United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.
pending before this Court is Plaintiff Kelly Van Dine's
(“Plaintiff”) application for attorney's fees
pursuant to 42 U.S.C. § 406(b) in the amount of $34,
684.25. [ECF No. 33].Plaintiff's Motion [ECF No. 33] is
ALLOWED IN PART, and the Court awards attorney's
fees in the amount of $23, 988.50.
January 20, 2015, Plaintiff appealed the Social Security
Commissioner's denial of her claim for SSDI benefits.
[ECF No. 1]. This Court vacated the Commissioner's
decision and remanded the case. [ECF No. 29]. In anticipation
of the appeal in December 2014, Plaintiff entered into a
contract with her attorney, Jackson & MacNichol
(hereinafter, “Counsel”), which included a
contingent fee provision whereby Plaintiff agreed “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.” [ECF No. 33, Ex. 2]. On remand,
Plaintiff was awarded past-due benefits in the amount of
$107, 735.00, plus benefits due to her dependent in the
amount of $55, 002.00. [ECF No. 33, Ex. 1]. This resulted in
a total past-due benefit award of $162, 737.00. On June 2,
2016, Plaintiff and the Acting Commissioner of Social
Security Administration (“Defendant”) stipulated
to attorney's fees in the amount of $4, 453.00, which
satisfied any claims to attorney's fees under the Equal
Access to Justice Act (“EAJA”), 28 U.S.C. §
2412(d). [ECF No. 31].
§ 406(b)(1)(A) provides, in relevant part, that:
[w]henever 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. .
. . In case of any such judgment, no other fee may be payable
or certified for payment for such representation except as
provided in this paragraph.
42 U.S.C. § 406(b)(1)(A). The Supreme Court has held
that “Congress . . . designed § 406(b) to control,
not to displace, fee agreements between Social Security
benefits claimants and their counsel.” Gisbrecht v.
Barnhart, 535 U.S. 789, 793 (2002). Nonetheless, fees
pursuant to contingency fee agreements must still be reviewed
for reasonableness. Gisbrecht, 535 U.S. at 809.
Gisbrecht instructs that a lodestar analysis is not
the starting point of a reasonableness review.
“Instead, Gisbrecht approved ‘looking
first to the contingent-fee agreement, then testing it for
reasonableness.'” Ezekiel v. Astrue, 853
F.Supp.2d 177, 179 (D. Me. 2012) (quoting Gisbrecht,
535 U.S. at 808).
in the amount that otherwise would be payable pursuant to a
contingent fee agreement between a claimant and attorney is
appropriate to the extent that (i) counsel's conduct is
improper or representation substandard; for example, an
attorney is responsible for a delay that has caused an
accumulation of past-due benefits, or (ii) the benefits are
disproportionate in relation to the amount of time counsel
spent on the case (thereby resulting in a windfall).”
Weed v. Colvin, No. 14-271-JHR, 2016 WL 3919849, at
*2 (D. Me. July 15, 2016) (citing Gisbrecht, 535
U.S. at 808 and Rodriquez v. Bowen, 865 F.2d 739,
746-47 (6th Cir. 1989)).
case, Counsel has been successful in representing Plaintiff,
and there is no suggestion that Counsel delayed proceedings
or provided inadequate representation. Plaintiff also
represents that the Commissioner does not oppose this motion.
Thus, the first ground for reduction is not present in this
Court is concerned, however, that a contingent fee award of
25% might result in “benefits [that] are large in
comparison to the amount of time counsel spent on the
case.” See Gisbrecht, 535 U.S. at 808. In such
cases, the Supreme Court has held that a downward adjustment
is in order. Id. While the Court understands that
fee agreements should generally govern, see Ezekiel,
853 F.Supp.2d at 181, the Court also believes that
Gisbrecht requires a reasonableness review that
avoids windfalls to attorneys at the expense of clients.
