Broton v. Colvin

Filing 28

DECISION AND ORDER: that Attorney Howard D. Olinsky, Esq. is hereby awarded the sum of $25,611.50 in accordance with 42 U.S.C. 406(b), as fees pursuant to the firm's fee agreement with plaintiff, to be paid from the amount withheld by the A cting Commissioner from the past due benefits awarded to plaintiff; and that Attorney Howard D. Olinsky, Esq. is hereby directed to refund to plaintiff the sum of $7,900.00 previously awarded in this matter as attorney's fees pursuant to EAJA. Signed by Magistrate Judge David E. Peebles on 11/5/2018. (hmr)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF NEW YORK
RITA M. B.,
v.

Plaintiff,

Civil Action No.
5:16-CV-0262 (DEP)

NANCY A. BERRYHILL, 1 Acting Commissioner
of Social Security,
Defendant.
APPEARANCES:

OF COUNSEL:

FOR PLAINTIFF
OLINSKY LAW GROUP
300 S. State Street
Suite 420
Syracuse, NY 13202

HOWARD D. OLINSKY, ESQ.
MARISA BURKETT, ESQ.

FOR DEFENDANT
HON. GRANT C. JAQUITH
United States Attorney
Northern District of New York
P.O. Box 7198
100 S. Clinton Street
Syracuse, NY 13261-7198

JOANNE JACKSON PENGELLY
ESQ.
OONA M. PETERSON, ESQ.
Special Assistant U.S. Attorneys

Carolyn W. Colvin, the former Acting Commissioner of Security, was replaced
by Nancy A. Berryhill, who currently serves in that position. Because Carolyn W.
Colvin was sued in this action only in her official capacity, Nancy A. Berryhill has been
automatically substituted for Carolyn W. Colvin as the named defendant. See Fed. R.
Civ. 25(d).

1

DAVID E. PEEBLES
CHIEF U.S. MAGISTRATE JUDGE
DECISION AND ORDER
Plaintiff Rita M. B. initiated this action in 2016, seeking judicial
review of a determination by the Acting Commissioner of Social Security
("Acting Commissioner"), in which she denied plaintiff's application for
Social Security benefits. Having succeeded in this court, and on remand
before the Social Security Administration, resulting in an award of past due
benefits to plaintiff, her counsel now seeks an order, pursuant to 42 U.S.C.
§ 406(b), awarding him fees in the amount of $25,611.50, conditioned
upon his return to the plaintiff of $7,900 previously awarded under the
Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. For the reasons
set forth below, the motion of plaintiff's counsel, which the Acting
Commissioner has not actively opposed, will be granted. 2
I.

BACKGROUND
Plaintiff commenced this action on March 4, 2016, pursuant to 42

U.S.C. § 405(g), to challenge a final determination by the Acting
Commissioner denying her application for disability insurance benefits

In her response to the fee application, the Acting Commissioner has raised an
issue regarding its timeliness, but defers to the court's discretion with respect to both
that question and the reasonableness of the amount sought.
2

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under Title II of the Social Security Act. Dkt. No. 1. That denial was the
result of an adverse decision, following a hearing, by Administrative Law
Judge John Ramos, issued on March 7, 2011, Dkt. No. 9 at 14-31, and a
subsequent decision of the Social Security Administration Appeals Council
denying plaintiff's request for review of that determination. See generally
Dkt. No. 9. Following the submission of the record of the administrative
proceedings before the agency, briefing by the parties, and oral argument,
I granted plaintiff's motion for judgment on the pleadings. Dkt. Nos. 9, 10,
11, 15. Specifically, at the close of oral argument on December 8, 2016, I
issued a bench decision in which I concluded that the Acting
Commissioner's determination did not result from the application of proper
legal principles and is not supported by substantial evidence. Dkt. No. 15
at 2. That bench decision was memorialized in an order dated December
27, 2016, directing that the matter be remanded to the agency pursuant to
sentence four of 42 U.S.C. § 405(g). Dkt. No. 15. Judgment was
subsequently entered, also on December 27, 2016, returning the matter to
the Acting Commissioner and closing the case. Dkt. No. 16.
On February 22, 2017, following the remand, plaintiff's counsel,
Howard D. Olinsky, Esq., filed a motion for an award of costs and
attorney's fees, pursuant to the EAJA. Dkt. No. 17. In that application,
3

