Moore v. Berryhill

Filing 27

MEMORANDUM OPINION AND ORDER: The Court GRANTS Plaintiff's Motion for An Award of Attorney Fees under 406(b) of the Social Security Act [Dkt. No. 23 ] and awards counsel $10,647.38 in attorneys fees pursuant to 42 U.S.C. § 406(b). (Ordered by Magistrate Judge David L. Horan on 11/1/2019) (mcrd)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
TINCY R. B.M.,

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Plaintiff,
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V.
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ANDREW SAUL,
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Acting Commissioner of Social Security, §
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Defendant.
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No. 3:17-cv-913-BN

MEMORANDUM OPINION AND ORDER
Plaintiff has filed a Motion for Award of Attorney Fees Under 406(b) of the
Social Security Act. See Dkt. No. 23; see also Dkt. Nos. 24 & 25. For the reasons
explained below, the Court GRANTS the motion.
Background
On March 31, 2017, Plaintiff Tincy R. B.M. filed a complaint seeking reversal
and remand of the Acting Commissioner of Social Security’s (“Commissioner”) decision
denying her claim for disability benefits under Title II of the Social Security Act. See
Dkt. No. 1. On October 3, 2017, the Court reversed and remanded the case to the
Commissioner for further proceedings. See Dkt. Nos. 19 & 20. Plaintiff then moved for,
and was awarded, attorney’s fees under the Equal Access to Justice Act (“EAJA”) in the
amount of $6,944.40. See Dkt. Nos. 21 & 22.
On remand, the Commissioner rendered a decision in favor of Plaintiff and
awarded disability benefits of somewhat more than $66,000. See Dkt. No. 24 at 1. As

