Reynolds v. Commissioner of Social Security
OPINION AND ORDER REJECTING REPORT AND RECOMMENDATION 22 ; Plaintiff's amended motion for attorney's fees 21 is granted; signed by Chief Judge Paul L. Maloney (Chief Judge Paul L. Maloney, kw)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
COMMISSIONER OF SOCIAL SECURITY,
HONORABLE PAUL L. MALONEY
OPINION AND ORDER REJECTING REPORT AND RECOMMENDATION
AND GRANTING MOTION FOR ATTORNEY’S FEES
Before the court today is Plaintiff Jeffrey Reynolds’s objections to the magistrate judge’s
Report and Recommendation (“R&R”) that his request for attorney’s fees be denied. (ECF No. 23.)
For the reasons discussed below, this court will reject that recommendation and award plaintiff’s
counsel the fees requested.
This case began in mid-2010, when Plaintiff Jeffrey Reynolds asked this court to review the
Commissioner of Social Security’s decision to deny him disability insurance benefits and
supplemental security income benefits. (ECF No. 1.) The parties soon stipulated to remand the case
back to the Commissioner for further proceedings, per sentence four of 42 U.S.C. § 405(g). (ECF
No. 10.) The court approved this stipulation and entered judgment against the Commissioner on
December 7, 2010. (ECF No. 11.) After two years of administrative proceedings, the Social
Security Administration determined that Mr. Reynolds was entitled to disability benefits dating back
to 2005. In a Notice of Award dated January 21, 2013 and received three days later, it informed Mr.
Reynolds and his attorney that he was owed $57,600 in past-due benefits. (See ECF No. 20, at 4–6.)
Two separate attorney’s fee provisions are relevant to our purposes. The first, 28 U.S.C. §
2412, allows a court to award attorney’s fees to a party who prevails in a civil action against the
United States (including an officer such as the Commissioner of Social Security), so long as the
government’s position was not “substantially justified.” Id. § 2412(d)(1)(A). These fees are
generally limited to $125 per hour and are based only on the time spent working on the civil case
itself, not any underlying administrative proceedings. Id. § 2412(d)(1)(A), (d)(2)(A). Plaintiff’s
counsel requested section-2412 fees shortly after this court remanded the matter to the
Commissioner. The court granted the request and ordered the Commissioner to pay attorney’s fees
of $2,205, based on 12.6 hours of work at the $125/hour base rate. (ECF No. 19.)
The second provision, 42 U.S.C. § 406(b), applies to Social Security cases only. It allows
the court to award attorney’s fees of up to 25% of the past-due benefits to a prevailing party’s
attorney. Id. § 406(b)(1)(A). Unlike the section-2412 fees, however, these fees are paid out of the
claimant’s award, rather than in addition to it. Id.
On March 29, 2013, some 64 days after receiving the Commissioner’s Notice of Award,
Plaintiff’s counsel filed a motion for section-406(b) fees. (ECF Nos. 20–21.) Counsel states that
he and Mr. Reynolds have agreed to a total fee of $10,000 for his work on this matter (reduced from
the $14,400 called for by the original 25% contingency fee agreement). The Social Security
Administration has already paid counsel $5,300 for his work at the agency level, leaving only $4,700
for this court to pay out.1
Counsel originally reduced this amount further to account for the $2,205 he received
under section 2412, but in an amended motion he asserts that “the better approach” is to ask for
the full $4,700 and then refund the $2,205 to Mr. Reynolds. Counsel does not explain this
decision, but the court assumes it is related to the statement in Gisbrecht v. Barnhart, 535 U.S.
789, 796 (2002), that “[f]ee awards may be made under both [sections 406 and 2412], but the
claimant’s attorney must ‘refun[d] to the claimant the amount of the smaller fee.’”
The magistrate judge reviewed this request and issued an R&R recommending that the court
deny counsel’s motion. (ECF No. 22.) Fourteen days later, counsel filed his objections to that
R&R. (ECF No. 23.)
STANDARD OF REVIEW
Parties have 14 days to file written objections to the proposed findings and recommendations
in a magistrate judge’s report and recommendation (“R&R”). 28 U.S.C. § 636(b)(1); Fed. R. Civ.