counsel sought recovery for (1) 38.7 hours of attorney work performed
between 2016 and 2017, to be compensated at an hourly rate of $195.61;
and (2) 6.7 hours of administrative work, to be compensated at a rate of
$100 per hour. Dkt. No. 17-1 at 2. The total amount sought was $8,240.11.
Id. An order was subsequently issued on March 17, 2017, based upon a
stipulation of the parties, directing payment of fees under the EAJA to
plaintiff's attorney in the amount of $7,900. Dkt. Nos. 20, 21.
As a result of the further administrative proceedings ordered by the
court, following remand, ALJ Jennifer Gale Smith issued a decision on
February 5, 2018, finding that the plaintiff was disabled at the relevant
times. Dkt. No. 22-2. A Notice of Award, dated May 9, 2018, was
subsequently sent by the Acting Commissioner to the plaintiff, advising her
that past due benefits were being awarded in the amount of $102,446.00
for the period December 2010 through April 2018. Dkt. No. 22-4.
On September 14, 2018, four months later, Attorney Olinsky filed a
motion seeking an additional award of attorney's fees, pursuant to 42
U.S.C. § 406(b), based upon the favorable result achieved before the
agency and his retainer agreement, under which plaintiff agreed to
compensate his firm to the extent of twenty-five percent of past due
benefits awarded, in the event of a favorable decision. See Dkt. No. 22-3.
4

In his request, Attorney Olinsky now seeks a total recovery of $25,611.50
for the 45.40 hours of work performed by his firm.3 Dkt. No. 22-1 at 2.
Plaintiff's counsel has agreed to return the $7,900 previously paid in
connection with the EAJA application to the plaintiff if his current request is
granted. Dkt. No. 22-1 at 3.
In response to Attorney Olinsky's application, the Acting
Commissioner, through her counsel, advises that she does not oppose the
application, noting that it is the court's responsibility to insure that the
requested relief is reasonable and does not result in an improper windfall
to counsel. Dkt. No. 24. However, she does observe that approximately
four months elapsed between the Notice of Award, dated May 9, 2018,
and the fee application of September 14, 2018, but concedes that the law

Plaintiff's counsel acknowledges that the 45.40 hours represents time
collectively expended by attorneys, paralegals, and other staff with the firm. Dkt. No.
22-1 at 3. The ledger submitted by plaintiff's counsel lists the time spent by all
personnel with Attorney Olinsky's firm, without indicating which time keepers are
attorneys, and which are paralegals, or support staff. Dkt. No. 22-5.

3

According to that ledger, at least 2.4 hours were expended by Shannon Persse
and 0.6 hours were expended by Michael P. Smith, both of whom appear to have been
employed as paralegals by Attorney Olinsky's firm. See, e.g., Stroud v. Comm'r of
Social Sec. Admin., 2015 WL 2114578, at *3 (S.D.N.Y. Mar. 24, 2015) (observing that
“Ms. Persse and Mr. Smith are paralegals"). In addition, Michelle Callahan, who
appears to have worked for the firm as part of its support staff, is reported to have
expended 3.7 hours in connection with this matter.
5

within the Second Circuit is unsettled with respect to the timing of a motion
pursuant to 42 U.S.C. § 406(b). Id. 3-5.
In response to the Acting Commissioner's brief and at the request of
this court, Attorney Olinsky has submitted supplemental briefing on the
issue of timeliness. Dkt. Nos. 26, 27. In it, Attorney Olinsky notes the lack
of any definitive guidance from the Second Circuit or the Acting
Commissioner concerning when such motions must be made, and that
other circuit courts are split concerning the issue. Dkt. No. 27. While
acknowledging contrary cases from within the Second Circuit, Attorney
Olinsky urges the court to reject the fourteen-day rule invoked by some
courts under Rule 54(d) of the Federal Rules of Civil Procedure, and to
instead analyze the matter under Rule 60(c)(1), which provides that such
an application may be made within a reasonable time, in this case after
the Acting Commissioner's decision awarding benefits.
II.

