Opinion
20 Civ. 11033 (KMK) (AEK)
04-12-2023
MARY DIANNE BRICKEL, Plaintiff, v. KILOLO KIJAKAZI,[1]ACTING COMMISSIONER OF THE SOCIAL SECURITY ADMINISTRATION, Defendant.
HONORABLE KENNETH M. KARAS, U.S.D.J
REPORT AND RECOMMENDATION
ANDREW E. KRAUSE, UNITED STATES MAGISTRATE JUDGE
Currently before the Court is Plaintiff Mary Dianne Brickel's motion for attorney's fees pursuant to 42 U.S.C. § 406(b). ECF No. 25. For the reasons set forth below, I respectfully recommend that Plaintiff's motion for attorney's fees be GRANTED IN PART.
BACKGROUND
Plaintiff filed applications for Disabled Adult Child benefits and Supplemental Security Income (“SSI”) benefits on September 11, 2017, with a claimed disability onset date beginning at birth. ECF No. 26 (“Bowes Decl”) ¶ 4. The Social Security Administration (“SSA”) denied her claim for benefits, and Plaintiff appealed by requesting a hearing before an administrative law judge (“ALJ”). Id. ¶ 5. On October 16, 2019, Plaintiff participated in a hearing before ALJ Sharda Singh, who ultimately determined that Plaintiff was not entitled to benefits via a decision issued on December 12, 2019. Id. ¶¶ 7-8. On October 26, 2020, the SSA Appeals Council denied Plaintiff's request for review of the ALJ's decision. Id. ¶ 10. Thereafter, on December 21, 2020, Plaintiff retained Christopher J. Bowes, Esq. to litigate her claim in federal court. Id. ¶ 12 & Ex. A. Pursuant to the “Retainer Agreement” executed by Plaintiff and counsel, Plaintiff agreed to pay Mr. Bowes, for his work in federal court, 25 percent of any past-due benefits resulting from successful litigation of her claim. Id.
Plaintiff filed her complaint in this action on December 29, 2020. ECF No. 1. Before any motion papers were filed in the case, Mr. Bowes sent a letter to counsel for the Commissioner regarding settlement. Bowes Decl. ¶¶ 13, 23-24. On October 19, 2021, the parties submitted a proposed stipulation and order of remand, ECF No. 17, which was so ordered by the Court the following day, ECF No. 18. Judgment was entered on October 20, 2021. ECF No. 19. Plaintiff filed a motion for attorney's fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, on January 18, 2022. ECF No. 20. Pursuant to a second stipulation and order submitted by the parties and signed by the Court, Plaintiff was awarded attorney's fees under the EAJA in the amount of $2,700.00. ECF Nos. 23, 24.
Upon remand to the SSA, a second hearing was held before ALJ Singh. Bowes Decl. ¶ 17. On October 31, 2022, ALJ Singh found that Plaintiff was disabled as of July 10, 2015, and was therefore entitled to benefits. Id. ¶ 18. The SSA issued a notice of award (“NOA”) to Plaintiff on January 28, 2023, setting forth the benefits she would be receiving. Id. ¶ 19 & Ex. C (NOA).The NOA indicated that the SSA withheld 25 percent of the past-due benefits-a total of $12,866.78-to pay fees to Plaintiff's lawyer. Id. ¶ 20; NOA at 3. Mr. Bowes received a copy of the NOA on February 1, 2023. Bowes Decl. ¶ 27.
The notice of award from the SSA states that the agency found that Plaintiff became disabled on July 9, 2015. Bowes Decl. Ex. C.
Although Mr. Bowes states that the NOA awarded Plaintiff benefits for the period from March 2017 through October 2022, Bowes Decl. ¶ 19, the NOA states that the SSA was awarding benefits through December 2022, id. Ex. C.
Mr. Bowes filed the instant motion, which seeks $12,866.78 in attorney's fees, on February 11, 2023. ECF No. 25. Counsel acknowledges that if he is awarded $12,866.78 in fees pursuant to 42 U.S.C. § 406(b), then Plaintiff is entitled to a $2,700.00 credit for the EAJA fees that were previously awarded. See Bowes Decl. ¶¶ 22, 42. Accordingly, Mr. Bowes has requested that the Court order that he receive a “net” payment of $10,166.78 ($12,866.78 -$2,700.00) as § 406(b) attorney's fees; he does not specify who would then be responsible for refunding the $2,700.00 to Plaintiff. Id.
On March 3, 2023, the Commissioner filed a response in her limited role “resembling that of a trustee for the claimant[ ].” ECF No. 30 (“Def.'s Ltr”) at 1 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 798 n.6 (2002)). The Commissioner did not take a specific position with respect to the fee request, and instead “respectfully defer[red] to the Court to determine whether the requested fee is reasonable . . . .” Id. at 3. The Commissioner did assert, however, that the Court should not award a “net” § 406(b) fee as requested by Mr. Bowes. Id. The Commissioner emphasized that awarding a “net” § 406(b) fee would “impermissibly shift the task of refunding the lesser fee from Plaintiff's counsel to the Court and the agency.” Id. Instead, the Commissioner proposes that upon receipt of any § 406(b) award in this case, Mr. Bowes be directed to refund to Plaintiff the lesser of any § 406(b) the Court award and the $2,700.00 EAJA fee. Id. (citing Gisbrecht, 535 U.S. at 796).
