Post v. Colvin

Filing 28

ORDER granting 20 Motion for Attorney Fees. Signed by Hon. Michael A. Telesca on 7/3/2019. (JMC)-CLERK TO FOLLOW UP-

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________
Jayne S. POST,
Plaintiff,
v.

15-CV-257
DECISION AND ORDER

ANDREW M. SAUL,1
Commissioner of Social Security,
Defendant.
_______________________________

INTRODUCTION
Pursuant to 42 U.S.C. § 406(b), Plaintiff’s counsel, Timothy
Hiller

(“Attorney

Hiller”),

has

applied

for

$21,873.75

in

attorney’s fees to be paid from 25% of the past-due Social Security
Disability Insurance (“SSDI”) benefits awarded to Plaintiff by the
Commissioner of Social Security. The Commissioner argues that the
Court should deny Attorney Hiller’s application as untimely, or in
the alternative, if further attorney’s fees are awarded, that the
Court require Attorney Hiller to “return the lesser of the two fees
(EAJA and Section 406(b)), which would most likely be the full
$5,800.00 in EAJA fees.” (Docket No. 25).

1

The president nominated Andrew M. Saul to be Commissioner of
Social Security and the Senate confirmed his appointment on June 4,
2019, vote number 133. He is substituted pursuant to Fed. R. Civ.
P. 25(d). The Clerk is directed to amend the caption to comply with
this substitution.

PROCEDURAL HISTORY
Plaintiff

applied

for

disability

insurance

benefits

on

January 23, 2012 and her application was denied on May 24, 2012.
Plaintiff appealed and her claim was again denied by an ALJ on
August 2, 2013. She appealed that decision, and the Appeals Council
affirmed that denial on January 27, 2015. Plaintiff then filed a
lawsuit in this Court on March 26, 2015. (Docket No. 20).
On January 14, 2016, the Court entered a judgment reversing
and remanding this matter for further administrative proceedings.
Upon

remand,

an

ALJ

granted

Plaintiff’s

application

in

its

entirety, finding her disabled as of September 1, 2010. (Docket
No. 20).

The

Social

Security

Administration

(“SSA”) issued a

Notice of Award that Plaintiff was entitled to $153,615.00 in past
due benefits, but indicating that there might be reductions in that
amount if Plaintiff received workers compensation benefits or owed
Medicare premium payments. The Notice provided no information as to
the amount withheld for payment of an attorney’s fees. (Docket
No. 20). On January 2, 2019, the SSA issued a letter to Attorney
Hiller indicating that $38,403.75 had been withheld to pay any duly
authorized attorney’s fees. (Docket No. 20).
Attorney Hiller was awarded and paid $5,800.00 in attorney’s
fees under the Equal Access to Justice Act (“EAJA”). Attorney
Hiller filed a motion in support of Plaintiff’s application for
attorney’s fees pursuant to 42 U.S.C. § 406(b) to seek this Court’s

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approval of he fee for the sum of $21,873.75. Attorney Hiller does
not agree to refund his receipt of the $5,800.00 EAJA fees. (Docket
No. 20).
APPLICABLE LEGAL PRINCIPLES
Section 406(b) provides in relevant part that “[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 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.” 42 U.S.C. § 406(b)(1)(A).
“Within the 25 percent boundary” set by Section 406(b), “the
attorney for the successful claimant must show that the fee sought
is reasonable for the services rendered.” Gisbrecht v. Barnhart,
535 U.S. 789, 807 (2002) (citation omitted). Section 406(b) also
“calls for court review of [contingent fee] arrangements as an
independent check, to assure that they yield reasonable results in
particular

cases.”

Id.

(footnotes

omitted).

Thus,

it

is

the

district court’s responsibility to determine whether the requested
fees are unreasonable, as required by Social Security Act and
Gisbrecht, supra.
After ascertaining that a given contingent fee agreement is
within the 25 percent statutory boundary, courts have considered
the following factors in determining whether the resulting fee is

3

reasonable: 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. Joslyn v. Barnhart,
389 F. Supp.2d 454, 456 (W.D.N.Y. 2005) (quoting Gisbrecht, 535
U.S. at 808).
DISCUSSION
A. Reasonableness of the Fee Requested
As an initial matter, the Court notes that Counsel’s request
of $21,873.75 represents less than 25 percent of the past due
benefit amount of $153,615.00 owed to Plaintiff and therefore does
not exceed the statutory cap. The Court also notes that the amount
withheld

by

the

SSA,

$38,403.75,

represents

25

percent

of

$153,615.00, which amount is nowhere reflected on the SSA’s Notice
of Award. In short, the requested amount of $21,873.75 does not
exceed the statutory cap and is permissible under the fee agreement
between Plaintiff and Counsel, which, consistent with the statutory
cap, allows for up to 25 percent of any past due benefits awarded.
With regard to the first Gisbrecht factor, the Court finds
that the requested fee is in line with the “character of the
representation and the results the representation achieved.” Here,

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Counsel’s

effective

briefing

secured

a

remand

for

further

administrative proceedings and, ultimately, a reversal and remand
for calculation and payment of benefits. This factor accordingly
weighs in favor of finding reasonableness.
Turning to the second factor, Counsel did not engage in
dilatory

litigation

tactics

or

otherwise

cause

delay

in

the

proceedings that might have inflated past due benefits and thus the
potential fee award. The second factor also weighs in favor of
finding reasonableness.
With regard to whether the fee award constitutes a “windfall,”
the Supreme Court has not provided clear guidance on assessing this
factor but has suggested that conducting what is essentially a
lodestar analysis may be helpful. See Gisbrecht, 535 U.S. at 808
(suggesting that the hours spent by counsel representing the
claimant

and

counsel’s

“normal

hourly

billing

charge

for

noncontingent-fee cases” may aid “the court’s assessment of the
reasonableness of the fee yielded by the fee agreement”). The
Commissioner submits the total fee of $21,873.75 added to the EAJA
fee of $5,800.00, “does not exceed the statutory 25% cap,” but that
“the Court may find that the de facto hourly rate of $856.77 per
hour constitutes a windfall.” (Docket No. 25 at 9). Because the
Court interprets Gisbrecht as requiring return of the EAJA fee, the
hourly rate of $677.21, which takes into account only the section
406(b) fee award, is not unreasonable. “Notwithstanding the usual

