Heyer v. BERRYHILL

Filing 24

OPINION and ORDER Granting in Part Plaintiff's Attorney's Motion for Fees Pursuant to 42 U.S.C. § 406(b). Signed by District Judge Bernard A. Friedman. (JCur)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JOHN HEYER,
Plaintiff,
vs.

Civil Action No. 17-CV-13167
HON. BERNARD A. FRIEDMAN

COMMISSIONER OF
SOCIAL SECURITY,
Defendant.
___________________/
OPINION AND ORDER GRANTING IN PART PLAINTIFF’S
ATTORNEY’S MOTION FOR FEES PURSUANT TO 42 U.S.C. § 406(b)
This matter is presently before the Court on the motion of plaintiff’s attorney, Wesley
Lamey, for fees pursuant to 42 U.S.C. § 406(b) [docket entry 21]. Defendant has filed a response
in opposition, and plaintiff’s attorney has replied. Pursuant to E.D. Mich. LR 7.1(f)(2), the Court
shall decide this motion without a hearing.
Plaintiff commenced this action in September 2017 under 42 U.S.C. § 405(g) to
challenge defendant’s decision denying his applications for Social Security disability insurance
benefits and Supplemental Security Income. He claimed to be disabled since May 2013 due to
bipolar disorder and anxiety disorder, among other impairments. In December 2017, defendant
answered the complaint and filed the administrative record. In January 2018, plaintiff filed a motion
for summary judgment and an eleven-page brief that made a single argument over three and one-half
pages that the Administrative Law Judge (“ALJ”) failed to explain adequately why, in denying his
applications, she rejected the opinions of his treating physician. Defendant did not respond to this
motion or file a summary judgment motion of his own. Rather, in February 2018 the Court entered
a stipulated order remanding the case for further proceedings, and requiring the ALJ to offer plaintiff

the opportunity for another hearing, to reevalute the opinions of his treating physician, and to
explain her reasons if she again decided to reject those opinions.
The Court remanded the matter pursuant to sentence four of § 405(g), which entitled
plaintiff to seek attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d).
In March 2018, the Court entered a stipulated order awarding plaintiff’s attorney EAJA fees in the
amount of $3,281.25. As he claims to have spent 18.75 hours working on this case from August
2017 to February 2018, see Pl.’s Mot. for Att’y Fees, Ex. E, this fee award was based on an hourly
rate of $175.
On remand, the ALJ issued a fully favorable decision in January 2019, finding that
plaintiff has been disabled since May 2013 due to bipolar disorder, generalized anxiety disorder, and
a developmental disorder. See id., Ex. A. Based largely on the opinions of plaintiff’s treating
physician, the ALJ found, without holding another hearing, that plaintiff is per se disabled under
Listing 12.04 (“Depressive, bipolar and related disorders”). In July 2019, defendant issued a “notice
of award” in which it indicated, as is customary, that he was withholding “25 percent of past due
benefits in order to pay the approved representative’s fee.” Id., Ex. B at 4. In this case, defendant
has withheld $33,421.75. Id.
In the instant motion, plaintiff’s attorney asks that the Court award him these
withheld funds – every penny of the $33,421.75 – to compensate him for the 18.75 hours he has
spent working on this case before this Court. Surprisingly, attorney Lamey claims that this fee
would be “reasonable under the circumstances” due to “the specialized nature of disability claims,
the favorable result acquired, and hours expended.” Id. at 5. If the Court were to grant this motion
in the requested amount, the fee would translate to an hourly rate of $1,782.

