Craig v Colvin

Filing 23

DECISION AND ORDER granting plaintiff's counsel's motion for attorney fees 17 subject to the conditions set forth in the attached Decision and Order. SO ORDERED. Signed by Hon. Richard J. Arcara on 12/15/17. (LAS)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
___________________________________
JOHN BYRON CRAIG,
Plaintiff,
v.

16-CV-121-A
DECISION AND ORDER

NANCY A. BERRYHILL,
Acting Commissioner of Social Security,
Defendant.
____________________________________
Plaintiff’s counsel, Sarah A. Frederick, Esq., has filed a motion for approval of her
fee pursuant to 42 U.S.C. § 406(b). Before approving counsel’s fee, the Court must
perform an “independent check[]” of the request. Gisbrecht v. Barnhart, 535 U.S. 789,
807 (2002). Upon such review, the Court may approve a “reasonable fee.” 42 U.S.C.
§ 406(b). After its independent check, and for the reasons stated below, the Court finds
that counsel’s requested fee of $10,926.75 is reasonable in this case.
BACKGROUND
On February 11, 2016, counsel filed a complaint in this Court pursuant to 42 U.S.C.
§ 405(g). The complaint sought review of the Commissioner’s decision denying Plaintiff’s
application for Social Security benefits. See Docket No. 1. After counsel filed a motion
for judgment on the pleadings, the parties stipulated that the case should be remanded
to the Commissioner for further administrative proceedings. See Docket No. 15. On
remand, the Administrative Law Judge issued a decision in favor of the Plaintiff. See
Docket No. 17-4. The Commissioner then determined that the Plaintiff was entitled to

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$43,707 in past-due benefits. Id. The Commissioner, however, withheld 25 percent of
that amount (totaling $10,930.25) for attorney’s fees. On November 22, 2016, the parties
stipulated that, under the Equal Access to Justice Act (EAJA), counsel was entitled to
fees and expenses totaling $4,400.
After the Commissioner found in favor of the Plaintiff on remand, counsel filed a
motion for fees pursuant to 42 U.S.C. § 406(b), which is now before the Court. Counsel’s
motion seeks $10,926.75 of the amount the Commissioner has withheld from the
Plaintiff’s past-due benefits. In support of her § 406(b) motion, counsel includes her billing
records for this case, which indicate that she spent 25.8 hours on her representation of
the Plaintiff before the Court. See Docket No. 15-4.
DISCUSSION
A. Standard for awarding fees under § 406(b)
The Social Security Act allows an attorney who successfully represents a Social
Security claimant “before the court” to petition that court for “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). The Supreme
Court has held that § 406(b) “calls for court review of [contingent-fee] arrangements as
an independent check[] to assure that they yield reasonable results in particular cases.”
Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). Towards that end, “Congress has
provided” courts with “one boundary line: Agreements are unenforceable to the extent
that they provide for fees exceeding 25 percent of the past-due benefits.” Id. (citing 42
U.S.C. § 406(b)).

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“Within the 25 percent boundary,” an attorney must show that “the fee sought is
reasonable for the services rendered.” Id. In other words, an attorney’s fee is not
presumptively recoverable simply because it is equal to or less than 25 percent of the
client’s recovery. Rather, § 406(b) “requires an affirmative judicial finding that the fee
allowed is ‘reasonable.’” Id. n.17 (internal quotation marks omitted). “[T]he attorney bears
the burden of persuasion that the statutory [reasonableness] requirement has been
satisfied.” Id.
The Supreme Court has identified several factors that a court may use to assess
the reasonableness of a contingent fee requested under § 406(b). First, a court may
consider “the character of the representation and the results the representative achieved.”
Id. at 808. Second, a court may reduce an attorney’s requested fee if the court finds that
the attorney is responsible for delay in obtaining a judgment. In other words, because the
attorney’s fee is contingent on her client’s recovery of past-due benefits, and because
past-due benefits increase the longer a case lingers, the court may reduce a fee “so that
the attorney will not profit” from delay that is attributable to him. Id. And third, a court
may reduce a fee if the court concludes that the benefits recovered—which drive the size
of an attorney’s potential fee—“are large in comparison to the amount of time counsel
spent on the case.” Id.
The Supreme Court and the Second Circuit have also identified two factors that
act as a check on a court’s reduction of an attorney’s requested fee under § 406(b).
First, courts must be mindful that “payment for an attorney in a social security case
is inevitability uncertain.” Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990). Thus, the
Second Circuit has “recognized that contingency risks are necessary factors in

