Elawyers Elawyers
Ohio| Change

Beckstedt v. Commissioner of Social Security, 1:13-cv-261. (2016)

Court: District Court, S.D. Ohio Number: infdco20160212655 Visitors: 14
Filed: Feb. 10, 2016
Latest Update: Feb. 10, 2016
Summary: REPORT AND RECOMMENDATION KAREN L. LITKOVITZ , Magistrate Judge . This matter is before the Court on plaintiff's motion for attorney fees under the Social Security Act, 42 U.S.C. 406(b)(1). (Doc. 23). The Commissioner does not oppose plaintiff's motion. (Doc. 25). Pursuant to 42 U.S.C. 406(b)(1)(A), a court may award a prevailing claimant's attorney a reasonable fee not in excess of 25 percent of past-due benefits recovered by the claimant for work done in a judicial proceeding. 42 U.S
More

REPORT AND RECOMMENDATION

This matter is before the Court on plaintiff's motion for attorney fees under the Social Security Act, 42 U.S.C. § 406(b)(1). (Doc. 23). The Commissioner does not oppose plaintiff's motion. (Doc. 25).

Pursuant to 42 U.S.C. § 406(b)(1)(A), a court may award a prevailing claimant's attorney a reasonable fee not in excess of 25 percent of past-due benefits recovered by the claimant for work done in a judicial proceeding. 42 U.S.C. § 406(b)(1)(A). See Horenstein v. Sec'y of H.H.S., 35 F.3d 261, 262 (6th Cir. 1994) (en banc) (court may award fees only for work performed before the court, and not before the Social Security Administration). Fees are awarded from past due benefits withheld from the claimant by the Commissioner and may not exceed 25 percent of the total past-due benefits. Gisbrecht v. Barnhart, 535 U.S. 789, 792 (2002).

In determining the reasonableness of fees under § 406(b), the starting point is the contingency fee agreement between the claimant and counsel. Gisbrecht, 535 U.S. at 807. When a claimant has entered into a contingency fee agreement entitling counsel to 25 percent of past-due benefits awarded, the Court presumes, subject to rebuttal, that the contract is reasonable. Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en banc). Within the 25 percent boundary, the attorney for the claimant must show that the fee sought is reasonable for the services rendered. Gisbrecht, 535 U.S. at 807. The Court should consider factors such as the character of the representation, the results achieved, the amount of time spent on the case, whether the attorney was responsible for any delay, and the attorney's normal hourly billing rate for noncontingent fee cases. Id. at 808. See also Rodriquez, 865 F.2d at 746. Additionally, the Court should consider instances of improper conduct or ineffectiveness of counsel; whether counsel would enjoy a windfall because of either an inordinately large award or from minimal effort expended; and the degree of difficulty of the case. Hayes v. Sec'y of HHS, 923 F.2d 418, 422 (6th Cir. 1990); Rodriquez, 865 F.2d at 746. An award of 25 percent of past due benefits may be appropriate where counsel has overcome legal and factual obstacles to enhance the benefits awarded to the client; in contrast, such an award may not be warranted in a case submitted on boilerplate pleadings with no apparent legal research. Rodriquez, 865 F.2d at 747.

An award of fees under Section 406(b) is not improper merely because it results in an above-average hourly rate. Royzer v. Sec'y of HHS, 900 F.2d 981, 981-82 (6th Cir. 1990). As the Sixth Circuit determined:

It is not at all unusual for contingent fees to translate into large hourly rates if the rate is computed as the trial judge has computed it here [by dividing the hours worked into the amount of the requested fee]. In assessing the reasonableness of a contingent fee award, we cannot ignore the fact that the attorney will not prevail every time. The hourly rate in the next contingent fee case will be zero, unless benefits are awarded. Contingent fees generally overcompensate in some cases and undercompensate in others. It is the nature of the beast.

Id. "[A] hypothetical hourly rate that is less than twice the standard rate is per se reasonable, and a hypothetical hourly rate that is equal to or greater than twice the standard rate may well be reasonable." Hayes, 923 F.2d at 422.

