Scott v. Colvin

Filing 29

DECISION and ORDER granting 22 Motion for Attorney Fees. Signed by Hon. Elizabeth A. Wolford on 10/24/22. (NNR)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
___________________________________
ROBERT S.,
v.

DECISION AND ORDER

Plaintiff,

COMMISSIONER OF SOCIAL SECURITY,

6:16-CV-06780-EAW

Defendant.
____________________________________
INTRODUCTION
Plaintiff Robert S. (“Plaintiff”) seeks attorneys’ fees in the amount of $25,000.00
pursuant to 42 U.S.C. § 406(b). (Dkt. 22). The Commissioner of Social Security (“the
Commissioner”) does not object to the requested amount but defers to the Court concerning
the timeliness and the reasonableness of Plaintiff’s fee request. (Dkt. 24). For the reasons
that follow, the Court grants Plaintiff’s motion.
BACKGROUND
On December 5, 2016, Plaintiff filed this action, seeking review of the
Commissioner’s final decision denying his application for Disability Insurance Benefits.
(Dkt. 1). Plaintiff moved for judgment on the pleadings on August 2, 2017. (Dkt. 11).
The Commissioner responded and cross-moved for judgment on the pleadings on October
2, 2017. (Dkt. 12). On December 14, 2018, the Court granted Plaintiff’s motion, reversed
the Commissioner’s decision, and remanded the matter solely for calculation and payment
of benefits. (Dkt. 18).

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By Stipulated Order filed April 1, 2019, the Court approved payment of $6,672.00
to Plaintiff’s counsel pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d)
(“EAJA”) for services performed in connection with this action. (Dkt. 21).
On June 30, 2020, the Commissioner issued a Notice of Change in Benefits
(“NCB”) in connection with Plaintiff’s claim, which stated that it withheld $30,831.00, or
25 percent of Plaintiff’s past-due benefits to be paid to Plaintiff’s representative for legal
services rendered. (Dkt. 22-3 at 5). Plaintiff’s counsel did not receive the NCB until March
12, 2021. (Dkt. 22-4 at ¶ 8; Dkt. 28-1 at ¶ 12).
On August 6, 2021, Plaintiff moved pursuant to 42 U.S.C. § 406(b) seeking
$25,000.00 in attorneys’ fees. (Dkt. 22). In his motion, Plaintiff’s counsel indicates that
even though he was awarded the sum of $6,672.00 under the EAJA, his office had not
received the award due to the offset initiated by the Department of the Treasury against
several debts owed by Plaintiff. (Dkt. 22-1 at 2; Dkt. 22-8). Counsel acknowledged that
in the event his office receives the EAJA fee in the future, he will refund the fee to Plaintiff
once the instant fee application is resolved. (Dkt. 22-1 at 2). The Commissioner filed a
response on August 18, 2021. (Dkt. 24). On March 14, 2022, the Court issued an order
requiring Plaintiff to supplement his briefing (Dkt. 27), which Plaintiff complied with on
March 25, 2022. (Dkt. 28).
DISCUSSION
I.

Timeliness of the Motion
Generally, a fee application under § 406(b) must be filed within 14 days after the

entry of judgment.

Fed. R. Civ. P. 54(d)(2)(B)(1).
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However, application of Rule

