Phillips v. Commissioner of Social Security Administration
Filing
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ORDER granting 22 Motion for Attorney Fees per Rule 406b, awarding a total attorney's fee of $33,864.00. Signed by Magistrate Judge Shiva V. Hodges on 02/13/2015.(bshr, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
AIKEN DIVISION
Elizabeth Phillips, on behalf of Mark,
Phillips, deceased,
Plaintiff,
vs.
Carolyn W. Colvin, Acting
Commissioner of Social Security
Administration,
Defendant.
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C/A No.: 1:12-533-SVH
ORDER
This matter is before the court on counsel’s motion for fees under 42 U.S.C. §
406(b). [ECF No. 22]. On August 14, 2013, the court reversed the Commissioner’s
decision denying Plaintiff’s claim for social security disability benefits and remanded the
case for further administrative proceedings pursuant to sentence four 42 U.S.C. § 405(g).
[ECF No. 16]. On December 13, 2013, the court issued an order granting Plaintiff’s
motion for fees under the Equal Access to Justice Act (“the EAJA”) and directing the
Commissioner to pay Plaintiff $6,500.00. [ECF No. 21]. Counsel informed the court that
the Commissioner subsequently awarded total past-due benefits in the amount of
$135,456.00.1 [ECF No. 22-3 at 1]. Counsel requested that the court authorize a fee in the
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notice of award stated that the past-due benefits for the claimant were $103,680.00
and the past-due benefits for P.P., C.P., and J.P. totaled $31,776.00. [ECF No. 22-3 at 1].
Based on discrepancies in the notices of award, the undersigned ordered the
Commissioner to provide an accounting as to the calculation of the past-due benefits.
[ECF No. 29]. The Commissioner acknowledged several errors in the notice of award,
but confirmed that the total past-due benefit amounts were correct for a total of
$135,456.00, which represented an underpayment to the deceased claimant of
amount of $33,864.00, which represents 25 percent of the past due benefits resulting from
the claim, as agreed to by the claimant in the contingent fee agreement dated April 12,
2010. [ECF No. 23 at 1–2, citing ECF No. 22-2]. The undersigned requested that counsel
provide supplemental briefing on several issues that concerned the court. [ECF No. 25].
Counsel subsequently submitted her own affidavit and an affidavit from Plaintiff. [ECF
Nos. 28, 28-2]. The Commissioner initially filed a response in support of counsel’s
motion for fees on January 8, 2015, but subsequently filed a response on February 11,
2015, in which she indicated that the maximum amount the court could award to counsel
was $27,864.00. [ECF Nos. 23, 31 at 5]. The court has considered the motion for fees,
and for the reasons that follow, the court approves the motion for fees under 42 U.S.C. §
406(b), as set forth herein.
I.
Timeliness of Motion for Attorney’s Fees
The Local Civil Rules of this court require an attorney to file a petition for
attorney’s fees no later than 60 days after the issuance of all notices of award of benefits.
Local Civ. Rule 83.VII.07 (D.S.C.). The rule provides that “[n]oncompliance with this
time limit may be deemed a waiver of any claim for attorney’s fees, unless the attorney
can show good cause for the delay.” Id.
Although counsel filed the petition for attorney’s fees over five months after the
notice of award was issued, the undersigned finds that she has demonstrated good cause
for the delay. See ECF Nos. 22, 22-3. Counsel submitted that the notice of award dated
July 8, 2014, contained several errors and ambiguities. [ECF No. 28 at 2]. She has
$103,680.00 and underpayments of $10,592.00 to each of the claimant’s three minor
children. [ECF Nos. 31, 31-1, 31-2, 31-3].
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submitted corroborating documentation demonstrating that she and her office staff made
repeated inquiries to the Social Security Administration (“SSA”) to have the errors
corrected and the ambiguities clarified. [ECF Nos. 28 at 2–3; 28-1]. Finally, counsel
stated she filed the motion for attorney’s fees after it became apparent that the SSA
would be providing no further response to her inquiries. [ECF No. 28 at ¶9] (“. . . it will
be a cold day in Hell before [counsel] is able to get any such statement out of Social
Security”). The court finds that counsel made a good faith effort to confirm the accuracy
of the attorney’s fee indicated in the notice of award and submitted the motion for
attorney’s fees within a reasonable time period after realizing that no additional
information would be forthcoming. The court also concludes based on Plaintiff’s
affidavit, counsel’s affidavit, and the Commissioner’s response that the SSA has not
released the funds withheld from the past-due benefits. See ECF Nos. 28 at 3; 28-2; 31 at
2.