Here, the fee of $8,508.50 requested by plaintiff falls within the 25 percent boundary. Thus, the issue is whether the requested fee is reasonable.1 Gisbrecht, 535 U.S. at 807. Plaintiff asserts the requested fee is reasonable given her attorney's background and experience, the contingency fee agreement, and counsel's success in achieving a favorable result on remand before the Commissioner. (Doc. 23 at 2-3). Plaintiff has submitted a copy of the contingency fee agreement she entered into with counsel under which she agreed to pay counsel a contingency fee of 25 percent of past-due benefits. (Id. at 7). Plaintiff has also submitted itemized billing sheets demonstrating that her attorney performed a total of 29 hours of work on the case in the District Court. (Id. at 5-6). Plaintiff therefore requests that the Court award fees in the amount of $8,508.50, which represents counsel's portion of the 25 percent of plaintiff' past due benefits. (Id. at 2-3). Plaintiff acknowledges that she is entitled to a refund from counsel of the $5,000.00 in fees previously awarded to counsel under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (see Doc. 22). (Doc. 23 at 3). As stated above, the Commissioner has not filed any opposition to the fee request.

Dividing the requested fee of $8,508.50 by the 29 hours counsel worked on this case before the Court produces a hypothetical hourly fee of $293.40. In determining whether counsel "would enjoy a windfall because of either an inordinately large benefit or from minimal effort expended," Hayes, 923 F.2d at 422 (quoting Rodriquez, 865 F.2d at 746), the Court notes that "a windfall can never occur when, in a case where a contingent fee contract exists, the hypothetical hourly rate determined by dividing the number of hours worked for the claimant into the amount of the fee permitted under the contract is less than twice the standard rate for such work in the relevant market." Id. As the Sixth Circuit explained in Hayes:

[A] multiplier of 2 is appropriate as a floor in light of indications that social security attorneys are successful in approximately 50% of the cases they file in the courts. Without a multiplier, a strict hourly rate limitation would insure that social security attorneys would not, averaged over many cases, be compensated adequately. . . . . A calculation of a hypothetical hourly rate that is twice the standard rate is a starting point for conducting the Rodriquez analysis. It provides a floor, below which a district court has no basis for questioning, under the second part of Rodriquez's windfall rule for "minimal effort expended," the reasonableness of the fee.

Id.

The Hayes "floor" in this case is $20,300.00, which represents 29 hours times an hourly rate of $350.00 multiplied by 2.2 Plaintiff's requested fee of $8,508.00 falls under this amount. Thus, the requested fee does not constitute a windfall to plaintiff's counsel. Moreover, counsel achieved an excellent result in this case. Plaintiff acknowledges that upon receipt of the 406(b) award, she is entitled to a refund from counsel of the $5,000.00 EAJA fee awarded by the District Court to plaintiff under Jankovich v. Bowen, 868 F.2d 867, 871 and n.1 (6th Cir. 1989) (recognizing that while a claimant may be awarded fees under both the EAJA and the Social Security Act, "any funds awarded pursuant to the EAJA serve as a reimbursement to the claimant for fees paid out of his or her disability award to his or her counsel" and should be refunded to the client). (Doc. 23 at 3). In view of these considerations, and having reviewed the fee request in light of the remaining criteria set forth in Gisbrecht and Rodriquez, the Court finds that a fee of $8,508.50 is reasonable for the work plaintiff's counsel performed in this Court. Counsel therefore should be awarded $8,508.50 in fees under § 406(b)(1)(A).

The Court therefore RECOMMENDS that plaintiff's § 406(b) motion for attorney fees (Doc. 23) be GRANTED and that counsel be AWARDED $8,508.50 in fees.

FootNotes


1. On remand, an ALJ found plaintiff disabled since September 2010, and the Social Security Administration withheld $14,508.50 for attorney fees - 25% of plaintiff's past due benefits. See Doc. 23 at 8-9. Of this total amount withheld, $6,000 was paid to the lawyer who represented plaintiff before the Administration at the hearing level; the instant motion relates to the fee to be awarded to plaintiff's counsel on appeal. Id. at 2.
2. Counsel for plaintiff attests that his hourly rate for work done on Social Security cases is $350.00. See Doc. 23 at 3, 16.
Source:  Leagle

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer