Ownby v. Social Security Administration, Commissioner of

Filing 33

MEMORANDUM AND ORDER: Plaintiff's Petition for Approval of 406(b) Attorney Fees [Doc. 27] is GRANTED IN PART, and Plaintiff's Motion to Amend Petition [Doc. 31] is GRANTED. It is ORDERED that attorney's fees in the a mount of $2,769.75 be payable to Plaintiff's counsel under 42 U.S.C. 406(b). The Court, however, reminds Plaintiff's counsel of his obligation pursuant to the EAJA and the Court's prior fee Order [Doc. 26] in this matter. Signed by Magistrate Judge H Bruce Guyton on June 2, 2020. (AYB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

BERNARD S. OWNBY,
Plaintiff,
v.
ANDREW M. SAUL, 1
Acting Commissioner of Social Security,
Defendant.

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No. 3:17-CV-211-HBG

MEMORANDUM AND ORDER
This case is before the undersigned pursuant to 28 U.S.C. § 636(b), the Rules of this Court,
and the consent of the parties [Doc. 12]. Now before the Court is Plaintiff’s Petition for Approval
of 406(b) Attorney Fees [Doc. 27], as well as Plaintiff’s Motion to Amend Petition [Doc. 31].
Plaintiff requests that the Court enter an Order awarding $2,769.75 in attorney’s fees under 42
U.S.C. § 406(b). 2
I.

BACKGROUND
On August 28, 2017, Plaintiff filed a Motion for Summary Judgment and Memorandum in

Support [Docs. 15 & 16], and on September 22, 2017, the Commissioner filed a competing Motion
for Summary Judgment and Memorandum in Support [Docs. 17 & 18]. The Court entered a

1

Andrew M. Saul was sworn in as the Commissioner of Social Security on June 17, 2019,
during the pendency of this case. Therefore, pursuant to Federal Rule of Civil Procedure 25(d),
Andrew M. Saul is substituted as the Defendant in this case.
2

Plaintiff originally requested an award of $22,769.75 [Doc. 27], but subsequently
amended this request to state that counsel “expects the Social Security Administration will pay
attorneys fees for services rendered at the administrative level and therefore, further amends the
petition and lowers his request” [Doc. 31 at 2].

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Memorandum Opinion [Doc. 20] on April 27, 2018, granting Plaintiff’s motion and denying the
Commissioner’s motion. Specifically, the Court ordered that the case be remanded to the Social
Security Administration with instructions that the ALJ reconsider the medical evidence of record,
particularly the treatment notes from Dr. Browder during the relevant period under review, in
assessing the credibility of Plaintiff’s subjective allegations regarding his level of pain. [Doc. 21].
On June 12, 2018, Plaintiff filed a Motion for Attorney’s Fees Under the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. § 2412(d) [Doc. 22]. After the Commissioner responded that he
did not oppose Plaintiff’s motion [Doc. 25], the Court entered an Order on June 28, 2018, granting
Plaintiff $4,134 in attorney’s fees pursuant to the EAJA, 28 U.S.C. § 2412(d) [Doc. 27]. The
instant motion before the Court seeks an additional award of attorney’s fees pursuant to 42 U.S.C.
§ 406(b). [Doc. 27].
II.

POSITIONS OF THE PARTIES
Plaintiff’s counsel initially requested approval to charge attorney’s fees pursuant to 42

U.S.C. § 406(b) based on his contingency fee agreement with the Plaintiff. [Doc. 27]. Counsel
asserts that Plaintiff was awarded $107,615 in past-due benefits, of which $26,903.75 was withheld
for payment of fees associated with the award. Counsel further explained that Plaintiff was also
filing a fee petition for services rendered at the administrative level, as well as that Plaintiff was
previously awarded an attorney’s fee of $4,134, and thus counsel requested approval of the fee in
the amount of $22,769.75 ($26,903.75 - $4,134). Counsel attached the client-attorney agreement,
affidavits of Paul Drozdowski and Kenneth Miller, and a time summary. Lastly, counsel submits
that this amount is reasonable and should be upheld pursuant to Gisbrecht v. Barhhart, 535 U.S.
789 (2002). [Id. at 2].

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The Commissioner responds [Doc. 30], that the petition was only partially complete, as
Plaintiff failed to submit the necessary materials for the Court to determine if the request is
reasonable. The Commissioner claims that upon filing of the agency Notice of Award letter and
the final favorable decision issued by the Commissioner on remand, the “record will contain the
past due benefit total, the amount withheld by the agency, and the existence of a favorable
decision.” [Id.]. Plaintiff subsequently filed the Fully Favorable Administrative Law Judge’s
decision dated March 13, 2019 [Doc. 31-1], as well as the December 7, 2019 Notice of Award
[Doc. 31-2]. Additionally, as the Court previously detailed, Plaintiff amended his 406(b) request
to the amount of $2,769.75. [Doc. 31 at 2]. The Commissioner does not oppose [Doc. 32] payment
of attorney’s fees in this case, pursuant to 42 U.S.C. § 406(b), in the amount of $2,769.75.
III.

