Reid v. Social Security Administration

Filing 33

MEMORANDUM OPINION AND ORDER by Magistrate Judge Stephan M. Vidmar GRANTING 27 Plaintiff's Motion for Attorney Fees Under § 406(b) (am)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
NHAN TO REID,
Plaintiff,
v.

No. 16-cv-1104 SMV

ANDREW SAUL,1
Commissioner of Social Security Administration,
Defendant.
MEMORANDUM OPINION AND ORDER
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. 27], filed on January 21,
2020. The motion seeks $15,001 in attorney fees for legal services rendered before the Court. Id.
at 1. The Commissioner filed his response on February 3, 2020. [Doc. 30]. He takes no position
on the request for fees. Id. at 1. The parties have consented to the undersigned’s entering final
judgment in this case. [Doc. 7]. 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 will be awarded $15,001 in attorney fees.
Procedural History
The Commissioner denied Plaintiff’s application for a period of disability and disability
insurance benefits. See [Doc. 23] at 3–4. After exhausting her administrative appeals, Plaintiff

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Andrew Saul is the current Commissioner of Social Security. Pursuant to Rule 25(d) of the Federal Rules of Civil
Procedure, Andrew Saul 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 section 205(g) of the
Social Security Act, 42 U.S.C. § 405(g).

timely filed an action in this Court on October 5, 2016. [Doc. 1]. Ultimately, the Court reversed
the Commissioner’s denial of benefits and remanded the case for further proceedings. [Docs. 23,
24]. On remand from this Court, an ALJ issued a final administrative decision fully favorable to
Plaintiff on April 2, 2019. Notice of Decision – Fully Favorable [Doc. 27-1] at 1, 4–7. Plaintiff
was awarded past-due benefits totaling approximately $84,004. Notice of Award [Doc. 27-1]
at 11; see [Doc. 27] at 4. The Commissioner has withheld $21,001 to pay for representation before
this Court.2 [Doc. 27-1] at 11 (May 12, 2019 Notice of Award).
Plaintiff and her counsel entered into a contingency fee agreement providing that Plaintiff
would pay her 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. 27-1] at 19. Plaintiff’s counsel has
requested $15,001 for representation before this Court, which is about 17.9% of the back benefits
awarded. [Doc. 27] at 5.
Standard
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 . . . .
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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. 42 U.S.C. § 406(b) (2018);
Wrenn v. Astrue, 525 F.3d 931, 937 (10th Cir. 2008).

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42 U.S.C. § 406(b)(1) (2018). “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.

Id.

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

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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.
Analysis
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. 27-1] at 19.3 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

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The Fee Agreement was entered into by Plaintiff and attorney Michael D. Armstrong, individually on October 3,
2016. Id. The attorney requesting fees at this time, however, is Laura J. Johnson on behalf of “Michael Armstrong
Law Office, LLC” (“the firm”). [Doc. 27]. Because the Fee Agreement mentioned neither Ms. Johnson nor the firm,
nor any other business entity, the Court ordered supplemental briefing from Ms. Johnson to establish her entitlement
to attorney fees under the Fee Agreement. [Doc. 31]. Ms. Johnson timely supplemented the Motion. [Doc. 32]. She
provided an affidavit from Mr. Armstrong, averring that he remains an employee of the firm and that “[a]ll proceeds
from my representation of claimants inures to the benefit of the firm.” [Doc. 32-1] at 2. This suffices to show that
Ms. Johnson as “current owner” of the firm, [Doc. 32] at 1, may collect on the Fee Agreement.

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has the burden of demonstrating that his request for fees is reasonable under the circumstances.
Id. 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 $15,001 is reasonable for representation of Plaintiff before
this Court. Counsel have ably represented Plaintiff before this Court, totaling 35.26 hours of
attorney time. [Doc. 27-1] at 16–17. Counsel’s representation was more than adequate; the
results achieved were excellent. See [Doc. 27-1] at 1–3. Next, the Court finds that Plaintiff’s
counsel were 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 (35.26 hours). See Affidavit of Michael
Armstrong [Doc. 31-1] at 16–19. It would equate to an effective hourly rate of $425.44.
Considering counsel’s experience and performance in this case, the Court finds the rate to be
reasonable.4
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. 27] is

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See generally Grunseich v. Barnhart, 439 F. Supp. 2d 1032, 1035 (C.D. Cal. 2006) (approving attorney fees of $600
per hour); Yarnevic v. Apfel, 359 F. Supp. 2d 1363, 1365–66 (N.D. Ga. 2005) (approving attorney fees at an effective
rate of $643 per hour); Montes v. Barnhart, No. 01-cv-0578 BB/KBM (D.N.M. Dec. 3, 2004) (approving attorney
fees at an effective rate of $701.75 per hour).

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GRANTED. Counsel is awarded $15,001 in attorney fees pursuant to 42 U.S.C. § 406(b)(1) for
representing Plaintiff before this Court.5
IT IS SO ORDERED.

______________________________
STEPHAN M. VIDMAR
United States Magistrate Judge
Presiding by Consent

This Court previously awarded $6,809.96 in attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C.
§ 2412. [Doc. 30] 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. 31] at 2.
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