DISCUSSION
I. Legal Standard
“Three statutes authorize attorney's fees in social security actions. 42 U.S.C. § 406(a) compensates attorneys for their representation at the administrative level; 42 U.S.C. § 406(b) compensates attorneys for representation before federal courts; and the EAJA provides additional fees if the Commissioner's position was not ‘substantially justified.'” LaFrance v. Saul, No. 17-cv-4709 (CM) (SN), 2019 WL 4677041, at *1 (S.D.N.Y. Aug. 26, 2019) (citing Gisbrecht, 535 U.S. at 794-96), adopted by 2019 WL 4565074 (S.D.N.Y. Sept. 20, 2019). Pursuant to § 406(b), which is invoked here, “[w]henever a court renders a judgment favorable to a claimant . . . 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,” as long as the fee does not exceed “25 percent of the total of the past-due benefits to which the claimant is entitled.” 42 U.S.C. § 406(b)(1)(A).
II. Analysis
A. Timeliness
In Sinkler v. Berryhill, the Second Circuit concluded that the 14-day filing period for seeking attorney's fees set forth in Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure applies to attorney's fee applications under 42 U.S.C. § 406(b); the filing period runs from the date on which the NOA is received, and the period may also be subject to equitable tolling. 932 F.3d 83, 85 (2d Cir. 2019). Here, the NOA is dated January 28, 2023, see Bowes Decl. Ex. C, and was received by Mr. Bowes on February 1, 2023, id. ¶ 27; the motion for attorney's fees was filed on February 11, 2023, ECF No. 25, 10 days after the NOA was received, and 14 days after it was mailed to Mr. Bowes. Accordingly, the motion was timely filed.
B. Reasonableness of the Fee Award
To ensure that contingency fees are employed fairly in Social Security cases, “Congress capped contingency fees at twenty-five percent of the claimant's past-due benefits and charged courts with ensuring that resulting fees are ‘reasonable.'” Fields v. Kijakazi, 24 F.4th 845, 849 (2d Cir. 2022). “[W]here there is a contingency fee agreement in a successful social security case, the 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.” Id. at 852-53 (quoting Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990)) (quotation marks omitted). “When conducting its analysis, the court's primary inquiry should be on the reasonableness of the contingency agreement in the context of the particular case and not merely to rubber stamp the contingent fee agreement.” Caraballo v. Comm'r of Soc. Sec., No. 17-cv-7205 (NSR) (LMS), 2021 WL 4949217, at *2 (S.D.N.Y. Oct. 22, 2021) (citing Wells, 907 F.2d at 371).
To assess the reasonableness of a contingency fee, a court must first “‘determine whether the contingency percentage is within the 25% cap' and . . . ‘whether there has been fraud or overreaching in making the agreement.'” Fields, 24 F.4th at 853 (quoting Wells, 907 F.2d at 372). A court must then consider the following factors to determine the reasonableness of a requested award: (1) whether the requested fee is out of line with the “character of the representation and the results the representative achieved,” (2) whether “the attorney is responsible for delay, lest the attorney profit from the accumulation of benefits during a delay that the attorney caused,” and (3) “if the benefits are large in comparison to the amount of time counsel spent on the case, the so-called windfall factor.” Id. (quoting Gisbrecht, 535 U.S. at 808) (cleaned up).
Here, as the Commissioner notes, counsel's requested fee “is not greater than 25% of past-due social security benefits,” Def.'s Ltr. at 2, and further, there is no evidence or suggestion of fraud or overreaching applicable to counsel's attorney's fee request, id.
The Court turns next to the reasonableness factors. First, the fee, comprising 25 percent of Plaintiff's past-due benefits award, see NOA at 3, is in accordance with the character of the representation and the results achieved. After bringing this action to challenge the denial of benefits, Mr. Bowes was able to achieve a successful result for his client, as the Commissioner agreed to remand the case to the agency for further proceedings. ECF Nos. 17, 18. Back before the SSA, the ALJ found Plaintiff to be disabled and entitled to receive benefits. Bowes Decl. ¶¶ 17-18; see, e.g., Shrack v. Saul, No. 16-cv-2064 (RMS), 2020 WL 373074, at *2 (D. Conn. Jan. 23, 2020) (finding that where “plaintiff sought and obtained a Sentence Four remand, and the plaintiff received a fully favorable result upon remand,” fee was in line with character of representation and results achieved).
Second, Plaintiff's counsel did not cause any unreasonable delay in this action to increase the size of the past-due benefits or attorney's fee. Rather, counsel sought, and obtained, a stipulated remand prior to any motion practice, avoiding any delays in Plaintiff's federal court case.
