Rieth v. Commissioner of Social Security
Memorandum of Opinion and Order For the reasons set forth herein, the Court grants Plaintiff's Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b) (ECF No. 23 ). The Court awards attorney fees under § 406(b) in the amount of $29,876.15 to be remitted to counsel for Plaintiff, provided that counsel for Plaintiff remits to Plaintiff $6,650 in attorney fees the Court previously awarded under the EAJA to prevent double recovery of fees. Judge Benita Y. Pearson on 7/16/2021. (JLG)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
DIANA L. RIETH,
ANDREW M. SAUL,
CASE NO. 1:16CV0574
JUDGE BENITA Y. PEARSON
MEMORANDUM OF OPINION
[Resolving ECF No. 23]
Pending is Plaintiff’s Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b) (ECF No.
23) for time spent before the Court. Plaintiff Diana L. Rieth requests an award of fees in the
amount of $29,876.15, which represents 25% of the retroactive benefits awarded to Plaintiff.
Upon receipt of this sum, counsel for Plaintiff appropriately declares they will refund the
previously awarded Equal Access to Justice Act (“EAJA”) fees of $6,6501 directly to Plaintiff.
See Reply Memorandum (ECF No. 26) at PageID #: 1727. In addition, counsel for Plaintiff does
not intend to seek any fees under 42 U.S.C. § 406(a)2 should the Court award the full amount of
fees sought in the within motion. See Memorandum in Support (ECF No. 23-4) at PageID #:
1712. Therefore, counsel’s aggregate fees will not exceed 25% of past-due benefits. The Court
See Stipulation to Award EAJA Fees (ECF No. 19) and Order (ECF No. 20).
A fee request under § 406(a) would be for time spent before the Social Security
has been advised, having reviewed the record, the parties’ briefs, and the applicable law. For the
reasons that follow, the Court grants the motion.
In February 2016, Plaintiff and her counsel executed a binding U.S. District Court
Retainer Agreement and Assignment that provides, in relevant part, “Attorney is to receive
twenty-five percent (25%) of the past due benefits due to Client and Client’s family.” ECF No.
23-3 at PageID #: 1696. Thereafter, experienced counsel for Plaintiff litigated the case through
multiple hearings and appeals, resulting in a favorable ruling from the SSA. During this time,
Plaintiff faced a number of initial denials by Defendant Commissioner of Social Security of her
applications for Disability Insurance Benefits and Supplemental Security Income.
On February 20, 2020, an Administrative Law Judge issued a written Fully Favorable
decision that found Plaintiff disabled since her alleged onset date of February 19, 2009. The
SSA wrote a Notice of Award to Plaintiff, dated April 2, 2020, stating that it withheld 25 percent
of past-due benefits, i.e. $29,876.15, in case the SSA needs to pay Plaintiff’s representative. See
ECF No. 23-3 at PageID #: 1703, 1705.
Plaintiff moves the Court to approve an attorney’s fee award of $29,876.15 to be paid out
of her total award in past-due benefits. Plaintiff asserts that the fee, which represents 25% of the
total award, is due to her attorneys for 37.3 hours of work in the case before the Article III forum.
Defendant suggests that a reduction in the requested fee is warranted to avoid a windfall. See
ECF No. 25 at PageID #: 1716.
II. Legal Standard
Section 406(b), Title 42 U.S.C. authorizes the Court to award attorney fees following the
successful disposition of a Social Security disability appeal. Pursuant to § 406(b), counsel for
plaintiff may recover “a reasonable fee . . . not in excess of 25 percent of the total of the past-due
benefits” for time representing a successful claimant in a judicial proceeding. Section 406(b)
“does not displace contingent-fee agreements,” but rather calls for judicial review as an
“independent check” to ensure that attorney’s fees are reasonable under the circumstances of the
particular case. Gisbrecht v. Barnhard, 535 U.S. 789, 807 (2002). When an attorney has
received an award of attorney fees under the EAJA, and subsequently seeks fees under § 406(b),
the attorney must return the lesser of the two awards to the plaintiff. See Jankovich v. Bowen,
868 F.2d 867, 871 (6th Cir. 1989) (funds paid pursuant to the EAJA serve as a “reimbursement”
to the claimant for fees paid out of her disability award).
