Velez v. Commissioner of Social Security
OPINION AND ORDER re: 37 MOTION for Attorney Fees . filed by Jackeline Velez. The motion for attorney's fees under 42 U.S.C. § 406(b) is GRANTED, and Mr. Osborn is awarded $3,400 in attorney's fees. The Commission er is instructed to disburse this amount to Daniel A. Osborn of Osborn Law, P.C. Upon receipt of this award, Mr. Osborn must promptly refund to Plaintiff $836.40, which represents the EAJA fees that counsel already has received. (Signed by Magistrate Judge Andrew E. Krause on 6/7/2021) (rro)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
18 Civ. 9754 (AEK)
OPINION AND ORDER
COMMISSIONER OF SOCIAL SECURITY,
THE HONORABLE ANDREW E. KRAUSE, U.S.M.J. 1
Before the Court is Plaintiff Jackeline Velez’s motion for attorney’s fees pursuant to 42
U.S.C. § 406(b). ECF Nos. 37-39. 2 For the reasons set forth below, the motion is GRANTED.
Plaintiff filed an application for disability insurance benefits on September 28, 2014 and
filed an application for supplemental security income on March 1, 2017. Administrative Record
dated March 14, 2019, Dkt. No. 25-2, at 10. On September 18, 2017, an administrative law
judge (“ALJ”) determined that Plaintiff was not entitled to benefits. Id. at 7-9. The Appeals
Council denied Plaintiff’s request for review of the ALJ decision on August 23, 2018. Id. at 1-4.
Thereafter, in October 2018, Plaintiff retained Daniel A. Osborn of Osborn Law, P.C. to litigate
On December 17, 2018, the parties consented to proceed before the Honorable Lisa
Margaret Smith for all purposes in accordance with 28 U.S.C. § 636(c). ECF No. 23. The
matter was reassigned to the undersigned on December 9, 2020.
The motion was originally filed at ECF No. 34 on June 17, 2020, but the filing was
rejected on the Court’s ECF system on July 27, 2020. That has created the unusual situation
where Defendant’s response to the motion (ECF No. 35, dated June 24, 2020) and Plaintiff’s
reply in further support of the motion (ECF No. 36, dated June 29, 2020) appear on the docket
before the re-filed motion, memorandum of law, and supporting declaration (ECF Nos. 37-39,
filed July 28, 2020).
her claim in federal court. Declaration of Daniel A. Osborn (“Osborn Decl.”) Ex. 1 (ECF No.
39-1) (“Attorney Fee Agreement” or the “Agreement”). Pursuant to the Agreement, Plaintiff
agreed to pay Mr. Osborn, for his work in federal court, the greater of 25 percent of any past-due
benefits resulting from her claim or such amount as Mr. Osborn was able to obtain pursuant to
the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Osborn Decl. Ex. 1. The
Agreement provided that if Mr. Osborn was ultimately granted fees pursuant to 42 U.S.C. §
406(b), he would refund the smaller of the either the 406(b) fees or the EAJA fees to Plaintiff or
her family. Id.
Plaintiff filed her complaint on October 23, 2018. ECF No. 1. After Defendant filed the
administrative record on March 14, 2019, ECF No. 25, but before Plaintiff filed her motion for
judgment on the pleadings, the parties submitted a proposed stipulation and order of remand,
ECF No. 29, which was so ordered by the Court on July 30, 2019, ECF No. 30. On September
10, 2019, the Court signed a stipulation and order approving the award of EAJA fees and
expenses in the amount of $836.40. ECF No. 33.
Upon remand to the Social Security Administration (“SSA”), a second hearing was held
before an ALJ, and the ALJ ultimately issued a decision on March 31, 2020 finding Plaintiff to
be disabled and entitled to benefits. Osborn Decl. ¶ 10 & Ex. 4. The SSA issued a notice of
award (“NOA”) to Plaintiff on May 18, 2020, setting forth the benefits she would be receiving.