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54(d)(2)(B) to assess the timeliness of a 406(b) motion creates a “practical problem”
because “the Commissioner typically does not calculate the amount of past-due benefits
until months after the district court remands.” Sinkler v. Berryhill, 932 F.3d 83, 87 (2d Cir.
2019). To rectify the timing conflict, it has been decided that the 14-day filing period is
subject to equitable tolling and the deadline to file the fee application is extended “until the
time the claimant receives notice of the amount of any benefits award.” Id. at 88. “Because
the benefits award amount is necessary to identify the maximum attorney’s fee that may
be awarded under § 406(b),” the 14-day limitation period begins to run from when “counsel
receives notice of the benefits award—and, therefore, the maximum attorney’s fees that
may be claimed[.]” Id. Therefore, the 14-day filing deadline is not absolute and can be
enlarged by a court “where circumstances warrant” it. Id. at 89-90.
Here, Plaintiff’s counsel does not argue that his fee application filed on August 6,
2021, was timely. (Dkt. 22-1 at 2; Dkt. 28 at 2). Instead, he asks the Court to extend his
filing deadline, arguing that the 147-day (four months and three weeks) delay in bringing
the instant application was reasonable and justified. (Id.). Specifically, counsel submits
that his office did not receive a copy of the final Notice of Award of Plaintiff’s past-due
benefits that the Social Security Administration (“SSA”) customarily sends to claimants
and their representatives at the conclusion of the claimant’s administrative case. (Dkt. 221 at 1-3; Dkt. 28 at 2). The only document that was ever issued by the SSA regarding
Plaintiff’s entitlement to past-due benefits was the NCB, which contained, among other
things, a chart of Plaintiff’s past-due benefits and the SSA’s withholding of 25 percent of
Plaintiff’s past-due benefits to cover his legal fees. (Id.). Since it was not a standard Notice
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of Award, the NCB’s receipt had not only caused confusion among the staff of Plaintiff’s
counsel’s law firm, but had also created an expectation that a final Notice of Award related
to Plaintiff’s retroactive benefits would still be forthcoming. (Dkt. 22-1 at 2-3; Dkt. 22-4
at ¶ 8-9; Dkt. 28 at 4; Dkt. 28-1 at ¶ 13-20; Dkt. 28-2 at ¶ 6).
The Court finds that the circumstances presented in this case justify the delay in
submitting the attorneys’ fees application. Specifically, even though the NCB was issued
on June 30, 2020, Plaintiff’s counsel presented sufficient evidence to demonstrate that his
office did not receive it until March 12, 2021. (Dkt. 22-4 at ¶ 8; Dkt. 28-1 at ¶ 12). In
support of his argument, counsel submitted an affidavit of his firm’s fee coordinator, who
described two attempts made in May 2020 and February 2021 to obtain a copy of Plaintiff’s
final calculation of retroactive benefits, which led to the firm’s receipt of the NCB on
March 12, 2021. (Dkt. 22-4 at ¶ 6-8; Dkt. 28-1 at ¶ 9-12). Two weeks later, having
concluded that the NCB did not constitute Plaintiff’s final Notice of Award, another staff
member made a third request to the SSA for a copy of Plaintiff’s Notice of Award. (Dkt.
22-4 ¶ 9; Dkt. 28-1 at ¶ 13). It was not until June 28, 2021, that the SSA provided a copy
of the same NCB that had been previously received by the counsel’s law firm. (Dkt. 22-4
at ¶ 10; Dkt. 28-1 at ¶ 14).
Continuing to believe that the NCB did not constitute a formal Notice of Award that
would be sufficient for purposes of filing Plaintiff’s fee application, and considering the
delays it has experienced in the SSA’s processing of fee notices and awards caused by the
COVID-19 pandemic, the staff of Plaintiff’s counsel’s law firm continued their efforts to
obtain a copy of Plaintiff’s final calculation of retroactive benefits after June 28, 2021.
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(Dkt. 28-1 at ¶¶ 16-20, 22). Such efforts included another fax request sent to the SSA on
July 23, 2021, as well as the letter dated July 27, 2021, both of which remained unanswered.
(Dkt. 28-6; Dkt. 28-7).
The Court finds that it was not unreasonable for counsel to inquire about Plaintiff’s
final Notice of Award even after it had received a copy of the NCB from the SSA because
“[a] notice of change in benefits letter is not the same as a notice of award letter.” Jeffrey
L. v. Comm’r of Soc. Sec., No. 18-CV-6482-LJV, 2021 WL 3549439, at *1 (W.D.N.Y.
Aug. 11, 2021).
While Rule 54 requires a fee motion be filed within 14 days, a court “may, for good
cause, extend the time on motion made after the time has expired if the party failed to act
because of excusable neglect”. Fed.R.Civ.P. 6(b)(1)(B); see also Johnson v. Comm’r of
Soc. Sec., No. 16 CV 4219 (LDH)(RML), 2019 WL 11270462, at *2 (E.D.N.Y. Dec. 17,
2019), R. & R. adopt., 2020 WL 6128966 (E.D.N.Y. Oct. 19, 2020) (“While the motion is
technically untimely under Rule 54, that lateness is not fatal.”). “Excusable neglect is an
elastic concept that is at bottom an equitable one, taking account of all relevant
circumstances surrounding the party’s omission.” Williams v. Comm’r of Soc. Sec., No.
18-CV-4734 (PKC), 2021 WL 4480536, at *3 (E.D.N.Y. Sept. 30, 2021) (internal citations
and quotation marks omitted). Relevant circumstances include prejudice to the other party,
the reason for the delay, its duration, and whether the movant acted in good faith. Pioneer
Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993).
The Court finds that extension of the 14-day filing deadline is warranted here.
Plaintiff’s counsel was justified in submitting the instant fee application outside the filing
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deadline based on his confusion about the nature of the NCB, as well as the SSA’s alleged
delays in processing of fee awards caused by the pandemic, both of which created a
reasonable expectation that a final notice of Plaintiff’s retroactive benefits would be
forthcoming. Counsel has demonstrated that he acted in good faith when his office made
repeated attempts to obtain Plaintiff’s Notice of Award from the SSA prior to his filing the
instant application on August 6, 2021. The Commissioner does not allege, nor does the
Court find evidence of any prejudice that she may have suffered as a result of Plaintiff’s
relatively short delay in submitting this application after the NCB was received.
Accordingly, because the Court is empowered to enlarge the 14-day filing requirement
where circumstances warrant it, see Sinkler, 932 F.3d at 89, Plaintiff’s request to extend
the filing deadline until August 8, 2021, is granted. See, e.g., Ferreira, 2022 WL 123623,
at *3 (a delay was excused where there was record of counsel’s efforts to meet the deadline
and solicit the information regarding the benefit award despite the confusion caused by the
SSA’s issuance of several notices of awards); Shawn H. v. Comm’r of Soc. Sec., No. 2:19CV-113, 2021 WL 4990049, at *3 (D. Vt. Oct. 27, 2021) (a delay was reasonable when the
SSA failed to send the Notice of Award to plaintiff’s counsel and counsel made good faith
attempt to file a timely fee motion); Williams v. Comm’r of Soc. Sec., No. 18-CV-4734
(PKC), 2021 WL 4480536, at *3 (E.D.N.Y. Sept. 30, 2021) (a four-month delay was
excused when counsel was experiencing difficulties working from home without staff and
receiving mail due to the COVID-19 pandemic); Johnson, 2019 WL 11270462, at *2
(collecting cases).