DISCUSSION
A.

Timeliness

A threshold issue to be addressed is whether the instant application
is timely, or whether the four-month delay between issuance of the Notice
of Award and Attorney Olinsky's motion should preclude his recovery of
attorney's fees.
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The Second Circuit has not squarely addressed the question of what
standard should govern the timeliness of a motion brought pursuant to
section 406(b). The Third, Fifth, and Eleventh Circuits have applied Rule
54(d)(2) of the Federal Rules of Civil Procedure to such applications,
requiring that they be filed within fourteen days after the entry of judgment.
See Sinkler v. Berryhill, 305 F. Supp. 3d 448, 452 (W.D.N.Y. 2018) (citing
cases).4 Other courts, including the Tenth Circuit, consider such an
application to brought under Rule 60(b)(6) of the Federal Rules of Civil
Procedure, requiring that the application be made within a reasonable time
after the Commissioner's decision awarding benefits. See, e.g. McGraw v.
Barnhart, 450 F.3d 493, 505 (10th Cir 2006); see also Geertgens v.
Colvin, No. 13 Civ. 5133, 2016 WL 1070845, at *2-3 (S.D.N.Y. Mar. 15,
2016).
In McGraw, the court noted that it was "uncomfortable" applying the
fourteen-day rule as delineated in Rule 54(d) because of its impracticality
as applied in Social Security cases, questioning whether the fourteen-day

To address the reality that an award of past due benefits is a condition
precedent to a section 406(b) application and invariably a motion filed within fourteen
days of the entry of judgment would therefore be premature courts, including the Third
Circuit, have applied equitable tolling for the period between the entry of judgment and
the issuance of a notice of award and required that the application be made within
fourteen days of notification of the Notice of Award. See, e.g., Walker v. Astrue, 593
F.3d 274, 280 (3d Cir. 2010).
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period was triggered by the court's sentence four-remand or instead the
ultimate Notice of Award of past-due benefits. McGraw, 450 F.3d at 50405. That court therefore chose to apply Rule 60(b)(6), which provides in
relevant part that "the court may relieve a party . . . from a final judgment,
order, or proceeding" for any "reason that justifies relief". McGraw, 450
F.3d at 505. The McGraw court determined that substantial justice would
be served by using this method of determining the timeliness of social
security attorney's fee motions. Id.
The lower courts within this circuit have split concerning this issue.
Two courts have applied Rule 54(d), subject to the tolling adopted by the
Third Circuit in Walker and similar cases. See Grace v. Berryhill, No. 1:11CV-09162, 2018 WL 1940420 at *1 (S.D.N.Y. Apr. 23, 2018); Sinclair v.
Berryhill, 305 F. Supp. 3d 448, 452-59 (W.D.N.Y. 2018).5 Other courts
from this circuit have applied a reasonableness standard. See, e.g.,
Geertgens, 2016 WL 1070845, at *2-3; see also Garland v. Astrue, 49 F.
Supp. 2d 216 (E.D.N.Y. 2007) (assuming arguendo that the Rule 60(b)(6)
reasonableness standard would apply, but concluding that the delay from

