Bays v. Commissioner of Social Security

Filing 36

ORDER granting 31 Motion for Attorney Fees. Signed by Magistrate Judge Jane M. Virden on 12/19/17. (ncb)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
OXFORD DIVISION
JENNIFER BAYS

PLAINTIFF

V.

NO. 3:15CV00053-JMV

COMMISSIONER OF SOCIAL SECURITY

DEFENDANT

ORDER
Jennifer Bays filed this civil action on April 8, 2015, to appeal the Commissioner's denial
of disability benefits. This Court entered a Judgment [23], dated October 28, 2015, that remanded
the case to the Social Security Administration (the “Agency”) for further proceedings pursuant to
sentence four of 42 U.S.C. § 405(g). By Order [30] dated February 10, 2016, the Court granted in
part and denied in part Plaintiff's motion for an award of fees under the Equal Access to Justice Act
(“EAJA”) and awarded a total of $3,586.63 in attorney’s fees for 19 hours of attorney time to
Plaintiff for the benefit of her counsel.
Now, counsel for Plaintiff returns with the instant Motion for Attorney Fees [31] pursuant
to 42 U.S.C. § 406(b) and § 1383(d)(2). Counsel reports Plaintiff was successful on remand in
obtaining an award of past-due benefits and seeks authorization of both a fee of “$8,157.00,
representing twenty-five percent of the past due benefits due Plaintiff” and a fee of $3,023.00,
which represents counsel’s “fee from the auxiliary family benefits paid to . . . the minor child of
Plaintiff.” Counsel is careful to point out, however, that the Agency has already paid him
$6,000.00 in fees for his work at the Agency level. In her response [32], the Acting Commissioner
questions counsel’s request, arguing that 1) the fee contract submitted by counsel does not address
fees for Federal court work; 2) the Agency has already paid counsel an amount representing the
full amount recoverable for work before the Agency; and 3) counsel has failed to present sufficient

evidence of the amount of past-due benefits awarded to Plaintiff’s minor child.
While fees under the EAJA are statutorily capped, fees under § 406 are limited to
reasonableness and may be no more than twenty-five percent of past-due benefits. See 42 U.S.C. §
406(b)(1). Fees under § 406(b) satisfy a client's obligation to her counsel and, accordingly, are
paid out of the plaintiff's social security benefits. See Orner v. Shalala, 30 F.3d 1307, 1309 (10th
Cir.1994). A contingency fee agreement to pay twenty-five percent of any past-due benefits
awarded may set the amount of the Section 406(b) award so long as the amount is reasonable under
the facts of the case. See Gisbrecht v. Barnhart, 535 U.S. 789, 807-08 (2002).1 An attorney may
obtain fees under both § 406(b) and the EAJA but must refund the lesser fee to the claimant. Id. at
796. Additionally, the combined fees under §§ 406(a) (administrative fees) and 406(b) (federal
court fees) may not exceed twenty-five percent of past-due benefits. Dawson v. Finch, 425 F.2d
1192, 1195 (5th Cir. 1970).
Counsel for Plaintiff did not timely file a reply to the Acting Commissioner’s response.

1

In Gisbrecht, the Supreme court noted:

Courts that approach fee determinations by looking first to the contingent-fee agreement, then testing
it for reasonableness, have appropriately reduced the attorney's recovery based on the character of
the representation and the results the representative achieved. 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. at 807-08, 122 S.Ct. at 1828, 152 L.Ed.2d 996 (internal citations and footnotes omitted).

2

Nevertheless, the undersigned issued a Show Cause Order [33] that required Plaintiff’s counsel to
address certain of the issues raised by the Acting Commissioner and an additional concern of the
Court, i.e., whether counsel’s delay in requesting fees was reasonable, considering his fee petition
had been filed nearly a year after an award of benefits to the claimant and her minor child.
Counsel filed his response [35] to the Show Cause Order on December 11, 2017. Having fully
considered the same and the record and the applicable law, the undersigned is of the opinion that
counsel should be awarded § 406(b) fees.
First, with regard to the issue of timeliness, the Court accepts counsel’s representation that
he did not realize that funds were being held by the Agency “in anticipation of” counsel’s filing of
a petition under § 406(b) until he received a call from the Agency. Furthermore, by all
appearances, the funds remain on hold for the payment of any fees awarded by this Court. Second,
the Court finds that a fair reading of the contingency-fee contract indicates the parties to the
contract envisioned that counsel would be entitled to fees for “winning” the claimant’s case at any
point after counsel’s agreement to appeal the first ALJ decision denying benefits. Finally, with
regard to proof of the total amount of benefits awarded the claimant’s minor child, counsel has now
submitted ample proof of the same.
Having determined that an award of fees is appropriate in this case, the Court now turns to
whether the amount requested is proper. Here, counsel asks for a total award of $5,180.00 (the
balance after subtracting the $6,000.00 already paid by the Agency) from fees withheld by the
Agency from the claimant’s and minor’s past-due benefits. An award of $5,180.00 would result in
an effective rate of $272.63 per hour for the 19 hours of reasonable work expended by counsel
before this Court. See Order [30]. Counsel states that he will refund to his client the amount of the
EAJA fees awarded earlier by this Court. The Court finds the amount requested by counsel does

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not contravene the limit that may be awarded under § 406(b) and is reasonable.
Indeed, several factors weigh in favor of a finding that the fee is reasonable. First, counsel
has presented a contingency-fee agreement signed by Plaintiff, wherein Plaintiff acknowledges her
attorney will seek payment of attorney fees from past-due benefits awarded for representing her in
federal court. Second, counsel successfully argued this case before this Court and on remand
before the Agency. Third, the Fifth Circuit and district courts in this Circuit have acknowledged
the high risk of loss inherent in Social Security appeals2. Fourth, Plaintiff’s counsel has
demonstrated he is an experienced Social Security attorney, and there are no indications of undue
delay in the record on his part. Fifth, the § 406(a) and (b) fees (($6,000.00 and $5,180.00,
respectively) combined will not consume more than twenty-five percent of the claimant’s and her
child’s past-due benefits; and, the § 406(b) fees alone amount to just under eleven percent of said
benefits.
THEREFORE, IT IS ORDERED that Plaintiff’s motion for attorney’s fees is granted,
and Plaintiff’s counsel is hereby awarded $5,180.00, which is to be paid from the claimant’s and
her minor child’s past-due benefits withheld by the Agency.
IT IS FURTHER ORDERED that Plaintiff’s counsel, upon receipt of this award, shall
refund to Plaintiff the EAJA fees previously awarded in this case in the amount of $3,586.63.
This, the 19th day of December, 2017.

/s/ Jane M. Virden
U.S. MAGISTRATE JUDGE

2

See Jeter v. Astrue, 622 F.3d 371, 379 & n. 9 (5th Cir. 2010).

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