Williams v. Berryhill
Filing
26
ORDER GRANTING 22 and 25 Motions for Attorney Fees. The court AWARDS fees to Andrews as requested; Andrews is ORDERED to return the EAJA fees to his client. (Signed by Judge Gray H Miller). Parties notified. (aarcher, 4)
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ALTON WILLIAMS,
Plaintiff,
v.
KILOLO KIJAKAZI, Acting Commissioner
of the Social Security Administration,
Defendant.
§
§
§
§
§
§
§
§
§
§
April 04, 2022
Nathan Ochsner, Clerk
CIVIL ACTION H- 17-1061
ORDER
Pending before the court is a motion for attorney’s fees filed by counsel for plaintiff Alton
Williams, Jr. Dkt. 22. After considering the motion, response by the acting Commissioner of
Social Security, supplemental brief, and applicable law, the court is of the opinion that the motion
should be GRANTED.
I. BACKGROUND
Williams is Veteran who served in the Navy for fifteen years. Dkt. 17. He was diagnosed
with post traumatic stress disorder and found to be 100% disabled by the Department of Veterans
Affairs (“VA”). Id. He was also having various physical problems with his joints, back, neck,
wrist, knee, and foot. Id. He applied for disability insurance benefits from the Social Security
Administration in 2015 and asserted that he had been unable to work since June 30, 2014. Id.
Williams had a hearing in front of an Administrative Law Judge (“ALJ”), and the ALJ issued an
unfavorable opinion. Id. The ALJ recognized that Williams suffers from PTSD and was obese,
but the ALJ found that the record did not support the Williams’s assertions of physical limitations
relating to his neck, back, knee, elbow, wrist, and headaches. Id. The ALJ determined that
Williams was capable of performing medium work and could perform jobs such as laundry worker,
hand packager, or kitchen helper. Id.
Williams appealed the unfavorable decision, and the Appeals Council denied a request for
a review. Id. Williams then sought judicial review by this court. Id. The parties filed competing
motions for summary judgment, which this court referred to the Magistrate Judge. The Magistrate
Judge noted, in a very thorough 43-page memorandum and recommendation, that the ALJ had
only mentioned the finding by the VA that Williams is 100% disabled once in his opinion and then
did not discuss the finding. Id. The ALJ did not set forth valid reasons for failing to give the VA
disability finding “great weight” as required by caselaw. Id. The Magistrate Judge determined
that this constituted reversible error and recommended remand. Id. This court agreed and
remanded the case for the ALJ to consider the VA disability rating. Dkt. 18 (district court order
adopting the Magistrate Judge’s recommendation).
After the case was remanded back to the ALJ, Williams’s counsel, James Foster Andrews,
filed a motion for attorney’s fees in this court pursuant to the Equal Access to Justice Act
(“EAJA”), 28 U.S.C. § 2412. Dkt. 19. Andrews sought fees at the rate of $190.62 per hour, which
is the statutory rate under the EAJA plus enhancements for inflation. Id. He noted that he has
been practicing law for 41 years with a concentration in Social Security Disability for the last 39
years. Id. The court granted Andrews’s motion for fees and awarded $8,027.50 pursuant to the
EAJA. Dkt. 21.
After remand, Andrews continued to represent Williams.
The Social Security
Administration ultimately determined that “there are no jobs in the national economy that
[Williams] could perform” and that he had been under a disability since June 30, 2014. Dkt. 22,
Ex. A (ALJ decision after remand). Williams’s past-due benefits were $114,024, and his first
2
payment, which included the back pay, was $90,009.50.
Administration Notice of Award).
Dkt. 22, Ex. B (Social Security
The Social Security Administration stated that it was
withholding $28,506 from the past-due benefits to pay Williams’s representative’s fees, and it
advised Williams that the fee was between him and his representative, but the representative could
not charge more than 25 percent. Id. It noted that it had approved the fee agreement, which
provided for $6000 to be paid to Andrews, and that it is was withholding the remaining $22506 in
case Andrews asked this court to approve fees for work done in federal court. 1 Id.
Andrews filed the instant motion in this court seeking an award of 25 percent of Williams’s
back pay. Dkt. 22. He attached the contingency fee agreement he had with Williams, and he states
that he will refund the $8,027.50 EAJA award to Williams once he has received a fee award from
his court. Id. Andrews also attached a document that Williams signed on January 25, 2022, in
which Williams agrees that his counsel is owed 25 percent of Williams’s back pay award. Dkt. 22,
Ex. F.