The decision of District Judge Elizabeth Wolford from the Western District of
New York in Sinclair is currently on appeal before the Second Circuit, and will likely
provide guidance from that court concerning the issue. It should be noted that the
attorney fee application rejected by the court as untimely in Sinclair was made by the
Olinsky Law Group, which represents the plaintiff in this action.
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February 28, 2006, when the Notice of Award was sent, in December 8,
2006, when the fee application was made, was unreasonable).
As can be seen, there is no clear, definitive guidance or consensus
concerning the issue, and judges from within this district have not enforced
Rule 54(d) in connection with such applications. For example, in Goff v.
Commissioner, No. 15-CV-1058, 2018 WL 546890 (N.D.N.Y. Jan. 22,
2018), a fee application filed on December 20, 2017 by the Olinsky Law
Group was granted despite the fact the corresponding Notice of Award
was dated June 21, 2017, nearly six months prior to the application. Goff
v. Commissioner, Dkt. No. 5:15-CV-1058, Dkt. No. 13-1 at 2; see also
Brown v. Berryhill, No. 6:15-CV-744, 2018 WL 2253126 (N.D.N.Y. May 17,
2018) (approving an application for fees filed February 16, 2018 when the
Notice of Award was dated October 24, 2017); Brown v. Berryhill, No.
5:15-CV-1000, 2017 WL 2929470 (N.D.N.Y. Jul. 10, 2017) (approving an
application for fees filed May 18, 2017 when the Notice of Award was
dated March 27, 2017).
I note, moreover, even in those jurisdictions where Rule 54(d) is
enforced, advanced notice has been provided to practitioners of this
requirement. In the Eleventh Circuit, for example, a court judgment
remanding a case to the Commissioner typically would include within it a
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notice regarding the time limit within which fee applications must be made
"[b]ased on the status of the law and in abundance of caution [.]" Cooper
v. Astrue, No. 2:07CV710, 2008, WL 2945551, at *2 (N.D. Ala. July 29,
2008); see also Clarke v. Astrue, No. 8:09-CV-00888-T-17, 2012 WL
570345, at *1 (N.D. Fla. Feb. 22, 2012)("the best practice for avoiding
confusion . . . is for the plaintiff to request, and the district court to include,
in the remand judgment a statement that attorney's fees may be applied
for within a specified time after the determination of past due benefits by
the Commission.") One district court within the Eleventh Circuit has
adopted a uniform standing order providing guidance on time limitations
normally allowing thirty days, rather than fourteen. See Cuebas v. Astrue,
No. 5:06-CV-144, 2010 WL 1931102, at *4 (M.D. Ga. May 12, 2010).
In light of the uncertainty and marked split of authority surrounding
the issue, and the lack of definitive guidance from the Second Circuit, I
find that if the fourteen-day limit of Rule 54(d) is found to apply, Attorney
Olinsky's delay in submitting the application beyond that period was the
result of excusable neglect, within the meaning of Rule 6(b)(1)(B) of the
Federal Rules of Civil Procedure, and therefore will not deny his
application on the basis of untimeliness. See Rabenda v. Colvin, No. 15CV-3449, 2018 WL 3178159, at *1 (S.D.N.Y. June 28, 2018).
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B.

