Brown v. Commissioner of Social Security Administration
Memorandum Opinion and Order granting 22 Motion for attorney fees, but the requested fees are reduced to $4,287.50. Counsel shall refund $1,843.75, the amount previously awarded under the EAJA in this case, to Brown. Magistrate Judge Nancy A. Vecchiarelli on 12/21/2012. (G,W)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
COMMISSIONER OF SOCIAL SECURITY, )
MEMORANDUM OPINION AND
Doc. No. 22
Marcia W. Margolius, counsel for Plaintiff, Anissa L. Garcia (“Plaintiff”), petitions
this Court for approval of attorney’s fees pursuant to 42 U.S.C. § 406(b)(1)
(“§ 406(b)(1)”) in the total amount of $4,900. Doc. No. 22. Defendant, the
Commissioner of Social Security (“Commissioner”), does not oppose an award of fees
but disputes the amount of an appropriate award. Doc. No. 24. For the reasons set
forth below, the motion is for fees is GRANTED, but the requested fees are reduced as
Brown filed an application for Disability Insurance Benefits on March 20, 2007,
alleging disability as of February 18, 2007. Her application was denied initially and upon
reconsideration. Brown timely requested an administrative hearing. Administrative Law
Judge Wayne Stanley (“ALJ”) held a hearing on March 19, 2009. Brown, represented
by counsel, testified on her own behalf at the hearing. Fred Monaco testified as a
vocational expert (“VE”). The ALJ issued a decision on April 1, 2009, in which he
determined that Brown is not disabled. Brown requested a review of the ALJ’s decision
by the Appeals Council. When the Appeals Council declined further review on October
14, 2009, the ALJ’s decision became the final decision of the Commissioner.
Brown filed an appeal to this court on December 10, 2009. Brown alleged that
the ALJ erred because (1) the ALJ failed to assign appropriate weight to the opinion of
Brown’s treating physician; and (2) the ALJ’s Residual Functional Capacity (“RFC”)
assessment was ambiguous and unsupported by substantial evidence. The court found
that the ALJ’s rejection of the treating physician’s opinion was not supported by
substantial evidence because it cited as support an echocardiogram that did not appear
in the record and relied on medical conclusions reached by the ALJ without the support
of medical experts. The court declined to reach the merits of Brown’s second ground
for appeal, instead directing the ALJ to consider Brown’s claims and clarify his ruling.
The court reversed the Commissioner, finding that the ALJ’s rejection of the opinion of
Brown’s treating physician was not supported by substantial evidence, and remanded
the case for further action consistent with the court’s opinion.
On September 30, 2010, Brown moved for $1,843.75 in attorney’s fees pursuant
to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(a). Doc. No. 19. On
October 13, 2010, the parties stipulated to an award of $1,843.75 in attorney’s fees, and
the court awarded that amount on October 14, 2010. Docs. No. 20, 21. This award
represented attorney’s fees at a rate of $125 per hour.
On November 12, 2012, the Commissioner awarded Brown $20,869.20 in past
due benefits. The Commissioner withheld 25% of the awarded benefits, $5,217.30, for
possible payment of the contingency fee of Brown’s attorney.
Brown’s counsel now moves for an award of attorney’s fees of $4,900 pursuant
to § 406(b)(1) and based upon her contingency fee agreement with Brown. Counsel
attaches to her motion the following: (1) her time sheet; (2) her resume; (3) Brown’s
November 12, 2012 Notice of Award of retroactive benefits; and (4) a December 3,
2009 contingent fee agreement between Brown and her counsel.
The Commissioner opposes the amount of the award. He notes that counsel has
miscalculated the amount which would not presumptively be a windfall. The
Commissioner points out that (1) the 6th Circuit has found that hourly fees up to $150
per hour are not excessive and (2) up to twice a reasonable hourly fee is presumptively
not a windfall in the case of an award based on a contingency agreement. The
Commissioner concludes, therefore, that an award of up to $300 per hour is
presumptively not a windfall. Thus, according to the Commissioner, an award at a rate
of $300 per hour would be reasonable, not a rate of $400 as Brown’s counsel requests.
In reply, Brown’s counsel notes that the case in which the 6th Circuit determined
that hourly fees up to $150 per hour are not excessive was decided in 1990. Counsel
then points out that, according to the Bureau of Labor and Statistics (“BLS”), $150 in
1990 would be worth $265.47 in 2012, citing the calculator at the website of the BLS.
Counsel concludes, therefore, that if $150 per hour was reasonable in 1990, then $200
per hour is reasonable in 2012 after accounting for inflation.
