Pais v. Berryhill
Filing
24
MEMORANDUM AND ORDER denying as untimely 20 Motion for Attorney Fees. So Ordered by Magistrate Judge Patricia A. Sullivan on 9/23/2021. (Saucier, Martha)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
JOSE P.,
Plaintiff,
v.
KILOLO KIJAKAZI,
Acting Commissioner of Social
Security Administration,
Defendant.
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C.A. No. 17-CV-381-PAS
MEMORANDUM AND ORDER
PATRICIA A. SULLIVAN, United Magistrate Judge.
Now pending before the Court is the motion of the attorneys representing Plaintiff Jose P.
(the “Attorneys”) for a fee for work performed before the Court pursuant to 42 U.S.C. § 406(b).1
ECF No. 20. The Attorneys seek a substantial premium in light of the contingent nature of their
fee arrangement with Plaintiff. The Commissioner opposes the motion as untimely;
alternatively, if the Court deems the motion timely, the Commissioner asks the Court to reject
the requested fee because it is unreasonably disproportional to the time (18.4 hours) invested
before the Court.2 For the reasons that follow, the motion is denied as untimely.
1
Section 406(b) is entitled, “Fees for representation before court.” It provides:
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, and the
Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title,
but subject to subsection (d) of this section, certify the amount of such fee for payment to such
attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such
judgment, no other fee may be payable or certified for payment for such representation except as
provided in this paragraph.
2
As the Attorneys acknowledge, on an hourly basis, the requested fee yields a substantial premium rate of $1,199.35
per hour. ECF No. 20, at 3. While not pertinent to the Court’s determination of timeliness, the Court observes that
BACKGROUND
In 2017, the Attorneys entered into a Fee Agreement3 with Plaintiff; prepared the
complaint; filed this case; drafted a motion to reverse the adverse decision of the Commissioner;
and, in 2018, prepared for and successfully argued the motion to remand before the Court.
Judgment entered in favor of Plaintiff remanding the case for further proceedings before the
Social Security Administration (“SSA”) on May 8, 2018. ECF No. 15. On June 11, 2018, the
Court approved the parties’ agreed-upon fee award of $3,618.15 for work before the Court
pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (“EAJA”), which was promptly
paid.4 Text Order of June 11, 2018; ECF No. 20 at 3. After further administrative proceedings,
the Commissioner found that Plaintiff was disabled and entitled to benefits; the Notice of Award
(“NOA”) is dated June 16, 2019. ECF No. 20-2. Consistent with § 406(b), twenty-five percent
of Plaintiff’s retroactive benefits (a total of $29,159.13) was withheld from the retroactive
portion of his award to cover additional attorneys’ fees should any be approved. The NOA
advised Plaintiff (and the Attorneys) that this had been done and why: “[w]e withheld
$29,159.13 from your past due benefits in case we need to pay your representative.” ECF No.
there is nothing per se wrong with such a fee. See Crawford v. Astrue, 586 F.3d 1142, 1152 (9th Cir. 2009)
(contingent-fee approach to § 406(b) is reasonable).
3
Pursuant to the Fee Agreement between Plaintiff and the Attorneys, the Attorneys earn nothing if they are
unsuccessful; but, if successful, are entitled to apply for agency and court-approval of fees in an amount so as to
“maximize the fee.” ECF No. 20-3. The Agreement further provides that, if the Court approves the payment of §
406(b) attorney’s fees out of Plaintiff’s retroactive benefits, the Attorneys must refund to Plaintiff the smaller of
either the EAJA fee or the § 406(b) fee. Id.
4
Whenever the government’s denial of benefits is not “substantially justified,” the plaintiff’s attorneys may request
EAJA fees. The EAJA fees are paid by the government. The Attorneys acknowledge that the EAJA fee for the
work before the Court was promptly paid soon after the award was approved. ECF No. 20 at 3. Importantly, as part
of the application for EAJA fees, the Attorneys were required to (and did) assemble their time records reflecting the
work before the Court – that means that the assembly of the time records to support the § 406(b) application was
already done well before the SSA determined that Plaintiff was entitled to disability benefits, which triggered the
right of the Attorneys to ask for more fees for the same work.
2
22-1 at 4. As the court observed in Rodriguez v. Saul, C.A. No. 18-1618 (CVR), 2021 WL
2232096 (D.P.R. June 1, 2021), the NOA contains “all the necessary information that counsel
needs to file his petition for attorney’s fees.” Id. at *2.
