Suchovsky v. Commissioner of Social Security
OPINION AND ORDER: GRANTING 30 First MOTION for Attorney Fees under 42 USC 406(b) by Plaintiff Judith Suchovsky. The Court GRANTS Counsel's petition for §406(b) fees in the amount of $12,645.00. The Court ORDERS that payment by the Commissioner in the amount of $12,645.00 be paid directly to Steven Parkman in accordance with the agreement signed by Plaintiff. The Court further ORDERS Attorney Parkman to REFUND Plaintiff $6,278.73, which represents the amount of the EAJA award already paid to Attorney Parkman and now credited to Plaintiff. Signed by Judge Philip P Simon on 7/11/2017. (lhc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
NANCY A. BERRYHILL1 Acting
Commissioner of Social Security
) CAUSE NO. 3:15-cv-144-PPS-CAN
OPINION AND ORDER
This matter is before me on Plaintiff’s counsel’s Motion for Authorization of
Attorney Fees Pursuant to 42 U.S.C. § 406(b), DE 30, which seeks $12,645.00 in
attorney’s fees, a percentage of the past-due Social Security Disability Insurance Benefits
awarded by the Commissioner of Social Security to Plaintiff. For the reasons explained
in detail below, I find the request reasonable and the motion is GRANTED.
After being denied Disability Insurance benefits under the provisions of the
Social Security Act, Plaintiff appealed her case to this Court on March 31, 2015. [DE 1.]
On December 14, 2015, I granted the Parties’ Joint Motion to Remand pursuant to
Pursuant to Federal Rule of Civil Procedure 25(d), Nancy A. Berryhill is substituted for her predecessor,
Carolyn W. Colvin, as defendant in this suit.
sentence four of 42 U.S.C. § 405(g) for further proceedings and a new decision by the
ALJ. [DE 22.] On March 29, 2016, I granted Plaintiff’s Motion for Attorney Fees
pursuant to the Equal Access to Justice Act. [DE 29.]
On remand from this Court, Plaintiff then received a Notice of Award (“NOA”)
from the Commissioner in her favor. The NOA awarded Plaintiff $85,306.00 in total
back benefits. [DE 30 at 6-11.] The Commissioner withheld $20,645.00 of the award for
Plaintiff’s counsel for his work on the case. [Id. at 8.] Plaintiff now asks me to approve
a fee authorization in the amount of $12,645.00 pursuant to Section 206(b)(1) of the
Social Security Act. Plaintiff’s counsel represents that he will request that the Social
Security Administration approve $8,000.00 as his fee for work before the agency, thus
requesting a total of $20,645.00, the total amount withheld by the Commissioner, for
work before the agency and federal court. [Id. at 2.] The Government has not objected
to the request.
Section 406(b) of the Social Security Act provides: “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.” 42
U.S.C. § 406(b)(1)(A). Section 406(b) is intended to control, but not displace, contingent
fee arrangements. Gisbrecht v. Barnhart, 535 U.S. 789, 793 (2002). The district court is to
review the amount set by the fee agreement for reasonableness based on “the character
of the representation and the results the representative achieved.” Id. at 807. The
Supreme Court described three situations in which courts have appropriately reduced
fees as unreasonable: (1) the representation is substandard, (2) counsel’s delay caused
past-due benefits to accumulate during the pendency of the case in court, and (3) pastdue benefits are large in comparison to the amount of time counsel spent on the case.
Id. at 808.
Here, Plaintiff entered into a twenty-five-percent contingency fee agreement with
her attorney, Steven T. Parkman, and his associates. [DE 30 at 12.] Plaintiff was
awarded past due benefits in the amount of $85,306.00, and the Commissioner withheld
slightly less than 25%, $20,645, in case Plaintiff needed to pay counsel, $12,645 of which
counsel now asks me to award him. This amount is reasonable. First, Attorney
Parkman and his associates’ representation was not substandard. On the contrary, after
drafting and filing an opening brief in this action, counsel secured a remand from this
court and reversal of the original administrative decision resulting in the Plaintiff
receiving a full favorable decision and an award of six years of retroactive benefits.
Further, counsel did not cause any unnecessary delay.
Finally, counsel worked on contingent fee basis, so the risk that he won’t recover
for his client, and thus won’t be paid at all, has to be priced in to the computation of a
reasonable fee. See Bastic v. Bowen, 691 F. Supp. 1176, 1177 (N.D. Ill. 1988) (“[A] universe
in which lawyers go wholly unpaid in cases they lose, but are paid for the cases they
win at rates that fail to reflect the risk of loss, is a distorted universe.”). The risk of no
recovery is high in a Social Security case. See Martinez v. Astrue, 630 F.3d 693, (7th Cir.
2011) (discussing a study finding 65.05% of Social Security appeals resulted in an
affirmance of the denial of benefits). In this context, then, an award of $12,645 is not
unreasonable. And awards of larger size have been approved in this district. See, e.g.
Soptich v. Colvin, No. 3:15-CV-109, 2017 WL 711021, at *2 (N.D. Ind. 2017) (approving
award of $18,646); Denune v. Colvin, No. 1:11-CV-64, 2014 WL 3899308, at *4 (N.D. Ind.
2014) (approving award of $24,830); Sparrow v. Astrue, No. 3:07-CV-506-TLS, 2010 WL
2195276, at *1 (N.D. Ind. 2010) (approving award of $17,322.10). Attorney Parkman
achieved the result his client sought in filing the suit and should be properly
compensated for his work.
There is one final piece of business. Attorney Parkman already has received
$6,278.73 in EAJA fees. While fee awards may be made under both Section 406 and the
EAJA, the attorney must refund to the claimant the amount of the smaller fee. Gisbrecht,
535 U.S. at 796. Parkman has agreed to refund the smaller of the EAJA award or the
award under Section 406. [DE 30 at 5.]
Plaintiff’s counsel’s Motion for Authorization of Attorney Fees Pursuant to 42
U.S.C. § 406(b), DE 30, is GRANTED. The Court GRANTS Counsel’s petition for
§406(b) fees in the amount of $12,645.00. The Court ORDERS that payment by the
Commissioner in the amount of $12,645.00 be paid directly to Steven Parkman in
accordance with the agreement signed by Plaintiff. The Court further ORDERS
Attorney Parkman to REFUND Plaintiff $6,278.73, which represents the amount of the
EAJA award already paid to Attorney Parkman and now credited to Plaintiff.
ENTERED: July 11, 2017.
s/ Philip P. Simon
PHILIP P. SIMON, JUDGE
UNITED STATES DISTRICT COURT
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