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However, Plaintiff’s counsel is cautioned that the Court likely will not consider such
a delay reasonable in future cases. In other words, Plaintiff’s counsel is now on notice that
the SSA sometimes issues only a Notice of Change in Benefits and not a formal Notice of
Award. Any future claims of confusion on this basis will accordingly ring hollow.
II.

The Reasonableness of the Requested Fee
Section 406(b) provides, in relevant part, as follows:
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. . . .

42 U.S.C. § 406(b)(1)(A). In other words, § 406(b) allows a successful claimant’s attorney
to seek court approval of his or her fees, not to exceed 25 percent of the total past-due
benefits. Section 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). This review is subject to “one boundary
line: Agreements are unenforceable to the extent that they provide for fees exceeding 25
percent of the past-due benefits.” Id. “Within the 25 percent boundary, . . . the attorney
for the successful claimant must show that the fee sought is reasonable for the services
rendered.” Id.
Accordingly, a fee is not automatically recoverable simply because it is equal to or
less than 25 percent of the client’s total past-due benefits. “To the contrary, because section
406(b) requires an affirmative judicial finding that the fee allowed is ‘reasonable,’ the
attorney bears the burden of persuasion that the statutory requirement has been satisfied.”
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Id. at 807 n.17.

As such, the Commissioner’s failure to oppose the motion is not

dispositive. Mix v. Comm’r of Soc. Sec., No. 6:14-CV-06219 (MAT), 2017 WL 2222247,
at *2 (W.D.N.Y. May 22, 2017). Several factors are relevant to the reasonableness
analysis, including the following: (1) “whether the contingency percentage is within the
25% cap[;]” (2) “whether there has been fraud or overreaching in making the agreement[;]”
and (3) “whether the requested amount is so large as to be a windfall to the attorney.” Wells
v. Sullivan, 907 F.2d 367, 372 (2d Cir. 1990). Also relevant are the following: (1) “the
character of the representation and the results the representative achieved[;]” (2) “the
amount of time counsel spent on the case[;]” (3) whether “the attorney is responsible for
delay[;]” and (4) “the lawyer’s normal hourly billing charge for noncontingent-fee cases.”
Gisbrecht, 535 U.S. at 808.
Here, the SSA withheld $30,831.00 as the 25 percent of Plaintiff’s benefits award
to be paid to counsel for legal services rendered. (Dkt. 22-3 at 5). Even though the NCB
did not expressly state the full amount of Plaintiff’s retroactive award, counsel submits that
the total amount of Plaintiff’s benefits was $123,324.00, and the Commissioner neither
contested this amount, nor the SSA’s withholding of legal fees. (Dkt. 22-2 at ¶ 10; Dkt. 24
at 5). The Court finds that there is no evidence of fraud or overreaching in the making of
the contingency agreement between counsel and Plaintiff. (Dkt. 22-7). Although counsel
sought two extensions during the course of Plaintiff’s litigation (Dkt. 9; Dkt. 10), the Court
does not find that either of them delayed any proceedings in an attempt to inflate past-due
benefits or the potential fee award that would warrant a downward adjustment of the
requested fee. As for the delay in bringing this fee application, counsel acknowledged its
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potential negative impact on Plaintiff’s case, and even though the Court has found the
reasons for the delay to be reasonable, it sees no reason to disturb Plaintiff’s request for a
reduced fee award of $25,000.00 since it does not exceed the 25 percent statutory cap. The
Court also finds that the hours expended by counsel on the case were reasonable in light of
the issues presented and the extent of his representation that ultimately led to a favorable
decision awarding Plaintiff past-due benefits.
Although the hourly rate that counsel seeks is high, the Court finds that the requested
