Whipple v. Berryhill

Filing 20

DECISION AND ORDER regarding Plaintiff's 17 Motion for Attorney Fees : Attorney Howard Olinsky, Esq. is hereby awarded the sum of $22,051.00 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 Commissioner from the past due benefits awarded to plaintiff. Attorney Howard Olinsky, Esq. is hereby directed to refund to plaintiff the sum of $5,800 previously awarded in this matter as attorney's fees pursuant to EAJA. Signed by Magistrate Judge David E. Peebles on 5/6/2019. (sal )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF NEW YORK
DANIEL E. W.,
Plaintiff,
v.

Civil Action No.
5:17-CV-0271 (DEP)

NANCY A. BERRYHILL, 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.

FOR DEFENDANTS:
HON. GRANT C. JAQUITH
United States Attorney
Northern District of New York
P.O. Box 7198
100 S. Clinton Street
Syracuse, NY 13261-7198
DAVID E. PEEBLES
CHIEF U.S. MAGISTRATE JUDGE

BENIL ABRAHAM, ESQ.
Special Assistant U.S. Attorney

DECISION AND ORDER
Plaintiff Daniel E. W. commenced this action in August of 2017,
seeking judicial review of a determination by the Acting Commissioner of
Social Security ("Commissioner"), in which the Commissioner 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, his counsel now seeks an
order, pursuant to 42 U.S.C. § 406(b), awarding him fees in the amount of
$22,051.50, conditioned upon his return to the plaintiff of $5,800.00
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 Commissioner has not actively opposed, will be
granted.
I.

BACKGROUND
Plaintiff commenced this action on March 8, 2017, pursuant to 42

U.S.C. § 405(g), challenging a final determination by the Commissioner
denying his application for disability insurance benefits under Title II of the
Social Security Act. Dkt. No. 1.1 That denial was the result of an adverse

This matter is before me on consent of the parties, pursuant to 28 U.S.C. §
636(c) and General Order No. 18 of this court. See Dkt. No. 6.
1

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decision, following a hearing, by Administrative Law Judge ("ALJ") Jennifer
Gale Smith, issued on April 4, 2016, and a subsequent decision of the
Social Security Administration Appeals Council denying plaintiff's request
for review of that determination. Dkt. No. 8 at 4-6, 13-25. Following the
submission of the record of the administrative proceedings before the
agency, and briefing and oral argument by the parties, I issued an order
on November 14, 2017, granting plaintiff's motion for judgment on the
pleadings, vacating the final decision of the Commissioner, and directing
that the matter be remanded to the agency pursuant to sentence four of 42
U.S.C. § 405(g). Dkt. Nos. 8, 9, 10, 12. Judgment was subsequently
entered on November 22, 2017, returning the matter to the Commissioner
and closing the case. Dkt. No. 13.
On February 5, 2018, following the court's 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. 14. In his application,
Attorney Olinsky sought recovery for (1) 25.9 hours of attorney work
performed in 2017 and 2018, to be compensated at an hourly rate of
$198.77; and (2) 10.1 hours of paralegal work, to be compensated at a
rate of $100 per hour, in a total amount of $6,158.14. Dkt. Nos. 14-1, 14-4,
14-5. An order was subsequently issued on February 12, 2018, based
3

upon a stipulation of the parties, directing payment of fees under the EAJA
to plaintiff's attorney in the amount of $5,800.00. Dkt. Nos. 15, 16.
As a result of the further administrative proceedings ordered by the
court, following remand, ALJ Jennifer Gale Smith issued a fully favorable
decision on November 26, 2018, finding that the plaintiff was disabled at
all relevant times. Dkt. No. 17-2 at 2-11. The agency subsequently issued
a Notice of Award, dated December 9, 2018, in which it determined that
plaintiff was entitled to past-due Title II benefits, for the period of June
2014 through October 2018. See Dkt. No. 17-4.
On February 6, 2019, approximately two months following the
agency's issuance of the Notice of Award, 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 upon
a favorable decision. See Dkt. Nos. 17, 17-3. In that application, Attorney
Olinsky asserts that plaintiff was awarded past-due benefits of
$112,206.00, and calculates the attorney's fees due him from the plaintiff
under the retainer agreement executed between his firm and the plaintiff at
twenty-five percent of that amount, or $28,051.00. Dkt. No. 17-1 at 2. After
4