LAW & ANALYSIS
Section 406(b)(1)(A) provides for the payment of an attorney’s contingency fee
from an award of benefits:
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, and the Commissioner of Social Security may . . . certify the
amount of such fee for payment to such attorney out of, and not in addition
to, the amount of such past-due benefits.
See also Horenstein v. Sec’y of Health & Human Servs., 35 F.3d 261, 262 (6th Cir.
1994). A court may award attorney’s fees only for work performed before it. Id.
Due deference should be given to the expression of the intentions of client and attorney
in setting fees. Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989). A twenty-five
percent fee agreement between attorney and client should not be viewed as reasonable
per se, but such a fee should be accorded a rebuttable presumption of reasonableness.
Id. If deductions are to be made in the fee, they should generally be one of two types:
(1) deductions occasioned by counsel’s improper conduct or ineffectiveness, or
(2) deductions to prevent a windfall resulting from either an inordinately large award, or
minimal effort expended. Id. In any event, “such fees may not . . . be greater than 25
percent of the amount of back benefits accumulated by three months after the case was
ready for decision by the district court.” Dearing v. Sec’y of Health & Human Servs.,
815 F.2d 1082, 1084 (6th Cir. 1987).
Contingent fees may translate into large hourly rates. A large hourly rate in a
particular case, however, is not necessarily grounds for finding the rate to be
In assessing the reasonableness of a contingent fee award, we cannot
ignore the fact that the attorney will not prevail every time. The hourly
rate in the next contingent fee case will be zero, unless benefits are
awarded. Contingent fees generally overcompensate in some cases and
undercompensate in others. It is the nature of the beast.
Royzer v. Sec’y of Health & Human Servs., 900 F.2d 981, 982 (6th Cir. 1990). A
contingent fee that translates into a large hourly rate is per se reasonable and not a
windfall if the hourly rate resulting from the contingent fee is less than twice the
standard rate for such work in the relevant market. Hayes v. Sec’y of Health & Human
Servs., 923 F.2d 418, 422 (6th Cir. 1990). Finally, it is well established that, where a
claimant has been awarded fees under the EAJA, and where counsel is awarded fees
under § 406(b)(1), counsel must refund the amount of the smaller fee to the claimant.
See Jankovich v. Bowen, 868 F.2d 867, 871, n.1 (6th Cir. 1989); see also Tharp v.
Comm’r of Soc. Sec., No. 1:08-CV-542, 2011 WL 3438431, *21 (S.D. Ohio Aug. 5,
2011) (“In the situation of a dual entitlement, the attorney must refund the amount of the
smaller fee to the claimant.”).
Here, there is no indication of improper conduct or ineffectiveness of counsel,
and counsel’s total requested contingency fee constitutes 23.48% of the award from the
Commissioner, which is within the 25% contingency fee permitted by counsel’s
agreement with her client. Counsel has failed to demonstrate, however, that the
requested contingent fee would not represent a windfall. Counsel argues that, when
considering the rate of inflation, the hourly rate of twice $150 in 1990 permitted by the
Sixth Circuit would be the equivalent of an hourly rate of twice $265.47 in 2012.
Consequently, plaintiff’s counsel concludes, a rate based on an hourly rate of twice
$200 is not excessive. But that is not the measure of whether a fee award is a windfall.
The proper measure is whether the fee is less than twice the standard rate for such
work in the relevant market. While plaintiff’s counsel asserts that a $200 per hour fee is
the standard rate in the Cleveland market, she offers no evidence to support that
Courts in this district have previously determined that a fee of $350 per hour is
not excessive in awarding fees pursuant to § 406(b)(1). See Arnold v. Astrue, Not
Reported in F.Supp.2d, 2011 WL 307969 (N.D. Ohio Jan. 11, 2011); Santiago v. Astrue,
2010 WL 5288170 (N.D. Ohio Dece. 17, 2010); As plaintiff’s counsel has failed to
demonstrate that a fee of $400 per hour is not excessive, the court shall award fees
based on a rate of $350 an hour. Plaintiff’s counsel documents a total of 12.25 hours of
work on Brown’s case. At a rate of $350.00 an hour, the total amount properly awarded
for this work is $4,287.50.
For the foregoing reasons, counsel’s motion for attorney’s fees is GRANTED, but
of the requested fees of $4,900.00 only $4,287.50 is awarded. Counsel shall refund
$1,843.75 – the amount previously awarded under the EAJA in this case – to Brown.
IT IS SO ORDERED.
Date: December 21, 2012
s/ Nancy A. Vecchiarelli___________
U.S. Magistrate Judge
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