Opinion
21-CV-2178 (LGS) (VF)
06-28-2024
XYNA BROCKINGTON, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT & RECOMMENDATION
VALERIE FIGUEREDO UNITED STATES MAGISTRATE JUDGE
Plaintiff Xyna Brockington brings this motion for approval of attorneys' fees pursuant to Social Security Act, 42 U.S.C. § 406(b). For the reasons explained below, I recommend that Plaintiff's motion be GRANTED.
BACKGROUND
On April 9, 2013, Plaintiff filed an application for disability insurance benefits under Title II of the Social Security Act for a disability that began on September 21, 2010. See Case No. 17-CV-7536 (JPO), ECF No. 1 at ¶¶ 3-4. On June 27, 2016, Plaintiff's application was denied following two hearings before an Administrative Law Judge (“ALJ”). Id. ¶ 5. On October 3, 2017, Plaintiff, who was then represented by Terry Katz & Associates, P.C., filed a complaint in this Court, requesting that the Court modify the ALJ's decision or remand to the Commissioner of Social Security for reconsideration and supplemental administrative proceedings. Id. at 3. On September 28, 2018, the case was remanded to the Social Security Administration (“SSA”) through a stipulation of the parties. See Case No. 17-CV-7536 (JPO), ECF No. 21. The Commissioner also agreed to pay Plaintiff attorneys' fees in the amount of $3,562.50, pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. See Case No. 17-CV-7536 (JPO), ECF No. 24.
After the case was remanded, the SSA again denied Plaintiff benefits. See ECF No. 1 at ¶ 6.On June 3, 2020, the ALJ denied Plaintiff's claim after a hearing held on February 18, 2020. Id. Plaintiff then requested review by the Appeals Council, which denied her request for review on January 15, 2021. Id. ¶ 7. This denial made the ALJ's decision a “final decision” of the Commissioner that was eligible for judicial review pursuant to 42 U.S.C. § 405(g). Id.
Unless otherwise noted, citations to ECF that are not preceded by a case number are to docket entries for this case (Case No. 21-CV-2178).
On February 23, 2021, Plaintiff entered into a contingent-fee agreement with her current counsel, Howard D. Olinsky. See ECF No. 28-1 (the “Contingency Agreement”). The Contingency Agreement allows Olinsky Law Group to petition the Court for an award of 25% of Plaintiff's past-due benefits for their representation in this case. See id. ¶ 3.
On March 12, 2021, Plaintiff filed the instant action, seeking an award of benefits or a remand to the SSA for further proceedings. ECF No. 28. On December 3, 2021, the parties filed a proposed stipulation and order, seeking a remand to the Commissioner for further administrative proceedings pursuant to 42 U.S.C. § 405(g). ECF No. 17. On December 6, 2021, the Court remanded the matter to the SSA for further proceedings. See ECF No. 18.
On March 15, 2022, the Honorable Lorna G. Schofield awarded Plaintiff $2,517.58 in attorneys' fees under the EAJA. See ECF No. 26. In a Notice of Award dated October 28, 2023, the Commissioner awarded Plaintiff past-due disability benefits in the amount of $359,728.90 for the period from March 2011 to June 2023. See ECF No. 28-2 at 3. The Commissioner noted that the SSA had withheld 25% of this total-$89,932.23-for Plaintiff's attorneys' fees. Id.
On November 8, 2023, Plaintiff filed the instant motion for attorney's fees pursuant to 42 U.S.C. § 406(b). See ECF Nos. 27-28. Plaintiff seeks approval of attorney's fees in the amount of $15,000. See ECF No. 28 at ¶ 6. In support of the motion, Plaintiff submitted a copy of the Contingency Agreement with Olinsky, the Commissioner's Notice of Award, and billing records documenting the time Olinksy, other attorneys at his firm and paralegals spent working on this case. See ECF Nos. 28-1, 28-2, 28-3, 28-4, 28-5. Olinsky acknowledges that if he is awarded fees in excess of the EAJA awards, Plaintiff will be refunded the previously approved EAJA fees. ECF No. 28 at ¶ 7. The Contingency Agreement, signed by Plaintiff, provided that Olinsky could “ask the court to award 25% of [Plaintiff's] past-due benefits . . . for representing [her] in federal court.” ECF No. 28-1 at ¶ 3.
