Sherrill v. Commissioner of Social Security

Filing 27

REPORT AND RECOMMENDATION that the plaintiff's 26 MOTION for Attorney Fees be Granted and that counsel be Awarded $8,573.00 in fees. Objections to R&R due by 6/20/2016. Signed by Magistrate Judge Karen L. Litkovitz on 6/3/2016. (art)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

MICHELLE SHERRILL,
Plaintiff,

Case No. 1: 13-cv-276
Barrett, J.
Litkovitz, M.J.

vs.
COMMISSIONER OF
SOCIAL SECURITY,
Defendant.

REPORT AND
RECOMMENDATION

This matter is before the Court on plaintiff's motion for attorney fees under the Social
Security Act, 42 U.S.C. § 406(b)(l) (Doc. 26). The Commissioner has not filed any opposition
to plaintiffs motion.
On April 28, 2014, the Court reversed and remanded this case for further proceedings
pursuant to Sentence Four of 42 U.S.C. § 405(g). (Doc. 22). On remand, the Commissioner
determined that plaintiff was disabled. (See Notice of Award, Doc. 26-1 ). The Court awarded
plaintiff $2,942.50 under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), which
represented $2,592.50 in attorney fees and $350.00 in costs. (Doc. 25). Plaintiff represents that
she has also received $6,000.00 in attorney fees for representation at the administrative level.
(Doc. 26 at 1 n.1). Acting pursuant to § 406(b)(1 )(A), the Commissioner withheld 25 percent of
past-due benefits-or $17,515.50-as a potential contingency fee to be awarded to plaintiffs
counsel. (See Doc. 26-1 at 3). From that amount, plaintiff now seeks an award of$8,573.00 in
attorney fees available under§ 406(b) for 15.25 hours of work performed before the Court. The
$8,573.00 requested represents 25% of plaintiffs past-benefits ($17,515.50), less the amount
paid to counsel by the Commissioner for work performed at the administrative level ($6,000.00),
and less the amount of EAJA fees and costs previously received ($2,942.50). (See Doc. 26 at 1
n. l).

Pursuant to 42 U.S.C. § 406(b)(l)(A), a court may award a prevailing claimant' s attorney
a reasonable fee not in excess of 25 percent of past-due benefits recovered by the claimant for
work done in a judicial proceeding. 42 U.S.C. § 406(b)(I)(A). See Horenstein v. Sec'y of

H.H.S., 35 F.3d 261, 262 (6th Cir. 1994) (en bane) (court may award fees only for work
performed before the court, and not before the Social Security Administration). Fees are
awarded from past due benefits withheld from the claimant by the Commissioner and may not
exceed 25 percent of the total past-due benefits. Gisbrecht v. Barnhart, 535 U.S. 789, 792
(2002) .
In determining the reasonableness of fees under § 406(b ), the starting point is the
contingency fee agreement between the claimant and counsel. Gisbrecht, 535 U.S. at 807.
When a claimant has entered into a contingency fee agreement entitling counsel to 25 percent of
past-due benefits awarded, the Court presumes, subject to rebuttal, that the contract is
reasonable. Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en bane). Within the 25
percent boundary, the attorney for the claimant must show that the fee sought is reasonable for
the services rendered. Gisbrecht, 535 U.S. at 807. The Court should consider factors such as the
character of the representation, the results achieved, the amount of time spent on the case,
whether the attorney was responsible for any delay, and the attorney's normal hourly billing rate
for noncontingent fee cases. Id. at 808. See also Rodriquez, 865 F.2d at 746. Additionally, the
Court should consider instances of improper conduct or ineffectiveness of counsel; whether
counsel would enjoy a windfall because of either an inordinately large award or from minimal
effort expended; and the degree of difficulty of the case. Hayes v. Sec'y ofHHS, 923 F.2d 418,
422 (6th Cir. 1990); Rodriquez, 865 F.2d at 746. An award of 25 percent of past due benefits
may be appropriate where counsel has overcome legal and factual obstacles to enhance the

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benefits awarded to the client; in contrast, such an award may not be warranted in a case
submitted on boilerplate pleadings with no apparent legal research. Rodriquez, 865 F.2d at 747.
An award of fees under§ 406(b) is not improper merely because it results in an above-

average hourly rate. Royzer v. Sec '.Y ofHHS, 900 F.2d 981, 981-82 (6th Cir. 1990). As the Sixth
Circuit determined:
It is not at all unusual for contingent fees to translate into large hourly rates if the
rate is computed as the trial judge has computed it here [by dividing the hours
worked into the amount of the requested fee]. 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.