The Commissioner has no direct financial stake in the within motion for § 406(b) attorney
fees, but plays a part resembling that of a trustee for claimants. Gisbrecht, 535 U.S. at 798 n. 6.
In that role, the Commissioner does not stipulate or agree to fee motions under § 406(b) as a
matter of policy because prevailing plaintiffs and their counsel are the real parties in interest.
Instead, the Commissioner files responses to § 406(b) motions advising the Court whether he
opposes the motion pursuant to the trustee-like role described in Gisbrecht.3
A copy of the within motion was sent by counsel for Plaintiff to his client at
Plaintiff’s last known address. See ECF No. 23-4 at PageID #: 1709. Plaintiff has not
filed a response to the motion.
The standards for reviewing a petition for attorneys’ fees under 42 U.S.C. § 406(b) are set
forth in the Sixth Circuit’s decisions of Rodriquez v. Bowen, 865 F.2d 739 (6th Cir. 1989) (en
banc) and Hayes v. Secy. of Health & Human Serve. 923 F.2d 418 (6th Cir. 1990). In Rodriquez,
the Sixth Circuit found that an award of 25 percent of past-due social security benefits is
presumptively appropriate so long as it is derived from a contingent fee contract between counsel
and the claimant permitting that amount to be charged. Rodriquez, 865 F.2d at 746. In Hayes,
the Sixth Circuit concluded that “[a] calculation of a hypothetical hourly rate that is twice the
standard rate is a starting point for conducting the Rodriquez analysis,” noting that a fee in the
amount of twice the standard hourly rate is per se reasonable and establishes a floor for awarding
of attorneys’ fees below which the district court may not ordinarily drop on grounds that counsel
is receiving a windfall from an award in excess of her usual hourly rate. Hayes, 923 F.2d at 422;
see also Lesley v. Comm’r of Soc. Sec., 771 F.3d 308, 309 (6th Cir. 2014) (reaffirming holding in
When counsel’s hourly billing rate for non-contingent-fee cases is more than half of the
effective hourly rate at issue, the Court should look to the following factors: (1) what portion of
the time expended on the case was attorney time versus paralegal time; (2) the degree of
difficulty of the case; and, (3) any improper conduct or ineffectiveness of counsel for Plaintiff.
Hayes, 923 F.2d at 422.
Motions for attorney fees are subject to scrutiny and may be discounted by the district
court. Both Rodriquez and Hayes make clear that the district court may reduce a fee request,
especially one which asks for more than twice the normal hourly rate. See Rodriquez, 865 F.2d
at 746; see also Hayes, 923 F.2d at 422 (“If the calculated hourly rate is above this floor, then the
court may consider arguments designed to rebut the presumed reasonableness of the attorney’s
fee.”). Courts may reduce a fee request in two instances: “1) those occasioned by improper
conduct or ineffectiveness of counsel; and 2) situations in which counsel would otherwise enjoy
a windfall because of either an inordinately large benefit award or from minimal effort
expended.” Hayes, 923 F.2d at 421-22 (emphasis in original) (citation omitted). Courts may also
consider other relevant factors including the extent of counsel’s services, the amount of time
counsel spent on the case, the results counsel achieved, and counsel’s fees in other cases. See
Gisbrecht, 535 U.S. at 794 (discussing the factors the Commissioner considers in evaluating a
fee request under 20 C.F.R. § 404.1725(b)).
Plaintiff’s counsel seeks 25% of Plaintiff’s past-due benefits, totaling $29,876.15.
