Trahan v. Social Security Administration
Filing
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RULING ON MOTION. IT IS ORDERED that the 18 Motion for Attorney Fees under 42 U.S.C. 406(b) is GRANTED, and the Court awards fees to be paid from the past-due benefits held by the Commissioner for such purposes. IT IS FURTHER ORDERED that, upon receipt of the Section 406(b) fee, Mr. Lane shall return to Ms. Trahan the EAJA fee that was awarded earlier in this case. Signed by Magistrate Judge Patrick J Hanna on 9/3/2014. (crt,Alexander, E)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
CRYSTAL TRAHAN o/b/o
T.T., a minor child
DOCKET NO. 6:12-cv-00989
VERSUS
JUDGE DOHERTY
MICHAEL J. ASTRUE,
COMMISSIONER OF THE SOCIAL
SECURITY ADMINISTRATION
MAGISTRATE JUDGE HANNA
RULING ON MOTION
Currently pending is the motion for authorization of attorneys’ fees pursuant
to 42 U.S.C. § 406(b), which was filed by Matthew D. Lane, Jr., the attorney for
Social Security claimant Crystal Trahan, who was acting on behalf of her minor child,
T.T., in this action. (Rec. Doc. 18).
BACKGROUND
On April 24, 2012, Ms. Trahan filed a complaint for judicial review, appealing
the denial of her claim for Social Security disability benefits for T.T. By report and
recommendation dated August 14, 2013, the undersigned recommended that the
Commissioner's decision be reversed and remanded with instructions for the
computation and payment of benefits beginning January 12, 2008. (Rec. Doc. 10).
On September 9, 2013, the District Judge entered a judgment adopting the report and
recommendation, reversing the Commissioner's decision, and awarding benefits from
the date of January 12, 2008 forward. (Rec. Doc. 11). Ms. Trahan was represented
by Mr. Lane in administrative proceedings concerning this claim as well as in this
judicial proceeding. Following the Court’s reversal of the Commissioner’s adverse
decision, Mr. Lane moved for an award of attorneys’ fees under the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. § 2412. (Rec. Doc. 14). A stipulated order for
attorneys’ fees was granted, and Mr. Lane was awarded $3,537.50. (Rec. Doc. 17).
On June 17, 2014, the Social Security Administration issued a Notice of Award
indicating that T.T. is owed past-due Supplemental Security Income (“SSI”) benefits
of $30,715.93 and advising that the sum of $7,678.00, which represents 25% of the
past-due benefits, was being withheld to pay attorneys’ fees. (Rec. Doc. 18-3). Mr.
Lane now seeks an award of attorneys’ fees under 42 U.S.C. § 406(b) in that same
amount.
ANALYSIS
Mr. Lane is entitled to apply to the agency, under 42 U.S.C. § 406(a), for a fee
for his efforts before it. He is also entitled to apply to the court, under 42 U.S.C. §
406(b), for an award for his work before the court. The Fifth Circuit interprets
Section 406 as precluding the combination of agency fees under Section 406(a) and
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court fees under Section 406(b) from exceeding twenty-five percent of a claimant’s
past-due benefits.1
In the instant motion, Mr. Lane requests an award of $7,678.00, an amount that
represents twenty-five percent of the past-due benefits that were awarded to T.T. In
support of his motion, Mr. Lane submitted a copy of the contingency fee agreement
between he and Ms. Trahan, which provides for attorneys’ fees of “twenty-five
percent (25%) of any and all past-due benefits awarded to my family and me.” (Rec.
Doc. 18-2 at 1). He also attached a time sheet detailing the professional services he
rendered from February 9, 2009 through June 28, 2014 for representation of Ms.
Trahan in administrative proceedings and from April 3, 2012 through August 1, 2014
for representation of Ms. Trahan in the federal-court proceeding. The time sheet
shows that a total of 63 hours of work were performed, with 29 of those hours
expended in representing Ms. Trahan before this Court. Mr. Lane acknowledges that
if he is awarded the $7,678.00 requested in this motion, he will be required to refund
the EAJA award of $3,537.50 to Ms. Trahan, and he represents that he will do so.
(Rec. Doc. 18-1 at 8).
1
Rice v. Astrue, 609 F.3d 831, 835 (5th Cir. 2010); Dawson v. Finch, 425 F.2d 1192,
1195 (5 Cir. 1970).
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The Commissioner of Social Security responded to the motion, agreeing that
Mr. Lane is entitled to a reasonable fee for court-related representation but taking no
position on the reasonableness of the amount sought to be recovered by Mr. Lane.
(Rec. Doc. 20 at 3).