Id. "[A] hypothetical hourly rate that is less than twice the standard rate is p er se reasonable, and
a hypothetical hourly rate that is equal to or greater than twice the standard rate may well be
reasonable." Hayes, 923 F.2d at 422.
Here, the fee of $8,573.00 that plaintiff requests falls within the 25 percent boundary.
Thus, the issue is whether the requested fee is reasonable. Gisbrecht, 535 U.S. at 807. Plaintiff
asserts the requested attorney fee is reasonable given attorney Shoshana R. Pehowic' s
background and experience, the contingency fee agreement, and the excellent result she achieved
for plaintiff. (Doc. 26 at 4-5). Plaintiff has submitted a copy of the contingency fee agreement
she entered into with counsel under which she agreed to pay counsel a contingency fee of 25
percent of past-due benefits. (Doc. 26-2). Plaintiff has also submitted an itemized billing sheet
demonstrating that her attorney performed a total of 15.25 hours of work on the case in this
Court. (Doc. 26 at 7). Plaintiff therefore requests that the Court award fees in the amount of
$8,573.00, which represents her counsel ' s unpaid portion of the 25% of plaintiff's past-due
benefits. (Id. at l n. l ).

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Dividing the $17,515.50 withheld by the Social Security Administration less the
$6,000.00 awarded to counsel for her work at the administrative level-$11 ,5 15.50-by the
15.25 hours counsel worked on this case before the Court produces a hypothetical hourly rate of
$755.11. In determining whether counsel "would enjoy a windfall because of either an
inordinately large benefit or from minimal effort expended," Hayes, 923 F.2d at 422 (quoting

Rodriquez, 865 F.2d at 746), the Court notes 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. As the Sixth
Circuit explained in Hayes:
[A] multiplier of 2 is appropriate as a floor in light of indications that social
security attorneys are successful in approximately 50% of the cases they file in
the courts. Without a multiplier, a strict hourly rate limitation would insure that
social security attorneys would not, averaged over many cases, be compensated
adequately.

A calculation of a hypothetical hourly rate that is twice the standard rate is a
starting point for conducting the Rodriquez analysis. It provides a floor, below
which a district court has no basis for questioning, under the second part of
Rodriquez' s windfall rule for "minimal effort expended," the reasonableness of
the fee.

Id.
The Hayes "floor" in this case is $5, 185.00, which represents 15.25 hours times an hourly
rate of $170.00 multiplied by 2. 1 Plaintiff's requested hourly rate of $755.11 is more than four
times her typical hourly rate of $170.00. Plaintiff contends that the requested fee is nonetheless
reasonable. She asserts that the "twice-the-hourly-rate formula [approved in Hayes] was only a
1

Counsel for plaintiff does not provide her specific hourly rate for non-contingency fee cases. Therefore, the Court
adopts the hourly rate of$ l 70.00 approved by the Court in connection with the EAJA fee petition. (See Doc. 25 at
5).

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floor, and the fee awarded could be higher than this rate." (Doc. 26 at 5). She also cites to cases
where comparable or larger hourly rates have been awarded in Social Security disability benefits
cases. (Id. , citing Claypool v. Comm 'r ofSoc. Sec., 294 F. Supp.2d 829 (S.D. W. Va. 2003);
Dodson v. Comm 'r ofSoc. Sec. , No. 4:00-cv-22, 2002 WL 31927589 (W.D. Va. Oct. 22, 2002)).

