Hunt v. SSA

Filing 21

MEMORANDUM ORDER: that Plaintiff's Motion for Attorney Fees 17 be and is hereby GRANTED IN PART and DENIED IN PART . Plaintiff counsel shall be awarded the sum of $6,000 pursuant to 42 U.S.C. § 406(b).. Signed by Judge David L. Bunning on 06/27/2016.(KRB)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION
AT COVINGTON
CIVIL ACTION NO. 11-236-DLB
CYNTHIA HUNT

vs.

PLAINTIFF

MEMORANDUM ORDER

CAROLYN W. COLVIN, Acting
Commissioner of Social Security

DEFENDANT
******************

I.

Introduction
This matter is before the Court upon Plaintiff’s Motion for Attorney’s Fees (Doc. #

17), in which she requests an award of $12,083.48 in fees pursuant to 42 U.S.C. § 406(b).
Defendant having filed a Response (Doc. # 20), this matter is now ripe for the Court’s
review. For reasons stated herein, Plaintiff’s Motion will be granted in part and denied
in part.
II.

Procedural Posture
On June 5, 2008, Plaintiff filed a claim for disability benefits. (Doc. # 10 at 1). ALJ

Paul Yerian held an administrative hearing on February 17, 2010 and issued an
unfavorable decision three months later. (Id.). Plaintiff sought relief from the Appeals
Council; it denied her appeal on August 13, 2011. (Id. at 2). About a month later, Plaintiff
filed a civil complaint with the Court contesting the denial of benefits. (Doc. # 1). On May
11, 2012, the Court reversed and remanded the case to the Commissioner for additional

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proceedings. (Docs. # 15 and 16).
On April 23, 2013, another ALJ conducted a second administrative hearing. (Doc.
# 17 at 2). He issued an unfavorable decision two months later. (Id.). Plaintiff again
sought relief from the Appeals Council. (Id.). This time, the Council remanded the case
to the ALJ for additional proceedings. (Id.). Finally, after a third hearing, the ALJ issued
a favorable decision on March 6, 2015, finding Plaintiff disabled as of May 13, 2005. (Id.).
Plaintiff received a Notice of Award on December 15, 2015, indicating that the amount of
accrued benefits due to her totaled $70,933.00. (Doc. # 17-1). The Social Security
Administration stated that it withheld $17,733.48, or 25% of the past-due benefits, for
attorney’s fees. (Id.).
In June of 2015, the Social Security Administration awarded Plaintiff’s counsel
$6,000 from those withheld funds for work performed at the administrative level pursuant
to 42 U.S.C. § 406(a).1 (Doc. # 17 at 5). Plaintiff’s counsel now seeks to recover the
remaining $11,733.48 of the withheld funds, arguing that he and his client have a
contingency-fee agreement that entitles him to this sum for his work at the district court
level. (Id.; Doc. # 17-2). He also seeks to recover the $350 district court filing fee, bringing
his total fee request to $12,083.48. (Doc. # 17 at 5).
III.

Analysis
Section 406(b), United States Code, Title 42, provides that:
[w]henever 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

1) Simply put, “§ 406(a) governs fees for representation in administrative proceedings.” Gisbrecht v. Barnhart,
535 U.S. 789, 794 (2002).