ANALYSIS
Section 406(b) permits courts to award “a reasonable [attorneys’] fee . . . not in excess of

25 percent,” payable “out of . . . [the claimant’s] past-due benefits” when a claimant secures a
favorable judgment. 42 U.S.C. § 406(b)(1)(A). Accordingly, three conditions must be met
before 406(b) fees will be awarded:
1. The Court must have rendered a judgment favorable to the Plaintiff;
2. The Plaintiff must have been represented by counsel; and
3. The Court must find that the fee is reasonable and not in excess
of twenty-five (25) percent of the total past-due benefits to which
Plaintiff is entitled.
See id. The Court will address each condition in turn.
A.

Favorable Judgment

In this case, the Plaintiff obtained a “sentence four” remand, which, for purposes of section
3

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406(b), may be considered a “favorable judgment.” See Wilson v. Saul, No. 3:16-cv-95-HBG,
2019 WL 6742965, at *2 (E.D. Tenn. Dec. 11, 2019) (citing Bergen v. Comm’r of Soc. Sec., 454
F.3d 1273, 1277 (11th Cir. 2006)). Thus, the Court finds that the first condition for granting
attorney’s fees under section 406(b) has been met.
B.

Representation by Counsel

In support of the motion for attorney’s fees, Plaintiff’s counsel attached a signed agreement
between counsel and the Plaintiff, which provides for a contingent fee in the amount of twentyfive percent of the past-due benefits received by the Plaintiff as payment for counsel’s
representation. [Doc. 27-3]. Accordingly, the Court finds that the Plaintiff was represented by
counsel for this claim.
C.

Reasonableness of Fee Amount

Counsel for Plaintiff submits that a fee request of twenty-five percent of the past-due
benefits awarded to the Plaintiff is reasonable because the twenty-five percent cap has been upheld
by case law, is consistent with the agreement between counsel and the Plaintiff, and the amount
requested is reasonable. [Doc. 27 at 2]. However, with the additional request for attorney’s fees
at the administrative level, counsel has further amended his request to only $2,769.75 in attorney’s
fees under section 406(b). [Doc. 31 at 2]. The Commissioner responds [Doc. 32] that he does not
oppose this amended amount.
However, the Court must still independently determine whether the requested fee is
reasonable. Gisbrecht, 535 U.S. at 807. The Court of Appeals for the Sixth Circuit has held that
“if the agreement states that the attorney will be paid twenty-five percent of the benefits awarded,
it should be given the weight ordinarily accorded a rebuttable presumption.” Rodriquez v. Bowen,
865 F.2d 739, 746 (6th Cir. 1989). The presumption may be overcome by a showing that “1) the
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attorney engaged in improper conduct or was ineffective, or 2) the attorney would enjoy an
undeserved windfall due to the client’s large back pay award or the attorney’s relatively minimal
effort.” Hayes v. Sec’y of Health & Human Servs., 923 F.2d 418, 419 (6th Cir. 1990) (citing
Rodriquez, 865 F.2d at 746). If neither circumstance applies, “an agreement for a [twenty-five
percent] fee . . . is presumed reasonable.” Id. at 421.
Here, the Commissioner has not alleged, and the Court is not aware of, any improper
conduct, delay, or ineffective representation on the part of Plaintiff’s counsel. In fact, counsel was
able to achieve favorable results as this case was remanded to the Commissioner and an award of
benefits was ultimately granted to the Plaintiff. Thus, counsel was effective in his representation
as he was able to achieve a favorable result.
Turning to whether the requested fee amount would constitute an underserved windfall, the
Sixth Circuit Court of Appeals “provides a floor” for determining the reasonableness of requested
406(b) fees. Hayes, 923 F.2d at 422. Where the amount requested divided by the numbers of
hours expended is less than twice the standard rate for such work in the relevant market, the
requested fee is per se reasonable. Id. The Sixth Circuit continued,
If the calculated hourly rate is above this floor, then the court may
consider arguments designed to rebut the presumed reasonableness
of the attorney’s fee. Such arguments may include, without
limitation, a consideration of what proportion of the hours worked
constituted attorney time as opposed to clerical or paralegal time and
the degree of difficulty of the case. Factors such as these should
inform the district court’s determination of whether the attorney
would “enjoy a windfall because of . . . minimal effort expended.”
Id. (quoting Rodriquez, 865 F.2d at 746.).
As noted, Plaintiff’s counsel has only requested $2,769.75 in attorney’s fees under section
406(b) in the present case. The Social Security Administration has withheld $26,903.75 of past5