In response to the motion, the acting Commissioner of Social Security noted that neither
she nor the government has a stake in the outcome and that the Commissioner plays the role of a
trustee to the claimant. Dkt. 23. She sets forth the law and advises the court that it must determine
whether counsel’s rate, which is about three times the hourly rate he received under the EAJA, is
a windfall and thus not reasonable under § 406(b). Dkt. 23. The Commissioner did not point to
any flaws in the contingency fee agreement. See id.
The court, however, ordered the parties to provide more briefing on whether the
contingency fee agreement and subsequent agreement by Williams that his counsel was entitled to
1
Andrews states that he has already been paid $5,896, which is the $6000 in the fee agreement
minus a $104 administrative fee. Dkt. 22.
3
recover 25 percent of his back due benefits allowed for such a recovery. Dkt. 24. Andrews
provided a short brief, but the Commissioner failed to provide the additional briefing the court
requested. See Dkt. 25.
The court will first briefly review the law related to fees and then consider whether
Andrews is entitled to the 25 percent he requests.
II. LEGAL STANDARD
The Social Security Administration currently is withholding 25 percent of Williams’s pastdue benefits pursuant to § 206(B) of the Social Security Act. See Dkt. 22, Ex. B. Under § 206(B),
“Whenever a court renders a judgment favorable to a claimant under this title 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). This provision “does not displace contingent-fee agreements as the primary means
by which fees are set for successfully representing Social Security benefit claimants in court,” but
rather “calls for court review of such arrangements as an independent check, to assure that they
yield reasonable results in particular cases.” Gisbrecht v. Barnhart, 535 U.S. 789, 807, 122 S. Ct.
1817 (2002). This independent check is, of course, subject to the “one boundary line” in the
statute—a 25 percent cap. Id. If an attorney requesting court-awarded fees pursuant to a
contingency fee agreement previously received EAJA fees, the attorney must refund the smaller
fee to the claimant. See id. at 796.
The court must determine whether a fee requested in a Social Security disability case under
the contingency agreement is reasonable or constitutes a windfall. Gisbrecht, 535 U.S. at 808. In
considering whether it is a windfall, the court may consider “whether an attorney’s success is
4
attributable to his own work or instead to some unearned advantage for which it would not be
reasonable to compensate him.” Jeter v. Astrue, 622 F.3d 371, 380 (5th Cir. 2010). The fact that
an award “may mathematically seem like a high fee award” compared to hours spent, the court
must keep in mind that an attorney may be able “to accomplish a great deal in a small window of
time.” Id. at 381. Courts may consider factors such as “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 382
(cleaned up). While it is impermissible to rely solely on a lodestar calculation 2 in determining the
reasonableness of fees pursuant to a contingency fee agreement in Social Security disability cases,
“courts may consider the lodestar in their analyses so long as [a court concluding the fee is a
windfall] can articulate additional factors demonstrating that the excessively high fee would result
in an unearned advantage.” Id. at 380. The lodestar “alone cannot constitute the basis of an
‘unreasonable’ finding.” Id. at 381.
III. ANALYSIS
Section 406(b) “calls for court review” of contingency fee agreements in Social Security
disability cases “as an independent check, to assure that they yield reasonable results in particular
cases.” Gisbrecht, 535 U.S. at 807. The U.S. Supreme Court instructs that courts must look first
at the agreement. Id. at 808. The relevant portion of the agreement provided to the court in this
case is set forth below:
2
The lodestar is a method of calculating reasonable attorneys’ fees in which “the district court
must first determine the reasonable number of hours expended on the litigation and the reasonable
hourly rates for the participating lawyers” and then “multiply the reasonable hours by the
reasonable hourly rate. . . . The product of this multiplication is the lodestar, which the district
court then either accepts or adjusts upward or downward, depending on the circumstances of the
case.” La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995).
5
A. In the event of a favorable determination before the Social
Security Administration at any stage, the fee shall be the
LESSER of:
1. Twenty-five (25%) of the past-due benefits of the client
and his/her family; or
2. Six Thousand and 00/100 Dollars ($6,000.00). NOTE:
In the event the Social Security Administration increases
the $6,000 figure, the parties agree to this increase.
