Opinion
18CV2113 (NSR)(LMS)
05-14-2020
Mayelin De Los Santos, Plaintiff, v. Commissioner of Social Security, Defendant.
TO: THE HONORABLE NELSON S. ROMÁN, U.S.D.J.
On March 14, 2018, the Honorable Nelson S. Román referred this matter to the undersigned. Docket # 8.
REPORT AND RECOMMENDATION
Lisa Margaret Smith, United States Magistrate Judge.
Currently before the Court is Plaintiff's amended motion for attorneys' fees pursuant to 42 U.S.C. § 406(b). Docket # 31. For the reasons set forth below, I conclude, and respectfully recommend that Your Honor should conclude, that Plaintiff's amended motion should be granted, and Plaintiff's counsel should be awarded $14,909.00 in fees and ordered to promptly refund to Plaintiff $8,031.20, the amount of attorneys' fees previously awarded under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412.
Plaintiff withdraws her original motion for attorneys' fees, Docket #22. See Docket # 31.
BACKGROUND
Plaintiff retained Pierre Pierre Law, P.C. to represent her "to appeal the denial of Social Security benefits by the Commissioner of Social Security to the United States District Court" on March 1, 2018. Docket # 33 ("Pierre Pierre Aff.") Ex. A ("Retainer Agreement"). The Retainer Agreement provides that "[i]f the appeal is successful and I am awarded past due benefits by the district court, or if upon remand to the Social Security Administration [SSA] I am awarded past due benefits, the law firm may request up to twenty-five percent (25%) of the past due benefits pursuant to 42 U.S.C. § 406(b) of the Social Security Act." Id. Plaintiff commenced this action on March 8, 2018. Docket # 1. On July 20, 2018, Plaintiff filed a motion for judgment on the pleadings. Docket # 11. Pursuant to a Stipulation and Order signed by the Court on November 1, 2018, a judgment was entered on November 2, 2018, reversing and remanding the action for further administrative proceedings. Docket ## 18-19. Thereafter, the parties stipulated to the payment of $8,031.20 in fees to Plaintiff's counsel under the EAJA, and the Court signed the stipulation on November 29, 2018. Docket # 21.
Following remand of the case to the SSA, Plaintiff was awarded social security disability benefits. Pierre Pierre Aff. Ex. C. On March 8, 2020, the SSA issued a Notice of Award to Plaintiff, explaining the benefits that she would be receiving. Id. The Notice of Award states that the SSA withheld 25% of Plaintiff's past due benefits, or $14,909.00, for attorneys' fees. Id. at 3. On March 8, 2020, the SSA also sent a letter to Plaintiff's counsel, enclosing a copy of the Notice of Award. Id. at 7. As is explained below, because the Notice of Award was mailed, the fourteen-day filing period for Plaintiff's motion for attorneys' fees was extended by three days, to seventeen days, and the instant motion was therefore due to be filed by no later than March 25, 2020. However, Plaintiff's counsel filed the motion on April 5, 2020, or 11 days late. Plaintiff explains that "as a direct result of the Coronavirus Crisis and the Stay-At-Home Order issued by the Governor of New York, Plaintiff's counsel has been working remotely which has delayed office operations including but not limited to the timely filing of motions." Mem. of Law in Supp. at 4-5.
For some reason, Plaintiff's motion papers state that the Notice of Award was issued on March 12, 2020, Docket # 32 ("Mem. of Law in Supp.") at 4, but the Notice of Award attached to her counsel's Affirmation is dated March 8, 2020. Pierre Pierre Aff. Ex. C. In addition, as explained in more detail, infra, Plaintiff erroneously cites social security regulations regarding the date on which the Notice of Award would be deemed received. Mem. of Law in Supp. at 4 n.1. Consequently, Plaintiff's calculation of the fourteen-day period within which the instant motion was due to be filed differs from the Court's. Id. at 4 & n.2 (motion was due to be filed by March 30 or March 31, 2020).
The Commissioner does not object to the motion in any respect. See Docket # 35 ("Def.'s Letter") ("The Commissioner has no objection to Plaintiff's counsel's fee request.").
DISCUSSION
I. Applicable Legal Standard
Section 406(b) provides for the award of attorneys' fees for representation in federal court as follows:
Whenever 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 . . ..42 U.S.C. § 406(b)(1)(A). In this case, Plaintiff's federal claim was remanded to the Commissioner for further administrative proceedings after the Court vacated the ALJ's decision, and Plaintiff was awarded benefits. As one district court recently noted, "The Court of Appeals for the Second Circuit has not addressed whether an attorney can recover fees in these circumstances i.e., when the district court remands for further proceedings without an award of benefits." Almodovar v. Saul, 16-CV-7419 (GBD)(SN), 2019 WL 7602176, at *1 (S.D.N.Y. Oct. 4, 2019) (emphasis in original), adopted by 2019 WL 6207784 (S.D.N.Y. Nov. 21, 2019). The district court then added, "The clear majority of courts, however, have answered this question in the affirmative.
