Opinion
20-CV-6033 (VSB) (JLC)
07-09-2024
BRIAN ANTHONY DAVIS, Plaintiff, v. MARTIN O'MALLEY,[1] Commissioner of the Social Security Administration, Defendant.
To the Honorable Vernon S. Broderick, United States District Judge:
REPORT AND RECOMMENDATION
JAMELS L. COTT, United States Magistrate Judge.
Following a stipulated remand and subsequent award of benefits, plaintiff Brian Anthony Davis has now moved for approval of attorney's fees pursuant to 42 U.S.C. § 406(b) in this social security case. For the reasons set forth below, I recommend that the motion be granted.
I. BACKGROUND
A. Facts & Procedural History
On April 6, 2017, Davis filed an application for Supplemental Security Income benefits under 42 U.S.C. § 401 et seq., alleging that he had been disabled since October 14, 2009. Complaint (“Compl.”) ¶¶ 4-5, Dkt. No. 1. His application was denied by Administrative Law Judge (“ALJ”) Laura Michalec-Olszewski on June 26, 2019. Compl. ¶ 6; Social Security Administration Administrative Record (“AR”) at 41-43, Dkt. No. 15. Davis appealed the decision and the Appeals Council denied his request for review on June 4, 2020. Id. at 1.
Citations to the Administrative Record refer to the original page numbers of the document, rather than the page numbers generated by the Court's ECF system.
Davis filed this action on August 3, 2020. Dkt. No. 1. On April 21, 2021, Davis moved for judgment on the pleadings and filed a memorandum of law in support. Dkt. Nos. 16-17. The Court entered a stipulation and order on August 4, 2021, reversing and remanding the action pursuant to sentence four of 42 U.S.C. § 405(g). Stipulation and Order dated August 4, 2021, Dkt. No. 23; Clerk's Judgment dated August 4, 2021, Dkt. No. 24. On October 20, 2021, the Court granted attorney's fees to Davis's counsel in “the sum of eight thousand six hundred dollars ($8,600.00) . . . pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (“EAJA”).” Stipulation and Order dated October 20, 2021 (“EAJA Stipulation and Order”), Dkt. No. 37.
Upon remand, the ALJ found Davis to be disabled and awarded him $46,312.67 in back payments. Notice of Award dated January 12, 2024 (“Notice of Award”) at 1-2, Dkt. No. 39-1. Davis filed a request for attorney's fees in the amount of $11,578.17, which is 25 percent of the back payment award, on April 3, 2024, in accordance with 42 U.S.C. § 406(b). Dkt. Nos. 38-40. Davis had previously agreed to pay a fee of 25 percent of any back payments obtained to his counsel, Timothy S. McAdam, Esq. (“McAdam”) and Irwin M. Portnoy, Esq. (“Portnoy”) (collectively “counsel”), in exchange for their services. Affirmation of Irwin M. Portnoy dated August 12, 2021 (“Portnoy Aff.”), Ex. 1, Dkt. No. 26-1. The Commissioner filed a response on April 25, 2024, “neither support[ing] nor oppos[ing] counsel's request for attorney's fees under 42 U.S.C. § 406(b).” Commissioner Response (“Comm'r Response”) at 1, Dkt. No. 44. However, the Commissioner requests that should the Court grant attorney's fees, it “decline to include language directing that the Commissioner ‘pay' the award” and instead only “authorize” an award to Davis's counsel. Id. at 3.
