United States District Court, N.D. Ohio, Eastern Division
CHRISTOPHER A. BOYKO, JUDGE.
REPORT & RECOMMENDATION
Kathleen B. Burke, United States Magistrate Judge.
before the Court is Plaintiff Jenifer Martuch's Motion
for Attorney Fees, wherein plaintiff's counsel, Marcia W.
Margolius, requests an award of attorney fees under 42 U.S.C.
§ 406(b) in the amount of $5, 547.50. Doc. 14. Defendant
filed a response indicating that it does not object to the
amount sought by plaintiff's counsel. Doc. 17. This
matter has been referred to the undersigned Magistrate Judge
for a Report and Recommendation pursuant to Local Rule
72.2(b)(1). Doc. 15.
Law & Analysis
Attorney fee awards in social security disability
are two statutes under which a plaintiff may recover attorney
fees in a social security disability case. First, under the
EAJA, a plaintiff may recover attorney fees which, if
awarded, are paid by the government. See 28 U.S.C.
§ 2412. Second, as part of the judgment rendered in
favor of a plaintiff, a court may award a reasonable fee for
an attorney's representation in court which, if awarded,
are to be paid out of a plaintiff's past-due benefits,
not as an addition to the amount of past due-due benefits.
See 42 U.S.C. § 406(b). The fee awarded
pursuant to 42 U.S.C. § 406(b) may not be in excess of
25 percent of the total past-due benefits. Id.
Further, a plaintiff's counsel may not receive fees under
both statutes for the same work. Bowman v. Colvin,
2014 WL 1304914, * 2 (N.D. Ohio Mar. 27, 2014). Thus, if a
court awards both EAJA fees and fees under 42 U.S.C. §
406(b), the plaintiff's attorney is required to refund
the smaller amount to the plaintiff. Gisbrecht v.
Barnhart, 535 U.S. 789, 796 (2002).
Reasonableness of attorney fees under 42 U.S.C. §
Gilsbrecht, the Supreme Court recognized the
“prevalence of contingent-fee agreements between
attorneys and Social Security claimants.” Id.
at 805. In doing so, the Supreme Court held that
“§ 406(b) does not displace contingent-fee
agreements within the statutory [25 percent] ceiling;
instead, § 406(b) instructs courts to review for
reasonableness fees yielded by those agreements.”
Id. at 808-809. The Supreme Court observed that, in
enacting § 406(b), Congress set one boundary line,
namely, “Agreements are unenforceable to the extent
that they provide for fees exceeding 25 percent of the
past-due benefits.” Id. at 807. However,
“[w]ithin the 25 percent boundary, . . . the attorney
for the successful claimant must show that the fee sought is
reasonable for the services rendered.” Id.
Circuit “precedent accords a rebuttable presumption of
reasonableness to contingency-fee agreements that comply with
§ 406(b)'s 25-percent cap.” Lasley v.
Comm'r of Soc. Sec., 771 F.3d 308, 309 (6th Cir.
2014) (citing Hayes v. Sec'y of Health & Human
Servs., 923 F.2d 418, 421 (6th Cir. 1991); Rodriquez
v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en banc)).
Courts shall make deductions for large fees in only two
circumstances: “1) those occasioned by improper conduct
or ineffectiveness of counsel; and 2) situations in which
counsel would otherwise enjoy a windfall because of
either an inordinately large benefit award or from minimal
effort expended.” Hayes, 923 F.2d at
420-421 (discussing Rodriquez, 865 F.2d at 746)
(emphasis in original). If the foregoing reasons are not
applicable, “an agreement for a 25% fee, the maximum
permitted under § 206(b) of the Social Security Act, 42
U.S.C. § 406(b), is presumed reasonable.”
Id. at 421. Additionally, in Hayes, the
Sixth Circuit held 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. at 422.
Plaintiff's request for attorney fee award under 42
U.S.C. § 406(b)
March 26, 2019, plaintiff was awarded past due social
security benefits going back to 2008; 25% of her award, or
$16, 372.50, was withheld for attorney fees. Doc. 14, p. 1;
Doc. 14-1, p. 3; Doc. 14-2, p. 3; Doc. 14-3, p. 3. Plaintiff
signed a Social Security Client Fee Agreement wherein she
agreed to pay her attorney 25% of all past-due benefits
awarded if the Social Security Administration favorably
decided her claim. Doc. 14-4. Plaintiff's counsel seeks
$5, 547.50, representing less than 25% of plaintiff's
past-due benefits. Doc. 14, p.1.
plaintiff's counsel submitted documentation that she
spent a total of 15.85 hours in connection with the federal
court litigation. Doc. 14-5. Based on 15.85 hours of work,
payment of $5, 547.50 would result in an hourly rate of $350,
which is less than twice the amount of the hourly rate of
$350.00 normally charged by plaintiff's counsel. Doc.
14-6, p.1, ¶4. Thus, it cannot be said that counsel will
enjoy a windfall. See Hayes, 923 F.3d at 422.
reasons explained above, the undersigned recommends that the
Court grant plaintiff's motion (Doc. 14) and awards
attorney fees in the ...