Courtney v. Commissioner of Social Security

Filing 18

REPORT AND RECOMMENDATIONS - IT IS THEREFORE RECOMMENDED THAT:1. Plaintiff's Motion for Allowance of Attorney Fees (Doc. #15) be GRANTED; 2. The Commissioner be directed to pay Plaintiff's attorney fees pursuant to 42 U.S.C. § 406(b) in the total amount of $18,015.00; and, 3. The case remains terminated on the docket of this Court. Objections to R&R due by 9/15/2014. Signed by Chief Magistrate Judge Sharon L Ovington on 8/29/2014. (rms)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
THERESE C. COURTNEY,
Plaintiff,

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vs.
CAROLYN W. COLVIN,
Acting Commissioner of the Social
Security Administration,
Defendant.

Case No. 3:12cv00329
District Judge Thomas M. Rose
Chief Magistrate Judge Sharon L. Ovington

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REPORT AND RECOMMENDATIONS1

This case is before the Court upon Plaintiff’s Motion for Allowance of Attorney
Fees (Doc. #15), the Commissioner’s Response (Doc. #16), Plaintiff’s Reply (Doc. #17),
and the record as a whole.
Plaintiff and her counsel entered into a written contingency-fee agreement,
specifying counsel’s fee will be 25% of any lump sum award for past-due benefits or a
minimum of $2,000, whichever is greater. (Doc. #15-3). The agreement therefore
documented, on one hand, Plaintiff’s agreement to pay attorney fees in the amount of
25% of any lump sum award for past-due benefits payable to Plaintiff, and, on the other

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Attached hereto is a NOTICE to the parties regarding objections to this Report and
Recommendations.

hand, counsel’s willingness to accept the risk of recovering zero attorney fees in the event
Plaintiff received no past-due benefits. Id. Plaintiff later prevailed in this case. On
remand to the Social Security Administration, she received past-due Disability Insurance
Benefits and Supplemental Security Income. (Doc. #15-4, 15-5). The Social Security
Administration withheld $18,015.00 – or 25% – of past due benefits to cover any
attorney’s fees. (Doc. #15-5, PageID# 1124).
Plaintiff’s counsel now seeks an award of $18,015.00 in attorney fees under 42
U.S.C. § 406(b) and due to the existence of the contingency-fee agreement.
Title 42 U.S.C. § 406(b) authorizes the Court to award attorney’s fees when a
Plaintiff brought in the District Court a successful challenge to the Commissioner’s denial
of the Plaintiff’s application for Social Security benefits. See Damron v. Comm’r of Soc.
Sec., 104 F.3d 853, 856 (6th Cir. 1997). Such an award may not exceed 25% of the pastdue benefits that the claimant received as a result of the successful challenge. See id.; see
also 42 U.S.C. § 406(b)(1). Plaintiff’s attorney must show, and the Court must
affirmatively find, that a contingency fee sought, even one within the 25% cap, is
reasonable for the services rendered. Gisbrecht v. Barnhart, 535 U.S. 789, 807, 122 S.Ct.
1817, 152 L.Ed.2d 996 (2002). Section 406(b) “does not displace contingent-fee
agreements” but instead “calls for court review of such arrangements as an independent
check, to assure that they yield reasonable results in particular cases.” Id.
A 25% contingency-fee agreement between a plaintiff and his or her attorney
“should be given the weight ordinarily accorded a rebuttable presumption.” Rodriquez v.
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Brown, 865 F.2d 739, 746 (6th Cir. 1989). And an award of attorney fees under § 406(b)
is not unreasonable merely because it results in an above-average hourly rate. Royzer v.
Sec’y of Health & Human Servs., 900 F.2d 981, 982 (6th Cir. 1990). As the Sixth Circuit
explained:
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 [dividing the
requested fee by the number of attorney hours worked]. 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, 900 F.2d at 982. Yet a reduction of the contingency-fee award may be warranted
if (1) counsel acted improperly or provided ineffective assistance, or (2) “counsel would .
. . enjoy a windfall because of either an inordinately large benefit award or from minimal
effort expended.” Id. “[A] windfall can never occur when, in a case where a
contingency-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.” Hayes
v. Sec’y of Health & Human Servs., 932 F.2d 418, 422 (6th Cir. 1990). This “multiplier
of 2 is an appropriate floor in light of indications that social security attorneys are
successful in approximately 50% of cases they file in the courts. Without a multiplier, a
strict hourly rate would insure that social security attorneys would not, averaged over
many cases, be compensated adequately.” Id.