Counsels’ fee request remains consistent with the 25% cap provided by § 406(b) and with the fee
agreement for federal court representation (ECF No. 23-3) that Plaintiff signed. There is no
suggestion of fraud or overreaching by counsel for Plaintiff in the case at bar. According to
counsels’ time-log (ECF No. 23-3 at PageID #: 1699), they expended a total of 37.3 hours
representing Plaintiff before the Court. The Court’s award of $29,876.15 in fees, therefore,
would result in a de facto hourly rate of approximately $622.68 an hour based on the 37.3 hours
the attorneys expended on this case before the Court after EAJA fees are refunded to Plaintiff.
See Bullock v. Comm’r of Soc. Sec., No. 1:15CV2158, 2020 WL 264258, at *3 (N.D. Ohio Jan.
17, 2020) (Pearson, J.) (holding that the effective hourly rate should be computed after deducting
any amount that will be refunded from the EAJA to Plaintiff from the past due benefits);4 see
also Ezzo v. Colvin, No. 4:13CV1892, 2016 WL 6652788, at *2 n. 29 (N.D. Ohio Oct. 12, 2016)
(Baughman, M.J.) (noting “that after deducting the EAJA fee, the net fee amount for claimant’s
counsel is $10,155.00, which, when divided by the hours expended, yields an hourly rate of
$491.76–an amount well below double the claimant attorney’s usual hourly rate.”).
The Commissioner alleges that counsel for Plaintiff would enjoy a windfall solely based
on this equivalent hourly rate. ECF No. 25 at PageID #: 1716. Defendant invites the Court to
consider rates commonly awarded under the EAJA in the Northern District of Ohio for purposes
of the Hayes test, imposing an upper limit of $350 per hour.5 ECF No. 25 at PageID #: 1717. A
de facto hourly rate reached by dividing past due benefits by the time expended in court may be
considered as only one of multiple factors in assessing the overall reasonableness of the
requested fees. Gisbrecht, 535 U.S. at 808. The Commissioner also does not allege that counsel
for Plaintiff engaged in improper conduct or expended only minimal effort in representing
Plaintiff over the past decade, nor has the Court found either in reviewing the case.
The Commissioner argues that this portion of the Bullock decision was wrongly
decided in determining if the hourly rate is a windfall. ECF No. 25 at PageID #: 1719.
However, Defendant cites to no contrary legal authority to support such a finding.
While EAJA fees may be calculated using the hourly rate or “lodestar” analysis,
the Sixth Circuit has held that, in applications for attorneys’ fees under 42 U.S.C. §
406(b), it is “error for the district courts to reduce the attorney’s fee award on the ground
that the amounts called for by the [twenty-five percent] contingency agreements
computed to high hourly rates.” Hayes, 923 F.2d at 421. Therefore, for purposes of the
windfall analysis, the Court uses counsels’ hourly rate. Gapen v. Comm’r of Soc. Sec.,
No. 1:18CV1037, 2020 WL 7889079, at *2 n. 3 (N.D. Ohio Dec. 23, 2020) (Pearson, J.).
For the fees to be per se reasonable in the case at bar, counsel for Plaintiff must establish
that the standard rate is no less than $311.34 an hour – half the de facto hourly rate of $622.68 an
hour. The normal hourly billing charge for non-contingent-fee cases of counsel for Plaintiff,
however, is $375 an hour. See ECF No. 23-4 at PageID #: 1710. When the standard hourly rate
of counsel for Plaintiff is doubled in light of the Hayes reasonability analysis, it amounts to $750
an hour, which is much higher than the de facto hourly rate at issue in the case at bar. See
Bullock, 2020 WL 264258, at *3 (finding effective hourly rate of $725 reasonable in this
district); Ezzo, 2016 WL 6652788, at *2, report and recommendation approved, No.
4:13CV1892, 2016 WL 6649309 (N.D. Ohio Nov. 10, 2016) (Gaughan, J.) (finding it appropriate
to award § 406(b) fees that resulted in a de facto hourly rate of $700).
