Ruhe v. Social Security Administration
ORDER by Magistrate Judge Stephan M. Vidmar GRANTING 35 Plaintiff's Motion for Attorney Fees under 42 U.S.C. § 406(b). (am)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
No. 15-cv-0374 SMV
NANCY A. BERRYHILL,1
Acting Commissioner of the Social Security Administration,
ORDER GRANTING ATTORNEY FEES UNDER § 406(b)
THIS MATTER is before the Court on Plaintiff’s Motion for Order Authorizing
Attorney Fees Pursuant to 42 U.S.C. § 406(b) and Supporting Memorandum [Doc. 35], filed on
July 7, 2017. The motion seeks $6,579.75 in attorney fees for legal services rendered before the
Court. Id. at 1. The Commissioner responded on July 11, 2017; she does not object to the
request for fees. [Doc. 36] at 1. The parties have consented to the undersigned’s entering final
judgment in this case. [Doc. 10]. Having reviewed the briefs, the record, and the applicable
case law and being otherwise fully advised in the premises, I find that the Motion is well-taken
and should be granted. Plaintiff should be awarded $6,579.75 in attorney fees.
The Commissioner denied Plaintiff’s application for a period of disability, disability
insurance benefits, and supplemental security income. See [Doc. 27] at 5. After exhausting his
Nancy A. Berryhill is now the Acting Commissioner of Social Security. Pursuant to Rule 25(d) of the Federal
Rules of Civil Procedure, Nancy A. Berryhill should be substituted for Acting Commissioner Carolyn W. Colvin as
the defendant in this suit. No further action needs to be taken to continue this suit by reason of the last sentence of
§ 205(g) of the Social Security Act, 42 U.S.C. § 405(g).
administrative appeals, Plaintiff timely filed an action in this Court on May 4, 2015. [Doc. 1].
Ultimately, the Court reversed the Commissioner’s denial of benefits and remanded the case for
further proceedings. [Docs. 28, 28]. On remand from this Court, an ALJ issued a final
administrative decision fully favorable to Plaintiff on March 15, 2017. Notice of Decision –
Fully Favorable [Doc. 35-1] at 1, 6–17.
Plaintiff was awarded back benefits totaling
See [Doc. 35] at 4; Notice of Award [Doc. 35-2] at 3.
Commissioner has withheld $12,579.75 to pay for representation before the Administration and
before this Court.2 [Doc. 35-2] at 3.
Plaintiff and his counsel entered into a contingency fee agreement providing that
Plaintiff would pay his attorney 25% of any back benefits in exchange for representation in
federal court. This fee would be in addition to any fee that Plaintiff had agreed to pay for
representation before the Administration. Fee Agreement—Federal Court, [Doc. 35-2] at 10.
Plaintiff’s counsel has requested $6,579.75 for representation before this Court, which is about
13% of the back benefits awarded. [Doc. 35] at 5. Because the attorney fees at issue here are
not paid by the government but, instead, are paid out of Plaintiff’s benefits, the Commissioner
has no interest in the instant motion for fees. [Doc. 36] at 1. She “generally takes no position
on such petitions.” Id.
Under 42 U.S.C. § 406(a), any award of fees for services performed before the Administration is properly a
matter for the Administration to decide. This Court awards fees only for services performed here. § 406(b); Wrenn
v. Astrue, 525 F.3d 931, 937 (10th Cir. 2008).
A court may award attorney’s fees pursuant to 42 U.S.C. § 406(b)(1) where the claimant
receives a favorable administrative decision following a remand of the case to the Secretary for
further consideration. In relevant part, the statute at issue states:
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, 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 . . . .
42 U.S.C. § 406(b)(1). “The tenor of 406(b) is permissive rather than mandatory. It says that
the court may make such an award, not that such an award shall be made.” Whitehead v.
Richardson, 446 F.2d 126, 128 (6th Cir. 1971). The Whitehead court reasoned that “Congress
recognized the difference between the mandatory term ‘shall’ and the permissive term ‘may.’”
Id. Congress used “shall” in 406(a) and “may” in 406(b) where the statute specifically provides
that the court is expected to determine whether to allow attorney’s fees. Id. Traditionally, an
award of attorney’s fees is a matter within sound discretion of the court.
In Gisbrecht v. Barnhart, the Supreme Court concluded that § 406(b) was designed by
Congress to “control, not displace, fee agreements between Social Security benefit claimants
and their counsel.” 535 U.S. 789, 792 (2002). Courts should review fee arrangements “as an
independent check, to assure that they yield reasonable results in particular cases.” Id. at 807.
The statute imposes the 25%-of-past-due-benefits limitation on fees as a ceiling, not as a
standard to be used to substantiate reasonableness. Id. at 808–09.
