Berry v. Commissioner of Social Security
Filing
28
REPORT AND RECOMMENDATIONS re 24 MOTION for Attorney Fees filed by Carl E Berry. IT IS RECOMMENDED THAT the motion for an award of attorney's fees be construed as if filed under 42 U.S.C. § 1383(d) and be GRANTED in part. Specifically , the undersigned recommends that counsel be awarded the additional net fee of $4,538.02, conditioned on counsel's submission to the Court of a copy of the referenced fee agreement. Objections to R&R due by 5/28/2020. Signed by Magistrate Judge Stephanie K. Bowman on 5/14/2020. (km)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
CARL E. BERRY,
Case No: 1:18-cv-207
Plaintiff,
v.
Black, J.
Bowman, M.J.
COMMISSIONER OF SOCIAL SECURITY,
Defendant.
REPORT AND RECOMMENDATION
Plaintiff’s motion for attorney’s fees has been referred to the undersigned for initial
review. I recommend that the motion be construed as if filed under 42 U.S.C. §1383(d)
and be GRANTED only in part, with the amount of fees to be reduced to avoid a windfall.
I.
Background
The above-captioned case arises out of Plaintiff’s judicial appeal to challenge the
Defendant’s denial of application for Supplemental Security Income payments under Title
XVI of the Social Security Act. On July 26, 2019, the undersigned recommended that the
non-disability finding be reversed and remanded for an immediate award of SSI benefits.
The presiding district judge adopted that Report and Recommendation on September 29,
2019. (Docs. 16, 19).
On October 10, 2019, the Court granted the parties’ joint motion
for an award of attorney’s fees to be made to Plaintiff’s counsel under the Equal Access
for Justice Act (“EAJA”). (Doc. 22).
On December 11, 2019, the Social Security Administration issued a Notice of
Award that calculated Plaintiff’s past due SSI benefits at $51,332.12. Just prior to the
expiration of the deadline for filing a further motion for attorney’s fees under the Social
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Security Act, 1 Plaintiff’s counsel sought and was granted an extension of time in which to
file a motion for attorney’s fees under 42 U.S.C. § 406(b). (Doc. 23). Pursuant to that
extension, Plaintiff’s counsel timely filed a motion seeking an additional fee award under
the provisions of the Social Security Act. The Commissioner has filed a response in
opposition to the motion, to which counsel has filed a reply. 2
II.
Analysis
A. Construing the Fee Motion Under the Correct Statute
In support of the award, counsel first argues that he successfully pursued and won
for his client a large award of past-due SSI benefits under Title XVI. Notably, counsel did
not pursue an award of past-due DIB benefits under Title II. Because Plaintiff was not
awarded DIB benefits, this Court may not award attorney’s fees under the particular
statute on which counsel relies. As this Court previously advised last year in Pennington
v. Com’r., Case No. 1:17-cv-264, 2019 WL 3228896 (S.D. Ohio July 18, 2019), 42 U.S.C.
§ 406(b) “covers only attorneys whose clients bring successful claims under Title II of the
Social Security Act.” Napier v. Commissioner, 190 Fed. Appx. 458, 459-60 (6th Cir.2006);
see also generally Bowen v. Galbreath, 108 S. Ct. 892 (1988) (citing 42 U.S.C. § 406(b));
McCarthy v. Sec’y of Health and Human Servs., 793 F.2d 741 (6th Cir. 1986).
The fact that no award may be made under 42 U.S.C. § 406(b) does not mean that
counsel must go uncompensated. Rather, Congress has provided for compensation
1Local
Rule 54.2(b) specifies that a motion for attorney’s fees under the Social Security Act must be filed
within forty-five days of the Notice of Award. See Rabong v. Com’r of Soc. Sec., Case No. 1:14-cv-811,
2018 WL 558918 (S.D. Ohio Jan. 25, 2018) (directing counsel to address timeliness issue, but approving
fee amounting to $519.60 per hour); Hancock v. Com’r, Case No. 1:15-cv-198, 2018 WL 504845 (S.D. Ohio
Oct. 17, 2018) (citing untimeliness of motion and counsel’s failure to comply with Rabong, reducing award
rate to $389); Pennington v. Com’r, 2019 WL 5066850 (S.D. Ohio Oct. 9, 2019) (approving rate of $499 for
timely filed motion).
