Illitch v. Commissioner of Social Security

Filing 30

ORDER that 27 plaintiffs § 406(b) motion for attorney fees is GRANTED and that counsel is AWARDED attorney fees in the amount of $7,358.50. Signed by Magistrate Judge Karen L. Litkovitz on 12/17/2020. (art)

Case: 1:17-cv-00835-KLL Doc #: 30 Filed: 12/17/20 Page: 1 of 4 PAGEID #: 1333

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
WILLIAM ILLITCH,
Plaintiff,

Case No. 1:17-cv-835
Litkovitz, M.J.

vs.
COMMISSIONER OF
SOCIAL SECURITY,
Defendant.

ORDER

This matter is before the Court on plaintiff’s motion for attorney fees under the Social
Security Act, 42 U.S.C. § 406(b)(1) (Doc. 27), as supplemented (Doc. 28), and the
Commissioner’s response stating the Commissioner does not oppose plaintiff’s request for
attorney fees (Doc. 29).
Pursuant to 42 U.S.C. § 406(b)(1)(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)(1)(A). See Horenstein v. Sec’y of
H.H.S., 35 F.3d 261, 262 (6th Cir. 1994) (en banc) (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. Id. 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 banc). Within the 25 percent boundary, the
attorney for the claimant must show that the fee sought is reasonable for the services rendered.

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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 of HHS, 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 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 Section 406(b) is not improper merely because it results in an
above-average hourly rate. Royzer v. Sec’y of HHS, 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 per 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. See also Lasley v. Comm’r of Soc. Sec., 771 F.3d 308, 309
(6th Cir. 2014).

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Here, the fee of $7,358.50 requested by plaintiff falls within the 25 percent boundary. 1
Thus, the issue is whether the requested fee is reasonable. Gisbrecht, 535 U.S. at 807. Plaintiff
has submitted an itemized billing record demonstrating that his attorney performed a total of 16
hours of work on the case in the District Court between December 2017 and October 2020.
(Doc. 27 at PAGEID 1319). Plaintiff has submitted a copy of the contingency fee agreement he
entered into with counsel under which he agreed to pay counsel a contingency fee of 25 percent
of past-due benefits. (Doc. 28-1 at PAGEID 1330).
Dividing the $7,358.50 requested by the 16 hours counsel worked on this case before the
Court produces a hypothetical hourly fee of $459.90. 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.

1
The fee requested represents the total amount withheld by the Social Security Administration ($13,358.50) reduced
by the amount withheld for administrative-level work ($6,000.00). (Doc. 27 at PAGEID 1318). Plaintiff’s counsel
was not awarded EAJA fees. (See Doc. 26). Plaintiff also notes that the amount withheld by the Social Security
Administration ($13,358.50) is slightly less than 25% of the past-due benefit award ($14,104.40). (See Doc. 27 at
PAGEID 1318).

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Id.
Plaintiff’s pending fee motion does not include his counsel’s standard hourly rate for
non-contingent cases but generally refers to a 2013 Ohio State Bar Association (OSBA) survey
of attorney fees 2 and several comparable cases—all of which suggest that the hypothetical hourly
rate requested ($459.90) is not more than twice the standard market rate. (See Doc. 27 at
PAGEID 1317) (citing comparable Cincinnati market hourly rates between $300.00 and $455.00
per hour and cases approving hypothetical hourly rates at $450.00, $694.00, and $1,433.00 per
hour). Therefore, the requested fee of $7,358.50 does not constitute a windfall to plaintiff’s
counsel. Hayes, 923 F.2d at 422. The Court notes that plaintiff’s counsel did not unduly delay
the resolution of this matter, and he achieved an excellent result in this case by obtaining a
favorable disability determination on remand with past due benefits in the amount of $43,059.10.
(See Doc. 28 at PAGEID 1323). Further, plaintiff voluntarily entered into the contingency fee
agreement with counsel and counsel assumed the risk of non-payment. The Commissioner has
submitted a response to plaintiff’s motion and does not oppose the motion to charge and collect a
fee of $7,358.50. (Doc. 29). Having reviewed plaintiff’s § 406(b) fee request in light of these
considerations, the Court finds that a fee of $7,358.50 is reasonable for the work plaintiff’s
counsel performed in federal court.
The Court therefore ORDERS that plaintiff’s § 406(b) motion for attorney fees
is GRANTED and that counsel is AWARDED attorney fees in the amount of $7,358.50.
12/17/2020
Date: _________________

_____________________________
Karen L. Litkovitz
United States Magistrate Judge

2

This resource is available at https://www.ohiobar.org/globalassets/home/member-benefits/personalfinance/osba_econoflawpracticeohio.pdf (last visited Nov. 29, 2020). The work performed in this case postdates the
survey data by several years.

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