deducting $6,000.00, the fee allowance granted by the agency, see Dkt.
No. 17-5 at 2-3, in his request Attorney Olinsky now seeks a total recovery
of $22,051.50 for the 36 hours of work performed by attorneys and
paralegals at his firm. 2 Dkt. No. 17-1 at 2; see also Dkt. No. 17-7. Attorney
Olinsky has agreed to return the $5,800.00 previously paid in connection
with the EAJA application to plaintiff if his current request is granted. Dkt.
No. 17-1 at 2.
The Commissioner, through counsel, does not oppose plaintiff's
application. See Dkt. No. 18. She does, however, dispute Attorney
Olinsky's calculation of past-due benefits awarded to plaintiff, and
consequently the amount comprising the twenty-five percent withheld by
the agency for attorney's fees. Id. at 3-4. In contrast to the $112,206.00
figure cited by Attorney Olinsky, the agency contends that plaintiff was
awarded past-due benefits of $110,053.00. Dkt. No. 18 at 3-4. To explain
the discrepancy, the Commissioner surmises that counsel "improperly
count[ed] months between the date of the Agency's decision to grant
benefits and the date of the Notice of Award." Id. at 3. Based upon the

Counsel represents that attorneys and paralegals collectively logged 36 hours in
representing plaintiff before this court, see Dkt. No. 17-1, but has not provided a
breakdown of this number in his application. Plaintiff's EAJA application, however,
reflects that paralegals spent 10.1 hours in connection with plaintiff's section 405(g)
judicial review proceeding. See Dkt. No. 14-1 at 2.
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5

agency's calculation, the Commissioner contends that the twenty-five
percent withheld to pay attorney's fees was $27,513.25, Dkt. No. 18 at 4,
as opposed to the $28,051.00 asserted by Attorney Olinsky. Dkt. No. 17-1
at 2. The Commissioner thus recommends that Attorney Olinsky receive
no more than the combined fees under section 406(a) ($6,000.00) and
section 406(b) (to total $27,513.25)—"not because of the statutory 25%
cap, but because of the fee agreement"—resulting in an award under
section 406(b) of $21,513.25. Dkt. No. 18 at 4-5. In other words, the
Commissioner recommends that the court award the contractually agreed
twenty-five percent fee of $27,513.25, less the $6,000 awarded under the
EAJA. Id. at 5.
The Commissioner further notes that the parties' differences in
calculation of plaintiff's past-due benefits impacts upon the de facto hourly
rate that would result from the requested fee award. Dkt. No. 18 at 5. In
addition, the Commissioner contends that the rate calculated by Attorney
Olinsky is inflated due to the inclusion of paralegal time, and that the
actual effective hourly rate is $830.63, an amount that some courts have
found to be excessive. 3 Id.

In response to counsel's application, the Acting Commissioner also notes the split of
authority regarding when an application under section 406(b) must be made, but
concedes, and I agree, that Attorney Olinsky's application is timely under any

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6

In reply, Attorney Olinsky notes that he has attempted to verify the
correct calculations regarding plaintiff's past-due benefits, but has been
unable to do so. Dkt. No. 19. Attorney Olinsky thus leaves the proper
calculation to the court's discretion. Id.
II.

DISCUSSION
A.

Calculation of Plaintiff's Past-Due Benefits

Prior to discussing the merits of Attorney Olinsky’s application, I
must first address the discrepancy between the parties' calculation of pastdue benefits used as a basis for determining the twenty-five percent
withheld for attorney's fees, based upon the December 9, 2018 Notice of
Award.
The Social Security Administration's ("SSA") Program Operations
Manual System ("POMS") is a primary authority used by SSA employees
for the processing of claims for disability benefits.4 Simonsen v. Bremby,
No. 15-CV-1399, 2015 WL 9451031, at *5 (D. Conn. Dec. 23, 2015). The
POMS is thus instructive in assisting the court to calculate the past-due

prevailing view. Dkt. No. 18 at 6-8.
As the Second Circuit has explained, "The POMS is a set of guidelines through
which the Social Security Administration further construe[s] the statutes governing its
operations. We have held that POMS guidelines are entitled to substantial deference,
and will not be disturbed as long as they are reasonable and consistent with the
statute." Lopes v. Dep't of Soc. Servs., 696 F.3d 180, 186 (2d Cir. 2012) (alteration in
original) (citations and internal quotation marks omitted).