2Because counsel’s interests are adverse to those of his client in this instance, the undersigned uses
“counsel” in lieu of “Plaintiff” for the remainder of this R&R.
2
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through a parallel statute applicable to Title XVI of the Social Security Act. See 42 U.S.C.
§1383(d)(2). As the Court did in Pennington, in the interests of justice, the undersigned
will construe counsel’s motion as if properly filed under §1383(d). Because §1383(d)
contains nearly identical language and is intended to produce the same result as
§406(b), 3 the same case law and analysis applies. Both §406(d) and §1383(d) cap fees
at 25% of any past-due benefits award and impose criminal penalties upon any attorney
who would seek to exceed that maximum. In this case, 25% of the past due benefits
award yields a maximum fee of $12,833.05. See §1383(d)(2)(B)(i).
B. Determining a Reasonable Fee
Nearly two decades ago in Gisbrecht v. Barnhardt, 535 U.S. 808-809 (2002), the
Supreme Court held that the Social Security Act does not wholly displace contingent fee
agreements but does impose an affirmative duty on courts to review for reasonableness
the fees that result from those agreements. More recently in Ringel v. Com’r of Soc. Sec.,
295 F. Supp.3d 816 (S.D. Ohio 2018), a case involving another attorney from the same
law firm, this Court closely examined Sixth Circuit case law since Gisbrecht with the
“modest ambition of amplifying the concerns previously expressed in controlling case
law.” Id. at 824.
Case law emphasizes the affirmative obligation of courts to determine
whether a fee award is “reasonable,” even when supported by an
unopposed motion that relies on a standard contingency fee agreement
within the 25% statutory cap. Lowery v. Com'r of Soc. Sec., 940 F.Supp.2d
689, 691 (S.D. Ohio 2013) (approving unopposed motion for fee where
counsel did not request full 25% fee authorized by agreement, but instead
voluntarily reduced fee to 14.5% of past-due benefits award). A primary
reason for all this scrutiny is that, unlike the EAJA award received… for the
same work, the § 406(b) fee award is paid directly out of, and therefore
directly reduces, the amount of the past-due benefits paid to the disabled
342
U.S.C. § 1383(d)(2)(A)(iv) expressly incorporates the language of § 406(b)(1)(A), but alters that
language slightly to state that the Commissioner may “pay the amount of such fee to such attorney out of,
and not in addition to, the amount of such past-due benefits.”
3
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claimant. See e.g., Royzer v. Sec'y of Health & Human Servs., 900 F.2d
981, 982 (6th Cir. 1990) (reversing trial court's flat rejection of a contingent
fee agreement, but warning that “[c]ontingent fees in social security cases
are different than in other cases of the law because Congress has put the
responsibility on the federal judiciary to make sure that fees charged are
reasonable and do not unduly erode the claimant's benefits”).
Still, federal courts - far more accustomed to enforcing contracts than to
breaking them - are understandably reluctant to rewrite the key term of a
facially valid contract for payment between a lawyer and his/her client.
Ringel, 295 F.Supp.3d at 822.
Synthesizing the prevailing case law, Ringel meticulously set forth five
“guideposts” used by most courts within the Sixth Circuit to navigate their duty under the
Social Security Act to determine whether a standard contingency fee agreement results
in a windfall, even in a case where counsel has done no wrong.
Gisbrecht confirmed that a contingent fee agreement may result in an
inordinately large - and therefore unreasonable - fee merely by virtue of the
benefits being large “in comparison to the amount of time counsel spent on
the case.” Gisbrecht, 535 U.S. at 808, 122 S.Ct. 1817 (emphasis added).