Third, with respect to the so-called “windfall” factor, counsel's requested fee of $12,866.78 is not inappropriately large in light of the 15.9 hours that counsel devoted to the case and the successful result that was achieved. See Bowes Decl. ¶¶ 23, 28 & Ex. B (time records). For purposes of evaluating the “windfall” factor, the Second Circuit has instructed courts to look beyond the de facto hourly rate and to assess: (1) the “ability and expertise” of the attorneys, (2) the “nature and length of the professional relationship” with the claimant, (3) the “satisfaction of the disabled claimant,” and (4) “how uncertain it was that the case would result in an award of benefits and the effort it took to achieve that result.” Fields, 24 F.4th at 854-55.
Here, Mr. Bowes has worked for over 25 years on Social Security disability cases at the federal and administrative levels, see Bowes Decl. ¶ 36, and certainly possesses the requisite ability and expertise in this field. Mr. Bowes's work on this matter in federal court included evaluating the merits of the potential appeal, initiating this civil action, and preparing a letter outlining the basis for settlement based on a review of the 660-page administrative record, which resulted in an agreement by the Commissioner to remand the matter. Id. ¶¶ 23-24 & Ex. B; see ECF No. 14 (administrative record). Courts within the Second Circuit generally and routinely endorse 20-40 hours for work performed by counsel in Social Security disability cases. See Bass v. Kijakazi, No. 16-cv-6721 (JCM), 2022 WL 1567700, at *4 (S.D.N.Y. May 18, 2022). Mr. Bowes's 15.9 hours of work falls below this range, reflecting his years of experience and efficiency, and the early stage at which this case was resolved. Additionally, this Court has no reason to believe that Plaintiff is in any way dissatisfied with the results of counsel's representation. Indeed, Plaintiff was awarded approximately $51,467 in past-due benefits, and was found eligible for $890 per month in benefits going forward. See NOA at 1; Bass, 2022 WL 1567700, at *5 (finding that counsel's success in advocating on behalf of plaintiff “militate[s] in favor of approving” fee request). Moreover, “[l]awyers who operate on contingency-even the very best ones-lose a significant number of their cases and receive no compensation when they do”; accordingly, when operating with a contingency agreement like the one at issue here, “payment for an attorney in a social security case is inevitably uncertain, and any reasonable fee award must take account of that risk.” Fields, 24 F.4th at 855-56 (cleaned up). The award amount sought here appropriately reflects this risk.
Since the SSA set aside $12,866.78, representing 25 percent of Plaintiff's past-due benefits award, for attorneys' fees, the Court calculates the total award to be $51,467.12. As set forth in the NOA, this award of past benefits may have been reduced if Plaintiff received SSI benefits during the relevant period. NOA at 1.
Turning to the de facto rate-which is not dispositive, see id. at 854-counsel would effectively be compensated here at a rate of $809.23 per hour ($12,866.78 for 15.9 hours worked). This rate is well within the range of de facto hourly rates approved by courts within this Circuit, and is substantially less than the $1,556.98 de facto hourly rate approved by the Second Circuit in Fields. See id. at 854-57. Accordingly, the Court finds that Mr. Bowes's requested fee award of $12,866.78 is reasonable.
The law is clear, however, that while fee awards may be made to Plaintiff's counsel in Social Security cases under the EAJA, with fees payable by the government, and under § 406(b), with fees payable out of the Social Security claimant's past due benefits, “the claimant's attorney must refund to the claimant the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796 (cleaned up) (emphasis added); see Johnson v. Kijakazi, No. 20-cv-2630 (BCM), 2022 WL 17718336, at *6 (S.D.N.Y. Dec. 15, 2022) (declining to award Mr. Bowes the requested “net” fee award). Counsel's request for payment of the “net” fee award here would improperly shift to the SSA the obligation of refunding the prior EAJA payment to Plaintiff. Accordingly, Mr. Bowes's fee award should be paid in full by the SSA, and Mr. Bowes should then refund the required amount to Plaintiff.
CONCLUSION
For the reasons set forth above, I respectfully recommend that Plaintiff's motion for attorney's fees (ECF No. 25) be GRANTED IN PART, and that Mr. Bowes be awarded the full fee amount of $12,866.78, as opposed to the requested “net” fee award. I further respectfully recommend that Mr. Bowes be directed to promptly refund to Plaintiff $2,700.00, which represents the EAJA fees that counsel previously received, upon receipt of the award recommended by this Report and Recommendation.
NOTICE
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. See also Fed.R.Civ.P. 6(a). A party may respond to another party's objections within fourteen (14) days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any responses to such objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Kenneth M. Karas, United States District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the Honorable Andrew E. Krause at the same address.
Any request for an extension of time for filing objections or responses to objections must be directed to Judge Karas, and not to the undersigned.
Failure to file timely objections to this Report and Recommendation will result in a waiver of objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140 (1985); Smith v. Campbell, 782 F.3d 93, 102 (2d Cir. 2015).
Respectfully submitted,