Merits

Counsel's application is made pursuant to 42 U.S.C. § 406(b), which
provides, in relevant part, as follows:
(b) Fees for representation before court
(1)(A) 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, and the
Commissioner of Social Security may,
notwithstanding the provisions of section 405(i) of
this title, but subject to subsection (d) of this
section, certify the amount of such fee for
payment to such attorney out of, and not in
addition to, the amount of such past-due benefits.
In case of any such judgment, no other fee may
be payable or certified for payment for such
representation except as provided in this
paragraph.
42 U.S.C. § 406(b)(1)(A). As the Supreme Court has noted, section 406(b)
does not supplant contingency fee arrangements, such as that entered
into between plaintiff and her attorney, but does require the court to
engage in an independent analysis to assure that the result dictated by the
contingency arrangement is reasonable given the circumstances of the
particular case at hand. Gisbrecht v. Barnhart, 535 U.S. 789, 807-08
(2002).
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In awarding attorney's fees under section 406(b) where there is an
underlying contingency fee agreement, "a court's primary focus should be
on the reasonableness of the contingency agreement in the context of the
particular case[.]" Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990). That
reasonableness inquiry is informed by several factors, including whether
(1) there is evidence of fraud, (2) the attorney was ineffective or caused
unnecessary delay, and (3) the fee would result in a windfall to the
attorney in relation to the services provided. Schiebel v. Colvin, No. 14CV-0739, 2016 WL 7338410, at *2 (N.D.N.Y. Dec. 19, 2016) (Kahn, J.)
(citing Wells, 907 F.2d at 372) (other citations omitted). Courts "have
appropriately reduced the attorney's recovery based on the character of
the representation and the results the representation achieved." Gisbrecht,
535 U.S. at 808; see also McGuire v. Sullivan, 873 F.2d 974, 983 (7th Cir.
1989). "If the attorney is responsible for delay," or "[i]f benefits are large in
comparison to the amount of time counsel spent on a case, a downward
adjustment is similarly in order." Gisbrecht, 535 U.S. at 808. In short, if
counsel's representation does not warrant recovery of the amount agreed
upon, the court may reduce the award.
In this case, there is no evidence of fraud. Moreover, the efforts of
Attorney Olinsky's firm proved effective in challenging the Acting
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Commissioner's denial of benefits, and there is no suggestion that he or
his firm delayed in his representation of plaintiff.
One focus of the court's evaluation of the pending request is upon
whether the requested fee would result in a windfall to plaintiff's counsel.
In determining whether compensation pursuant to a retainer agreement
would result in a windfall to counsel, the court considers whether (1) the
attorney's efforts were successful for the plaintiff; (2) there is evidence of
the effort expended by the attorney demonstrated through pleadings which
were not boilerplate, but rather arguments involving issues of material fact
and research; and (3) the case was handled efficiently due to the
attorney's experience in handling Social Security cases. Joslyn v.
Barnhart, 389 F. Supp. 2d 454, 456-57 (W.D.N.Y. 2005).
The effective hourly rate associated with Attorney Olinsky's fee
application gives the court brief pause. Although cases addressing
applications made under such fee shifting statutes as 42 U.S.C. § 1988,
for example, are not directly applicable, the rate at which recovery is now
sought is slightly higher than the hourly rates typically applied by this court
to applications filed under those fee-shifting statutes. 6 See, e.g., Stevens

The lodestar method of calculating attorney's fees does not apply in the context
of awarding fees under 42 U.S.C. § 406(b). Gisbrecht, 535 U.S. at 806; see also Wells,
907 F.2d at 371 ("[T]he traditional lodestar method borrowed from the fee shifting

6

13

v. Rite Aid Corp., No. 13-CV-0783, 2016 WL 6652774, at *3 (N.D.N.Y. July
6, 2016) (McAvoy, J.) ("Recent cases in the Northern District have upheld
hourly rates between $250 and $345 for partners; between $165 and $200
for associates; and between $80 and $90 for paralegals." (quotation marks
omitted)). Those types of fee-shifting provisions, however, under which a
losing party can be required to pay attorney's fees to a prevailing party,
are distinct from the statute under which Attorney Olinsky's current
application is made, permitting plaintiffs to enter into contingency fee
agreements with lawyers willing to take their cases. Allowing for such
arrangements that, as is the case in this instance, result in recovery of
fees at effective rates higher than ordinarily sanctioned in fee-shifting
cases, serves an important purpose of encouraging lawyers to agree to
represent Social Security claimants, many of whom are of limited
resources.
With respect to the first and second windfall factors, I have reviewed
plaintiff's twenty-five-page brief to the court, and finds that it was capably
prepared. See Dkt. No. 10. Attorney Olinsky's efforts were undeniably
successful because plaintiff, whose application for benefits was initially

context is not appropriate for evaluating a reasonable fee to be paid by the client in a
Social Security case where there is a contingent fee agreement.").
14

denied, secured a recovery of past due benefits as a result of his counsel's
representation. Addressing the third factor, the court is familiar with and
acknowledges Attorney Olinsky's skill and legal experience in Social
Security cases.
In determining whether the requested fee would result in a windfall,
the court must also examine the effective hourly rate associated with the
application. Here, Attorney Olinsky seeks a total recovery of $25,611.50
for the 45.40 hours of work performed by attorneys and paralegals at his
firm. Dkt. No. 22-1 at 2-3. The contemporaneous time records submitted in
support of the application reveal that 38.7 hours were expended by
attorneys, while 6.7 hours were expended by paralegals and other support
staff. Dkt. No. 22.5 If the court considers the entire section 406(b) request
of $25,611.50, the blended hourly rate for combined counsel paralegal
time would be approximately $564.13 per hour (i.e., $25,611.50 / 45.40
hours). 7 Deducting the cost of 6.7 hours of paralegal time at the reported