Notwithstanding the foregoing, the client, within fifteen (15) days
after notice, can request a reduced fee and the attorney, within
fifteen (15) days after notice, can request an increased fee, as is
allowed by law. [See 42 USCS 406(a)(3)(A).]
Dkt. 22, Ex. 5 (bracketed text in original). The plain language of sections A(1) and A(2) of this
agreement indicates that the maximum amount the plaintiff can receive pursuant to the contingency
fee agreement, absent modification, is $6,000. Since the 25 percent Andrews now seeks is
significantly more than this, the court asked the parties to prepare additional briefing addressing
this issue. Dkt. 24. Andrews asserted in his supplemental brief that the fee agreement “envisioned
a scenario that does not cap the fee at $6,000,” citing the “notwithstanding” sentence after
paragraph A in the agreement.3 Dkt. 25.
If one considers only the text of the “notwithstanding” sentence, absent the citation that is
provided directly after the sentence in the agreement, it appears that either party can request a
change in the fees within fifteen days of notice of a decision—though there is no indication if this
request is just made between the parties or if another entity is involved. The citation, however,
clarifies this. The citation is to 42 U.S.C. § 406(a)(3)(A), which states:
3
Andrews also respectfully advised the court in his supplemental briefing that two other courts
had approved fees of 25 percent under this agreement, and he cited Steele v. Saul, No. 4:17cv03539, Dkt. 24 (S.D. Tex. Sep. 14, 2020) (Stacy, J.). In Steele, Judge Stacy very thoroughly
addressed how courts determine if a 25 percent fee is reasonable. She did not, however, address
the terms of the contingency fee agreement. See id. Thus, her analysis is Steele, while helpful in
providing an overview of the law, is not helpful in determining the issues this court requested the
parties to address in their supplemental briefs.
6
(A)
The Commissioner of Social Security shall provide by
regulation for review of the amount which would otherwise be the
maximum fee as determined by paragraph (2) if, within 15 days after
receipt of the notice provided pursuant paragraph (2)(D)—
(i)
The claimant, or the administrative law judge or
other adjudicator who made the favorable determination,
submits a written request to the Commissioner of Social
Security to reduce the maximum fee, or
(ii)
The person representing the claimant submits a
written request to the Commissioner of Social Security to
increase the maximum fee.
Any such review shall be conducted after providing the claimant,
the person representing the claimant, and the adjudicator with
reasonable notice of such request and an opportunity to submit
written information in favor of or in opposition to such request. The
adjudicator may request the Commissioner of Social Security to
reduce the maximum fee only on the basis of evidence of the failure
of the person representing the claimant to represent adequately the
claimant’s interest or on the basis of evidence that the fee is clearly
excessive for services rendered.
The paragraph (2) discussed in paragraph (3)(A) is about permissible contingency fee agreements,
including required caps, in cases considered by the Commissioner of Social Security.
See
§ 406(a)(2). Thus, this citation clarifies that the “notwithstanding” sentence does not apply to fee
requests for representation in federal court.
Moreover, even if the plain language of the
“notwithstanding” sentence were clear without referring to the citation, and the court must consider
this citation because otherwise it would be rendered mere surplusage. Under Texas law, contracts
must be interpreted to avoid surplusage. Ewing Constr. Co., Inc. v. Amerisure Ins. Co., 420 S.W.3d
30, 37 (Tex. 2014). Section 406(a)(3)A) relates to notice to the Commissioner of Social Security
for fees for representation before the Commissioner, not the fees for the court, which are addressed
in 42 U.S.C. § 406(b). See Gisbrecht, 535 U.S. at 805 (referring to § 406(a) as “the provision
governing fees for agency-level representation”). Thus, this agreement taken in isolation does not
support the fee award Andrews now seeks.
7
However, Andrews also points out that the week after the award, he conferred with
Williams regarding the increased fee and Williams “readily agreed.” Dkt. 25. Andrews notes that
Williams has received over $100,000 in back due benefits and that Andrews is not even requesting
additional fees for benefits that will accrue for Williams’s children, which exceed $50,000. Id.
The subsequent agreement to which Andrews refers is the document Williams signed on
January 25, 2022. Dkt. 22, Ex. F. In this document, Williams agrees as follows:
I agree that my attorney, James F. Andrews, is entitled to
25% of the back due benefits amounting to $28,506.
