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Kapilaben C. Patel v. Michael J. Astrue

November 26, 2012

KAPILABEN C. PATEL, PLAINTIFF,
v.
MICHAEL J. ASTRUE, COMMISSIONER OF SOCIAL SECURITY, DEFENDANT.



The opinion of the court was delivered by: John Gleeson, United States District Judge:

ORDER

On September 18, 2012, counsel for Kapilaben C. Patel ("Ms. Patel") moved this Court pursuant to 42 U.S.C. § 406(b)(1) to authorize an award of attorney fees from Ms. Patel's past due social security disability insurance benefits in the amount of $27,067.23. For the reasons set forth below, the motion is granted.

A. Background

On September 16, 1998, Ms. Patel filed an administrative application for Social Security benefits, alleging that she became disabled beginning on November 15, 1994. Her application was denied and, on June 28, 1999, she signed a retainer agreement with the Law Offices of Harry J. Binder and Charles E. Binder ("Binder & Binder"), to appeal the denial of benefits to the United States District Court. According to the express terms of the retainer, if the district court remanded Ms. Patel's case to the Social Security Administration ("SSA") and, upon remand, the SSA awarded benefits, Ms. Patel would be obliged to pay Binder & Binder "twenty-five percent (25%) of the past due benefits"; however, if the appeal was unsuccessful, Ms. Patel would not be charged anything. The retainer also acknowledged that any potential fee was subject to approval by the district court. See Retainer Agreement, Ex. A, ECF No. 27-3.

In 1999, Ms. Patel requested that the denial of her Social Security benefits be reviewed by an Administrative Law Judge ("ALJ"), and, over the next ten years, she litigated her claim at the administrative level without success. See Binder Affirmation 1-3, Sept. 18, 2012, ECF No. 27-2 (describing Ms. Patel's efforts to secure benefits at the administrative level from 1999 to 2010). Binder & Binder does not elaborate on the extent of its representation during this ten-year period, but notes that it "submitted comments in support of [her] claim" to the Appeals Council*fn1 on May 6, 2004 and December 22, 2008. Id. at ¶¶ 3, 5.

On March 31, 2010, Ms. Patel, through her counsel, filed a civil action against the Commissioner of Social Security ("Commissioner") in this Court pursuant to 42 U.S.C. § 405(g). She alleged that she is disabled as a result of bilateral shoulder impairments and borderline intellectual functioning and that the Commissioner's decision to the contrary was not supported by substantial evidence. Compl., ECF No. 1. After briefing and oral argument, I granted Ms. Patel's motion for judgment on the pleadings, holding that the ALJ "failed to correctly apply the treating physician rule," and I remanded the case to the Commissioner for further proceedings. See Memorandum and Order 11, Dec. 10, 2010, ECF No. 23.

In 2011 the Commissioner re-opened Ms. Patel's disability case and, after two additional hearings, found that Ms. Patel qualified for disability benefits with an onset date of November 10, 1998. The SSA then sent Ms. Patel a notice informing her that she was entitled to $81,120.77*fn2 in past due benefits as well as $726.00 every month thereafter, and that it had withheld twenty-five percent of her past due disability benefits -- or $27,067.23 -- "in case [it] need[s] to pay your representative." Notice of Award 1-2, Aug. 7, 2012, ECF No. 27-3.

On September 18, 2012, counsel petitioned this Court pursuant to 42 U.S.C. § 406(b)(1) for an award of attorney's fees in the amount of $27,067.23. In support of its § 406(b) fee petition, Binder & Binder filed an Affirmation describing its work on the case, a copy of the retainer agreement signed by Ms. Patel, and an itemization of the 41.25 attorney hours spent representing Ms. Patel in this Court. Counsel also indicated that, if awarded the full amount of fees it seeks in the § 406(b) motion, it will refund to Ms. Patel the $7,000.00 in Equal Access to Justice ("EAJA") fees, 28 U.S.C. § 2412, previously received for the same work. See Binder Affirmation ¶ 16, Sept. 18, 2012, ECF No. 27-2.*fn3

On September 19, 2012, I expressed my preliminary view that an award of $27,067.23 for 41.25 hours of work, which amounts to rate of more than $650 per hour, may be unreasonable. I directed Ms. Patel to advise the Court whether her counsel had received additional remuneration other than the $7,000 in attorney's fees awarded pursuant to EAJA. See Minute Entry, Sept. 19, 2012. I also directed the Commissioner to inform this Court of its position on the reasonableness of the fee petition.

In response to this Court's request, Binder & Binder stated that it has not received any payment of fees under 42 U.S.C. § 406(a) for its work at the administrative level but that it might seek such fees if this Court authorized less than $27,067.23 under § 406(b). See Letter from Binder & Binder, Sept. 20, 2012, ECF No. 28. Moreover, in its letter to this Court, the Commissioner expressed its view that Binder & Binder's award would drop to $20,067.23 -- and the corresponding hourly rate would drop to approximately $486 per hour -- once Binder & Binder returned the $7,000 EAJA fee to Ms. Patel. The Commissioner stated that it does not oppose the motion on the condition that the $7,000 in EAJA fees is returned to Ms. Patel and indicated that the requested fee "does not appear to be unreasonable," Def.'s Letter 2, Oct. 3, 2012, ECF No. 29.

B. Discussion

1. Applicable Law

The statutory basis for an award of fees to a lawyer representing a client who obtains Social Security benefits is set forth in The Social Security Act, 42 U.S.C. § 406(b)(1)(A), which provides in relevant part:

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 . . . "The prescriptions set out in ยงยง 406(a) and (b) establish the exclusive regime for obtaining fees for successful representation of Social Security benefits claimants," and "[c]ollecting or even demanding from the ...


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