Id. ¶ 11 & Ex. 5. The NOA indicated that the SSA withheld 25 percent of the past-due
benefits—a total of $6,806.70—to pay fees to an authorized representative. Id. ¶ 12 & Ex. 5 at 4.
The SSA sent the NOA to the law firm that represented Plaintiff in the administrative
proceedings. Id. ¶ 13. Mr. Osborn did not receive a copy of the NOA until he requested and
received a copy from that law firm on June 17, 2020. Id. ¶ 14.
Mr. Osborn filed the instant motion, which seeks $3,400 in attorney’s fees, on the same
day he received the NOA. 3 See id. & ECF No. 34 (motion originally filed on June 17, 2020).
On June 24, 2020, the Commissioner filed a response in his limited role “resembling that of a
trustee for the claimant.” ECF No. 35 at 1 (citing Gisbrecht, 535 U.S. at 798 n.6). The
Commissioner did not take a specific position with respect to the fee request, and noted that the
SSA “defers to the Court to make a determination as to whether counsel’s request is
reasonable.” 4 Id. at 3.
“Three statutes authorize attorney’s fees in social security actions. 42 U.S.C. § 406(a)
compensates attorneys for their representation at the administrative level; 42 U.S.C. § 406(b)
compensates attorneys for representation before federal courts; and the EAJA provides additional
fees if the Commissioner’s position was not substantially justified.” Lafrance v. Saul, No. 17-cv4709 (CM) (SN), 2019 U.S. Dist. LEXIS 145812, at *3 (S.D.N.Y. Aug. 26, 2019), (quotation
marks omitted) (citing Gisbrecht, 535 U.S. at 794-96), adopted by 2019 U.S. Dist. LEXIS
162093 (S.D.N.Y. Sept. 20, 2019). Pursuant to Section 406(b), which is invoked here,
“[w]henever a court renders a judgment favorable to a claimant . . . who was represented before
the court by an attorney, the court may determine and allow as part of its judgment a reasonable
Mr. Osborn acknowledges that while counsel may receive fee award under both EAJA
and 42 U.S.C. §406(b), counsel must refund to Plaintiff the amount of the smaller fee. See ECF
No. 36 at 3; ECF No. 38 at 5 n.2; Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002).
The Commissioner cites several cases purportedly involving a range of fee awards for
Mr. Osborn; in reality, however, these cases all involved a different attorney. See ECF No. 23 at
fee for such representation,” as long as the fee does not exceed “25 percent of the total of the
past-due benefits to which the claimant is entitled.” 42 U.S.C. § 406(b)(1)(A).
The Court will first address whether Mr. Osborn timely filed his application for
attorney’s fees. In Sinkler v. Berryhill, the Second Circuit concluded that the 14-day filing
period set forth in Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure applies to attorney’s
fees applications under 42 U.S.C. § 406(b), but that the 14-day filing period is subject to
equitable tolling. 932 F.3d 83, 85 (2d Cir. 2019). 5 Thus, “[w]here, 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 . . . because the benefits award amount is necessary to identify the
maximum attorney’s fee that may be awarded under § 406(b).” Id. “[I]t is unclear whether the
court in Sinkler intended for the 14-day tolling period to commence when the party to the action
receives notice of the damage award or when the party’s counsel receives notice.” Almodovar v.
Saul, No. 16-cv-7419 (GBD) (SN), 2019 U.S. Dist. LEXIS 202785, at * 5 (S.D.N.Y. Nov. 21,
2019); compare Sinkler, 932 F.3d at 85 (“[T]he fourteen-day filing period is tolled until the
claimant receives notice of the amount of any benefits award.”) with id. at 88 (“Once counsel
receives notice of the benefits award . . . there is no sound reason not to apply Rule 54(d)(2)(B)’s
fourteen-day limitations period . . . .”).
Rule 54(d)(2)(B) states that “[u]nless a statute or a court order provides otherwise,” a
motion for attorney’s fees must “be filed no later than 14 days after the entry of judgment.” Fed.
