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Dine v. Colvin

United States District Court, D. Massachusetts

December 15, 2016

KELLY VAN DINE, Plaintiff,



         Presently 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].[1]Plaintiff's Motion [ECF No. 33] is ALLOWED IN PART, and the Court awards attorney's fees in the amount of $23, 988.50.

         I. BACKGROUND

         On 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].


         Section § 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).

         “Reduction 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)).


         In this 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 case.

         The 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 claimant.

         In 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.[2] [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.[3]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.

         In 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[4]-the resulting award in this case would be $18, 988.50.[5] 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 ...

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