Stewart v. Social Security Administration

Filing 27

OPINION AND ORDER by Magistrate Judge Frank H McCarthy ; granting 24 Motion for Attorney Fees (FHM1, Chambers)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
LEE STEWART
Plaintiff,
vs.

Case No. 10-CV-170-FHM

MICHAEL ASTRUE,
Commissioner,
Social Security Administration,
Defendant.
ORDER
The Motion For Attorneys Fees [Dkt. 24] filed by Plaintiff’s Counsel is before the
undersigned United States Magistrate Judge for decision.
Relief Pursuant to Fed. R. Civ. P. 60(b)(6)
In McGraw v. Barnhart, 450 F.3d 493, 496 (10th Cir. 2006), the Court ruled that
attorney fees are awardable under 42 U.S.C. § 406(b)(1) when the Social Security
Administration awards disability benefits to a claimant following a remand from the federal
court. In such a circumstance the authority of Fed. R. Civ. P. 60(b)(6) is employed to allow
counsel to seek fees under §406(b)(1) long after the usual fourteen days allotted by Fed.
R. Civ. P. 54((d)(2)(B)(I) for filing a motion for attorney fees has expired. McGraw, 450
F.3d at 505.
On April 26, 2011, the Court remanded this case to the Commissioner for further
administrative action. On remand the Commissioner issued a fully favorable decision
awarding benefits to Plaintiff. By letter dated November 11, 2011, a Notice of Award was
issued which explained that out of past-due benefits of $70,627.40, an amount of
$17,656.69 was being withheld for payment of attorney fees. [Dkt. 24-1, p. 7]. The instant

motion was filed on November 22, 2011. The Court finds that the instant motion was filed
within a reasonable time of the decision awarding benefits. Therefore Plaintiff is entitled
to relief under Fed. R. Civ. P. 60(b)(6) which means that the Motion for Attorney Fees will
be considered.
Attorney Fees Under 42 U.S.C. § 406(b)
Counsel seeks approval of an attorney fee award of $ 13,229.54 pursuant to the
terms of 42 U.S.C. § 406(b) and the contingency fee agreement between Plaintiff and
counsel. Counsel has certified that Plaintiff has been advised of the fee request, and
Plaintiff has expressed he does not object to the requested fee award. [Dkt. 24-3]. The
Court previously granted Plaintiff's application for an award of $ 2,590.85 in fees under the
Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, for the work counsel performed
before the Court.

[Dkt. 23]

The EAJA award was paid by the Social Security

Administration, at no cost to Plaintiff. Counsel has submitted a document signed by
Plaintiff, which contains Plaintiff’s acknowledgment that the attorney fee will be 25% of any
past due benefits. [Dkt. 24-2].
Section 406(b)(1) allows an award of attorney fees, payable from the past due
benefits withheld by the Social Security Administration, when the district court has
remanded a Title II Social Security case for further proceedings and benefits are awarded
on remand. McGraw v. Barnhart, 450 F.3d 493 (10th Cir. 2006). 42 U.S.C. § 406(b)(1)(A)
provides that a court may award “a reasonable fee . . . not in excess of 25 percent of the
. . . past due benefits” awarded to the claimant. The fee is payable “out of, and not in
addition to, the amount of the [the] past-due benefits.” Section 406(b)(1)(A) does not

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replace contingency fee agreements between Social Security claimants and their counsel.
Instead, that section requires the district court to review contingency fee agreements as
an “independent check” to assure that the agreement yields a reasonable result. Gisbrecht
v. Barnhart, 535 U.S. 789, 807, 122 S.Ct. 1817, 1828, 152 L.Ed.2d 996 (2002). Section
406(b) provides a boundary that agreements are unenforceable to the extent that they
provide for fees exceeding 25 percent of the past-due benefits. Id.
In determining whether a fee resulting from a contingency fee contract is
reasonable, it is appropriate to adjust the attorney’s recovery based on the character of the
representation and the results the representation achieved. A reduction is in order if the
attorney is responsible for delay, so the attorney will not profit from the accumulation of
past-due benefits while the case is pending in court. In addition, if the benefits are large
in comparison to the amount of time counsel spent on the case, the fee award may be
adjusted. Id. 535 U.S. at 808, 122 S.Ct. at 1828. Further, the burden to prove the fee is
reasonable is placed upon the attorney seeking the fee. Id. at n.17.
The undersigned concludes that the requested fee award of $13,229.54 which is
less than 19% of Plaintiff’s past due benefit award as reflected in the record submitted is
reasonable. That award comports with the agreement between counsel and Plaintiff and
is within the statutory limits of §406(b). The fee yields an hourly rate of approximately $998
per hour for 13.25 hours of work performed before the district court, which does not
amount to a windfall. Often a fee recovery in a percentage-based contingency fee contract
will be higher than the fee produced by a straight hourly rate agreement.

That

circumstance serves to induce attorneys to risk providing legal services in cases where

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they may not be paid. And finally, when the amount of the EAJA fee award, $ 2,590.85,
is returned to Plaintiff in accordance with Weakley v. Brown, 803 F.2d 575, 580 (10th Cir.
1986), the net result is an out-of-pocket payment from Plaintiff of $ 10,638.69 which is 15%
percent of Plaintiff’s past due benefits.
Plaintiff’s Attorney’s Motion for an Award of Attorney Fees Pursuant to 42 U.S.C.
§ 406(b), [Dkt. 21] is GRANTED as follows:
Counsel is awarded $13,229.54 to be paid from Plaintiff’s past due benefits being
withheld by the Commissioner for attorney fees. In accordance with Weakley v. Brown,
803 F.2d 575, 580 (10th Cir. 1986), upon receipt of payment, counsel is required to refund
$2,590.85 to Plaintiff, which is the amount of the EAJA award.
SO ORDERED this 28th day of November, 2011.

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