Coaxum v. Colvin

Filing 31

MEMORANDUM AND OPINION, Lassiter's motion for attorney fees under 42:406(b) is GRANTED in the amount of $17,100.75, to be paid from plaintiff's recovered past-due benefits. Signed by Magistrate Judge Katherine P. Nelson on 1/30/19. (srr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
SIDNEY R. COAXUM,
Plaintiff,
v.
NANCY A. BERRYHILL, Acting
Commissioner of Social Security,
Defendant.

)
)
)
)
)
)
)
)

CIVIL ACTION NO. 16-00262-N

MEMORANDUM OPINION AND ORDER
This action is before the Court on the motion for fees under 42 U.S.C. § 406(b)
(Doc. 28) filed by Byron A. Lassiter, Esq., counsel of record for Plaintiff Sidney R.
Coaxum.1 The Defendant Commissioner of Social Security (“the Commissioner”)
timely filed a response (Doc. 30) stating that she “neither supports nor opposes” the
motion.2 Upon consideration, the Court finds that Lassiter’s § 406(b) motion is due
to be GRANTED.3
I.

Background

Plaintiff Coaxum, at all times represented by Lassiter, brought this action
A Social Security claimant’s attorney is the real party in interest to a § 406(b)
award. Gisbrecht v. Barnhart, 535 U.S. 789, 798 n.6 (2002).
1

2 “A

§ 406(b) fee is paid by the claimant out of the past-due benefits awarded.”
Jackson v. Comm'r of Soc. Sec., 601 F.3d 1268, 1271 (11th Cir. 2010). “[T]he
Commissioner of Social Security…has no direct financial stake in the answer to the §
406(b) question; instead, she plays a part in the fee determination resembling that of
a trustee for the claimants.” Gisbrecht, 535 U.S. at 798 n.6.
With the consent of the parties, the Court designated the undersigned Magistrate
Judge to conduct all proceedings in this civil action in accordance with 28 U.S.C. §
636(c), Federal Rule of Civil Procedure 73, and S.D. Ala. GenLR 73. (See Docs. 20,
21).
3

under 42 U.S.C. §§ 405(g) and 1383(c)(3) for judicial review of an unfavorable final
decision of the Commissioner denying his applications for a period of disability and
disability insurance benefits (“DIB”) under Title II of the Social Security Act, 42
U.S.C. § 401, et seq., and for supplemental security income (“SSI”) under Title XVI of
the Social Security Act, 42 U.S.C. § 1381, et seq. In accordance with the Court’s
scheduling order (Doc. 7), the Commissioner filed her answer (Doc. 12) to the
complaint and the certified record of the relevant administrative proceedings (Docs.
13, 14), and Coaxum filed his fact sheet and brief identifying alleged errors in the
Commissioner’s final decision (Doc. 18). In lieu of a brief responding to those claims
of error, the Commissioner filed a voluntary, unopposed motion to reverse her
unfavorable final decision under sentence four of § 405(g) and remand the case to the
Social Security Administration (“SSA”) for further proceedings, which the Court
granted. (See Docs. 19, 22, 23). Coaxum subsequently filed a motion for attorney
fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 24124 (Doc. 24),
which the Court granted, awarding Coaxum $3,171.47 in EAJA attorney fees. (See
Doc. 27).
Following remand to the SSA, an Administrative Law Judge (“ALJ”) issued a
“[S]uccessful Social Security benefits claimants may request a fee award under the
EAJA. Under the EAJA, a party that prevails against the United States in court
may be awarded fees payable by the United States if the government's position in
the litigation was not ‘substantially justified.’ 28 U.S.C. § 2412(d)(1)(A). EAJA fees
are awarded to the prevailing party in addition to and separate from any fees
awarded under 42 U.S.C. § 406(b). See Gisbrecht, 535 U.S. at 796, 122 S. Ct. at 1822;
Reeves v. Astrue, 526 F.3d 732, 736 (11th Cir. 2008). Unlike § 406(b) fees, which are
taken from the claimant’s recovery, EAJA fees are paid from agency funds.”
Jackson, 601 F.3d at 1271.
4

favorable decision for Coaxum on his DIB and SSI applications. A notice of award
computing Coaxum’s past-due benefits was issued on November 13, 2018 (Doc. 28-2).
Lassiter filed the present § 406(b) motion on December 7, 2018.
II.

