.D. Ohio, Western Division
AND ENTRY ADOPTING UNITED STATES MAGISTRATE JUDGE'S
REPORT AND RECOMMENDATIONS (DOC. #22); OVERRULING
DEFENDANT'S OBJECTIONS THERETO (DOC. #23); SUSTAINING
PLAINTIFF'S MOTION FOR ALLOWANCE OF ATTORNEY FEES (DOC.
#19); AWARDING ATTORNEY FEES IN THE AMOUNT OF $17, 550.00;
ORDERING PLAINTIFF'S COUNSEL TO REFUND TO PLAINTIFF THE
$4, 300.00 PREVIOUSLY PAID UNDER THE EQUAL ACCESS TO JUSTICE
ACT; CASE TO REMAIN TERMINATED
H. RICE, UNITED STATES DISTRICT JUDGE
October 24, 2017, United States Magistrate Judge Sharon L.
Ovington issued a Report and Recommendations, Doc. #22, in
which she recommended that the Court sustain Plaintiff's
Motion for Allowance of Attorney Fees, Doc. #19, and order
Defendant to pay $17, 550.00 in attorney fees pursuant to 42
U.S.C. § 406(b). She also recommended that the Court
order Plaintiff's counsel to refund directly to Plaintiff
the $4, 300.00 in attorney fees previously paid under the
Equal Access to Justice Act ("EAJA").
matter is currently before the Court on Defendant's
Objections to the Report and Recommendations, Doc. #23.
Defendant argues that the $17, 550.00 contingency fee award
for 26 hours of work, equating to a hypothetical hourly rate
of $675.00, constitutes a windfall to Plaintiff's
counsel, and that Magistrate Judge Ovington's
justification for such a large award is erroneous.
relevant statute permits the court to award a
"reasonable fee . . . not in excess of 25 percent of the
total of the past due benefits to which the claimant is
entitled." 42 U.S.C. § 406(b)(1)(A). The Sixth
Circuit has held that "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 v. Sec'y of Health &
Human Servs., 923 F.2d 418, 422 (6th Cir. 1991). If the
hypothetical hourly rate is equal to or greater than twice
the standard rate, the court may consider reducing it if
"1) the attorney engaged in improper conduct or was
ineffective, or 2) the attorney would enjoy an undeserved
windfall due to the client's large back pay award or the
attorney's relatively minimal effort." Id.
serve as an "independent check" of the
reasonableness of a fee request that is the product of a
contingent-fee agreement. Plaintiff's counsel bears the
burden of showing "that the fee sought is reasonable for
the services rendered." Gisbrecht v. Barnhart,
535 U.S. 789, 807 (2002).
Magistrate Judge Ovington noted that Plaintiff and his
attorney had agreed that attorney fees would be equal to 25%
of any lump sum award that the Plaintiff received. Here, the
$17, 550.00 in requested attorney fees was considerably less
than 25% of the $94, 243.00 that Plaintiff was awarded in
past-due benefits. Given that counsel spent 26 hours working
on the case, this resulted in a hypothetical hourly rate of
$675.00. Magistrate Judge Ovington found this to be a
reasonable rate. She explained that, under Hayes, if
this amount is viewed as the product of the applicable
multiplier of 2, this translates to a "standard
rate" of $337.50 per hour. She cited to numerous
opinions from this District in which judges have approved
hypothetical hourly rates above $700.00. Doc. #22,
PageID##806-07 (collecting cases).
Judge Ovington also found that the hypothetical hourly rate
of $675.00 was reasonable based on "the excellent
results Plaintiff's counsel obtained in this case, "
and on the risk inherent in contingency fee contracts.
Id. at PageID##807-08.
heavily on Lasley v. Commissioner of Social
Security, 771 F.3d 308 (6th Cir. 2014), Defendant
objects to Magistrate Judge Ovington's findings. In
Lasley, the district court held that plaintiff's
counsel's request for a $26, 049.73 contingency fee
constituted a windfall. Counsel had worked 35.5 hours on the
case, resulting in an hourly rate of $733.80. The district
court had reduced the fee to $12, 780.00, or $360.00 per
hour. Other factors considered by the district court included
"the delay in filing the § 406(b) motion, the
Commissioner's opposition to the fee, and the
'brevity' and 'relative simplicity' of the
representation." Id. at 310.
Sixth Circuit found no abuse of discretion. It noted that the
hourly rate of $733.80 "grossly exceeded -indeed, more
than quadrupled-the standard rates applied to social security
fee requests in the Southern District of Ohio."
Id. In support of this statement, the court cited to
one district court case in which the court applied a
"'conservative' hourly rate of $180, " and
another in which the district court had applied an hourly
rate of $165.00, equivalent to the rate approved in
counsel's request for fees under the EAJA. Id.
maintains that this case is analogous to Lasley. The
hypothetical hourly rate of $675.00 is more than four times
the EAJA hourly rate of $163.81 to which the parties
stipulated. Docs. ##17, 18. Defendant cites to several recent
cases in which judges in this District have approved
hypothetical hourly rates in the range of $360.00-$400.00.
This is approximately twice the standard EAJA hourly rate.
Doc. #23, PageID##812-14 (collecting cases). Defendant asks
the Court to reduce the hypothetical hourly rate from $675.00
to $400.00 and award a total of not more than $10, 500.00 in
also argues that, as in Lasley, the issues involved
in this case were not complex and, the large size of the
award was attributable not so much to counsel's legal
abilities, but to the fact that six years elapsed between the
filing of the application and the award of benefits.