Ice v. Astrue

Filing 20

MEMORANDUM OPINION AND ORDER it is Ordered and Adjudged that, pursuant to the 42 USC 406(b), granting 15 MOTION for Attorney Fees to the extent that the contingent fee amount is reduced by 20% and counsel be and is hereby awarded $5,307.8 0 as a reasonable attorney's fee; The Commissioner shall pay to the plaintiff's attorney $5,307.80 of the amount previously withheld from the plaintiff's past due benefits; and 3) The Commissioner shall pay to the plaintiff $ 1,326.95 of the amount previously withheld from his past due benefits. Signed by Honorable Charles S. Coody on 10/16/08. (Attachments: # 1 appeals checklist)(vma, ) (Additional attachment(s) added on 10/16/2008 to correct typographical errors in the previously attached PDF document: # 2 Corrected main document) (djy, ).

IN THE DISTRICT COURT OF THE UNITED STATES F O R THE MIDDLE DISTRICT OF ALABAMA S O U T H E R N DIVISION F R E D D IE ICE, P l a i n t if f , v. M IC H A E L J. ASTRUE, C o m m is s io n e r of Social Security, D e fe n d a n t. ) ) ) ) ) ) ) ) ) )

C I V IL ACTION NO. 1:07cv385-CSC (W O )

M E M O R A N D U M OPINION AND ORDER O n September 2, 2008, the plaintiff filed a petition for authorization of attorney's fees p u r su a n t to 42 U.S.C. § 406(b). The plaintiff seeks $6,634.75 representing 25 percent of past d u e benefits withheld for payment of attorney's fees minus $5,300.00 requested from the S o c ia l Security Administration for services rendered at the administrative level. The United S ta te s does not object to an award of fees but asserts that the amount requested "may be u n rea so n ab le because it may represent a windfall to counsel." (Doc. # 17 at 2). O n March 9, 2005, the plaintiff applied for disability insurance benefits pursuant to T itle II of the Social Security Act, 42 U.S.C. §§ 401 et seq., alleging that he was unable to w o rk because of a disability. His application was denied at the initial administrative level. T h e plaintiff then requested and received a hearing before an Administrative Law Judge (" A L J " ). Following the hearing, the ALJ also denied the claim on September 14, 2006. The A p p e a ls Council rejected a request for review. The ALJ's decision consequently became the

fi n al decision of the Commissioner of Social Security (Commissioner).1 See Chester v. B o w e n , 792 F.2d 129, 131 (11 th Cir. 1986). O n October 9, 2006, the plaintiff entered into a contingency fee agreement with c o u n se l in which plaintiff agreed to payment of attorney's fees in the amount of 25 percent o f any past due benefits awarded to plaintiff. On May 4, 2007, the plaintiff sought review o f the Commissioner's decision pursuant to 42 U.S.C. §§ 405(g) and 1631(c)(3). Pursuant to 28 U.S.C. § 636(c), the parties consented to entry of final judgment by the United States M a g istra te Judge. On October 12, 2007, the Commissioner filed a motion to remand this c a se pursuant to sentence four of 42 U.S.C. § 405(g). The plaintiff did not object to the re m a n d . Consequently, the court remanded this case to the Commissioner for further p roc ee d ing s pursuant to sentence four of 42 U.S.C. § 405(g). T h e plaintiff was subsequently awarded past due disability benefits. The Social S e c u r it y Administration withheld $11,934.75 from the plaintiff's past due benefits for p a y m e n t of attorney's fees. Plaintiff's counsel has petitioned the Social Security

A d m inistratio n for an award of attorney's fees in the amount of $5,300.00 for work p e rfo rm e d at the administrative level. Pursuant to 42 U.S.C. § 406(b), the plaintiff now seeks p a y m e n t of fees in the amount of $6,634.75 which is 25 percent of the past due benefits a w a rd e d the plaintiff minus the $5,300.00 requested for services rendered at the

Pursuant to the Social Security Independence and Program Improvements Act of 1994, Pub.L. No. 103-296, 108 Stat. 1464, the functions of the Secretary of Health and Human Services with respect to Social Security matters were transferred to the Commissioner of Social Security.

