HILBERT v. COLVIN
ORDER - 34 Motion for Attorney Fees is DENIED. See order for details. Signed by Magistrate Judge Tim A. Baker on 10/17/2016. (LBT)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION
JESSICA ANN HILBERT,
CAROLYN W. COLVIN Commissioner of
It is said that time is money. This proverb rings true here, where Plaintiff Jessica Ann
Hilbert’s counsel, Tim E. Staggs, filed the instant motion for attorney’s fees one year after
Hilbert received her Social Security benefits award. This passage of time has prejudiced Hilbert
by delaying her receipt of additional past-due benefits. For reasons explained below, time has
overtaken counsel’s ability to directly collect attorney’s fees. The present motion [Filing No. 34]
On July 3, 2013, counsel initiated the appeal of the Commissioner’s decision to deny
Hilbert’s claim for Social Security benefits. On July 25, 2014, the Court remanded the case for
reconsideration, which resulted in a favorable decision for Hilbert. On November 6, 2014, the
Court issued an order, awarding Hilbert’s counsel $6,847.47 of attorney’s fees under the Equal
Access to Justice Act.
When the agency approved Hilbert’s claim, it sent a July 28, 2015, award letter. The
letter explained that Hilbert’s past-due benefits totaled $65,504, of which $16,376 would be
withheld for possible payment of attorney’s fees. On September 14, 2015, the agency sent
Hilbert another award letter, informing her that her two children were also entitled to benefits on
her earnings record and that the agency was withholding $4,087.50 from each child’s past-due
benefits for possible payment of attorney’s fees.
Pursuant to 20 C.F.R. § 404.1730(c)(1), to receive attorney’s fees directly from Hilbert’s
past-due benefits, her counsel “should file a request for approval of a fee, or written notice of the
intent to file a request … within 60 days of the date we mail the notice of the favorable
determination or decision.” If counsel fails to make a request within 60 days, § 404.1730(c)(2)(i)
provides that the agency will mail a written notice that “unless the representative files, within 20
days from the date of the notice, a written request for approval of a fee under § 404.1725, or a
written request for an extension of time, we will pay all the past-due benefits to you.” Then,
subject to approval, “the collection of any approved fee is a matter between you and the
representative.” § 404.1730(c)(2)(ii).
On November 28, 2015, the agency sent a letter to Hilbert’s counsel that $18,551 of
Hilbert’s past-due benefits were being withheld in anticipation of directly paying an attorney’s
fee. The letter asked whether counsel intended to file a fee petition. Counsel did not respond.
On March 27, 2016, the agency sent another letter to counsel, advising that the agency
did not wish to delay releasing past-due benefits. The letter expressly invoked the 20-day
deadline pursuant to § 404.1730(c)(2)(i), which gave Hilbert’s counsel until April 18, 2016, to
request fees or an extension. On April 4, 2016, counsel responded in a letter, acknowledging the
deadline. On April 18, 2016, counsel sent another letter, advising that a fee petition would be
filed “as soon as possible.” [Filing No. 43-1, at ECF p. 30.] Counsel did not file a fee petition or
request an extension of time on or before April 18, 2016.
On July 27, 2016, the agency sent another letter to counsel, referencing the March letter,
asking counsel whether there was any reason Hilbert’s withheld past-due benefits should not be
released to her. On July 29, 2016, counsel filed the present motion, seeking direct payment of
attorney’s fees from Hilbert’s withheld past-due benefits in the amount of $10,376. The
Commissioner objects, arguing the motion should be denied because Hilbert’s counsel failed to
file a fee petition within a reasonable time. Hilbert’s counsel did not reply and the time to do so
has now passed.
The Seventh Circuit Court of Appeals has held that “a petition for fees under § 406(b)(1)
must be brought within a reasonable time.” Smith v. Bowen, 815 F.2d 1152, 1156 (7th Cir.
1987). However, what constitutes a reasonable time was not explained by the court. Since the
“reasonable time” standard was identified in Smith, courts have grappled with what constitutes a
reasonable amount of time for making a § 406(b) fee request.
In Bassett v. Astrue, No. 09-cv-3231, 2012 WL 295068, *2 (C.D. Ill. 2012), the court
found that a four-and-a-half month delay between counsel’s fee petition and plaintiff’s benefit
award was reasonable. However, in Hill v. Colvin, No. 1:11-cv-134, 2016 WL 2643360, *5
(N.D. Ind. 2016), the court found that nine months caused a timeliness issue. Similarly, in Blow
v. Colvin, No. 1:11-cv-293, 2015 WL 4591655, *3 (N.D. Ind. 2015), an 18-month delay was
found unreasonable. And in Cox v. Astrue, No. 3:07-cv-234, 2011 WL 2692910, *2 (N.D. Ind.
2011), the court found that a two-year interval between counsel’s fee petition and receipt of
notice of award was per se unreasonable.