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due benefits in this case. The Court considers the factors set forth in Hayes, the affidavits and
itemized bill set forth by Plaintiff, the lack of opposition from the Commissioner, and the nature
and complexity of the case, and finds the contingency fee award in the amount of $2,769.75 is
reasonable. Moreover, the Court is mindful of the nature of contingency fee contracts and the risk
absorbed by attorneys in these matters. See Royzer v. Sec’y of Health & Human Servs., 900 F.2d
981, 982 (6th Cir. 1990) (in considering contingency agreements, “we cannot ignore the fact that
the attorney will not prevail every time . . . Contingent fees generally overcompensate in some
cases and undercompensate in others. It is the nature of the beast.”). Accordingly, the Court finds
that an attorney’s fee in the amount of $2,769.75 does not represent a windfall.
As a final matter, the Court notes that when attorney’s fees are awarded under both the
EAJA and section 406(b), the attorney is required to refund the smaller of the two fees to the
plaintiff. Gisbrecht, 535 U.S. at 796 (quoting Act. of Aug. 5, 1985, Pub. L. No. 99–80 (HR 2378),
PL 99–80, § 3, 99 Stat. 186). However, in the present case, Plaintiff's counsel subtracted the
previously-awarded EAJA fee from his initial request.
This practice, sometimes referred to as the “offset procedure,” has “yet to [be] considered”
by the Sixth Circuit. See Drake v. Comm’r of Soc. Sec., No. 14-12662, 2016 WL 492704, at *3
(E.D. Mich. Feb. 9, 2016) (declining to apply the offset procedure under the lack of Sixth Circuit
precedent, the Supreme Court’s decision in Grisbecht v. Barnhard, 535 U.S. 789, 796 (2002), and
an analysis of the Savings Provision of the EAJA). Congress harmonized the EAJA and Section
406(b) “in this manner: Fee awards may be made under both prescriptions, but the claimant's
attorney must ‘refun[d] to the claimant the amount of the smaller fee.’” Gisbrecht, 535 U.S. at
796 (quoting 28 U.S.C. § 2412 note); see Drake, 2016 WL 492704, at *2 (“The EAJA Savings
Provision thus prevents an attorney from obtaining a ‘double recovery’ under the EAJA and
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Section 406(b) for the same work.”). In Jackson v. Comm’r of Soc. Sec., the Eleventh Circuit
noted that the EAJA Savings Provision does not detail the specific procedure for refunding the
attorney’s fees under the EAJA and found that the attorney may do so by reducing a Section 406(b)
fee request by the amount of the EAJA award or refunding the smaller EAJA award to Plaintiff.
601 F.3d 1268 (11th Cir. 2010).
Ultimately, the Court does not generally endorse the application of the offset procedure,
but due to Plaintiff’s counsel’s reduced request and the lack of opposition from the Commissioner,
the Court finds that Plaintiff’s counsel has appropriately accounted for the refund as set forth in
the EAJA Savings Provision. See Ferry v. Comm'r of Soc. Sec., No. 1:13-CV-482, 2016 WL
4471672, at *1 (S.D. Ohio Aug. 4, 2016) (“In lieu of seeking a higher award and refunding the
amount of EAJA fees as would otherwise be required under the statute, counsel has simply
subtracted the amount of the prior EAJA fee award from the total sought under § 406(b). The same
practice has been sanctioned previously by this Court, as well as by published case law from other
courts.”) (citing Jackson, 601 F.3d at 1268), report and recommendation adopted by, 2016 WL
4447819 (S.D. Ohio Aug. 24, 2016)).
IV.

CONCLUSION
Based upon the foregoing, Plaintiff’s Petition for Approval of 406(b) Attorney Fees [Doc.

27] is GRANTED IN PART, and Plaintiff’s Motion to Amend Petition [Doc. 31] is GRANTED.
It is ORDERED that attorney’s fees in the amount of $2,769.75 be payable to Plaintiff’s counsel
under 42 U.S.C. 406(b). The Court, however, reminds Plaintiff’s counsel of his obligation
pursuant to the EAJA and the Court’s prior fee Order [Doc. 26] in this matter. See Drake, 2016
WL 492704, at *2 (“Moreover, the Savings Provision references Section 206(b)(2), which makes
it a misdemeanor for an attorney to collect fees greater than the amount authorized by the court,
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but clarifies that ‘no criminal penalties attach when the claimant's attorney receives fees under
both the EAJA and § 406(b) but refunds the smaller of the fees to the claimant.’”) (citing Jackson,
601 F.3d at 1272).
IT IS SO ORDERED.
ENTER:

United States Magistrate Judge

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