Woodrow v. Commissioner of Social Security
Filing
29
MEMORANDUM-DECISION AND ORDER granting 24 Motion for Attorney Fees: The Court hereby ORDERS that Plaintiff's motion for attorneys' fees is GRANTED; and the Court further ORDERS that Attorney Lawrence D. Hasseler, Esq., is awarded the su m of $4,975.75 as fees pursuant to 42 U.S.C. § 406(b), to be paid from the amount withheld by the Commissioner of Social Security from the past due benefits awarded to Plaintiff; and the Court further ORDERS that Attorney Lawrence D. Has seler, Esq. is directed to refund to Plaintiff the sum of $1,143.23 that was previously awarded (and received) as attorneys' fees pursuant to the EAJA; and the Court further ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order on the parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 10/21/2019. (ban)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
RUSSELL W.,
Plaintiff,
vs.
7:16-CV-00008
(MAD)
COMMISSIONER OF SOCIAL SECURITY,
Defendant.
____________________________________________
APPEARANCES:
OF COUNSEL:
CONBOY, MCKAY, BACHMAN &
KENDALL, LLP
407 Sherman Street
Watertown, New York 13601
Attorneys for Plaintiff
LAWRENCE D. HASSELER, ESQ.
SOCIAL SECURITY ADMINISTRATION
Office of Regional General Counsel
Region II
26 Federal Plaza, Room 3904
New York, New York 10278
Attorneys for Defendant
BENIL ABRAHAM, AUSA
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
Lawrence D. Hasseler, counsel to Plaintiff Russell W., filed this Motion for Attorney's
Fees, seeking fees in the amount of $3,832.52 pursuant to 42 U.S.C. § 406(b) on February 20,
2019. Dkt. No. 24-2 at 4. The Commissioner of Social Security (hereinafter "Commissioner")
has submitted a letter in opposition. Dkt. No. 27. Upon review, the Court denies Plaintiff's
motion as untimely.
II. BACKGROUND
Plaintiff applied for Social Security disability benefits on February 23, 2011. Dkt. No. 242 at 2. Plaintiff's application was subsequently denied after a hearing before an Administrative
Law Judge ("ALJ") at which Plaintiff was represented by counsel. See id. Plaintiff appealed the
judgment to the Appeals Council, which denied the request for review. Id. Mr. Hasseler
represented Plaintiff in his appeal to this Court, which reversed the Commissioner's decision and
remanded the case for further proceedings. Id.
The parties subsequently stipulated to award Mr. Hasseler $4,975.75 in attorney's fees and
expenses pursuant to the Equal Access to Justice Act ("EAJA") for his work at the district court
level. Id. Of the amount awarded, Mr. Hasseler only received $1,148.23, as Plaintiff had unpaid
obligations due to the New York State Department of Taxation and Finance that were deducted
from the EAJA fees that were to be paid to Mr. Hasseler. Dkt. No. 24-6; Dkt. No. 24-2.
On remand, the ALJ found Plaintiff disabled within the meaning of the Social Security
Act. See Dkt. No. 24-2 at 2. By Notice of Award dated April 8, 2018, the Commissioner granted
Plaintiff disability benefits and withheld $13,175.25, twenty-five percent of the past-due benefits
awarded, pending a decision on any application for fees by Plaintiff's attorney. Id. $5,850.00 was
paid to Attorney Molly E. Clough, Esq., who "handled the administrative proceedings before the
Commissioner." Id. at 2. $7,325.25 was withheld for potential fees for Mr. Hasseler. Id. On
February 20, 2019, ten months after the Notice of Award was issued, Mr. Hasseler filed this
motion pursuant to 42 U.S.C. § 406(b), seeking the remaining $3,832.52 of the $4,975.75
withheld from his fees. See Dkt. No. 24-2 at 3-4.