Following the NOA, the Attorneys promptly petitioned for fees for their work before the
SSA pursuant to 42 U.S.C. § 406(a) and, by November 19, 2019, the ALJ had approved an
award of $7,091.03. ECF No. 20-4 at 3-4. This left $22,068.10 (the “Fund”) remaining withheld
from Plaintiff’s retroactive benefit award for any additional fees that might be approved by the
Court for work before the Court pursuant to § 406(b). ECF No. 22-2 at 3. As of this point –
November 19, 2019 – the Attorneys not only had already assembled their time records and had
all of the information that they needed to file their § 406(b) fee petition but also knew what
portion of the Fund would be tapped to pay them for their work before the SSA. That is, as of
November 19, 2019, viewed from the perspective of the procedural posture of the administrative
and court proceedings in this case, there was no conceivable reason for any further delay in filing
the § 406(b) petition for work before the Court.
Nevertheless, over six months passed, with no fee petition. On May 24, 2020, the SSA
wrote to Plaintiff, with a copy to the Attorneys, advising him that the Fund was still being
withheld and that the delay was to allow the Attorneys to file a fee petition and for the Court to
approve some or all of the requested fee. ECF No. 22-2. After the May 24, 2020, letter, the
Attorneys still did nothing, nor did Plaintiff object to the withholding of the Fund. Five more
months passed with no fee petition.
On October 26, 2020, the SSA sent the first of three substantially similar letters to the
Attorneys. ECF No. 22-3. This letter states that the SSA “do[es] not wish to delay the release of
funds withheld” from the past-due benefits to which Plaintiff, a disabled individual, is entitled.
3
Id. It notes that SSA had previously asked the Attorneys to “let us know whether you have
petitioned or will petition for a fee but we have not received a response” and warns that the Fund
will be released to Plaintiff unless, within twenty days (that is, by November 15, 2020), the
Attorneys either file their petition or a request for an extension to do so. Id. The Attorneys
apparently asked for a very short extension to an unspecified date still in November 2020.5
Nevertheless, the Attorneys did not file a fee petition in or after November 2020 – instead, six
more months passed with no fee petition nor did the SSA make good on its threat to pay the
Fund to Plaintiff. The Fund just sat. On April 25, 2021, the SSA again sent substantially the
same letter to the Attorneys. ECF No 22-4. Like the first iteration of the letter, the SSA advised,
“We will certify for payment to the claimant all withheld benefits unless you file a petition for
approval of a fee within 20 days from the date of this letter.” Id. This time, the letter required
that the fee petition be filed by May 15, 2021. Yet still no fee petition was filed, nor was the
Fund turned over to Plaintiff. Almost four more months passed; for the third time, on August 11,
2021, the SSA sent the same letter to the Attorneys emphasizing that their delay was preventing
Plaintiff from accessing the withheld portion of his retroactive benefits and setting yet another
twenty-day deadline for the filing of a fee petition. ECF No. 22-5. The new deadline was
August 31, 2021.
At last, the Attorneys acted. Two days after the August 11, 2021, letter, on August 13,
2021, the Attorneys finally moved for an award of the full amount of the Fund ($22,068.10).
This motion comes more than two years after the date of the NOA (June 16, 2019). It comes
5
Neither party has presented a copy of a written request for an extension. The only suggestion that such an
extension was requested appears in the SSA’s August 11, 2021 letter, which references such an extension request.
According to that letter, the unwritten extension request asked for leave to file the fee petition in November 2020, a
request that is somewhat puzzling (to the Court) because November 2020 is when the fee petition was already “due”
according to the SSA letter of October 26, 2020. See ECF No. 22-5. For purposes of this motion for fees, the Court
ignores the confusion and assumes that there was such an extension request and that it was granted.
4
almost twenty-one months after the Fund was reduced to $22,068.10 by the granting of the
Attorney’s § 406(a) petition (November 19, 2019).
The Attorneys vaguely attribute this lengthy delay to “clerical and logistical difficulties
(including moving office and the [COVID-19] pandemic).” ECF No. 23 at 2. Alternatively, the
Attorneys contend that the Commissioner should be precluded from arguing that the petition was
unreasonably delayed because the SSA continued to withhold the Fund despite repeated threats
(in the three letters) to return the Fund to Plaintiff. The Attorneys ask the Court to approve an
award for the full amount of the Fund ($22,068.10), which would pay them at the premium rate
of $1,199.35 per hour, six times the EAJA hourly rate. They argue that this is reasonable based
on the success of the work, counsel’s experience in this area of the law and the risk of
undertaking such work on a contingent basis.
