United States District Court, W.D. New York
DECISION AND ORDER
HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT JUDGE
counsel, Sarah A. Frederick, Esq., has filed a motion for
approval of her fee pursuant to 42 U.S.C. § 406(b).
Before approving counsel's fee, the Court must perform an
“independent check” of the request.
Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002).
Upon such review, the Court may approve a “reasonable
fee.” 42 U.S.C. § 406(b). After its independent
check, and for the reasons stated below, the Court finds that
counsel's requested fee of $10, 926.75 is reasonable in
February 11, 2016, counsel filed a complaint in this Court
pursuant to 42 U.S.C. § 405(g). The complaint sought
review of the Commissioner's decision denying
Plaintiff's application for Social Security benefits.
See Docket No. 1. After counsel filed a motion for
judgment on the pleadings, the parties stipulated that the
case should be remanded to the Commissioner for further
administrative proceedings. See Docket No. 15. On
remand, the Administrative Law Judge issued a decision in
favor of the Plaintiff. See Docket No. 17-4. The
Commissioner then determined that the Plaintiff was entitled
to $43, 707 in past-due benefits. Id. The
Commissioner, however, withheld 25 percent of that amount
(totaling $10, 930.25) for attorney's fees. On November
22, 2016, the parties stipulated that, under the Equal Access
to Justice Act (EAJA), counsel was entitled to fees and
expenses totaling $4, 400.
the Commissioner found in favor of the Plaintiff on remand,
counsel filed a motion for fees pursuant to 42 U.S.C. §
406(b), which is now before the Court. Counsel's motion
seeks $10, 926.75 of the amount the Commissioner has withheld
from the Plaintiff's past-due benefits. In support of her
§ 406(b) motion, counsel includes her billing records
for this case, which indicate that she spent 25.8 hours on
her representation of the Plaintiff before the Court.
See Docket No. 15-4.
Standard for awarding fees under § 406(b)
Social Security Act allows an attorney who successfully
represents a Social Security claimant “before the
court” to petition that court for “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 U.S.C. §
406(b). The Supreme Court has held that § 406(b)
“calls for court review of [contingent-fee]
arrangements as an independent check to assure that they
yield reasonable results in particular cases.”
Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002).
Towards that end, “Congress has provided” courts
with “one boundary line: Agreements are unenforceable
to the extent that they provide for fees exceeding 25 percent
of the past-due benefits.” Id. (citing 42
U.S.C. § 406(b)).
the 25 percent boundary, ” an attorney must show that
“the fee sought is reasonable for the services
rendered.” Id. In other words, an
attorney's fee is not presumptively recoverable simply
because it is equal to or less than 25 percent of the
client's recovery. Rather, § 406(b) “requires
an affirmative judicial finding that the fee allowed is
‘reasonable.'” Id. n.17 (internal
quotation marks omitted). “[T]he attorney bears the
burden of persuasion that the statutory [reasonableness]
requirement has been satisfied.” Id.
Supreme Court has identified several factors that a court may
use to assess the reasonableness of a contingent fee
requested under § 406(b). First, a court may consider
“the character of the representation and the results
the representative achieved.” Id. at 808.
Second, a court may reduce an attorney's requested fee if
the court finds that the attorney is responsible for delay in
obtaining a judgment. In other words, because the
attorney's fee is contingent on her client's recovery
of past-due benefits, and because past-due benefits increase
the longer a case lingers, the court may reduce a fee
“so that the attorney will not profit” from delay
that is attributable to him. Id. And third, a court
may reduce a fee if the court concludes that the benefits
recovered-which drive the size of an attorney's potential
fee-“are large in comparison to the amount of time
counsel spent on the case.” Id.
Supreme Court and the Second Circuit have also identified two
factors that act as a check on a court's reduction of an
attorney's requested fee under § 406(b).
courts must be mindful that “payment for an attorney in
a social security case is inevitability uncertain.”
Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990).
Thus, the Second Circuit has “recognized that
contingency risks are necessary factors in determining
reasonable fees under § 406(b).” Id.
(internal quotation marks omitted). In other words, while
“contingent fee agreements cannot simply be adopted as
per se reasonable in all social security cases,
” courts should recognize that “a contingency
agreement is the freely negotiated expression both of a
claimant's willingness to pay more than a particular
hourly rate to secure effective representation, and of an
attorney's willingness to take the case despite the risk
of nonpayment.” Id.
“the traditional lodestar method, borrowed from
fee-shifting contexts, is not appropriate for evaluating a
reasonable fee” under § 406(b). Id. Thus,
the Court may not evaluate the “reasonableness”
of the attorney's fee by engaging in “satellite
litigation.” Gisbrecht, 535 U.S. at 808. The
Court should instead evaluate “the reasonableness of
the contingency agreement in the context of the particular
case.” Wells, 907 F.2d at 371. Combining these
principles, a court's task under § 406(b) is, on the
one hand, to “give due deference to the intent of the
parties, ” but, on the other hand, to “not
blindly approve every fee request made pursuant to a
contingent agreement.” Wells, 907 F.2d at 372.
At bottom, a court should consider “whether there has
been fraud or overreaching in making the agreement, ”
or “whether the requested amount is so large as to be a
windfall to the attorney.” Id.
Whether counsel's requested fee is