As stated above, the Commissioner has not filed any opposition to the fee request.
The undersigned finds the Court's reasoning in Pickett v. Astrue, No. 3:10-cv-I 77, 2012
WL 1806136 (S.D. Ohio May 17, 2012), to be persuasive. The Court in Pickett stated:
Such a high hypothetical hourly rate arguably falls within the range of what may
be perceived as a "windfall." However, the Court notes that Plaintiffs counsel ' s
work on behalf of Plaintiff resulted in a significant, though not inordinate, award
of past-due benefits. Further, Plaintiff voluntarily entered into the contingency
fee agreement with counsel and counsel undertook and assumed the risk of nonpayment, which is the nature of contingency fee agreements. In addition, there is
no suggestion nor even a hint of impropriety regarding the agreement between
Plaintiff and Plaintiffs counsel, and, as already noted, Plaintiff's attorney's work
proved greatly successful.
Id. at *2.

This same analysis applies here and supports awarding the requested fee. Counsel did
not unduly delay the resolution of this matter and achieved an excellent result. The case was
reversed and plaintiff received a fully favorable decision on remand. Counsel ' s work resulted in
a significant award of benefits to plaintiff. Further, plaintiff voluntarily entered into the
contingency fee agreement with counsel and counsel undertook and assumed the risk of nonpayment. Plaintiff has reduced her§ 406(b) fee request by the $2,942.50 EAJA fee the Court
awarded to plaintiff as required under Jankovich v. Bowen, 868 F.2d 867, 871 and n. l (6th Cir.
1989) (recognizing that while a claimant may be awarded fees under both the EAJ A and the
Social Security Act, "any funds awarded pursuant to the EAJA serve as reimbursement to the
claimant for fees paid out of his or her disability award to his or her counsel" and should be
awarded to the client). Finally, comparable rates have been awarded in similar cases in this

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Court. See, e.g., Jodrey v. Comm 'r ofSoc. Sec., No. 1:12-cv-725,2015 WL 799770, at *3-*4
(S.D. Ohio Feb. 25, 2015) (Report and Recommendation) (Litkovitz, M.J.), adopted, 2015 WL
1285890 (S.D. Ohio Mar. 19, 2015) (Barrett, J.) (approving effective hourly rate of$700.00);

Havens v. Comm 'r ofSoc. Sec., No. 2:12-cv-637, 2014 WL 5308595, at *2 (S.D. Ohio Oct. 16,
2014) (Report and Recommendation) (Kemp, M.J.), adopted, 2014 WL 6606342 (S.D. Ohio
Nov. 20, 2014) (Smith, J.) (approving effective hourly rate of$750.00); Metz v. Comm 'r, Soc.

Sec. Admin., No. 3:1l-cv-391 , 2014 WL 1908512, at *1-*2 (S.D. Ohio May 12, 2014)
(approvingeffectivehourlyrateof$780.25); Smith v. Comm'rofSoc. Sec., No. 2:10-cv-701 ,
2014 WL 618996, at *2 (S.D. Ohio Feb. 18, 2014) (Report and Recommendation) (Kemp, M.J .),

adopted, 2014 WL 1046025 (S.D. Ohio Mar. 17, 2014) (Sargus, J.) (approving effective hourly
rate of $750.00); Pickett, 2012 WL 1806136, at *2 (approving effective hourly rate of $709.00).
In view of these considerations, and having reviewed the fee request in light of the remaining
criteria set forth in Gisbrecht and Rodriquez, the undersigned finds that a fee award of $8,573.00
is reasonable for the work plaintiffs counsel performed in this Court.
The undersigned therefore RECOMMENDS that plaintiffs§ 406(b) motion for attorney
fees (Doc. 26) be GRANTED and that counsel be AWARD ED $8,573.00 in fees.

IT IS SO RECOMMENDED.

Date:

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
MICHELLE SHERRILL,
Plaintiff,

Case No. I: 13-cv-276
Barrett, J.
Litkovitz, M.J .

vs.
COMMISSIONER OF
SOCIAL SECURITY,
Defendant.

NOTICE TO THE PARTIES REGARDING THE FILING OF OBJECTIONS TO R&R

Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of
the recommended disposition, a party may serve and file specific written objections to the
proposed findings and recommendations. This period may be extended further by the Court on
timely motion for an extension. Such objections shall specify the portions of the Report objected
to and shall be accompanied by a memorandum oflaw in support of the objections. If the Report
and Recommendation is based in whole or in part upon matters occurring on the record at an oral
hearing, the objecting party shall promptly arrange for the transcription of the record, or such
portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the
assigned District Judge otherwise directs. A party may respond to another party's objections
WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in

accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140
(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

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