LAW AND ANALYSIS
Under § 406(b), a prevailing claimant’s attorney may be awarded “a reasonable” fee for
representation of the claimant in court payable out of the benefits recovered; such fees may not
exceed twenty-five percent of past-due benefits. Gisbrecht v. Barnhart, 535 U.S. 789, 792, 79596 (2002). For work before the court,6 Congress harmonized the fees payable by the government
under EAJA with fees payable under § 406(b) out of the claimant’s past-due disability benefits in
this manner: “Fee awards may be made under both prescriptions, but the claimant’s attorney
must refund to the claimant the amount of the smaller fee. . . . Thus, an EAJA award offsets an
award under Section 406(b), so that the amount of the total past-due benefits the claimant
actually receives will be increased by the EAJA award up to the point the claimant receives 100
6
Work before the SSA is paid pursuant to 42 U.S.C. § 406(a), while work before the Court is paid pursuant to §
406(b).
5
percent of the past-due benefits.” Id. at 796; see Rodriguez, 2021 WL 2232096, at *2 (internal
brackets omitted). Section 406(b) requires that the court must review whether the fee sought is
reasonable. Gisbrecht, 535 U.S. at 807-08. For example, if the attorney is responsible for delay,
or if the benefits are large in comparison to the amount of time counsel spent on the case, a
downward adjustment may be in order. See id. “The tenor of § 406(b) is permissive rather than
mandatory”; that is, the court may make such an award, not that such an award shall be made.
Whitehead v. Richardson, 446 F.2d 126, 128 (6th Cir. 1971).
Section 406(b) does not contain a time limitation for filing fee applications. Garland v.
Astrue, 492 F. Supp. 2d 216, 219 (E.D.N.Y. 2007). Nor does this District (unlike the District of
Maine,7 but similar to the District of Puerto Rico) have a specific Local Rule setting an
applicable deadline. See Rodriguez, 2021 WL 2232096, at *3. In some circuits, but not the First
Circuit, courts have looked for guidance at the deadline (fourteen days) for filing a fee petition in
Fed. R. Civ. Pro. 54(d)(2)(B).8 See Sinkler v. Berryhill, 932 F.3d 83, 87 (2d Cir. 2019); Walker
v. Astrue, 593 F.3d 274, 280 (3d Cir. 2010); Pierce v. Barnhart, 440 F. 3d 657, 663 (5th Cir.
2006); Bergen v. Comm’r of Soc. Sec., 454 F.3d 1273, 1277 (11th Cir. 2006). However, as the
court observed in Rodriguez, 2021 WL 2232096, this Rule is not a good fit because it is the
SSA’s NOA, and not the court’s “judgment,” that is the triggering event for a § 406(b) fee
petition. Id. at *2; see McGraw v. Barnhart, 450 F.3d 493, 504 (10th Cir. 2006) (Fed. R. Civ. P.
54 is not practical for § 406(b) deadline – “SSA fee award will only rarely be calculable before
the end of that fourteen-day period”). In McGraw, the court suggested that a better analogy is
7
Maine requires that a § 406(b) fee petition must be filed within thirty days of the NOA. D. Me. LR Cv 54.2.
8
This Rule is incorporated into the Local Rules of this Court in DRI LR Cv 54.1, which requires that the fee petition
be filed within fourteen days after the entry of judgment.
6
Fed. R. Civ. Pro 60(b), which allows the litigant a “reasonable time” to act, but in no event more
than one year after the triggering event. See id.
Consistent with the holding of the District of Puerto Rico in Rodriguez, 2021 WL
2232096, the Court finds that a § 406(b) fee petition must be filed “within a reasonable time of
the Commissioner’s decision awarding benefits,” that is, the date of the NOA. Id. at *3; see
McGraw, 450 F.3d at 505 (“motion for an award of fees under § 406(b)(1) should be filed within
a reasonable time of the Commissioner's decision awarding benefits”); Smith v. Bowen, 815
F.2d 1152, 1156 (7th Cir. 1987) (“petition for fees under § 406(b)(1) must be brought within a
reasonable time”). As to what amounts to a reasonable delay, courts should look to the
“particular circumstances of each case,” including any explanation for the delay. Rodriguez,
2021 WL 2232096, at *4. For example, a § 406(b) application filed five months9 after the NOA
with no “reasonable explanation to justify waiting such an inordinate amount of time” was
denied as untimely in Rodriguez, 2021 WL 2232096, at *3, and a § 406(b) application filed nine
months after the NOA without any explanation “justifying this lengthy delay” was denied as
untimely in Garland, 492 F. Supp. 2d at 217, while in Ortiz-Ocasio v. Comm’r of Soc. Sec., Civil
Action No. 19-1337-MGM, 2021 WL 3214368, at *1-2 (D.P.R. July 29, 2021), the court held
that a delay of eight months from the NOA was not unreasonable because replacement counsel
had not actually received the NOA during most of the period of delay.