“Many courts and Congress have discussed the need to
prevent windfalls for lawyers.” Rodriquez, 865
F.2d at 747. Distilling the lessons of Gisbrecht,
535 U.S. at 796, Crawford v. Astrue, 586 F.3d 1142,
1148 (9th Cir. 2009), and Jeter v. Astrue, 622 F.3d
371 (5th Cir. 2010), Judge D. Brock Hornby of the District of
Maine explained that a fee award should be reduced when the
outcome is unearned, or, in other words, not attributable to
the attorney's performance. Ezekiel, 853
F.Supp.2d at 178-81. In cases like the present, where
attorney's fees come out of past-due benefits, a windfall
to the attorney comes directly at the expense of the
connection with the EAJA application, Counsel submitted an
itemized statement of the work performed, time expended, and
costs incurred. [ECF No. 33, Ex. 3]. Counsel, along with his
paralegal, expended 35.95 hours, which included a boilerplate
complaint [ECF No. 1], filing a motion to reverse [ECF No.
20], and filing a response to the Commissioner's motion
for an order affirming its decision [ECF No. 28]. The motion
to reverse was 17 pages long and the response was 11 pages
long. The paralegal seems to have done the bulk of the work
on these briefs: Counsel spent 11.90 hours on the appeal,
while the paralegal spent 24.05 hours. Counsel represents
that $350 per hour is his regular rate, but does not provide
a regular rate for his paralegal. See [ECF No. 33 at
4]. Accordingly, the Court relies on the paralegal rate
listed in the EAJA application ($90 per hour), which seems
like an appropriate rate. [ECF No. 33, Ex. 3]. At these rates,
for 35.95 hours of work, Counsel's fee would have been
$6, 329.00. Based on the contingent-fee agreement, however,
Counsel requests $34, 684.25. While 35.95 hours is not an
insignificant investment of time, it falls within the normal
range for social security cases.Furthermore, this case was
not particularly complex, which is underscored by the fact
that a paralegal initially drafted the briefs and Counsel
spent a relatively short amount of time revising them.
Moreover, the result in this case was exceptionally large,
fortuitously so, in light of the time invested. The requested
fee amount seems disproportionate to the time actually spent
on the case, even taking into account the very successful
outcome for the claimant. It would result in 5.445 times the
normal hourly rate, or an attorney's hourly rate of $1,
905.75 and a paralegal's hourly rate of $490.05. For
these reasons, the Court finds that the contingent-fee award
is unreasonable in light of the time worked, and a reduction
is appropriate in this case to avoid a windfall.
determining what reduction is appropriate, “[t]here is
no mathematical answer to guide [the Court] or the lawyers in
what is allowed and what is not.” Ezekiel, 853
F.Supp.2d at 180-81. The Court finds the approach used in
Weed, 2016 WL 3919849, at *2, *3 (approving $30,
197.50 for 25.6 hours of attorney time, resulting in an
hourly rate of $1, 279.56), Ezekiel, 853 F.Supp.2d
at 181 (determining that the requested $49, 704 was too large
in comparison to the 3.1 hours worked, and ultimately
approving an hourly rate of $395.16), and Nichols,
2016 WL 5374119, at *3 (finding $11, 378.50 to be too large
in comparison to the 3.6 hours worked, and ultimately
approving an hourly rate of $1, 185.00), to be instructive.
In those cases, the judges determined that a reduction was
appropriate to avoid a windfall and ultimately awarded three
times a reasonable hourly rate for the hours worked as listed
in the EAJA applications. Applying this approach-awarding
three times the hourly rate of $350 for Counsel and $90 for
paralegal-the resulting award in this case would be
$18, 988.50. In light of the exceptionally good result
achieved here, the Court finds that an additional enhancement
of $5, 000 is warranted. The resulting award is $23, 988.50.
The Court believes that three times Counsel's normal
hourly rate and the paralegal's hourly EAJA rate, plus an
enhancement for the exceptionally good outcome, comports with
Gisbrecht by avoiding a windfall, adequately
accounts for the risk of taking cases on a contingency fee
basis, and ...