II. DISCUSSION
A. Legal Standards
Section 406 of the Social Security Act provides:
Whenever 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, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled.42 U.S.C. § 406(b)(1)(A). Section 406 “calls for court review of such arrangements as an independent check” and “a court's primary focus should be on the reasonableness of the contingency agreement in the context of the particular case[.]” McCrann v. O'Malley, No. 22-CV-4383 (JGK), 2024 WL 532288, at *1 (S.D.N.Y. Feb. 9, 2024) (quoting Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990)). “Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). Moreover, “[w]ithin the 25 percent boundary . . . the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered.” Id. In assessing the reasonableness of a requested award, a court must take into consideration:
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.Nieves v. Colvin, No. 13-CV-1439 (WHP) (GWG), 2017 WL 6596613, at *1 (S.D.N.Y. Dec. 26, 2017), (quoting Gisbrecht, 535 U.S. at 808), adopted by 2018 WL 565720 (Jan. 24, 2018). In assessing the “windfall” factor in light of an award, courts consider:
1) whether the attorney's efforts were particularly successful for the plaintiff, 2) whether there is evidence of the effort expended by the attorney demonstrated through pleadings which were not boilerplate and through arguments which involved both real issues of material fact and required legal research, and finally 3) whether the case was handled efficiently due to the attorney's experience in handling social security cases.Dorta v. Saul, No. 18-CV-396 (JLC), 2021 WL 776446, at *2 (S.D.N.Y. Mar. 1, 2021) (quoting Joslyn v. Barnhart, 389 F.Supp.2d 454, 456-57 (W.D.N.Y. 2005)). In the case that attorney's fees are awarded under both EAJA and § 406(b), “the claimant's attorney must refund to the claimant the amount of the smaller fee, up to the point the claimant receives 100 percent of the past-due benefits.” Gisbrecht, 535 U.S. at 789. “Notably, § 406(b)'s 25 percent cap applies only to fees awarded for federal court work and not the aggregate amount of fees under both § 406(a) and (b).” Fabiani v. Kijakazi, No. 21-CV-5453 (LJL) (JLC), 2023 WL 8582274, at *2 (S.D.N.Y. Nov. 21, 2023) (citing Culbertson v. Berryhill, 139 S.Ct. 517, 522 (2019)), adopted sub nom. Fabiani v. Saul, 2023 WL 8566545 (Dec. 11, 2023).
B. Analysis
1. Timeliness
The Second Circuit held in Sinkler v. Berryhill that motions for attorney's fees under § 406(b) are “subject to the fourteen-day filing limitation of Rule 54(d)(2)(B) [of the Federal Rules of Civil Procedure] once a party receives notice of a benefits calculation following a sentence four remand judgment.” 932 F.3d 83, 89 (2d Cir. 2019). However, the Second Circuit also made clear that “district courts are empowered to enlarge that filing period where circumstances warrant,” noting that Rule 54's “fourteen-day limitations period is not absolute.” Id.
Here, the Notice of Award is dated January 12, 2024. See Notice of Award at 1 (Dkt. No. 39-1); Plaintiff Memorandum (“Pl. Mem.”) at 3, Dkt. No. 40. Thus, the motion for attorney's fees should presumably have been filed by January 26, 2024. However, the motion was not filed until April 3, 2024. In arguing that the application for fees is timely, plaintiff's counsel (Portnoy) contends as follows:
The undersigned was recently hospitalized since January, this year due [to] infection from a virus, resulting pneumonia, and discharged from treatment at in-patient facility on Friday, March 29, 2024. Accordingly, the Court should apply the doctrine of equitable tolling.Pl. Mem. at 3 (citing Williams v. Commissioner of Social Security, 2021 WL 4480536, at *2-3 (E.D.N.Y. Sept. 30, 2021)). He also reports in his reply letter to the Court dated May 1, 2024 (Dkt. No. 47) that the SSA did not send his firm the Notice of Award even though they represented plaintiff in the administrative proceedings. Counsel did eventually obtain a copy of the notice of award, as they filed it on April 3, 2024 (Dkt. No. 39-1), but they do not state when they received it.
It would have been preferable if these facts had been included in counsel's affirmation, rather than in a memorandum of law, as it is well-settled that “[a]n attorney's unsworn statements in a brief are not evidence.” Kulhawik v. Holder, 571 F.3d 296, 298 (2d Cir. 2009).