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a d m in is tra tiv e level.2 Plaintiff's counsel asserts that he expended 18.25 hours over a seven m o n th period representing the plaintiff. In Grisbrecht v. Barnhart, 535 U.S. 789 (2002), the Supreme Court examined the q u e stion of attorney's fees in conjunction with contingency fee agreements in Social Security d is a b ility cases. Specifically, the Court held that "§ 406(b) does not displace contingent-fee a g re e m e n ts as the primary means by which fees are set for successfully representing Social S e c u rity benefits claims in court. Rather § 406(b) calls for court review of such

a r ra n g e m e n t s as an independent check, to assure that they yield reasonable results in p a rtic u la r cases." Id. at 807. The contingency fee agreement in this case does not exceed the 2 5 percent ceiling established by § 406(b). However, it is not sufficient for the court to s im p ly accept 25 percent of past due benefits as a reasonable attorney fee. Courts that approach fee determinations by looking first to the contingent-fee a g re e m e n t, then testing for reasonableness, have appropriately reduced the a tto rn e y 's recovery based on the character of the representation and the results th e representation achieved. . . . . If the benefits are large in comparison to the a m o u n t of time counsel spent on the case, a downward adjustment is similarly in order. Id . at 808. Thus, the court must determine whether the amount of fees sought pursuant to the

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42 U.S.C. 406(b) provides as follows:

Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title, but subject to subsection (d) of this section, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.

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c o n tin g e n c y fee agreement is reasonable. " W ith in the 25 percent boundary . . . the attorney for the successful claimant must s h o w that the fee sought is reasonable for the services rendered." Id., at 807 (emphasis a d d e d ). The burden is on plaintiff's counsel to demonstrate that reasonableness of the re q u e s te d fee. Id. Counsel is seeking $6,634.75 in attorney's fees for 18.25 hours of work o v e r a seven month period. In Gisbrecht, the court noted that if the "benefits are large in c o m p a ris o n to the amount of time counsel spent on the case, a downward adjustment is . . . in order." 536 U.S. at 808. The plaintiff's counsel did not submit to the court his hourly ra te for non-contingent fee work, nor did counsel refer this court to any previous awards of f e e s to him for similar work. Moreover, counsel has not argued, and the court does not find, th a t this case presented any greater risk of loss than the typical social security disability case. S e e McGuire v. Sullivan, 873 F.2d 974, 985 (7 th Cir. 1989).3 A n award of the full 25% of the past due benefits will result in an hourly rate of $ 3 6 3 .5 5 . While this hourly rate is surely not determinative of reasonableness, a comparison o f this rate to what counsel would bill for non-contingent fee work or has previously been a w a rd e d would be a legitimate indicator of reasonableness. However, the court has nothing b e f o r e it except counsel's assertion that the amount sought is reasonable. (Doc. # 19 at 1) (e m p h a s is in original). Of course, the court's judgment about reasonableness must itself be tempered by

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Cited with approval in Gisbrecht v. Barnhart, 535 U.S. 789 (2002).

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G isbre ch t's conclusion that Congress meant to "contain" and not "outlaw" lawful contingent fe e agreements. Justice Scalia's observation that the Gisbrecht opinion does not provide a fram ew ork for analysis underscores the difficulty in "making reasonableness determinations" u n d er Gisbrecht. While the Gisbrecht court notes that district courts perform this function in a wide variety of contexts, the court does not give any context for making these decisions. In the instant case, counsel expended 18.25 hours for which he claims fees in the amount of $ 6 ,6 3 4 .7 5 . Although counsel is experienced in representing Social Security claimants, he p ro v id e s the court no evidence about how long he has been practicing law in general and re p re se n tin g Social Security claimants in particular. Thus, the court cannot make a

d e te rm in a tio n about whether the amount of time counsel spends on a case will be less than o th e r lawyers who are not as experienced or skilled. Additionally, there is the lack of ev iden ce that this case was exceptional or that there was an increased possibility of loss. In s h o rt, counsel has not met his burden of giving the court a framework within which to make a reasonable determination. Consequently, the court concludes that counsel has failed to m e e t his burden of establishing that payment of 25% of the past due benefits would be re a so n a b le under the circumstances of this case. T h e court concludes that the contingent fee amount should be reduced by $1326.95 w h ic h equals a reduction of 20%. Counsel will be awarded $5,307.80 which represents an h o u rly rate in the amount of $290.88 which the court concludes is a reasonable attorney fee in this case in light of the hours of work performed over the time period of counsel's in v o lv e m e n t. The court reiterates that this reduction is due to counsel's failure to meet his 5

b u r d e n of demonstrating the reasonableness of an award of 25% of the past due benefits. A c c o r d in g ly , it is ORDERED and ADJUDGED that, pursuant to the 42 U.S.C. § 406(b), 1. T h e petition for attorney's fees be and is hereby GRANTED to the extent that

th e contingent fee amount is reduced by 20% and counsel be and is hereby AWARDED $ 5 ,3 0 7 .8 0 as a reasonable attorney's fee. 2. T h e Commissioner shall pay to the plaintiff's attorney $5,307.80 of the amount

p re v io u s ly withheld from the plaintiff's past due benefits; and 3. T h e Commissioner shall pay to the plaintiff $1,326.95 of the amount

p r e v io u s ly withheld from his past due benefits. D o n e this 16 th day of October, 2008.

/s/Charles S. Coody CHARLES S. COODY U N IT E D STATES MAGISTRATE JUDGE

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