R. Civ. P. 54(d)(2)(B)(i).
Here, the NOA is dated May 18, 2020, and is presumed to have been received on May
21, 2020. Osborn Decl. Ex. 5; see Sinkler, 932 F.3d at 89 n.5 (“Nothing in this opinion departs
from the law’s presumption that a party receives communications three days after mailing.”).
The motion for attorney’s fees was filed 27 days later. But as Mr. Osborn has explained, he did
not receive the NOA until June 17, 2020, when it was relayed to him by the firm that represented
Plaintiff before the SSA, and the motion for attorney’s fees was filed the same day Mr. Osborn
received the NOA. Osborn Dec. ¶¶ 13, 14 & Ex. 6; ECF No. 34. The Commissioner’s letter
noted a question about the timeliness of the application, but the Commissioner “defers to the
Court as to whether Counsel’s request is untimely under Sinkler.” See ECF No. 35 at 2.
The Court need not—and does not—decide the correct interpretation of Sinkler to resolve
this matter. In holding that Rule 54(d)(2)(B) applies in the context of § 406(b) motions, the
Second Circuit noted that the 14-day limitations period “is not absolute,” and that such a period
applies “unless a statute or a court order provides otherwise.” Sinkler, 932 F.3d at
89 (quoting Fed. R. Civ. P. 54(d)(2)(B)). “Thus, district courts are empowered to enlarge that
filing period where circumstances warrant.” Id. The Court finds that the circumstances here
warrant doing so. Mr. Osborn was not Plaintiff’s counsel before the SSA on remand and was not
notified by the SSA of Plaintiff’s ultimate benefit award. See Osborn Decl. ¶¶ 13, 14 & Ex. 6.
“Without the [NOA], [Mr. Osborn] could not file a motion for attorney’s fees because he did not
know the amount of past-due benefits.” Lafrance, 2019 U.S. Dist. LEXIS 145812, at *6. Once
Mr. Osborn received the NOA on June 17, 2020, see Osborn Decl. ¶ 14 & Ex. 6, he filed the
instant motion the same day, see ECF No. 34. Accordingly, even if the filing period began to run
when Plaintiff presumably received the NOA on May 21, 2020, enlargement of the filing period
is warranted under the circumstances, and the motion is deemed to be timely. See Sinkler, 932
F.3d at 89-90; Diberardino v. Comm’r of Soc. Sec., No. 17-cv-2868 (PKC), 2020 U.S. Dist.
LEXIS 214696, at *8 (E.D.N.Y. Nov. 17, 2020) (enlarging the filing period and deeming a §
406(b) motion timely filed in nearly identical circumstances); Phillip v. Comm’r of Soc. Sec., No.
18-cv-5005 (SN), 2021 U.S. Dist. LEXIS 32400, at *6 (S.D.N.Y. Feb. 22, 2021) (same); see also
Lopez v. Comm’r of Soc. Sec., No. 18-cv-2186 (CS) (LMS), 2020 U.S. Dist. LEXIS 44509, at
*6-9 (S.D.N.Y. Mar. 12, 2020), adopted by No. 18-cv-2186 Dkt. No. 40 (text only order).
2. Reasonableness of the Fee Award
“Although 42 U.S.C. § 406(b) requires the court to review the reasonableness of any
requested attorney’s fees, because a contingency fee arrangement is the result of a freely
negotiated arrangement between the claimant and his or her attorney, the court may only reduce
the agreed upon contingency fee amount when it finds the amount unreasonable.” Ibbetson v.
Saul, No. 14-cv-7824 (KMK) (JCM), 2019 U.S. Dist. LEXIS 107259, at *8 (S.D.N.Y. June 25,
2019) (citing Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990)), adopted by 2019 U.S. Dist.
LEXIS 118146 (S.D.N.Y. July 16, 2019). “Thus, ‘§ 406(b) does not displace contingent-fee
agreements within the statutory ceiling; instead, § 406(b) instructs courts to review for
reasonableness fees yielded by those agreements.’” Id. (quoting Gisbrecht, 535 U.S. at 808-09).
