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Earnest Underwood v. Commissioner of Social Security

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

June 18, 2019

EARNEST UNDERWOOD, II, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

          Walter H. Rice, District Judge.

         REPORT AND RECOMMENDATION[1] THAT: (1) THE MOTION BY PLAINTIFF'S COUNSEL FOR AN ATTORNEY'S FEE AWARD (DOC. 14), AS MODIFIED BY PLAINTIFF'S REPLY BREIF (DOC. 20) BE GRANTED; (2) FEES, PURSUANT TO 42 U.S.C. § 406(B), IN THE AMOUNT OF $15, 479.25 BE AWARDED AS FOLLOWS: THE $6, 000.00 SUM NOW HELD IN ESCROW BE RELEASED TO PLAINTIFF'S COUNSEL AND THE COMMISSIONER BE DIRECTED TO AWARD PLAINTIFF'S COUNSEL THE DIFFERENCE BETWEEN THESE TWO AMOUNTS, I.E., $9, 479.25; AND (3) THIS CASE REMAIN TERMINATED ON THE COURT'S DOCKET

          Michael J. Newman, United States Magistrate Judge.

         On June 23, 2017, Judge Rice reversed the Commissioner's non-disability finding and remanded this case to the Commissioner of Social Security for further proceedings. Doc. 12. Subsequently, Plaintiff received an award of benefits under the Social Security Act. See doc. 14-4 at PageID 693-96. Plaintiff's counsel moved for a twenty-five percent fee award in the amount of $15, 479.25[2] under 42 U.S.C. § 406(b).[3] Doc. 14. The Commissioner filed a memorandum in opposition, and Plaintiff filed a reply. Doc. 19, 20. The Court heard oral argument with counsel from both sides on June 18, 2019. Doc .22. Plaintiff's counsel and the Commissioner then agreed as follows: (1) the appropriate sum due and owing to Plaintiff's counsel is $15, 479.25; (2) of this amount, the $6, 000.00 previously set aside by the Commissioner, and now held in escrow, should be released to Plaintiff's counsel; and (3) Plaintiff's counsel should be paid the difference between these two sums, i.e., $9, 479.25. Id.

         I.

         In Supplemental Security Income (“SSI”) and/or Disability Insurance Benefit (“DIB”) cases, the Court is authorized to award attorney's fees following a successful Social Security disability appeal. See 42 U.S.C. §§ 402(b)(1), 1383(d)(2). However, such contingency fees (1) may not exceed 25% of the past-due benefits which the claimant receives as a result of an appeal, and (2) must additionally be reasonable for the services rendered. Gisbrecht v. Barnhard, 535 U.S. 789, 807 (2002).

         The Social Security Act “does not displace contingen[cy]-fee agreements, ” but rather “calls for court review of such arrangements as an independent check, to assure that they yield reasonable results in particular cases.” Id. A 25% contingency fee agreement “should be given the weight ordinarily accorded a rebuttable presumption.” Rodriquez v. Brown, 865 F.2d 739, 746 (6th Cir. 1989). A reduction of a contingency fee award may be appropriate when counsel acts improperly or provides ineffective assistance, or when “counsel would otherwise enjoy a windfall because of either an inordinately large benefit award or from minimal effort expended.” Id. Such an award is not improper merely because it results in an above-average hourly rate. Royzer v. Sec'y of Health & Human Servs., 900 F.2d 981, 981-82 (6th Cir. 1990).

         As the Sixth Circuit explained:

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 [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 v. Sec'y of Health & Human Servs., 923 F.2d 418, 422 (6th Cir. 1990).

         Here, counsel's requested fee of $15, 479.25, divided by the 38.25 hours spent working on the case, results, in a hypothetical hourly rate of $404.69, an hourly rate that is -- without dispute and based upon the materials submitted in support of Plaintiff's motion -- reasonable in light of the skill and experience of counsel. Doc. 14 at PageID 681. Therefore, this Court approves -- and the Commissioner does not object -- to a total fee award of $15, 479.25. However, because the Commissioner previously paid $6, 000.00 to counsel, the parties agreed in the telephone conference held on June 18, 2019, as follows: (1) the $6, 000.00 sum, which is now held in escrow, shall be released to Plaintiff's counsel; (2) Plaintiff's counsel shall be awarded the amount of $15, 479.25 minus $6, 000.00, i.e., $9, 479.25.

         II.

         Accordingly, it is RECOMMENDED THAT: (1) Plaintiff's motion for attorney's fees under the Social Security Act (doc. 14) be GRANTED; (2) Plaintiff's requested total sum of $15, 479.25 be APPROVED; (3) the $6, 000.00 held in escrow by Plaintiff's counsel shall be RELEASED (4) the Commissioner shall PAY Plaintiff's counsel the difference between these two sums, i.e., $9, 479.25; and (5) this case remain TERMINATED on the Court's docket.

         NOTICE ...


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