Opinion
14 Civ. 7824 (KMK)(JCM)
06-25-2019
MICHAEL THOMAS IBBETSON, Plaintiff, v. ANDREW M. SAUL, Commissioner of Social Security, Defendant.
REPORT AND RECOMMENDATION
To the Honorable Kenneth M. Karas, United States District Judge:
Plaintiff Michael Thomas Ibbetson ("Plaintiff"), commenced this action pursuant to 42 U.S.C. § 405(g) seeking judicial review of a decision by the Commissioner of Social Security (the "Commissioner"), who denied Plaintiff's application for disability benefits. (Docket No. 1). Consistent with a stipulation between the parties, this Court remanded the case to the Commissioner for further administrative proceedings. (Docket No. 16). An Administrative Law Judge ("ALJ") later issued a favorable decision for Plaintiff. (Bowes Decl. ¶ 17). Before the Court is a motion for attorney's fees brought by Plaintiff's counsel pursuant to 42 U.S.C. § 406(b). (Docket No. 21). The Commissioner does not oppose the motion. (Docket No. 24). For the reasons set forth below, the Court respectfully recommends granting Plaintiff's motion.
Refers to the Declaration of Christopher James Bowes, dated April 19, 2018. (Docket No. 22).
I. BACKGROUND
Plaintiff filed an application for Social Security Disability benefits on October 6, 2010. (Bowes Decl. ¶ 4). The Social Security Administration ("SSA") denied Plaintiff's claim and the ALJ found Plaintiff not disabled within the meaning of the Social Security Act after a hearing. (Id. ¶¶ 5-7). After the Appeals Council denied Plaintiff's request for review, Plaintiff retained Christopher James Bowes to represent him in federal court along with Plaintiff's existing attorney, Stephen Jackel. (Id. ¶¶ 8-9, Ex. A).
Plaintiff commenced this action on September 26, 2014 by filing a complaint. (Docket No. 1). On June 16, 2015, Plaintiff filed a motion for judgment on the pleadings. (Docket No. 11). The parties subsequently agreed to remand the claim for further administrative proceedings. (Bowes Decl. ¶¶ 12-13). The Court endorsed a stipulation between the parties for attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, in the amount of $5,250.00. (Docket No. 20). On remand, the ALJ found that Plaintiff was disabled and entitled to disability benefits as of July 2010. (Bowes Decl. ¶ 17). The SSA issued a Notice of Award ("NOA") to Plaintiff on November 19, 2017 and issued NOAs to Plaintiff's three children on January 14, 2018. (Id. Ex. C, D).
On April 19, 2018, Plaintiff's counsel, Mr. Bowes, filed the instant motion seeking an award of attorney's fees in the amount of $25,000.00 pursuant to 42 U.S.C. § 406(b). (Docket No. 21). Counsel affirms that this sum represents the agreed upon contingent attorney fee for the 29.8 hours of work performed in federal court, which amounts to less than 25 percent of the past- due benefits awarded to Plaintiff and his children. (Bowes Decl. ¶¶ 28-29). Counsel seeks a net award of $19,750.00 ($25,000.00 less the $5,250.00 already awarded under the EAJA). (Docket No. 21).
Twenty-five percent of the past-due benefits awarded to Plaintiff and his children amounts to $50,308.75. (Bowes Decl. Ex C, D).
Plaintiff's counsel, Mr. Bowes, attributes the delay in filing the instant motion to personal family circumstances. (Bowes Decl. ¶ 22). Counsel's sister died of cancer on December 17, 2017 and counsel's wife's sister also has cancer. (Id. ¶¶ 24-25). Further, counsel claims only to have been made aware of Plaintiff's children's NOAs on the date of filing the instant motion. (Id. ¶ 21). By letter dated May 17, 2018, the Commissioner informed the Court that he does not object to the amount sought by Plaintiff's counsel for payment of attorney's fees. (Docket No. 24 at 3).
Plaintiff's attorney, Mr. Bowes, received a copy of Plaintiff's NOA on November 20, 2017. (Bowes Decl. ¶ 21).