Analysis

Under 42 U.S.C. § 406(b), “[w]henever a court renders a judgment favorable to
a [DIB] claimant…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…”

42 U.S.C. §

406(b)(1)(A). “42 U.S.C. § 406(b) authorizes an award of attorney’s fees where[, as
here,] the district court remands the case to the Commissioner of Social Security for
further proceedings, and the Commissioner on remand awards the claimant
past-due benefits.”

Bergen v. Comm'r of Soc. Sec., 454 F.3d 1273, 1277 (11th Cir.

2006) (per curiam).5
a.

Timeliness

Federal Rule of Civil Procedure 54(d)(2), which “applies to a § 406(b)
attorney’s fee claim[,]” id., provides that, “[u]nless a statute or a court order provides
otherwise, [a] motion[ for attorney’s fees] must be filed no later than 14 days after
“Under 42 U.S.C. § 406(b)(2), it is a criminal offense for an attorney to collect fees
in excess of those allowed by the court.” Jackson, 601 F.3d at 1271. See also
Gisbrecht, 535 U.S. at 795-96 (“The prescriptions set out in §§ 406(a) and (b)
establish the exclusive regime for obtaining fees for successful representation of
Social Security benefits claimants. Collecting or even demanding from the client
anything more than the authorized allocation of past-due benefits is a criminal
offense. §§ 406(a)(5), (b)(2) (1994 ed.); 20 CFR §§ 404.1740–1799 (2001).”).
5

the entry of judgment.”

Fed. R. Civ. P. 54(d)(2). In its order remanding Coaxum’s

case, the Court granted “Coaxum’s counsel an extension of time in which to file a
motion for fees under 42 U.S.C. § 406(b)…until thirty days after the date of receipt of
a notice of award of benefits from the SSA.”

(Doc. 22 at 2-3). The order further

stated: “Consistent with 20 C.F.R. § 422.210(c), ‘the date of receipt of notice … shall
be presumed to be 5 days after the date of such notice, unless there is a reasonable
showing to the contrary.’ ”

(Id.).6 Coaxum’s award notice was issued November

13, 2018. Therefore, Lassiter’s § 406(b) motion (Doc. 28), filed less than 30 days
later, is timely.
b.

Reasonableness

In Gisbrecht v. Barnhart, the Supreme Court considered 42 U.S.C. § 406(b)
and clarified its impact on the district court's role in awarding a reasonable
fee following a favorable claim for Social Security benefits. See 535 U.S.
789, 807, 122 S. Ct. 1817, 1828, 152 L. Ed. 2d 996 (2002). Although §
406(b)(1)(A) gives district courts the power to “determine and allow as part
of its judgment a reasonable fee” following a favorable claim for Social
Security benefits, 42 U.S.C. § 406(b)(1)(A), it does not empower them to
ignore the fee agreements entered into by parties when determining what
a reasonable fee would be, see Gisbrecht, 535 U.S. at 807, 122 S. Ct. at 1828
(concluding that “ § 406(b) does not displace contingent-fee agreements as
the primary means by which fees are set”). Instead, courts must look to the
agreement made by the parties and independently review whether the
resulting fee is reasonable under the circumstances. Id. Accordingly, [a
court] must look to the fee agreement made by [a claimant] and his
See Blitch v. Astrue, 261 F. App'x 241, 242 n.1 (11th Cir. 2008) (per curiam)
(unpublished) (“In Bergen v. Comm'r of Soc. Sec., 454 F.3d 1273 (11th Cir. 2006), we
suggested the best practice for avoiding confusion about the integration of Fed. R.
Civ. P. 54(d)(2)(B) into the procedural framework of a fee award under 42 U.S.C. §
406 is for a plaintiff to request and the district court to include in the remand
judgment a statement that attorneys fees may be applied for within a specified time
after the determination of the plaintiff's past due benefits by the Commission. 454
F.3d at 1278 n.2.”).
6

