Kemp v. Social Security
Filing
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OPINION & ORDER Granting In Part Motion for Attorney Fees (Dkt. 24 ). Signed by District Judge Mark A. Goldsmith. (Sandusky, K)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MATTHEW THOMAS KEMP,
Plaintiff,
Case No. 16-12250
vs.
HON. MARK A. GOLDSMITH
COMMISSIONER OF SOCIAL
SECURITY,
Defendant.
___________________________/
OPINION & ORDER
GRANTING IN PART MOTION FOR ATTORNEY FEES (Dkt. 24)
This matter is before the Court on Plaintiff’s motion for an award of attorney fees under
the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, and an award of fees under 42
U.S.C. § 406(b) (Dkt. 24). On February 23, 2017, the underlying case was remanded under
sentence four by stipulation of the parties (Dkt. 22). A judgment was entered on that same day
(Dkt. 23). More than two years later, Plaintiff filed the present motion seeking $10,072.75 in
attorney fees under the EAJA and $46,536.25 in attorney fees under 42 U.S.C. § 406(b). The
Commissioner filed a response arguing that the request for fees under the EAJA is untimely and
that any award under § 406(b) should be reduced. Resp. at 19 (Dkt. 25). No reply brief was
filed. For the reasons discussed below, the motion is granted in part.
I.
APPLICABLE LAW
There are two statutes under which a plaintiff may recover attorney fees in a Social
Security disability case. First, under the EAJA, a plaintiff may recover attorney fees paid by the
Government. See 28 U.S.C. § 2412. Second, as part of the judgment in plaintiff’s favor, a court
may award a reasonable fee for an attorney’s representation paid out of a plaintiff’s past-due
benefits. See 42 U.S.C. § 406(b). The fee awarded under § 406(b) may not exceed 25% of the
total past-due benefits. 42 U.S.C. § 406(b)(1)(A); Lasley v. Comm’r of Soc. Sec., 771 F.3d 308,
309 (6th Cir. 2014). If fees are awarded under both the EAJA and § 406(b), counsel must refund
the smaller amount to the plaintiff. Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002).
II.
DISCUSSION
A. EAJA Attorney Fees
The EAJA provides that “a court shall award to a prevailing party . . . fees and other
expenses . . . in any civil action . . . brought by or against the United States . . . unless the court
finds that the position of the United States was substantially justified or that special
circumstances make an award unjust.” 28 U.S.C. § 2412(d). The statute provides that the
prevailing party’s motion for attorney fees must be filed “within 30 days of final judgment in the
action.” 28 U.S.C. § 2412(d)(1)(B). A “final judgment” is defined in the statute as “a judgment
that is final and not appealable.” 28 U.S.C. § 2412(d)(2)(G).
Judgment in this case was entered on February 23, 2017, which started the sixty-day
period for appealing the claim. Shalala v. Schaefer, 509 U.S. 292, 302 (1993). After the sixtyday appeal period expired, Plaintiff’s attorney had thirty days to file an application for EAJA
fees. Id.; 28 U.S.C. § 2412(d)(1)(B). No application was filed. EAJA fee applications are
nonetheless subject to equitable tolling, Townsend v. Comm’r of Soc. Sec., 415 F.3d 578, 583
(6th Cir. 2005); however, Plaintiff’s counsel did not raise the timeliness issue in his motion and
failed to file a reply brief to address the matter.
Because Plaintiff’s motion under the EAJA is untimely and Plaintiff’s counsel fails to
provide any basis to equitably toll the application period, the motion is denied as to fees under
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the EAJA.
B. Attorney Fees Under 42 U.S.C. § 406(b)
Fees under 42 U.S.C. § 406(b), unlike those under the EAJA, are paid from the
claimant’s past due benefits. Section 406(b) attorney fees are awarded to a claimant who
succeeds on his Social Security appeal, not to exceed 25% of the total past-due benefits to which
the claimant is entitled:
(b) Fees for representation before court
(1) (A) Whenever a court renders a judgment favorable to a claimant under [42
U.S.C. § 401 et seq.] 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, and the Commissioner
of Social Security may, notwithstanding the provisions of section 405(i) of this
title, but subject to subsection (d) of this section, 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. In case of any such judgment, no other fee may be payable or
certified for payment for such representation except as provided in this paragraph.