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Plaintiff signed a fee agreement with his attorney’s firm, Stu Johnson & Associates,
P.C., in Warren, Michigan, which states in relevant part that “[i]f the claimant is awarded benefits
. . . following an Order of Remand issued by the Appeals Council or Federal Court, the fee shall be
25% of the total past due benefits to the Claimant and/or the Claimant’s family.” Id., Ex. C.
However, as plaintiff’s attorney concedes, the Court is not bound to award a fee in this amount.
Instead, the Social Security Act “calls for court review of such arrangements as an independent
check, to assure that they yield reasonable results in particular cases.” Gisbrecht v. Barnhart, 535
U.S. 789, 807 (2002). Under § 406(b), the Court may award “a reasonable fee” to a prevailing
claimant, “not in excess of 25 percent of the total of the past-due benefits to which the claimant is
entitled by reason of [a favorable] judgment.” As the Supreme Court noted in Gisbrecht, “[c]ourts
. . . have appropriately reduced the attorney’s recovery based on the character of the representation
and the results the representative achieved.” Id. at 808. Further, “[i]f the benefits are large in
comparison to the amount of time counsel spent on the case, a downward adjustment is similarly in
order.” Id. (citing Rodriguez v. Bowen, 865 F.2d 739, 747 (6th Cir. 1989) (en banc)). It is plaintiff’s
attorney’s burden to “show that the fee sought is reasonable for the services rendered.” Id. at 807.
In Rodriguez, at the page the Supreme Court cited with approval, the Sixth Circuit
stated:
[A] deduction should be made by the court if the award of
benefits is so high as to cause attorney’s fees to constitute a
“windfall.” Many courts and Congress have discussed the need to
prevent windfalls for lawyers. See, e.g., Coulter v. State of Tennessee,
supra, 805 F.2d at 149. . . .
Although we recognize that there are cases where the
lawyer’s unusual skill or diligence wins the case, typically the
number of hours that are required to prosecute an appeal from the
Secretary’s determination will not vary greatly and will bear little if
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any relationship to the results achieved. Where a case has been
submitted on boilerplate pleadings, in which no issues of material
fact are present and where no legal research is apparent, the
benchmark twenty-five percent of awards fee would obviously be
inappropriate. The reviewing courts should not hesitate to make
reductions in such situations, and at the other end of the spectrum
should only allow maximum fees for extensive effort on the part of
counsel who have overcome legal and factual obstacles to the
enhancement of the benefits awarded to his client.
Rodriquez, 865 F.2d at 747 (footnote omitted).
Subsequently, in Hayes v. Sec’y of Health & Human Servs., 923 F.2d 418, 422 (6th
Cir. 1990) (citation and footnotes omitted), the Sixth Circuit stated:
We believe that, under Rodriquez, a windfall can never occur
when, in a case where a contingent fee contract exists, the
hypothetical hourly rate determined by dividing the number of hours
worked for the claimant into the amount of the fee permitted under
the contract is less than twice the standard rate for such work in the
relevant market. We believe that a multiplier of 2 is appropriate as a
floor in light of indications that social security attorneys are
successful in approximately 50% of the cases they file in the courts.
Without a multiplier, a strict hourly rate limitation would insure that
social security attorneys would not, averaged over many cases, be
compensated adequately. Such a result would thwart Congress’s
intention to assure social security claimants of good representation.
See Rodriquez, 865 F.2d at 744 (“[t]he fee approval provision is also
designed to assure adequate compensation to the claimant’s attorney
and as a consequence to encourage attorney representation”).
A calculation of a hypothetical hourly rate that is twice the
standard rate is a starting point for conducting the Rodriquez analysis.
It provides a floor, below which a district court has no basis for
questioning, under the second part of Rodriquez’s windfall rule for
“minimal effort expended,” the reasonableness of the fee. In other
words, 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.
More recently, in Lasley v. Comm’r of Soc. Sec., 771 F.3d 308 (6th Cir. 2014), the
court of appeals affirmed a district court’s order granting fees under § 406(b) in an amount
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significantly less than the 25% of past-due benefits plaintiff’s attorney requested. In that case, as
here, plaintiff entered into a 25% contingency fee agreement with his attorney. Twenty-five percent
of the past-due benefits in that case amounted to $26,049.73. Id. at 308. Plaintiff’s attorney spent
35.5 hours on the case. This translated to a requested hourly rate of $733.80, which the court of
appeals characterized as “grossly exceed[ing] – indeed, more than quadrupl[ing] – the standard rates
applied to social security fee requests in the Southern District of Ohio.” Id. at 310. The district
court found the requested amount to be a windfall and reduced the award to $12,780, which
translated to an hourly rate of $360. Id. at 309. The court of appeals noted that in calculating the
fee the district court considered, in addition to the excessiveness of the effective hourly rate
plaintiff’s attorney requested, “other factors, too, including counsel’s delay in filing the § 406(b)
motion, the Commissioner’s opposition to the fee, and the ‘brevity’ and ‘relative simplicity’ of the
representation.” Id. at 310.
In the present case, the fee requested by plaintiff’s attorney would be not just a
windfall but an outrageous one. The time and effort attorney Lamey spent working on this case was
minimal. His time records show thirteen entries totaling 18.75 hours, five hours of which were spent
reviewing the 559-page record and six hours of which were spent researching and writing a
summary judgment motion. As noted, the eleven-page summary judgment brief was “thin,” to say
the least, presenting a single, simple, run-of-the-mill argument (i.e., the weight defendant must
accord to treating physicians’ opinions) over three and one-half pages. Nor was any further effort
needed in this case to persuade defense counsel to stipulate to remand the matter and to persuade
the ALJ to approve plaintiff’s claim. In short, the ALJ’s initial decision was plainly erroneous,
plaintiff’s attorney pointed out this error, and the ALJ corrected the error on remand.