Mr. Lane and the Commissioner agree that 42 U.S.C. § 406(b) governs this
attorneys’ fee application. Section 406(b) provides, in pertinent part, as follows:
“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. . .”2 Section
406(b) governs the award and collection of fees by attorneys for the representation
of claimants in court.3 The statute does not displace contingent-fee agreements within
the statutory ceiling; instead, it instructs courts to review for reasonableness the fees
calculated based on such agreements.4 Although the application of the lodestar
method (hours reasonably spent on the case times reasonable hourly rate) to calculate
fees under Section 406(b) was expressly rejected, the claimant's attorney may be
required to submit a record of the hours spent representing the claimant and a
2
42 U.S.C. § 406(b)(1)(A).
3
Murkeldove v. Astrue, 635 F.3d 784, 788 (5th Cir. 2011).
4
Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002); Jeter v. Astrue, 622 F.3d 371 (5th
Cir. 2010).
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statement of the lawyer's normal hourly billing charge for non-contingent-fee cases
as aids to the court's evaluation of the reasonableness of the fee yielded by the fee
agreement.5 Additionally, a downward adjustment is permitted in order to prevent a
“windfall” for the lawyer if the benefits resulting from the contingency fee are large
in comparison to the amount of time the lawyer actually spent on the case.6
This led to confusion concerning the role that the lodestar calculation should
play in calculating a reasonable contingency fee. The Fifth Circuit examined this
issue and held that “courts may consider the lodestar in their analysis so long as the
court can articulate additional factors demonstrating that the excessively high fee
would result in an unearned advantage.”7 The windfall evaluation may take into
consideration an effective hourly rate “but only so long as this mathematical
calculation is accompanied by a consideration of whether an attorney's success is
attributable to his own work or instead to some unearned advantage for which it
would not be reasonable to compensate him.”8
The court explained that the
“windfall” does not preclude attorneys from recovering what may seem like a high
5
Gisbrecht v. Barnhart, 535 U.S. at 808.
6
Gisbrecht v. Barnhart, 535 U.S. at 808.
7
Jeter v. Astrue, 622 F.3d 371, 380 (5th Cir. 2010).
8
Jeter v. Astrue, 622 F.3d at 380.
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fee award if the attorney's success on appeal is of his own making. If “success on
appeal can be attributed to his attorney's endeavors before the district court, then that
attorney should reap the benefit of his work – even if he managed to accomplish a
great deal in a small window of time.”9 The Fifth Circuit left to the district courts
formulation of the factors that might be considered in determining whether the
attorney’s success on appeal was the result of his own hard work.
Mr. Lane argues that the requested sum is reasonable. Dividing the requested
sum of $7,678.00 by the 63 hours expended on agency and courtroom representation
yields an effective hourly rate of $121.87 per hour, while dividing $7,678.00 by the
29 hours of federal-court work yields an effective hourly rate of $264.75 per hour.
The first number is significantly below the $225.00 per hour that Mr. Lane would
charge for non-contingency litigation-related work, while the second number is
somewhat higher but would not result in a large windfall.
Mr. Lane also addresses several factors that the undersigned finds to be worthy
of consideration. Although appeals of adverse rulings are rare in Social Security
disability cases, Mr. Lane’s efforts resulted in reversal of an adverse ruling and the
award of a significant amount of past-due benefits in this case, which must be
balanced against the many unsuccessful cases that result in no compensation for the
9
Jeter v. Astrue, 622 F.3d at 381.
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claimant’s attorney. The representation provided in this case was professional and
competent. Mr. Lane restricts his practice primarily to the area of Social Security
disability law and is one of only a few attorneys in the area who represent Social
Security claimants in federal court. He has significant experience in that field as well
as sterling academic credentials and solid litigation experience. Were he billing at
an hourly rate for his work, he would charge $225 per hour. Therefore, although Mr.
Lane's effective hourly rate might seem a little high, the undersigned finds, in light
of the additional factors, that the requested fee is reasonable and not attributable to
anything other than the attorney's own work. T.T. likely would have received no
benefits had Mr. Lane not presented successful arguments on appeal. His arguments
led to the plaintiff receiving more than $30,000 in past due benefits, plus continuing
monthly payments. The Court has reviewed the fee application, and finds that the
requested fee award of $7,678.00 is reasonable in light of the circumstances and
should be approved.
Mr. Lane represents that the previously-ordered EAJA award of $3,750.50 will,
upon receipt of the Section 406(b) fee award, be refunded to the plaintiff as required
by the statute under these circumstances.
Accordingly:
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IT IS ORDERED that the motion (Rec. Doc. 18) is GRANTED, and the Court
awards fees in the amount of $7,678.00, to be paid from the past-due benefits held by
the Commissioner for such purposes.
IT IS FURTHER ORDERED that, upon receipt of the Section 406(b) fee, Mr.
Lane shall return to Ms. Trahan the $3,537.50 EAJA fee that was awarded earlier in
this case.
Signed at Lafayette, Louisiana on September 3, 2014.
____________________________________
PATRICK J. HANNA
UNITED STATES MAGISTRATE JUDGE
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