Specifically, these courts have held that § 406(b) allows the district court to award fees in cases of remand so long as the plaintiff is eventually awarded benefits, either at the agency level or through further judicial proceedings." Id., at *2 (emphasis in original) (citing cases). The court in Almodovar determined that because the ALJ had awarded the plaintiff benefits after her case was remanded, the plaintiff's attorney in that case could recover attorney's fees under § 406(b). Id. Plaintiff's counsel here can therefore also recover fees on this basis under § 406(b).
II. Timeliness of the Motion
In a decision issued on August 2, 2019, the Second Circuit concluded that the 14-day filing period set forth in Fed.R.Civ.P. 54(d)(2)(B) applies to attorneys' fee applications under 42 U.S.C. § 406(b), but that the 14-day filing period is subject to equitable tolling. Sinkler v. Berryhill, 932 F.3d 83, 85 (2d Cir. 2019). Thus, "[w]here, as here, a Social Security claimant secures a judgment reversing a denial of benefits and remanding for further proceedings, the fourteen-day filing period is tolled until the claimant receives notice of the amount of any benefits award . . . because the benefits award amount is necessary to identify the maximum attorney's fee that may be awarded under § 406(b)." Id.
Rule 54(d)(2)(B) states that "[u]nless a statute or a court order provides otherwise," a motion for attorney's fees must "be filed no later than 14 days after the entry of judgment." Fed.R.Civ.P. 54(d)(2)(B)(i).
Although the Second Circuit reiterates in its "Conclusion" that "the fourteen-day filing period starts to run when the claimant receives notice of the benefits calculation," Sinkler, 932 F.3d at 91 (emphasis added), at an earlier point in the decision it states, "Once counsel receives notice of the benefits award-and, therefore, the maximum attorney's fees that may be claimed-there is no sound reason not to apply Rule 54(2)(B)'s [sic] fourteen-day limitations period to a § 406(b) filing, just as it would apply to any other final or appealable judgment." Id. at 88 (emphasis added).
The Second Circuit added, however, that "[i]n holding Rule 54 applicable in these circumstances, we are mindful that its fourteen-day limitations period is not absolute." Id. at 89. Rather, "[t]he rule expressly states that the specified period applies '[u]nless a statute or a court order provides otherwise.' Fed.R.Civ.P. 54(d)(2)(B). Thus, district courts are empowered to enlarge that filing period where circumstances warrant." Id. And "where, as here, the rule itself affords courts the discretion to alter a specified filing time, we will generally defer to a district court in deciding when such an alteration is appropriate in a particular case . . .." Id. at 90.
Here, Plaintiff's counsel filed the instant motion for attorneys' fees on April 5, 2020, Docket # 31, which was 28 days after the SSA sent the Notice of Award to both Plaintiff and Plaintiff's counsel. Pierre Pierre Aff. Ex. C. Thus, strictly speaking, the motion is untimely as outside the fourteen-day filing period announced in Sinkler, even if it were extended by three days to a seventeen-day filing period to account for the fact that the Notice of Award was mailed. 932 F.3d at 89 n.5 ("Nothing in this opinion departs from the law's presumption that a party receives communications three days after mailing.") (citation omitted). Nonetheless, as the Second Circuit noted, Rule 54(d)(2)(B) states that the deadline it imposes applies "[u]nless . . . a court order provides otherwise," and district courts may "enlarge that filing period where circumstances warrant." Sinkler, 932 F.3d at 89. Accordingly, I conclude, and respectfully recommend that Your Honor should conclude, that the circumstances in this case warrant enlarging the 14-day filing period.
Because the Notice of Award addressed to Plaintiff and the letter sent to Plaintiff's counsel are both dated March 8, 2020, see Pierre Pierre Aff. Ex. C, the Court assumes they were received on the same day, and thus the Court assumes that the filing period deadline is the same regardless of whether Sinkler is read narrowly to hold that the fourteen-day filing period starts to run from the date on which "the claimant" receives notice of the benefits award, or, as noted in footnote 5, supra, from the date on which "counsel" receives notice of the benefits award.