II. DISCUSSION
Under the Social Security Act, when an attorney represents a claimant who receives a favorable judgment from the court, the court may determine and allow "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 Hopkins v. Cohen, the Supreme Court held that the 25 percent ceiling was based on the past-due benefits of the claimant and his dependent family members, rather than those of the claimant alone. 390 U.S. 530, 534-35 (1968). The Commissioner may "certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits." 42 U.S.C. § 406(b)(1)(A). As such, a fee award under 42 U.S.C. § 406(b) is not the result of any fee shifting between the parties, but it is instead an amount paid by the social security claimant to his or her own attorney. Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990).
A. Timeliness of Motion for Attorney's Fees
42 U.S.C. § 406(b) does not specify a time limit for filing motions for attorney's fees and the Second Circuit has not provided guidance on this issue. Daniel J. M. v. Comm'r of Soc. Sec., No. 16 Civ. 01466 (DEP), 2019 WL 477898, at *3 (N.D.N.Y. Feb. 7, 2019). "The Third, Fifth, and Eleventh Circuits have applied Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure, to such applications, requiring that the application be filed within fourteen days after the entry of judgment." Id.; see also Sinkler v. Berryhill, 305 F. Supp. 3d 448, 452 (W.D.N.Y. 2018), appeal docketed, 18-2044 (2d Cir. July 11, 2018). Some circuits have adopted a doctrine of equitable tolling, tolling the filing deadline until the NOA is issued, because a literal application of Rule 54(d) inevitably would require premature filing. Walker v. Astrue, 593 F.3d 274, 278 (3d Cir. 2010); see also Sinkler, 305 F. Supp. 3d at 454 (holding that Rule 54(d), subject to equitable tolling, should govern as "the Third Circuit's analysis in Walker presents the clearest and fairest method for resolving the timing conflict."). Other circuits, including the Tenth Circuit, have held that Rule 60(b)(6) of the Federal Rules of Civil Procedure governs such attorney's fees applications, requiring filing of the motion "within a reasonable time of the Commissioner's decision awarding benefits." Geertgens v. Colvin, No. 13 Civ. 5133 (JCF), 2016 WL 1070845, at *2 (S.D.N.Y. Mar. 15, 2016) (citing McGraw v. Barnhart, 450 F.3d 493, 505 (10th Cir. 2006)). The Second Circuit has not yet ruled on this issue, nor have courts in this District applied a consistent approach. Compare Grace v. Berryhill, No. 11 Civ. 09162 (ALC), 2018 WL 1940420, at *1 (S.D.N.Y. Apr. 23, 2018) (adopting a doctrine of equitable tolling under Rule 54(d)), with Rose v. Barnhart, No. 01 Civ. 1645 (KMW)(RLE), 2007 WL 549419, at *3 n.1 (S.D.N.Y. Feb. 16, 2007) (endorsing a 60(b)(6) reasonableness approach). Some courts in this District have declined to endorse either approach, finding such motions to be timely due to excusable neglect or otherwise. See Brown v. Colvin, No. 15 Civ. 04823 (SDA), 2018 WL 6061199, at *2 n.1 (S.D.N.Y. Nov. 20, 2018) (finding that plaintiff's counsel's "delay in submitting the application was the result of excusable neglect," without discussing either approach); Rabenda v. Colvin, No. 15 Civ. 3449 (GWG), 2018 WL 3178159, at *1 (S.D.N.Y. June 28, 2018) (refraining from formally adopting an approach, but justifying the filing delay "because counsel's delay in submitting the application was the result of excusable neglect within the meaning [of] Fed. R. Civ. P. 6(b)(1)(B) in light of the fact that there was previously almost no case law in this Circuit on this issue.... We note that this argument as to excusable neglect may not be available to plaintiffs in the future given the Sinkler decision."); Geertgens, 2016 WL 1070845, at *3 (declining to formally adopt an approach, but holding "[i]n these circumstances, where neither the Commissioner nor the plaintiff has argued that the Section 406(b) application is belated, I will deem it timely"); Allen v. Comm'r of Soc. Sec., No. 10 Civ. 0068 (LAP)(FM), 2012 WL 1596661, at *4 (S.D.N.Y. Apr. 27, 2012), report and recommendation adopted, 2013 WL 6331727 (S.D.N.Y. Dec. 5, 2013) (declining to formally adopt an approach, but finding the motion timely under either approach).