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While the result achieved in this case was fully favorable, plaintiff’s attorney has not
met his burden to demonstrate that the enormous $33,421.75 fee he requests is reasonable. Merely
asserting that the fee “is reasonable under the circumstances,” Pl.’s Mot. at 5, does not make it so.
As noted, this request translates to an hourly rate of $1,782. This is nearly two and one-half times
higher than the rate the court of appeals in Lasley found to “grossly exceed[]” the standard rate
awarded in social security cases. And as defendant correctly notes, it is also more than ten times
higher than the $175/hour rate used to calculate plaintiff’s fee award under the EAJA. The law
requires “reasonable results in particular cases,” Gisbrecht, 535 U.S. at 807, and by any measure
attorney Lamey’s fee request exceeds all bounds of reasonableness. It is all the more unreasonable
when one considers the relative shortness of the administrative record, the brevity of plaintiff’s
summary judgment motion, the simplicity of the only substantive issue presented therein, and the
ease with which a favorable ruling was obtained on remand from the ALJ who, as noted, held no
further hearing and found plaintiff to be per se disabled under a Listing, as she was plainly bound
to do. The “maximum fees” plaintiff’s attorney requests are appropriately awarded “only . . . for
extensive effort on the part of counsel who have overcome legal and factual obstacles,” Rodriguez,
865 F.2d at 747, and no such effort or obstacles were present in this case. Nor, as defendant
correctly notes, has plaintiff’s attorney “cited any case in which any court in any jurisdiction has
approved a similar fee for a similar effort.” Def.’s Resp. at 6.
Given plaintiff’s attorney’s failure to provide the Court with any evidence or
argument to the contrary, and in keeping with the direction provided by the cases cited above, a
reasonable fee in this matter should be based on twice the standard rate applicable in social security
disability matters. In the Court’s experience, fees in such cases are commonly awarded in this

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district under the EAJA based on an hourly rate of $175, just as they were in this case once the Court
remanded the case for further proceedings. Therefore, a reasonable attorney fee in this matter is
$175 x 2 x 18.75 = $6,562.50. Accordingly,

IT IS ORDERED that plaintiff’s attorney’s motion for fees pursuant to 42 U.S.C. §
406(b) is granted in the amount of $6,562.50. Defendant is directed to pay this amount to plaintiff’s
attorney and to pay the balance of the 25% of withheld past-due benefits to plaintiff.

IT IS FURTHER ORDERED that within thirty days of the date of this order
plaintiff’s attorney refund to plaintiff the $3,281.25 awarded in this matter under the EAJA, as
required by Gisbrecht, 535 U.S. at 796, and that he promptly file proof with the Court that he has
done so.

Dated: August 15, 2019
Detroit, Michigan

s/Bernard A. Friedman
BERNARD A. FRIEDMAN
SENIOR UNITED STATES DISTRICT JUDGE

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