III. DISCUSSION
Pursuant to 42 U.S.C. § 406(b), a court may award reasonable attorney's fees to a
successful plaintiff's attorney, provided that those fees do not exceed twenty-five percent of the
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past-due benefits awarded. See Gisbrecht, 535 U.S. at 807; see also Wells v. Sullivan, 907 F.2d
367, 370 (2d Cir. 1990). "[B]ecause a successful social security claimant evaluates and pays his
own attorney, a court's primary focus should be on the reasonableness of the contingency
agreement in the context of the particular case." Wells, 907 F.2d at 371. Section 406(b) does not
discredit any contingent-fee agreement between the claimant and attorney, but rather calls for
judicial review of such arrangements to ensure that it yields reasonable results. See Gisbrecht,
535 U.S. at 807. Moreover, where fees are awarded under both § 406(b) and the EAJA, the lesser
of the two amounts must be refunded to the claimant. See id. at 796.
To determine the reasonableness of the fee, the court must: (1) "give due deference to the
intent of the parties"; (2) "determine whether the contingency percentage is within the 25% cap";
(3) "consider whether there has been fraud or overreaching in making the agreement"; and (4)
consider "whether the requested amount is so large as to be a windfall to the attorney." Wells,
907 F.2d at 372.
Until very recently, the law in the Second Circuit was unsettled as to when a motion for
attorneys' fees must be filed under Section 406(b). Some courts applied Rule 54(d)(2)(B)'s
fourteen-day filing period, while others applied the "reasonable" period pursuant to Rule 60(b).
See Sinkler v. Berryhill, 305 F. Supp. 3d 448, 452 (W.D.N.Y. 2018) (citing cases). On August 2,
2019, the Second Circuit held that motions for attorneys' fees under 42 U.S.C. § 406(b) are
subject to Rule 54(d)(2)(B)'s fourteen-day filing period. See Sinkler v. Berryhill, 932 F.3d 83, 85
(2d Cir. 2019). In its ruling, the Second Circuit also held that the fourteen-day filing period is
subject to equitable tolling. See id. "Where, as here, a Social Security claimant secures a
judgment reversing a denial of benefits and remanding for further proceedings, the fourteen-day
filing period is tolled until the claimant receives notice of the amount of any benefits award. That
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is because the benefits award amount is necessary to identify the maximum attorney's fee that
may be awarded under § 406(b)." Id.
In his supplemental affidavit in support of an award of attorneys' fees, Mr. Hasseler
explains that he did not initially receive a copy of the Notice of Award dated April 5, 2018. See
Dkt. No. 28 at ¶ 4. Mr. Hasseler claims that the "first notice [he] received to the effect that there
were retroactive benefits being withheld for which [he] could apply to this Court for approval was
a letter from the Social Security Administration to [him] dated November 24, 2018 and received
by [his] office on November 26, 2018." Id. at ¶ 5. Mr. Hasseler claims that he did not receive a
copy of the Notice of Award until he requested a copy from Molly Clough, the attorney who
represented Plaintiff before the Social Security Administration on remand. See id. at ¶ 4.
Presumably, Mr. Hasseler did not receive a copy of the Notice of Award because he did
not represent Plaintiff before the Social Security Administration upon remand. Had Mr. Hasseler
filed his motion for attorney's fees within fourteen days of receipt of the November 24, 2018 letter
from the Social Security Administration, the Court would be presented with the task of
determining the proper interpretation of Sinkler. Under a narrow reading of Sinkler, such a
motion may still be untimely because the Second Circuit specifically held that the fourteen-day
filing period starts to run "when the claimant receives notice of the benefits calculation." Sinkler,
932 F.3d at 91 (emphasis added). The Court doubts that such a rigid interpretation would be
warranted or was intended by the Circuit. Indeed, earlier in its decision, the Second Circuit
indicated that the fourteen-day period begins to run "[o]nce counsel receives notice of the benefits
award[.]" Id. at 88 (emphasis added). Presumably, notice is mailed to counsel of record and the
claimant at the same time. Mr. Hasseler, however, was not counsel of record before the
Administration and, therefore, was not immediately notified.
