Payne v. Commissioner of Social Security

Filing 20

ORDER that Pltf's 18 Motion for Attorney Fees Under § 406(b) of the Social Security Act is GRANTED. Signed by U.S. Magistrate Judge W. Carleton Metcalf on 6/4/2024. (ejb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
STATESVILLE DIVISION
5:22-cv-00031-WCM
MICHAEL PAYNE,
Plaintiff,
v.
COMMISSIONER OF SOCIAL
SECURITY,
Defendant.
_______________________________

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ORDER

This matter is before the Court on Plaintiff’s Motion for Attorney Fees
Under § 406(b) of the Social Security Act (the “Motion,” Doc. 18).
I.

Procedural Background
On March 18, 2022, Michael Payne (“Plaintiff”) initiated this action

seeking judicial review of the Commissioner’s decision to deny his application
for disability insurance benefits. Doc. 1.
On August 3, 2022, Plaintiff filed a Motion for Summary Judgment.
Docs. 11, 12.
The Commissioner filed a Consent Motion for Reversal and Remand
Pursuant to Sentence Four of 42 U.S.C. § 405(g) on October 3, 2022 (the
“Motion to Remand,” Doc. 13).

On October 4, 2022, the undersigned granted the Motion to Remand,
denied Plaintiff’s Motion for Summary Judgment as moot, and remanded this
matter for further administrative proceedings. Doc. 14.
On January 10, 2023, Plaintiff’s Petition for Attorney Fees under the
Equal Access to Justice Act, (“EAJA”), 28 U.S.C. § 2412, was granted, and
Plaintiff was awarded attorney’s fees in the amount of $4,300.00. Doc. 17.
The Commissioner subsequently issued a Notice of Award, reflecting a
total back payment award to Plaintiff of $77,108.20. Doc. 18-1.
On May 20, 2024, Plaintiff filed the instant Motion seeking an award of
$16,500.00 in attorneys’ fees under 42 U.S.C. § 406(b). Doc. 18.
The Commissioner has filed a response stating that he “neither supports
nor opposes counsel’s request….” Doc. 19.
II.

Discussion
There are two ways attorney’s fees may be awarded to a Social Security

benefits claimant.
First, the EAJA provides that “a court shall award to a prevailing party
other than the United States fees and other expenses ... incurred by that party
in any civil action (other than cases sounding in tort), including proceedings
for judicial review of agency action, brought by or against the United States in
any court having jurisdiction of that action....” 28 U.S.C. § 2412(d)(1)(A).

Second, 42 U.S.C. § 406(b) provides 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).
The Supreme Court has explained that:
Congress harmonized fees payable by the Government
under EAJA with fees payable under § 406(b) out of
the claimant's past-due Social Security benefits in this
manner: Fee awards may be made under both
prescriptions, but the claimant's attorney must
“refun[d] to the claimant the amount of the smaller
fee.”
Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002).
See also Astrue v. Ratliff, 560 U.S. 586, 598 (2010) (“The 1985 amendments
address the fact that Social Security claimants may be eligible to receive fees
awards under both the SSA and EAJA, and clarify the procedure that
attorneys and their clients must follow to prevent the windfall of an
unauthorized double recovery of fees for the same work. Section 206(b)
provides that no violation of law occurs ‘if, where the claimant’s attorney
receives fees for the same work under both [42 U.S.C. § 406(b) and 28 U.S.C. §
2412(d)], the claimant’s attorney refunds to the claimant the amount of the
smaller fee’”); Stephens ex rel. R.E. v. Astrue, 565 F.3d 131, 135 (4th Cir. 2009)

(“[T]he claimant’s attorney refunds to the claimant the amount of the smaller
fee”).
The Fourth Circuit has explained that 42 U.S.C. § 406(b) was designed
“‘to control, not to displace, fee agreements between Social Security benefits
claimants and their counsel.’ As long as the agreement does not call for a fee
above the statutory ceiling of twenty-five percent of awarded past-due benefits,
...§406(b) simply instructs a court to review the agreement for reasonableness.”
Mudd v. Barnhart, 418 F.3d 424, 428 (4th Cir. 2005) (quoting Gisbrecht, 535
U.S. at 807). In that regard, a reduction of a contingent fee may be appropriate
when “(1) the fee is out of line with ‘the character of the representation and the
results ... achieved,’ (2) counsel’s delay caused past-due benefits to accumulate
‘during the pendency of the case in court,’ or (3) past-due benefits ‘are large in
comparison to the amount of time counsel spent on the case.’” Id. (quoting
Gisbrecht, 535 U.S. at 808).
Here, Plaintiff and his attorney entered a Fee Agreement pursuant to
which any attorney’s fee award would not exceed 25% of the past due benefits,
Doc. 18-3 at 1, and Plaintiff’s counsel seeks to recover $16,500.00 in fees
pursuant to the Fee Agreement and 42 U.S.C. § 406(b).
Having considered the factors set forth in Mudd, the undersigned will
allow the Motion.

IT IS THEREFORE ORDERED that Plaintiff's Motion (Doc. 18) is
GRANTED, and Plaintiff is awarded attorney’s fees in the amount of Sixteen
Thousand and Five Hundred Dollars and Zero Cents ($16,500.00).
IT IS FURTHER ORDERED that upon receipt of the § 406(b) fees
approved herein, Plaintiff's counsel shall pay to Plaintiff the sum of $4,300.00,
representing a refund of the fee that counsel previously received pursuant to
the Equal Access to Justice Act, 28 U.S.C. § 2412(d).
Signed: June 4, 2024