Plaintiff argues that the facts of the case at bar warrant a slight deviation above what the
Court may find is the standard hourly rate to award the full 25% agreed to in this case. ECF No.
23-4 at PageID #: 1710. In Hayes, the Sixth Circuit held that in some cases “a hypothetical
hourly rate that is equal to or greater than twice the standard rate may well be reasonable.” 923
F.2d at 422. Although the rate sought in the case at bar is not per se reasonable, it nevertheless
triggers the rebuttable presumption of reasonableness set forth in Rodriquez and Hayes.
Social Security practitioners accepting contingent-fee arrangements bear the sometimes
high risk of non-payment in unsuccessful cases. In assessing the reasonableness of a contingent
fee award, the Court does not ignore the fact that the social security attorney will not prevail
every time. Contingent fees generally overcompensate in some cases and undercompensate in
others. Royzer v. Sec’y of Health and Human Servs. 900 F.2d 981, 982 (6th Cir. 1990).
The Court finds the Hayes factors here weigh in favor of a deviation above any per se
reasonable hourly rate as (1) all the time spent on the merits of briefing the case before the
district court was performed by attorneys, see ECF No. 23-3 at PageID #: 1699; (2) the case
involved great difficulty and risk, requiring multiple appeals and hearings before resulting in an
award of benefits to Plaintiff for the entire period of disability claimed; and, (3) there is no
evidence counsel was ineffective or engaged in improper conduct to prolong the proceedings.
See Bowman v. Colvin, No. 1:09CV248, 2014 WL 1304914, at *4 (N.D. Ohio March 27,
2014) (Gaughan, J.) (finding that an effective hourly rate of about $720, which was
approximately 2.6 times counsel’s average hourly rate, was not a windfall); see also Parish v.
Comm’r of Soc. Sec., No. 13-cv-14410, 2017 WL 3084371, at *3 (E.D. Mich. July 20, 2017)
(finding an effective hourly rate of nearly $900 appropriate); Wummel v. Comm’r of Soc. Sec.,
No. 12-14860, 2016 WL 245287, at *2-3 (E.D. Mich. Jan. 21, 2016) (awarding fees that resulted
in a de facto hourly rate of $960.68); Ballatore v. Comm’r of Soc. Sec., No. 11-15335, 2015 WL
5830836, at *10 (E.D. Mich. Aug. 5, 2015) report and recommendation approved,
No.11-CV-15335, 2015 WL 5772000 (E.D. Mich. Oct. 2, 2015) (awarding the full 25% of pastdue benefits for work performed before the court); Droke v. Barnhart, No. 02-1284-T/AN, 2005
WL 2174397, at *2 (W.D.Tenn. Sept. 6, 2005) (awarding § 406(b) fees equating to 25 percent of
past-due benefits when de facto hourly rate was $830.82 – 5.5 times larger than counsel’s normal
hourly rate – considering that counsel was an experienced attorney who achieved “exceptional”
Considering all the relevant factors and the Court’s review for reasonableness, the Court
finds counsel for Plaintiff have shown that an award of $29,876.15 does not constitute a windfall
in light of the windfall analysis suggested by Hayes, and is reasonable for the services rendered
in this case. Furthermore, the total fee of counsel for Plaintiff does not exceed the 25 percent
statutory cap and the contingency fee that Plaintiff agreed upon and it is reasonable given “the
character of the representation and the results of the representation achieved.” Gisbrecht, 535
U.S. at 808.
For these reasons, the Court grants Plaintiff’s Motion for Attorney Fees Pursuant to 42
U.S.C. § 406(b) (ECF No. 23). The Court awards attorney fees under § 406(b) in the amount of
$29,876.15 to be remitted to counsel for Plaintiff, provided that counsel for Plaintiff remits to
Plaintiff $6,650 in attorney fees the Court previously awarded under the EAJA to prevent double
recovery of fees.
IT IS SO ORDERED.
July 16, 2021
/s/ Benita Y. Pearson
Benita Y. Pearson
United States District 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?