II.
Consideration of Motion for Attorney’s Fees Under 42 U.S.C. § 406(b)
When a court renders a favorable judgment to a claimant in a claim brought
against the Commissioner, the relevant statute allows the court to “determine and allow
as part of its judgment a reasonable fee” to the claimant’s attorney that is “not in excess
of 25 percent of the total of the past-due benefits to which the claimant is entitled by
reasons of such judgment.” 42 U.S.C. § 406(b)(1)(A). The Supreme Court held in
Gisbrecht v. Barnhardt, 535 U.S. 789 (2002), that 42 U.S.C. § 406(b) instructs courts to
review contingent fee agreements for reasonableness where the agreed-upon fee does not
exceed the statutory ceiling of 25 percent. However, the contingent fee may be reduced
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from the agreed-upon amount “when (1) the fee is out of line ‘with the character of the
representation and the results . . . achieved,’ (2) counsel’s delay caused past-due benefits
to accumulate ‘during the pendency of the case in court,’ or (3) past-due benefits ‘are
large in comparison to the amount of time counsel spent on the case.’” Mudd v.
Barnhardt, 418 F.3d 424, 427 (4th Cir. 2005), citing Gisbrecht at 808.
Counsel filed a copy of the contingent fee agreement, signed by the claimant,
which provides for a contingent fee of “twenty-five percent (25%) of all past due
benefits” awarded in his case, including “benefits awarded to my family.” See ECF No.
22-2 at 1. She also filed a copy of a contingent fee agreement signed by Plaintiff, on
behalf of the deceased claimant, that contains the same terms. See ECF No. 1-2. Because
the fee agreements are presumptively valid under the Supreme Court’s ruling in
Gisbrecht, the undersigned considers only the reasonableness of the fee based on the
three factors set forth in Gisbrecht.
The court concludes that the fee is not out of line with the character of the
representation and the results achieved. Counsel represented the claimant and his family
for over four years in multiple administrative and district court proceedings. See ECF No.
22-1 at 2. Her representation included work in the present action, as well as in a prior
action in this court. See Phillips v. Commissioner of the Social Security Administration,
C/A No. 1:10-936-TLW (D.S.C. Aug. 18, 2011) (“Prior Action”). Counsel obtained total
past-due benefits on claimant’s behalf in the amount of $135,456.00 for the period from
October 2004 through March 2011. [ECF Nos. 31-4; 31-5; 31-6; 31-7]. In consideration
of the nature of the representation at both the administrative and district court levels, the
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lengthy period of the representation, and the amount of past-due benefits obtained for
Plaintiff and the claimant’s other beneficiaries, the court concludes that the fee is not out
of line with the character of the representation and the results achieved.
The court further determines that counsel did not cause any delays that affected
the accumulation of past-due benefits during the pendency of the case in this court.
Counsel filed one motion for a 30-day extension of time to file a brief in the Prior Action.
Prior Action at ECF No. 6. Counsel’s extension request was reasonable and did not affect
the accumulation of past-due benefits. Counsel also sought a 30-day extension within
which to file Plaintiff’s brief in this action, which was reasonable and did not affect the
claimant’s past-due benefits because the past-due benefits ceased to accumulate after the
claimant’s death. See ECF Nos. 8, 16 at 3; 31-4, 31-5; 31-6; 31-7.