42 U.S.C. § 406(b)(1)(A). The Supreme Court has explained, “§ 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. Rather, § 406(b) calls for court review
of such arrangements as an independent check, to assure that they yield reasonable results in
particular cases.” Gisbrecht, 535 U.S. at 807 (footnote omitted).
The Sixth Circuit has explained that a court should use the 25% cap as a benchmark for
evaluating the reasonableness of attorney fees, although a 25% attorney fee award is not per se
reasonable. Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en banc). Courts must look
to the executed fee agreement and give deference to the expression of the parties’ intentions. Id.
There is a “rebuttable presumption that an attorney would receive the full 25% contingency fee
under contract unless 1) the attorney engaged in improper conduct or was ineffective, or 2) the
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attorney would enjoy an undeserved windfall due to the client’s large back pay award or the
attorney’s relatively minimal effort.” Hayes v. Sec’y of Health & Hum. Servs., 923 F.2d 418,
419 (6th Cir. 1990) (citing Rodriquez, 865 F.2d at 746).
Plaintiff was awarded $186,145 in past-due Social Security disability benefits for August
2012 through October 2018, of which $46,536.25 (25% of the total award) was withheld pending
Plaintiff’s counsel’s request for attorney fees. Notice of Award, Ex. 2 to Mot., at 3 (Dkt. 24-2).
Plaintiff’s counsel represents that he spent 53.75 hours of work on the matter and requests the
full $46,536.25. Id. ¶¶ 8, 14. The fee agreement, see Ex. 3 to Mot. (Dkt. 24-3), allows for
attorney fees not exceed the 25% statutory maximum. Thus there is a rebuttable presumption
that the requested fee award is reasonable. See Hayes, 923 F.2d at 419.
Although the Commissioner has no direct financial stake in the Court’s § 406(b)
determination, Gisbrecht, 535 U.S. at 798 n.6, the Commissioner challenges the presumption on
the grounds that Plaintiff’s attorney did not file a timely motion for fees under the EAJA. Resp.
at 10. Because the § 406(b) award exceeds any potential award under the EAJA, the EAJA
award would have gone directly to Plaintiff. The Commissioner argues that in order to avoid
penalizing Plaintiff for his attorney’s failure to file a timely EAJA fee application, the § 406(b)
award should be reduced to account for EAJA fees Plaintiff would have received. Id. at 11-12.
The argument is sound. A full award under § 406(b) would be unreasonable because Plaintiff’s
counsel was ineffective with respect to the EAJA fees. See Hayes, 923 F.2d 419 (finding it
reasonable to reduce a § 406(b) award because an attorney was ineffective). Therefore, the
award will be reduced.
The Commissioner suggests two ways to calculate an appropriate award reduction: (1)
accept Plaintiff’s counsel’s $10,067.75 calculation; or (2) delve into the EAJA fee request and
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parse the billing records to determine the reasonability of the fee request. Because Plaintiff’s
counsel did not file a reply brief addressing the Commissioner’s argument, the better course is to
accept Plaintiff’s counsel’s EAJA calculation and use it as the basis for a reduction.
Other than the failure to file the motion for fees under the EAJA, there are no allegations
or indications of improper conduct or substandard performance by Plaintiff’s counsel. Indeed,
Plaintiff’s counsel secured a past-due benefits award of approximately $186,000.00 through
adjudication before the ALJ and litigation before this Court, and there is no indication that
Plaintiff’s attorney caused any delay in this matter.
The reduced fee is reasonable. Awarding attorney fees in the amount of $36,468.50
would not result in an undeserved windfall. Nor would awarding $36,468.50 in attorney fees
“unduly erode” Plaintiff’s past-due benefit award. Royzer v. Sec’y of Health & Hum. Servs.,
900 F.2d 981, 982 (6th Cir. 1990).
III.
CONCLUSION
Plaintiff’s motion for attorney fees (Dkt. 26) is granted in part. The Commissioner of
Social Security is directed to pay Plaintiff’s attorney $36,468.50 out of the $46,536.25 withheld
and release the remaining $10,067.75 to Plaintiff. The motion is denied in all other respects.
SO ORDERED.
Dated: September 27, 2019
Detroit, Michigan
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
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