Wolf v. Berryhill
DECISION AND ORDER: that Mr. Olinsky's Dkt. No. 19 motion for an award of attorney's fees pursuant to 42 U.S.C. 406(b) is Granted in the amount of $26,690.00; that the amount of $26,690.00 in attorney's fees pursuant to 42 U.S.C. 406(b) shall be paid to Mr. Olinsky out of the sums that Defendant has withheld from Plaintiff's past-due benefits; that, upon his receipt of attorney's fees in the amount of $26,690.00, pursuant to 42 U.S. C. 406(b), Mr. Olinsky shall immediately refund to Plaintiff the previously awarded EAJA sum of $5,400.00. This case remains closed. Signed by Magistrate Judge Therese Wiley Dancks on 10/12/2020. (hmr)
Case 5:17-cv-00104-TWD Document 24 Filed 10/12/20 Page 1 of 8
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
OLINSKY LAW GROUP
Attorney for Plaintiff
250 South Clinton Street
Syracuse, New York 13202
HOWARD D. OLINSKY, ESQ.
U.S. SOCIAL SECURITY ADMIN.
OFFICE OF REG’L GEN. COUNSEL
Attorney for Defendant
26 Federal Plaza - Room 3904
New York, New York 10278
ELIZABETH D. ROTHSTEIN, ESQ.
KAREN T. CALLAHAN, ESQ.
THÉRÈSE WILEY DANCKS, United States Magistrate Judge
DECISION AND ORDER
Currently before the Court is Plaintiff’s counsel’s (“Mr. Olinsky”) motion for attorney’s
fees pursuant to 42 U.S.C. § 406(b)(1). (Dkt. No. 19.)
Mr. Olinsky represented Plaintiff in a civil action before this Court, seeking judicial
review of the Commissioner of Social Security’s (“Defendant” or “Commissioner”) denial of
Plaintiff’s application for disability benefits under the Social Security Act. On July 17, 2017,
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Mr. Olinsky filed a brief in support of remand arguing substantial evidence did not support the
Administrative Law Judge’s (“ALJ”) decision. (Dkt. No. 11.) Rather than respond, Defendant
stipulated to remand of this action for further proceedings. (Dkt. Nos. 12, 13.) Mr. Olinsky
continued to represent Plaintiff post-remand. Upon remand, on October 25, 2019, an ALJ issued
a fully favorable decision granting Plaintiff disability insurance benefits from April 2, 2012,
onward. (Dkt. No. 19-1 at ¶ 3.)
On March 14, 2020, the Commissioner issued a Notice of Award indicating the total past
due benefits were $158,760.00. Id. at ¶ 5. Mr. Olinsky submitted a fee petition to the ALJ to
collect $10,000.00 of this total for work done at the agency level. Id. at ¶ 8. However, to date,
the ALJ has not yet approved this fee request. In a Stipulation and Order dated May 10, 2018,
Plaintiff was also awarded $5,400.00 in attorney’s fees under the Equal Access to Justice Act
(“EAJA”), 28 U.S.C. § 2412. (Dkt. No. 18.)1
Mr. Olinsky now seeks attorney’s fees in the amount of $26,690.00, to be paid to him
pursuant to a contingency fee agreement he had with Plaintiff. Defendant responded, expressing
no opinion as to the propriety of his fee request. (Dkt. No. 20.)
Under 42 U.S.C. § 406, a prevailing claimant’s fees are payable out of the benefits the
claimant recovers, and such fees may not exceed 25 percent of past-due benefits. See Gisbrecht
v. Barnhart, 535 U.S. 789, 792 (2002). “[Section] 406(a) governs fees for representation in
administrative proceedings; § 406(b) controls fees for representation in court.” Id. at 794 (citing
20 CFR § 404.1728(a)). For representation of a claimant at the administrative level, an attorney
may file a fee petition. See Gisbrecht, 535 U.S. at 794 (citing 42 U.S.C. § 406(a)). In response
Plaintiff has stated he will refund the $5,400.00 EAJA fee upon receipt of an award of
attorney’s fees in excess of this amount. (Dkt. No. 19-1 at ¶ 9.)
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to such a petition, “the agency may allow fees ‘for services performed in connection with any
claim before’ it; [however,] if a determination favorable to the benefits claimant has been made, .