In calculating the fourteen-day filing period, Plaintiff's counsel cites social security regulations regarding the date on which the SSA notifies a claimant's attorney, Mem. of Law in Supp. at 4 n.1 (citing 20 C.F.R. § 404.1703, which defines "[d]ate we notify him or her [as] 5 days after the date on the notice . . ."), however, the Second Circuit decision in Sinkler governs the timing with respect to the filing of a § 406(b) attorneys' fee application. See McDonald v. Comm'r of Soc. Sec., 16-CV-926-FPG, 2019 WL 1375084, at *1 n.1 (W.D.N.Y. Mar. 27, 2019) (in a preSinkler case, the district court noted, "Plaintiff filed her motion six days after the SSA issued the Notice [of Award] and one day after she received it. See 20 C.F.R. § 404.1703. The Social Security Act does not set a deadline for filing a § 406(b) motion and the Second Circuit has not indicated what standard governs the timeliness of such a motion.") (citation omitted) (emphasis added).
As explained in Plaintiff's motion papers, the current pandemic hampered her counsel's ability to file the motion timely. See Mem. of Law in Supp. at 4-5 ("[A]s a direct result of the Coronavirus Crisis and the Stay-At-Home Order issued by the Governor of New York, Plaintiff's counsel has been working remotely which has delayed office operations including but not limited to the timely filing of motions."). The Notice of Award was issued on March 8, 2020, and is presumed to have been received in the mail three days later, or on March 11, 2020, and thus the instant motion was due to be filed fourteen days later, or by no later than March 25, 2020. Plaintiff's counsel filed the motion only 11 days late. Under the extraordinary circumstances of the COVID-19 crisis, I conclude, and respectfully recommend that Your Honor should conclude, that the deadline under Rule 54(d)(2)(B) should be extended from March 25, 2020, to April 5, 2020, and Plaintiff's counsel's motion for attorneys' fees should be deemed timely.
III. Reasonableness of Fees Requested
"Although 42 U.S.C. § 406(b) requires the court to review the reasonableness of any requested attorney's fees, because a contingency fee arrangement is the result of a freely negotiated arrangement between the claimant and his or her attorney, the court may only reduce the agreed upon contingency fee amount when it finds the amount unreasonable." Ibbetson v. Saul, 14 Civ. 7824 (KMK)(JCM), 2019 WL 3208432, at *3 (S.D.N.Y. June 25, 2019) (citing Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990)), adopted by 2019 WL 3202998 (S.D.N.Y. July 16, 2019). "Thus, '§ 406(b) does not displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts to review for reasonableness fees yielded by those agreements.'" Id. (quoting Gisbrecht v. Barnhart, 535 U.S. 789, 808-09 (2002)). "To determine the reasonableness of a contingency fee, a court should determine (1) that the fee is within the 25 percent statutory cap, (2) whether there has been fraud or overreaching in making the contingency agreement, and (3) whether the fee amount is so large that it constitutes a windfall to the attorney." Id. (citations omitted).
Applying these standards, I conclude, and respectfully recommend that Your Honor should conclude, that the fees requested by Plaintiff's counsel are reasonable. As noted by Plaintiff, the Notice of Award states that the SSA is withholding $14,909.00, 25% of Plaintiff's past due benefits, for the payment of attorneys' fees. See Pierre Pierre Aff. Ex. C. Plaintiff's counsel seeks attorneys' fees of $14,909.00, the 25% statutory cap. There is no evidence of any fraud or overreaching in the making of the contingency agreement-the Retainer Agreement-between Plaintiff and her counsel, which agreement itself is a straightforward document. See Pierre Pierre Aff. Ex. A.
