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Pennington v. Commissioner of Social Security

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

July 18, 2019


          Black, J.



         Plaintiff's motion for attorney's fees has been referred to the undersigned for initial review. I recommend that the unopposed motion be GRANTED, but write further to provide guidance in future cases.

         I. Background

         The above-captioned case represents Plaintiff Lonelle Pennington's second judicial appeal to challenge the Defendant's denial of application for Supplemental Security Income payments under Title XVI of the Social Security Act. Plaintiff filed her first appeal in this Court in 2013, docketed as Case No. 1:13-cv-591. In 2014, this Court reversed the non-disability finding and remanded for further development of the record. Plaintiff sought and was granted an award of attorney's fees, to be paid by the Commissioner under the Equal Access to Justice Act (“EAJA”), in Case No. 1:13-cv-59.

         Following remand, the ALJ issued a second adverse decision. After the Commissioner declined additional review, Plaintiff initiated this second lawsuit, again seeking judicial relief from the adverse decision. In September 2018, the Court reversed and remanded for an immediate award of SSI benefits. (Docs. 18, 21). On February 21, 2019, the Court granted Plaintiff's motion for EAJA fees in the above-captioned case, since Plaintiff was again a prevailing party. (Docs. 23, 25).

         On July 3, 2019, Plaintiff's counsel filed a second motion for fees in this case, seeking an additional award under the provisions of the Social Security Act, 42 U.S.C. §406(b). On July 11, 2019, the Commissioner filed a one-sentence response that states that the Commissioner does not object to the counsel's motion.

         II. Analysis

         While the undersigned appreciates the Commissioner's lack of objection, the Commissioner has no financial interest in whether or not a motion for § 406(b) fees is granted. Unlike EAJA fee awards that are paid by the Commissioner, the current motion seeks fees that will be paid directly by the Plaintiff from her past-due benefits award. Courts therefore have an “affirmative obligation… to determine whether a fee award is ‘reasonable,' even when supported by an unopposed motion that relies on a standard contingency fee agreement within the 25% statutory cap.” Ringel v. Com'r of Soc. Sec., 295 F.Supp.3d 816, 822 (S.D. Ohio 2018) (citing Lowery v. Com'r of Soc. Sec., 940 F.Supp.2d 689, 691 (S.D. Ohio 2013)).

         Here, Plaintiff's counsel successfully pursued and won for his client a large award of past-due SSI benefits under Title XVI. However, counsel did not pursue an award of past-due DIB benefits under Title II. Because Plaintiff was not awarded DIB benefits, this Court may not award attorney's fees under 42 U.S.C. § 406(b). The referenced statutory provision “covers only attorneys whose clients bring successful claims under Title II of the Social Security Act.” Napier v. Commissioner, 190 Fed.Appx. 458, 459-60 (6th Cir.2006); see also generally Bowen v. Galbreath, 108 S.Ct. 892 (1988) (citing 42 U.S.C. § 406(b)); McCarthy v. Sec'y of Health and Human Servs., 793 F.2d 741 (6th Cir. 1986).

         The fact that no award may be made under 42 U.S.C. § 406(b) does not mean that Plaintiff's counsel must go uncompensated. Rather, Congress has provided for compensation through a parallel statute applicable to Title XVI. See 42 U.S.C. §1383(d)(2). In the interests of justice, the undersigned construes counsel's motion under §1383(d). Because §1383(d) contains nearly identical language and is intended to produce the same result, [1] the same case law and analysis applies to a motion filed under that statute.

         In Ringel, this Court meticulously set forth the “guideposts” most frequently used to determine whether a fee is “reasonable” under §406(b). The provision for an attorney fee award to be paid under §1383(d) requires the same “reasonableness” determination, with all awards subject to the same 25% statutory cap. The relevant guideposts to determine reasonableness include: (1) the Hayes test;[2] (2) the amount of administrative and/or judicial delay; (3) the quality and quantity of attorney hours expended; (4) whether counsel has compromised his/her fee; (5) whether the Commissioner has filed any opposition; and (6) a small number of less “common” factors. Based upon the time period that elapsed between Plaintiff's first appeal in this Court and the ultimate grant of benefits, Plaintiff's past-due benefits award had grown to the sum of $60, 573.92 at the time the final award was determined. Calculating the statutory cap of 25% of that past-due benefits award yields a maximum possible fee of $15, 143.48.

         The instant case is somewhat unique insofar as counsel seeks compensation not only for the time expended on the above-captioned case, but also for time spent obtaining remand in the first case that he filed on Plaintiff's behalf. Plaintiff's counsel has attached as exhibits to the motion a contingency fee agreement that authorizes a 25% fee of past-due benefits in the instant case, a Notice of Award bearing the date of April 22, 2019, [3]and counsel's time records for both cases. (See Doc. 30 at 7-10). In order to avoid a duplicate recovery for hours previously compensated through the EAJA awards, counsel explains that he is requesting only $9, 328.48 as an additional fee, rather than the full $15, 143.48. See Jankovich v. Sec'y, 868 F.2d 867, 871 n.1 (6th Cir. 1989) (holding that remittance of the EAJA award for the duplicate work in federal court is required under §406(b)). Thus, counsel seeks the net sum of $9, 328.48, calculated by subtracting the total sum of the two previous EAJA fee awards ($5, 815.00) from the maximum fee authorized by statute.[4] (Doc. 30 at 5-6).

         Based upon the April 28, 2014 date, the contingency fee agreement attached to the motion appears to cover only the current federal case. However, the Court will assume, for purposes of the pending motion, that Plaintiff executed a similar agreement in Case No. 1:13-cv-591. The referenced Agreement states that counsel is entitled to “a fee equal to 25% of the past due benefits” for “all services through the initial hearing(s) and one appeal to the Appeals Council.” (Doc. 30 at 9). The Agreement further provides that fees for work beyond that scope of work “will still be 25% of ...

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