To assess the reasonableness of a contingency fee, a court must first determine whether “the
contingency percentage is within the 25% cap . . . [and] whether there has been fraud or
overreaching in making the agreement.” Wells, 907 F.2d at 372. A court must then consider the
following factors to determine the reasonableness of a requested award: (1) whether the
requested fee is out of line with the “character of the representation and the results the
representation achieved;” (2) whether the attorney unreasonably delayed the proceedings in an
attempt to increase the accumulation of benefits and thereby increase his own fee; and (3)
whether “the benefits awarded are large in comparison to the amount of time counsel spent on
the case,” the so-called “windfall” factor. Palazzolo v. Saul, No. 18-cv-1097 (VSB) (JLC), 2020
U.S. Dist. LEXIS 192167, at *4 (S.D.N.Y. Oct. 16, 2020) (quoting Gisbrecht, 535 U.S. at 808);
see also Wells, 907 F.2d at 371.
Here, Mr. Osborn is requesting a fee of $3,400 under § 406(b) for 4.1 hours of work,
which is less than half of the negotiated contingency percentage set forth in the Agreement. ECF
No. 38 at 1, 6; ECF No. 39-2 (hours billed); ECF No. 39-5; ECF No. 35 at 2. Moreover, there is
no evidence of fraud or overreaching in the negotiation of the Agreement. The requested fee
amount also does not constitute a windfall. “Counsel’s efforts were particularly successful given
that they contributed to the Commissioner’s ultimate decision to stipulate to a remand before
briefing had even commenced,” Phillip, 2021 U.S. Dist. LEXIS 32400, at *7 (quotation marks
omitted), and there is no indication that counsel unreasonably delayed the proceedings. Given
Mr. Osborn’s requested § 406(b) fee of $3,400, his hourly rate amounts to a de facto rate of
$829.27 per hour. See ECF No. 38 at 1, 6; ECF No. 35 at 2. While this is at the higher end of
the range of hourly rates for these types of cases, other courts in this district have granted similar
and even higher rates, including in cases litigated by Mr. Osborn. See, e.g., Philip, 2021 U.S.
Dist. LEXIS 32400, at *8 (approving $950 hourly rate for Mr. Osborn); Muniz v. Comm’r of Soc.
Sec., No. 18-cv-8295 (KMK) (PED), 2020 U.S. Dist. LEXIS 236935, at *7-8 (S.D.N.Y. Dec. 15,
2020) (approving $1,257.15 hourly rate), adopted by 2021 U.S. Dist. LEXIS 16519 (S.D.N.Y.
Jan. 28, 2021); Valle v. Colvin, No. 13-cv-2876 (JPO), 2019 U.S. Dist. LEXIS 82180, at *8-9
(S.D.N.Y. May 15, 2019) (approving $1,079.72 hourly rate); Nieves v. Colvin, No. 13-cv-1439
(WHP) (GWG), 2017 U.S. Dist. LEXIS 211590, at *5-7 (S.D.N.Y. Dec. 26, 2017) (approving
$1,009.11 hourly rate), adopted by 2018 U.S. Dist. LEXIS 11545 (S.D.N.Y. Jan. 24, 2018).
Furthermore, contingency agreements, like the one at issue here, present risks of non-payment;
“payment . . . is inevitably uncertain, and any reasonable fee award must take account of that
risk.” Nieves, 2017 U.S. Dist. LEXIS 211590, at *6 (citing Wells, 907 F.2d at 371). The award
amount sought here appropriately reflects that risk. Accordingly, Mr. Osborn’s requested fee
award of $3,400 is reasonable.
The motion for attorney’s fees under 42 U.S.C. § 406(b) is GRANTED, and Mr. Osborn
is awarded $3,400 in attorney’s fees. The Commissioner is instructed to disburse this amount to
Daniel A. Osborn of Osborn Law, P.C. Upon receipt of this award, Mr. Osborn must promptly
refund to Plaintiff $836.40, which represents the EAJA fees that counsel already has received.
Dated: June 7, 2021
White Plains, New York
ANDREW E. KRAUSE
United States Magistrate Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?