The Western District of New York decision in Sinkler is currently on appeal before the Second Circuit, which likely will provide guidance on this issue.
The Western District of New York recently enacted Local Rule 5.5(g) to address a similar inconsistency. (Available at https://www.nywd.uscourts.gov/sites/nywd/files/2019_civil.pdf). This Local Rule was effective on January 1, 2019 and requires filing of attorney's fees under 42 U.S.C. § 406(b) within sixty-five days of the NOA. Abbey v. Berryhill, No. 17 Civ. 06430 (MAT), 2019 WL 336572, at *4 (W.D.N.Y Jan. 28, 2019); see also Suwen Zhang v. Berryhill, No. 17 Civ. 06492 (MAT), 2019 WL 2281228, at *3 (W.D.N.Y. May 29, 2019) (finding a motion for attorney's fees "timely under new Local Rule 5.5, which may be applied, insofar as just and practicable, to all actions pending as of January 1, 2019").
The Court respectfully recommends that Plaintiff's counsel's motion for attorney's fees be found timely under either approach. Here, the delay in filing would be both reasonable under Rule 60(b)(6) and justified under Rule 54(d) as a result of excusable neglect pursuant to Rule 6(b)(1)(B). First, there is no definitive guidance from the Second Circuit on this issue, and the law in this District and other Circuits is unsettled. See Rita M. B. v. Berryhill, No. 16 Civ. 0262 (DEP), 2018 WL 5784101, at *4 (N.D.N.Y. Nov. 5, 2018) (finding that "[i]n light of the uncertainty and marked split of authority surrounding the issue, and the lack of definitive guidance from the Second Circuit, I find that if the fourteen-day limit of Rule 54(d) is found to apply, Attorney Olinsky's [four month] delay in submitting the application beyond that period was the result of excusable neglect, within the meaning of Rule 6(b)(1)(B) of the Federal Rules of Civil Procedure, and therefore will not deny his application on the basis of untimeliness"). Second, although the NOAs were granted in November 2017 and January 2018, Plaintiff's counsel claims not to have received notice of Plaintiff's children's NOAs until April 19, 2018, at which time he filed the instant motion. (Bowes Decl. ¶ 21). See Abbey, 2019 WL 336572, at *3-4 (finding a motion to be timely where plaintiff's counsel filed the motion thirty-three days after the NOA was sent to the plaintiff, which was four days after plaintiff's counsel was informed of the NOA). Third, Plaintiff's counsel was dealing with family illness and the death of his sister around the time the NOAs were issued, which restricted his time and resources. (Bowes Decl. ¶¶ 24-25). See Garland v. Astrue, 492 F. Supp. 2d 216, 221 (E.D.N.Y. 2007) (concluding that plaintiff's counsel's delay in filing was "unreasonable unless justified by a compelling reason"). Finally, courts in this Circuit have granted attorney's fees that were filed in timeframes similar to the instant case, particularly when the Commissioner did not object to the award. See Daniel J. M., 2019 WL 477898, at *4 (collecting cases).
Accordingly, the Court respectfully recommends that Plaintiff's motion for attorney's fees be deemed timely.
B. Reasonableness of Award 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. Wells, 907 F.2d at 371. 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." Gisbrecht v. Barnhart, 535 U.S. 789, 808-09 (2002). Recently, in Culbertson v. Berryhill the Supreme Court held that the 25 percent cap on attorney's fees applies only to fees for court representation and not to aggregate fees awarded under both 42 U.S.C. § 406(a) and § 406(b). 139 S. Ct. 517, 522-23 (2019).