I also understand that Mr. Andrews will reimburse me the
sum of $8,027.50 as Equal Access to Justice Act Fees that was paid
to Mr. Andrews in 2018. That reimbursement will occur upon Mr.
Andrews’ receipt of the sum of $28,506.
Dkt. 22, Ex. F. When the court requested additional briefing, it specifically asked the parties to
brief the impact of this subsequently signed document, but Andrews’s only discussion of this
impact is to state that the plaintiff agreed to the increase, which Andrews asserts it pursuant to the
“notwithstanding” section of the original contingency fee agreement. Dkt. 25. However, since
the court interprets the notwithstanding language as inapplicable in this situation, the January 25
document can only be enforced if it is a valid modification of the previous agreement.
Under Texas law, a modification of a contract “must satisfy the elements of a contract: a
meeting of the minds supported by consideration.” Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227,
228 (Tex. 1986). The parties have not discussed modification, but after a review of the document
Williams signed on January 25, 2022, the court finds that it satisfies the commonly known
requirements of a modification. There appears to be a meeting of the minds with regard to how
much money Andrews now seeks, which is clearly set forth in the agreement, and the return of the
fees already paid is, though a small amount in comparison, consideration. See Dkt. 22, Ex. F. No
party has argued that the agreements in this case do not allow Andrews to receive 25 percent,
8
including the Commissioner which noted that it acts as a trustee for Williams. The court will
therefore enforce the January 25 document as a modification.
The court must consider whether 25 percent of Williams’s backpay is a reasonable amount
for Andrews’s work in this court or whether it constitutes a windfall. As the Commissioner pointed
out in her response to the motion, if one were to calculate the hourly rate based on the records
counsel submitted, the rate would be $674.70, which is no doubt a very high rate. Dkt. 23.
However, while Fifth Circuit precedent allows the court to consider whether the hourly rate is
reasonable the same way it would when calculating the lodestar, the lodestar cannot be the sole
consideration. See Jeter, 622 F.3d at 380. The court must be able to articulate why this rate would
be a windfall for other reasons, and it cannot. Andrews appealed an unfavorable decision to federal
court, risking no fees, and the Magistrate Judge’s 43-page memorandum and recommendation
granted in part and denied in part competing motions for summary judgment and remanded the
case to the Commissioner for further consideration. Dkt. 17. It is not a run-of-the-mill case, and
counsel, who is very experienced with this type of case, obtained a good result for his client—a
client who otherwise would not have received any benefits. Andrews is seeking 25 percent of
Williams’s back pay, but he does not request any percentage of the funds the children are receiving
that also resulted from his work, and Williams agrees that his counsel was entitled to 25 percent
of his backpay. The court thus finds that, under Fifth Circuit law, the amount requested is
reasonable.
The court notes that the statute allows for 25 percent of the past-due benefits, and that the
Social Security Administration withheld 25 percent pending this court’s decision on fees. See
Dkt. 22, Ex. B. However, the Social Security Administration paid Andrews $6,000 out of that
withheld amount for his work at the agency level. See id. This raises the question: Does the 25
9
percent cap apply to the aggregate award at both the agency and court levels? It does not. The
statute addresses fees for court representation and agency representation separately; “the amount
of past-due benefits that the agency can withhold for direct payment does not delimit the amount
of fees that can be approved for representation before the agency [under § 406(a)] or the court
[under § 406(b)].” Culbertson v. Berryhill, 139 S. Ct. 517, 523 (2019). The fees for representation
at the federal court level are capped at 25 percent of the past-due benefits, and this amount is not
reduced by the amount awarded at the agency level. Id. (analyzing the plaint language of the
statutory text). Thus, even though the remaining funds held by the Social Security Administration
are $22,506 ($28,506-$6,000), Andrews seeks $28,506, which represents the full 25 percent of
Williams’s past-due benefits. Williams agreed to this full statutorily-approved amount, and that
is the amount the court awards.
IV. CONCLUSION
The motion for fees (Dkt. 22) is GRANTED. The court hereby AWARDS fees to Andrews
in the amount of $28,506. Andrews is ORDERED to return the $8,027.50 that he received in
EAJA fees to his client.
Signed at Houston, Texas on April 4, 2022.
_________________________________
Gray H. Miller
Senior United States District Judge
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?