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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 . . . 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.
The United States Supreme Court has held that Ҥ 406(b) does not displace contingent-fee
agreements as the primary means by which fees are set for successfully representing
Social Security benefits claimants in court[,]” so long as such agreements do not provide
for fees in excess of the 25% statutory ceiling. Gisbrecht, 535 U.S. at 807. “Rather, §
406(b) calls for court review of such arrangements as an independent check, to assure that
they yield reasonable results in particular cases.” Id.
The Supreme Court has further explained that an attorney’s recovery may be
appropriately reduced based on the character of the representation and the results
achieved.” Id. at 808.
If the attorney is responsible for delay, for example, a reduction is in order so
that the attorney will not profit from the accumulation of benefits during the
pendency of the case in court. If the benefits are large in comparison to the
amount of time counsel spent on the case, a downward adjustment is
similarly in order. In this regard, the court may require the claimant’s
attorney to submit, not as a basis for satellite litigation, but as an aid to the
court’s assessment of the reasonableness of the fee yielded by the fee
agreement, a record of the hours spent representing the claimant and a
statement of the lawyer’s normal hourly billing charge for noncontingent-fee
cases.
Id.
On May 5, 2008, Plaintiff and her attorney executed a Contingency Fee Agreement,
which provides in pertinent part:
We agree that if Social Security favorably decides my claim or claims, my
representative should be paid a fee equal to 25% of the past due benefits
resulting from my claims or $5,300.00 or the applicable maximum amount set
by the Commissioner pursuant to 42 U.S.C. § 406(b), whichever is less.
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...
This agreement covers all services through an appeal to the Appeals
Council. Fees for action beyond the Appeals Council are not limited to
$5,300.00 maximum, but are still 25% of the past due benefits resulting from
all claims, and subject to approval by the SSA.
(Doc. # 17-2) (emphasis added).
Plaintiff’s counsel asks the Court to enforce the Fee Agreement as written and
award him the remaining $11,733.48 withheld from the past-due benefits for the payment
of attorney’s fees. (Doc. # 17). However, his time sheet indicates that he spent only
twelve hours working on this case at the district court level. (Doc. # 17 at 7). To award him
the full $11,733.48 would be to compensate him at a rate of $977.79 per hour. By his own
admission, the hourly rate for an attorney in the Cincinnati area with comparable
experience is around $200, according to an Ohio bar study conducted in 2004. (Doc. # 17
at 4). Although the Sixth Circuit has held that “a hypothetical hourly rate that is less than
twice the standard rate is per se reasonable, and a hypothetical hourly rate that is equal
to or greater than twice the standard rate may well be reasonable,” the fee requested in
this case more than quadruple the hourly rate suggested by Plaintiff’s counsel. Hayes v.
Sec’y of Health & Human Servs., 923 F.2d 418, 421 (6th Cir. 1991); see also Lasley v.
Comm’r of Soc. Sec., 771 F.3d 308, 309 (6th Cir. 2014) (applying Hayes in a postGisbrecht decision).
Plaintiff’s counsel insists that this sum is an appropriate award because he provided
high-quality representation and obtained a favorable result for his client. However, the
Commissioner sees this award as a windfall for Plaintiff’s counsel, given the size of the
benefit in comparison to the time expended on this case. See Gisbrecht, 535 U.S. at 808
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(explaining that courts should disallow windfalls for lawyers). The Commissioner suggests
that the Court fix the proposed hourly rate at $500 and award Plaintiff’s counsel $6,000 for
his representation at the district court level. (Doc. # 20). Having reviewed the applicable
case law, the Court finds this to be a reasonable solution. See, e.g., Amburgey v. Comm’r
of Social Sec., Civ. A. No. 5:08-335-DCR, 2016 WL 2859611, at *4-5 (E.D. Ky. May 16,
2016) (reducing the proposed hourly rate from $981.06 to $500); Lockridge v. Astrue, Civ.
A. No. 04-499-JBC, 2009 WL 127668, at *2 (Jan. 16, 2009) (finding that an hourly rate of
$350 was appropriate, given the attorney’s background and experience in handling Social
Security cases).
As a final matter, Plaintiff’s counsel also seeks to recover the $350 district court
filing fee. However, as the Commissioner pointed out, § 406(b) does not specifically
provide for reimbursement of filing fees, and Plaintiff’s counsel has not cited to any other
authorities supporting his request. Therefore, Plaintiff’s counsel is not entitled to recover
this fee.
IV.

Conclusion
Accordingly, for the reasons stated herein,
IT IS ORDERED that Plaintiff’s Motion for Attorney’s Fees (Doc. # 17) be, and is,

hereby GRANTED IN PART and DENIED IN PART. Plaintiff’s counsel shall be awarded
the sum of $6,000 pursuant to 42 U.S.C. § 406(b).
This 27th day of June, 2016.

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