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benefits indicated in plaintiff's Notice of Award. See Lopes, 696 F.3d at
186. The twenty-five percent amount withheld for attorney's fees is derived
from a claimant's "past-due benefits," which accrue on the date of
entitlement and end the month prior to the month of effectuation. POMS §
GN 3920.30(A), (B); see also Culbertson v. Berryhill, 139 S. Ct. 517, 520
(2019) ("A claimant's application for Title II benefits can result in payments
of past-due benefits—i.e., benefits that accrued before a favorable
decision[.]"); 20 C.F.R. § 404.1703. The month of effectuation is defined
as the calendar month that the agency issues a favorable decision. POMS
§ GN 03920.30(D). Thus, the months between issuance of the favorable
decision and the Notice of Award, if any, are not included in the calculation
of "past-due benefits," and therefore may not be used in calculating a
section 406(b) attorney’s fee. See id.; see also 20 C.F.R. § 404.1703.
The agency issued its fully favorable decision in this case in
November 2018, making November the month of effectuation. See POMS
§ GN 03920.30(D); Dkt. No. 17-2. December 2018, the month in which the
Notice of Award was actually issued by the agency, is therefore not
included in the calculation of past-due benefits for the purpose of
determining the twenty-five percent withheld for attorney’s fees. See
POMS § GN 03920.30(D). Thus, plaintiff’s past due benefits are calculated
8

beginning in June 2014 (the month of entitlement) and ending in October
2018 (the month prior to the month of effectuation). See id. § 03920.30D;
Dkt. No. 17-4. Considering these parameters, I find that the agency's
calculations of (1) $110,053.005 for plaintiff’s past due benefits, and (2)
$27,513.25 for the amount withheld to pay attorney's fees, are correct.
See Dkt. No. 18 at 3-4.
While I find the Commissioner's calculations to be correct, I
nonetheless will consider the specific fee amount requested by plaintiff,
$22,051.50, in addressing the reasonableness of the fee. As is set forth
fully below, section 406(b) allows a claimant's attorney to recover up to
twenty-five percent of the claimant's past-due benefits. 42 U.S.C. § 406(b).
In its recent decision in Culbertson v. Berryhill, 139 S. Ct. 517, 522 (2019),
the Supreme Court explained that "the [twenty-five percent] cap applies
only to fees for representation before the court, not the agency." The
statutory text of sections 406(a) and 406(b) "contain[] separate caps on
fees for each type of representation, and authorizes two pools of withheld

This amount was calculated using the monthly benefits set forth in the
December 19, 2018 Notice of Award and in accordance with the POMS guidance
discussed herein. Specifically, the following totals $110,053.00: monthly benefits of
$2,035 from June 2014 to November 2014; $2,069 from December 2014 to November
2016; $2,075 from December 2016 to November 2017; and $2,117 from December
2017 to October 2018. See Dkt. No. 17-4 at 2. In determining a total amount of pastdue benefits, the agency rounds down to the nearest dollar when calculating past-due
monthly benefits. See id.
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benefits." Id. at 523. Thus, in seeking attorney's fees in the present
application, Attorney Olinsky is under no obligation to subtract the fees he
recovered at the administrative level from the twenty-five percent withheld
from plaintiff's past-due benefits under section 406(b). See id.
Attorney Olinsky presumably derived his request for $22,051.00 in
attorney's fees by subtracting the $6,000.00 he received in fees at the
administrative level from the miscalculated twenty-five percent fee of
$28,051.00. See Dkt. No. 17-1 at 2. Thus, even though Attorney Olinsky
miscalculated plaintiff's past-due benefits, and subsequently the twentyfive percent figure, his requested fee of $22,051.00 nevertheless does not
exceed the twenty-five percent allowed under the statute in this case—
$27,513.25—nor does it exceed the twenty-five percent contingency fee
agreed upon in plaintiff and Attorney Olinsky's fee agreement. See Dkt.
No. 17-3. Thus, despite Attorney Olinsky's slight miscalculation of plaintiff's
past-due benefits, I find no compelling reason to lower the fee sought by
plaintiff to the amount of $21,513.25 as suggested by the Commissioner.
See Dkt. No. 18 at 4-5 (recommending that Attorney Olinsky receive no
more than the combined awards from Section 406(a) and 406(b)). As
such, I will proceed by analyzing the reasonableness of the $22,051.00
fee as requested by Attorney Olinsky.
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B.