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determining reasonable fees under § 406(b).” Id. (internal quotation marks omitted). In
other words, while “contingent fee agreements cannot simply be adopted as per se
reasonable in all social security cases,” courts should recognize 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.
Second, “the traditional lodestar method, borrowed from fee-shifting contexts, is
not appropriate for evaluating a reasonable fee” under § 406(b). Id. Thus, the Court may
not evaluate the “reasonableness” of the attorney’s fee by engaging in “satellite litigation.”
Gisbrecht, 535 U.S. at 808. The Court should instead evaluate “the reasonableness of
the contingency agreement in the context of the particular case.” Wells, 907 F.2d at 371.
Combining these principles, a court’s task under § 406(b) is, on the one hand, to
“give due deference to the intent of the parties,” but, on the other hand, to “not blindly
approve every fee request made pursuant to a contingent agreement.” Wells, 907 F.2d
at 372. At bottom, a court should consider “whether there has been fraud or overreaching
in making the agreement,” or “whether the requested amount is so large as to be a windfall
to the attorney.” Id.
B. Whether counsel’s requested fee is “reasonable” under § 406(b)
With these principles in mind, the Court assesses the reasonableness of counsel’s
requested fee.

The Commissioner states that she sees no evidence of fraud or

overreaching. 1 Docket No. 22 at 3.

1 Fees requested pursuant to § 406(b) come from the attorney’s client’s recovery. They do not come, as
they do under the EAJA, from the public fisc. Thus, unlike a claim for fees under the EAJA, the
Commissioner “has no direct financial stake in the answer to the § 406(b) question; instead she plays a
part in the fee determination resembling that of a trustee for the claimants.” Gisbrecht, 535 U.S. at 798 n.6.

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In assessing the reasonableness of counsel’s requested fee, the Court has
considered the fact that the Commissioner stipulated to remand—and litigation in this
Court ended—after counsel filed a motion for judgment on the pleadings. Thus, counsel
did not need to file a reply to the Commissioner’s motion for judgment on the pleadings,
nor did she need to file possible objections to a Report and Recommendation. At the
same time, however, the Commissioner’s decision to stipulate to remand after counsel
filed a motion for judgment on the pleadings demonstrates counsel’s skill and knowledge
of Social Security law. In other words, the parties’ stipulation to remand is indicative of
“the character of the representation and the results the representative achieved.”
Gisbrecht, 535 U.S. at 808
The Court has also considered that counsel previously stipulated to an EAJA
award of $4,400 for the same work at issue in her § 406(b) motion. This provides the
Court with a rough baseline of what a “reasonable” fee might be in this case. Balanced
against that fact, however, the Court must consider the Second Circuit’s reminder that a
contingency agreement, which is the basis for the fee counsel requests in her motion, “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.” Wells, 907 F.2d at 371. Thus, in
deciding whether counsel’s requested fee is reasonable under § 406(b), the Court is very
cognizant of the fact that counsel assumes the risk of nonpayment in all of her Social
Security matters.

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After considering these facts, and giving due deference to the intent of counsel
and the Plaintiff, the Court concludes that counsel’s requested $10,926.75 fee is
“reasonable.” 42 U.S.C. § 406(b).
CONCLUSION
Sarah A. Frederick, Esq.’s motion for attorney’s fees pursuant to 42 U.S.C.
§ 406(b) is granted. The Court finds that Ms. Frederick is entitled to recover $10,926.75
as a reasonable fee for her work on this case before the Court. Thus, from the amount
the Commissioner has withheld from Plaintiff’s past-due benefits award, the
Commissioner shall release $10,926.75 to Sarah A. Frederick, Esq. The Commissioner
shall release the remainder of the withheld benefits to the Plaintiff. Further, Ms. Frederick
shall refund her $4,400 EAJA fee to the Plaintiff. See Act of Aug. 5, 1985, Pub. L. 99-80,
§ 3, 99 Stat. 186.
SO ORDERED.

Dated: December 15, 2017
Buffalo, New York

_s/Richard J. Arcara____________
HONORABLE RICHARD J. ARCARA
UNITED STATES DISTRICT JUDGE

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