United States District Court, S.D. New York
MR. ROBERT TORRES, Plaintiff,
CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.
MICHAEL H. DOLINGER, Magistrate Judge.
Before the court is a motion by plaintiff's attorney, Christopher J. Bowes, Esq., for attorneys' fees pursuant to the Social Security Act, 42 U.S.C. § 406(b)(1). Counsel invokes a contingent-fee arrangement with his client, and asks that the court award fees in the amount of $13, 700.00, a figure substantially less than called for by that preexisting fee agreement.
Plaintiff filed his claim for social security disability benefits on August 20, 2008, citing injuries that he had sustained from a motor vehicle accident. (Decl. of Christopher J. Bowes, Esq., dated July 8, 2013 (Dkt. No. 26) ("Bowes Decl.") at ¶¶ 5-6). Plaintiff's claim was denied by the Social Security Administration ("SSA") on November 6, 2008, based on(a finding that he retained the capacity to perform light work. (Id. at ¶ 7). He appealed, and on July 14, 2010, an administrative law judge ("ALJ") found him to be not disabled. (Id. at ¶ 9). Plaintiff-appealed that finding to the SSA Appeals Council, and on May 19, 2011, the Council denied review and affirmed the ALJ's decision. (Id. at ¶¶ 10-11). He then filed this action pro se on July 18, 2011. (Id. at ¶ 12).
On February 2, 2012, plaintiff retained Mr. Bowes to represent him in his civil action. (See Pl.'s Mem. of L. in Supp. of Mot. for Fees, dated July 8, 2013 (Dkt. No.) ("Pl.'s Mem.") at 2). Plaintiff and Mr. Bowes signed a contingent-fee agreement in which plaintiff agreed to pay a fee "equivalent to one-quarter (i.e. 25%) of all past due benefits" upon approval of his claim. (Bowes Deci. Ex. A).
Counsel for both parties engaged in settlement discussions, and on or about March 20, 2012, they submitted a Stipulation and Order agreeing to vacate the underlying administrative decision and remand the case for additional administrative proceedings. (See Pl.'s Mem. 2-3, Bowes Decl. ¶ 16). Judgment was entered on March 23, 2012, and on April 26, 2012, plaintiff's counsel moved for payment of attorneys' fees and costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, seeking payment for 13.7 hours of attorney time expended. (See Bowes Decl. Ex. B).
On June 27, 2012, the parties entered into a stipulation under which the Social Security Administration ("SSA") agreed to pay $2, 175.85 to settle the claim for attorneys' fees under the EAJA. (Pl.'s Mem. 3; Def.'s Letter in Opp'n to Pl.'s Mot. for Fees, dated Aug. 14, 2013 ("Def.'s Opp'n") at 3). The district court endorsed the stipulation on July 2, 2012. (See Dkt. No. 24). On September 25, 2012, plaintiff received notice from the Department of the Treasury stating that the EAJA attorney-fee award was being seized to satisfy a preexisting debt by Torres to the federal government. (See Bowes Decl. ¶ 21 & Ex. C).
On remand to the SSA, plaintiff was represented by administrative representative Mark Ramnauth. (Pl.'s Mem. 4). He received a favorable decision in February 2013, with the SSA finding him disabled as of June 2008. (Id.). On June 10, 2013, the SSA issued a Notice of Award advising plaintiff that he was due $84, 036.00 in past-due benefits, and that 25% of that amount ($21, 009.00) was being withheld from his past-due benefits for the payment of attorneys' fees. (Id.; Def.'s Opp'n 3; Bowes Decl. Ex. D). The Notice also advised plaintiff that from the $21, 009.00 amount it had authorized payment of $6, 000.00 to his administrative representative, Mr. Ramnauth, under 42 U.S.C. 406(a). (Def.'s Opp'n 3; Pl.'s Mem. 4; Bowes Decl. ¶ 26, Ex. D).
Mr. Bowes moved for attorneys' fees under 42 U.S.C. § 406(b) and pursuant to the contingency-fee agreement on July 9, 2013. He requested a fee of $13, 700 for 13.7 hours of work at the federal-court level. (See Dkt. No. 25).
I. Standard of Review
Section 406(b) of the Social Security Act authorizes a court to award reasonable attorneys' fees to a successful claimant's attorney, provided that those fees do not exceed twenty-five percent (25%) of the amount of past-due benefits awarded to the claimant. 42 U.S.C. § 406(b); see also Gisbrecht v. Barnhart , 535 U.S. 789, 807 (2002); Wells v. Sullivan , 907 F.2d 367, 370 (2d Cir. 1990). "(B]ecause a successful social security claimant evaluates and pays his own attorney, a court's primary focus should be on the reasonableness of the contingency agreement in the context of the particular case; and the best indicator of the 'reasonableness' of a contingency fee in a social security case is the contingency percentage actually negotiated between the attorney and client, not an hourly rate determined under lodestar calculations." Wells , 907 F.2d at 371. Section 406(b) does not displace any contingent-fee arrangement between the claimant and attorney, but rather sets the ceiling for an award under any such agreement at twenty-five percent of the past-due benefits. Gisbrecht , 535 U.S. at 792-93.
Although the court initially looks to the fee arrangement between counsel and client, the maximum twenty-five percent contingency fee arrangement "cannot simply be adopted as per se reasonable in all social security cases." Benton v. Commissioner of Soc. Sec., 2007 WL 2027320, at *1 (E.D.N.Y. May 17, 2007) (quoting Wells , 907 F.2d at 371). Courts are directed to consider several factors, including (1) whether the requested fee is out of line with the "character of the representation and the results the representation achieved;" (2) whether the attorney unreasonably delayed the proceedings in an attempt to increase the accumulation of benefits and thereby increase his own fee; and (3) whether "the benefits awarded are large in comparison to the amount of the time counsel spent on the case" the socalled "windfall" factor. Joslyn v. Barnhart , 389 F.Supp.2d 454, 456 (W.D.N.Y. 2005) (quoting Gisbrecht , 535 U.S. at 808). "[T]he district court's determination of a reasonable fee under § 406(b) must begin with the agreement, and the district court may reduce the amount called for by the contingency agreement only when it finds the amount to be unreasonable." Wells , 907 F.2d at 371. Nonetheless, "[t]hat the fee sought represents less than the percentage amount agreed to under the contingent-fee agreement with plaintiff does not, in and of itself, render the amount reasonable." Muniz v. Astrue, 2011 WL 5563506, at *4 (E.D.N.Y. Nov. 15, 2011).
When determining whether an award of attorneys' fees is a windfall, courts have considered the following factors: "1) whether the attorney's efforts were particularly successful for the plaintiff, 2) whether there is evidence of the effort expended by the attorney demonstrated through pleadings which were not boilerplate and through arguments which involved both real issues of material fact and required legal research, and finally, 3) whether the case was handled efficiently due to the attorney's experience in handling social security cases." Blizzard v. Astrue , 496 F.Supp.2d 320, 323 (S.D.N.Y. 2007) (quoting Joslyn , 389 F.Supp.2d at 456-57). In cases where a windfall ...