P. 72(b). A district court judge reviews de novo the portions of the R&R to which objections have
been filed, and may accept, reject, or modify, in whole or in part, the magistrate judge’s findings or
recommendations. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). Only specific objections are
entitled to de novo review under the statute, see Mira v. Marshall, 806 F.2d 636, 637 (6th Cir. 1986)
(per curiam), and the statute does not “positively require some lesser review by the district court
when no objections are filed.” Thomas v. Arn, 474 U.S. 140, 150 (1985). Failure to object to an
issue waives that issue, along with the party’s right to appeal that issue. United States v. Sullivan,
431 F.3d 976, 984 (6th Cir. 2005); see Arn, 474 U.S. at 155 (upholding the Sixth Circuit’s practice).
The R&R recommends that the court deny the motion for fees on three separate grounds.
The court will address each in turn.
Lack of Supporting Brief
First, the magistrate judge objects that counsel’s motion was not filed with a supporting brief,
as Local Rule 7.1(a) requires, and that it failed to adequately support its fee request. It is true that
counsel failed to follow the local rules in filing his motion. But his failure did not deprive the court
of legal argument necessary to resolve the motion. Plaintiff’s motion included a citation to the
appropriate statutory authority and all documentation needed to support his request: the notice of
award; counsel’s fee agreement with Mr. Reynolds; documentation of amounts already paid; an
accounting of time spent on this matter; and Mr. Reynolds’s consent to the requested fee. While
counsel could have, and indeed should have, included further discussion of why his fee request was
proper and supported by the law, his failure to follow the rules of this district given the posture of
this case (no substantive opposition from the government) did no harm and the court will not take
it as cause to deny his request. However, counsel’s failure should not be repeated.
Benefits Not Authorized by Section 406(b)
Second, the magistrate judge found that section 406(b) allowed attorney’s fees only for
recovery under Title II of the Social Security Act, governing disability insurance, and not Title
XVI’s welfare program. Because counsel failed to break up the award into its constituent parts, the
R&R recommended denying the motion.
Counsel objects, arguing that the Notice of Award itself shows that the entire award fell
under Title II. While one could perhaps infer this from the Notice’s statement that “[w]e may have
to reduce these benefits if you received Supplemental Security Income (SSI) [under Title XVI] for
this period,” it is far from obvious to a casual reader. This issue is just the sort of thing that counsel
should have addressed in his motion (that is, in his supporting brief) in the first place. But the
distinction between Title II and Title XVI recovery would make little difference here in any case.
As the magistrate judge notes, 42 U.S.C. § 1383 governs attorney’s fees from Title XVI awards, and
subsection (d)(2) states that the rules of section 406 apply equally to such awards. Thus, even if Mr.
Reynolds’s award included some Title XVI recovery, counsel’s request would not have been
improper, just incompletely argued. Given counsel’s subsequent explanation, this court will not
deny his motion on this basis either.
Motion Is Untimely
Finally, the magistrate judge found that plaintiff’s motion was untimely. Noting that section
406(b) itself does not set any time limit for filing motions for attorney’s fees, the R&R applied Rule
54, which provides that claims for attorney’s fees must “be filed no later than 14 days after the entry
of judgment.” Fed. R. Civ. P. 54(d)(2)(B)(I). Because counsel’s motion was filed more than two
years after judgment issued in Mr. Reynolds’s case, the R&R recommended denying counsel’s fees
But as plaintiff’s counsel points out, at the time the judgment entered, he did not know the
amount of any fees request—or even whether he would be entitled to any fees under section 406(b).
This court resolved its case by simply remanding to the Commissioner for further proceedings; it
did not find that Mr. Reynolds was entitled to benefits, and it certainly did not calculate the amount
of past-due benefits that he was owed. It wasn’t until he received the Notice of Award in January
2013 that counsel’s fees request became ripe.