In considering what is a reasonable delay, courts must focus on the important reality that
it is the claimant whose interests are at stake: “[s]ince Section 406(b) attorney fees are withheld
9
One factor in Rodriguez which made that delay even more egregious – the case had been remanded by the court for
an award of benefits – is not present here. That is, in Rodriguez, the attorneys knew that there would be a § 406(b)
award from the time of the court’s entry of judgment. Rodriguez, 2021 WL 2232096, at *4. Here, the remand was
for further proceedings so the Attorneys did not know of their entitlement to ask for § 406(b) fees until the NOA
issued on June 16, 2019.
7
from a claimant’s award of benefits, fairness and finality favor quick disposition of any motion
for fees so that the claimant can obtain the balance (if any) of his award.” Ortiz-Ocasio, 2021
WL 3214368, at *1 (emphasis supplied). Mindful of this reality, our sister court in Puerto Rico
firmly rejected as “misplaced and self-serving” the argument that a protracted delay was justified
because the attorneys had not yet received the SSA’s “reminder [letter] that those moneys are
waiting to be distributed and urging counsel to submit the fee petition if so desired or otherwise
inform the agency.” Rodriguez, 2021 WL 2232096, at *2. With the interest of the claimant
front and center, the SSA’s seeming acquiescence to the delay should not be dispositive. See
Garland, 492 F. Supp. 2d at 222 (“Commissioner’s failure to object to the award as untimely
does not bind the court to rule accordingly.”). Similarly, the failure of Plaintiff, a disabled
person, to object to the ongoing delay should not persuade the Court to overlook counsel’s
failure to file his 406(b) application in a reasonable period of time. See id.
With this backdrop, the Court is not moved by the Attorneys’ explanation for a delay that
materially exceeds every metric of what conceivably is “reasonable,” including the Fed. R. Civ.
P. 60(b) one-year outside limit. The Attorneys’ reliance on “the COVID-19 pandemic” is
particularly hollow – the NOA is dated almost a year before (and the § 406(a) fees were resolved
almost four months before) the pandemic began in March 2020. The Attorneys’ other
explanation – “clerical and logistical difficulties (including moving office . . .)” – might justify a
delay of days, or even weeks, but it falls hopelessly short of justifying the inordinate delay in this
case of twenty-six months from the NOA, and twenty-one months from the § 406(a) fee
approval.10 The Court further finds that this delay is not made reasonable because of the SSA’s
10
The Court is compelled to observe that during this protracted period the Attorneys were actively filing new cases
and making filings in their pending cases.
8
acquiescence to the delay by sending reminder letters with what turned out to be feckless threats
to turn the Fund over to Plaintiff unless the Attorneys acted. If the fees were to be paid out of
government funds, the Court might find appealing the Attorneys’ argument that the SSA’s letters
should estop it from now arguing that a delay arguably suborned by its inaction is unreasonable.
But that is not the case. Rather, the Fund belongs to Plaintiff, and the Court must focus on
fairness to him and his interest in finality. Ortiz-Ocasio, 2021 WL 3214368, at *1-2.
To conclude, the Court declines to adopt a rigid rule of thumb, instead holding that how
much delay in filing a § 406(b) fee petition is reasonable11 should be determined flexibly, taking
into consideration the various deadlines established by arguably analogous Rules, as well as any
explanation counsel may proffer, but also guided by the claimant’s paramount interest in “quick
disposition of any motion for fees so that [he] can obtain the balance (if any) of his award.”
Ortiz-Ocasio, 2021 WL 3214368, at *1-2. In this case, the Court finds that the Attorneys have
failed to present any justification for the unusually long delay of twenty-six months from the
NOA and twenty-one months from the § 406(a) determination, which are well outside of every
possible benchmark. Accordingly, the Court holds that the Attorneys “simply waited too long . .
. and must therefore forfeit [their] entitlement to a fee.” Garland, 492 F. Supp. 2d at 223. Based
on this holding, the Court will not address the reasonableness of the amount of the fee requested.
CONCLUSION
Based on the foregoing, the motion of the Attorneys for a fee award for work performed
before the Court pursuant to 42 U.S.C. § 406(b) is denied as untimely. ECF No. 20.
11
For example, by analogy to the Maine Local Rule, if the § 406(a) fee application is made promptly (that is, within
thirty days of the NOA), a delay of thirty more days after it is resolved should not be seen as unreasonable. The
Court further observes that, if Social Security practitioners prefer the greater certainty of a safe-harbor deadline, they
can propose a new Local Rule that sets a specific deadline during the annual period for attorney-initiated suggestions
for Local Rules amendments as described on the Court’s website.
9
/s/ Patricia A. Sullivan
PATRICIA A. SULLIVAN
United States Magistrate Judge
September __, 2021
10
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