Courts in this District have exercised their discretion to enlarge the 14-day filing period as a result of a delay relating to illness, especially in recent years given the COVID-19 pandemic. See, e.g., Marrero v. Comm'r of Soc. Sec., No. 17-CV-2648 (VSB) (BCM), 2022 WL 4774799, at *2 (S.D.N.Y. Oct. 3, 2022) (motion filed “nearly a month after” notice of award issued to plaintiff was deemed timely because delay was result of COVID-19 pandemic); Fields v. Saul, No. 19-CV-18 (AJN) (DF), 2022 WL 847299, at *1 (S.D.N.Y. Feb. 18, 2022) (six-day delay explained by conditions created by COVID-19 pandemic), adopted sub nom. Fields v. Comm'r of Soc. Sec., 2022 WL 845749 (Mar. 22, 2022); De Los Santos v. Comm'r of Soc. Sec., No. 18-CV-2113 (NSR) (LMS), 2020 WL 12654676, at *3 (S.D.N.Y. May 14, 2020) (motion filed 11 days late during COVID-19 pandemic), adopted by 2021 WL 4507554 (Sept. 30, 2021); Williams v. Comm'r of Soc. Sec., No. 18-CV-4734 (PKC), 2021 WL 4480536, at *3 (E.D.N.Y. Sept. 30, 2021) (motion filed more than four months after 14-day filing period deemed timely where attorney was working from home and experienced mailing delays).
Here, the Commissioner does not argue that the motion is untimely, and plaintiff's counsel - albeit in their memorandum of law - have provided an explanation for why the motion was delayed. In these circumstances, the Court should credit the reason for the delay and find in all the circumstances that the motion is timely. See, e.g., Marrero, 2022 WL 4774799, at *2 (court credited attorney declaration and exercised discretion to enlarge filing period because circumstances warranted doing so).
It is also worth noting that “it is unclear whether the court in Sinkler intended for the 14-day tolling period to commence when the party to the action receives notice of the damage award or when the party's counsel receives notice.” Almodovar v. Saul, No. 16-CV-7419 (GBD) (SN), 2019 WL 6207784, at *2 (S.D.N.Y. Nov. 21, 2019). The Sinkler decision seems to imply both. Compare Sinkler, 932 F.3d at 85 (“[T]he fourteen-day filing period is tolled until the claimant receives notice of the amount of any benefits award.” (emphasis added)) with id. at 88 (“Once counsel receives notice of the benefits award . . . there is no sound reason not to apply Rule 54(2)(B)'s fourteen-day limitations period ....” (emphasis added)). In this case, it appears that Davis's counsel was not sent the Notice of Award. Thus, if Sinkler is read to suggest that the 14-day filing period is tolled until counsel receives notice of the award, then the time to file the fees motion has not begun to run.
2. Reasonableness
The fee request is reasonable here, as counsel is seeking an award “equal to the 25 percent negotiated in the contingency fee agreement.” Fabiani, 2023 WL 8582274, at *2 (citing Wells, 907 F.2d at 372). Plaintiff's counsel have, as a result of their representation, achieved a favorable outcome for Davis following a prior application denial and the denial of a previous request for administrative review. There is no indication that Davis is unsatisfied by the services and representation provided by McAdam and Portnoy nor any indication that they “unreasonably delayed the proceedings in an attempt to increase the accumulation of benefits and thereby increase [their] own fee.” Nieves, 2017 WL 6596613, at *1. There is also no evidence of “fraud or overreaching” in negotiating the fee agreement. Wells, 907 F.2d at 372.
