Savage v. Barnhart

Filing 27

ORDER granting 24 Motion for Attorney Fees.Ordered by Judge C. Ashley Royal on 5/20/10 (lap)

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA MACON DIVISION THOMAS SAVAGE : : Plaintiff, : : v. : : MICHAEL J. ASTRUE, Commissioner of : Social Security, : : Defendant. : _____________________________________

Civil Action No. 5:06CV196 (CAR)

ORDER ON MOTION FOR ATTORNEY'S FEES UNDER THE SOCIAL SECURITY ACT, 42 U.S.C. § 406(b) Currently before the Court is Plaintiff's counsel's Application for Att o rney Fees under the Social Security Act, 42 U.S.C. §§ 406(b)(1)(A) and 1383(d)(2)(A) [Doc. 24]. The Commissioner filed a timely Response [Doc. 25] opposing the amount of f e e s requested, and Plaintiff thereafter filed a timely Reply [Doc. 2 6]. Through the present Motion, Pla in t if f ' s counsel asks the Court to award him $27,310 in attorney fees pursuant to 42 U.S.C. § 406(b). After careful review of the record in this case and the applicable law, the Court finds the requested amount to be reasonable and therefore GRANTS Plaintiff's counsel's Motion. BACKGROUND Plaintiff, represented by Robin Bargeron, applied for disability benefits under the

Social Security Act in January 2003 alleging that h e was disabled as a result of physical and/or mental impairments. A Social Securit y A dminstrative Law Judge ("ALJ") denied Plaintiff's application for benefits, and the Appeals Council subsequently denied review. Having exhausted the administrative claims process, Plaintiff retained attorney Michel Phillips to se e k j udicial review of the denial of his benefits. Plaintiff executed a contingency fee agreement wherein he agreed Phillips's fee for handling the appeal in this Court wo uld b e t he greater of (a) 25 percent of any retroactive disability benefits due Plaintiff and Plaintiff's family, or (b) any fe e awarded to counsel under the Equal Access to Justice Act, 28 U.S.C. § 2412 ("EAJA"). Almost four years ago, n June 9, 2006, Phillips filed a complaint in this Court seeking reversal of the Appeals Council's decision. The case was referred to a magistrate judge who evaluated the record and applicable law and issued a report recommending that the c ase be remanded. On September 25, 2007, this Court a do pt e d the Magistrate Judge's report and recommendation in its entirety and entere d judgment remanding the case to the Commissioner of Social Security under sentence four of 42 U.S.C. § 405(g). On December 22, 2007, Phillips filed an application for attorney's fees un der the EAJA. Based on 33.8 hours of billed work at a rate of 161.25 per hour,1 Phillips requested

Counsel stated that the $161.25 hourly rate represented "the EAJA statutory rate of $125.00 adjusted upward using the Consumer Price Index for the month in which Plaintiff's counsel did the most work on this case." 2

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$5,450.25 in fees and $48.37 in expenses, for a total amount of $5,498.62. On January 18, 2008, this Court granted counse l' s re quest and awarded $5,498.62 in attorney's fees and costs under the EAJA. Meanwhile, the administrative proceedings following the Court's remand continued. On remand, Plaintiff was again represented by Bargeron. The ALJ held a new hearing and once again denied benefits. The Appeals Council, however, reversed the ALJ and found Plaintiff disabled. Pursuant to the Appeals Council's fully fa vorable decision, Plaintiff's application for disability benefits was approved, and Plaintiff and his minor children were awarded $130,440 in total pastdue s o c ia l s ecurity benefits. The Social Security Administ ra t ion granted Plaintiff's administrative counsel, Robin Bargeron, a 42 U.S.C. § 406(b) fee of $5,300 for her representation of Plaintiff in the pro c e e din gs held before the Administration. Thereafter, Phillips filed the application for attorney's fees under 42 U.S.C. § 406(b) currently at bar. Phillips moves the Court for an a ward of $27,310 to be paid out of Pla in t if f ' s $ 1 30,440 benefits award. Phillips has reduced the amount of his 406(b) fee request (25% of the pastdue benefits award) by the $5,300 amount already awarded to Bargero n b y t h e SSA. When the requested $27,310 is combined with the $5,300 already awarded, the total in requested attorney's fees equals $32,610, which is 25% of Plaintiff's $130,440 benefits award. Phillips recognizes that upon any award under § 406(b), he must

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refund the hourlyrate EAJA fee of $5,450.25 previously awarded by this Court.2 Thus, when the fee amount is reduced by both the SSA award and the EAJA award, Plaintiff's outofpocket attorney's fee expense will be $21,859.75, or 16.8% of pastdue benefits. The Commissioner opposes the fee as excessive and argues it would be a windfall. DISCUSSION Pursuant to 42 U.S.C. § 406(b), an attorney who successfully represents a claimant before the court in a Social Security benefits case may receive a reasonable fee that does not exceed 25% of the pastdue benefits awarded. Thus, contingency agreements are allowed. Indeed, "any endeavor by the claimant's attorney to gain more than" an authorized "fee, or to charge the claimant a noncontingent fee, is a c riminal offense." Gisbrecht v. Barnhart, 535 U.S. 789, 80607 (2002). The statute " c a lls for court review of [contingent] arrange me n t s a s an independent check, to assure that they yield reasonable results in