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The Commissioner opposes the amount of Plaintiff’s requested award, arguing
“[a]n award of $18,015.00 does not represent a reasonable fee because Plaintiff’s
attorneys failed to exclude hours from the fee request that are excessive, redundant, or
otherwise unnecessary.” (Doc. #16, PageID# 1154). The Commissioner argues the
number of hours that Plaintiff’s attorneys requested – 55.5 – is “outside the range of what
is seen in a typical social security appeal in this district,” and accordingly, “should be
reduced.” (Id., PageID# 1155).
The Commissioner opposes 15.25 attorney work-hours time and 1.75 legal
assistant work-hours. (Doc. #16, PageID# 1156). Specifically, the Commissioner
opposes the following entries: 8 attorney work-hours for Attorney Donoff to review the
draft brief of Attorney Gerhardt; 4.5 attorney work-hours for “receipt and review” of
various routine court documents; 2 attorney work-hours for review of the Report and
Recommendations and Judgment, and to advise client of the outcome; .75 attorney workhours to prepare and file a motion for extension of time; and 1.75 hours of legal assistant
work-hours to check the internet for the status of the Report and Recommendation and
whether the agency was going to file an appeal. (Doc. #16, PageID# 1155-56).
Plaintiff’s counsel argues that “[e]ven if you limit Plaintiff’s hours to 40 hours, the
requested fee should be approved as a matter of law.” (Doc. #17, PageID# 1159).
There is no allegation or indication in the record of the case that Plaintiff’s counsel
acted improperly or provided ineffective assistance. Likewise, the amount of requested
attorney fees – $18,015.00 – does not constitute a windfall. This is true even if the Court
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were to accept the Commissioner’s argument that the amount of attorney work-hours
should be reduced by 15.25 and amount of legal assistant work-hours should be reduced
by 1.75. (See Doc. #16). Eliminating these challenged hours would result in a new
hourly total of 40.25 attorney work-hours and 3.5 legal assistant work-hours.
After subtracting $175 for legal assistant fees (3.5 hours x $50/hr), Plaintiff’s
counsel would be left with an award of $17,840 for 40.25 hours of work, or an hourly rate
of $443.23. Viewing this, in turn, as the product of the applicable multiplier of 2, see
Hayes, 923 F.2d at 422, translates to an hourly rate of $221.61. This hourly rate is nearly
20% less than the $270.00 x 2 = $540.00 hypothetical hourly rates used and permitted in
Pencil, and in fact, is only minimally higher than the median $200 hourly rate of attorneys
in Dayton, Ohio in or near 2010. See Pencil v. Astrue, 2012 WL 4364273 at *2 (S.D.
Ohio, Sept. 24, 2012). Even reducing the amount of reasonable hours further than by just
what the Commissioner opposes – to 35 work-hours – would result in a hourly rate of
$509.71 (a hourly rate also less than the $540 hourly rate permitted in Pencil).
Given Plaintiff’s counsel’s skill and extensive experience in social security cases,
see Doc. #15, the amount of $18,015.00 for 40.25 work-hours does not constitute a
windfall. Accord Wright v. Astrue, No. 3:09-cv-115, 2012 U.S. Dist. LEXIS 93489, at
*6-7, 2012 WL 2700393, at *2-3 (S.D. Ohio July 6, 2012) (Merz, M.J.), adopted by 2012
U.S. Dist. LEXIS 103014 at *1, 2012 WL 3023258 at *1 (S.D. Ohio July 24, 2012) (Rice,
D.J.) (approving a contingency fee award of $15,000.00 for 27.80 attorney hours (a
hypothetical hourly rate of $539.57) under the Social Security Act).
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For these reasons, Plaintiff’s Motion for Allowance of Attorney Fees (Doc. #15) is
well taken.
IT IS THEREFORE RECOMMENDED THAT:
1.

Plaintiff’s Motion for Allowance of Attorney Fees (Doc. #15) be
GRANTED;

2.

The Commissioner be directed to pay Plaintiff’s attorney fees pursuant to
42 U.S.C. § 406(b) in the total amount of $18,015.00; and,

3.

The case remains terminated on the docket of this Court.

August 29, 2014
s/Sharon L. Ovington
Sharon L. Ovington
Chief United States Magistrate Judge

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NOTICE REGARDING OBJECTIONS
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written
objections to the proposed findings and recommendations within FOURTEEN days after
being served with this Report and Recommendations. Pursuant to Fed. R. Civ. P. 6(d),
this period is extended to SEVENTEEN days because this Report is being served by one
of the methods of service listed in Fed. R. Civ. P. 5(b)(2)(C), (D), (E), or (F). Such
objections shall specify the portions of the Report objected to and shall be accompanied
by a memorandum of law in support of the objections. If the Report and Recommendation
is based in whole or in part upon matters occurring of 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 FOURTEEN 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,
949-50 (6th Cir. 1981).

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