The Commissioner “neither supports nor opposes counsel's request for attorney's fees in the amount of $15,000, under 42 U.S.C. § 406(b).” ECF No. 30 at 1. However, the Commissioner asks that if the Court authorizes a section 406(b) award, the Court should “indicate in its Order the amount of any section 406(b) award but decline to include language directing that the Commissioner ‘pay' the award.” Id. at 2.
As the Commissioner explains, the “fee authorization by the Court is separate and distinct from the Commissioner's withholding and direct payment obligations.” See ECF No. 30 at 2 (citing Dobson v. Comm'r of Soc. Sec., No. 09-CV-1460 (KJN), 2013 WL 6198185, at *4 (E.D. Cal. Nov. 27, 2013) (unpublished) (“[T]he amount of fees that may be awarded to plaintiff's counsel and the amount that the Commissioner withholds and pays directly to plaintiff's counsel are two independent calculations.”)).
STANDARD OF REVIEW
Section 406(b) of the Social Security Act states that when a disability claimant succeeds in federal court, “the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25% 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)(1)(A). To the extent a contingency-fee arrangement exists, courts must look first to the agreement to assess its reasonableness. See Gisbrecht v. Barnhart, 535 U.S. 789, 807-08 (2002) (explaining that “§ 406(b) calls for court review of such arrangements as an independent check, to assure that they yield reasonable results”).
Courts in this District generally assess three factors when considering whether the fee sought is reasonable: “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 time counsel spent on the case, the so-called ‘windfall' factor.” Valle v. Colvin, No. 13-CV-2876 (JPO), 2019 WL 2118841, at *2 (S.D.N.Y. May 15, 2019) (quoting Blizzard v. Astrue, 496 F.Supp.2d 320, 322 (S.D.N.Y. 2007)); see also Gisbrecht, 535 U.S. at 808. As a threshold matter, courts also look to “whether there has been fraud or overreaching in making the agreement.” Wells v. Sullivan, 907 F.2d 367, 372 (2d Cir. 1990).
DISCUSSION
Plaintiff seeks a fee award of $15,000 for 15.7 hours of work performed by members of the Olinsky Law Group-9.5 hours of work by attorneys and 6.2 hours of work by paralegals. See ECF No. 28 at ¶ 9; ECF No. 28-4; ECF No. 28-5. For the reasons explained below, I recommend approval of the fee award.
First, the $15,000 contingency fee requested is well below the 25 percent statutory cap of $89,932.23, see 42 U.S.C. § 406(b)(1)(A), and there is no evidence of fraud or overreaching in the negotiation of the Contingency Agreement. See ECF No. 28-1; see e.g., Hennelly v. Kijakazi, No. 20-CV-4786 (JGK), 2023 WL 3816961, at *2 (S.D.N.Y. June 5, 2023) (finding that absence of evidence of fraud or overreaching is sufficient to satisfy this threshold inquiry); Casiano v. Kijakazi, No. 19-CV-9732 (JGK), 2023 WL 3760941, at *2 (S.D.N.Y. June 1, 2023) (same).
Second, the requested fee is in line with the “character of the representation and the results the representation achieved.” Valle, 2019 WL 2118841, at *2. Here, counsel successfully obtained the Commissioner's agreement to remand for further administrative proceedings even before any briefing in this Court was necessary. Phillip v. Comm'r of Soc. Sec., No. 18-CV-5005 (SN), 2021 WL 681289, at *3 (S.D.N.Y. Feb. 22, 2021) (“Counsel's efforts were particularly successful given that ‘they contributed to the Commissioner's ultimate decision to stipulate to a remand' before briefing had even commenced.”).
Third, there is no indication in the record of any purposeful delay created by Olinsky for the purpose of increasing the total benefits award. To the contrary, Plaintiff was able to obtain the Commissioner's agreement to remand the matter for further proceedings before any briefing was filed by either party in this Court.