. . the Commissioner of Social Security ‘shall . . . fix . . . a reasonable fee’ for an attorney’s
services.” See Gisbrecht, 535 U.S. at 794 (quoting 42 U.S.C. § 406(a)(1)).
With respect to proceedings before a court, the statute provides “for fees on rendition of
‘a judgment favorable to a claimant.’” See Gisbrecht, 535 U.S. at 794 (quoting 42 U.S.C.
§ 406(b)(1)(A)). As part of its judgment, a court may allow “a reasonable fee . . . not in excess
of 25 percent of the total of the past-due benefits” awarded to the claimant. 42 U.S.C.
§ 406(b)(1)(A). This fee is payable “out of, and not in addition to, the amount of [the] past-due
In addition, the EAJA “effectively increases the portion of past-due benefits the
successful Social Security claimant may pocket.” Gisbrecht, 535 U.S. at 796 (citation omitted).
Pursuant to the EAJA, a court may award a claimant “fees payable by the United States if [its]
position in the litigation was not ‘substantially justified.’” Id. (citation omitted). “EAJA fees are
determined not by a percent of the amount recovered, but by the ‘time expended’ and the
attorney’s ‘[hourly] rate,’ § 2412(d)(1)(B), capped in the mine run of cases at $125 per hour,
§ 2412(d)(2)(A).” Id. (citation and footnote omitted).
A court may award fees under both the EAJA and Section 406(b), but the claimant’s
counsel must “‘refun[d] to the claimant the amount of the smaller fee.’” Id. (citation omitted).
“‘Thus, an EAJA award offsets an award under Section 406(b), so that the [amount of the total
past-due benefits the claimant actually receives] will be increased by the . . . EAJA award up to
the point the claimant receives 100 percent of the past-due benefits.’” Id. (quotation omitted).
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In Gisbrecht, the Supreme Court held “§ 406(b) does not displace contingent-fee
agreements as the primary means by which fees are set for successfully representing Social
Security benefits claimants in court.” Gisbrecht, 535 U.S. at 807. “Rather, § 406(b) calls for
court review of such arrangements as an independent check, to assure that they yield reasonable
results in particular cases.” Id. (footnote omitted).
The Gisbrecht Court noted “[c]ourts 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 representation
achieved.” Id. at 808 (citations omitted). “If the benefits are large in comparison to the amount
of time counsel spent on the case, a downward adjustment is . . . in order.” Id. (citing Rodriquez
v. Bowen, 865 F.2d 739, 747 (6th Cir. 1989) (reviewing court should disallow “windfalls for
lawyers”)). “In this regard, the court may require the claimant’s attorney to submit . . . 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.” Gisbrecht, 535 U.S. at 808 (citing Rodriquez, 865
F.2d at 741).
Likewise, in Wells v. Sullivan, 907 F.2d 367 (2d Cir. 1990), the Second Circuit held
“§ 406(b) does not invalidate all contingent fee arrangements it merely sets their upper limit and
because such arrangements effectuate congress’s objective of securing adequate representation
for social security claimants, a requested fee based on a contingent fee arrangement should be
enforced unless the court finds it to be unreasonable.” Id. at 370. The court noted that, “because
§ 406(b) requires the district court to review the reasonableness of any requested fee, contingent
fee agreements cannot simply be adopted as per se reasonable in all social security cases.” Id.
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(citations omitted). However, the court recognized “that a contingency agreement is the freely
negotiated expression both of a claimant’s willingness to pay more than a particular hourly rate
to secure effective representation, and of an attorney’s willingness to take the case despite the
risk of nonpayment.” Id. (citing Rodriguez, 865 F.2d at 746) (other citations omitted).
Furthermore, the court stated it “ought normally to give the same deference to these agreements
as [it] would to any contract embodying the intent of the parties.” Wells, 907 F.2d. at 370
Thus, in determining the reasonableness of a contingent fee agreement, courts should
consider “whether the contingency percentage is within the 25% cap; . . . whether there has been
fraud or overreaching in making the agreement, and whether the requested amount is so large as
to be a windfall to the attorney.” Id. (citations omitted). “Should the district court find that the
agreement provides an unreasonable fee under the circumstances, the court may reduce the fee
provided it states the reasons for and the amounts of the deductions.” Id. (citation omitted).
Finally, “[a]lthough the reviewing court may not use the lodestar method to calculate the
fee due, a record of the number of hours spent on the case in federal court may assist a court in
determining whether a given fee is reasonable.” Benton v. Comm’r of Soc. Sec., No. 03 CV
3154, 2007 WL 2027320, *2 (E.D.N.Y. May 17, 2007) (citation omitted).