The EAJA, pursuant to which Phillips has already received $5,450.25, provides for an award of attorney's fees a ga inst the government. Watford v. Heckler, 765 F.2d 1562, 1566 (11th Cir. 1985). Phillips now additionally seeks attorney's fees pursuant to 42 U.S.C. § 406(b), which provides for attorney's fees payable out of the Pla intiff's pa std ue benefits a wa rd . Parties may seek and receive fees under both the EAJA and § 406(b). See generally id. at 1562; see also Gisbrecht v. Barnhart, 535 U.S. 789, 79495 (200 2 ) . However, to avoid double recovery of attorney's fees, a claimant's attorney who is awarded attorney's fees under both § 406(b) and the EAJA must refund the lesser amount to his client. Gisbrecht, 535 U.S. at 796; see also Meyer v. Sullivan, 958 F.2d 1029, 1035 n.12 (11th Cir. 1992) ("[W]here, in addition [to an award under § 406(b)], the plaintiff obtains an award of attorney's fees under the EAJA, the plaintiff is simply reimbursed for th e fees that, pursuant to the SSA, are taken out of pastdue benefits."). In acknowledgment of this requirement, Phillips understands that he must refund the $5,450.25 previously awarded under the EAJA. 4

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particular cases." Id. at 807. However, the burden is on the attorney to "show that the fee sought is reasonable for the services rendered." Id. Although here the motion is opposed, even where a § 406(b) petition is unopposed, a court is not permitted to automatically grant the requested fee. In Gisbrecht, the Supreme court acknowledged that "Congress . . . sough t t o pro t e ct claimants against inordinately large fees," and so "provided for a reasonable fee, not in excess of 25 percent of accrued benefit s [ . ]" 535 U.S. at 80405 (internal quotation marks omitted). Therefore, any fee awarded must both (1 ) be reasonable, and (2) not in excess of 25 percent of accrued benefits. Although Ph illips is n ot seeking a fee in excess of 25% of Plaintiff's pastdue benefits award, the Court still must inquire into whether the requested fee is reasonable. Generally, "[t]he best indicator of the `reasonableness' of a c o n t in gency fee in a social security case is the contingency percentage actually negotiated between the attorney and client. . . ." Coppett v. Barnhart, 242 F. Supp. 2d 1380, 1383 (S.D. Ga. 2002) (quoting Wells v. Sullivan, 907 F.2d 367, 371 2d Cir. 1990)); see also Yarnevic v. Apfel, 359 F. Supp. 2d 1363, 1365 (N.D. Ga. 2005)("Since Gisbrecht . . . the district courts . . . have been deferential to the terms of contingency fee contracts in § 406(b) cases[.]") (quoting Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003)). Other factors to be considered address the "character of the representation and the results the representative achieved"; for example, whether the attorney was responsible for delay in the case that would result

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in a greater fee due to the accumulation of back benefits, and whether the "benefits are large in comparison to the amount of time counsel spent on the case." Gisbrecht, 535 U.S. at 808 (citations omitted). In this case, Pla in tiff entered into a fee agreement with Phillips agreeing to pay "[o]nefourth (25%) of any retroa c t ive Title II and Title XVI benefits due [Plaintiff] and [Plaintiff's] family[.]" See Federal Court Attorney Retainer and Fee Agreement, Doc. 246. Additionally, there is no evidence or indication that Phillips was responsible for any delay in this case that would result in an inequitable profit. Moreover, Phillips, an experienced, reputable, and capable attorney who practices almost exclusively in the area of Social Security law, filed wellorganized, wellreason e d b riefs, which ultimately led to the reversal and remand of the c a s e. The issues set forth in over 90 pages of briefs and supporting documents, while perhaps not entirely novel or extraordinarily complex, were developed appro priately and the discussion thereof reflected a high degree of conscientiousness. The arguments were tailored to the specific circumstances of the case, and t his was not a case in which a generic brief was hurriedly customized. Rather, the grounds urged for reversal were lucidly presented, and t h e a dvo cacy was ultimately persuasive. Counsel's performance was obviously not substandard, whereas the prospect of any recovery was uncertain. By assuming this representatio n , P h illips assumed a significant

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risk that he may never recover a § 406(b) fee for his efforts. Taking into account the risk counsel assumes in a contingency case, as well as the fact that the requested fees are not out of line with other fee requests approved by district courts in this circ uit , the Court finds, despite the Commissioner's arguments to the contrary, that the requested $27,310 in attorney's fees for 33.8 hours of work is reasonable and should not be characterized as a win df a ll. The Court acknowledges that while the hours spent may appea r disproportionate to the award, Plaintiff and Phillips entered into an agreement, within the statutory maximum, which secured repre s e n tation for Plaintiff of very capable and experienced counsel. This Court recognizes that a contingency agreement is the freely negotiated expressio n b o t h of a claimant's willingness to pay more than a particular hourly rate to secure effective representation, and of an attorney's willingness to take the case despite the risk of nonpayment. . . . [Thus,] [t]he dis trict court's determination of a reas o n a ble fee under § 406(b) must begin with the agreement, and the district court may reduce the amo un t c a lled for by the contingency agreement only when it finds the amount to be unreasonable. Wells, 907 F.2d at 371(internal citations omitted). CONCLUSION In accordance with the foregoing, Plaintiff's Application for Attorney Fees under the Social Security Act, 42 U.S.C. §§ 406(b)(1)(A) and 1383(d)(2)(A) [Doc. 24] is hereby GRANTED. Plaintiff's counsel is authorized to receive $27,310 in attorney's fees pursuant to 42 U.S.C. § 406(b). Counsel is directed to refund to Plaintiff the hourlyrate 7

EAJA fee of $5,450.25 previously awarded by this Court. SO ORDERED this 20th day of May, 2010. S/ C. Ashley Royal C. ASHLEY ROYAL, JUDGE UNITED STATES DISTRICT COURT

SSH/apg

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