The only remaining question is whether a $15,000 award would be a windfall to Olinsky. Stated differently, are the benefits to be awarded to Plaintiff “large in comparison to the amount of time [Olinsky] spent on the case.” Gokey v. Berryhill, No. 18-CV-658 (RA), 2021 WL 5014576, at *2 (S.D.N.Y. Oct. 27, 2021) (citation, internal quotation marks, and alterations omitted). In assessing whether there is a windfall, “courts must consider more than the de facto hourly rate,” because “even a relatively high hourly rate may be perfectly reasonable, and not a windfall, in the context of any given case.” Fields v. Kijakazi, 24 F.4th 845, 854 (2d Cir. 2022). Specifically, courts should consider (1) “the ability and expertise of the lawyers and whether they were particularly efficient”; (2) “the nature and length of the professional relationship with the claimant-including any representation at the agency level”; (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.” Id. at 854-55. Further, “courts in this circuit have generally refrained from finding a windfall based on the resulting hourly rate when the contingent fee falls within the [twenty-five] percent boundary.” Rowell v. Astrue, No. 05-CV-1592 (CBA) (JMA), 2008 WL 2901602, at *5 (E.D.N.Y. July 28, 2008). Considering these factors, there is no evidence of a windfall here.
Olinsky's firm performed 15.7 hours of work in this case, of which 9.5 hours was attorney time and 6.2 hours was for paralegal work. See ECF No. 28 at ¶ 9. Olinsky requests a reasonable and established rate of $100 per hour for work performed by paralegals. See ECF No. 28 at ¶ 9; see also Benevento v. Berryhill, No. 17-CV-7564 (FB), 2021 WL 3112678, at *1 (E.D.N.Y. July 22, 2021) (stating that $100.00 per hour for paralegal work is reasonable). Given an hourly rate of $100 for paralegal work, the de facto hourly rate for the 9.5 hours of attorney work is $1,513.68.
Olinksy suggests that the paralegal team billed at an hourly rate of $100.00, yielding an effective attorney rate of $1,513.68 (($15,000 - ($100.00 x 6.2)) / 9.5).
1. Olinsky's ability and expertise
Olinsky submitted billing records that show that he and two other attorneys, Andrew Flemming and Matthew McGarry, performed work on this case. See ECF No. 28-4. Together, they provided 9.5 hours of legal services: Flemming billed 1.0 hour, Olinsky billed 3.0 hours, and McGarry billed 5.5 hours. See id. In his declaration, Olinsky did not provide details about his experience or that of his colleagues. See ECF No. 28. However, this Court has previously determined that “there is no question that Olinsky is well experienced in handling social security cases.” See, e.g., Cutajar v. Comm'r of Soc. Sec., No. 19-CV-5569 (SDA), 2021 WL 1541386, at *3 (S.D.N.Y. Apr. 20, 2021). Courts in this District have also recognized the impressive experience of Olinsky's firm more broadly. See McDonald v. Colvin, No. 13-CV-6903 (PGG) (SDA), 2017 WL 11662397, at *3 (S.D.N.Y. Dec. 28, 2017) (establishing that Olinsky has practiced Social Security law since 1986 and, as of 2017, his firm had represented over 15,000 claimants before the SSA and over 1,500 Social Security cases in federal district court).
Further, Olinsky and his firm used attorney time efficiently. Olinsky billed only 9.5 hours for time spent reviewing case documents, drafting and filing the complaint, discussing settlement with opposing counsel, and drafting the EAJA motion. See ECF No. 28-4; see also Caceras v. Comm'r of Soc. Sec., No. 18-CV-6790 (KHP), 2024 WL 324781, at *2 (S.D.N.Y. Jan. 29, 2024) (determining that 9.2 hours of attorney time on a social security case was “very low”); Coleman v. Comm'r of Soc. Sec., No. 21-CV-76 (KHP), 2023 WL 2301376, at *2 (S.D.N.Y. Mar. 1, 2023) (determining that 8.5 hours of attorney time was “an efficient use of attorney time” in a social security case). Olinsky was able to advise his client very efficiently toward a large recovery of past-due benefits. The $1,513.68 de facto hourly rate “must be viewed in this context” since “[i]t would be foolish to punish a firm for its efficiency and thereby encourage inefficiency.” See Fields, 24 F.4th 854 (concluding that an attorney's “relatively high de facto hourly rate of $1,556.98” was not a windfall where attorney accomplished in “25.8 hours what other lawyers might reasonably have taken twice as much time to do”). Though the de facto hourly rate Olinsky requests here is “certainly high, that number is the product of competent and efficient advocacy, which should not be held against counsel in their request for fees.” Valle, 2019 WL 2118841, at *3. Therefore, this first factor weighs in favor of the fee request.
