Smith v. Social Security Administration
Filing
31
ORDER by Magistrate Judge Karen B. Molzen granting 28 Motion for Section 406(b) Attorney Fees. (KBM)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
SAMMY R. SMITH,
Plaintiff,
vs.
CIV 14-0973 KBM
NANCY A. BERRYHILL, Acting Commissioner
of the Social Security Administration,
Defendant.
ORDER GRANTING § 406(b) ATTORNEY FEES
THIS MATTER is before the Court on Plaintiff’s Motion for an award of
$12,438.00 in attorney fees under 42 U.S.C. § 406(b)(1). Doc. 28. The Motion recites
that Defendant took no position at the time of the filing, and the record reflects that
Defendant has since confirmed that she takes no position at this time. Doc. 30. Being
fully advised in the premises, the Court finds that Plaintiff’s Motion is well-taken and
should be granted.
Plaintiff instituted an action in this Court seeking judicial review of Defendant’s
denial of his application for Social Security disability benefits. This Court reversed the
decision of the Commissioner and remanded for a new hearing and awarded EAJA fees
in the amount of $6,555.00. See Docs. 24, 27. Following this Court’s remand, an ALJ
issued a final administrative decision fully favorable to Plaintiff and withheld $18,438.00
(25% of the awarded past due benefits in the amount of $73,752.00) in the event that
Plaintiff’s counsel was to bring a claim for attorney fees pursuant to the retainer
agreement. Plaintiff’s counsel now seeks authorization from this Court for an award of
compensation for legal services in an amount significantly less than that withheld.
When a court renders a judgment favorable to a Social Security claimant who
was represented before the court by an attorney, the court may allow “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.” 42 U.S.C. § 406(b)(1)(A). Unlike EAJA fees, which are
paid in addition to past-due benefits, § 406(b) fees are paid out of past-due benefits.
Wrenn ex rel. Wrenn v. Astrue, 525 F.3d 931, 933-34 (10th Cir. 2008). If fees are
awarded under both EAJA and § 406(b), the attorney must refund the lesser award to
the claimant. Id. at 934. The court may award fees under § 406(b) when “the court
remands . . . a case for further proceedings and the Commissioner ultimately
determines that the claimant is entitled to an award of past-due benefits.” McGraw v.
Barnhart, 450 F.3d 493-96 (10th Cir. 2006).
Although § 406(b) does not prohibit contingency fee agreements, it renders them
unenforceable to the extent that they provide for fees exceeding 25% of the past-due
benefits. Gisbrecht v. Barnhart, 535 U.S. 798, 807 (2002). Section 406(b) also requires
the court to act as “an independent check” to ensure that fees are reasonable even if
they are less than 25% of the past-due benefits because there is no presumption that
25% is reasonable. Id. at 807 n. 17. Counsel has the burden of demonstrating the
reasonableness of the fees. Id. at 807. The reasonableness determination is “based on
the character of the representation and the results the representative 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
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disproportionately large in comparison to the amount of time spent on the case. Id. A
court may require the claimant’s attorney to submit a record of the hours spent
representing the claimant and a statement of the lawyer’s normal billing rate for noncontingency fee cases. Id. The statute does not specify a deadline for requesting fees.
See 42 U.S.C. § 406(b). The Tenth Circuit, however, has held that a request “should be
filed within a reasonable time of the Commissioner’s decision awarding benefits.”
McGraw, 450 F.3d at 505.
In this case, the Court finds that the legal representation by Michael D.
Armstrong Law Office, LLC was more than adequate, and it obtained a fully favorable
decision for Plaintiff. Counsel did not delay the proceedings before this Court. The
instant Motion was filed within a reasonable time after Plaintiff received notice of
entitlement to past-due benefits. The Court further finds that the requested fees are
significantly below the 25% permitted by the retainer agreement and proportionate given
the amount of time (34.5 hours) efficiently spent on the case. The requested attorney
fees would therefore be in line with other fee awards authorized in this District under
406(b). See e.g., Marquez v. Astrue, CIV 10-1165 CG (Doc. 30) (awarding $10,105 for
18.9 hours, or $529.00 per hour); Dimas v. Astrue, CIV 03-1157 RHS (Doc. 34)
(awarding $17,000 for 38.26 hours or $444.23 per hour). Having performed its
“independent check” duties, the Court finds the requested award to be both appropriate
and reasonable.
Wherefore,
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IT IS HEREBY ORDERED that Plaintiff’s Motion for attorney fees under § 406(b)
is granted. The Court hereby authorizes $12,438.00 in attorney fees for legal services
rendered in United States District Court, to be paid by the Social Security
Administration. Plaintiff’s counsel will then reimburse Plaintiff the sum of $6,390.47
which represents the previous award of EAJA fees of $6,555.00 that was subject to an
offset under the Treasury Offset Program.
________________________________________
UNITED STATES CHIEF MAGISTRATE JUDGE
Presiding by Consent
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