Shepherd v. Commissioner of Social Security

Filing 28

REPORT AND RECOMMENDATIONS re 26 MOTION for Leave to File Instanter Motion For Attorney Fees Under Section 406(b) of the Social Security Act: The Magistrate Judge RECOMMENDS that Plaintiff Becky A. Shepherds Motion for Leave to File Inst anter Motion & Brief in Support of Attorney Fees Pursuant to 42 U.S.C. § 406(b) be GRANTED and authorize Plaintiffs counsel attorney fees in the amount of $18,000.00. Objections to R&R due by 1/25/2021. Signed by Magistrate Judge Elizabeth Preston Deavers on 1/11/2021. (er)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
BECKY A. SHEPHERD,
Plaintiff,
Case No. 2:18-cv-417
Chief Judge Algenon L. Marbley
Magistrate Judge Elizabeth P. Deavers

v.

COMMISSIONER OF SOCIAL
SECURITY,
Defendant.

REPORT AND RECOMMENDATION
This matter is before the Court for consideration of Plaintiff Becky A. Shepherd’s Motion
for Leave to File Instanter Motion & Brief in Support of Attorney Fees Pursuant to 42 U.S.C. §
406(b). (ECF No. 26.) The Commissioner of Social Security has responded to Plaintiff’s
Motion, to “provide [an] analysis to assist the Court in its exercise of its discretion under §
406(b).” (ECF No. 27.) For the reasons that follow, it is RECOMMENDED that Plaintiff’s
Motion be GRANTED. It is further RECOMMENDED that the Court AWARD Plaintiff
attorney’s fees in the amount of $18,000.00.
I.
On April 30, 2018, Plaintiff filed this action under 42 U.S.C. § 405(b) for review of a
final decision of the Commissioner of Social Security denying Plaintiff’s application for period
of disability and disability insurance benefits. (ECF No. 1.) On September 23, 2019, the Court
reversed the decision of the Commissioner and remanded the action, pursuant to Sentence 4 of
42 U.S.C. § 405(g), for further administrative proceedings. (ECF No. 20.) Following remand,

1

the Administrative Law Judge issued a fully favorable decision on April 7, 2020. (ECF No. 262.) The amount of past due benefits owed plaintiff was calculated at $103,508.45, and the
Commissioner withheld $31,945.75 for attorney’s fees. (ECF No. 26-3; ECF No. 26-1 at
PAGEID ## 752-753.)
On November 27, 2020, Motion for Leave to File Instanter Motion & Brief in Support of
Attorney Fees Pursuant to 42 U.S.C. § 406(b), seeking a fee award of $18,000.00.1 (ECF No.
26.) The Commissioner has reviewed Plaintiff’s Motion for Attorney Fees and supporting
exhibits and concluded that “either reducing the fee sought by counsel or awarding the full fee
requested would be within this Court’s discretion.” (ECF No. 27.) The Commissioner therefore
does not oppose the Motion for Fees. (Id.)
II.
Plaintiff’s counsel moves for fees pursuant to 42 U.S.C. § 406(b), which provides in
relevant part:
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 . . . .
42 U.S.C. § 406(b)(1)(A). Pursuant to this statute, the Court may only award fees for work done
at the district court level. Horenstein v. Sec’y of Health & Human Servs., 35 F.3d 261, 262 (6th
Cir. 1994) (“[I]n cases where the court remands the case back to the Secretary for further
proceedings, the court will set the fee—limited to 25 percent of past-due benefits—for the work

1

The parties previously stipulated to an EAJA fee of $4,400, which this Court approved on June
22, 2020. (ECF No. 25.) Plaintiff now requests that Plaintiff’s counsel be ordered to refund the
EAJA fee amount of $4,400 to Plaintiff directly upon payment of the approved § 406(b) fees, to
the extent that the approved § 406(b) fees either equals or exceeds the EAJA fee of $4,400.
(ECF No. 26-1 at PAGIED # 753.)
2

performed before it, and the Secretary will award whatever fee the Secretary deems reasonable
for the work performed on remand and prior administrative proceedings.”); see also Gisbrecht v.
Barnhart, 535 U.S. 789, 794 (2002) (“The statute deals with the administrative and judicial
review stages discretely: § 406(a) governs fees for representation in administrative proceedings;
§ 406(b) controls fees for representation in court.”).
In evaluating the reasonableness of requested fees, the Court “begin[s] by using twentyfive percent of the past due benefits as a benchmark.” Rodriquez v. Bowen, 865 F.2d 739, 746
(6th Cir. 1989) (“While we use that mark as a starting point for the court’s analysis, we
emphasize that it is not to be viewed as per se reasonable.”). When a claimant has entered into a
contingency fee agreement entitling counsel to twenty-five percent of past-due benefits awarded,
the Court presumes, subject to rebuttal, that the contract is reasonable. Id. at 746. The Court,
however, still stands as an “independent check” on the reasonableness of such arrangements.
Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002).
In assessing the reasonableness of a fee, the Court can consider a variety of factors
including the hours spent in representation and “the lawyer’s normal hourly billing charge for
noncontingent-fee cases.” Id. at 808. The Court should reduce fees in situations where counsel
“would otherwise enjoy a windfall because of either an inordinately large benefit award or from
minimal effort expended.” Rodriquez, 865 F.2d at 746. Even in contingency-agreement cases,
the Court may calculate hourly rates in considering whether an award results in a windfall.
Hayes v. Sec’y of Health & Human Servs., 923 F.2d 418, 421–22 (6th Cir. 1990). The United
States Court of Appeals for the Sixth Circuit, however, has expressed dissatisfaction with the use
of an across-the-board, strict hourly rate limitation:
[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
3

