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Trimble v. Commissioner of Social Security

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

July 18, 2019

DIANA M. TRIMBLE, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

          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. 29) and plaintiffs addendum to its motion[1] for approval of attorney fees (Doc. 34). The Commissioner filed a response to plaintiffs addendum indicating no opposition to the motion. (Doc. 35).

         On June 6, 2017, the undersigned recommended that this case be reversed and remanded for further proceedings pursuant to Sentence Four of 42 U.S.C. § 405(g). (Doc. 18). On September 18, 2017, the District Judge rejected the Commissioner's objections and adopted the Report and Recommendation in its entirety. (Doc. 21). On remand, a new hearing was held and the ALJ issued a favorable decision on August 6, 2018, finding plaintiff disabled as of November 19, 2012. (Doc. 29 at 3). On January 8, 2018, the Court awarded plaintiff $4, 080.00 in attorney fees and S400.00 in costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). (Doc. 24).

         Plaintiff states that she petitioned for $6, 000.00 in attorney fees for representation at the administrative level. (Doc. 34 at 2).[2] Plaintiff further states that pursuant to § 406(b)(1)(A), the Commissioner withheld 25 percent of past-due benefits or $11, 763.02-as a potential contingency fee to be awarded to plaintiffs counsel. (Id. at 2, n.2). Plaintiff now seeks an award of $1, 283.02 in attorney fees under § 406(b) for 32 hours of work performed before the Court. (Doc. 29 at 4, Doc. 34 at 2). The $1, 283.02 fee request represents 25 percent of plaintiffs past-due benefits (SI 1, 763.02), less the amount plaintiff petitioned for work performed at the administrative level ($6, 000.00), less the EAJA fee previously awarded by the Court ($4, 480.00) (to be credited to plaintiff). (Id.).

         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 Rodriguez, 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); 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. 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. See also Lasley v. Comm 'r of Soc. Sec, 111 F.3d308, 309 (6th Cir. 2014).

         Plaintiff acknowledges that the Social Security Administration withheld $11, 763.02 -25% of plaintiff s past-due benefits - from those benefits for attorney fees. (Doc. 34 at 2, n.2). Plaintiff has petitioned the Administration for an award of S6, 000.00 for work performed at the administrative level, leaving a potential contingency fee amount of 55, 763.02. Even though plaintiff has heen awarded EAJA fees of $4, 480.00, the effective hourly rate must be based on the total of the remaining potential contingency fee of $5, 763.02, without reduction of the EAJA fee award. See Ringel v. Comm 'r of Soc. Sec., 295 F.Supp.3d 816, 839-40 (S.D. Ohio 2018). As explained in Ringel:

It is true that the EAJA's Savings Clause bars duplicative awards, and that an attorney who recovers a second, larger fee under 42 U.S.C. § 406(b) must refund the duplicate EAJA fee to the claimant. However, the effective hourly rate can be calculated only prior to the subtraction of the duplicate prior EAJA award; subtracting the EAJA award from the total fee sought is incorrect, as the EAJA fee is a wash. Here, [the] . . . effective hourly rate is calculated by reference to [the total fee requested] (including her prior EAJA award) divided by the total number of hours expended. The return of an EAJA fee is not a compromise and does not reduce the effective hourly fee sought but only prevents double recovery for the same work.

Id. (footnotes omitted). Thus, the proper approach is to perform the Hayes calculation using the full 25% contingency amount of $5, 763.02, without reducing that amount by the prior EAJA fee award. The Court will therefore treat plaintiffs request for a § 406(b) fee award as a request for the full contingency amount of $5, 763.02 in analyzing whether the fee request is reasonable.

         Here, the fee of $5, 763.02 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. 29 at 3-4). Plaintiff has also submitted an itemized billing sheet demonstrating that his attorney performed a total of 32 hours of work on the case in this Court. (Id. at 6; Doc. 34 at 4). Plaintiff has also submitted a copy of the contingency fee agreement he entered into with counsel under which he agreed to pay counsel a contingency fee of 25% of past-due benefits. (Doc. 29 at 7).

         Dividing the $5, 763.02 requested by plaintiff by the 32 hours counsel worked on this case before the Court yields a hypothetical hourly rate of $180.09. 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 ...


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