Though a number of courts have pointed out the dilemma inherent in applying Rule 54 to
section-406(b) fee requests, a common solution to this problem has not emerged. The Fifth and
Eleventh Circuits, for instance, have applied Rule 54 as written. See Bergen v. Comm’r of Soc. Sec.,
454 F.3d 1273, 1277 (11th Cir. 2006); Pierce v. Barnhart, 440 F.3d 657, 663–64 (5th Cir. 2006).
But while the Third Circuit has also applied Rule 54, it also held that the 14-day deadline was tolled
until counsel was notified of the Commissioner’s award. See Walker v. Astrue, 593 F.3d 274, 280
(3d Cir. 2010). The Tenth Circuit has taken a different tack, addressing section-406 motions as
requests for relief from judgment under Rule 60(b)(6) and giving counsel a “reasonable time” after
the award to file. McGraw v. Barnhart, 450 F.3d 493, 505 (10th Cir. 2006). And the Seventh
Circuit, in a case decided before Rule 54’s 14-day limit came into effect, required only that a
section-406 motion be brought “within a reasonable time.” Smith v. Bowen, 815 F.2d 1152, 1156
(7th Cir. 1987).
For its part, the Sixth Circuit has not weighed in on this issue. Another court in this district,
however, has discussed this problem in depth. See Bentley v. Comm’r of Soc. Sec., 524 F. Supp. 2d
921 (W.D. Mich. 2007). The Bentley court acknowledged that “it is clear that Rule 54(d)(2)(B) and
§ 406(b) do not fit easily together,” but reasoned that because the statute did not address the timing
issue, the Rule must govern. Id. at 922. Nevertheless, the court avoided the undeniable practical
difficulties that this rule would produce by applying the principles of equitable tolling to the fee
Given the lack of guidance from the Sixth Circuit on the timing of §
406(b) fee petitions and the variety of approaches taken in other
jurisdictions, the denial of a § 406(b) fee petition on the basis that it
was not filed within fourteen days of a remand order would be
exceedingly harsh, and would not further the § 406(b) policy goals of
encouraging the representation of Social Security claimants. Such a
strict application of Rule 54(d)(2)(B) would also elevate form over
substance because neither the right to an award nor the amount of the
award could be determined at that time.
Id. at 924.
Since Bentley, the rule in the Sixth Circuit has not become any clearer, and the number of
different approaches taken by other jurisdictions has only expanded. See Walker v. Astrue, 593 F.3d
274, 280 (3d Cir. 2010). While Bentley itself arguably provided some clarity in this circuit, that case
is not binding on the other courts in this district and so cannot provide true certainty here. The
analysis adopted in Bentley therefore applies just as strongly here, and this court will similarly apply
the doctrine of equitable tolling to counsel’s motion.
Courts consider five factors in determining whether a deadline should be equitably tolled:
(1) the petitioner’s lack of notice of the filing requirement;
(2) the petitioner’s lack of constructive knowledge of the filing
(3) diligence in pursuing one’s rights;
(4) absence of prejudice to the respondent; and
(5) the petitioner’s reasonableness in remaining ignorant of the legal
requirement for filing his claim.
Griffin v. Rogers, 399 F.3d 626, 635 (6th Cir. 2005) (quoting Dunlap v. United States, 250 F.3d
1001, 1008 (6th Cir. 2001)) (whitespace added). The Bentley court found that these factors weighed
in favor of tolling, and this court does as well. No authority clearly sets out a deadline for filing a
section-406(b) motion, and counsel was reasonably diligent in filing his motion approximately two
months after the notice of award issued. No party was prejudiced by counsel’s delay, and neither
party has objected to the motion. Indeed, the affected party, Mr. Reynolds, has expressly consented
to his attorney’s fee request. For these reasons, the court will apply equitable tolling and treat
counsel’s motion as timely.
Counsel’s request of approximately 17% of his client’s past-due benefits award, representing
a significant discount from his agreed-upon contingency rate, is eminently reasonable. The court will
therefore grant counsel’s fee request.
For the reasons discussed above, IT IS HEREBY ORDERED as follows:
The magistrate judge’s report and recommendation (ECF No. 22) is REJECTED;
Plaintiff’s Amended Motion for Attorney’s Fees (ECF No. 21) is GRANTED;
Plaintiff’s attorney, Thomas A. Geelhoed, is AWARDED attorney’s fees in the
amount of $4,700, payable from Plaintiff’s past-due Social Security benefits that
have been withheld by the Commissioner; and
Within 14 days of receiving this fee award, Plaintiff’s attorney shall REFUND
$2,205 to Plaintiff.
IT IS SO ORDERED.
June 21, 2013
/s/ Paul L. Maloney
Paul L. Maloney
Chief United States District Judge
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