Schwartz v. Saul
Filing
31
DECISION AND ORDER signed by Magistrate Judge Nancy Joseph on 1/27/2025 granting 28 Motion for Attorney Fees. Attorney Dana Duncan is awarded fees in the amount of $12,320.00. Upon receipt of this sum, Attorney Duncan is directed to refund $7,245.24, representing fees that were previously awarded under the EAJA, directly to claimant. (cc: all counsel)(llc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
TROY S.,
Plaintiff,
v.
Case No. 21-CV-365
MICHELLE KING,
Acting Commissioner of Social Security,1
Defendant.
DECISION AND ORDER APPROVING AN AWARD OF ATTORNEY’S FEES
PURSUANT TO 42 U.S.C. § 406(b)
On December 14, 2021, I granted the parties’ stipulated motion to remand this case
to the Administration for further proceedings, thus reversing the Social Security
Commissioner’s decision denying claimant’s claim for Disability Insurance Benefits. (Docket
# 23.) The case was remanded for further proceedings pursuant to 42 U.S.C. § 405(g),
sentence four. (Id.) I granted claimant’s request for attorney’s fees under the Equal Access to
Justice Act (“EAJA”) on January 13, 2022 and awarded $7,245.24 in fees. (Docket # 27.) On
remand, claimant received a favorable decision awarding disability benefits as of January
2021. (Docket # 28-2.) The Social Security Administration issued a Notice of Award letter
dated May 14, 2024 stating that claimant was entitled to past-due benefits in the amount of
$63,470.00. (Id. at 3.)
Claimant agreed to pay his attorney 25% of his past-due benefits award. (Docket # 281.) Twenty-five percent of $63,470.00 is $15,867.50. Claimant’s counsel, Attorney Dana
Pursuant to Federal Rule of Civil Procedure 25(d), Michelle King is substituted for her predecessor. The Clerk
is directed to update the docket accordingly.
1
Duncan, states that he expended 22.4 hours of attorney time litigating this appeal. (Docket #
28-5.) Because the amount of attorney time spent divided by the amount of § 406(b) fees owed
equates to an hourly rate of approximately $708.37/hour, Attorney Duncan instead requests
an hourly rate of $550/hour for the 22.4 hours spent. This amounts to § 406(b) fees in the
amount of $12,320.00. (Docket # 29 at 3.)
As stated above, Attorney Duncan was previously granted EAJA fees in the amount
of $7,245.24. (Docket # 27.) “[W[hen attorney’s fees are awarded under both the SSA and
the EAJA for the same services, an attorney is entitled to keep the larger fee but must return
the smaller fee to the claimant.” Hanrahan v. Shalala, 831 F. Supp. 1440, 1452 (E.D. Wis.
1993). Attorney Duncan requests that the Court subtract the previously awarded EAJA award
from
the
requested
§
406(b)
fees
and
award
counsel
$5,074.76
($12,320.00-
$7,245.24=$5,074.76). (Docket # 29 at 3.) The Commissioner takes no position on Attorney
Duncan’s request to award a “net” fee rather than requiring counsel to refund the EAJA fee
previously granted; however, the Commissioner argues that the reasonableness determination
of the section 406(b) fee request must be based on the full 406(b) fees sought rather than the
net fee awarded after the offset. (Docket # 30.)
Turning first to the reasonableness of the fee requested, the court must approve any
fee under § 406(b). Congress intended such review not to override the claimant and counsel’s
fee arrangement, but rather to act as an “independent check” to ensure that the arrangement
yielded a reasonable result in the particular case. Gisbrecht v. Barnhart, 535 U.S. 789, 807
(2002). “Congress has provided one boundary line: Agreements are unenforceable to the
extent that they provide for fees exceeding 25 percent of the past-due benefits.” Id. Within the
2
25% boundary, the attorney for the successful claimant must show that the fee sought is
reasonable for the services rendered. Id. In making this determination, the court may consider
the character of the representation and the results obtained, reducing an award if the attorney
is responsible for delay in the proceeding that had the effect of inflating past-due benefits, or
if the fee is so large in comparison to the amount of time counsel spent on the case that the
fee would constitute a windfall to the attorney. Id. at 808.
Claimant entered into a 25% contingency fee agreement with counsel. Although 25%
of the past-due benefits equals $15,867.50, counsel agrees to seek a reduced amount of
$12,320.00. Thus, counsel has met the “one boundary line” of requesting a fee that does not
exceed 25% of the past-due benefits.
However, within the 25% boundary, counsel must still show that the fee sought is
reasonable. Counsel contends that the requested fee is reasonable for the 22.4 hours of
attorney work spent in this case. (Docket # 29.) Attorney Duncan argues that he is an
experienced attorney who has been litigating SSA law for the past twenty-five years. (Id. at
10–11.) He further argues that he achieved a favorable result for claimant, including more
than two years of additional backpay and Medicare benefits eligibility since January 1, 2022.
(Id. at 8.)
Pursuant to Gisbrecht, I find the requested fee is reasonable. Counsel obtained a fully
favorable result for claimant, who was awarded disability benefits and was awarded back
benefits of $63,470.00. I further find the fee does not constitute a windfall to the attorney. The
amount sought by counsel under § 406(b) is within the 25% permitted by law and provided
for in the fee agreement. The fee of $12,320.00 for 22.4 hours of work equates to an hourly
3
fee of $550.00/hour, and this is well within the realm of reasonable fees approved by the
courts in this circuit. See Koester v. Astrue, 482 F. Supp. 2d 1078, 1081 (E.D. Wis. 2007)
(approving an hourly rate of $580.67 per hour for 38.80 hours of work); Stemper v. Astrue, No.
04-CV-838, 2008 WL 2810589, at *1 (W.D. Wis. July 14, 2008) (approving an hourly rate of
$666 per hour).
Turning next to Attorney Duncan’s request for payment, he asks that rather than him
refunding the $7,245.24 in EAJA fees to claimant, he requests that the amount be refunded
directly by the SSA so that counsel need not issue a form 1099 to pay claimant. (Docket # 29
at 14.) Attorney Duncan argues that if claimant does not file taxes, the “potential exists” that
counsel will be taxed on the amount. (Id.)
The netting method—whereby the court offsets the prior EAJA award instead of
ordering that the attorney refund the award to the claimant—is “disfavored in light of the
Savings Provision’s language that anticipates an attorney-to-claimant refund.” O’Donnell v.
Saul, 983 F.3d 950, 957 (7th Cir. 2020) (internal quotations omitted). It is within the court’s
discretion whether to employ the netting method as requested by counsel or to require that
counsel refund the EAJA award directly. Id. Counsel argues that if the netting method is not
used, he may have to pay taxes on the amount if claimant does not file taxes. Counsel’s
argument rests on two contingencies that may not occur. Given the Seventh Circuit’s
guidance in O’Donnell, I decline to utilize the netting method in considering counsel’s request
for § 406(b) fees.
ORDER
NOW, THEREFORE, IT IS HEREBY ORDERED that Plaintiff’s motion for an
4
award of attorney’s fees pursuant to 42 U.S.C. § 406(b) (Docket # 28) is GRANTED.
Attorney Dana Duncan is awarded fees in the amount of $12,320.00
IT IS FURTHER ORDERED that upon receipt of this sum, Attorney Duncan is
directed to refund $7,245.24, representing fees that were previously awarded under the EAJA,
directly to claimant.
Dated at Milwaukee, Wisconsin this 27th day of January, 2025.
BY THE COURT
__________________________
____________
___
______________
NANCY JOSEPH
United States Magistrate Judge
5
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?