In addition, the fee sought by Davis's counsel hardly constitutes a “windfall.” Counsel filed a detailed and specific memorandum of law in support of Davis's motion for judgment on the pleadings, which led to a successful remand stipulation. McAdam and Portnoy worked on this case for a combined total of 82.48 hours and are requesting a total of $11,578.17. Portnoy Aff. ¶ 8; Affirmation of Timothy S. McAdam dated August 12, 2021, ¶ 8, Dkt. No. 27. This would result in a reimbursement rate of $140.38 per billed hour ($11,578.17/82.48 = $140.38). This rate is unquestionably within the reasonable range, as courts within the Second Circuit have deemed awards with rates more than ten times as high to be reasonable. See, e.g., McCrann, 2024 WL 532288, at *2 (citing Eric K. v. Berryhill, No. 15-CV-845 (BKS), 2019 WL 1025791, at *3 (N.D.N.Y. Mar. 4, 2019) (awarding fees at an effective hourly rate of $1,500); Kazanjian v. Astrue, No. 09-CV-3678 (BMC), 2011 WL 2847439, at *2 (E.D.N.Y. July 15, 2011) (awarding fees at an effective hourly rate of $2,100)). In addition, McAdam's and Portnoy's efforts on Davis's behalf were “particularly successful” in that they secured him $46,312.67 in back payments. See Cruz v. Saul, No. 17-CV-3951 (GBD) (JLC), 2020 WL 3965345, at *3 (S.D.N.Y. July 14, 2020) (attorney's efforts were “particularly successful” when more than $25,000 was secured for claimant), adopted by 2020 WL 6491692 (Nov. 4, 2020). Accordingly, Davis's fee request is reasonable.
Even if the Court considers the discounted request of a total compensation of 57.48 hours of attorney time instead of 82.48 hours, as the Commissioner notes, this would result in an hourly rate of $201.43. See Comm'r Response at 2 n.3. Such an amount is still reasonable and would not constitute a windfall.
3. Return of the EAJA Award
When awarded both EAJA and § 406(b) fees, counsel shall return the lesser of the two fees back to the plaintiff. See Gisbrecht, 535 U.S. at 796 (“Congress harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the claimant's past-due Social Security benefits in this manner: Fee awards may be made under both prescriptions, but the claimant's attorney must refund to the claimant the amount of the smaller fee[.]” (internal quotations and citations omitted)). Here, $8,600.00 was stipulated and awarded to Davis's counsel under the EAJA. Thus, Davis's counsel should be ordered to return $8,600.00, the smaller of the two awards, to Davis.
4. Language of the Order
The Commissioner “requests that any section 406(b) award indicate the amount the Court authorizes for section 406(b) fees instead of directing the Commissioner to ‘pay' a specific amount.” Comm'r Response at 4. In so requesting, the Commissioner seeks to avoid being ordered to pay a larger sum of fee money to plaintiff's counsel than he has withheld to do so. Id. “The Commissioner withheld 25 percent of the claimant's past-due benefits in this case.” Id. at 3 n.5.
Other courts have previously declined to grant an identical request by the Commissioner because the Social Security Administration had expressly stated that it had withheld the exact fee amount requested by plaintiff's counsel. See Fabiani, 2023 WL 8582274, at *4. Given that counsel “is seeking that exact amount in fees . . . the ‘unlikely event that the agency inadvertently did not withhold past due benefits' that concerned the Commissioner appears to have been avoided.” Id. Accordingly, there appears to be no basis for the Court to grant the Commissioner's request, and he cites no authority in which a court has approved his proposed language. See e.g., id. at *3 (rejecting same language); Mehlrose v. Comm'r of Soc. Sec., No. 22-CV-3406 (WFK) (LGD), 2024 WL 698729, at *5 (E.D.N.Y. Feb. 15, 2024) (same), adopted by 2024 WL 990122 (Mar. 7, 2024).
III. CONCLUSION
For the foregoing reasons, counsel's request for an award should be granted, the SSA should be ordered to pay counsel $11,578.17 out of the amount that it has withheld from Davis's past-due benefits, and counsel should be ordered, upon receipt of the $11,578.17 in attorney's fees under § 406(b), to pay their client the $8,600.00 they received pursuant to the Equal Access to Justice Act.
PROCEDURE FOR FILING OBJECTIONS
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 to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to such objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Vernon S. Broderick, United States Courthouse, 40 Foley Square, New York, NY 10007. Any requests for an extension of time for filing objections must be directed to Judge Broderick.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. See 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).