attorney.
Keller v. Comm'r of Soc. Sec., 759 F.3d 1282, 1284 (11th Cir. 2014).

“[T]he

agreement, not the statute, provides the ‘primary means by which fees are set.’ ”
Id. (quoting Gisbrecht, 535 U.S. at 807).
In retaining Lassiter, Coaxum entered into an attorney fee agreement (Doc.
28-3) which provides, in relevant part, as follows: “It is understood and agreed that I
will pay an attorney’s fee that will be 25% of the combined gross retroactive benefits
from Social Security and Supplemental Security Income (SSI) resulting from a
favorable award of the Commissioner, prior to any reduction under Section 1127(a)
of the [Social Security] Act…It is understood that the term ‘combined gross
retroactive benefits’, as used herein, represents the total amount of money to which I
and any auxiliary beneficiary or beneficiaries become entitled through the month
before the month SSA effectuates a favorable administrative determination or
decision on my Social Security claim and that SSI past-due benefits are the total
amount of money from which I become eligible through the month SSA effectuates a
favorable administrative determination or decision on my SSI claim.”

The Court

finds no reason to believe that this fee agreement violates § 406(b)(1)(A).
However,
[Gisbrecht further] explained that even when a contingency agreement
complies with the statutory limit and caps the fee at 25 percent of the
claimant’s benefits award, “§ 406(b) calls for court review of [contingency
fee] arrangements as an independent check, to assure that they yield
reasonable results in particular cases.” [535 U.S.] at 807, 122 S. Ct. at
1828.

Even when there is a valid contingency fee agreement, Gisbrecht sets forth
certain principles that a district court should apply to determine if the
attorney's fee to be awarded under § 406(b) is reasonable. See id. at 808,
122 S. Ct. at 1828. Under Gisbrecht the attorney for the successful social
security benefits claimant must show that the fee sought is reasonable for
the services rendered. Id., 122 S. Ct. at 1828. The district court may reduce
the fee based on the character of the representation and the results
achieved; and if the recovered benefits are large in comparison to the time
the claimant's attorney invested in the case, a downward adjustment may
be in order. Id., 122 S. Ct. at 1828. The Gisbrecht Court held that Ҥ 406(b)
does not displace contingent-fee agreements within the statutory ceiling [of
25 percent of the claimant's recovered benefits]; instead, § 406(b) instructs
courts to review for reasonableness fees yielded by those agreements.” Id.
at 808–09, 122 S. Ct. at 1829.
Thomas v. Astrue, 359 F. App'x 968, 974-75 (11th Cir. 2010) (per curiam)
(unpublished) (footnote omitted). See also Jackson, 601 F.3d at 1271 (“Assuming
that the requested fee is within the 25 percent limit, the court must then determine
whether ‘the fee sought is reasonable for the services rendered.’

Gisbrecht v.

Barnhart, 535 U.S. 789, 807, 122 S. Ct. 1817, 1828, 152 L. Ed. 2d 996 (2002). For
example, courts may reduce the requested fee if the representation has been
substandard, if the attorney has been responsible for delay, or if the benefits are
large in comparison to the amount of time the attorney spent on the case. Id. at 808,
122 S. Ct. at 1828.”).
The award notice does not state the amount of past-due benefits Coaxum was
awarded, but does state that the SSA “usually withhold[s] 25 percent of past due
benefits in order to pay the approved representative’s fee[,]” and that it had
“withheld $23,100.75 from [Coaxum’s] past due benefits in case [it] need[ed] to pay
[his] representative.”