In this case, to determine whether the fee award Mr. Olinsky seeks under Section 406(b)
is reasonable, the Court will begin by looking at the contingency-fee agreement between Plaintiff
and his counsel. This agreement provides, in pertinent part, that, if she receives a favorable
decision in federal court, Mr. Olinsky will seek an attorney fee award of 25% of the past due
benefits. (Dkt. No. 19-3.) There is no evidence this agreement was the result of fraud or
overreaching. Moreover, the agreement seeks no more than the maximum allowed under the
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relevant statute. Thus, the only issue the Court need address is whether the amount of fees Mr.
Olinsky seeks would result in a windfall to him.
Mr. Olinsky’s record of the time he expended in federal court and the tasks he performed
related to the federal court litigation is one factor the Court may consider in determining
reasonableness. Here, Mr. Olinsky’s records indicate his office spent a total of 32.4 hours of
work related to this case. (Dkt. No. 19-5.) Of that time, 26.4 are attorney hours and 6 are
paralegal hours. Id. Here, Mr. Olinsky seeks an award of $26,690.00 in fees, which is based on
twenty-five percent of Plaintiff’s past-due benefits the Social Security Administration has
withheld minus what he seeks at the administrative level. Mr. Olinksy suggests the Court
assume a $100.00 rate for paralegal. (Dkt. No. 19-1 at ¶ 11.) In other words, of the $26,690.00
Mr. Olinsky seeks, $600.00 of that is for paralegal work and $26,090.00 is for attorney work. If
the Court divides the total attorney fee sought, $26,090.00, by the 26.4 attorney hours he
expended for work before this Court, the effective hourly rate would be $988.26.2
To determine whether fees in this amount would result in a windfall to Mr. Olinsky, the
Court must consider the following factors:
“(1) whether the attorney’s efforts were particularly successful for
the plaintiff, (2) whether there is evidence of the effort expended
by the attorney demonstrated through pleadings which were not
boilerplate and through arguments which involved both real issues
of material fact and required legal research, and finally, ... (3)
whether the case was handled efficiently due to the attorney’s
experience in handling social security cases.”
Mr. Olinsky suggested the effective rate would be $1,010.98, but that number divides the
attorney hours by the total fee and does not account for the $600.00 in paralegal work.
Nevertheless, the distinction is irrelevant.
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Fura v. Astrue, No. 08–CV–0689, 2011 WL 1541307, *3 (N.D.N.Y. Apr. 21, 2011) (quoting
Porter v. Comm’r of Soc. Sec., 2009 WL 2045688 (N.D.N.Y. July 10, 2009)) (other citation
A review of the record demonstrates Mr. Olinsky’s efforts were particularly successful
for Plaintiff and it appears he was able to handle this case efficiently because of his experience
with Social Security cases. Thus, the Court concludes that, in light of the total amount of time
Mr. Olinsky expended on this case at both the administrative and district court level, his
expertise in handling Social Security cases, the complexity of the issues in this case, the success
he achieved in this case, and the inherent uncertainty of non-payment that is always involved
when entering into a contingency fee agreement, as well as the lack of any evidence of fraud or
overreaching in this case, an award of fees in the amount of $26,690.00 pursuant to § 406(b)
would be reasonable for the type and amount of work he expended before this Court.
After reviewing the entire record in this matter, the parties’ submissions and the
applicable law, and for the above-stated reasons, the Court hereby
ORDERS that Mr. Olinsky’s motion for an award of attorney’s fees pursuant to 42
U.S.C. § 406(b) is GRANTED in the amount of $26,690.00; and the Court further
ORDERS that the amount of $26,690.00 in attorney’s fees pursuant to 42 U.S.C.
§ 406(b) shall be paid to Mr. Olinsky out of the sums that Defendant has withheld from
Plaintiff’s past-due benefits; and the Court further
ORDERS that, upon his receipt of attorney’s fees in the amount of $26,690.00, pursuant
to 42 U.S.C. § 406(b), Mr. Olinsky shall immediately refund to Plaintiff the previously awarded
EAJA sum of $5,400.00.
Case 5:17-cv-00104-TWD Document 24 Filed 10/12/20 Page 8 of 8
This case remains closed.
Dated: October 12, 2020
Syracuse, New York
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