In short, both Gisbrecht and Sixth Circuit authority through Lasley [v. Com’r,
771 F.3d 308 (6th Cir. 2014)] support reducing a contingent fee to avoid a
windfall even if counsel gave more than “minimal” effort and did nothing
wrong, where only the passage of time has caused the inordinately large
benefit award. See also Rodriquez, 865 F.2d at 746, 747 (defining a
windfall as resulting from “either an inordinately large benefit award or from
minimal effort expended,” and noting that “with the best of will on the part of
the claimant's lawyer, these disability cases are frequently drawn out over
a considerable period of time.”)(emphasis added, internal quotation
omitted).
Ringel, 295 F.Supp.3d at 828 (emphasis original). The five guideposts are: (1) the Sixth
Circuit’s long-standing Hayes test; 4 (2) the amount of administrative and/or judicial delay;
(3) the quality and quantity of attorney hours expended; (4) whether counsel has
4See
Hayes v. Sec’y of HHS, 923 F.2d 418, 422 (6th Cir. 1990).
4
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compromised his fee; and (5) whether the Commissioner has filed any opposition. Id. at
842.
Although the Court does not yet have a copy to review, counsel represents that
Plaintiff signed a standard contingency fee agreement. 5 Consistent with nearly all such
agreements, counsel states that the Agreement authorizes a contingency fee award equal
to the full 25% statutory maximum fee of $12,833.05. 6 Counsel has attached his time
records and the Notice of Award. 7
As a first step in determining whether the proposed award is “reasonable” or
amounts to a windfall under the Ringel guideposts, the undersigned calculates the
hypothetical hourly fee and compares that fee with the EAJA-based “standard rate” in
accordance with the Hayes test. In Hayes, the Sixth Circuit rejected the approach of
some courts to reduce nearly every contingency fee and acknowledged that a premium
may be paid without creating a windfall due to the contingent nature of recovery. Setting
forth an elegantly simple test that has withstood the test of time to determine when that
contingency premium might be questioned as a windfall, the Hayes court explained:
5Counsel
has not included the date or a copy of the Agreement, despite a reference to it being “[a]ttached.”
(Doc. 24 at 2). However, contingency fee agreements that reflect the maximum statutory fee are standard,
with rare exceptions. See Gisbrecht, 535 U.S. at 808 n. 15 (acknowledging dissenting view that standard
social security fee agreements closely resemble adherence contracts but holding that judicial review
together with the statutory cap will ensure reasonableness). Although the undersigned accepts counsel’s
statement that Plaintiff executed such an Agreement, the final award should be conditioned on counsel’s
submission of a copy in order to complete the Court’s affirmative obligation of review.
6Counsel suggests that because he has subtracted the prior EAJA award amount from the additional
compensation he seeks, the EAJA award should not be considered. However, the prior EAJA award was
paid to counsel. Under controlling case law, counsel would be required to return the EAJA award to avoid
double-recovery for the same work performed in federal court. Janovic v. Sec’y, 868 F.2d 867 n.1 (6th Cir.
1989). Counsel’s offset of the EAJA award, in lieu of remitting the fee to Plaintiff, does not reduce the total
fee received by counsel for his 15.5 hours of work. See Ringel, 295 F. Supp.3d at 838 (rejecting the
“common error” of presenting an hourly rate after decreasing the amount sought by the amount of the EAJA
award).
7Counsel states that the Social Security Administration withheld 25% from the past due benefits award but
the attached exhibits are silent as to any withholding. However, the Agency’s failure to withhold fees does
not impact this Court’s ability to award such a fee, if warranted under the law. See Culbertson v. Berryhill,
139 S. Ct. 517 (2019)
5
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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 ..., the reasonableness of the fee. In other
words, 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.
Id., 923 F.2d at 422. Thus, in cases in which the proposed award is reasonable under
the Sixth Circuit’s longstanding Hayes test, “the windfall analysis is complete.” Ringel,
295 F. Supp.3d at 829.
Although some courts have determined a different “standard rate” to be used in
the Hayes test, the EAJA-based “standard rate” has been used by most courts for multiple
reasons, including consistency.