fee is not so high as to constitute a windfall to counsel. The requested fee would result in
a de facto hourly rate of $738.55 ($25,000.00 divided by 33.85 hours). (Dkt. 22-2 at 2;
Dkt. 22-5). Recently, the Court of Appeals for the Second Circuit clarified that in
determining whether a requested fee constitute a windfall, courts should consider: (1) “the
ability and expertise of the lawyers and whether they were particularly efficient[;]” (2) “the
nature and length of the professional relationship with the claimant—including any
representation at the agency level[;]” (3) “the satisfaction of the disabled claimant[;]” and
(4) “how uncertain it was that the case would result in an award of benefits and the effort
it took to achieve that result.” Fields v. Kijakazi, 24 F.4th 845, 854-56 (2d Cir. 2022).
Here, the Court finds that the requested attorneys’ fees amount does not constitute
a windfall to Plaintiff. Even though the effective hourly rate requested is greater than
counsel’s normal hourly rate of $350.00 per hour (Dkt. 22-2 at 3), his firm’s successful
representation ultimately achieved reversal of the Commissioner’s decision and remand of
Plaintiff’s application solely for calculation and payment of benefits. (Dkt. 18; Dkt. 19).
Counsel’s effective hourly rate also falls withing the range of rates under § 406(b) approved
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by courts. See e.g., Fields, 24 F.4th at 851, 856 (2d Cir. 2022) (an effective hourly rate of
$1,556.98 was not a “windfall”); Amy Sue H. v. Comm’r of Soc. Sec., 1:17-cv-00713-JJM,
2021 WL 4519798, at *3 (W.D.N.Y. Oct. 4, 2021) (collecting cases finding effective
hourly rates between $697.20 and $1,000 to be reasonable in this district). Accordingly,
in light of the above, the Court finds that a de facto hourly rate of $738.55 is in line with
awards generally approved in this District for similar work performed. The Court is also
“mindful that ‘payment for an attorney in a social security case is inevitability uncertain.’”
Buckley v. Berryhill, 15-CV-0341-A, 2018 WL 3368434, at *2 (W.D.N. Y July 10, 2018)
(quoting Wells, 907 F.2d at 371). Accordingly, “the Second Circuit has recognized that
contingency risks are necessary factors in determining reasonable fees under § 406(b).” Id.
(quotation marks omitted).
The Court also notes that counsel would ordinarily be required to return the
previously awarded EAJA fee of $6,672.00. (Dkt. 21). However, counsel indicated that
his firm never received the award as it was “offset because Plaintiff owed debts under the
Department of the Treasury.” (Dkt. 22-1 at 2; Dkt. 22-8). Accordingly, no refund of the
EAJA fee will be necessary because the award was used to satisfy Plaintiff’s debts owed
to the Department of Veterans Affairs, New York Department of Labor, and the
Department of Health and Human Services. See Yarger v. Comm’r of Soc. Sec., No. 1:18cv-00489 EAW, 2020 WL 5704271, at *2 (W.D.N.Y. Sept. 24, 2020) (the EAJA fee could
not be refunded when it was offset to satisfy plaintiff’s student loan obligations). However,
in the event the EAJA fee is ever awarded to counsel in the future, he must return the award

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to Plaintiff. See Juanita Marie D. v. Comm’r of Soc. Sec., No. 6:16-CV-1457 (CFH), 2019
WL 2053849, at *3 (N.D.N.Y. May 8, 2019).
CONCLUSION
For the foregoing reasons, Plaintiff’s motion for attorneys’ fees under § 406(b) (Dkt.
22) is granted, and the Court hereby orders as follows: (1) Plaintiff’s counsel shall be paid
attorneys’ fees in the amount of $25,000.00 out of funds withheld from Plaintiff’s past-due
benefits; and (2) should the EAJA fee award ever be awarded to Plaintiff’s counsel, he
must return the award, or any portion thereof that may be awarded, to Plaintiff.
SO ORDERED.
___________________________
ELIZABETH A. WOLFORD
Chief Judge
United States District Court
Dated:

October 24, 2022
Rochester, New York

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