United States District Court, D. Maine
RECOMMENDED DECISION ON MOTION FOR AWARD OF ATTORNEY FEES
JOHN H. RICH, III, Magistrate Judge.
The plaintiff's attorney in this Social Security benefits case seeks an award of fees pursuant to 42 U.S.C. § 406(b) in the amount of $26, 500 in connection with an award of past-due benefits to the plaintiff. The commissioner opposes the amount of the request, characterizing it as a windfall. I recommend that the court grant the motion for a reduced amount.
I. Factual and Procedural Background
On September 29, 2010, the plaintiff executed a contingent fee agreement with the law firm of Jackson & MacNichol in connection with his appeal to this court of the commissioner's adverse decision on his application for Social Security Disability benefits. Contingent Fee Agreement for Representation Before the Court with the Law Firm of Jackson & MacNichol (ECF No. 24-2) at 6. The agreement provided, in relevant part: "Client agrees to pay a fee equal to twenty[-]five percent (25%) of the total amount of any past-due benefits awarded to Client, to include any dependents['] benefits, subject to the approval of said fee by the court." Id. at 3 ¶ 3(A).
On February 23, 2011, following the plaintiff's filing of his Itemized Statement of Errors, the commissioner filed an unopposed motion to reverse the decision of which the plaintiff complained and remand the case for further action. ECF No. 10. The motion was granted the next day. ECF No. 11.
On March 23, 2011, the plaintiff filed a motion for attorney fees pursuant to the Equal Access to Justice Act ("EAJA"). ECF No. 13. On March 30, 2011, this court entered an order approving payment under the EAJA in the amount of $692.00. ECF No. 15. The plaintiff's attorney has already received payment of $6, 000 for work performed in this matter at the administrative level. That amount, plus the $26, 500 sought by the instant motion, would equal almost 25% of the past due benefits awarded to the plaintiff ($131, 278.00). Defendant's Response to Plaintiff's Amended Motion for Award of § 406(B) Fees ("Opposition") (ECF No. 25) at 2-3; Motion at 1.
The plaintiff's attorney's itemized statement of work performed in this court indicates that Jackson & MacNichol expended 3.55 hours of attorney time, billed at $177.00 per hour, and.85 hours of paralegal time, billed at $75.00 per hour, to obtain the remand order that eventually led to the plaintiff prevailing in further proceedings before the commissioner. ECF No. 24-3.
Section 406 provides, in relevant part:
Whenever a court renders a judgment favorable to a claimant under this subchapter [ i.e., Title II] 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 US.C. § 406(b)(1)(A).
This court has authority to award court-related fees pursuant to section 406(b), even though the benefits award itself was made by the commissioner on remand. See, e.g., Horenstein v. Secretary of Health & Human Servs., 35 F.3d 261, 262 (6th Cir. 1994) (overruling "single tribunal rule" of Webb v. Richardson, 472 F.2d 529 (6th Cir. 1972), pursuant to which only the tribunal that ultimately upheld a claim for benefits could approve and certify payment of section 406 attorney fees; joining majority of circuits-including the First Circuit-in ruling, inter alia, that "in cases where the court remands the case back to the [commissioner] for further proceedings, the court will set the fee-limited to 25 percent of past-due benefits-for the work performed before it, and the [commissioner] will award whatever fee the [commissioner] deems reasonable for the work performed on remand and prior administrative proceedings.")
The making of an application for an award of attorney fees pursuant to the EAJA does not preclude an award of attorney fees pursuant to section 406(b). However, a claimant's attorney must refund the smaller of the EAJA fee or the section 406(b) fee to the claimant. See, e.g., Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002) ("Congress harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the claimant's past-due Social Security benefits in this manner: Fee awards may be made under both prescriptions, but the claimant's attorney must refund to the claimant the amount of the smaller fee.") (citation and internal punctuation omitted).
This court has a duty to satisfy itself that a section 406(b) contingency fee is "reasonable[.]" Id. at 807 ("Most plausibly read, ... § 406(b) does not displace contingent fee arrangements as the primary means by which fees are set for successfully representing Social Security benefits claimants in court. Rather, § 406(b) calls for court review of such arrangements as an independent, check, to assure that they yield reasonable results in particular cases. Congress has provided one boundary line: Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of past-due benefits. Within the 25 percent ...