[C]ourts have adopted the hourly rate that the attorney receives under the
EAJA as proxy for the “standard rate” in the Hayes test.
EAJA
compensation rates work well as a standard rate in the Hayes test because
in the typical social security case, the EAJA provides the only other means
by which counsel may be compensated for work performed in a judicial
appeal of a social security case. In fact, Hayes itself referenced hourly rates
that appear derived from the EAJA….
Using an EAJA-based fee for the Hayes test assures consistency, since the
same attorney usually will have recovered that rate for the same work.
Using that standard also decreases the complexity required for courts to
perform the requisite § 406(b) analysis and keeps intact the intended
simplicity of Hayes, while decreasing satellite litigation over the definition of
the “standard rate.” Additionally, the EAJA inflation-adjusted rate has been
widely adopted in a clear majority of unpublished cases employing
the Hayes test.
Ringel, 295 F. Supp.3d at 829-830. The presumptive use of EAJA rates in the Hayes test
builds in inflationary factors including consideration of state bar data over time, because
the EAJA rate ultimately is derived from that data. Id., at 831. The Sixth Circuit also has
acknowledged and affirmed the use of an EAJA-based rate as the “standard rate[ ]
6
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applied to social security fee requests in the Southern District of Ohio.” Lasley, 771 F.3d
at 310.
Here, counsel was previously awarded $2,635.00 under the EAJA for the same
15.5 hours for which he now seeks an additional fee, a rate that translates to a “standard
rate” of $175 per hour. The proposed additional fee ($12,833.03) divided by the same
number of hours (15.5) yields a hypothetical hourly fee of $827.93, an amount that is
more than 4.7 times the previous hourly rate that counsel was awarded for the same work,
and that the Commissioner points out is “well above the amount courts in the Southern
District of Ohio have found reasonable.” (See Doc. 25 at 2-4, collecting cases and noting
that most courts conclude that the $350-400 hourly rate range constitutes a reasonable
award); see also Lasley, 771 F.3d 308 (approving Judge Dlott’s decision to reduce
counsel’s fee from $733 per hour to $360 per hour to avoid a windfall).
The Hayes test establishes a floor but not a ceiling. In Ringel, the court approved
a relatively high rate of $600 per hour after explaining the justification on the facts
presented, while also explaining the basis of increased scrutiny whenever counsel seeks
a higher rate:
Courts must be willing to approve multipliers above the Hayes “floor” when
appropriate. At the same time, Hayes suggests that the higher the
multiplier/rate, the more closely an award should be reviewed for windfall.
Even where counsel's conduct is above approach and achieves a good
result, the contingent fee to which the claimant agreed may still be too
much.
Ringel, 295 F.Supp.3d at 833. Although statistical outlier cases may be found, the vast
majority of cases in this district support the approach of more closely scrutinizing cases
“the higher the multiplier/rate” in order to avoid a windfall.
In support of the unusually high contingency multiplier and fee sought in this case,
7
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counsel first focuses on his “very good” representation of Plaintiff since March 7, 2014,
when his firm began representing Plaintiff at the administrative level. 8 Counsel suggests
that “because this case was granted at the District Court level, the typical approval of
administrative fees, up to the maximum $6,000.00 did not occur.” (Doc. 24 at 4). In his
reply memorandum, counsel further argues that if the $6,000 fee had been paid to counsel
at the administrative level, “it would be deducted from the withheld amount of $12,833.03,
and then the balance of $6,833.03 divided by the 15.5 hours worked would come out to
be $440.84 per hour.” (Doc. 27 at 2). Counsel explains that he chose not to petition SSA
for work at the administrative level “because the claim was granted at the District Court
level. If the full amount of fees requested herein is granted, there will be no application
for fees at the Administrative level.” (Doc. 24 at 4). 9
Counsel seems to be advocating for the award of a higher fee by this Court based
upon work counsel’s firm performed before the Social Security Agency at the
administrative level. But settled and controlling case law (as well as the explicit statutory
language) prohibit this Court from awarding fees for any time outside of this federal court,
including time that his firm may have spent on work at the administrative level. See, e.g.,
Horenstein v. Sec’y of Health & Human Servs., 35 F.3d 261 (6th Cir. 1994) (en banc); 42
U.S.C. §§ 406(a), 406(b) and 1383(d).
An attorney’s willingness to compromise his fee below the maximum allowable fee
8A non-attorney representative from counsel’s firm represented Plaintiff at the hearing before the ALJ. The
extent to which counsel himself may have represented Plaintiff at the administrative level is not clear in the
record before this Court, but neither is it relevant for the reasons discussed herein.
9Contrary to counsel’s argument, this case was remanded for calculation and entry of the final award. The
statutory provisions ensure separate compensation for representatives for work performed at the
administrative level and prohibit this Court from awarding any compensation for such work. Although
counsel’s argument implies otherwise, (see Doc. 27 at 1-2), the award of a fee by this Court has no bearing
on counsel’s ability to submit a separate application for fees for work performed at the administrative level.
See Culbertson v. Berryhill, 139 S. Ct. 517 (2019).
8
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authorized by the contingency fee agreement is laudable. And the undersigned would
have no difficulty in approving counsel’s theoretical hourly fee if that were the actual fee
being sought on the record presented. However, counsel’s suggestion that this Court
should imagine that the hourly rate is roughly half of the actual rate that counsel is seeking
is not rational, because counsel has not reduced or compromised his fee in this Court.
Moreover, counsel’s promise that his firm will not submit a future application to the Agency
for work at the administrative level (under a different statutory provision) if he is awarded
a large fee by this Court is based upon a mistaken perception that the 25% cap applies
to the aggregate of all fees received. Contrary to that perception, the Supreme Court
recently held that the 25% statutory cap “applies only to fees for court representation, and
not to the aggregate fees awarded under §§ 406(a) and (b).” See Culbertson v. Berryhill,
139 S. Ct. at 523.
Counsel next claims that other courts have held that “similar” large fees do not
constitute a windfall. Counsel does not cite to any recent published cases in the Southern
District of Ohio or even within the Sixth Circuit. Instead, counsel relies on three cases
from California and West Virginia decided close in time to Gisbrecht, when the
“reasonable” standard was still evolving. This Court previously has explained why the
same three cited cases are not persuasive in other cases involving counsel’s firm.
[I]n Claypool v. Comm'r of Soc. Sec., 294 F. Supp. 2d 829 (S.D. W. Va.
2003), the amount of past due benefits was more than double the amount
awarded in this case, and the resulting fee award, while very high,
constituted just 9% of that award. One of the other two cases cited by
counsel is unpublished as well as not within this jurisdiction, and both reflect
much lower hourly rates than sought by counsel here. See Dodson v.
Comm'r of Soc. Sec., 2002 WL 31927589 (W.D. Va. Oct. 22, 2002)
($694.44 per hour) and Hearn v. Comm'r of Soc. Sec., 262 F. Supp. 2d 1033
(N.D. Cal. 2003) ($450.00 per hour).
9
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Iames v. Com’r of Soc. Sec., 2017 WL 574931 at *5 (S.D. Ohio Jan. 25, 2017); Hicks v.
Commissioner of Social Security, 2016 WL 7634457, at *5 (S.D. Ohio 2016); see also
Ringel, 295 F. Supp.3d at 833 n.28. The undersigned instead relies upon the more
persuasive and controlling case law cited herein. 10
The second factor under Ringel is the degree to which the slow wheels of justice
have contributed to an unusually large award. As Judge Weber explained in a 2014 case:
In the typical case, the quantity and quality of an attorney's services is not
causally connected to the amount of benefits obtained. Rather, the size of
the claimant's recovery depends on factors such as the claimant's past
earnings, the number of dependents and, unfortunately, the delay inherent
in the administrative and judicial processes. Accordingly, the United States
Court of Appeals for the Sixth Circuit has counseled that courts should not
routinely approve the statutory maximum but that 25% should be used as a
bench mark and it should be given the weight ordinarily accorded a
rebuttable presumption.…
The Sixth Circuit has made clear that an “inordinately large benefit award”
occasioned by the passage of time may constitute a windfall of attorney’s
fees, irrespective of any wrongdoing by counsel.
Boston v. Commissioner of Social Sec., 2014 WL 1814012, at *1 (S.D. Ohio May 7, 2014)
(reducing hourly rate from to $400 per hour in order to avoid a windfall to counsel). Here,
as in other “windfall” cases, the size of the large past-due benefits award was not due to
any conduct by counsel. 11 Rather, the unusually large fee reflects the regrettable slow
pace of resolution of Plaintiff’s claim, which required more than six years to resolve when
both administrative and judicial proceedings are considered. As another court lamented:
It seems perverse that an ultimately successful disabled claimant should be
further punished by the delays of the administrative process. Thatch filed
her application on March 24, 2006. It was more than 5 years later before
she was ultimately successful. Thus, for five years, Thatch was disabled
and not receiving the benefits to which she and her child were entitled by
10In
his reply memorandum, counsel cites to an unpublished case in this district in which he was awarded
a hypothetical hourly rate of $969.62. However, based upon the published authority of Lasley, Ringel and
other case law cited infra, the instant case does not warrant a similar extreme deviation from the norm.
11Counsel sought only a routine extension of time in which to file his Statement of Errors.
10
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law. By not taking into account this administrative delay in evaluating a
request for attorney fees, the claimants are punished twice. First, they do
not receive their benefits in a timely manner. Second, their retroactive
benefits are reduced by 25% for the full length of the administrative process.
Thus, the only party ultimately benefitting from such a delay is the attorney.
Thatch v. Com'r of Social Sec., 2012 WL 2885432, at *6 (N.D. Ohio 2012); see also Willis
v. Com'r of Soc. Sec., Case No. 1:10–cv–594, 2014 WL 2589259 at *5–6 and n.3 (S.D.
Ohio June 10, 2014) (Barrett, J.) (reducing § 406(b) award in part because “an estimated
one-third of Plaintiff's past due benefits accrued” during administrative delay after
remand, citing cases supporting similar reductions for administrative delay); Woods v.
Colvin, 2014 WL 2918454 at *6 (N.D. Ohio June 26, 2014) (finding delay at administrative
level more relevant when fee exceeds Hayes test).
While counsel’s firm is to be
commended for patience and persistence (particularly at the administrative level which is
not compensable by this Court), the fact remains that counsel spent only 15.5
compensable hours in this Court. The unearned inflation of his fee based solely upon the
slow wheels of justice weighs in favor of reduction.
The third guidepost is the quality and quantity of attorney hours expended. Mr.
Acciani is a longstanding member of the bar who very frequently appears on behalf of
social security claimants in this Court. His experience level is reflected in part in his
efficiency, with the 15.5 hours spent on this case falling on the low side of the average
time spent by other attorneys prosecuting similar cases. 12 And the undersigned can
agree that the quality of representation was “very good” insofar as it produced a large SSI
award for Plaintiff. On the other hand, the two assertions of error presented to this Court
are the most common claims presented. The case law supporting those claims was well-
12Counsel’s
use of standard case law and analysis was appropriate for the routine claims presented on
behalf of his client.
11
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established and counsel understandably used language and citations from other cases in
which he has appeared. 13 (See Doc. 10, Statement of Errors that argued that the ALJ
failed to give the treating physician “controlling weight” and over-relied upon consulting
physicians who did not have access to the records of the treating physician).
In Rodriquez, the Sixth Circuit explained that why the routine nature of most social
security appeals should inform a trial court's analysis of a “reasonable” fee versus a
windfall:
Although we recognize that there are cases where the lawyer's unusual skill
or diligence wins the case, typically the number of hours that are required
to prosecute an appeal from the Secretary's determination will not vary
greatly and will bear little if any relationship to the results achieved. Where
a case has been submitted on boilerplate pleadings, in which no issues of
material fact are present and where no legal research is apparent, the
benchmark twenty-five percent of awards fee would obviously be
inappropriate. The reviewing courts should not hesitate to make reductions
in such situations, and at the other end of the spectrum should only allow
maximum fees for extensive effort on the part of counsel who have
overcome legal and factual obstacles to the enhancement of the benefits
awarded to his client.