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. Wells, 907 F.2d at 372; see also Gisbrecht, 535 U.S. at 808. Fee awards may be made under both § 2412 of the EAJA and 42 U.S.C. § 406(b), but the attorney must give the smaller fee to the client. See Gisbrecht, 535 U.S. at 796.
Applying these standards, the Court recommends that the fee sought by Plaintiff's counsel is reasonable within the meaning of 42 U.S.C. § 406(b). The $25,000.00 award sought by Plaintiff's counsel does not exceed the 25 percent statutory ceiling and there is no evidence of fraud or overreaching in the creation of the contingency agreement. (Bowes Decl. Ex. C, D). Plaintiff's attorneys, Mr. Bowes and Mr. Jackel, spent 29.8 hours working on Plaintiff's case, which computes to an hourly rate of about $838.93 per hour if Plaintiff's request is approved. (Bowes Decl. ¶¶ 29, 31).
Moreover, the fee sought by Plaintiff's counsel will not result in a windfall to Plaintiff's counsel for several reasons. First, Plaintiff's attorneys represented Plaintiff on a contingency fee basis, and the fee sought appropriately accounts for the risk of taking on a contingency case. See Wells, 907 F.2d at 371 ("In the absence of a fixed-fee agreement, payment for an attorney in a social security case is inevitably uncertain, and any reasonable fee award must take account of that risk."). Second, having examined the submitted time sheets, (Bowes Decl. Ex. B), the Court recommends that Plaintiff's counsel's hours are reasonable. Cf. Borus v. Astrue, No. 09 Civ. 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."). Furthermore, "plaintiff's counsel should not be penalized for working efficiently on the case as compared to other attorneys who might have taken longer to perform the same work and whose corresponding hourly rate would be lower due to their lack of experience and productivity." Blizzard v. Astrue, 496 F. Supp. 2d 320, 323 (S.D.N.Y. 2007) (quoting Maier v. Apfel, No. 95 Civ. 9264 (JGK), 1998 WL 401536, at *2 (S.D.N.Y. July 17, 1998)). Third, in social security cases, "a substantial body of caselaw has awarded rates that approach, if they do not exceed, $1,000.00." Torres v. Colvin, No. 11 Civ. 5309 (JGK), 2014 WL 909765, at *4 (S.D.N.Y. Mar. 6, 2014) (citing cases). Finally, the Court notes that the Commissioner has no objection to Plaintiff's requested award. (Docket No. 24).
Accordingly, the Court respectfully recommends finding that an attorney fee award of $25,000.00 is reasonable.
Plaintiff's counsel requests that the Court approve an award of "$25,000 ... less the $5,250 ... already received ... as attorney fees under the Equal Access to Justice Act, for a net payment of $19,750 as attorney's fees under 42 U.S.C. § 406(b)." (Docket No. 21).
III. CONCLUSION
For the foregoing reasons, the Court respectfully recommends granting Plaintiff's counsel's motion and awarding $25,000.00 to Plaintiff's counsel as attorney's fees pursuant to 42 U.S.C. § 406(b) less the $5,250.00 already received by Plaintiff's counsel under the EAJA, for a net award of $19,750.00.
IV. NOTICE
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b)(2) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from receipt of this Report and Recommendation to serve and file written objections. See Fed. R. Civ. P. 6(a) and (d) (rules for computing time). A party may respond to another party's objections within fourteen (14) days after being served with a copy. See Fed. R. Civ. P. 72(b)(2). Objections and responses to objections, if any, shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Kenneth M. Karas at the United States District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the undersigned at said Courthouse.
Requests for extensions of time to file objections must be made directly to the Honorable Kenneth M. 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 later appellate review of any order of judgment that will be rendered. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(b), 6(d), 72(b); Caidor v. Onondaga Cnty., 517 F.3d 601, 604 (2d Cir. 2008). Dated: June 25, 2019
White Plains, New York
SO ORDERED:
/s/_________
JUDITH C. McCARTHY
United States Magistrate Judge