provided by a contingency fee agreement, Plaintiff now seeks approval under Section
406(b) of the Social Security Act to pay her attorney fees in the amount of $10,647.38
from the $16,647.38 withheld from Plaintiff’s past-due benefits. See Dkt. No. 23 & 24.
The Commission timely filed a response, see Dkt. No. 26, and the motion is now ripe
for decision.
Legal Standards and Analysis
“Sections 406(a) and 406(b) of the Social Security Act provide for the
discretionary award of attorney’s fees out of the past-due benefits recovered by a
successful claimant in a Social Security action.” Murkeldove v. Astrue, 635 F.3d 784,
787 (5th Cir. 2011). While Section 406(a) governs the award of attorneys’ fees for
representing a claimant in administrative proceedings, Section 406(b) governs the
award of attorneys’ fees for representing a claimant in court. See Gisbrecht v.
Barnhart, 535 U.S. 789, 794 (2002). Section 406(b) 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....
42 U.S.C. § 406(b)(1)(A); see also Murkeldove, 635 F.3d at 788 (citing Gisbrecht, 535
U.S. at 800); accord Jackson v. Astrue, 705 F.3d 527, 531 (5th Cir. 2013) (holding that
Ҥ 406(b) fees are authorized in cases where an attorney obtains a favorable decision
on remand”).
Contingency fee agreements in Social Security cases are unenforceable to the
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extent that they provide for fees exceeding 25% of past-due benefits. See Gisbrecht, 535
U.S. at 807. Even when contingency fee agreements are within the statutory ceiling,
Section “406(b) calls for court review of such arrangements as an independent check,
to assure that they yield reasonable results in particular cases.” Id.
The Commissioner has declined to assert a position on the reasonableness of
Plaintiff’s fee request on the ground that she is not the true party in interest but notes
that “[c]ontrolling authority directs the Court to resolve the question of whether Mr.
Osterhout’s requested fee is reasonable.” See Dkt. No. 26 at 1, 3. As the United States
Court of Appeals for the Fifth Circuit has noted, the Commissioner has no direct
financial stake in the fee determination; rather, her role resembles that of a “trustee”
for the claimant. See Jeter v. Astrue, 622 F.3d 371, 374 n.1 (5th Cir.2010) (citing
Gisbrecht, 535 U.S. at 798 n.6). Seeking a Court’s review of the reasonableness of the
fees sought is consistent with this role.
But the Commissioner notes that Plaintiff’s attorney, Karl Osterhout, “seeks an
award of $10,647.38 from the $16,647.38 withheld from Plaintiff’s past-due benefits as
attorney’s fees pursuant to 42 U.S.C. § 406(b)” and that “Mr.Osterhout’s requested fee
does not appear to be unreasonable,” where “[b]ased on the 44.3 hours of court-related
representation claimed in Plaintiff’s EAJA petition, the requested § 406(b) award of
$10,647.38 represents an hourly rate of $375.79 ($16,647.38 divided by 44.3).” Dkt. No.
26 at 1, 4; see also id. at 5 (noting that “the Commissioner is not empowered to
stipulate as to counsel’s requested fee, and in this case does not independently question
the reasonableness of the requested fee”). Acknowledging that Mr. Osterhout already
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received $6,000 from the agency in connection with the administrative level case, the
Commissioner submits that the proposed amount “is not excessive on its face when
considered as a lodestar.” Dkt. No. 26 at 4.
The reasonableness of attorneys’ fees awarded pursuant to a fee-shifting statute
is generally determined by using the lodestar method. See id. Noting that Section
406(b) is not a fee-shifting statute, however, the Supreme Court has “explicitly
rejected” the use of the lodestar method as the “starting point” in determining the
reasonableness of a fee under this statute. Gisbrecht, 535 U.S. at 801. Instead, “lower
courts [are] to give a contingency fee agreement ‘primacy,’” although this will “in some
instances result in an excessively high fee award.” Jeter, 622 F.3d at 379. Gisbrecht
acknowledged that, “[i]f the benefits [resulting from a contingency fee agreement] are
large in comparison to the amount of time counsel spent on the case, a downward
adjustment is ... in order [to disallow windfalls for lawyers].” 535 U.S. at 808. The Fifth
Circuit has interpreted this language to mean that courts may still employ the lodestar
method in determining whether a contingency fee constitutes a windfall but only if
they “articulate additional factors demonstrating that the excessively high fee would
result in an unearned advantage.” Jeter, 622 F.3d at 379. For instance, a court may
consider a reasonable hourly rate in its “windfall” assessment, “so long as this
mathematical calculation is accompanied by consideration of whether an attorney’s
success is attributable to his own work or instead to some unearned advantage for
which it would not be reasonable to compensate him.” Id.
The Fifth Circuit has not prescribed an exhaustive list of factors to consider in
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determining whether a fee award is unearned. It has noted with approval several
factors considered by lower courts, including “risk of loss in the representation,
experience of the attorney, percentage of the past-due benefits the fee constitutes,
value of the case to a claimant, degree of difficulty, and whether the client consents to
the requested fee.” Id. at 381-82 (citing Brannen v. Barnhart, No. l:99-CV-325, 2004
WL 1737443, at *5 (E.D. Tex. July 22, 2004)). The claimant’s attorney bears the burden
of persuasion on the reasonableness of the fees sought. See Gisbrecht, 535 U.S. at 807
n.17.
With regard to the first factor, courts have consistently recognized that “there
is a substantial risk of loss in civil actions for social security disability benefits.”
Charlton v. Astrue, No. 3:10-cv-56-O-BH, 2011 WL 6325905, at *4 (N.D. Tex. Nov. 22,
2011) (noting that, in the year 2000, only 35 percent of claimants who appealed their
case to federal court received benefits), rec. adopted, 2011 WL 6288029 (N.D. Tex. Dec.
14, 2011); see also Hartz v. Astrue, No. Civ. A. 08-4566, 2012 WL 4471846, at *6 (E.D.
La. Sept. 12, 2012) (collecting cases), rec. adopted, 2012 WL 4471813 (E.D. La. Sept.
27, 2012). According to evidence submitted by Plaintiff’s counsel, the percentage of
cases remanded in this court was 24% in 2010 through 2013, the last time this
information was compiled. See Dkt. No. 24 at 2. Thus, counsel faced a substantial risk
of loss.
Counsel’s resulting hourly rate of $375.79 ($16,647.38 divided by 44.3 hours of
attorney work devoted to the case) does not exceed 25% of the past-due benefits that
Plaintiff received. See Dkt. No. 24 at 3. An hourly rate of $375.79 falls below amounts
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that have been approved by courts as reasonable. See, e.g., Prude v. U.S. Comm’r, Soc.
Security Admin., No. 11-cv-1266, 2014 WL 249033, at *2 (W.D. La. Jan.22, 2014)
(finding that the resulting hourly fee of $937.50 was reasonable in light of factors “such
as the few attorneys in the area who will handle a disability appeal,” “the lack of
compensation in the many unsuccessful cases,” and the fact that the fee was “not
attributable to anything other than the attorney’s own work”); Claypool v. Barnhart,
294 F. Supp. 2d 829, 833 (S.D. Va.2003) (awarding attorney’s fees whose effective
hourly fee was $1,433.12). Even in cases where courts found a fee reduction was
warranted, they “reduced the fee to 2.5 times the rate normally charged by the
attorney.” Jeter v. Comm’r, Soc. Sec., No. 2:06-CV-81, 2009 WL 909257, at *6 (W.D. La.
Apr. 3, 2009) (collecting cases). The resulting hourly rate requested here, therefore,
seems reasonable.
Moreover, counsel provided effective and efficient representation, expending over
44 hours of work on behalf of Plaintiff. See Dkt. No. 24 at 1. The fees requested reflect
the favorable result obtained, given that Plaintiff recouped over $66,000 in wrongfullydenied past-due benefits. See id. By the time that counsel represented Plaintiff in
federal court, he had approximately 35 years of experience practicing in Social Security
law, during which he personally represented approximately 20,000 claimants in
administrative hearings and 5,000 claimants in appeals to federal district courts. See
id. at 2. The contingency fee requested in this case represents exactly 25% of the pastdue benefits awarded to Plaintiff. See id. at 1. Finally, while certainly not
determinative, the existence of a contingency fee agreement [Dkt. No. 24 at 3] indicates
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that Plaintiff consented to the payment of a 25% fee. See Jeter, 622 F.3d at 381-82;
Hartz, 2012 WL 4471846, at *6.
After weighing the relevant factors, the Court finds that the requested
contingency fee award in the amount of $10,647.38 is reasonable and should be
granted. Plaintiff was previously awarded attorneys’ fees pursuant to the EAJA.
See Dkt. No. 22. Given the overlap between the EAJA and Section 406(b) of the Social
Security Act, “Congress harmonized fees payable by the Government under” these
statutes by requiring that the attorney “refund to [Plaintiff] the amount of the smaller
fee.” Gisbrecht, 535 U.S. at 796 (citation omitted); Rice v. Astrue, 609 F.3d 831,837-39
(5th Cir. 2010). Here, counsel represents that “fees in the amount of $6,944.40 awarded
pursuant to the EAJA,” the lesser of the two fees, “will be refunded per the
requirements of Gisbrecht.” Dkt. No. 24 at 4.
Conclusion
The Court GRANTS Plaintiff’s Motion for An Award of Attorney Fees under
406(b) of the Social Security Act [Dkt. No. 23] and awards counsel $10,647.38 in
attorneys’ fees pursuant to 42 U.S.C. § 406(b).

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DATED: November 1, 2019

_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE

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