Rodriquez v. Bowen, 865 F.2d 739, 747 (6th Cir. 1989) (footnote omitted).
To be clear, the undersigned is not suggesting that counsel expended only
“minimal” effort or effort that would be below the average for this case. However, this
case does not justify a windfall award. As the Court explained in Ringel,
The fact that counsel was guilty of no misconduct does not immunize
her fee from windfall reduction. Nor does the fact that [counsel’s] work can
be described as “simple and routine” detract from the reality that she
performed her job admirably, achieving a significant benefit on Mr. Ringel's
behalf.
13See
Ringel, 295 F. Supp. at 836 (“[S]ocial security cases reflect a very standardized number of attorney
hours…with most…falling near the midpoint of a 12-30 hour range.”); Spiller v. Com’r of Soc. Sec., 940 F.
Supp.2d 647, 652 (S.D. Ohio 2013) (“Without establishing a firm, bright line rule, …the general range of
time expended on these cases is 15-25 hours.”)
12
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Id., 295 F. Supp.3d at 837 (noting counsel’s Statement of Errors was “formulaic” and
consistent with other briefs by the same counsel, using standard arguments and case
law). The routine nature of the instant case, notwithstanding counsel’s efficient use of
standard case law and analysis, weighs in favor of reduction of the unusually high fee
award to avoid a windfall.
The fourth Ringel guidepost is whether counsel has voluntarily compromised his
fee.
In many unpublished cases in which an unusually high effective hourly rate
has been awarded, the trial court will do so after noting that
the fee requested does not, in fact, represent the full contracted amount. In
those cases, courts point out that the motions reflect a voluntary
compromise of the contingent fee well below the agreed-upon 25%, in
recognition of the fact that the contract would result in a windfall. See, e.g.,
Lowery, 940 F.Supp.2d 689 (granting unopposed motion where counsel
sought only 14.5% of past-due benefits representing an effective hourly rate
of $406, rather than full contingent fee); Willis v. Com'r, 2014 WL 2589259
at *5 (“While counsel is not required to seek less than the 25 percent
contingency fee, a discounted fee or the lack thereof is relevant to a
reasonableness determination”)(collecting cases)
Id., at 838-839.
Here, counsel’s motion clearly acknowledges the windfall potential inherent in his
standard contingency fee but offers no real compromise.
This factor can put counsel in the difficult position of bidding against
themselves, as it were, by offering to take a significantly reduced fee in lieu
of the contracted amount agreed to by their clients. Yet, the statute
authorizes only a “reasonable” fee, which does not include a windfall.
Application of Hayes and similar guideposts continue to alert both counsel
and courts of whether further windfall review is warranted. In cases where
the Hayes test or significant delay suggest possible windfall, the extent to
which counsel has offered to compromise the fee (or failed to compromise)
will be more relevant. See Willis, 2014 WL 2589259 at *5 (holding that
voluntary reduction “is particularly relevant where, as here, the Court's
judgment was followed by an administrative delay in the final award of pastdue benefits”).
Ringel, 295 F.Supp.3d at 839.
After filing his motion, counsel had an additional
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opportunity to compromise his fee in his reply memorandum. His choice not to do so
favors a reduction. Contrast Ringel, 295 F. Supp.3d at 840-841 (awarding higher-thanusual fee in part because attorney had offered some minimal compromise in her initial
motion and additional compromise in her reply memorandum).
The fifth guidepost also favors a reduction, since the Commissioner has filed a
well-supported memorandum as a trustee for the Plaintiff. Such opposition is relatively
rare and should be taken seriously.
