Townsend v. Commissioner of Social Security Administration

Filing 23

Memorandum Opinion and Order: The Court GRANTS Plaintiff's motion (Doc. 21 ) and awards attorney fees in the amount of $6,212.50 under 42 U.S.C. § 406(b), provided that Plaintiff's counsel refund to Plaintiff any amount received under the Equal Access to Justice Act to prevent double recovery of fees. Magistrate Judge Kathleen B. Burke on 6/21/2021. (P,G)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
LIANE TOWNSEND,
Plaintiff,
v.
COMMISSIONER OF SOCIAL
SECURITY ADMINISTRATION,
Defendant.

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CASE NO. 1:17-cv-2069
MAGISTRATE JUDGE
KATHLEEN B. BURKE

MEMORANDUM OPINION & ORDER

Pending before the Court is Plaintiff Liane Townsend’s Motion for Attorney Fees,
wherein Plaintiff’s counsel, Marcia W. Margolius, requests an award of attorney fees under 42
U.S.C. § 406(b)(1) in the amount of $6,212.50. Doc. 21. Plaintiff’s counsel states that she
previously received an award of attorney fees under the Equal Access to Justice Act (EAJA) and
that any amount received under the EAJA will be returned to the claimant to prevent double
recovery of fees. Doc. 21, p. 3. Defendant filed a response stating that he has no objection.
Doc. 22.
I. Law & Analysis
A. Attorney fee awards in social security disability cases
There are two statutes under which a plaintiff may recover attorney fees in a social
security disability case. First, under the EAJA, a plaintiff may recover attorney fees which, if
awarded, are paid by the government. See 28 U.S.C. § 2412. Second, as part of the judgment
rendered in favor of a plaintiff, a court may award a reasonable fee for an attorney’s
representation in court which, if awarded, are to be paid out of a plaintiff’s past-due benefits, not
as an addition to the amount of past due-due benefits. See 42 U.S.C. § 406(b). The fee awarded

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pursuant to 42 U.S.C. § 406(b) may not be in excess of 25 percent of the total past-due benefits.
Id. Further, a plaintiff’s counsel may not receive fees under both statutes for the same work.
Bowman v. Colvin, 2014 WL 1304914, * 2 (N.D. Ohio Mar. 27, 2014). Thus, if a court awards
both EAJA fees and fees under 42 U.S.C. § 406(b), the plaintiff’s attorney is required to refund
the smaller amount to the plaintiff. Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002).
B. Reasonableness of attorney fees under 42 U.S.C. § 406(b)
In Gilsbrecht, the Supreme Court recognized the “prevalence of contingent-fee
agreements between attorneys and Social Security claimants.” Id. at 805. In doing so, the
Supreme Court held that Ҥ 406(b) does not displace contingent-fee agreements within the
statutory [25 percent] ceiling; instead, § 406(b) instructs courts to review for reasonableness fees
yielded by those agreements.” Id. at 808-809. The Supreme Court observed that, in enacting §
406(b), Congress set one boundary line, namely, “Agreements are unenforceable to the extent
that they provide for fees exceeding 25 percent of the past-due benefits.” Id. at 807. However,
“[w]ithin the 25 percent boundary, . . . the attorney for the successful claimant must show that
the fee sought is reasonable for the services rendered.” Id.
Sixth Circuit “precedent accords a rebuttable presumption of reasonableness to
contingency-fee agreements that comply with § 406(b)’s 25-percent cap.” Lasley v. Comm’r of
Soc. Sec., 771 F.3d 308, 309 (6th Cir. 2014) (citing Hayes v. Sec’y of Health & Human Servs.,
923 F.2d 418, 421 (6th Cir. 1991); Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989)(en
banc)). Courts shall make deductions for large fees in only two circumstances: “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 420-421 (discussing Rodriquez, 865 F.2d at 746)

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(emphasis in original). If the foregoing reasons are not applicable, “an agreement for a 25% fee,
the maximum permitted under § 206(b) of the Social Security Act, 42 U.S.C. § 406(b), is
presumed reasonable.” Id. at 421. Additionally, in Hayes, the Sixth Circuit held that “a windfall
can never occur when, in a case where a contingent fee contract exists, the hypothetical hourly
rate determined by dividing the number of hours worked for the claimant into the amount of the
fee permitted under the contract is less than twice the standard rate for such work in the relevant
market.” Id. at 422.
C. Plaintiff’s request for attorney fee award under 42 U.S.C. § 406(b)
Plaintiff was awarded past due social security benefits. Doc. 21-1, p. 1. Plaintiff signed
a Social Security Client Fee Agreement wherein she agreed to pay her attorney 25% of all pastdue benefits awarded if the federal appeal was successful and, on remand, the Social Security
Administration favorably decided her claim. Doc. 21-2. After her claim was favorably decided,
the Agency withheld $22,869.75 from Plaintiff’s past due benefits, representing 25% of her
benefits award. Doc. 21-1, p. 1. See Culbertson v. Berryhill, --U.S.--, 139 S. Ct. 517, 523
(2019) (holding that the 25% cap in § 406(b)(1)(A) applies to fees for court representation).
Plaintiff’s counsel reasonably expended a total of 17.75 hours in connection with the
federal court litigation in this case. Doc. 21-3. Based on 17.75 hours of work, payment of
$6,212.50 would result in an hourly rate of $350. That amount is the hourly rate charged by
Plaintiff’s counsel. Doc. 21-4, p. 1, ¶4. Thus, it cannot be said that counsel will enjoy a
windfall. See Hayes, 923 F.3d at 422.
II. Conclusion
For the reasons explained above, the Court GRANTS Plaintiff’s motion (Doc. 21) and
awards attorney fees in the amount of $6,212.50 under 42 U.S.C. § 406(b), provided that

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Plaintiff’s counsel refund to Plaintiff any amount received under the EAJA to prevent double
recovery of fees.

IT IS SO ORDERED.
Dated: June 21, 2021

/s/Kathleen B. Burke
Kathleen B. Burke
United States Magistrate Judge

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