Courts have reduced attorney fee “recovery based on the character of the representation
and the results the representation achieved.” Id. at 808. In cases where plaintiffs’ attorneys
have caused delays or provided substandard representation or if the benefits are large in
comparison to the amount of time counsel spent on the case, courts have authorized reduced
fees. Id.; see also McGuire v. Sullivan, 873 F.2d 974, 981 (7th Cir. 1989) (explaining that “the
court should consider the reasonableness of the contingency percentage to make sure the
attorney does not receive fees which are out of proportion to the services performed, the risk of
loss and the other relevant considerations”). Ultimately, plaintiffs’ attorneys have the burden
of showing that the fee sought is reasonable. Gisbrecht, 535 U.S. at 808. “Within the
25 percent boundary, . . . the attorney for the successful claimant must show that the fee sought
is reasonable for the services rendered.” Id. at 807.
First, the Court must determine if the Fee Agreement meets § 406(b)(1) guidelines. In
relevant part, the Fee Agreement reads:
FEE AGREEMENT—FEDERAL COURT
. . . . If I am awarded benefits in federal court or if I am awarded
benefits by the Social Security Administration following a remand
ordered by [the] federal court in my case in which my attorney
represented me, I agree to pay my attorney twenty-five percent
(25%) of my and my family’s past-due benefits. . . .
This agreement is in addition to any previous fee agreement I
have signed with my attorney for representation before the Social
Security Administration. . . .
[Doc. 35-2] at 10. Thus, the Fee Agreement meets § 406(b)(1)’s guideline of not exceeding
25% of the past-due benefits.
Second, the Court must review contingent fee agreements such as these “to assure that
they yield reasonable results in particular cases.” Gisbrecht, 535 U.S. at 807. Plaintiff’s
counsel has the burden of demonstrating that his request for fees is reasonable under the
The reasonableness determination is “based on the character of the
representation and the results the representation achieved.” Id. at 808. Factors relevant to the
reasonableness of the fee request include: (1) whether the attorney’s representation was
substandard; (2) whether the attorney was responsible for any delay in resolution of the case;
and (3) whether the contingency fee is disproportionately large in comparison to the amount of
time spent on the case. Id.
Having reviewed the particular facts of this case in light of the Gisbrecht factors, I
find that Plaintiff’s counsel has shown that $6,579.75 is reasonable for his representation of
Plaintiff before this Court. Counsel has ably represented Plaintiff before this Court, totaling
30.4 hours of attorney time. [Doc. 35-2] at 7–8. Counsel’s representation was more than
adequate; the results achieved were excellent. See [Doc. 27]. Next, the Court finds that
Plaintiff’s counsel was not responsible for any appreciable delay in resolution of the case.
Finally, the Court finds that the award would not be disproportionately large in
comparison to the amount of time spent on the case (30.4 hours). See Affidavit of Michael
Armstrong [Doc. 35-2] at 7–9. It would equate to an effective hourly rate of $216.44.
Considering counsel’s experience and his performance in this case, the Court finds the rate to
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Plaintiff’s
Motion for Order Authorizing Attorney Fees Pursuant to 42 U.S.C. § 406(b) [Doc. 35] is
Counsel is awarded $6,579.75 in attorney fees pursuant to 42 U.S.C.
§ 406(b)(1) for representing Plaintiff before this Court.4
IT IS SO ORDERED.
STEPHAN M. VIDMAR
United States Magistrate Judge
Presiding by Consent
See generally Grunseich v. Barnhart, 439 F. Supp. 2d 1032, 1035 (C.D. Cal. 2006) (approving attorney’s fees of
$600 per hour); Yarnevic v. Apfel, 359 F. Supp. 2d 1363, 1365–66 (N.D. Ga. 2005) (approving attorney’s fees at an
effective rate of $643 per hour).
This Court previously awarded $5,787.08 in attorney fees under the Equal Access to Justice Act (“EAJA”), 28
U.S.C. § 2412. [Doc. 34] at 1. As counsel acknowledges, he is required to refund the smaller of the EAJA award
(or, if applicable, whatever portion of the EAJA award not subject to offset under the Treasury Offset Program) or
this § 406(b) award to Plaintiff in accordance with Gisbrecht, 535 U.S. at 796. [Doc. 35] at 2. In this case, the
entire amount of the EAJA award was subject to offset under the Treasury Offset Program. Id.; [Doc.35-2] at 14.
Neither Plaintiff nor his attorney every received the money. Accordingly, Plaintiff’s counsel is not required to
refund the EAJA award to Plaintiff. See, e.g., Raney v. Colvin, No. CIV-10-399-FHS-SPS, 2015 WL 588829, *2,
n.2 (E.D. Okla. Feb.11, 2015) (unpublished) (finding that counsel was not required to refund the EAJA attorney fee
award to Plaintiff when that award was applied to offset Plaintiff's debt on a child support obligation).
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