(Doc. 28-2 at 3).

Neither Lassiter nor the Commissioner

challenges that amount as an inaccurate calculation of 25% of Coaxum’s past-due
benefits. Lassiter represents that he has petitioned an ALJ for approval of $6,000.00
in fee for his services in representing Coaxum before the SSA. See (Doc. 28 at 4); 42
U.S.C. § 406(a)(1) (“Except as provided in paragraph (2)(A), whenever the
Commissioner of Social Security, in any claim before the Commissioner for benefits
under this subchapter, makes a determination favorable to the claimant, the
Commissioner shall, if the claimant was represented by an attorney in connection
with such claim, fix (in accordance with the regulations prescribed pursuant to the
preceding sentence) a reasonable fee to compensate such attorney for the services
performed by him in connection with such claim.”).

Lassiter moves that he be

allowed $17,100.75 (i.e., $23,100.75 - $6,000.00) in fees for work performed on behalf
of Coaxum in this Court.7

The Court’s duty now is to determine whether it is

reasonable for Lassiter to receive that amount for the work performed in this action.
Considering the amount of time Lassiter devoted to this case and the services
performed (see Doc. 28-1), the Court finds that the benefits awarded to Coaxum are
not so “large in comparison to the amount of time counsel spent on the case” such
that “a downward adjustment is…in order.”

Gisbrecht, 535 U.S. at 808. By all

accounts, Lassiter appears to have obtained excellent results for his client through
Abrogating prior Eleventh Circuit precedent, the United States Supreme Court
has recently held that the 25% cap in § 406(b)(1)(A) applies only to fees for court
representation, and not to the aggregate fees awarded under §§ 406(a) and (b).
Culbertson v. Berryhill, 139 S. Ct. 517 (2019). Lassiter’s fee agreement with
Coaxum nevertheless appears to limit his overall fee to 25% total of Coaxum’s
past-due benefits.
7

his efforts, and a review of the docket for this action does not indicate that Lassiter
has been responsible for any significant delay. Having considered the guidance set
forth in Gisbrecht, the undersigned finds that it is reasonable for Lassiter to receive
$17,100.75 under § 406(b) in this action.8
III.

Conclusion

In accordance with the foregoing analysis, it is ORDERED that Lassiter’s
motion for fees under 42 U.S.C. § 406(b) (Doc. 28) is GRANTED and that Lassiter is
allowed a reasonable fee under § 406(b) for work performed in this district court
action in the sum of $17,100.75, to be paid from Coaxum’s recovered past-due
benefits.9
DONE and ORDERED this the 30th day of January 2019.
/s/ Katherine P. Nelson
KATHERINE P. NELSON
UNITED STATES MAGISTRATE JUDGE

Under EAJA’s Savings Provision, 28 U.S.C. § 2412 note, Act of Aug. 5, 1985, Pub.
L. No. 99–80, § 3, 99 Stat. 183, 186, “an attorney who receives fees under both the
EAJA and 42 U.S.C. § 406(b) must refund the smaller fee to his client…” Jackson,
601 F.3d at 1274. Lassiter represents that the $3,171.47 in previously paid “EAJA
fees are being temporarily held in the firm’s trust account for distribution to the
Plaintiff…” (Doc. 28 at 6). See Jackson, 601 F.3d at 1274 (“The obligation to make
the refund is imposed on the attorney. There is no language in the Savings Provision
that requires courts to take any action with respect to the refund. In particular,
nothing in the Savings Provision commands courts to order a specific refund
procedure if the claimant's attorney has already taken other steps to effectuate the
refund.”).
8

Unless a party requests one, no separate judgment regarding attorney’s fees shall
be forthcoming. See Fed. R. Civ. P. 58(a)(3) (judgment need not be set out in a
separate document for an order disposing of a motion for attorney’s fees).
9