Merits of Attorney Olinsky's Fee Application

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 his 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).
11

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.)
(quoting Kazanjian v. Astrue, No. 09-CV-3678, 2011 WL 2847439, at *1
(E.D.N.Y. July 15, 2011). Courts "have appropriately reduced the
attorney's recovery based on the character of the representation and the
results the representative 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 the benefits are large in comparison to the
amount of time counsel spent on the 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
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Attorney Olinsky proved effective in challenging the Commissioner's denial
of benefits, and there is no suggestion that he 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).
With respect to the first and second windfall factors, I have reviewed
plaintiff's brief to the court, and find that it was capably prepared. See Dkt.
No. 9. Attorney Olinsky's efforts were undeniably successful because
plaintiff, whose application for benefits was initially 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.
13

In determining whether the requested fee would result in a windfall,
the court must also examine the effective hourly rate associated with the
application. The effective hourly rate associated with Attorney Olinksy's
fee application gives the court brief pause. Here, Attorney Olinsky seeks a
total recovery of $22,051.50 for the 36 hours of work performed by
attorneys and paralegals at his firm, resulting in a blended effective hourly
rate of $612.54 per hour. As was noted above, the contemporaneous time
records submitted in support of the application do not differentiate
between work performed by attorneys and that of paralegals.6 Dkt. No. 171 at 3 (citing Dkt. No. 17-7). However, in conjunction with his application
for fees under the EAJA, Attorney Olinsky submitted separate time records
for time expended by paralegals, totaling 10.1 hours, which I will consider
for the present application. Dkt. No 14-5. Deducting the cost of 10.1 hours
of paralegal time at the reported EAJA hourly rate of $100, see Dkt. No.
14-1 at 2, I calculate the effective hourly rate for attorney time to increase
to approximately $812.41 per hour.

Attorney Olinsky has been cautioned that he "would be well-advised in future
applications to specifically identify paralegals and their hours worked so as not to
burden the Court with the task." Wood-Callipari v. Berryhill, No. 15-CV-743, 2018 WL
5999941, at *2 n.4 (N.D.N.Y. Nov. 15, 2018) (Mordue, J.)
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14

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. See, e.g., Stevens v. Rite Aid Corp., No. 13CV-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." (citation and internal 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.

15

While either hourly rate of $612.54 or $812.41 is far from modest,
both nonetheless fall within the range of rates approved by courts in this
district and elsewhere when analyzing applications under 42 U.S.C. §
406(b). See, e.g., Wood-Callipari, 2018 WL 5999941, at *2 (approving an
effective hourly rate of $854.32); 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, 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. Comm'r of Soc.
Sec., 2017 WL 2473174, at *2 (N.D.N.Y. Jun. 8, 2017) (approving an
effective hourly rate of $643.49); Schiebel, 2016 WL 7338410, at *3
(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).
In sum, while the attorney-only hourly rate of $812.41 is approaching
windfall territory, considering that there is no evidence of fraud and
Attorney Olinsky's representation was effective, I find that the amount now
sought is reasonable under the circumstances.

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III.

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

contingency fee agreement under which plaintiff agreed to compensate
Attorney Olinsky 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 Olinsky, Esq. is hereby awarded the sum of

$22,051.00 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 Commissioner from the past due benefits awarded to plaintiff.
(2)

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

plaintiff the sum of $5,800 previously awarded in this matter as attorney's
fees pursuant to EAJA.

Dated:

May 6, 2019
Syracuse, New York
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