Holland v. Commissioner of Social Security

Filing 21

ORDER AND ENTRY: (1) GRANTING THE MOTION BY PLAINTIFFS COUNSEL FOR AN ATTORNEYS FEE AWARD UNDER 42 U.S.C. § 406(b) (DOC. 18 ); (2) AWARDING PLAINTIFFS COUNSEL $20,000.00 IN FEES; AND (3) DIRECTING PLAINTIFFS COUNSEL TO REFUND TO PLAINTIFF, WITHIN FOURTEEN DAYS, THE EAJA FEE PREVIOUSLY AWARDED TO COUNSEL. Signed by Magistrate Judge Michael J. Newman on 7/18/18. (kma)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
DEBRA L. HOLLAND,
Plaintiff,

Case No. 3:16-cv-385

vs.
COMMISSIONER OF SOCIAL SECURITY,

Magistrate Judge Michael J. Newman
(Consent Case)

Defendant.

ORDER AND ENTRY: (1) GRANTING THE MOTION BY PLAINTIFF’S COUNSEL
FOR AN ATTORNEY’S FEE AWARD UNDER 42 U.S.C. § 406(b) (DOC. 18); (2)
AWARDING PLAINTIFF’S COUNSEL $20,000.00 IN FEES; AND (3) DIRECTING
PLAINTIFF’S COUNSEL TO REFUND TO PLAINTIFF, WITHIN FOURTEEN DAYS,
THE EAJA FEE PREVIOUSLY AWARDED TO COUNSEL

On September 25, 2017 the Court reversed the ALJ’s non-disability finding and remanded
this case to the Commissioner under 42 U.S.C. § 405(g) for an immediate award of benefits. Doc.
14. Thereafter, Plaintiff’s counsel sought, and was awarded in this Court, attorney’s fees in the
amount of $2,948.75 under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d). Docs.
16, 17. Plaintiff’s counsel now requests an order authorizing a 25% contingency fee award in the
amount of $20,000.00 under 42 U.S.C. § 406(b). 1 Doc. 18.
In support of the motion, counsel attaches a contingency fee agreement executed by
Plaintiff. Doc. 18 at PageID 1156. Counsel also submits an itemized billing statement indicating
that he spent 23.25 hours on this matter -- 17.75 hours of attorney time and 5.5 hours of paralegal
time. Id. at PageID 1152-54. The Commissioner, in response, argues that the award sought -42 U.S.C. § 406(b) permits an award of attorney’s fees for successful Disability Insurance
Benefits (“DIB”) claims under Title II of the Social Security Act. Supplemental Security Income (“SSI”)
benefits are awardable pursuant to Title XVI of the Social Security Act, which incorporates 42 U.S.C.
§ 406(b) by reference, and likewise permits the award of attorney’s fees for successful SSI claims. See 42
U.S.C. § 1383(d)(2); Napier v. Comm’r of Soc. Sec., 190 F. App’x 458, 459-60 (6th Cir. 2006). The same
analysis applies in deciding motions for attorney’s fees under both statutes. See id.
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$20,000.00 for 17.75 hours of work, or an hourly rate of $1,126.76 -- would constitute a windfall
to Plaintiff’s counsel. Doc. 19 at PageID 1167. The Commissioner argues that the Court should
reduce the amount to reflect a more reasonable rate of $400.00 per hour, for a total award of
$7,100.00. Id. at PageID 1175. The undersigned has carefully considered each of the forgoing
documents, and the fees motion is now ripe for decision.
In Social Security cases, the Court is authorized to award attorney’s fees following a
successful Social Security disability appeal. See 42 U.S.C. §§ 402(b)(1), 1383(d)(2). However,
such contingency fees (1) may not exceed 25% of the past-due benefits which the claimant receives
as a result of an appeal, and (2) must additionally be reasonable for the services rendered.
Gisbrecht v. Barnhard, 535 U.S. 789, 807 (2002).
The Social Security Act “does not displace contingen[cy]-fee agreements,” but rather “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 “should be given the weight
ordinarily accorded a rebuttable presumption.” Rodriquez v. Brown, 865 F.2d 739, 746 (6th Cir.
1989). A reduction of a contingency fee award may be appropriate when counsel acts improperly
or provides ineffective assistance, or when “counsel would otherwise enjoy a windfall because of
either an inordinately large benefit award or from minimal effort expended.” Id. Such an award
is not improper merely because it results in an above-average hourly rate. Royzer v. Sec’y of Health
& Human Servs., 900 F.2d 981, 981-82 (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
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

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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 v. Sec’y of Health & Human Servs., 923 F.2d 418, 422 (6th Cir. 1990).
Here, counsel’s requested fee of $20,000.00, divided by the 17.75 attorney hours spent
working on the case, results, as noted, in a hypothetical hourly rate of $1,126.76.2 Doc. 18 at
PageID 1152-54. In light of counsel’s extensive experience in these matters and the hypothetical
rates awarded in previous cases, see doc. 18 at PageID 1147, the fee sought is reasonable and does
not result in an undeserved windfall.

Moreover, no allegations of improper conduct,

ineffectiveness or insufficient effort of counsel are present. Quite the contrary: the record reveals
that Plaintiff’s attorney -- who is an experienced Social Security practitioner -- diligently and
zealously worked on her behalf and did so in a timely fashion.
Based upon the foregoing: (1) Plaintiff’s unopposed motion for a § 406(b) fee award (doc.
18) is GRANTED; (2) Plaintiff’s counsel is AWARDED the requested sum of $20,000.00 in
attorney’s fees; and (3) Plaintiff’s counsel is ORDERED to reimburse to Plaintiff, within
FOURTEEN (14) DAYS, the EAJA fee previously awarded to counsel. As no further matters
remain pending for review, this case remains TERMINATED upon the Court’s docket.
IT IS SO ORDERED.
Date:

July 18, 2018

s/ Michael J. Newman
Michael J. Newman
United States Magistrate Judge

Contrary to the Commissioner’s representation, the Sixth Circuit has not put forward a standard
rate upon which to base § 406(b) fees. See Doc. 19 at PageID 1173-74; Pierce v. Colvin, Case No. 3:10cv-00349, 2016 WL 1294554, at *2 (S.D. Ohio April 4, 2016) (citing Lasley v. Comm’r of Soc. Sec., 771
F.3d 308, 309 (6th Cir. 2014)).
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