Counsel for the Acting Commissioner presumes that the effective hourly rate is
$564.13 and does not comment on how paralegal work should be compensated under
section 406(b). See generally Dkt. No. 24. Courts from other districts have reached
varying conclusions regarding this question. See e.g., Chandler v. Sec'y of Dep't of
Health and Human Serv., 792 F.2d 70, 73 (6th Cir. 1986) (noting that an attorney can
bill for paralegal time but only at paralegal rates under section 406(b)); Smith v. Astrue,
No. 06-883, 2009 WL 649192, at * 3 (C.D. Cal. Mar. 9, 2009) (concluding that fees may
be awarded for paralegal work under section 406(b) when the paralegal performs work
that would otherwise be handled by an attorney and that are ordinarily billed separately
to the client); Yarnevic v. Apfel, 359 F. Supp. 2d 1363, 1365-1366 (N.D. Ga. 2005)
7

15

EAJA hourly rate of $100, see Dkt. No. 17-1 at 2, then the effective hourly
rate for attorney time would increase to approximately $644.48 per hour.
While either hourly rate is no doubt considerable, both nonetheless
fall well within the range of rates recently approved by courts in this district
and elsewhere in the Second Circuit when analyzing applications under 42
U.S.C. § 406(b). See, e.g. Buckley v. Berryhill, No. 15-CV-0341-A, 2018
WL 3368434, at *2-*3 (W.D.N.Y. Jul. 10, 2018) (approving an effective
hourly rate of $1,000); Cieslik v. Berryhill, No. 14-CV-430-A, 2018 WL
446218, at *3 (W.D.N.Y. Jan. 17, 2018) (approving an effective hourly rate
of approximately $792.45); Cole on Behalf of Cole v. Commissioner of
Social Security, 2017 WL 2473174, at *2 (N.D.N.Y. Jun. 8, 2017)
(approving an effective hourly rate of $643.49); Schiebel v. Colvin, No.
6:14-CV-00739, 2016 WL 7338410, at *3 (N.D.N.Y. Dec. 19, 2016)
(accepting a contingency fee agreement with an effective hourly rate of
$975.68); Joslyn, 389 F. Supp.2d at 455-56 (accepting a contingency fee
agreement with an effective hourly rate of $891.61).

(concluding that not including paralegal fees would amount to a windfall to the plaintiff);
Roark v. Barnhart, 221 F.Supp.2d 1020, 1026 (W.D. Mo. 2002) (declining to include
paralegal time, which comprised over half of the time spent in the case, in the section
406(b) award because it had been compensated in the EAJA award).
16

While there is no evidence of fraud, Attorney Olinsky's
representation was effective, and the fee agreement would not result in a
windfall to counsel, I find that the amount now sought is unreasonable in
light of the four month delay between receipt of judgment granting
plaintiff's benefits and the filing of this motion.
III.

SUMMARY AND ORDER
Plaintiff and her counsel, the Olinsky Law Group, entered into a

contingency fee agreement under which she agreed to compensate her
attorneys in the amount of twenty-five percent of past due benefits
awarded to him in the event of a favorable decision. Having reviewed the
pending application for approval of the payment of fees, I conclude that
the amount now sought by plaintiff's counsel pursuant to that arrangement
is reasonable and would not result in a windfall to counsel. Accordingly, it
is hereby
ORDERED as follows:
(1)

Attorney Howard D. Olinsky, Esq. is hereby awarded the sum

of $25,611.50 in accordance with 42 U.S.C. § 406(b), as fees pursuant to
the firm's fee agreement with plaintiff, to be paid from the amount withheld
by the Acting Commissioner from the past due benefits awarded to
plaintiff.
17

(2)

Attorney Howard D. Olinsky, Esq. is hereby directed to refund

to plaintiff the sum of $7,900.00 previously awarded in this matter as
attorney's fees pursuant to EAJA.

Dated:

November 5, 2018
Syracuse, New York

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