Lastly, the fee amount requested does not constitute a windfall to Plaintiff's counsel. The expenditure of 67.9 hours for work performed by attorneys in this case, as reflected in the time records provided, Pierre Pierre Aff. Ex. B, is within the range of reasonableness for the number of hours spent on a social security case. See, e.g., Borus v. Astrue, No. 09-CV-4723 (PAC)(RLE), 2012 WL 4479006, at *3 (S.D.N.Y. Sept. 28, 2012) ("Although some courts in this circuit find that twenty to forty hours is a reasonable amount of time to spend on routine Social Security cases, fees have regularly been awarded far in excess of this amount."). The $14,909.00 sought for these 67.9 hours of work amounts to an hourly rate of $219.57, which is reasonable and well within the range of rates awarded in social security cases. See, e.g., Morrison v. Saul, No. 16-CV-4168 (OTW), 2019 WL 6915954, at *3 (S.D.N.Y. Dec. 19, 2019) ("Courts often permit, however, higher-than-usual hourly rates for Social Security cases due to the uncertain nature of contingency cases and to encourage representation of Social Security litigants, who often lack the resources to independently retain counsel."; finding an hourly rate of $935.52 "within the range previously found to be reasonable") (citing cases); Guzman v. Comm'r of Soc. Sec., 15CV3920 (VB)(LMS), 2019 WL 4935041, at *3 (S.D.N.Y. Aug. 1, 2019) (finding de facto hourly rate of $497.39 "not unreasonable"), adopted by 2019 WL 4933596 (S.D.N.Y. Oct. 7, 2019). As the Commissioner points out, Plaintiff's counsel's time records include 6.5 hours of work performed by a paralegal, and "[c]ourts have reached varying conclusions about whether and how paralegal work should be compensated under § 406(b)." Def.'s Letter at 2 n.1 (citing Rita M.B. v. Berryhill, No. 16 Civ. 0262, 2018 WL 5784101, at *6 n.7 (N.D.N.Y. Nov. 5, 2018) (collecting cases)). However, the Commissioner adds that "[b]ecause counsel's fee request appears to be reasonable without paralegal hours included, the Commissioner does not-and the Court need not-address the issue of paralegal work," id., a conclusion with which the undersigned agrees. Notably, the Commissioner does not object to the amount of fees requested. See id. at 2 ("[T]he Commissioner does not object to the amount of the requested § 406(b) fees as unreasonable, but instead defers to the Court's discretion.").
Finally, as noted above, Plaintiff's counsel was already awarded $8,031.20 in fees under the EAJA. Fee awards may be made under both the EAJA and § 406(b), but the claimant's attorney must "refun[d] to the claimant the amount of the smaller fee." Gisbrecht, 535 U.S. at 796 (internal quotation marks and citation omitted). Courts in this district routinely and explicitly mandate attorneys who obtain fee awards under both statutes to "return the amount of such EAJA award to plaintiff out of the payment received under Section 406(b)." Jackson v. Astrue, No. 09-CV-1290 (FB), 2011 WL 1868718, at *2 (E.D.N.Y. May 16, 2011); see, e.g., Valle v. Colvin, No. 13-CV-2876 (JPO), 2019 WL 2118841, at *4 (S.D.N.Y. May 15, 2019) ("Accordingly, [counsel's] motion for [ ] attorney's fees is granted, provided that [counsel] refunds to [plaintiff] the amount of the EAJA award previously received."); Brown v. Colvin, 15-CV-04823 (SDA), 2018 WL 6061199, at *4 (S.D.N.Y. Nov. 20, 2018) ("Upon receipt of this sum, Binder & Binder is ORDERED to refund the previously awarded EAJA fees of $4,600.00 directly to the Plaintiff."). Plaintiff's counsel acknowledges that he "has received an award under the Equal Access to Justice Act in the amount of $8,031.20, and will refund this amount to Plaintiff upon an award of fees pursuant to 42 U.S.C. § 406(b)(1)." Pierre Pierre Aff. ¶ 11.
Accordingly, I conclude, and respectfully recommend that Your Honor should conclude, that Plaintiff's counsel should be awarded $14,909.00 in attorneys' fees under § 406(b) and ordered to promptly refund to Plaintiff the $8,031.20 in fees previously awarded under the EAJA.
CONCLUSION
For the foregoing reasons, I conclude, and respectfully recommend that Your Honor should conclude, that Plaintiff's amended motion for attorneys' fees pursuant to 42 U.S.C. § 406(b), Docket # 31, should be granted, and Plaintiff's counsel should be awarded $14,909.00 in fees and ordered to promptly refund to Plaintiff $8,031.20, the amount of attorneys' fees previously awarded under the EAJA, upon the receipt of fees awarded under 42 U.S.C. § 406(b). I further recommend that because Plaintiff has withdrawn her original motion for attorneys' fees, see Docket # 31, the motion at Docket # 22 should be terminated.
NOTICE
Pursuant to 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72(b), the parties shall have fourteen (14) days, plus an additional three (3) days, pursuant to Fed.R.Civ.P. 6(d), or a total of seventeen (17) days, see Fed.R.Civ.P. 6(a), from the date hereof, to file written objections to this Report and Recommendation. Such objections, if any, shall be filed with the Clerk of Court with extra copies delivered to the chambers of The Honorable Nelson S. Roman at the United States Courthouse, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the undersigned at the same address.
Failure to file timely objections to this Report and Recommendation will preclude later appellate review of any order of judgment that will be entered.
Requests for extensions of time to file objections must be made to Judge Román.