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In any event, the Court does not need to decide the proper interpretation of Sinkler at this
time. The Court does not doubt that Mr. Hasseler first learned of the Notice of Award from the
Administration's November 24, 2018 letter sent to him. Given the unsettled nature of the law in
the Second Circuit at the time he received the Notice of Award from the Administration, the
Court believes that it was unwise of counsel to wait nearly three months to file his renewed
application for attorneys' fees. Nevertheless, it is clear that even following the district court's
ruling in Sinkler, there was considerable disagreement among the district courts in the Second
Circuit concerning the proper timeline for filing Section 406(b) applications. See Wurzer v.
Commissioner of Soc. Sec'y, No. 15-cv-6528, 2019 3821897, *3 (W.D.N.Y. Aug. 14, 2019).
Courts had regularly held that four months or less was a "reasonable time" within which to file a
Section 406(b) motion following a final award of benefits. See, e.g., Jenis v. Colvin, No. 12-cv0600, 2016 WL 6246423, *1 n.1 (W.D.N.Y. Oct. 26, 2016) (finding that a Section 406(b) motion
filed four months after receipt of notice was filed "within a reasonable time").
Accordingly, based on the particular circumstances surrounding the instant application as
discussed above, the Court declines to deny Plaintiff's motion on the basis of untimeliness. See
Wurzer, 2019 WL 3821897, at *3. Counsel is now on notice, however, that future applications
for attorneys' fees under Section 406(b) must be submitted within fourteen days upon receipt of
notice of the amount of any benefits award.
As noted above, Plaintiff's counsel asks the Court to authorize an award of attorneys' fees
of $3,827.52 pursuant to 42 U.S.C. § 406(b). See Dkt. No. 24-1 at ¶ 6. Counsel states in his
motion that he was previously awarded fees pursuant to the EAJA totaling $4,975.75, however,
he received only $1,143.23 of the fee because the remaining $3,827.52 was subject to offset by
the New York State Department of Taxation and Finance. See id. at ¶¶ 3-4. Although counsel is
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seeking $3,827.52 in his present application to account for the remaining fees due from his award
under the EAJA, he fails to account for the fact that when the Court awards fees pursuant to
Section 406(b), any attorneys' fees awarded under the EAJA must be remitted to Plaintiff. As
such, an award of $3,827.52 would not result in the desired award of $4,975.75.
In the EAJA attorneys' fees application, counsel indicated that they spent a total of 25.9
attorney hours on the matter before this Court. Awarding Plaintiff's counsel the total amount
sought ($4,975.75) would result in a de facto hourly rate of $192.11. This hourly rate is well
within the range of what courts have generally considered not to be a windfall in the Northern
District of New York. See Tanner v. Commissioner of Soc. Sec'y, No. 5:15-cv-577, 2018 WL
6521585, *2 (N.D.N.Y. Dec. 12, 2018) (finding that a total award of $8,156.50, representing an
hourly rate of $339.15, was reasonable); Rodriguez v. Berryhill, No. 5:15-cv-1000, 2017 WL
2929470, *3 (N.D.N.Y. July 10, 2017) (holding that an effective hourly rate of $400.00, although
high, was not unreasonable) (citing cases). Having found that the amount previously awarded
under the EAJA and now sought under Section 406(b) is reasonable and not a windfall for
counsel, the Court hereby grants attorneys' fees in the amount of $4,975.75.
IV. CONCLUSION
After carefully 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 Plaintiff's motion for attorneys' fees is GRANTED; and the Court further
ORDERS that Attorney Lawrence D. Hasseler, Esq., is awarded the sum of $4,975.75 as
fees pursuant to 42 U.S.C. § 406(b), to be paid from the amount withheld by the Commissioner of
Social Security from the past due benefits awarded to Plaintiff; and the Court further
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ORDERS that Attorney Lawrence D. Hasseler, Esq. is directed to refund to Plaintiff the
sum of $1,143.23 that was previously awarded (and received) as attorneys' fees pursuant to the
EAJA; and the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision
and Order on the parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: October 21, 2019
Albany, New York
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