Unlike the underlying judicial appeal or an EAJA award, the Commissioner
has no direct financial stake in the § 406(b) fee. Filing any opposition to
a fee motion not only requires the Commissioner's attorney to devote
scarce resources to briefing a matter in which his client will not benefit, but
also requires counsel to reverse his/her earlier role and advocate in support
of the Commissioner's previous opponent, who has not asked for such
assistance. Accord Wells v. Sullivan, 907 F.2d 367, 372 (2nd Cir.
1990) (noting “the anomalous role of the Social Security Administration in
first denying benefits to a claimant, and then after losing the case, posing
as a protector of the plaintiff, but spending more time and money in order to
reduce the fees to be paid to the claimant's attorney.”) In cases like Mr.
Ringel's, the Supreme Court accurately predicted that the Commissioner
would play “a part ... resembling that of a trustee for the
claimants,” see Gisbrecht, 535 U.S. at 798 n.6, 122 S.Ct. 1817, but scores
of unopposed motions give testament that such opposition remains
rare. See Bailey v. Heckler, 777 F.2d 1167, 1169 (6th Cir. 1985) (rejecting
argument that the fee should be approved because it is unopposed, since
“claimant is unlikely to object to an allowance of a fee in accordance with
his contingent fee arrangement, for, rightly or wrongly, he will usually give
the lawyer all of the credit for the success in winning an award of benefits
for him”) (internal quotation and citation omitted).
Ringel, 295 F. Supp.3d at 823 (footnote omitted).
In conclusion, none of the five common guideposts cited in Ringel, nor any other
persuasive or controlling authority cited by counsel supports such a high hourly rate of
$827.93 as “reasonable” in this case, even considering the “contingency premium” and
all other relevant factors. Based upon the controlling authority of the Supreme Court and
the Sixth Circuit, and other authority cited herein that requires this Court to disapprove of
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any fee that would result in a windfall to counsel, the undersigned concludes that any
presumption of reasonableness has been thoroughly rebutted. Instead, based upon the
exercise of judicial discretion and the record presented, the undersigned concludes that
a “reasonable” fee consistent with the contingent nature of recovery is $440.84, the
hypothetical hourly rate suggested by counsel himself as fair and reasonable for his 15.5
hours of work in this Court. That sum represents 2.5 times the “standard rate” that
counsel previously received for the same work and awards him a “contingency premium”
without straying into the realm of a windfall at the expense of his long-suffering client.
The calculation of the recommended award would result in a total contingency fee
award of $6,833.02 for the 15.5 hours of work spent in this Court (15.5 x $440.84). The
prior EAJA award must be subtracted from that sum as an offset in order to avoid a double
recovery. Thus, the total additional fee to be awarded under 42 U.S.C. §1383(d) equals
$4,538.02, or $6,833.02 - $2295.00 (the prior EAJA fee not including costs)
III.
Conclusion and Recommendation
Plaintiff’s motion should be granted only in part to avoid a windfall for the reasons
stated herein. Having determined a “reasonable” fee under Ringel and controlling case
law, IT IS RECOMMENDED THAT the motion for an award of attorney’s fees be
construed as if filed under 42 U.S.C. § 1383(d) and be GRANTED in part. Specifically,
the undersigned recommends that counsel be awarded the additional net fee of
$4,538.02, conditioned on counsel’s submission to the Court of a copy of the referenced
fee agreement.
s/ Stephanie K. Bowman
Stephanie K. Bowman
United States Magistrate Judge
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
CARL E. BERRY,
Case No: 1:18-cv-207
Plaintiff,
Black, J.
Bowman, M.J.
v.
COMMISSIONER OF SOCIAL SECURITY,
Defendant.
NOTICE
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written
objections to this Report & Recommendation (“R&R”) within FOURTEEN (14) DAYS of
the filing date of this R&R. That period may be extended further by the Court on timely
motion by either side for an extension of time. All objections shall specify the portion(s)
of the R&R objected to, and shall be accompanied by a memorandum of law in support
of the objections. A party shall respond to an opponent’s objections within FOURTEEN
(14) DAYS after being served with a copy of those objections. 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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