On the other hand, in Vanbuskirk v. Colvin, No. 1:10-cv-360, 2015 WL 3439228, *3
(N.D. Ind. 2015), counsel filed a fee petition two years after plaintiff received the benefit award
and the court granted the request over the Commissioner’s objection. The Vanbuskirk decision is
distinguishable because there was no sum of money remaining after the fee award, thus the delay
had no effect on the plaintiff. Id. As such, the reasonableness of a delay in making the fee
petition is more difficult to show where money rightfully due plaintiff is being withheld. See
e.g., Blow v. Colvin, No. 1:11-cv-293, 2015 WL 4591655, *4 (N.D. Ind. 2015) (finding the delay
was not reasonable because it deprived plaintiff of timely receiving additional withheld past-due
For no clear reason, Hilbert’s counsel shows little interest in collecting fees that are being
withheld from Hilbert and apparently due to him. One full year has passed since the agency first
informed counsel that a petition for fees needed to be filed. According to the regulations,
counsel was supposed to file a fee petition within 60 days of the award. However, counsel filed
the petition one year after the award, despite earlier prompts by the Commissioner. Four months
after Hilbert was awarded benefits, the agency sent her counsel a reminder to file a fee petition.
This letter went unheeded and an additional four months later, the agency sent counsel another
reminder, which explicitly triggered the final 20-day deadline. At this point, the clock began
counting down on counsel’s ability to file a petition for fees. On the date of the 20-day deadline,
counsel responded that a fee petition would be made “as soon as possible.” However, that
deadline passed without counsel filing a fee petition or a request for additional time. This is the
pivotal moment for the instant motion. When the 20-day deadline passed without a proper filing
by counsel, this motion was doomed.
Counsel’s fee petition was not brought within a reasonable time. Significantly, this is a
case where money rightfully due to Hilbert has been needlessly withheld for an excessive
amount of time. In total, the agency withheld $24,551 of Hilbert and her children’s past-due
benefits for potential payment of attorney’s fees. Of this amount, the agency paid counsel
$6,000 as the approved attorney fee for administrative services under 406(a). Hilbert’s counsel
now requests an attorney fee of $10,376 for work at the district court under 406(b), which would
leave Hilbert the remaining $8,175. Counsel’s delay has unfairly prejudiced Hilbert by
depriving her of the timely receipt of this sizable amount. See Blow, 2015 WL 4591655, *4
(“there is a sum remaining after the fee award, and thus, the delay has prejudiced [plaintiff]”).
The facts show that counsel essentially ignored the agency’s repeated notices and letters
advising counsel that he must file a fee petition within the allowed time. When counsel did
communicate with the agency, it was not to request additional time or request fees. Rather,
counsel’s short letter suggested a fee request was forthcoming, but delayed due to counsel’s lack
of familiarity with § 406(b). However, more than three more months passed before counsel filed
the fee petition, after more prompting by the Commissioner. Section 406(b) is a rather short,
straight-forward statute which should not take counsel months to research. Counsel failed to
present any reasons for making an untimely request for fees and he failed to reply to the
Commissioner’s objection. The Court can only speculate why the fee petition was delayed.
Such speculation renders the Court unable to establish reasonableness. Accordingly, the Court
finds the present motion was not filed within a reasonable time.
The Court notes that in similar situations, case law also supports subtracting Hilbert’s
portion from counsel’s fee and awarding the difference, which would result in counsel receiving
$2,201. E.g., Hill, 2016 WL 2643360, *5 (ordering the fee award “be reduced to account for the
prejudice that resulted to [plaintiff] because of [counsel’s] delay”); Blow, 2015 WL 4591655, *4
(reducing the attorney’s fee award by the amount owed to plaintiff, plus interest). However,
doing so is not mandatory and the Commissioner only asks that the present motion be denied.
The Commissioner defers to the Court’s discretion as to whether counsel should be
allowed to collect attorney’s fees under the contingency agreement [Filing No. 36-2] directly
from Hilbert, without the Commissioner or the Court’s involvement. The Court has found little
guidance on how discretion should be exercised. The regulations indicate that counsel may still
collect his fee from Hilbert, but only subject to approval. 20 C.F.R. § 404.1730(c)(2)(ii). Such
approval will not be given here. Plaintiff’s counsel’s inexplicable delay, which prejudiced his
client, should not be rewarded. Moreover, counsel does not demonstrate the extent of his
representation. Counsel only points to a contingency fee agreement with Hilbert that he will
receive 25% of the past-due benefit. Thus, the amount of work counsel did is unknown, in
addition to counsel’s feeble efforts in seeking a fee under § 406(b) at all. Accordingly, the Court
does not approve of counsel’s collection of attorney’s fees directly from Hilbert. Counsel may
only keep the previously awarded attorney’s fee under EAJA.
In conclusion, the petition for attorney’s fees [Filing No. 34] is denied. Counsel did not
file a fee petition within 20 days of March 27, 2016. Because counsel filed his fee petition after
the deadline, he has forfeited the right to receive payment of withheld funds from the agency.
The Commissioner shall release past-due benefits in the amount of $18,551 to Hilbert and her
children. Counsel may retain his prior EAJA fee award but may not collect attorney’s fees from
Tim A. Baker
United States Magistrate Judge
Southern District of Indiana
G. Gene Arnholt
Timothy E. Staggs
ARNHOLT & STAGGS LAW OFFICE
Brian J. Alesia
OFFICE OF REGIONAL CHIEF COUNSEL FOR SOCIAL SECURITY
Kathryn E. Olivier
UNITED STATES ATTORNEY'S OFFICE
Thomas E. Kieper
UNITED STATES ATTORNEY'S OFFICE
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