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hourly rate decisions, courts in this Circuit routinely approve fee
awards in the social security context that are above the regular
hourly rates.” Heffernan v. Astrue, 87 F. Supp. 3d 351, 355
(E.D.N.Y. 2015).
The Court further observes that a contingent fee outside of
the Social Security context typically represents the past and
future value of the case. Here, however, the statute provides that
attorney’s

fees

are

based

solely

on

past

due

benefits.

See

42 U.S.C. § 406(b)(1). The value of this case to Plaintiff is
greater than the amount of past due benefits received. In addition,
the value of health care benefits attendant to Title II benefits is
not included in the computation of the fee under Section 406(b)(1).
Counsel, on the other hand, assumed a substantial risk of loss in
taking this case, given that Plaintiff’s claim had been denied at
multiple levels of agency review before the initiation of this
civil action. The remand rate for this district, as provided by
Attorney Hiller, shows that only 45% of cases are remanded, and
that only 66% of the remanded cases result in awards. In this
regard,

the

Court

considers

the

deference

owed

to

lawful

attorney-client fee agreements, Gisbrecht, 535 U.S. at 793, and the
interest in assuring that attorneys continue to represent clients
such as Plaintiff. Id. at 805.
Consideration of all of the Gisbrecht factors warrant a
finding that the requested fee is reasonable, and the Commissioner

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does not disagree. However, Attorney Hiller has stated that he will
not refund the amount of the EAJA fees awarded to Plaintiff before
this Court (i.e., $5,800.00) should the Section 406(b) application
be approved. This is not in compliance with Gisbrecht and therefore
Attorney Hiller must remit to Plaintiff the $5,800.00 EAJA fee
awarded. See Gisbrecht, 535 U.S. at 796 (“Fee awards may be made
under both prescriptions [in the EAJA and Section 406(b)], but the
claimant’s attorney must ‘refun[d] to the claimant the amount of
the smaller fee.’”) (quoting Act of Aug. 5, 1985, Pub. L. 99–80,
§ 3, 99 Stat. 186; second alteration in original).
B.

Timeliness of the Section 406(b) Motion
The law within the Second Circuit is unsettled regarding the

deadline to file a Section 406(b) motion. The Act does not require
a fee application to be filed within any specific time limit,
“making

the

timeliness

question

somewhat

more

complicated.”

Geertgens v. Colvin, No. 13 CIV. 5133(JCF), 2016 WL 1070845, at *2
(S.D.N.Y. Mar. 15, 2016). The Second Circuit has not squarely
addressed the question of what standard should govern the question
of whether a Section 406(b) application is timely filed. Courts in
this District, up until recently, had consistently applied a
reasonableness standard. See, e.g., Jenis v. Colvin, 12-CV-0600A,
2016 WL 624623, at *1 n. 1 (W.D.N.Y. Oct. 26, 2016) (Section 406(b)
application filed four months after notice of award was filed
within a reasonable time and was timely); see also Buckingham v.

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Astrue, 07-CV-159-JTC, 2010 WL 4174773, at *1 (W.D.N.Y. Oct. 25,
2010) (granting Section 406(b) application filed 98 days after
notice of award received, without consideration of timeliness); but
see Sinkler v. Berryhill, 305 F. Supp.3d 448, 452 (W.D.N.Y. 2018),
appeal docketed, 18-2044 (2d Cir. July 11, 2018). However, newly
enacted Western District of New York Local Rule 5.5(g)(1) rejects
the 14-day standard and sets a window of 65 days for filing Section
406(b) applications.
Attorney Hiller represents that his fee petition is timely
because, although the Notice of Award is dated March 21, 2018, it
did not state the amount withheld for attorney’s fees. He then
argues the letter sent to him finally stating the amount withheld
for attorney’s fees is dated January 2, 2019. Therefore, Attorney
Hiller argues, his fee petition is timely under the 65-day window
of New York Local Rule 5.5(g)(1). The Court accepts Attorney
Hiller’s

representation

that

the

SSA

Notice

of

Award

dated

March 21, 2018, did not state the amount withheld for attorney’s
fees. In such case, his Section 406(b) Motion, filed March 7, 2019,
is timely under new Local Rule 5.5, which may be applied, insofar
as just and practicable, to all actions pending as of January 1,
2019.
CONCLUSION
For the reasons set forth above, the Court grants the Section
406(b)(1)

Motion (Docket

No.

20)

8

in its

entirety

and

awards

Plaintiff attorney’s fees in the amount of $21,873.75. The Court
directs the Commissioner to release the funds withheld from the
benefits awards. Upon receipt of the Section 406(b) fee, Attorney
Hiller is directed to remit payment of $5,800.00, representing the
EAJA fees received in Plaintiff’s case before this Court, to
Plaintiff.
ALL OF THE ABOVE IS SO ORDERED.
S/Michael A. Telesca
____________________________________
HONORABLE MICHAEL A. TELESCA
UNITED STATES DISTRICT JUDGE
DATED:

July 3, 2019
Rochester, New York

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