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. We believe that 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.
Id. at 422.
III.
Here, in light of the information provided, the Court finds that counsel’s requested fees
are reasonable. Counsel requests $18,000.00 for 28.1 hours of work, resulting in an hourly rate
of approximately $640.56. (ECF No. 26-1 at PAGEID # 758.) Although this rate may exceed
the “multiplier of 2” floor set in Hayes, the Court cannot say, given the contingent nature of
Social Security Appeals, that such a fee results in an unjust windfall. Counsel notes, for
example, that “[a]fter accounting for the already paid EAJA fee of $4,400.00 which is to be
refunded to plaintiff, the remaining fee to be paid by plaintiff would be $13,600.00, which
equates to an hourly rate to plaintiff of about $483.99 per hour.” (Id.) Further, counsel has
produced a contingency fee agreement indicating that Plaintiff agreed to pay her twenty-five
percent of any past-due benefits awarded. (ECF No. 26-4.) The fees counsel now requests are
much less than this twenty-five percent figure. Finally, the Undersigned notes that the
Commissioner does not oppose the request for fees because “either reducing the fee sought by
counsel or awarding the full fee requested would be within this Court’s discretion.” (ECF
No. 27 at PAGEID # 793 (emphasis added).)
Separately, Plaintiff’s counsel affirmatively concedes that the motion was not timely filed
under Local Rule 54.2(b), at least in part due to staffing issues related to COVID-19. (ECF No.
26 at PAGEID # 749-750.) The Court finds, however, that the brief delay was not prejudicial to
any party, and that it is excusable under the unpredictable and extraordinary circumstances of the
4

COVID-19 pandemic. Accordingly, the Court is not inclined to reduce or deny the request for
fees for untimeliness. Plaintiff’s counsel is advised, although not expressly warned, that failure
to comply with the time limitations of Local Rule 54.2(b) may result in a reduction or denial of
fees in the future. See Rabong v. Comm'r of Soc. Sec., No. 1:14-CV-811, 2018 WL 286166, at
*2 (S.D. Ohio Jan. 4, 2018), report and recommendation adopted, No. 1:14CV811, 2018 WL
558918 (S.D. Ohio Jan. 25, 2018) (Approving fee despite untimely motion where “counsel
obviously achieved excellent results and . . . does not appear to have been expressly warned on
any prior occasion that a failure to timely file his § 406(b) motion could result in a reduction or
denial of his fee”); Hancock v. Comm'r of Soc. Sec., No. 1:15-CV-198, 2018 WL 4292149, at *1
(S.D. Ohio Sept. 10, 2018), report and recommendation adopted, No. 1:15CV198, 2018 WL
5043845 (S.D. Ohio Oct. 17, 2018) (Reducing fee where “the same counsel has been expressly
warned in a prior case that any future failure to comply with the time limitations of L.R. 54.2(b)
likely would result in a significant reduction, if not the outright denial of his fee”).
IV.
For the foregoing reasons, it is RECOMMENDED that Plaintiff Becky A. Shepherd’s
Motion for Leave to File Instanter Motion & Brief in Support of Attorney Fees Pursuant to 42
U.S.C. § 406(b) be GRANTED and authorize Plaintiff’s counsel attorney fees in the amount of
$18,000.00. (ECF No. 26.)
PROCEDURE ON OBJECTIONS
If any party seeks review by the District Judge of this Report and Recommendation, that
party may, within fourteen (14) days, file and serve on all parties objections to the Report and
Recommendation, specifically designating this Report and Recommendation, and the part in
question, as well as the basis for objection. 28 U.S.C. ' 636(b)(1); Fed. R. Civ. P. 72(b).

5

Response to objections must be filed within fourteen (14) days after being served with a copy.
Fed. R. Civ. P. 72(b).
The parties are specifically advised that the failure to object to the Report and
Recommendation will result in a waiver of the right to de novo review by the District Judge and
waiver of the right to appeal the judgment of the District Court. See, e.g., Pfahler v. Nat=l Latex
Prod. Co., 517 F.3d 816, 829 (6th Cir. 2007) (holding that “failure to object to the magistrate
judge’s recommendations constituted a waiver of [the defendant=s] ability to appeal the district
court’s ruling”); United States v. Sullivan, 431 F.3d 976, 984 (6th Cir. 2005) (holding that
defendant waived appeal of district court’s denial of pretrial motion by failing to timely object to
magistrate judge's report and recommendation). Even when timely objections are filed, appellate
review of issues not raised in those objections is waived. Robert v. Tesson, 507 F.3d 981, 994
(6th Cir. 2007) (“[A] general objection to a magistrate judge’s report, which fails to specify the
issues of contention, does not suffice to preserve an issue for appeal . . . .”) (citation omitted)).

Date: January 11, 2021

/s/ Elizabeth A. Preston Deavers
ELIZABETH A. PRESTON DEAVERS
UNITED STATES MAGISTRATE JUDGE

6