The court finds that the requested attorney’s fee is not large in comparison to the
amount of time counsel spent on the case. The record reflects that counsel represented the
claimant for 17.10 hours in 2010 and 39.50 hours in 2012. See ECF No. 18-2 at 2; Prior
Action at ECF No. 24-2 at 1. Although an hourly rate of $598.30 seems exorbitant, the
undersigned may consider as part of the reasonableness determination the work expended
by counsel at the agency level. See Mudd v. Barnhardt, 418 F.3d 424, 428 (4th Cir. 2005)
(while the court may not award attorney’s fees based on the attorney’s work at the agency
level, the court may consider “as one factor in its reasonableness determination, the work
performed by counsel on the case when it was pending at the agency level”). Counsel
represented the claimant at the administrative level from 2011 to 2014. She appeared on
the claimant’s behalf at a hearing on January 6, 2012. See ECF No. 16 at 3. She finally
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obtained benefits on claimant’s behalf in April 2014. [ECF No. 22-1 at 3]. Based on the
lengthy administrative and court processes and the action performed, the undersigned
concludes that counsel likely devoted substantial time to the claim at the administrative
level. Therefore, the undersigned concludes that the requested fee is not unreasonably
large in comparison to the amount of time counsel spent on the case.
The court finds that the contingent fee agreement complies with 42 U.S.C. §
406(b)(1)(A) in that it is both reasonable and does not exceed the statutory maximum fee.
The court grants counsel’s motion for fees under 42 U.S.C. § 406(b) and approves a total
attorney’s fee of $33,864.00. The undersigned notes that 42 U.S.C. § 406(b)(1)(A)
prohibits this court from authorizing a fee in excess of 25 percent of the total of the pastdue benefits to which the claimant was entitled, and therefore recognizes that this amount
should be offset by the $6,000.00 already paid to Plaintiff’s attorney.2 Therefore, the
Commissioner is directed to remit to Plaintiff’s attorney the additional $27,864.00
withheld from the past-due benefits payable on behalf of claimant and to his
beneficiaries.3
2
Counsel indicated in the motion for attorney’s fees that she would refund the fee already
paid to her by the SSA to the claimant. [ECF No. 22 at 1–2]. The undersigned expressed
concern that if counsel were paid an additional $33,864.00 and refunded $6,000.00 to
Plaintiff that Plaintiff would receive a windfall at the expense of the SSA. See [ECF No.
25 at 4 n. 4]. Counsel indicated in her affidavit that the SSA’s attorneys requested that
she structure her motions in this fashion to streamline their recordkeeping. [ECF No. 28
at 3]. The Commissioner subsequently indicated that the maximum the court should
award to Plaintiff’s counsel was $27,864.00, which represented the amount retained by
the SSA from all past-due benefits payable on the claimant’s record. [ECF No. 31 at 1,
2]. Therefore, the undersigned declines to order the SSA to pay Plaintiff an additional
$33,864.00, but instead approves payment of a total attorney’s fee of $33,864.00.
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The court also notes that the Commissioner acknowledges a possible underpayment to
the claimant’s minor children in the amount of $636.00 each, for a total of $1,908.00.
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III.
Refund of EAJA Fees
The Gisbrecht Court directed that the attorney should refund the smaller fee to
“the claimant” when the attorney obtained fees under both the EAJA and 42 U.S.C. §
406(b). Because this claim was brought on behalf of a deceased claimant, the EAJA fee
cannot be refunded to the claimant. The Commissioner has explained that the majority of
the withheld benefits were withheld from the amount payable to Plaintiff and counsel has
indicated Plaintiff is the custodian and payee for the claimant’s minor children. See ECF
Nos. 28-2; 31 at 4. Therefore, the court finds that all amounts to be refunded should be
refunded to Plaintiff. The court directs counsel, upon receipt of the total attorney’s fee
approved herein, to refund to Plaintiff the $6,500.00 EAJA fee paid in this action and any
proceeds she received from the EAJA fee paid in the Prior Action.4
IT IS SO ORDERED.
February 13, 2015
Columbia, South Carolina
Shiva V. Hodges
United States Magistrate Judge
Although no action is before the undersigned regarding payment of these benefits, the
undersigned encourages the Commissioner to remit any additional funds that may be
payable to the claimant’s beneficiaries.
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In the Prior Action, Judge Wooten awarded an EAJA fee to the claimant in the amount
of $2,794.48 and directed that the check be payable to the claimant, but mailed to his
attorney. Although Judge Wooten’s order references an assignment of the attorney’s fee
to counsel, the undersigned is unable to determine if the claimant remitted the EAJA fee
to counsel. Therefore, the undersigned directs counsel to refund the $6,500 EAJA fee
paid in this action and any fees pursuant to the EAJA that she was paid in the Prior
Action.
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