2. The nature and length of Olinsky's relationship with Plaintiff
Olinsky has represented Plaintiff in this matter since February 2021. See ECF No. 28-1; ECF No. 28-3. Given this, the nature and length of Olinsky's professional association with Plaintiff has now been considerable, as Olinsky has handled the case since its filing in this Court. See Galan v. Comm'r of Soc. Sec., No. 20-CV-9096 (ER) (JLC), 2023 WL 4420289, at *3 (S.D.N.Y. June 10, 2023) (illustrating the standard for counsel's professional association with a case that took place over a similar period of time); Casiano, 2023 WL 3760941, at *3 (same). This second factor thus also weighs in favor of the fee request.
3. Plaintiff's satisfaction with counsel's representation
Third, Olinsky achieved a favorable outcome for Plaintiff, with an award of $359,728.90 in past-due benefits and ongoing monthly benefits. See ECF No. 28-2 at 4. Although there is no affidavit or declaration from Plaintiff herself, Plaintiff clearly received a favorable result due to counsel's efforts, as she was awarded benefits for almost the entirety of her alleged period of disability. See id. (awarding back benefits from March 2011 to June 2023 on a disability originally alleged to have begun on September 21, 2010). This factor, too, weights in favor of the fee request. See, e.g., Fields, 24 F.4th at 855 (explaining that claimant achieved a favorable decision from the SSA in the form of a six-figure award of past-due benefits as well as ongoing monthly benefit, supporting a de facto hourly rate of $1,556.98 and finding no windfall).
4. The uncertainty of Plaintiff's case
In contingency-fee cases such as this one, “payment . . . is inevitably uncertain, and any reasonable fee award must take account of that risk,” which is borne by the attorney. Velez v. Comm'r of Soc. Sec., No. 18-CV-9754 (AEK), 2021 WL 2310517, at *4 (S.D.N.Y. June 7, 2021) (quoting Nieves v. Colon, No. 13-CV-1439 (WHP) (GWG), 2017 WL 6596613, at *2 (S.D.N.Y. Dec. 26, 2017)); see also Devenish v. Astrue, 85 F.Supp.3d 634, 638 (E.D.N.Y. 2015) (collecting cases); Warren v. Astrue, No. 06-CV-2933 (CBA), 2011 WL 5402493, at *2 (E.D.N.Y. Nov. 7, 2011) (“[A]lthough $25,000.00 is a substantial sum for [thirty-eight] hours of work, it does not constitute a windfall when balanced against the excellent result counsel obtained and the risk of loss inherent in the retainer's contingency arrangement.”). Plaintiff and Olinsky signed the retainer agreement more than two years prior to the present motion. Moreover, when Olinsky took on Plaintiff's case, there was no guarantee that he would be paid for his work, given that an award of past-due benefits was not a certainty. The award amount sought here thus appropriately reflects the risk borne by counsel and consequently this factor also weighs in favor of the fee request.
In short, all four factors weigh in favor of the fee request, and I therefore recommend approval of the fee award. Moreover, although a fee award “may be made under both the EAJA and § 406(b),” the claimant's attorney “must refund to the claimant the amount of the smaller fee.” Guzman v. Comm'r of Soc. Sec., No. 15-CV-3920 (VB) (LMS), 2019 WL 4935041, at *3 (S.D.N.Y. Aug. 1, 2019) (quoting Gisbrecht, 535 U.S. at 796 (cleaned up)). Courts in this District have thus mandated that attorneys who obtain fees under both statutes “return the amount of such EAJA award to plaintiff out of the payment received under Section 406(b).” Guzman, 2019 WL 4935041, at *3 (quoting Jackson v. Astrue, No. 09-CV-1290 (FB), 2011 WL 1868718, at *2 (E.D.N.Y. May 16, 2011)). I thus recommend that Olinsky be required to refund Plaintiff the attorney's fees in the amount of $2,517.58 previously awarded under the EAJA. See ECF No. 26.
The EAJA award of $3,562.50 in Plaintiff's first case from 2017 was awarded to a different law firm, Terry Katz & Associates, P.C. See supra at 1.
CONCLUSION
For the foregoing reasons, I respectfully recommend that Plaintiff's motion for attorneys' fees be GRANTED, and Olinsky be awarded the sum of $15,000 in fees. I further recommend that upon receipt of this sum, Olinsky be required to refund the previously awarded EAJA fees of $2,517.58 to Plaintiff.
SO ORDERED.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), 6(b), 6(d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to the Honorable Lorna G. Schofield. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72; Fed.R.Civ.P. 6(a), 6(b), 6(d); Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).